Tokyo Steel to Post Recurring Loss in F2011

Tokyo Steel Manufacturing announced on Wednesday the firm expects 10 billion yen of recurring loss for fiscal 2011 ending March 2012 compared with 9.095 billion yen of loss in fiscal 2010. The firm posts annual loss for 3 years in a row through fiscal 2011.

The firm expected zero recurring profit for fiscal 2011 as of October 2011. The margin between steel selling price and ferrous scrap cost is narrower and the steel sales volume is lower than the former expectation.

The firm reported the recurring loss increased by around 3 billion yen in October-December 2011. The wider loss was due to 900 million yen from smaller margin, 1 billion yen from inventory valuation and more than 1 billion yen from lower production.

The firm posted 6.183 billion yen of recurring loss in April-December compared with 4.219 billion yen in same period of 2010. The sales increased by 11.6% to 127.916 billion yen from same period of 2010. The firm posted around 2.3 billion yen of onetime loss on shutdown of Takamatsu plant. The firm posted quarterly loss for 2 quarters in a row. The firm is still willing to distribute 3 yen per share of dividend for the fiscal year end and 6 yen for fiscal 2011 compared with 3 yen for year end and 8 yen for fiscal 2010.

The steel sales volume increased by 135,000 tonnes to 1.813 million tonnes including 260,000 tonnes at Tahara plant in April-December from same period of fiscal 2010. The export decreased by 15,000 tonnes to 64,000 tonnes. The export represented 3.2% of the total sales value.

The firm expects averaged 62,500 yen per tonne of steel selling price and 31,500 yen of ferrous scrap cost for January-March 2012. The firm expects the recurring loss increases by 900 million yen during the period. The firm expects 2.5 million tonnes of steel sales for fiscal 2011, which is 200,000 tonnes lower than former outlook.