Japan: Tokyo Steel's operating profit plunges 22% y-o-y in Apr-Dec'24

• Sales volume drops 8% in April-Dec'24
  
  
• Lower sales, prices push down profits
  
  

Japan Metal Daily: Tokyo Steel's non-consolidated financial results for April-December 2024 revealed a 22% drop in operating profit to JPY 23.512 billion and a 7.9% y-o-y decrease in sales to JPY 254.712 billion.

Lower sales, prices push down profits

Two factors contributed to the decline in operating profit. First, lower product tags, implemented in October 2024, led to reduced shipping prices. Second, while October-December 2024 saw a recovery in shipment figures after typhoon-related delays, there was a decline in overall volume, particularly that of exports, which saw a significant drop.

Sales drop amid focus on profitability

Steel sales in April-December 2024 touched 2.253 million tonnes (mnt), reflecting a decline of 192,600 tonnes (t) compared to the corresponding period last year (CPLY). Moreover, exports totalled 325,000 t, down by 273,000 t y-o-y. This is because selective orders were taken, prioritising profit margins.

Sales ratios by product type (quantity basis) were 42% for bar steel and 58% for steel plates. The unit price of steel products sold during April-December 2024 was JPY 108,700/t, down by JPY 1,300/t y-o-y.

Revised earnings forecast for FY'25

Tokyo Steel has increased its non-consolidated earnings forecast for FY'25. The company now projects sales of JPY 323 billion, an operating profit of JPY 28 billion, and an ordinary profit of JPY 29 billion.

However, the company also expects that its full-year sales volume will decline to 2.936 mnt, roughly 10% below the previous forecast. This would be the first time sales have fallen below 3 mnt in three years, since FY'21.

Note: This article has been written in accordance with a content exchange agreement between Japan Metal Daily and BigMint.