Japan's two biggest steelmakers will likely downgrade earnings for the year to March 2009 and announce a 12 percent drop in profits, a leading Japanese business newspaper said on Sunday.
Nippon Steel in October said it expected a one percent year-on-year drop in operating profit to 540 billion yen (six billion dollars) but will now lower that estimate to 480 billion yen, a 12 percent decline, the Nikkei daily said.
The paper cited falling output at key clients of the country's top steel firm, especially automakers. Meanwhile JFE Holdings, the nation's second-largest steelmaker, is also likely to downgrade projections for operating profit to 450 billion yen, which would also be down 12 percent from the previous year, the paper said.
JFE had earlier forecast a four percent decline to 490 billion yen. Neither firm could be reached for immediate comment on the report. Nippon Steel and JFE Holdings have announced plans to cut production to one million tonnes and 500,000 tonnes, respectively, but both will now be forced to reduce output more quickly, the paper said.