Japanese first half performance and expectations
For the first half financial year ending on September 30, 2002, Japan's largest steelmaker Nippon Steel posted a group net loss of Yen 5 billion ($41 million). Despite this loss recorded, Nippon Steel's steel sales grew by 4.1% year-on-year in the first half to Yen 935.7 billion ($7,6 billion) with the help of active domestic automotive industry, recently rising exports into other Asian countries together with cost cutting and restructuring applications within the company, rallying the core steel business. The group's steel business operating profit rose from Yen 15.8 billion ($129 million) to Yen 37.2 billion ($303 million). The group's sales also grew by 3.5% to Yen 1.25 trillion and total consolidated operating profit rose by 27% to Yen 41. billion. For the first half of this year, the merger of Japanese Kawasaki Steel and NKK Corp. recorded a consolidated profit of Yen 17.6 billion ($144 million) and an operating profit of Yen 50 billion ($ 409 million). JFE Holdings expects to record a net group profit of Yen 33 billion, revising at the same time its profit forecast for the whole year upward, to Yen 142 billion from the September forecast of Yen 133 billion. This proves cost cutting measures working more proper than expected. The positive impacts of cutting costs can be seen on Japan's fourth largest steel firm Sumitomo Metal's financial reports as well. First half results of the company appear enough to offset the declining sales in the first half. The group operating profit rose by 68% to Yen 27 billion despite the decline of 9.6% of group sales. The predictions for the full financial year are revised upwards, to Yen 17 billion from the earlier quoted amount of Yen 15 billion. Kobe Steel, the fifth largest steelmaker in Japan, raised a group net profit of Yen 5.2 billion compared with a Yen 10.5 billion loss recorded last year in the same period. Operating profit reached Yen 34.5 billion levels from 15.2 billion although first half group sales fell to Yen 577.4 billion from Yen 578 billion. The company forecasts group sales of Yen 1.18 trillion and net group profit of Yen 10 billion for the full year. Last year all major steelmakers of Japan posted loss for the full year with the exception of Kawasaki Steel. This was a result of weak domestic demand, strong competition in the international market and the pressure for price cuts from their major customers of automotive and electronics manufacturers. However this year's rising demand both domestically and internationally and consolidation projects among Japanese steelmakers seems to have helped them out. According to the outlook of these major Japanese steelmakers' first half financial statements, the cost cutting measures seem to have helped with their performance. Nevertheless, the doubts are there regarding the possible negative impacts of Chinese import safeguard that might bring export levels down into Asia from Japan together with the global economic uncertainty for the full year performance.