Japan’s Kobe Steel has revised its consolidated revenue forecast up 8.8pc to JPY990bn ($9bn) for H1 FY2021 (April 1-September 30, 2021). The FY2021 (ending March 31, 2022) forecast was also revised up by 8.6pc to JPY2tn while the operating income outlook was revised upwards by 45.5pc to JPY80tn.
The company’s non-consolidated sales forecast, which includes its main steel units, was revised up by 7.8pc to JPY550bn for H1 FY2021 and up by 7.1pc for FY2021 to JPY1.2tn against the same periods of the prior year. Net income for FY2021 is now projected 66.7pc higher at JPY50bn with the updated sales revenue revision compared to FY20.
The sales revenue revision was driven by the recovering economy, especially, in the manufacturing sector despite the lurking risk from a resurgence in COVID-19 cases. Raw material prices have increased more than initially expected in 2021 with iron ore, coal, and other input materials surpassing 100pc increases in some circumstances but the company is also focusing on cost reduction and improved processes as possible.
In Q1 FY2021, crude steel production leaped by 43.1pc to 1.66mn mt against the same year-ago quarter. Steel sales increased by 40.2pc to 1.36mn mt and the average sales price rose by 13.2pc to JPY90,700/mt during the same timeframe. Aluminum sales volumes gained by 20.5pc to 88,000mt in Q1 FY2021 against 73,000 in the same year-ago quarter.
Net consolidated sales grew by 23.8pc to JPY463.2bn with net income trending positively at JPY18.9bn in Q1 against a loss of JPY13.1bn in the year-ago quarter. The increase in the quarter was driven by strong automotive sales and economic recovery but the net income shrinkage due to the deterioration in metal spreads resulting from raw material price increases.
Net sales from the steel & aluminum division encompassed 44.6pc of total sales at JPY206.4bn in Q1, up 56.8pc against the same quarter in FY2020. Steel sales climbed by 42.6pc to JPY167.5bn and aluminum rose by 21.6pc to JPY38.8bn in the first quarter, both against the same year-ago period.
The construction machinery segment achieved an increase of 18.9pc to JPY93.5bn in the first quarter compared annually. Advanced material sales grew by 18pc to JPY74.8bn while other segments include welding with JPY19.1bn in sales, machinery with JPY35bn, engineering with JPY24.6bn, electric power with JPY15.8bn, and other businesses with JPY4.7bn in the same period.