Japan's scandal-hit Kobe Steel yanks profit forecast

Tokyo-30 October 2017: Japan's crisis-hit Kobe Steel on Monday yanked its net profit forecast for the current fiscal year, saying it could not yet determine how much a snowballing fake data scandal would damage its business.

The company also cancelled a planned dividend as it withdrew its projection for a 35 billion yen ($308 million) net profit in the year to March 2018.

It had announced the forecast before the quality data crisis erupted several weeks ago.

"It's difficult at this moment to assess how much the improper conduct concerning products made by our company and group companies will impact earnings," Kobe Steel said in a statement.

The firm has admitted falsifying strength and quality data for a string of products shipped to hundreds of clients, from automakers to plane manufacturers.

The crisis at a venerable company that once employed Japan's Prime Minister Shinzo Abe has already hit wide sections of Japanese industry, including Toyota, Nissan and Honda which used the affected materials in their vehicles.

Also Monday, the company cut its operating-profit estimate to 75 billion yen from an earlier 80 billion yen estimate while it left revenue projections unchanged at 1.88 trillion yen for the year.

Kobe Steel shares rose 2.22 percent on Monday after the Nikkei business daily reported that major Japanese banks were preparing billions of dollars in loans to the troubled steelmaker.

It made the earnings forecast announcement after markets closed.