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Presentation materials for financial results5406Kobe Steel,Ltd.Iron & Steel, Nonferrous Metals

Earnings Presentation Materials for the First Quarter of Fiscal 2026

In the first quarter of FY2026, revenue exceeded the year-earlier period, but ordinary income and net income declined due to a deterioration in the steel metal spread and the extension of scheduled maintenance at the power business, among other factors. The full-year forecasts for ordinary income and net income were unchanged, while the free cash flow forecast was revised down to ¥0, and the annual impact of the situation in the Middle East was estimated at a negative ¥12 billion.

Worth reading
83Important
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
-200
Hundreds of millions of yen
Wording
Avoiding a definitive answer
How definitive the wording is.

Contents of this document

Presentation materials for financial resultsFY2026 First Quarter14 items taken from the company’s own explanation
Financial Results Figures (The key points of this material are explained below)
Net Sales5,783 Hundreds of millions of yen
Operating profit204 Hundreds of millions of yen
Ordinary income226 Hundreds of millions of yen
Net income121 Hundreds of millions of yen
Results for the three months of the current quarter
Net Sales
5,783 Hundreds of millions of yen
Operating profit (loss)
204 Hundreds of millions of yen
Ordinary profit or loss
226 Hundreds of millions of yen
Quarterly profit attributable to owners of the parent
121 Hundreds of millions of yen
Full-year earnings forecast
Net Sales
26,900 Hundreds of millions of yen
Operating profit (loss)
1,500 Hundreds of millions of yen
Ordinary profit or loss
1,200 Hundreds of millions of yen
Ordinary income/loss excluding inventory valuation impact
995 Hundreds of millions of yen
Net income or loss attributable to owners of the parent
1,000 Hundreds of millions of yen
ROIC
5.5 Approximately %
ROE
7.5 Approximately %
Free cash flow
0 Hundreds of millions of yen
What the company explained in this material
Self-assessment against the planThe company's self-assessment against its own plan.
Ordinary income and net income were in line with the previous forecast, while free cash flow was revised downward
Breakdown of Factors Affecting the ChangeReasons cited by the Company for the change in the figures.
  • Volume and product mix-¥22.5 billion (Middle East impact: -¥4 billion)
  • Steel selling and raw material pricesUp ¥1.5 billion
  • Selling and procurement prices excluding steel+¥2.2 billion
  • Cost changes-¥6.8 billion
  • Consolidation and equity method+¥0.8 billion
  • Electricity-¥6.8 billion
  • Inventory valuation impact+¥15.0 billion
Assumptions Underlying the Business OutlookThe assumptions used by the company in preparing its forecast.
  • US dollar exchange rateFY2026 full-year: ¥156.4/USD
  • Chinese yuan exchange rateFY2026 full-year: ¥22.4/CNY
  • Euro exchange rateFY2026 full-year: ¥181.5/EUR
  • Iron oreFY2026 Q2 price: $96/tonne; from the second half onward, at current levels
  • Hard coking coalFY2026 Q1 price: $232/tonne; from Q2 onward, at current levels
  • Thermal coalApril-June 2026: approximately $130-$150/tonne; from Q2 onward, at current levels
New initiatives
Plans are in place to pass higher costs through to selling prices. New investments, alliances, products and organizational changes: not disclosed.
Key KPIsA metric the company considers important as a management benchmark.
  • Crude steel production (including Takasago)147 10,000 tonnes
    Year on year against the same period last year+10,000 tonnes
  • Steel product sales volume (non-consolidated)114 10,000 tonnes
    Year on year against the same period last year-10,000 tonnes
  • Aluminum sheet sales volume (consolidated)71 thousand tonnes
    Year on year against the same period last year+1,000 tonnes
  • Aluminum extrusion sales volume (consolidated)10 thousand tonnes
    Year on year against the same period last year+1,000 tonnes
  • Copper sheet sales volume (non-consolidated)13 thousand tonnes
    Year on year against the same period last year+1,000 tonnes
  • Welding materials sales volume (consolidated)60 thousand tonnes
    Year on year against the same period last year+4,000 tonnes
  • Orders received (Machinery)590 Hundreds of millions of yen
    Year on year against the same period last year-¥300 million
  • Orders received (Engineering)845 Hundreds of millions of yen
    Year on year against the same period last year+¥19.5 billion
Unit price and quantity metricsThese figures show sales broken down by price and volume.
  • BusinessIron and Steel
    Number of versionsSteel product sales volume: 1.14 million tonnes
