Nippon Steel posts $792 million net loss in H1 FY2009-10

Thursday, 29 October 2009 08:07:20 (GMT+2)

On October 29, Japanese steelmaker Nippon Steel Corporation has released its consolidated financial results for the first half of the current Japanese fiscal year, which ended on September 30.

Accordingly, in the first half of FY2009-10, Nippon Steel's net loss amounted to Yen 71.84 billion ($791.6 million), compared to a net income of Yen 161.68 billion registered in the first six months of the previous fiscal year, while the company's net sales decreased 39.5 percent year on year, reaching Yen 1.57 trillion ($17.34 billion).

"Despite intensive efforts, the substantial impact from the sluggish demand, particularly for the steelmaking and steel fabrication business, that commenced in the second half of the previous fiscal year resulted in major declines in sales and income in the group's overall performance in the half under review compared with the same period of the previous year," the company statement reads.

In the second quarter of the FY2009-10, Nippon Steel produced 6.34 million mt of pig iron -up 31.2 percent quarter on quarter, but down 21.02 percent year on year, while the company's crude steel output totaled 7.38 million mt, increasing by 37.43 percent over Q1 FY2009-10, but down 18.54 percent year on year.

On the other hand, in the first six months of the current fiscal year, Nippon Steel's pig iron output amounted to 11.19 million mt, declining by 9.83 percent compared to previous half, and down 30.37 percent year on year. Meanwhile, in the period in question, the company's crude steel decreased two percent compared to H2 2008-09, and down 30.06 percent year on year, reachin 12.75 million mt.

In the third quarter of the current fiscal year, the company anticipates growing domestic demand for steel, with recovery in economic activity supported by the manufacturing industry, most notably in the automobile and electric machinery segments, as manufacturers continue to make progress with inventory adjustments and the positive effects of government economic measures emerge. According to the company the outlook for steel demand will remain steady in international markets, particularly in China, India, and other countries in Asia.

As regards to the full fiscal year, the company forecasts major declines in sales and income, as a result of factors, such as the decline in production and shipments due to downturn in the world economy, deterioration in the price structure, and the temporary negative impact from inventory valuations along with the arrival of raw materials bearing the high prices contracted in the previous fiscal year.

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