Kobe Steel Limited said that it will book an appraisal loss of JPY 13.8 billion on securities holdings in its group earnings statement for the April to December period of 2011 due chiefly to a slump in the stock prices of steelmakers with which it has cross shareholdings.

The Kobe based major steelmaker is expected to lower its consolidated net profit estimate for fiscal 2011 ending March from an earlier projected JPY 20 billion.

Japan's business accounting rules require a company to book an appraisal loss if the market value of its shareholdings declines by at least 50% from the cost of acquisition.

Kobe Steel has maintained cross shareholdings with Nippon Steel Corporation and Sumitomo Metal Industries Limited as an anti takeover measure in light of global realignment in the industry since around 2000, but their share prices have fallen recently amid deterioration in the balance of global steel supply and demand.

For similar reasons, Sumitomo Metal reported a special loss of JPY 79.7 billion in the first half of fiscal 2011 and Nippon Steel said it will book a securities appraisal loss of JPY 84.6 billion in its consolidated earnings report for the first three quarters of fiscal 2011.

(Sourced from Kyodo)