TOYKO Japan's biggest steelmaker Nippon Steel on Thursday raised its full-year profit forecast amid improving margins in the steel business, and reiterated its confidence in closing its proposed acquisition of US Steel by year-end.

Net profit in April-June, its first quarter, fell 11% from a year earlier to ¥157.6 billion (US$1 billion or RM4.57 billion), but exceeded analyst expectations of ¥108.7 billion as per LSEG data.

The world's fourth-biggest steelmaker increased its net profit forecast for the year ending in March 2025 to ¥340 billion from ¥300 billion, expecting its steel business to improve. Still, the revised figure fell short of analysts' estimate of ¥372.6 billion.

"We face an unprecedented slump in steel demand, but our efforts have borne fruit," vice chairman Takahiro Mori said, noting its restructuring including shutting down steel plants.

Nippon Steel, which clinched the US$14.9 billion deal to buy US Steel last December, said on Thursday it received a second request for information and data from the US Department of Justice as part of the US government's review of the deal.

"We are confident that we can close the deal by the end of this year," Mori said, citing his repeated visits to the US and dialogue with some 700 stakeholders, including employees of the US Steel, have helped to foster a better understanding of the deal.

Both steelmakers have received all regulatory approvals outside of the US for the deal, but face political opposition, US regulatory scrutiny and objections from the powerful United Steelworkers (USW) union, which fears the deal could lead to job losses.

"The union has not explicitly changed its position, but the right understanding has been disseminated around it," Mori said.

As a part of its bid, which has faced resistance from both Democrats and Republicans, Nippon Steel said it has committed to no job cuts, job or production transfer overseas or plant closures even after the current agreement between USW and US Steel expires in September 2026.

Last month, Nippon Steel said it hired former US Secretary of State Mike Pompeo to help seal the deal.

"Pompeo will become a strong advisor to us as he is well respected by both Republicans and Democrats," Mori said, adding the deal is expected to receive understanding regardless of who becomes the next US president since it would be good for the US economy.

  - Reuters