Nisshin Steel Revises Down Full-Year Recurring Profit Forecasts to 18B Yen for F2010

Nisshin Steel announced on Friday the firm posted consolidated recurring profit at 11.7 billion yen for the first half of fiscal 2010 ended in September, almost as high as 12 billion yen of the forecast and 11.4 billion yen in the second half of fiscal 2009. The firm posted recurring loss at 65.1 billion yen in the first half of fiscal 2009. For a full year of fiscal 2010 ending in March 2011, the firm revised down recurring profit forecast to 18 billion yen from previously estimated 20 billion yen and net profit forecast to 13 billion yen from previous 17 billion yen due to unforeseeable market condition in the second half year.

The three month recurring profit increased to 10.1 billion yen for July-September from 1.6 billion yen for April-June. The selling price improved along material cost up.

In the first half of fiscal 2010, the sales volume decreased by 50,000 tonnes to 18.4 million tonnes compared with the second half of fiscal 2009. Average selling price of steel products surged by 9,000 yen to 119,000 yen per tonne. Export ratio lowered by 1 percentage points to 16% against total sales. Raw material costs upped by total 28.5 billion yen for iron ore, coal, nickel and chrome. The loss was covered by price improvement, inventory evaluation profit, cost down and better operations at subsidiaries. The recurring profit of stainless business was 5 billion yen, as high as originally expected.

Nisshin Steel forecasted the second six month recurring profit at 6.3 billion yen. Mr. Yoshikazu Tsuda, managing director, explained the sales volume would decrease to 1.72 million tonnes in the second half year due to backwater of Chinese economy and higher yen rate. The recurring profit is forecasted to lower by 5.4 billion yen from the first half year due to material cost upsurge, inventory evaluation loss and lower profits at subsidiaries. The recurring profit of stainless business is estimated at 2.5 billion yen.