Komori
Financial results presentation5406Kobe Steel,Ltd.Iron & Steel, Nonferrous Metals

Fiscal 2025 Financial Results Presentation

In FY2025, revenue decreased by ¥118.4 billion year on year and ordinary income decreased by ¥35.8 billion, resulting in lower revenue and earnings. For FY2026, the company forecasts revenue of ¥2,560.0 billion, ordinary income of ¥120.0 billion and net income of ¥100.0 billion, anticipating improvements in the materials businesses and construction machinery.

Worth reading
69In focus
0–100. This measures how worthwhile something is to read, not how good or bad the company is.
Direction
Mixed performance
Direction inferred from the company’s description.
Scale
-358
¥100 million (year-on-year change in ordinary income)
Wording
Conditional
How definitive the wording is.

Contents of this document

Financial results presentationFY2025 full year (including the FY2026 earnings outlook)13 items taken from the company’s own explanation
Financial Results Figures (The key points of this material are explained below)
Net Sales¥24,365 100 million-4.6%
Operating profit¥1,298 100 million-18.1%
Ordinary income¥1,213 100 million-22.8%
Net income¥937 100 million-22.0%
Full-year earnings forecast
Net Sales
¥25,600 100 million
Operating profit
¥1,500 100 million
Ordinary income
¥1,200 100 million
Profit attributable to owners of the parent
¥1,000 100 million
Free cash flow
100 Approximately ¥100 million
ROIC
5.5 Approximately %
ROE
7.5 Approximately %
Equity ratio
49 Approximately %
Debt-to-equity ratio
0.55 approximately ×
What the company explained in this material
Breakdown of Factors Affecting the ChangeReasons cited by the Company for the change in the figures.
  • Volume and product mix¥65 100 million
  • Steel selling and raw material prices¥-55 100 million
  • Selling and procurement prices excluding steel¥95 100 million
  • Foreign Exchange Effects¥30 100 million
  • Cost changes¥-115 100 million
  • Consolidated subsidiaries and equity-method investments¥-175 100 million
  • Electric power¥-55 100 million
  • Inventory valuation impact¥-148 100 million
Assumptions Underlying the Business OutlookThe assumptions used by the company in preparing its forecast.
  • U.S. dollar exchange rate150 Yen/Dollar
  • Chinese yuan exchange rate21 JPY/CNY
  • Euro exchange rate175 JPY/EUR
  • Iron ore price96 US$/tonne
  • Middle East-related transactions as a percentage of consolidated revenue1 Approximately %
New initiatives
  • Reduce fixed costs in the aluminum sheet business to levels aligned with demand and improve selling prices
  • Maintain financial discipline in preparation for future carbon-neutrality and growth investments
  • Secure multiple orders in the direct reduced iron-related and waste treatment-related businesses
Key KPIsA metric the company considers important as a management benchmark.
  • Crude steel production581 10,000 tonnes
    Year on year against the same period last year-15.0%
  • Steel product sales volume (non-consolidated)463 10,000 tonnes
    Year on year against the same period last year-9.0%
  • Aluminum sheet sales volume (consolidated)263 thousand tonnes
    Year on year against the same period last year-44.0%
  • Welding materials sales volume (consolidated)227 thousand tonnes
    Year on year against the same period last year0.0%
  • Hydraulic excavator sales (consolidated)21 thousand units
    Year on year against the same period last year+0.7%
  • Crawler crane sales (consolidated)329 Units
    Year on year against the same period last year-45.0%
Unit price and quantity metricsThese figures show sales broken down by price and volume.
  • Steel product sales volume (non-consolidated)463 10,000 tonnes
    Year on year against the same period last year-9.0%
  • Steel product selling price¥133 thousand/t
    Year on year against the same period last year-11.0%
  • Aluminum sheet sales volume (consolidated)263 thousand tonnes
    Year on year against the same period last year-44.0%
  • Hydraulic excavator sales (consolidated)21 thousand units
    Year on year against the same period last year+0.7%
Segment results
Iron and Steel
Net Sales
¥8,222 100 million
Ordinary profit or loss
¥38 100 million
Year on year against the same period last year
Net Sales¥-921 100 million
Ordinary profit or loss¥-204 100 million
Aluminum sheet
Net Sales
¥1,746 100 million
Ordinary profit or loss
¥-9 100 million
Year on year against the same period last year
Net Sales¥-270 100 million
