Nippon Steel & Sumitomo Metal Corp. (5401), the world’s larger steelmaker by market value, forecast full-year profit that lagged analyst estimates. Its shares fell.
Net income may be 200 billion yen ($2.04 billion) in the 12 months ending March 31, the Tokyo-based company said today in a statement. That compares with the average estimate of 232 billion yen from 18 analysts compiled by Bloomberg.
Shares of Nippon Steel, formed by the merger of Nippon Steel Corp. and Sumitomo Metal Industries Ltd. on Oct. 1, 2012, pared earlier gains, dropping as much as 11 yen, or 3.2 percent, to 329 yen in Tokyo trading after the release.
“Our second-half results will be affected by plans to reline the No. 4 blast furnace at the Yawata Works and the non-recurrence of valuation gains booked on foreign currency-denominated assets due to currency fluctuation,” according to a statement released by the company.
Chairman Shoji Muneoka has vowed to accelerate cost cutting targets by reorganizing its inherited steelworks in Japan as it seeks to fend off competition from Asian rivals. That push will continue, according to today’s statement.
On a current profit basis, the company raised its forecast, saying it now expects full-year current profit of 340 billion yen, up from an earlier 300 billion yen outlook. Annual sales are forecast at 5.45 trillion yen.
Posco (005490), South Korea’s biggest steelmaker, last week cut its 2013 sales forecast for a second time after reporting a 22 percent decline in third-quarter profit.
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