Kobe Steel (5406) Q1 2025 earnings summary

Executive summary

• First quarter profit attributable to owners rose to 38.6 billion yen, up 60.7% year-over-year, driven by extraordinary gains from asset sales, despite a year-on-year drop in ordinary profit to 28.7 billion yen.

• Net sales for the quarter declined to 569.0 billion yen, down 3.7% year-over-year, mainly due to lower unit selling prices in steel and electric power, and reduced construction machinery sales.

• Comprehensive income dropped 65.0% year-over-year to 9.7 billion yen, mainly due to negative foreign currency translation adjustments and valuation differences.

• Full-year ordinary profit forecast was revised down to 110.0 billion yen, reflecting U.S. tariff impacts and inventory valuation deterioration; profit attributable to owners remains at 100.0 billion yen.

• Interim and annual dividends are maintained at 40 and 80 yen per share, respectively.

Financial highlights

• First quarter net sales: 569.0 billion yen (down 21.6 billion yen year-on-year); operating profit: 31.3 billion yen (up 0.7% year-on-year); ordinary profit: 28.7 billion yen.

• Profit attributable to owners: 38.6 billion yen (up 14.5 billion yen year-on-year), supported by 16.7 billion yen in extraordinary income from asset sales.

• Basic earnings per share rose to 98.03 yen from 60.90 yen year-on-year.

• Full-year net sales forecast: 2,480.0 billion yen (down 70.0 billion yen from previous forecast); free cash flow forecast revised down to 70.0 billion yen.

• Total assets decreased to 2,819.8 billion yen from 2,891.1 billion yen at the previous fiscal year-end.

Outlook and guidance

• Demand in construction, civil engineering, and automotive sectors expected to remain sluggish due to U.S. tariffs and economic uncertainty.

• Ordinary profit forecast lowered by 10.0 billion yen to 110.0 billion yen; free cash flow forecast reduced by 20.0 billion yen to 70.0 billion yen.

• Full-year profit attributable to owners of parent is projected at 100.0 billion yen, down 16.8% year-on-year.

• Basic earnings per share for the full year is forecast at 253.99 yen.

• Dividend forecast for fiscal 2026 is 80.00 yen per share.