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JFE Cuts Operating Profit Estimate for FY 2005

Posted on: Thursday, 2 March 2006, 21:00 CST

Tokyo, March 2 (Jiji Press)--JFE Holdings Inc. on Thursday cut its group operating profit estimate for the year ending March to 510 billion yen from 520 billion yen, due to a cutback in production and the fallout from a bid-rigging scandal.

The major steel group left intact other estimates, including a group net profit of 310 billion yen, recurring profit of 500 billion yen and sales of 3,050 billion yen.

JFE Holdings expects to pay an annual dividend of 100 yen per share, as previously planned, up 55 yen from the previous year.

The lower operating profit estimate comes after an increase in inventories of thin steel sheets in Japan and the rest of Asia prompted the company to slash production of multipurpose steel products.

Also contributing to the downward revision is the government's suspension of the JFE group's participation in biddings for bridge construction works due to its engineering unit's involvement in an industrywide bid-rigging scheme, JFE Holdings said.

Still, the company remains on track to achieve sharp profit and sales growth in the current business year, thanks to brisk demand from automakers and other major manufacturers.

By segment, the company forecasts sales of 2,690 billion yen at its steel division, 320 billion yen at its engineering division, 29 billion yen at its urban development division and 46.5 billion yen at its large-scale integrated chip division.

The holding company also said the steelmaking unit, JFE Steel Corp., is planned to produce 26.73 million tons of crude steel in the year. The average price of steel products is estimated at 77,000 yen per ton.

JFE Holdings plans to invest about 180 billion yen in facilities and equipment.[EARNINGS]END

Source: Jiji Press English News Service

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