    Unit priceSteel product selling price: ¥133,000/tonne
  • BusinessConstruction machinery
    Number of versionsHydraulic excavator sales: 4.5 thousand units; crawler crane sales: 45 units
Segment results
Iron and Steel
Ordinary profit or loss
-77 Hundreds of millions of yen
Year-on-year change
-138 Hundreds of millions of yen
Aluminum sheet
Ordinary profit or loss
54 Hundreds of millions of yen
Year-on-year change
59 Hundreds of millions of yen
Advanced Materials
Ordinary profit or loss
81 Hundreds of millions of yen
Year-on-year change
80 Hundreds of millions of yen
Welding
Ordinary profit or loss
23 Hundreds of millions of yen
Year-on-year change
14 Hundreds of millions of yen
Machinery
Ordinary profit or loss
62 Hundreds of millions of yen
Year-on-year change
-42 Hundreds of millions of yen
Engineering
Ordinary profit or loss
60 Hundreds of millions of yen
Year-on-year change
48 Hundreds of millions of yen
Construction machinery
Ordinary profit or loss
9 Hundreds of millions of yen
Year-on-year change
-2 Hundreds of millions of yen
Electricity
Ordinary profit or loss
16 Hundreds of millions of yen
Year-on-year change
-68 Hundreds of millions of yen
Medium-term management plan targets
FY2024-FY2026
Payout ratioApproximately 30%
Financial targets
ROICApproximately 5.5%
ROEApproximately 7.5%
Equity ratioApproximately 49%
Debt-to-equity ratioApproximately 0.55x
Risk amount incorporated into the outlookThe amount representing the range of variation the company expects in its forecast.
Annual total-¥12 billion
Breakdown
  • Higher logistics, energy and other materials prices, and delays in passing costs through to selling prices: -¥10 billion
  • Alternative raw material procurement costs in the aluminum-related businesses: -¥1 billion
  • Decline in and timing shifts in machinery-related business sales to the Middle East: -¥500 million
  • Impact on customers' and business partners' production and sales: -¥500 million
Orders received and order backlog
Machinery
Orders received¥59 billion
Order backlog¥239.9 billion
Engineering
Orders received¥84.5 billion
Order backlog¥436.7 billion
Capital expenditures
Accounting amount¥160.0 billion
Cash payments¥165 billion
Annual Dividend
Annual¥80 per share
Interim¥40 per share
End of period¥40 per share
Payout ratio
31.7% (mid-term management plan policy: approximately 30%)
Contents of this document
ItemDetails
Document typePresentation materials for financial results
Fiscal Period CoveredFY2026 First Quarter
Net Sales5,783 Hundreds of millions of yen
Operating profit204 Hundreds of millions of yen
Ordinary income226 Hundreds of millions of yen
Net income121 Hundreds of millions of yen
Results for the three months of the current quarterNet Sales 5,783 Hundreds of millions of yen / Operating profit (loss) 204 Hundreds of millions of yen / Ordinary profit or loss 226 Hundreds of millions of yen / Quarterly profit attributable to owners of the parent 121 Hundreds of millions of yen
Full-year earnings forecastNet Sales 26,900 Hundreds of millions of yen / Operating profit (loss) 1,500 Hundreds of millions of yen / Ordinary profit or loss 1,200 Hundreds of millions of yen / Ordinary income/loss excluding inventory valuation impact 995 Hundreds of millions of yen / Net income or loss attributable to owners of the parent 1,000 Hundreds of millions of yen / ROIC 5.5 Approximately % / ROE 7.5 Approximately % / Free cash flow 0 Hundreds of millions of yen
Self-assessment against the planOrdinary income and net income were in line with the previous forecast, while free cash flow was revised downward
Segment resultsIron and Steel Ordinary profit or loss -77 Hundreds of millions of yen / Year-on-year change -138 Hundreds of millions of yen / Aluminum sheet Ordinary profit or loss 54 Hundreds of millions of yen / Year-on-year change 59 Hundreds of millions of yen / Advanced Materials Ordinary profit or loss 81 Hundreds of millions of yen / Year-on-year change 80 Hundreds of millions of yen / Welding Ordinary profit or loss 23 Hundreds of millions of yen / Year-on-year change 14 Hundreds of millions of yen / Machinery Ordinary profit or loss 62 Hundreds of millions of yen / Year-on-year change -42 Hundreds of millions of yen / Engineering Ordinary profit or loss 60 Hundreds of millions of yen / Year-on-year change 48 Hundreds of millions of yen / Construction machinery Ordinary profit or loss 9 Hundreds of millions of yen / Year-on-year change -2 Hundreds of millions of yen / Electricity Ordinary profit or loss 16 Hundreds of millions of yen / Year-on-year change -68 Hundreds of millions of yen
