TOKYO (Reuters) -Nippon Steel, Japan’s biggest steelmaker, said it expects to report a 14% fall in annual profit before one-offs for the current fiscal year, but that excluded its outlook for U.S. Steel, due to significant challenges in the U.S. market.
The Japanese steelmaker expects an underlying business profit, or profit adjusted for one-offs, of 680 billion yen ($4.51 billion) for the year ending in March, down from 793.7 billion yen last year.
Nippon Steel, which acquired U.S. Steel in June in a $15 billion deal, said it excluded the business from its forecast for this fiscal year “due to the significant decline in the U.S. steel market, one-time cost deterioration caused by facility troubles and other factors, and the high uncertainty in the U.S. market.”
The comments came as the company posted a loss of 113.4 billion yen for the six months through September, versus a profit of 243.4 billion yen in the same period a year earlier.
At the same time, it said it expects to report a full fiscal year loss of 60 billion yen ($398 million), 50% worse than its previous forecast, as it would book a 21 billion yen loss on the sale of its stake in the Usiminas steel manufacturing company in Brazil.
Nippon Steel’s minority stake in Usiminas will be transferred to another shareholder, Ternium, as the Japanese company plans to focus on its key regions: the U.S., India and Thailand instead, it said in its results presentation.
($1 = 150.7800 yen)
(Reporting by Katya Golubkova; Editing by Sonali Paul)
