Japan's economy was flat in the third quarter of fiscal 2011 (October to December 2011). Although the Great East Japan Earthquake on March 11th 2011 led to a sharp drop in production levels in the first quarter (April to June period), the effects of the quake had faded by the second quarter (July to September period). However, the third quarter was weighed down by the deceleration of the overseas economy brought about in part by the flooding in Thailand and by the high yen. Although overseas markets, mainly emerging countries, continued to gradually grow, the financial turmoil in Europe and monetary tightening in China have blunted the pace of economic growth.
In this economic environment, the Kobe Steel Group saw a decrease in sales volume, compared with the same April to December 2011 period, for steel products, aluminum rolled products, and copper sheet and strip due to the Great East Japan Earthquake and flooding in Thailand. Unit sales of hydraulic excavators in China enjoyed strong demand after the Lunar New Year last year, but since April demand had decreased due to monetary tightening in that country. Unit sales of excavators in the first nine months of 2011 (January to September period) were similar to the same period in the previous year.
As a result, the Kobe Steel Group's consolidated net sales in April to December 2011 period increased JPY 53.7 billion to JPY 1,409.5 billion in comparison to the same period last year owing to sales from large orders in the Machinery Business and Natural Resources and Engineering Business, as well as higher sales prices of steel products. However, the lower sales volume of steel products and aluminum rolled products, as well as higher raw material prices mainly for steel decreased operating income by JPY 31.4 billion in comparison to the same period in the previous year to JPY 69.1 billion. Ordinary income decreased by JPY 28.7 billion in comparison to the same period in the previous year to JPY 50.1 billion. Net income was also affected by these factors and a loss on the write down of investments in securities in the third quarter. As a result, net income decreased JPY 34.6 billion as compared with the same period in the previous year to JPY 12.5 billion.
Consolidated operating
| | 9M '11 | Change | 9M '10 | Change |
| Net sales | 1,409,556 | 4.0% | 1,355,790 | 12.4% |
| Operating income | 69,125 | -31.3% | 100,578 | - |
| Ordinary income | 50,160 | -36.4% | 78,892 | - |
| Net income | 12,598 | -73.3% | 47,223 | - |
| Net income per share | JPY 4.19 | JPY 15.72 | - | |
| Diluted net income | - | - | - | - |
Dividends
| Period | Q1 '11 | Q2 '11 | Q3 '11 | Q4 '11 | FY '11 |
| FY2010 | 1.5 | 1.5 | 3 | ||
| FY2011 | 1 | ||||
| FY2011 Forecast |
In JPY
Consolidated Forecast for Fiscal 2011
| | FY '11 | change |
| Net sales | 1870000 | 0.6 |
| Operating income | 50000 | -59.9 |
| Ordinary income | 25000 | -71.9 |
| Net income | -10000 | |
| Net income per share | -3.33 |
In JPY millions
