Economic, market, political and operating risks in Vietnam

「In Vietnam, robust demand for steel products continued throughout the year, centered on infrastructure investment by the government, which had shifted its policy focus to economic growth. Product shipments increased at both the northern and southern operations from the previous fiscal year, and together with the effects of ongoing cost-reduction measures, all operations recorded operating profits. In North America, production continued at the US operation while addressing operating challenges caused by aging equipment amid solid steel demand. Although a loss was recorded for the full year, as in the previous fiscal year, an operating profit was recorded in the second half due to the stabilization of operations and higher product market prices.」

「ベトナムにおいては、経済成長重視の政策に転換した政府によるインフラ投資を中心に、年度を通じて旺盛な鋼材需要が続きました。」

「In Vietnam, steel demand recovered, led by government-driven infrastructure investment, and product shipments at each operation increased year on year. Although competition remained severe, higher shipments and the effects of cost reductions enabled all Vietnam operations to record operating profits. In North America, the business environment was favorable in both the United States and Canada.」

「In Vietnam, construction demand, which had been sluggish due to political factors, showed signs of recovery and shipments increased. However, competition remained severe due to the downturn in the Chinese economy and the resulting impact of steel exports. Although the loss narrowed, an operating loss was recorded. In North America, construction demand remained strong and performance at the Canadian operation progressed favorably, while performance at the US operation remained sluggish as market conditions softened somewhat and it took time to stabilize operations following the fire.」

「In Vietnam, sluggish real estate and construction demand continued, resulting in an extremely difficult business environment. In particular, at the southern operation, which focuses mainly on housing, performance remained sluggish due to higher cost burdens from production adjustments in response to lower demand and declining product market prices. In North America, at the US operation, production and shipments declined and manufacturing costs increased due to equipment problems caused by aging facilities and a fire in August, resulting in a substantial deterioration in performance.」

「In Vietnam, while the recession in the real estate and construction sectors continued from the second half of the previous fiscal year, efforts were made at each operation to expand sales to new customers and thoroughly reduce costs. However, competition remained severe, and performance remained sluggish.」

「In Vietnam, real estate and construction demand, which had deteriorated since the second half of the previous fiscal year, showed no signs of recovery due to higher interest rates and tighter lending restrictions for the real estate sector, triggered by fraudulent incidents involving major real estate developers. Each production operation was forced to reduce sales and production, resulting in difficult business performance.」

「In Vietnam, the business environment became difficult as higher interest rates and tighter lending restrictions for the real estate sector, triggered by fraudulent incidents involving major real estate developers, depressed demand for private housing, while project orders were repeatedly postponed or suspended.」

「In Vietnam, the business environment was difficult as construction demand slowed amid intensifying competition, an off-season for demand due to seasonal factors such as the rainy season, and bank lending restrictions. Meanwhile, in North America, although the economy was showing signs of a slight slowdown due to the government's anti-inflation measures, the business environment remained solid as infrastructure investment, private investment and personal consumption remained strong.」

「In the Vietnam operations, as competition intensified, conditions remained difficult, with customers continuing to take a wait-and-see approach due to expectations that product prices would decline, in line with Japan, amid falling raw-material prices. Meanwhile, the North American operations continued to benefit from a favorable business environment, supported by the advancement of infrastructure investment policies and increased private investment.」

「The business environment for the overseas steel business was favorable, with the Vietnam operations benefiting from the economic recovery and pent-up demand following the COVID-19 pandemic, and the North American operations benefiting from the advancement of infrastructure investment policies and increased private investment.」

「At the Vietnam operations, performance was strong in the first half amid favorable demand conditions, supported by a recovery in demand after the Lunar New Year and robust steel demand in China. In the second half, operations were difficult due to lockdowns and other effects associated with the spread of COVID-19, but for the full year, the Vietnam operations as a whole achieved record-high profits. At the North American operations, shipments increased substantially in both the United States and Canada amid robust steel demand. Although steel scrap prices rose, the increase was successfully passed through to product prices, and the spread between purchase and selling prices widened. As a result, as in Vietnam, the North American operations as a whole achieved record-high profits for the full year.」

「In the overseas steel business, earnings at the Vietnam operations remained sluggish due to the impact of COVID-19, while earnings at the North American operations were strong, supported by robust steel demand, driving earnings for the overseas steel business as a whole.」

