JFE Steel posts lower sales revenue but higher profit for Q1 FY 2012-13

On July 26, Japan's second-largest steelmaker JFE Holdings Co. announced a net income of JPY 18.14 billion ($232.1 million)for the first quarter ended June 30 of the fiscal year 2012-13, compared to a net profit of JPY 7.12 billion in the corresponding period of the previous fiscal year, when the steelmaker posted an extraordinary loss related to damage to its facilities caused by the earthquake disaster which hit Japan on March 11, 2011. JFE expects to register a net profit of JPY 80 billion (1.02 billion $) in the current fiscal year.
 
In the first quarter of the current fiscal year, JFE posted net sales of JPY 730.63 billion ($9.35 billion), decreasing by 3.2 percent year on year amid the harsh economic environment in Japan and in the export markets, due to the persistent strength of the yen and the ongoing global economic recession. However, the producer said that there was some demand resulting from reconstruction efforts following the March 11 earthquake.
 
JFE's crude steel output in the first fiscal quarter was 7.24 million mt, up from 6.94 million mt in the previous quarter. The steelmaker expects second quarter output to be about 7.2 million mt. In the meantime, JFE is expecting to achieve crude steel production of 14.4 million mt in the first half of the current fiscal year, up from 13.65 million mt a year earlier.
 
According to JFE's statement, the outlook in the steel business is unclear due to the slowdown in growth in Asian economies, partly as a result of the European debt crisis. In Japan, meanwhile, there is still some concern regarding the competitiveness of domestic manufacturing in light of the continuing strength of the yen, said JFE, adding that  the Japanese manufacturing sector is maintaining a recovery trend, supported by reconstruction demand and government subsidies for eco-friendly cars.