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Nippon Steel warns about a full-year loss after $1.3 Billion Q1 shortfall

Nippon Steel revised its forecast on Friday for the full fiscal to a loss of 40 billion yen (266 million dollars) from a profit of 200 billion yen previously. This was partly due to costs associated with its acquisition by U.S. Steel.

After 18 months of trying to get the U.S. Government to approve the deal due to concerns about national security, Nippon Steel closed its $14.9billion acquisition of U.S. Steel in June.

Nippon Steel announced that its full-year results would be affected by a special loss related to the U.S. Steel transaction, namely a loss of 231.5 bn yen relating to the transfer of 50% of the joint venture AM/NS Calvert, to partner ArcelorMittal.

Nippon Steel reported a loss of 195.83 Billion Yen for the three-month period ending June 30. This was higher than expected by analysts.

Analysts surveyed by LSEG had predicted Nippon Steel would post quarterly losses of 25.7 billion yen. It reported a quarterly net profit of 157.56 billion yen a year ago.

Nippon Steel also decided to split its stock at a ratio five shares per one share, effective October 1.

S&P, the global rating agency, downgraded Nippon Steel last month to 'BBB+,' from a previous 'BBB+,' with a "negative" outlook. The reason given was an increase in financial stress following Nippon Steel's acquisition by U.S. Steel. ($1 = 150,5440 yen)

(source: Reuters)