May 24, 2002	Friday	Rabi-ul-Awwal 11,1423

TOKYO, May 23: Three major Japanese steelmakers said on Thursday they suffered massive losses in the year to March but said they expected to clamber back to profitability in the current year as they streamline operations and demand picks up.

Japan’s largest steelmaker Nippon Steel Corp., along with leading rival NKK Corp. and smaller Kobe Steel Ltd. swung to a loss in the financial year just ended. Another major steelmaker Kawasaki Steel managed to eke out a modest profit.

Nippon Steel suffered its first loss in seven years, plunging to a net loss of 28.4 billion yen from a net profit of 26.5 billion yen previously.

Its pre-tax profit nosedived 85.0 percent to 16.7 billion yen while revenue sank 6.1 per cent to 2,581.4 billion yen.

In the steel industry, domestic demand fell sharply while steel exports deteriorated due to a slowdown in the global economy, said a company official.

But an economic recovery this year would help the giant steelmaker return to profitability.

During the latter part of the fiscal year, we expect an improvement in our business, but should remain cautious about production and shipments in line with demand in the market, Nippon Steel said in a statement.

In the current year, it forecast a net profit of 25 billion yen.

NKK incurred a net loss of 67.6 billion yen in the year to March from a profit of 97.0 billion yen previously, due to the collapse of a US subsidiary and the stock market slump.

But a net profit of eight billion yen is expected this year, after a merger with Kawasaki Steel, NKK said. The pair plan to establish a holding company on September 27.

We expect business conditions in the Japanese economy to remain challenging in the year to March 2003. However, we look for a moderate improvement in the second half based on the assumption that the economy will bottom out, is said.

The company will focus on enhancing profitability in its steel business by firming prices, making further cost cuts and maximising benefits from the consolidation with Kawasaki Steel, said NKK.

Kawasaki Steel bucked the trend with a net profit of 6.8 billion yen following a net loss of 18.2 billion yen previously. It expects a net profit of 25 billion yen this year as global demand recovers.

Kobe Steel lost 28.5 billion yen, compared with a net profit of 6.5 billion yen previously. It too is expecting a pick up in demand to see it produce a net profit this year of five billion yen.

The Asian economy is on a general recovery track. Among various items, exports of steel and machinery to Asian nations are growing rapidly, said Susumu Okano, an economist at Daiwa Institute of Research.

In April, steel production in Japan grew at a fairly high rate. The domestic demand is still slow, but the steel demand in Asia is pulling the industry up, he said.

Japan’s steel exports in April grew 24 per cent year-on-year in monetary value, according to the Ministry of Finance.

But Nippon Steel voiced concern over recent protectionist moves in major markets. The United States in March announced three-year “safeguard” tariffs of up to 30 per cent on certain steel imports.

We are seeing trade protectionism as the United States and the European Union exercised safeguard measures. There are many companies in the world that cannot post profits because of this, Nippon Steel said in a statement.—AFP