Sumitomo Metals Increases Recurring Profit by 9.8% in Apr-Jun

Sumitomo Metal Industries announced on Wednesday its consolidated recurring profit increased by 9.8% to 69.2 billion yen in quarterly settlement for April-June 2006 from the same period of 2005. The firm forecasts 130 billion yen of consolidated recurring profit for the half-year settlement ending September 2006, the same level as the previous year. The firm originally expected 125 billion yen for April-September 2006, because the firm accounted for the appraisal gain of the inventory in April-September 2005 thanks to escalating price of raw material. Fumio Honbe, senior vice president of Sumitomo Metals, said that the profit would exceed by 5 billion yen for April-September 2006 when the selling price of the steel products rises and the high-grade steel products sales increases. The firm estimates 270 billion yen of profit through fiscal 2006 ending March 2007, increasing by 10 billion yen from originally expected. The consolidated sales increased by 8.3% to 373 billion yen in quarterly settlement for April-June from a year ago. The consolidated net income increased by 8.2% to 41.5 billion yen. The recurring profit increased by 6.2 billion yen. The recurring profit improved by 3.5 billion yen due to the cost reduction, by 16.2 billion yen due to the increase of the selling prices and the high-grade steel products sales and by 4 billion yen due to the exchange gain. On the other hand, the recurring profit decreased by 6 billion yen due to the raw material costs expansion, by 8 billion yen due to the paper loss and by 3.5 billion yen due to the fixed cost increases. The amount of crude steel production was 3.29 million tonnes including group companies, Sumitomo Metals Kokura, Sumitomo Metals Naoetsu and Sumikin iron & Steel Corporation. The export ratio was 46% in value. The averaged selling price of the steel products was 95,500 yen per tonne in Aril-June 2006, which was 88,500 yen in the same period of 2005 and 93,700 yen through fiscal 2005. The averaged selling price is estimated to become 96,000 yen per tonne in the half year ending September 2006 and to 97,000 yen through fiscal 2006. Mr. Honbe said that the firm expects the selling price rising by the achievement of the price hike for specific users, mainly automobile makers.