Japan's biggest steelmaker Nippon Steel said on January 27 it suffered a $16 million loss for the nine months to December and downgraded its full-year forecast to break-even. The company will become the world's second-largest steel firm in October, when a merger with smaller rival Sumitomo Metal Industries goes into effect, generating savings in the face of increasingly intense global competition.
But Nippon Steel's group net loss for the nine-month period came to 1.3 billion yen, instead of a 104.5 billion yen profit the previous year, mainly due to its shareholdings in other firms falling in value, it said.
"The company recorded a special loss due mainly to the stagnant stock market conditions and a consequent loss on the valuation of investments in securities, including investments in domestic listed stocks," the firm said in a statement.
Operating profit plunged 46.0 percent to 82.2 billion yen for the nine months on sales of 3.07 trillion yen, up 1.5 percent from a year earlier.
"The Japanese economy rebounded from the temporary setback caused by the Great East Japan Earthquake," Nippon Steel said.
"But business conditions continued to be unstable due to the slowdown in economic growth overseas and other factors, including the persisting historic high levels of the yen," it said.
Nippon Steel revised its forecast for the full year to March 31 downward from an 85 billion yen net profit to break-even, and lowered its full-year sales forecast to 4.05 trillion yen from 4.2 trillion yen.
Global competition in the steel industry has intensified in recent years with demand spurred by emerging economies such as China, which are undertaking huge construction, infrastructure and manufacturing projects.