Cost and selling-price improvements in response to the surge in coking coal prices

「The Indonesian overseas business reported higher profit due to increased sales volume, as well as improvements in selling prices and costs, although」

「Operating profit fell by ¥41 million, or 2.2%, year on year to ¥1.858 billion. Although it was affected by lower sales volumes, progress in improving selling prices and costs kept profit broadly in line with the previous corresponding period.」

「Profit declined because, in addition to lower sales volumes and the resulting deterioration in productivity and unit costs in the domestic business, selling prices failed to keep pace with the increase in imported raw material prices caused by the weaker yen, and the profit contribution from using low-cost raw material inventories acquired before the sharp rise in prices in the previous corresponding period disappeared.」

「Revenue in the special steel materials business fell by ¥1.223 billion, or 2.5%, year on year to ¥47.306 billion. Although the Group made progress in passing through higher raw material and energy prices into selling prices, the impact of lower demand for construction machinery, industrial machinery and other products was significant, resulting in an overall decline in revenue.」

「Revenue in the special steel materials business fell by ¥801 million, or 3.4%, year on year to ¥23.106 billion. Although the Group made progress in passing through higher domestic and overseas raw material and energy prices into selling prices and the Indonesian overseas business reported higher revenue year on year, the impact of lower domestic demand was significant, resulting in an overall decline in revenue.」

「The Group made progress in passing through higher domestic and overseas raw material and energy prices and the impact of the weaker yen into selling prices.」

「Revenue in the special steel materials business increased by ¥13.477 billion, or 21.6%, year on year to ¥75.99 billion, as the Group made progress in passing through higher raw material and energy prices and the impact of the weaker yen into selling prices. Operating profit increased in the domestic business as the Group proceeded to reflect higher costs in selling prices. The Indonesian overseas business also reported higher profit, supported by progress in passing through higher scrap prices and the effects of increased production.」

「Revenue in the special steel materials business increased by ¥8.708 billion, or 21.9%, year on year to ¥48.529 billion, supported by firm demand related to construction machinery and progress in passing through higher raw material costs into selling prices. In the domestic business, operating profit increased despite the time lag before the price pass-through took effect and the impact of higher energy prices and the weaker yen, partly because the Group used raw material inventories acquired before prices surged.」

「Procurement costs have risen due to surging raw-material and energy prices as well as the rapid depreciation of the yen, making it a major challenge to pass further cost increases on to selling prices.」

「Although the time lag in reflecting higher raw-material prices in selling prices remains a negative factor both domestically and overseas, the domestic business recorded a substantial increase in profit due to the elimination of one-off costs associated with last year's blast-furnace refurbishment, as well as cost improvements from higher sales volumes and the resulting increase in production.」

「Aiming for a more resilient business structure, the Group reduced fixed costs and lowered the break-even point by 10%.」

「In the Special Steel Products segment, the domestic business recorded lower profit, primarily due to lower sales volumes and higher costs associated with blast-furnace refurbishment. Although the use of stockpiled inventory ahead of the refurbishment produced cost savings, profit still declined.」

「Operating profit increased by ¥77 million, or 7.0%, year on year to ¥1.19 billion. In the domestic business, the impact of lower sales volumes was offset by selling-price improvements, inventory build-up ahead of next year’s blast furnace repairs, and cost improvements through productivity gains using that inventory. In the overseas business, despite continued weakness in demand for commercial vehicles in Indonesia and higher costs caused by soaring auxiliary material prices and production problems, the reduction in depreciation expenses following the recognition of impairment losses on property, plant and equipment and other factors contributed to higher profit.」

「Operating profit increased by ¥77 million, or 7.0%, year on year to ¥1.19 billion. In the domestic business, the impact of lower sales volumes was offset by selling-price improvements, inventory build-up ahead of next year’s blast furnace repairs, and cost improvements through productivity gains using that inventory. In the overseas business, despite continued weakness in demand for commercial vehicles in Indonesia and higher costs caused by soaring auxiliary material prices and production problems, the reduction in depreciation expenses following the recognition of impairment losses on property, plant and equipment and other factors contributed to higher profit.」

「Operating profit amounted to ¥859 million, down ¥228 million (21.0%) year on year. In the domestic business, the benefits of selling-price improvements and higher production associated with inventory accumulation ahead of next year's blast-furnace refurbishment were more than offset by a significant decline in sales volumes. In the overseas business, costs increased due to higher auxiliary-material prices and production problems at a steelmaking plant.」

「In the special steel materials business, revenue fell by ¥175 million, or 1.1%, year on year to ¥15.573 billion, despite progress in selling-price improvements and higher sales at the overseas subsidiary PT.JATIM TAMAN STEEL MFG., due to lower volumes, mainly in the construction machinery sector. Operating profit fell by ¥26 million, or 6.6%, year on year to ¥382 million, as the impact of lower volumes and higher auxiliary material costs outweighed progress in improving selling prices.」

「With demand strong in Japan and overseas, particularly for construction machinery, a major customer, the Group will focus on passing through higher raw material costs and improving selling prices to restore appropriate margins.」

「In the special steel materials business, sales volumes increased in both domestic and export markets as market conditions recovered, and the Group proceeded with selling-price measures to reflect higher raw material costs. Revenue increased by ¥9.702 billion, or 34.0%, year on year to ¥38.42 billion. Although the increase in sales contributed to higher operating profit, the impact of higher prices for the main raw material, ferroalloys and auxiliary materials was significant, and operating profit increased by only ¥310 million, or 34.0%, year on year to ¥1.224 billion.」

「In the Special Steel Products segment, demand recovered both domestically and for exports, and the Company implemented pricing measures to reflect higher raw-material prices. Net sales amounted to ¥25,713 million, up ¥7,423 million (40.6%) year on year. Although pricing measures did not fully offset the increase in costs due to higher raw-material prices, operating profit rose by ¥665 million (150.3%) to ¥1,108 million on higher sales.」

「In the Special Steel Products segment, demand, mainly for construction machinery, recovered, and the Company implemented pricing measures in response to the raw-material price increases in the second half of the previous fiscal year. Net sales amounted to ¥13,131 million, up ¥4,205 million (47.1%) year on year. Although costs increased due to higher raw-material prices, operating profit rose by ¥425 million (135.9%) to ¥738 million, driven by pricing measures and higher sales.」

「As demand recovers, particularly in the construction machinery sector, a major customer, the Group will persistently implement selling-price revisions to pass on higher raw material costs and secure appropriate margins.」

「Operating profit increased by ¥127 million, or 16.3%, year on year to ¥913 million, owing to higher sales to the construction machinery sector and the effects of cost reductions, among other factors.」

「In the Special Steel Products segment, coking coal prices have surged, and the Company will work to achieve further improvements in costs and selling prices.」