Nippon posts strong profit, but sees drop in current year

Japan's largest steel producer Nippon Steel Corporation disclosed that its net profit rose approximately 56 percent in the fiscal year ended March 31 thanks to increased product prices. However, the company said that rising costs and intense competition will reduce earnings in the current fiscal year. Nippon Steel said net profit rose from Yen 220.6 billion ($1.93 billion) a year ago to Yen 343.9 billion ($3.01 billion) in the fiscal year ended March 31. Operating profit grew 34 percent to Yen 576.3 billion ($5.04 billion). The company indicated that the revenue rose 15.3 percent to Yen 3.91 trillion ($34.2 billion) as crude steel production soared from 32.8 million tons to 33.95 million tons. On the other hand, Nippon Steel expects around 18.6 percent drop in full-year profit as greater competition from China lowers global prices and raw material costs rise. Net profit is expected to fall to Yen 280 billion ($2.45 billion) in the fiscal year to March 2007.