Japanese steelmaker Kobe Steel cut its profit forecast for the fiscal year 2019-20 (April 2019-March 2020) due to weak results in the first half of the year and still negative sentiments for steel demand from overseas carmakers for the rest of the year. The producer expects to post a JPY 5 billion ($45.9 million) net loss for the fiscal year 2019-20, while previously it was expected to record a net profit of JPY 10 billion ($91.7 million). Ordinary income of the group is forecast at zero for the fiscal year, the company said.
In the steel business, Kobe Steel posted an ordinary loss of JPY 5.8 billion ($53 million) for the first half even despite stable crude steel production of 3.39 million mt. The sales volume of steel products was similar to the same period of last year as firm demand in Japan’s automotive sector was offset by decreased sales in the overseas automotive sector.
The full-year forecast in the steel segment is for an ordinary loss of JPY 5 billion ($45.9 million). “For steel products, demand in the domestic automotive sector is expected to be firm, but in the industrial machinery, construction machinery and some other sectors, demand is anticipated to decline. Overseas, demand from the manufacturing sector, mainly in the automotive sector, is anticipated to decrease [further],” the company said in its report.
$1 = JPY 109.01
