Kobe Steel Reviews Down Steel Division’s Profit Forecast for F2010

Kobe Steel announced on Thursday its consolidated recurring profit for nine months of April-December 2010 improved to 78.8 billion yen from 23.9 billion yen loss in the same period of fiscal 2009. The firm didn’t change full-year financial result forecast for fiscal 2010 ending in March 2011 but reviewed each division’s profit forecast including steel division. Steel division would post recurring loss for January-March, which would be the first quarter loss since July-September 2010.

Kobe Steel forecasts its full-year recurring profit would improve by 69.8 billion yen year-on-year. The improvement is estimated at 97.5 billion yen by production and shipment recovery, 17 billion yen by cost reduction, 48 billion yen by inventory valuation and 30 billion yen by subsidiaries’ profit improvement. Meanwhile, the profit forecast involves 94 billion yen year-on-year minus due to raw material cost up.

The firm reviewed steel division’s recurring profit forecast down by 3 billion yen to 18 billion yen for fiscal 2010. The quarter loss of 3.9 billion yen is obtained for January-March.

For nine months of April-December, Kobe Steel’s total recurring profit improved by 102.8 billion yen from a year earlier. The improvement was 69 billion yen by production and shipment recovery, 13 billion yen by cost reduction, 55.5 billion yen by inventory valuation and 34 billion yen by subsidiaries’ profit recovery. The negative impact was 59 billion yen by rising raw material price.

For three months of October-December, the recurring profit increased by 18.3 billion yen to 29.5 billion yen from the previous quarter. Steel sales volume decreased by 10,000 tonnes to 1.55 million tonnes quarter-on-quarter while average sales price upped by 2,000 yen to 81,800 yen per tonne.