Nippon Steel and Kobe Steel revised forecasts for 2002

Tuesday, 11 March 2003 14:29:00 (GMT+3)   |  
       

Nippon Steel and Kobe Steel revised forecasts for 2002

As the economic situation in Japan continued to be weak in fiscal year 2002 ending in March 31, 2003 Japanese steelmakers, namely Nippon Steel Corp. and Kobe Steel, last week changed their forecasts for fiscal 2002. World's third largest steelmaker Nippon Steel reported that for the current fiscal year ending March 31, they expect a consolidated net loss of Yen 45 billion(approx. $386 million). The company explained that though they have predicted a profit of Yen 25 billion(approx. $214.5 million) in their previous forecast issued in November, due to restructuring of its financially troubled subsidiary Nippon Steel Chemical Co. at the cost of Yen 84 billion and sharply decreasing value of its stock holdings, they had to revise fiscal 2002 forecast. Added to that Nippon Steel changed its sales expectancy and forecast for consolidated operating profits, respectively from Yen 2.66 trillion to Yen 2.7 trillion and from Yen 125 billion to Yen 130 billion owing to the strong demand particularly from China and South East Asia and its cost-cutting endeavors. Likewise Kobe Steel Ltd., one of Japan's leading steelmakers, said that although they revised both consolidated and non-consolidated sales and pre-tax profits, they had to revise their net profit of Yen 4 billion to a net loss of Yen 4 billion, due to large write-offs on securities. Net sales are expected to increase by Yen 10 billion from previous estimate Yen 800 billion, and pre-tax profit to reach Yen 17 billion from Yen 16 billion by reason of Kobe Steel expecting domestic steel demand from auto manufacturers to be higher in the second half of the fiscal year 2002 and exports to be stronger. However, expectation of a significant loss deriving from write-offs on securities due to weak stock market, had a negative effect on net consolidated profit, decreasing to Yen 1 billion from Yen 10 billion forecast in November.

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