Kobe Steel Gains 8.7 Times Higher Consolidated Recurring Profit in F2010

Kobe Steel announced on Wednesday the firm’s consolidated recurring profit increased by 8.7 times to 89 billion yen in fiscal 2010 ended in March 2011 compared with the previous fiscal year. The recurring profit was even higher than the latest forecast of 80 billion yen. The steel business’ profit turned into black while the aluminum & copper business and KOBELCO Construction Machinery posted much higher profits year-on-year. As for fiscal 2011, Kobe Steel didn’t announce financial forecasts because influences of Japan Earthquake and raw material price upsurge are unclear at present.

The steel business’s recurring profit turned into 23.7 billion yen of black in fiscal 2010 from 24.6 billion yen of loss in fiscal 2009. The recurring profit increased by 6.6 times to 14.7 billion yen for the aluminum & copper business and by 2.7 times to 4.6 billion yen for the welding business. Meanwhile, the recurring profit decreased by 30.4% to 14.5 billion yen for the machinery business and by 35.6% to 3 billion yen for the natural resources & engineering business. As for subsidiaries, KOBELCO Construction Machinery’s profit increased by 4.8 times to 26.3 billion yen. KOBELCO Eco-Solutions’ profit increased by 1.9 times to 3.1 billion yen. KOBELCO Cranes turned into 1.3 billion yen of red from 1.2 billion yen of black.

Kobe Steel’s consolidated recurring profit improved by 78.8 billion yen from 10.2 billion yen in fiscal 2010. The negative factors totaled 106.2 billion yen including material cost upsurge by 94 billion yen and profit down along Japan Earthquake by 3 billion yen. Meanwhile, the positive factors totaled 185 billion yen including sales increase by 90 billion yen, cost reduction by 17.5 billion yen, inventory evaluation profit by 46 billion yen. The three-month recurring profit was 10.1 billion yen for January-March 2011, which was 38 billion yen for April-June 2010, 11.2 billion yen for July-September and 29.5 billion yen for October-December.

Kobe Steel plans crude steel production at 7.6 million tonnes plus extra in fiscal 2011, based on 1.9 million tonnes for January-March 2011. Against the plan, the actual crude steel output in April is 85-90% in Kakogawa iron works and Kobe iron works and the steel products output is 90% in Kakogawa iron works and 70% in Kobe iron works, explained Mr. Hiroaki Fujiwara, Kobe Steel’s vice president. Mr. Fujiwara said the business surroundings are severe due to rising raw material prices and steel demand slowdown. On the other hand, demand for construction machines is increasing and orders are increasing for used fuel canister for nuclear power plants, power source car and booster for gas turbine of power generating plants.