Nippon Sheet unlikely to post profit rise in 08/09

TOKYO (Reuters) - It is very unlikely that Nippon Sheet Glass Co (5202.T: Quote, Profile, Research, Stock Buzz) will be able to post profit growth this business year due to soaring prices of energy and raw materials, the glass maker's incoming chief executive said on Monday.

But Stuart Chambers, who is due to become CEO pending shareholder approval in June, also told Reuters in an interview that he was confident of beating profit targets in a business plan ending March 2011 and may accelerate its growth strategy.

Analysts on average expect operating profit to have more than doubled to about 50 billion yen ($479 million) in the year ended March 2008, helped by the contribution of British glass maker Pilkington, which Nippon Sheet acquired in 2006 for about 2 billion pounds.

But the market consensus, based on nine analysts polled by Reuters Estimates, sees profit falling to about 47.7 billion yen in the current year to March 2009.

Chambers conceded the assumption that earnings will fall was probably right given the high price of oil, which pushes up the cost of gas and electricity to run its offices and factories, as well as raw materials such as soda ash.

"I think it's extremely unlikely that we could show profit growth this year," said Chambers, a 51-year-old British national. "And the reason for that is the very, very dramatic cost push that we are seeing in the energy market."

Chambers said, however, that any setback would be temporary.

He said he was confident Nippon Sheet Glass could exceed targets set out under a business plan that calls for operating profit to rise to 55 billion yen by March 2011, up from 23.8 billion yen recorded in the year ended March 2007.

The appointment of Chambers last week grabbed headlines in Japan, where he joins a small group of foreign chief executives such as Nissan Motor's (7201.T: Quote, Profile, Research, Stock Buzz) Carlos Ghosn and Sony Corp's (6758.T: Quote, Profile, Research, Stock Buzz) Howard Stringer.