Nippon Steel’s Recurring Loss is 55.6 Billion Yen in April-June

Nippon Steel announced on Wednesday the firm’s consolidated recurring loss was 56.6 billion yen in the first quarter for April-June 2009, which was the red for 2 consecutive quarters. The recurring profit was 144 billion yen in the first quarter in fiscal 2008 at ended March 2009. The steel unit’ profit largely reduced due to over carry of higher raw material price, dropped shipping volume and selling price. The firm forecasts consolidated recurring loss decreases to 110 billion yen by 10 billion yen for the half year ending September from beginning forecast in April, while didn’t change the forecasts of consolidated recurring profit at zero for the year ending March 2010. The firm will pass on midterm dividend.

The recurring gain and loss decreased by 200.6 billion yen in April-June from the same period of last year. Especially, steel unit’ loss was large at 160 billion yen by carry-over of raw material and inventory written loss, 110 billion yen by dropped output and shipment, 25 billion yen by dropped selling price, 21 billion yen by group company and 15 billion yen by other reason.

Stand-alone crude steel output decreased to 4.82 million tonnes by 41.9% in April-June from the same period of last year. Steel products shipment decreased to 4.73 million tonnes by 41.5%. Average selling price of steel products decreased to 88,400 yen per tonne by 3,600 yen. Export rate increased to 33.1% by 1.3 percentage points.

The firm forecasts the crude steel output decreases to 6.68 million tonnes by 19.2% in July-September from the same period of last year, steel products shipment decreases to 6.57 million tonnes by 20.7%, average selling price of steel products decreases by about 20% and export rate increases to about 40%.

The firm forecasts consolidated recurring los is 53.3 billion yen, which is the red for 3 consecutive quarters. However, Shinichi Taniguchi, vice president said the profit would be the black at about 20 billion yen except for loss of 60 billion yen by carry-over of raw material and other cost.

Mr. Taniguchi said crude steel output would recover to about 7 million tonnes in October-December, but wouldn’t be clear in January-March 2010 when the supply may increase by enhancement of Asian steel makers’ capacity.