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Earnings presentation5406Kobe Steel,Ltd.Iron and Steel, Nonferrous Metals

Second-Quarter Financial Results Presentation for Fiscal 2026

In the second quarter of fiscal 2026, revenue increased, while ordinary income (loss) was at the same level as in the year-earlier period and interim net income attributable to owners of the parent declined. The full-year forecast was revised upward to ¥135 billion for ordinary income (loss) and ¥105 billion for net income, reflecting factors including an increase in inventory valuation gains.

Worth reading
67In 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
150
¥100 million (increase from the previous full-year ordinary income (loss) forecast)
Wording
Conditional
How definitive the wording is.

Contents of this document

Earnings presentationFY2026 second quarter12 items taken from the company’s own explanation
Financial Results Figures (The key points of this material are explained below)
Net Sales¥12,598 100 million+6.6%
Operating profit¥609 100 million-2.6%
Ordinary income¥572 100 million-0.7%
Net income¥425 100 million-32.2%
Full-year earnings forecast
Net Sales
¥27,500 100 million
Operating profit (loss)
¥1,650 100 million
Ordinary profit or loss
¥1,350 100 million
Net income attributable to owners of the parent
¥1,050 100 million
What the company explained in this material
Breakdown of Factors Affecting the ChangeReasons cited by the Company for the change in the figures.
Year-on-year change in ordinary income/loss
Volume and product mix-10
Selling and procurement prices-345
Cost changes-40
Consolidation and equity method35
Electricity-92
Inventory valuation impact340
Other-62
Assumptions Underlying the Business OutlookThe assumptions used by the company in preparing its forecast.
Foreign exchange
US dollars¥157.5/USD
Chinese yuan¥23.3/CNY
Euro¥182.3/EUR
Iron oreFiscal 2026 Q3 price: $87; Q4 at the same level as Q3
Hard coking coalFiscal 2026 Q2 price: $236; from the second half onward, at the same level as Q2
Thermal coalFrom the second half onward, at current levels
Key KPIsA metric the company considers important as a management benchmark.
  • Crude steel production300 10,000 tonnes
    Year on year against the same period last year+7.0%
  • Steel product sales volume229 10,000 tonnes
    Year on year against the same period last year-2.0%
  • Aluminum sheet sales volume138 thousand tonnes
    Year on year against the same period last year+3.0%
  • Aluminum extrusion sales volume19 thousand tonnes
    Year on year against the same period last year+2.0%
  • Copper sheet sales volume27 thousand tonnes
    Year on year against the same period last year+2.0%
  • Welding consumables sales volume118 thousand tonnes
    Year on year against the same period last year+6.0%
  • Hydraulic excavator unit sales10.1 thousand units
    Year on year against the same period last year-0.2%
  • Crawler crane unit sales119 Machines
    Year on year against the same period last year-35.0%
Unit price and quantity metricsThese figures show sales broken down by price and volume.
Steel product sales volume229 10,000 tonnes
Steel product selling price136 10,000 tonnes
Price unit¥ thousand/t
Aluminum sheet sales volume138 10,000 tonnes
Volume unitthousand tonnes
Segment results
Iron and steel
Net Sales4,096
Ordinary profit or loss-37
Aluminum Sheet
Net Sales1,003
Ordinary profit or loss51
Fabricated materials
Net Sales1,955
Ordinary profit or loss121
Welding
Net Sales523
Ordinary profit or loss48
Machinery
Net Sales1,289
Ordinary profit or loss139
Engineering
Net Sales827
Ordinary profit or loss75
Construction equipment
Net Sales2,025
Ordinary profit or loss44
Electricity
Net Sales1,144
Ordinary profit or loss142
Medium-term management plan targets
FY2024-FY2026
Payout ratioApproximately 30%
Financial targets
ROICApproximately 6.0%
ROEApproximately 8.0%
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.
Impact of the situation in the Middle East on results
First half¥-95 100 million
Second half¥-50 100 million
Fiscal year¥-145 100 million
Breakdown
Logistics, energy, etc.¥-130 100 million
Alternative sourcing for aluminum-related products¥-5 100 million
Decline in machinery-related sales to the Middle East, etc.¥-5 100 million
Impact on customers' and business partners' production and sales¥-5 100 million
Orders received and order backlog
Machinery
Orders received¥1,206 100 million
Order backlog¥2,308 100 million
Engineering
Orders received¥1,774 100 million
Order backlog¥4,934 100 million
Capital expenditures
¥1,650 100 million scheduled payment
Annual Dividend
Annual¥80 /share
Interim¥40 /share
End of period¥40 /share
Payout ratio
30.2
Contents of this document
ItemDetails
Document typeEarnings presentation
Fiscal Period CoveredFY2026 second quarter
Net Sales¥12,598 100 million (YoY +6.6%)
Operating profit¥609 100 million (YoY -2.6%)
Ordinary income¥572 100 million (YoY -0.7%)
