Nisshin Steel Forecasts 94.6% Y/Y Recurring Profit Decrease in F2011

Nisshin Steel announced on Friday the firm’s full-year consolidated recurring profit is now estimated to decrease by 94.6% or down by 10 billion yen to 1 billion yen in fiscal 2011 ending in March 2012 compared with the previous fiscal year. Market condition has worsened for the company since steel import has increased due to high yen rate and overseas steel market prices have weakened. The firm forecasted full-year net loss at 10 billion yen though the previous estimation was the net profit at 7 billion yen. This would be the first full-year net loss in two years.

For nine months of April-December, Nisshin Steel posted consolidated recurring profit at 9 billion yen. The profit dropped by 44.7% year-to-year. The profit for stainless steel business decreased by 76.9% to 1.5 billion yen for the nine months.

For three months of January-March, the firm forecasts recurring loss at 8 billion yen, in which stainless steel business accounts for 5.5 billion yen. The three-month net loss is estimated at 12.2 billion yen. For a full year of fiscal 2011, net loss would total 10 billion yen due to investment evaluation loss and reversal of corporate tax assets.

Three-month crude steel output is planned at 930,000 tonnes for January-March. The output for stainless steels would be 110,000 tonnes. The average sales price is estimated at 116,000 yen per tonne for January-March. Export sales rate would represent 14% for January-March.