JFE Holdings Inc., Japan’s second-biggest steelmaker, posted a 28-fold jump in fourth-quarter profit, helped by a weaker yen and cost cuts.
Net income was 17.6 billion yen ($178.1 million) in the three months ended March 31, the Tokyo-based company said today in a statement. That compares with 625 million yen a year earlier, according to a Bloomberg calculation.
The Japanese currency has depreciated about 14 percent against the dollar since Prime Minister Shinzo Abe took office Dec. 26, alleviating cost pressures at exporters. JFE exports half of its steel products. The company met its cost reduction target of 120 billion yen in the last fiscal year mainly by using lower grade raw materials, and will likely save an additional 100 billion yen in the current year, Executive Vice President Shinichi Okada told a group of reporters today in Tokyo.
JFE Holdings didn’t provide an earnings outlook for the current year to March 2014, saying it isn’t possible to make accurate forecasts at this stage. Profit is expected to be 120.8 billion yen for the year, almost seven times the level of the previous year, according to the average estimate of 17 analysts compiled by Bloomberg.
JFE Holdings closed up 0.5 percent to 1,964 yen on the Tokyo Stock Exchange, after climbing as much as 4.2 percent, extending its gain over the past year to 23 percent.
JFE has yet to decide whether to build an integrated steel mill in Vietnam, its first outside Japan, because it needs more time to assess risks and profitability, Okada said, without specifying a time frame. JFE Steel Corp. President Eiji Hayashida said in December it will decide on the 300-billion-yen ($3 billion) mill by the end of March.
For the full year ended March 31, the company had a profit of 39.6 billion yen, compared with a 36.6 billion yen loss a year earlier. Sales increased 0.7 percent to 3.19 trillion yen, the company said in the statement.
Based on improving profits, JFE also raised its dividend for the last fiscal year to 20 yen, from the 15 yen it forecast on Jan. 31.
Nippon Steel & Sumitomo Metal Corp., Japan’s biggest steelmaker created by the merger of Nippon Steel Corp. and Sumitomo Metal Industries Ltd. in October, is scheduled to report full-year result on May 10.