Net income¥425 100 million (YoY -32.2%)
Full-year earnings forecastNet Sales ¥27,500 100 million / Operating profit (loss) ¥1,650 100 million / Ordinary profit or loss ¥1,350 100 million / Net income attributable to owners of the parent ¥1,050 100 million
Segment resultsIron and steel Net Sales 4,096 / Ordinary profit or loss -37 / Aluminum Sheet Net Sales 1,003 / Ordinary profit or loss 51 / Fabricated materials Net Sales 1,955 / Ordinary profit or loss 121 / Welding Net Sales 523 / Ordinary profit or loss 48 / Machinery Net Sales 1,289 / Ordinary profit or loss 139 / Engineering Net Sales 827 / Ordinary profit or loss 75 / Construction equipment Net Sales 2,025 / Ordinary profit or loss 44 / Electricity Net Sales 1,144 / Ordinary profit or loss 142
Breakdown of Factors Affecting the ChangeYear-on-year change in ordinary income/loss Volume and product mix -10 / Selling and procurement prices -345 / Cost changes -40 / Consolidation and equity method 35 / Electricity -92 / Inventory valuation impact 340 / Other -62
Key KPIsIndicator name Crude steel production / Value 300 10,000 tonnes / Year on year against the same period last year 7 10,000 tonnes, Indicator name Steel product sales volume / Value 229 10,000 tonnes / Year on year against the same period last year -2 10,000 tonnes, Indicator name Aluminum sheet sales volume / Value 138 thousand tonnes / Year on year against the same period last year 3 thousand tonnes, Indicator name Aluminum extrusion sales volume / Value 19 thousand tonnes / Year on year against the same period last year 2 thousand tonnes, Indicator name Copper sheet sales volume / Value 27 thousand tonnes / Year on year against the same period last year 2 thousand tonnes, Indicator name Welding consumables sales volume / Value 118 thousand tonnes / Year on year against the same period last year 6 thousand tonnes, Indicator name Hydraulic excavator unit sales / Value 10.1 thousand units / Year on year against the same period last year -0.2 thousand units, Indicator name Crawler crane unit sales / Value 119 Machines / Year on year against the same period last year -35 Machines
Unit price and quantity metricsSteel product sales volume 229 10,000 tonnes / Steel product selling price 136 10,000 tonnes / Price unit ¥ thousand/t / Aluminum sheet sales volume 138 10,000 tonnes / Volume unit thousand tonnes
Assumptions Underlying the Business OutlookForeign exchange US dollars ¥157.5/USD / Chinese yuan ¥23.3/CNY / Euro ¥182.3/EUR / Iron ore Fiscal 2026 Q3 price: $87; Q4 at the same level as Q3 / Hard coking coal Fiscal 2026 Q2 price: $236; from the second half onward, at the same level as Q2 / Thermal coal From the second half onward, at current levels
Risk amount incorporated into the outlookImpact of the situation in the Middle East on results First half ¥-95 100 million / Second half ¥-50 100 million / Fiscal year ¥-145 100 million / Breakdown Logistics, energy, etc. ¥-130 100 million / Alternative sourcing for aluminum-related products ¥-5 100 million / Decline in machinery-related sales to the Middle East, etc. ¥-5 100 million / Impact on customers' and business partners' production and sales ¥-5 100 million
Medium-term management plan targetsSubject FY2024-FY2026 / Payout ratio Approximately 30%
Financial targetsROIC Approximately 6.0% / ROE Approximately 8.0% / Equity ratio Approximately 49% / Debt-to-equity ratio Approximately 0.55x
Annual DividendAnnual ¥80 /share / Interim ¥40 /share / End of period ¥40 /share
Payout ratio30.2
Capital expenditures¥1,650 100 million (scheduled payment)
Orders received and order backlogMachinery Orders received ¥1,206 100 million / Order backlog ¥2,308 100 million / Engineering Orders received ¥1,774 100 million / Order backlog ¥4,934 100 million
Items this document does not state (12)
Gross Profit MarginOperating profit marginSelling, general and administrative expensesResults for the three 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&ANew initiatives

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.

In the first half, revenue increased due to higher selling prices resulting from rising market prices for aluminum and copper ingots, among other factors. The deterioration in the steel metal spread caused by higher raw material market prices was offset by an improvement in the impact of inventory valuation resulting from rising market prices for steel raw materials, aluminum and copper ingots. Interim net income declined as gains on the sale of policy-held shares and other items recorded in the year-earlier period were absent. The upward revision to the full-year forecast reflects an increase in inventory valuation gains resulting from rising market prices for aluminum and copper ingots, among other factors.

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Second-Quarter Financial Results Presentation for Fiscal 2026 | Kobe Steel,Ltd. (5406) timely disclosure | Komori