Japan-based Nippon Steel Corporation has announced its financial results for the first quarter ended June 30 of financial year 2020-21. In the given quarter, Nippon Steel recorded a net loss of JPY 41.42 billion ($390.5 million), compared to a net profit of JPY 38.90 billion in the same quarter of the previous year, while the company's net sales amounted to JPY 1.13 trillion ($12.25 billion), decreasing by 25.7 percent compared to net sales of JPY 1.52 trillion in the same quarter of the previous financial year, due to lower demand amid the impact of the coronavirus.
Meanwhile, in the first quarter of the given financial year, Nippon Steel produced 7.20 million mt of crude steel, down 34.48 percent, while its steel product shipments amounted to 7.12 million mt, decreasing by 27.42 percent, both year on year. The company expects its crude steel production to increase to approximately 14.90 million mt in the first half and 16.90 million mt in the second half of the year. Its capacity utilization rate is expected to be approximately 60-70 percent in the first half and 80 percent in the second half of the year.
Nippon Steel stated that, although demand for steel products, affected by the coronavirus, is expected to bottom out in the first half of the year and recover in the second half of the year, mainly in the manufacturing industry, it is expected to be at a low level compared to the pre-pandemic period. The company expects a loss of JPY 120 billion for the fiscal year ending March 31, 2021.
Nippon steel expects demand to increase in the second half but still to be at a lower level compared to the pre-pandemic period. The company stated that it will rebuild its profit structure and improve its financial status as soon as possible, and return profit to shareholders.