「In Vietnam, the pass-through of higher raw material prices after the Lunar New Year into product prices progressed, and performance was strong at both the northern and southern operations during the second quarter. In North America, steel demand also increased substantially as economic activity resumed, and sales and shipments continued to progress steadily.」

「In Vietnam, with demand remaining solid since the second half of the previous fiscal year, the pass-through of higher raw material prices after the Lunar New Year into product prices progressed, and performance was strong in both the north and south during the first quarter. In North America, profit declined year on year due to the severe cold wave in Texas in February and the suspension of operations for scheduled maintenance at the Canadian operation, acquired in March 2020, among other factors. However, performance began to recover from the difficult second half of the previous fiscal year as steel demand increased and product market conditions improved with the resumption of economic activity.」

「In Vietnam, the first half (January-June) was challenging due to sluggish sales at the southern operation amid intensifying competition, but performance began to recover in the second half as steel demand recovered and product prices rose. Meanwhile, in North America, both the United States and Canada recorded a substantial decline in profit as demand for mining-related products remained weak amid the stagnation of economic activity caused by COVID-19, and operations were suspended for equipment upgrades and equipment problems during the fourth-quarter accounting period (October-December).」

「In the overseas steel business, both Vietnam and North America were affected by the economic stagnation caused by COVID-19. Vietnam was beginning to regain stability, while North America continued to struggle in a challenging environment.」

「In southern Vietnam, product market conditions weakened amid intensifying competition, and performance deteriorated significantly. In northern Vietnam, although the business environment remained challenging, signs of recovery emerged as a result of initiatives in both manufacturing and sales. In North America, product market conditions remained on a downward trend as economic activity stagnated due to the impact of COVID-19, and performance was weak as shipments of mining-related products in Canada remained sluggish, among other factors.」

「In Vietnam, although strict government regulations and other measures succeeded in containing COVID-19, market conditions in southern Vietnam weakened as competing companies expanded production capacity and pursued aggressive low-price sales, resulting in difficult performance.」

「In Vietnam, performance had remained generally steady since the beginning of the fiscal year, supported by solid steel demand and relatively weak prices for iron scrap and semi-finished products. However, during the third quarter consolidated accounting period, intensifying competition caused product market conditions to decline, resulting in difficult operating conditions.」

「In Vietnam, although the competitive environment remained challenging, performance was generally steady as steel demand remained solid and iron scrap and semi-finished product prices declined.」

「In Vietnam, although the competitive environment remained challenging, performance was generally steady year on year as temporary disruptions in raw material procurement during the fourth quarter of the previous fiscal year subsided and product market conditions also recovered.」

「In Vietnam, steel demand remained solid, but the competitive environment became increasingly challenging as peer companies successively expanded production capacity, resulting in difficult operating conditions.」

「The overseas steel business recorded higher revenue and profit in both Vietnam and the United States, supported by solid steel demand.」

「In Vietnam, overall steel demand remained firm, but during the cumulative first-quarter consolidated period, shipments declined due to seasonal factors and the spread between selling and purchasing prices narrowed as raw material prices (iron scrap and semi-finished products) rose amid a challenging competitive environment.」

「We have affiliated companies in the Socialist Republic of Vietnam and the United States of America. The performance of these affiliated companies is affected by economic conditions and steel market conditions in their respective countries. If economic conditions or steel market conditions in either country deteriorate, the performance of the affiliated company concerned may also deteriorate.」

「In Vietnam, during the third quarter (January-September 2017), iron scrap and semi-finished product prices remained at high levels due to the effects of safeguard measures and Chinese steel demand. However, product price increases progressed from July, and sales volumes also expanded, resulting in steady performance.」

「In Vietnam, steel demand continued to grow steadily against a backdrop of economic growth. However, during the second quarter (January-June 2017), the spread between selling and purchasing prices narrowed as semi-finished product prices remained at high levels due to the effects of safeguard measures and Chinese steel demand, resulting in a loss.」

「In Vietnam, the competitive environment has become increasingly challenging as peer companies expand capacity in anticipation of growing steel demand against a backdrop of economic growth. However, as the period was a peak demand season, we secured a certain level of profit during the cumulative first-quarter consolidated period.」

「In the overseas steel business in Vietnam, performance deteriorated despite strong steel demand due to higher raw material prices resulting from safeguard measures and intensifying competition.」

「The performance of the affiliated company concerned is affected by economic conditions in Vietnam and steel market conditions. If economic conditions or steel market conditions in the country deteriorate, the performance of the affiliated company may also deteriorate.」