Higher Ferrous Scrap Cost Reduces Tokyo Steel’s Profit

Tokyo Steel Manufacturing announced on Friday the firm revised the outlook downward to 35 billion yen of recurring profit with 209 billion yen of sales for parent company for the year to March 2007 compared with former estimate at 42.5 billion yen and 220 billion yen respectively. The firm expects lower profit and sales with output reduction due to remitted availability of ferrous scrap and higher scrap cost. The firm expects the ferrous scrap availability keeps unfavorable when the price accelerated to increase at home and abroad. The firm reported the recurring profit decreased by 34.6% to 31.1 billion yen for April-December from same period of 2005. The net profit decreased by 32.4% to 18.7 billion yen with 3% lower sales at 155.9 billion yen. The firm was forced to reduce output due to limited availability of scrap under higher scrap market. The firm reported the gross assets increased by 9.4% to 292.2 billion yen and the equity capital rate increased by 1 percentage point to 77.3% at the end of December from same period of 2005.