Steelmaker JFE Holdings Inc. reported Wednesday a 75 percent drop in first-quarter profit after raw material costs rose and the March 11 earthquake disrupted supply lines at carmakers and other customers.
Net income fell to ¥7.12 billion in the three months that ended June 30 from ¥28 billion a year earlier, the Tokyo-based company said in a statement.
Full-year profit expected to climb to ¥80 billion from ¥58.6 billion a year earlier on higher steel prices and cost cuts, it said.
Steelmakers are seeing profits squeezed as product price increases fail to keep pace with rising material costs. The quake forced carmakers to slash output due to supply disruption, triggering a 6.1 percent decline in crude steel output last quarter.
“The Japanese economy in the first quarter of fiscal 2011 remained in a harsh environment due to slowed production and other ongoing effects of the Great East Japan Earthquake,” JFE said.
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