Japan Major 4 Stainless Makers Post Better F2010 Results

Nippon Yakin Kogyo announced the financial results on Tuesday the firm posted consolidated operation profit for fiscal 2010 ended March 2011, which was the first profit in 3 years, while the firm posted recurring loss. Other Japanese major 3 stainless steel makers posted recurring profit. Nippon Yakin Kogyo and Nippon Steel & Sumikin Stainless Steel (NSSC) posted more than 10 billion yen of net loss. Three makers of the 4 majors failed to disclose the outlook for fiscal 2011 under uncertainty for stainless and the raw materials market. They have to improve the profitability through competitive products under shrinking domestic market when their international business condition gets severer with continuous expansion by the rivals in South Korea and China.

Nippon Yakin Kogyo posted 1.034 billion yen of consolidated operating profit for fiscal 2010 while the firm posted 439 million yen of recurring loss compared with 6.635 billion yen of loss for fiscal 2009. The results were better than recent outlook as of March. The net loss was 10.467 billion yen due to reversal of 8.214 billion yen deferred tax assets. The firm expects 2.5 billion yen of recurring profit and 2 billion yen of net profit for fiscal 2011 with same level of sales as fiscal 2010. The firm expects the profit is 1.5 billion yen for recurring profit and 1.2 billion yen for net profit for the first half. The sales volume decreases by 40,000 tonnes to 240,000 tonnes for the full year from fiscal 2010 due to lower export.

NSSC’s shipment increased by 16.8% to 885,000 tonnes in fiscal 2010 from fiscal 2009. Nisshin Steel’s stainless shipment increased by 4.2% to 500,000 tonnes. Nippon Yakin Kogyo reported the shipment increased by 9.6% to 241,000 tonnes for commodity grade products and by 39.3% to 39,000 tonnes for high performance products. Nippon Metal Industry’s shipment increased by 1.2% to 261,000 tonnes. The major 4 makers increased the sales volume while they were suffered from low profitable export market.

Nisshin Steel posted 6 billion yen of adjusted recurring profit for stainless unit for fiscal 2010 while the firm posted no inventory valuation profit for the second half. The adjusted recurring profit was 3 billion yen each for the first and second half.

Nippon Metal Industry reposted the sales of precision strip and foil products increased by 75% for offshore market and by 31% for domestic market in fiscal 2010 from fiscal 2009 while Kinuura plant operated only at 70% level. The firm realized 1.1 billion yen of cost reduction after 4.4 billion yen of reduction in fiscal 2009.