TOKYO: Nippon Steel & Sumitomo Metal said Thursday its nine-month net profit dropped 20.3 percent as it slashed its full-year profit forecast, citing the impact of plunging oil prices on a Brazilian unit.
The Tokyo-based company, one of the world's biggest steelmakers, said its earnings for the April to December period came in at 153.6 billion yen ($1.3 billion), while sales rose 3.6 percent to 4.18 trillion yen.
Nippon Steel blamed part of the profit slump on a 68.6 billion yen extraordinary loss that it took due to an unexpected slowdown at its seamless pipe maker Vallourec & Sumitomo Tubos do Brasil (VSB), which supplies the oil and gas market.
"The recent rapid decline in oil prices is expected to impair the business environment surrounding the oil and gas related markets and future profits of VSB," the company said in a statement.
Nippon Steel also cut its net profit forecast for the fiscal year to March to 180 billion yen, from an earlier estimate of 250 billion yen.
"The global economy maintained an overall moderate growth pace as solid corporate profits and private consumption supported an ongoing improvement in business conditions in the United States," the company said in a statement.
But "the European economy continued to be weak and the trend of slowing growth in China and other emerging countries became more pronounced".
It also said demand at home was flat, partly owing to delays in construction projects.
The company was also hit by recent explosions at a domestic plant.
At least 15 people were injured in September after an explosion at a steel mill in central Japan, the latest in a series of accidents at the site.
"(The company) sincerely regrets the great trouble and inconvenience caused to shareholders and others concerned by the power failures and fire accident which occurred at the company's Nagoya Works," it said.
The firm's Tokyo-listed shares fell 1.9 percent to 289.1 yen on Thursday.
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