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|Nippon Steel's Apr - Dec Results: Sales Up, Profit Down|
|= Greater-than-anticipated raw material, fuel costs squeeze profit =|
Nippon Steel Corp announced Jan. 28 its consolidated financial results for the April to December period of 2007; net sales were up 14.3% from the previous corresponding period to 3,506,192 million yen (MY), operating profit down 4.7% to 408,105 MY, and ordinary profit down 0.7% to 434,669 MY. Regarding general economy in and outside Japan and steel business environment, the Company announced the following view points along with:|
while it will be important to monitor closely the impact of the credit contraction in global financial markets sparked by the US subprime loan problem, global economy as a whole continues to expand as emerging countries led by the BRIC's continue to report GDP growth and investment in the fields of energy and infrastructure remains active.
<Steel market in Japan>
In the domestic steel market, production in the field of construction materials has been pared back because of the steep decline in construction activity since the reform in the Japanese Building Standards Law took effect. Even so, demand continues to be robust, especially from the automotive, shipbuilding, machinery, and other manufacturing industries underpinned by expanding demand overseas, and the overall supply - demand relationship in Japan remains tight.
<Steel market outside Japan>
In the overseas steel market, while the economic slowdown in the United States has exposed some weakness in real demand, there is solid demand expansion in other regions arising from economic growth, and Chinese steel exports have fallen off due to export restrictions the government has put into place.
<Costs of raw materials and fuel>
While steel demand continues strong vis-a-vis supply, cost increases have been greater than what we had anticipated as market prices for raw materials and fuels, especially steel scrap, ocean freight, and crude oil, have soared. While we are still striving to reduce costs as much as possible through in-house initiatives, we will continue to seek price increases from our customers by asking for their understanding in view of the higher market prices for raw materials and fuel.
This time NSC has not given remarks on the possible review of the previous outlook made in Oct. 2007 for full Fiscal Year 2007 ending in March 2008.
|last modified : Fri 01 Feb, 2008 [10:58]|