Ordinary profit or loss¥-3 100 million
Advanced Materials
Net Sales
¥3,328 100 million
Ordinary profit or loss
¥87 100 million
Year on year against the same period last year
Net Sales¥157 100 million
Ordinary profit or loss¥-20 100 million
Welding
Net Sales
¥964 100 million
Ordinary profit or loss
¥58 100 million
Year on year against the same period last year
Net Sales¥25 100 million
Ordinary profit or loss¥6 100 million
Machinery
Net Sales
¥2,827 100 million
Ordinary profit or loss
¥467 100 million
Year on year against the same period last year
Net Sales¥175 100 million
Ordinary profit or loss¥141 100 million
Engineering
Net Sales
¥1,938 100 million
Ordinary profit or loss
¥126 100 million
Year on year against the same period last year
Net Sales¥190 100 million
Ordinary profit or loss¥-34 100 million
Construction machinery
Net Sales
¥3,895 100 million
Ordinary profit or loss
¥123 100 million
Year on year against the same period last year
Net Sales¥15 100 million
Ordinary profit or loss¥-64 100 million
Electric power
Net Sales
¥2,032 100 million
Ordinary profit or loss
¥347 100 million
Year on year against the same period last year-175.0%
Year on year against the same period last year
Net Sales¥-556 100 million
Medium-term management plan targets
Period CoveredFY2024-FY2026
Payout ratioApproximately 30%
Equity ratioApproximately 49%
Debt-to-equity ratioApproximately 0.55x
Financial targets
ROIC
Actual results5.3 %
Targets and outlook5.5 %
ROE
Actual results7.7 %
Targets and outlook7.5 %
Equity ratio
Actual results46.4 %
Targets and outlook49 %
Debt-to-equity ratio
Actual results0.61 times
Targets and outlook0.55 times
Risk amount incorporated into the outlookThe amount representing the range of variation the company expects in its forecast.
¥-100 100 million
DetailsDeclines in sales to the Middle East, alternative raw material procurement costs, and higher logistics, energy and other material costs due to higher crude oil prices
Orders received and order backlog
Machinery
Orders received¥2,701 100 million
Order backlog¥2,412 100 million
Engineering
Orders received¥1,321 100 million
Order backlog¥3,860 100 million
Capital expenditures
Investment payments exceeding depreciation and amortization
Annual Dividend
FY2025
Annual¥80 per share
End of period¥40 per share
Fiscal 2026
Annual¥80 per share
Interim¥40 per share
End of period¥40 per share
Payout ratio
FY202533.6 %
Fiscal 202631.8 %
Medium-Term Management PlanApproximately 30%
Contents of this document
ItemDetails
Document typeFinancial results presentation
Fiscal Period CoveredFY2025 full year (including the FY2026 earnings outlook)
Net Sales¥24,365 100 million (YoY -4.6%)
Operating profit¥1,298 100 million (YoY -18.1%)
Ordinary income¥1,213 100 million (YoY -22.8%)
Net income¥937 100 million (YoY -22.0%)
Full-year earnings forecastNet Sales ¥25,600 100 million / Operating profit ¥1,500 100 million / Ordinary income ¥1,200 100 million / Profit attributable to owners of the parent ¥1,000 100 million / Free cash flow 100 Approximately ¥100 million / ROIC 5.5 Approximately % / ROE 7.5 Approximately % / Equity ratio 49 Approximately % / Debt-to-equity ratio 0.55 approximately ×
Segment resultsIron and Steel Net Sales ¥8,222 100 million / Ordinary profit or loss ¥38 100 million / Year on year against the same period last year Net Sales ¥-921 100 million / Ordinary profit or loss ¥-204 100 million / Aluminum sheet Net Sales ¥1,746 100 million / Ordinary profit or loss ¥-9 100 million / Year on year against the same period last year Net Sales ¥-270 100 million / Ordinary profit or loss ¥-3 100 million / Advanced Materials Net Sales ¥3,328 100 million / Ordinary profit or loss ¥87 100 million / Year on year against the same period last year Net Sales ¥157 100 million / Ordinary profit or loss ¥-20 100 million / Welding Net Sales ¥964 100 million / Ordinary profit or loss ¥58 100 million / Year on year against the same period last year Net Sales ¥25 100 million / Ordinary profit or loss ¥6 100 million / Machinery Net Sales ¥2,827 100 million / Ordinary profit or loss ¥467 100 million / Year on year against the same period last year Net Sales ¥175 100 million / Ordinary profit or loss ¥141 100 million / Engineering Net Sales ¥1,938 100 million / Ordinary profit or loss ¥126 100 million / Year on year against the same period last year Net Sales ¥190 100 million / Ordinary profit or loss ¥-34 100 million / Construction machinery Net Sales ¥3,895 100 million / Ordinary profit or loss ¥123 100 million / Year on year against the same period last year Net Sales ¥15 100 million / Ordinary profit or loss ¥-64 100 million / Electric power Net Sales ¥2,032 100 million / Ordinary profit or loss ¥347 100 million / Year on year against the same period last year Net Sales ¥-556 100 million
