Japanese Steel Makers Increase Profit Forecasts

Major Japanese steelmakers Sept. 7 raised their earnings forecasts for the fiscal year ending next March because of brisk demand for high-end steel and a sustained rise in selling prices. Nippon Steel Corp and Kobe Steel Ltd. promised their first interim dividend payments in 14 years while JFE Holdings Inc said it will return cash to investors at the half-year mark for the first time since its creation in 2002.

Nippon Steel now expects to post net profit of 300 billion yen (US$2.58 billion) on revenue of 4.1 trillion yen for this fiscal year, having previously forecast a net profit of 280 billion yen on revenue of 4.0 trillion yen. "In Japan, steel demand has been brisk, thanks to high levels of housing starts and plant construction, while in the export market, demand for high-end products has also been tight, especially in the East Asian area," Nippon Steel executive vice-president Nobuyoshi Fujiwara said.

JFE Holdings said it now expects to earn a net profit of 280 billion yen (US$ 2.4 billion) on revenue of 3.16 trillion yen for this fiscal year, having previously forecast net profit of 270 billion yen on revenue of 3.12 trillion yen. "A better-than-expected improvement in the export market more than offset the adverse impact of rising procurement costs, allowing us to beat the profit target originally set," JFE Holdings executive vice-president Toshikuni Yamazaki said.

Kobe Steel said it now projects net profit of 90 billion yen (US$773 million) on revenue of 1.82 trillion yen, up from previous estimates of 85 billion yen and 1.75 trillion yen. Kobe Steel senior managing director Takashi Takatani said, "Domestic demand from auto makers and shipbuilders continues to be brisk, while export demand is now improving, led by thin steel sheets."

Copyright Agence France-Presse, 2006

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