Japanese steelmaker Kobe Steel Ltd (Kobe) has announced that it has revised its consolidated earnings forecast for the financial year 2015-16, ending March 31, 2016, from the previous forecast made on July 28, 2015.
Kobe Steel stated that it anticipates that the production volume at its Kakogawa Works will decrease due to temporary production trouble, resulting in higher maintenance and other costs. As a result, Kobe Steel has revised its consolidated forecast downward for the first half of the fiscal 2015-16. For the full fiscal year, Kobe Steel anticipates deterioration in its business results mainly in overseas group companies and an increase in maintenance costs for the stable operation of steel production in Japan. With regard to net income, Kobe Steel anticipates losses due to poor business performance mainly in an affiliated company in the construction machinery business in China.
Accordingly, in the first half of the fiscal year 2015-16, the company expects its net sales to total JPY 940 billion ($7.8 billion), decreasing from the previous forecast of JPY 950 billion ($7.92 billion) and compared to JPY 916 billion ($7.64 billion) of net sales registered in the first half of the fiscal year 2014-15. In the given period, the company’s operating income is expected to amount to JPY 45 billion ($375.39 million), down from JPY 50 billion ($417.1 million) forecast in July, while its forecast for net income declined to JPY 10 billion ($83.4 million), compared to the previous forecast of JPY 20 billion ($166.85 million).
In the whole fiscal year 2015-16, Kobe Steel expects net sales of JPY 1.9 trillion ($15.8 billion) compared to the previous forecast of JPY 1.95 trillion ($16.25 billion) and its operating income to amount to JPY 95 billion ($793 million) compared to the previous forecast of JPY 125 billion ($1.04 billion), while the company expects its net income to decrease to JPY 25 billion ($208.7 million) from the previous forecast of JPY 60 billion ($500.8 million).