JFE Holdings Posts 21.6% Lower Profit in April-June

JFE Holdings announced on Thursday the consolidated recurring profit decreased by 21.6% to 91.4 billion yen for April-June from same period of 2005. The firm reduced the profit when the steel selling price decreased the shipment was lower due to blast furnace relining while the profit in April-June 2005 enjoyed one time gain from low cost carry-over raw materials. The firm is in line with the targeted 190 billion yen of recurring profit for the first half and 460 billion yen of recurring profit for the full year. The profit could be higher than expected due to higher sales volume and higher selling price in July-September. The net profit decreased by 23% to 54.9 billion yen with flat sales at 691.5 billion yen for April-June from same period of 2005. The steel unit’s recurring profit decreased by 27 billion yen to 93.1 billion yen. The steel business’ lower profit was due to 15 billion yen from higher raw materials cost and more than 10 billion yen from sales volume, products mix and lower price. Around 20 billion yen of negative impact was one time factors including higher raw materials cost and delayed shipment. JFE Steel produced 6.92 million tonnes of raw steel in April-June compared with 6.95 million tonnes in same period of 2005. The consolidated raw steel output was 7.88 million tonnes compared with 7.9 million tonnes. JFE Steel’s steel shipment decreased to 6.08 million tonnes from 6.27 million tonnes. The export represented 42.1% of total steel sales of JFE Steel compared with 44.3% in April-June 2005. JFE Steel’s averaged steel selling price decreased to 73,500 yen per tonne from 77,000 yen in January-March and 76,900 yen in April-June 2005.