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TOKYO - NKK Corporation announced today its projections for consolidated and non-consolidated earnings in the company's 148th reporting term (fiscal 2002 ending March 31, 2002). During the reporting period, the Japanese economy continued to deteriorate as consumer spending remained weak and private-sector capital spending declined. The economies of the United States, Asia and other parts of the world also slowed down. In the steel industry, increasingly rigorous production cuts lowered inventories, but falling demand led to weaker prices in both the domestic and international markets. The sales environment was extremely difficult. In the engineering field, the business environment also remained harsh as competition for public- and private-sector orders intensified. The engineering division of NKK continued to adapt to such conditions by moving ahead as planned with cost reductions, and the division expects to achieve its targets as previously forecast. The steel division also implemented cost reductions as scheduled, but the division forecasts a decline in ordinary income due to worsening results at National Steel Corp. and unexpectedly slow recovery in both the domestic and export markets. The company will post special charges for losses on writedowns of its investment securities due to falling stock prices and for losses related to National Steel Corp., which filed the petition for reorganization under Chapter 11 of U.S. Bankruptcy Code on March 6. National Steel's losses will be reflected in NKK's consolidated income statement through the end of this fiscal year, but its year-end assets and liabilities will be removed from NKK's consolidated balance sheet. On the consolidated level, NKK is projecting an ordinary loss of approximately ¥45 billion and a net loss of approximately ¥74 billion. In consideration of the circumstances, the Board of Directors in its meeting today regretfully decided that a dividend would be foregone this fiscal year. NKK is proceeding with consolidation with Kawasaki Steel as scheduled. The company endeavors a strong effort to solidify the group's earnings and financial structure, while also working to realize the synergy effects earlier than scheduled. We would sincerely appreciate the continued support and understanding of our shareholders.
Supplementary Information for Earnings Projection for Fiscal 2002 (PDF) |
