JFE Holdings (5411) investor relations material

Executive summary

• FY2025 revenue declined 6.6% year-over-year to ¥4,539.2 bn, with business profit flat at ¥135.3 bn and profit attributable to owners at ¥70.1 bn, reflecting a challenging environment due to global economic headwinds and fewer one-time gains.

• FY2026 business profit is forecast at ¥215.0 bn, with profit attributable to owners expected to rise to ¥150.0 bn, driven by cost improvements, price increases, and overseas expansion, though still below medium-term targets.

• Engineering segment set record revenue and orders, while steel and trading segments faced weak demand and lower prices.

• Major joint venture established in India, expanding overseas steel operations.

• Dividend remains at ¥80/share, with a payout ratio target of around 30%.

Financial highlights

• FY2025 business profit (excluding inventory valuation) was ¥166.3 bn, down ¥70.0 bn year-over-year.

• Gross profit was ¥525.9 bn, down slightly from the prior year.

• Operating profit dropped to ¥112.2 bn from ¥165.1 bn year-over-year.

• Basic EPS decreased to ¥110.30 from ¥144.43.

• Cash flow from operations was ¥379.1 bn; free cash flow was negative ¥73.7 bn due to high investment outflows.

Outlook and guidance

• FY2026 revenue is projected at ¥4,800.0 bn (+5.7% YoY), with business profit at ¥215.0 bn (+58.8% YoY), and net profit at ¥150.0 bn (+113.8% YoY).

• Segment profit expected to rise across steel, engineering, and trading businesses, with steel segment profit forecast at ¥100.0 bn.

• Engineering profit to remain stable; trading profit to improve with North America recovery and higher domestic prices.

• Medium-term plan targets business profit of ¥400.0 bn and ROE of at least 10% by FY2027.

• Middle East risks not factored into guidance; each $10/barrel oil increase could impact costs by ¥10 bn/month.