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Financial Results from Apr. to Dec. of 5 Ordinary Steel Mini Mills
5 electric steelmakers, such as Osaka Steel Co., Ltd, Kyoei Steel Ltd., Chubu Steel Co., Ltd., Tokyo Tekko Co., Ltd. and Yamato Kogyo Co., Ltd., announced consolidated financial results from April to December 2018 on January 31. 3 companies, except Osaka Steel and Chubu Steel, increased in ordinary profit. Osaka Steel increased in profit on operating profit basis. 3 companies, such as Osaka Steel, Kyoei Steel, and Yamato Kogyo revised up a full-year forecast.

<Osaka Steel>: The consolidated sales quantity of steel product was 892,000 tons. Although operating profit slightly increased by 0.2% from the same period of a year ago, ordinary profit declined by 5.7% ditto. Although sales increased, profit declined on ordinary profit basis. ROS was 6.9%, down by 2.1% ditto. Because Osaka Works of the company and Nihon Steel, a subsidiary of the company, had damage by typhoon No. 21, the company posted Y 574 million of extraordinary loss for casualty loss. As a result of that, the net profit declined by 19.9% ditto.

<Kyoei Steel>: Sales and profit increased, and ROS improved to 3.4%. Shipments of steel products in the domestic steel division increased to 1,300,000 ton, up by 43,000 tons from the same period of a year ago. Although the price of ferrous scrap increased by Y5,500/ton or 18.2% ditto, the sales prices of steel products increased by Y 11,100/ton or 19.6%. As a result of that, the metal spread expanded by Y5,600/ton or 21.1%. The overseas steel business was Y 74,327 million in sales, up by 37.3%, and operating profit was Y 1,092 million, up by 15.6%. The company revised up a full-year forecast, because the price of ferrous scrap was less than expected continuously.

< Chubu Steel>: Both sales and profit increased. ROS was 4.3%, down by 4.2% ditto. Concerning the steel related business, the demand for heavy plate, which was a major item, kept firmer tone, and both sales quantity and sales price of heavy plate were above that of the same period of a year ago. But the operating profit in steel related business segment declined by 49.5% or reduced by almost half to Y 1,365 million, because the average unit purchase price of ferrous scrap exceeded that of the same period of a year ago. The company maintained a full-year forecast of FY 2018, as the company expected Y 2.4 billion for ordinary profit in FY 2018.

<Tokyo Tekko>: Sales increased by 26% ditto, thanks to the increase of shipment quantity and product price. Operating profit/loss improved, thanks to the increase of metal spread by the rise of product price. Although the cost of sub-raw materials, such as ferro-ally and electrode, increased, ordinary profit/loss improved by Y 3,125 million from the same period of a year ago, because the company posted an equity in earnings of affiliated companies or a negative good will on the non-operative income. The company maintained a full-year forecast of FY 2018, as the company expected Y 1 million of surplus for operating profit/loss in FY 2018.

<Yamato Kogyo>: Both sales and profit increased. ROS increased to 15.9%. The investment gain on equity method is Y 13,079 million, drastically up by 150.3% from the same period of a year ago. The segment profit of steel business in each country varied, and it was as follows. Japan was Y 3,957 million, up by 48.3% ditto. South Korea, which held YK Steel, was Y 396 million, down by 80.2% ditto, and Thailand, which held Siam Yamato, was Y 3,100 million, up by 14.2% ditto. The company revised up a full-year forecast, thanks to the improvement of financial results of a company accounted for using the equity method, and the company raised a forecast of net profit in FY 2018 by Y 2.5 billion.
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