Japan Major 5 Steels Post Lower Profit in F2008

Japanese 5 major steel makers posted lower profit for fiscal 2008 ended March 2009 due to surging raw materials cost and sharp drop of steel demand in the second half of the year under worldwide recession. Nippon Steel and Sumitomo Metal Industries expect the consolidated recurring profit is provisionally zero for fiscal 2009 while Kobe Steel expects 30 billion yen of loss and Nisshin Steel expects 50 billion yen of loss. JFE Holdings didn’t disclose the outlook for 2 years in a row.

They could secure profitability for fiscal 2008 despite of the severe condition in the second half year thanks to high profitable first half year. Sumitomo Metals kept 10 yen per share of dividend while other 4 makers reduced the dividend.

The 5 major makers expect lower sales value due to lower volume and selling price for fiscal 2009 from fiscal 2008. The business condition is extremely severe in the first half due to historical low sales volume along with carried high priced raw materials and inventory valuation loss. The 4 makers expect recurring loss for the first half year while Nippon Steel and Sumitomo Metals try to cover the loss in the second half toward full year breakeven.