Japanese steelmakers Nippon Steel & Sumitomo Metal Corp. (NSSMC) and Kobe Steel Ltd have announced that they expect lower earnings for the full financial year starting April 1. Shares of both companies have declined after their announcements of their financial results for the first quarter of the current financial year.
For the first quarter, Japanese steelmaker NSSMC posted a net profit of JPY 38.9 billion ($367 million), falling by 56.8 percent compared to the corresponding quarter of the previous financial year. The decline in the net profit is due to a rise in raw material prices, the impacts from the electricity outage caused by lightning at the Kimitsu Works, inventory valuation difference, and other factors. In the given period, the company's net sales amounted to JPY 1.52 trillion ($14.33 billion), up 4.3 percent year on year.
Kobe Steel posted a net loss of JPY 1.15 billion ($10.84 million) in the same period, compared to a net profit of JPY 12.7 billion in the corresponding period of the previous financial year. In the first quarter, the company’s sales revenues amounted to JPY 464.45 billion ($4.4 billion), down 2.9 percent year on year.
Kobe Steel stated that the sales volume of steel products was similar to the same period last year, as demand remained firm mainly in the domestic automotive sector, although some impact from protectionist trade policies were seen. Sales prices increased, compared with the same period last year, owing to a rise in main raw material prices and other factors.