Nippon Steel Sales Offset by Higher Costs
Posted on: Friday, 28 April 2006, 06:00 CDT
By KOZO MIZOGUCHI
TOKYO - Japan's top steel maker Nippon Steel said Friday profit was flat in the most recent quarter compared to a year ago as solid sales of high-grade steel products offset higher costs of raw materials.
Nippon Steel, the world's third-largest steel maker by output, posted a group net profit of 73.79 billion yen ($647.3 million) for the January-March period, slightly up from a 73.49 billion yen profit in the same quarter a year earlier, the Tokyo-based company said.
Sales inched up to 1.09 trillion yen ($99.56 billion) for the quarter from 1.021 trillion yen. Revenue held steady as Nippon Steel implemented cost-cutting efforts by trying to increase production capacity among its group companies to absorb higher prices of raw materials, the company said.
Nippon Steel said demand for high-grade steel sheets and plates for automobile production and shipbuilding remains strong, helping the company's healthy earnings.
The company said it has adequately responded to the changing market for general-purpose steel products amid Chinese steel makers' increased output.
Over the past year, Nippon Steel said it agreed with Sanyo Special Steel Co. to increase production through closer cooperation by helping each other. The Himeji-based Sanyo Steel is strong in bearing steel and bearing pipes, while Nippon Steel has technology to produce high-quality steel products.
For the full fiscal year ended March, Nippon Steel booked a 56 percent rise in net profit to 343.90 billion yen ($33.02 billion) from 220.60 billion yen in the previous fiscal year.
Sales for the year rose 15 percent to 3.906 trillion yen ($334.27 billion) from 3.389 trillion yen.
For the current fiscal year through March 2007, Nippon Steel forecast net profit of 280.00 billion yen ($2.46 billion) on sales of 4.000 trillion yen ($335.08 billion).
Nippon Steel shares, which have risen early 70 percent since July 2005, closed down 1.2 percent to 420 yen ($33.68) in Tokyo.
Source: Associated Press/AP Online
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