Nip­pon Steel prof­its fall as oil prices tum­ble

The China Post - - WORLD BUSINESS -

Nip­pon Steel & Su­mit­omo Metal said Tues­day its net profit fell al­most 12 per­cent in its fis­cal year to March, as plung­ing oil prices led to losses at a Brazil­ian af­fil­i­ate.

The Tokyo-based com­pany, one of the world’s big­gest steel­mak­ers, said its an­nual net profit came to 214.3 bil­lion yen (US$1.8 bil­lion) and fore­cast weak mar­ket con­di­tions for the year ahead.

But its op­er­at­ing profit grew 17.1 per­cent in fis­cal 2014 from the pre­vi­ous year to 349.5 bil­lion yen, helped by the weaker Ja­panese cur­rency and lower prices of the iron ore used in steel­mak­ing, while sales rose 1.7 per­cent to 5.6 tril­lion yen.

The com­pany blamed part of the slump in earn­ings on an ex­tra­or­di­nary loss at its seam­less pipe maker Val­lourec & Su­mit­omo Tu­bos do Brasil (VSB), which sup­plies the oil and gas mar­ket.

En­ergy com­panie s around the world have been rein­ing in in­vest­ments since oil prices more than halved last year, but the in­dus­try has been hit par­tic­u­larly hard in Brazil where its top player, Petrobras, is fac­ing a huge cor­rup­tion scan­dal.

Nip­pon Steel also booked a loss tied to dis­man­tling in­ac­tive fa­cil­i­ties in Ja­pan.

The com­pany did not pub­lish a profit es­ti­mate for fis­cal 2015, which started this month, cit­ing un­cer­tainty over the price of steel prod­ucts.

But it warned it would have to trim pro­duc­tion, due to ex­pected weak­ness in in­ter­na­tional mar­kets.

“A pro­jected mod­er­ate rise in de­mand in the ASEAN (As­so­ci­a­tion of Southeast Asian Na­tions) re­gion will be off­set by a down­turn in China, a slow­down in en­ergy-re­lated de­mand trig­gered by a sharp drop in the crude oil mar­ket and other fac­tors,” the com­pany said. “In­ter­na­tional mar­ket con­di­tions will likely re­main weak amid the per­sist­ing ex­ces­sive sup­ply of steel prod­ucts in China and else­where in East Asia.”

Newspapers in English

Newspapers from Taiwan

© PressReader. All rights reserved.