Japanese steelmaker Nippon Steel Corporation has released its financial results for 2008, which show a severe drop in profits from the previous year as the company's steel production and shipment volumes sank dramatically in the fourth quarter.
In 2008, Nippon Steel's net profit amounted to Yen 155.08 billion (approx. US$1.6 billion) -- down 56.3 percent year-on-year, due to a sharp decrease in demand for automobiles and other products amid the global economical downturn.
During the period in question, Nippon Steel registered a 37.1 percent decrease in its consolidated operating profit to Yen 342.93 billion (approx. US$3.5 billion), and a 1.2 percent drop in its sales to Yen 4.77 trillion (approx. US$48.6 billion), both compared to 2007.
In Q4 2008, Nippon Steel moved forward the scheduled suspension of operations for the renovation of blast furnace No. 1 at its Oita Works, carried out the banking of the blast furnace No. 2 at the Kimitsu Works, and implemented various additional measures that resulted in a major reduction in steel production by nearly four million mt from the previous year. These measures resulted in the lowest fourth-quarter steel production and shipment volumes in the company's history.
As regards the future, Nippon Steel expects neither operating profit nor net profit in the current business year through next March, though the estimates are tentative, citing anticipated record-low production in the first six-month period.
Meanwhile, Nippon Steel said that from the second quarter onward it expects business performance and real demand to start recovering with an accompanying rebound in production output volume supported by the progress made in inventory adjustments in the main demand segments.