Tokyo Steel has forecast a 28.1pc fall in sales revenue in Q2 amid concerns that the COVID-19 pandemic will delay the recovery of steel demand by a considerable amount of time, noted the company in its earnings release. Tokyo Steel expects a decline in sales and production volume and plans to focus on profit-oriented production and cost reductions. The company expects the volatility in ferrous scrap prices and demand for steel products to significantly impact its results in the upcoming quarters.
| Tokyo Steel’s production in Q1 (mt) | |||
|---|---|---|---|
| Products | Q1 2021 | Q1 2019 | % Change |
| Billet | 542,000 | 7,13,000 | -24.0% |
| Steel | 525,000 | 6,71,000 | -21.8% |
| Sales (including exports) | |||
| Steel | 564,000 | 6,46,000 | -12.7% |
| Others | 16,000 | 28,000 | -42.9% |
| Total sales | 581,000 | 6,75,000 | -13.9% |
Tokyo Steel forecasts Q2 sales revenue to drop by 28.1pc to JPY69,000mn, while full year FY2021 sales revenue is expected to dip by 25.5pc to JPY134,000mn. The company’s net income is forecast to drop by 45.4pc to CNY 4,000mn in Q1 and fall by 60.1pc to CNY5,500mn in FY2021.
In Q1, Tokyo Steel’s sales revenue fell by 28.6pc to JPY36,378mn, while operating income dropped by 21.4pc to JPY3,237mn from the prior year quarter. Net income dropped by 18pc to JPY3,136mn, from the prior year quarter. Tokyo Steel’s sales were better than expected amid a early recovery of domestic construction activities. The company’s exports sales improved from the March quarter, according to the report.