Kobe Steel to withdraw earnings forecast after data scandal

Embattled Kobe Steel Ltd has decided to withdraw its forecast for the current financial year as it struggles to quantify the impact of its data falsification scandal, the Nikkei business daily reported on Monday.

The steelmaker’s forecast for its first full-year profit in three years has been thrown into doubt by revelations of widespread tampering of data on products used across the world in cars, trains, airplanes and other equipment.

It reports earnings on Monday at 6:30 a.m.GMT. Japan’s third-biggest steelmaker has also decided to cancel plans to pay an interim dividend for the first time in two years, the Nikkei reported.

A company spokesman declined to comment on the Nikkei report.

Kobe Steel forecast in July that it would earn net profit of 35 billion yen, or 308 million US dollars in the year through March 2018 after two years of losses.

The company is also trimming its recurring profit forecast for the full year to 50 billion yen, from 55 billion yen, the Nikkei reported.

In a later article the Nikkei said Japan’s biggest banks are considering a loan of 50 billion yen for Kobe Steel, to shore up its finances.

Kobe Steel shares were down about 1 percent by the end of morning trading on the Tokyo exchange, while the Nikkei 225 was off by 0.1 percent.

Kobe Steel’s market value has slumped by about 1.5 billion US dollars since it said in early October it had found widespread data tampering in its aluminum and copper business. The cheating has since been found across its businesses.

(REUTERS)