Breakdown of Factors Affecting the ChangeFactors Volume and product mix / Amount ¥65 100 million, Factors Steel selling and raw material prices / Amount ¥-55 100 million, Factors Selling and procurement prices excluding steel / Amount ¥95 100 million, Factors Foreign Exchange Effects / Amount ¥30 100 million, Factors Cost changes / Amount ¥-115 100 million, Factors Consolidated subsidiaries and equity-method investments / Amount ¥-175 100 million, Factors Electric power / Amount ¥-55 100 million, Factors Inventory valuation impact / Amount ¥-148 100 million
Key KPIsCrude steel production 581 10,000 tonnes, Steel product sales volume (non-consolidated) 463 10,000 tonnes, Aluminum sheet sales volume (consolidated) 263 thousand tonnes, Welding materials sales volume (consolidated) 227 thousand tonnes, Hydraulic excavator sales (consolidated) 21 thousand units, Crawler crane sales (consolidated) 329 Units
Unit price and quantity metricsSteel product sales volume (non-consolidated) 463 10,000 tonnes, Steel product selling price ¥133 thousand/t, Aluminum sheet sales volume (consolidated) 263 thousand tonnes, Hydraulic excavator sales (consolidated) 21 thousand units
Assumptions Underlying the Business OutlookU.S. dollar exchange rate 150 Yen/Dollar, Chinese yuan exchange rate 21 JPY/CNY, Euro exchange rate 175 JPY/EUR, Iron ore price 96 US$/tonne, Middle East-related transactions as a percentage of consolidated revenue 1 Approximately %
Risk amount incorporated into the outlook¥-100 100 million
Medium-term management plan targetsPeriod Covered FY2024-FY2026 / Payout ratio Approximately 30% / Equity ratio Approximately 49% / Debt-to-equity ratio Approximately 0.55x
Financial targetsROIC Actual results 5.3 % / Targets and outlook 5.5 % / ROE Actual results 7.7 % / Targets and outlook 7.5 % / Equity ratio Actual results 46.4 % / Targets and outlook 49 % / Debt-to-equity ratio Actual results 0.61 times / Targets and outlook 0.55 times
Annual DividendFY2025 Annual ¥80 per share / Interim Not disclosed / End of period ¥40 per share / Fiscal 2026 Annual ¥80 per share / Interim ¥40 per share / End of period ¥40 per share
Payout ratioFY2025 33.6 % / Fiscal 2026 31.8 % / Medium-Term Management Plan Approximately 30%
Capital expendituresInvestment payments exceeding depreciation and amortization
Orders received and order backlogMachinery Orders received ¥2,701 100 million / Order backlog ¥2,412 100 million / Engineering Orders received ¥1,321 100 million / Order backlog ¥3,860 100 million
New initiativesReduce fixed costs in the aluminum sheet business to levels aligned with demand and improve selling prices, Maintain financial discipline in preparation for future carbon-neutrality and growth investments, Secure multiple orders in the direct reduced iron-related and waste treatment-related businesses
Items this document does not state (11)
Gross Profit MarginOperating profit marginSelling, general and administrative expensesThree months of the current quarterProgress against full-year forecastSelf-assessment against the planNumber of stores and locationsNumber of employeesAcquisition of treasury sharesMarket Size / ShareKey points of the Q&A

These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.

The reasons the company gives

The company's own explanation, not something inferred from the numbers.

FY2025 revenue and earnings declined due to lower selling prices following declines in the prices of primary steelmaking raw materials and coal for power generation, an extended scheduled inspection of Unit 3 at the Kobe Power Plant, higher costs mainly from fixed costs, the absence of compensation income in the construction machinery business, and a deterioration in the impact of inventory valuation. For FY2026, the forecast incorporates higher sales volumes in the materials businesses and construction machinery, together with a deterioration in steel metal spreads, lower machinery equipment sales, higher fixed costs and risks related to the situation in the Middle East.

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Fiscal 2025 Financial Results Presentation | Kobe Steel,Ltd. (5406) timely disclosure | Komori