Breakdown of Factors Affecting the ChangeFactors Volume and product mix / Amount -¥22.5 billion (Middle East impact: -¥4 billion), Factors Steel selling and raw material prices / Amount Up ¥1.5 billion, Factors Selling and procurement prices excluding steel / Amount +¥2.2 billion, Factors Cost changes / Amount -¥6.8 billion, Factors Consolidation and equity method / Amount +¥0.8 billion, Factors Electricity / Amount -¥6.8 billion, Factors Inventory valuation impact / Amount +¥15.0 billion
Key KPIsIndicator name Crude steel production (including Takasago) / Value 147 10,000 tonnes / Year on year against the same period last year +10,000 tonnes, Indicator name Steel product sales volume (non-consolidated) / Value 114 10,000 tonnes / Year on year against the same period last year -10,000 tonnes, Indicator name Aluminum sheet sales volume (consolidated) / Value 71 thousand tonnes / Year on year against the same period last year +1,000 tonnes, Indicator name Aluminum extrusion sales volume (consolidated) / Value 10 thousand tonnes / Year on year against the same period last year +1,000 tonnes, Indicator name Copper sheet sales volume (non-consolidated) / Value 13 thousand tonnes / Year on year against the same period last year +1,000 tonnes, Indicator name Welding materials sales volume (consolidated) / Value 60 thousand tonnes / Year on year against the same period last year +4,000 tonnes, Indicator name Orders received (Machinery) / Value 590 Hundreds of millions of yen / Year on year against the same period last year -¥300 million, Indicator name Orders received (Engineering) / Value 845 Hundreds of millions of yen / Year on year against the same period last year +¥19.5 billion
Unit price and quantity metricsBusiness Iron and Steel / Number of versions Steel product sales volume: 1.14 million tonnes / Unit price Steel product selling price: ¥133,000/tonne, Business Construction machinery / Number of versions Hydraulic excavator sales: 4.5 thousand units; crawler crane sales: 45 units / Unit price Not disclosed
Assumptions Underlying the Business OutlookItem US dollar exchange rate / Value FY2026 full-year: ¥156.4/USD, Item Chinese yuan exchange rate / Value FY2026 full-year: ¥22.4/CNY, Item Euro exchange rate / Value FY2026 full-year: ¥181.5/EUR, Item Iron ore / Value FY2026 Q2 price: $96/tonne; from the second half onward, at current levels, Item Hard coking coal / Value FY2026 Q1 price: $232/tonne; from Q2 onward, at current levels, Item Thermal coal / Value April-June 2026: approximately $130-$150/tonne; from Q2 onward, at current levels
Risk amount incorporated into the outlookAnnual total -¥12 billion / Breakdown Higher logistics, energy and other materials prices, and delays in passing costs through to selling prices: -¥10 billion, Alternative raw material procurement costs in the aluminum-related businesses: -¥1 billion, Decline in and timing shifts in machinery-related business sales to the Middle East: -¥500 million, Impact on customers' and business partners' production and sales: -¥500 million
Medium-term management plan targetsSubject FY2024-FY2026 / Payout ratio Approximately 30%
Financial targetsROIC Approximately 5.5% / ROE Approximately 7.5% / Equity ratio Approximately 49% / Debt-to-equity ratio Approximately 0.55x
Annual DividendAnnual ¥80 per share / Interim ¥40 per share / End of period ¥40 per share
Payout ratio31.7% (mid-term management plan policy: approximately 30%)
Capital expendituresAccounting amount ¥160.0 billion / Cash payments ¥165 billion
Orders received and order backlogMachinery Orders received ¥59 billion / Order backlog ¥239.9 billion / Engineering Orders received ¥84.5 billion / Order backlog ¥436.7 billion
New initiativesPlans are in place to pass higher costs through to selling prices. New investments, alliances, products and organizational changes: not disclosed.
Items this document does not state (9)
Gross Profit MarginOperating profit marginSelling, general and administrative expensesProgress against full-year forecastNumber 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.

Demand conditions from the second quarter onward are expected to remain sluggish, particularly in the automotive, construction and civil engineering-related sectors. Factors cited as affecting performance include higher crude oil, logistics, energy and other materials prices resulting from the deterioration in the Middle East situation, delays in passing higher costs through to selling prices, a deterioration in the steel metal spread, and the extension of scheduled maintenance at Unit 3 of the Kobe Power Plant. On the other hand, increases in inventory valuation gains and the effects of the weaker yen are expected to partially offset the factors weighing on earnings.

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Earnings Presentation Materials for the First Quarter of Fiscal 2026 | Kobe Steel,Ltd. (5406) timely disclosure | Komori