JFE Holdings Posts 20% Lower Recurring Profit for F2008

JFE Holdings announced on Friday its consolidated recurring profit decreased by 20.4% to 400.5 billion yen for a full fiscal year from April 2008 to March 2009 compared with the previous fiscal year. The consolidated net profit was 194.2 billion yen, down by 25.8% year-on-year. The firm set the annual cash dividend at 90 yen per shear for fiscal 2008, lower by 30 yen than fiscal 2007. The firm won’t announce earnings forecast for fiscal 2009 under the unforeseeable business condition.

JFE Holdings posted the record consolidated revenue at 3.9082 trillion yen for fiscal 2008, increasing by 10.4% year-on-year. Kohei Wakabayashi, JFE Holdings’ vice president, said the firm could gain recurring profit for last 3 months of January-March and the annual recurring profit exceeded 400 billion yen despite of rapid deterioration of business environment.

The steel business unit posted annual revenue at 3.4233 trillion yen for fiscal 2008, higher by 6.9% year-on-year, while recurring profit at 412.5 billion yen, lower by 18.9% year-on-year. For the engineering business, both sales and profit improved and regained the black. On the other hand, both sales and profit shrank for shipbuilding, urban development and LSI departments.

In the steel business unit, the recurring profit improved by 650 billion yen thanks to higher selling price of steel products and by 92 billion yen due to cost cut effort. Meanwhile, the recurring profit was impacted by 741 billion yen due to higher raw material costs and by 125 billion yen with lower sales volume of steel products.

JFE Steel’s annual revenue increased by 13.6% to 2.585 trillion yen in fiscal 2008 from fiscal 2007 while the recurring profit decreased by 16.5% to 335.1 billion yen. JFE Steel’s crude steel output decreased by 13% to 26.55 million tonnes through fiscal 2008, which shrank by 28.6% year-on-year to 11.06 million tonnes for the last half of fiscal 2008 and by 41% year-on-year to 4.58 million tonnes for the 4th quarter.

Mr. Wakabayashi explained JFE Group keeps the output reduction of steel products by 40% year-on-year while the firm expects the production could recover in the 2nd quarter and the 2nd half year along the recovery of car production and the progression of steel inventory adjustment. However, he said, it is difficult to forecast annual earnings when the business circumstance is unstable and the firm is in price negotiation for iron ore.