Tokyo Steel Posts 38% Lower Profit for F2006

Tokyo Steel Manufacturing announced on Friday the recurring profit decreased by 38.2% to 35.9 billion yen for fiscal 2006 ended March 2007 from fiscal 2005. Higher ferrous scrap price reduced the profit despite of the higher steel selling price. The firm expects the recurring profit decreases to 25 billion yen in fiscal 2007. The operating profit decreased by 40.6% to 34.1 billion yen and the net profit decreased by 36.3% to 21.6 billion yen with 0.3% lower sales at 208.5 billion yen for fiscal 2006 from fiscal 2005. The recurring profit rate decreased by 10.6 percentage points to 17.2% for sales. The accumulated earnings hit record 162.9 billion yen. The steel sales volume decreased by 1.2% to 3.08 million tonnes in fiscal 2006 from fiscal 2005. The export volume increased to 4.2 times at 320,000 tonnes lifting the export rate for total sales by 7 points to 10%. The rolled steel output increased by 2.3% to 3.13 million tonnes. The averaged steel selling price increased by 0.7% to 67,400 yen per tonne in fiscal 2006 from fiscal 2005. The scrap purchase price increased to 39,000 yen per tonne for ocean transport to Okayama plant at the end of March 2007 from 25,500 yen at beginning of April 2006. The firm expects the net profit decreases to 14 billion yen with higher sales at 250 billion yen for fiscal 2007. The firm expects the steel sales volume increases by 10% with strong demand at home and abroad. The firm estimates the selling price will be higher than previous year while the averaged scrap purchase will increase to near 40,000 yen per tonne. The firm increased the capital expenditure to 3.2 times at 48.5 billion yen including plate mill at Kyushu plant and land purchase for new plant in Aichi for fiscal 2006 from fiscal 2005. The firm plans 26 billion yen of expenditure including machinery and building for the new plant to start operation in October 2009.