TEX reported that Japan's electric steelmaker Tokyo Tekko Co has succeeded in enlarging the pretax profit by a factor of 4.3 to JPY 3,620 million in the company's consolidated earnings results for April to September 2009 period or the first half of fiscal 2009.

The company's sales prices of steel products fell by JPY 11,000 per tonne on average, while its purchase prices of ferrous scrap declined by JPY 32,000 per tonne on average, an expanded metal spread that benefited the bottom line.

Tokyo Tekko announced its consolidated results of JPY 24,605 million in sales for April to September 2009 period, down by 36.5% YoY, JPY 3,914 million in operating profit, up by 275.1% YoY, JPY 3,620 million in pretax profit, up by 327.3% YoY and JPY 1,885 million in net profit, up by 274.5% YoY. The ratio of pretax profit to sales rose to 14.7% from 2.2%.

For the whole of fiscal 2009, the company estimates its consolidated results at JPY 44.5 billion in sales, down by 36.6% YoY, JPY 5,500 million in operating profit, down by 19.5% YoY, JPY 5,000 million in pretax profit, down by 21.7% YoY and JPY 2,500 million in net profit, down by 27.3% YoY.

The company admits that slack construction demand for steel products threatens to enhance downward price pressure on what the company sells, leading to a deterioration of profitability in the latter half of fiscal 2009.

(Sourced from TEX Report Limited)