News Release | Friday, February 3, 2023 |
Company name: | Mitsubishi Steel Mfg. Co., Ltd. |
Representative: | Jun Yamaguchi, Representative Director and President & CEO |
(Securities code: 5632, Prime Market of Tokyo Stock Exchange) | |
Address inquiries to: | Koichi Yaginuma, |
Executive Officer/General Manager, Accounting Department | |
(Tel. +81-3-3536-3135) |
Notice of revisions of full-year forecasts of consolidated financial results
Based on the most recent trends in financial results and other factors, we have revised our full-year forecasts of consolidated financial results for the fiscal year ending March 2023 as reported below.
Details
1. Revisions of full-year forecasts of consolidated financial results
Revisions of full-year forecasts of consolidated financial results for the fiscal year ending March 2023 (from April 1, 2022 to March 31, 2023)
Net income | ||||||
Net sales | Operating | Ordinary | attributable to | Net income per | ||
income | income | owners of | share | |||
parent company | ||||||
Million yen | Million yen | Million yen | Million yen | Yen | ||
Previously announced forecast (A) | 180,000 | 5,500 | 4,500 | 2,700 | 175.83 | |
Revised forecast (B) | 175,000 | 6,500 | 4,500 | 2,700 | 175.83 | |
Change (B-A) | (5,000) | 1,000 | 0 | 0 | ||
Change (%) | (2.8) | 18.2 | 0.0 | 0.0 | ||
(Reference) Actual results in | ||||||
previous period | 146,292 | 6,270 | 5,780 | 4,068 | 264.78 | |
(Fiscal year ended March 2022) |
2. Reasons for these revisions
The yen, which had been rapidly depreciating, has recently gained strength on international currency markets. Thus, due to foreign exchange conversion effects, we expect net sales to be lower than previously forecast.
With regard to income, due to exchange rate fluctuations, we expect the cost of imported raw materials for the Special Steel Bars business to rise less than previously forecast. Foreign exchange conversion effects on losses at the North American subsidiary operating in the Springs business are also projected to be less pronounced than previously expected.
Additionally, steady progress on measures to resolve production disruptions at the Springs business' North American subsidiary and on measures to adjust selling prices to reflect rising raw material and other costs are expected to lead to higher operating income than previously forecast.
(Exchange rates)
Projected second-half exchange rate at time of previous forecasts: USD1 = JPY145.00
Actual rate in 3Q: USD1 = JPY141.38 (average TTM rate during October-December 2022)
Projected 4Q rate: USD1 = JPY130.00
Despite the projected increase in operating income, projections for ordinary income and net income attributable to owners of the parent company remain unchanged from previous forecasts. This is due to anticipated revaluation losses on assets denominated in foreign currency resulting from the trend away from yen devaluation.
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(Reference) Trend in projected operating income
(Billion yen) | ||||||
1Q actual | 2Q actual | 3Q actual | 4Q projected | Full year | ||
Previous forecast | 8 | 9 | 38 | 55 | ||
Current forecast | 12 | 36 | 65 | |||
- In the Special Steel Bars business, due to the recent trend toward revaluation of the yen on international currency markets, we expect the rise in the cost of imported raw materials to ease in the fourth quarter. These costs had skyrocketed due to yen devaluation.
We also expect income to grow as planned during this fiscal year due to steady progress with efforts to adjust selling prices to reflect first-half increases in raw material costs and to positive operating income achieved by our Indonesian subsidiary (PT. JATIM TAMAN STEEL MFG.) since the previous period. - We project significant improvements in fourth-quarter profit/loss in the Springs business, including the transitory positive effects of retroactive recovery of cost increases not reflected in selling prices. These improvements are due to steady progress in adjusting selling prices to reflect rising production costs, chiefly in Japan and North America.
The North American subsidiary, which had anticipated significant losses due to production disruptions, is moving ahead with the following rebuilding efforts: - Expanding use of the U.S. plant to build inventory that will make it possible to promptly address production disruptions at the Canada plant and the need for emergency shipment costs
- Negotiating to adjust selling prices to reflect rising costs other than those due to materials market conditions.
The inventory buildup stemming from expanded use of the U.S. plant, which has resumed operations, is proceeding according to plan. The need for emergency shipping measures has abated. Negotiations are proceeding steadily to adjust selling prices to reflect cost increases, including efforts to eliminate transactions in unprofitable products. Having set the goal of regaining profitability in the next fiscal year and beyond, we continue to pursue measures to comprehensively address the factors that may lead to impaired profit/loss.
In light of the above conditions, while the large-scale improvements in income in the fourth quarter include some transitory effects (retroactive recovery of cost increases not reflected in selling prices), we will continue to move forward with various efforts to strengthen financial results. We will make steady progress according to plans to rebuild the North American springs subsidiary, which had been our greatest concern.
Note: The above forecasts of financial results are based on information available at this time. Actual results may differ from forecast figures for various reasons.
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Mitsubishi Steel Mfg. Co. Ltd. published this content on 08 February 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 February 2023 05:23:05 UTC.