Japanese steelmaker Kobe Steel Ltd has issued its financial results for the first half ended September 30 of the fiscal year 2020-21.
For the given period, Kobe Steel has reported a net loss of JPY 15.2 billion ($145.93 million), increasing from the net loss of JPY 6.2 billion recorded in the first half of the previous financial year. The company’s consolidated net sales revenues for the first half of the current financial year amounted to JPY 776.4 billion ($7.45 billion), falling by 17.78 percent year on year. Both sales and profits decreased significantly year on year despite a recovery from the first quarter that was severely impacted by the coronavirus.
Kobe Steel produced 2.48 million mt of crude steel in the period in question, down 26.8 percent year on year. Kobe’s steel product sales volume in the given period declined by 25 percent to 2.04 million mt, compared to 2.72 million mt recorded in the first half of the previous financial year. The sales volume decrease by and large centered on sales to the automobile industry amid the impact of the coronavirus.
According to Kobe Steel, its steel exports declined by 16.4 percent year on year to 610,000 mt, while its domestic sales fell by 28.5 percent year on year to 1.43 million mt. The company’s main material and export prices fell.
Kobe Steel forecasts its production and sales will improve compared to the previous forecast owing to a recovery of demand in the automotive sector and the effect of associated inventory accumulation. According to the company, although the economic environment remained severe throughout the first half, earnings increased from the previous forecast due to the recovery of demand mainly in the automotive sector, cost reduction efforts such as emergency profit improvement, cost improvement associated with a decreased reduction rate of steel production, improvement in the impact of inventory valuation, and other factors.