Nippon Steel suffered losses of $ 4 billion

Nippon Steel forecast a record net loss of 440 billion yen ($ 4 billion) for the fiscal year ending March 31, up from a previously forecast profit of 40 billion yen, as protectionist governments and Asian rivals cut the bottom line.

The company is curtailing opportunities to improve its competitiveness in a changing market, with further structural changes on the radar. It remains unclear if that will be enough, along with whether Japan's iconic steel companies are once facing even greater acceleration.

Nippon Steel will register 490 billion yen in impairment and other losses from announced measures such as the closure of the Kure plants in Hiroshima Prefecture by the end of September 2023 and the shutdown of the blast furnace at the Wakayama plant in the next few years.


Stalevar will also waive dividends at the end of the fiscal year. Investors will have to make do with an interim payment of ¥ 10 per share - a drop in total payments last fiscal year of ¥ 80. Executives will pay 10% to 20% of their annual pay.

The completion of the work will reduce Nippon Steel's annual crude steel capacity by 5 million tonnes, or about 10% of Japan's total. Consolidating production at more cost-competitive facilities and reducing fixed costs is expected to save about 100 billion yen per year.

“Chinese manufacturers have excess capacity,” said Akio Migita, executive vice president in charge of corporate planning, at a press conference on Friday. "Their products are currently consumed at home, but once China's growth slows down and these products hit the global market, we will face stiffer competition."

“When we consider this future, our company has too many opportunities,” said Migita.

“Chinese companies have a completely different level of presence than before,” he said. "It's overwhelming."

Migita said Nippon Steel will make further optimization efforts if necessary.

In addition to protectionism amid the Sino-American trade war and increased Chinese competition, Nippon Steel is being affected by higher material and logistics costs.

“We look forward to rebuilding our revenue base as quickly as possible by creating an optimal manufacturing base and increasing prices,” said Katsuhiro Miyamoto, executive vice president in charge of accounting and finance.

Nippon Steel is not factoring in the coronavirus outbreak in its latest projections as the full impact remains unclear. Some impact on demand and its supply chains is expected.

The company reported a net loss of 357.3 billion yen for the April-December period amid declining �