TOKYO : Nippon Steel Corp said on Wednesday that its annual net profit rose 8.9 per cent to 694 billion yen ($5.1 billion) for the year ended in March thanks to higher margins after price increases, but forecast a slump in profit for the current year.
The results beat the company’s own profit forecast of 670 billion yen.
For the business year to March 2024, Japan’s biggest steelmaker expects its net profit to fall 46.7 per cent to 370 billion yen, falling short of a mean forecast of 416.6 billion yen by 11 analysts surveyed by Refinitiv.
The weaker profit was forecast due to an expected appraisal loss on its inventories in light of lower prices of steelmaking raw materials as well as restructuring losses, the company said.
Nippon Steel also said it will spend an additional 90 billion yen to boost its output capacity of high grade non-oriented electrical steel sheet at two of its domestic steel works.
The company will also start studies to shift to electric arc furnace steelmaking from the current blast furnace at its Kyushu Works Yawata Area in southern Japan and Setouchi Works Hirohata Area in western Japan as candidate sites.
The move comes as part of its efforts to reduce carbon dioxide emissions.
As steelmakers worldwide face pressure to cut emissions to combat climate change, Nippon Steel has set itself a goal to trim its CO2 emissions by 30 per cent versus 2013 levels by 2030.
Shares of the company tanked more than 9 per cent after the forecast, underperforming the Nikkei 225 index which was down 0.4 per cent.
($1 = 135.0500 yen)