Japanese steelmaker Kobe Steel Ltd has issued its financial results for the first quarter ended June 30 of the financial year 2020-21.
For the given period, Kobe Steel has reported a net loss of JPY 13.1 billion ($124.2 million), increasing from the net loss of JPY 1.1 billion recorded in the same quarter of the previous financial year. The company's consolidated net sales revenues for the first quarter of the financial year amounted to JPY 374.1 billion ($3.54 billion), falling by 19.4 percent year on year.
Kobe Steel produced 1.17 million mt of crude steel in the period in question, down 31.97 percent year on year. Kobe's steel product sales volume in the given period declined by 28.67 percent to 970,000 mt, compared to 1.36 million mt recorded in the same period of the financial year 2019-20. According to Kobe Steel, both sales and profits declined year on year due to the impacts of the coronavirus.
In the financial year 2020-21, Kobe Steel’s crude steel production is estimated to be about 5.4 million mt and Japan’s crude steel production is estimated to be about 80 million mt. The company’s sales volume is estimated to be about 4.35 million mt in the given year.
The economic environment impacted by the coronavirus is anticipated to recover toward the end of FY 2020-21. Kobe Steel forecasts earning an additional profit of JPY 50 billion through emergency measures to improve profits centered on the reduction of fixed costs and to cut costs in the materials businesses.
On May 25 this year, Japan completely lifted the state of emergency, and economic activity gradually resumed. However, the end of the coronavirus pandemic still remains uncertain. Due to reduced demand from the impact of the coronavirus pandemic, Kobe Steel’s sales volume is expected to decline sharply. As a result, the company’s net sales in the fiscal year 2020-21 are anticipated to reach approximately JPY 1.64 trillion.
