TOKYO: Japan’s Kobe Steel on Monday lifted its annual net profit forecast for the year just ended to 7 billion yen ($63 million) from nil, as the yen’s drop helped boost machinery exports and an electricity crunch in winter raised its power sales.

“A weaker-than-expected yen against the US dollar helped improve profitability in our exports of construction machinery while power sales volume expanded amid an electricity crunch during the winter,” a Kobe Steel spokesman said.

The dollar hit a one-year high versus the yen in March as investors bet that fiscal stimulus and aggressive vaccinations will help the United States lead a global recovery from the pandemic.

Japan’s wholesale electricity prices hit record highs in January, stoked by cold weather, causing a supply crunch and sending power generators scrambling to source supplies.

The earnings prediction by Japan’s third-biggest steelmaker and the supplier of aluminium and copper products also comes as a global chip shortage failed to slow down automobile production, as the company had anticipated, the spokesman said.

The automobile industry has been grappling with a shortfall in chip supply since late last year, driven by coronavirus lockdowns in Southeast Asia and bulk-buying by US sanctions-hit Chinese tech giant Huawei Technologies while a recent fire at a Japanese semiconductor factory has exacerbated the shortage.

Kobe Steel’s latest profit forecast compares with a net loss of 68.0 billion yen in the year ended March 2020 when steel demand from the manufacturing industry declined and steel prices slumped amid the US-China trade war, even before the COVID-19 pandemic hit global demand.

It had not expected to make an annual net profit for the year ended March 31, 2021 in its February forecast. It also now predicts a recurring profit of 6 billion yen, instead of its February forecast of a loss of 10 billion yen. It’s scheduled to report annual results on May 11.