Posted on 30 Oct 2014
Nippon Steel & Sumitomo Metal Corp. reported a 22 percent gain in second-quarter profit as a weaker yen helped Asia’s biggest steelmaker overcome industry overcapacity and lower prices.
Net income rose to 63.91 billion yen ($59 million) in the three months ended Sept. 30 from 52.2 billion yen a year earlier, according to Bloomberg calculations based on six-month results released today by the Tokyo-based company.
Nippon Steel, formed in October by the merger of Nippon Steel Corp. and Sumitomo Metal Industries Ltd., forecast today net income will reach 250 billion yen for the full year, up from an earlier estimate of 248.4 billion yen.
The shares rose as much as 3.7 percent to 282.6 yen and traded at 280.8 yen as of 1:40 p.m. in Tokyo, paring declines this year to 20 percent.
The yen depreciated 7.6 percent to the dollar during the three months through Sept. 30, giving Japanese steelmakers and their auto customers a competitive edge over rivals. JFE Holdings Inc., Nippon Steel’s closest domestic rival, said this week full-year profit will rise 17 percent, aided by demand from domestic customers and the weaker yen.
The increase in profit comes as Nippon Steel finds itself embroiled in a spat with Techint Group over control of Usinas Siderurgicas de Minas Gerais SA, the Belo Horizonte, Brazil-based company known as Usiminas.
Usiminas’ chief executive officer was fired in September over alleged financial misconduct in a vote decided by Chairman Paulo Penido. The chairman is backed by Nippon Steel.
The spat has soured relations between the two companies, which signed an agreement in 2012 to jointly manage Usiminas.
