Japan: Tokyo Steel’s net profit soars to over JPY 31 billion in Jan-Mar’22

Japan’s Tokyo Steel Corporation announced non-consolidated financial results for the fiscal year ending 31 March on 22 April 2022.

• Net income was JPY 31.937 billion ($248.5 million) from JPY 5.89 billion, approximately 5.4 times the previous year’s level.
• Net sales surged to JPY 27.88 billion, up 91.5% from the previous year on higher steel prices and a fiscal stimulus-driven recovery in steel demand.
• Operating income was JPY 31,773 million, higher by about eight times over the previous year’s level.

Increase in sales volume

Amid the global steel shortage, sales volume increased in response to domestic and overseas demand. The metal spread widened as a result of efforts to raise prices in the face of soaring overall manufacturing costs, including those for steel scrap, the main raw material. Net sales were the second highest in the company’s history. Profits were at the highest level in 13 years since March 2009.

Steel sales volume for the full year was 2,673,800 tonnes (t), up 57,800 t from the previous year. On the other hand, exports of steel products increased by 73,000 t to 562,000 t. The export ratio (in value terms) was 20.9%, up 2% y-o-y.

Increase in operating income

Operating income increased by JPY 27.8 billion from the previous year. The increase in operating income was due to the increase in metal spread by JPY 25,668 million and the increase in volume by JPY 1,085 million, including a JPY 2.0 billion profit from inventories at the beginning of the period, therefore, the total increase in profit was JPY 28,753 million. On the other hand, high costs such as electric power and auxiliary raw materials were the factors that reduced profits by JPY 935 million.

In January-March 2022 period, the sales volume was 726,000 t while the sales price was JPY 107,900, up JPY 12,200 y-o-y. Meanwhile, scrap price was JPY 57,100, an increase of JPY 1,600 y-o-y. The metal spread was JPY 50,800, lower by JPY 4,000 than the previous year.

Note: This insight has been published in accordance with an article exchange agreement between SteelMint and Japan Metal Daily.