Nisshin Steel Posts 23% Lower Profit for April-December

Nisshin Steel announced on Friday the consolidated recurring profit decreased by 22.9% to 40.6 billion yen for April-December from same period of 2005. The firm couldn’t cover higher cost for nickel and zinc fully by the price hike despite of the firm steel demand. However, the profit was around 10% higher than expected when the 9 months profit reached 86% of full year outlook announced in October. The consolidated net profit decreased by 7.8% to 24.9 billion yen with 12.2% higher sales at 470.7 billion yen for April-December from same period of 2005. The higher sales volume and price lifted the recurring profit by 23 billion yen while the higher raw materials cost reduced the profit by 28 billion yen. The firm also reported 5 billion yen of higher depreciation due to change of depreciation method to fixed rate. The firm reported inventory valuation gain for nickel and zinc in April-December while the firm posted inventory valuation gain for iron ore and coal in April-December 2005. The net inventory valuation was negative 1 billion yen for April-December 2006 compared with same period of 2005. The raw steel output increased by 4.9% to 2.99 million tonnes in April-December from same period of 2005. The export value for the sales increased by 4 percentage points to 18% due to higher hot rolled stainless shipment for Chinese stainless cold rolling joint venture, Ningbo Baoxin Stainless Steel. The parent company’s recurring profit decreased by 35% to 33.1 billion yen and the net profit decreased by 22.4% to 20.7 billion yen with 11.4% higher sales at 351 billion yen for April-December from same period of 2005.