Nippon Steel Has Fourth-Quarter Loss on Demand Slump

By Masumi Suga and Ichiro Suzuki

April 28 (Bloomberg) -- Nippon Steel Corp., the world’s second-largest producer, swung to a fourth-quarter loss as the global recession cut demand from carmakers, electronics companies and builders.

The net loss was 57 billion yen ($594 million) for the three months ended March 31, compared with a profit of 91.9 billion yen a year earlier, the Tokyo-based company said today in a statement filed to the city’s stock exchange. Nippon Steel forecast it will break even this fiscal year.

Nippon Steel and its rivals are cutting production as sales to customers including Toyota Motor Corp. plummet. JFE Holdings Inc., Japan’s second-largest steelmaker, last week posted a 12 percent drop in fourth-quarter net income and didn’t provide a full-year estimate, saying the outlook was “uncertain.” Luxembourg-based ArcelorMittal, the world’s biggest producer, will probably report a second straight quarterly loss tomorrow.

Sales fell to 939.6 billion yen from 1.32 trillion yen a year earlier in the quarter. The company reported an operating loss of 53.6 billion yen, compared with a 137.5 billion yen profit a year earlier.

The Japanese company will delay the planned resumption of a blast furnace in Oita, southern Japan at least until the end of June, President Shoji Muneoka said April 22. The furnace was scheduled to restart operations in mid-May. The company cut executive pay by 16 percent this month and plans to expand a reduction in working days to all its domestic factories from next month.

Nippon Steel shares fell 4.1 percent to 330 yen as of 1:43 p.m. on the Tokyo Stock Exchange. The stock has gained 14 percent this year, compared with a 2.7 percent decline in the benchmark Nikkei 225 Stock Average.

For the year, net income slid 56 percent to 155.1 billion yen, or 24.61 yen a share, compared with a profit of 355 billion yen, or 56.33 yen a share, a year earlier, the Tokyo-based company. Sales fell 1.2 percent to 4.77 trillion yen.

Sales are expected to drop 27 percent this year to 3.5 trillion yen, Nippon Steel said.

To contact the reporters on this story: Masumi Suga in Tokyo at msuga@bloomberg.net; Ichiro Suzuki in Tokyo at isuzuki@bloomberg.net.