Kobe Steel (5406) Q3 2025 earnings summary

Executive summary

• Cumulative third quarter results for fiscal 2024 were roughly flat year on year, with full-year forecasts revised upward for ordinary profit and profit attributable to owners of parent, both expected to reach record highs.

• Net sales for the nine months ended December 31, 2024, rose 0.6% year-over-year to ¥1,884.1 billion, with operating profit down 9.9% to ¥124.5 billion and profit attributable to owners of parent down 6.3% to ¥102.8 billion.

• Comprehensive income decreased to ¥97.6 billion from ¥161.3 billion year-over-year.

• Enhanced cost reduction and price pass-through efforts contributed to profitability, offsetting lower sales volumes in some segments.

• Equity-to-asset ratio improved to 38.8% from 36.2% at the end of the previous fiscal year.

Financial highlights

• Cumulative 3Q FY2024 net sales: 1,884.0 billion yen (up 10.3 billion yen year on year); operating profit: 124.5 billion yen (down 13.7 billion yen); ordinary profit: 132.8 billion yen (down 1.0 billion yen); profit attributable to owners of parent: 102.8 billion yen (down 6.9 billion yen).

• Full-year FY2024 forecast: net sales 2,580.0 billion yen (down 20.0 billion yen from previous forecast); operating profit 150.0 billion yen (up 10.0 billion yen); ordinary profit 140.0 billion yen (up 10.0 billion yen); profit attributable to owners of parent 130.0 billion yen (up 10.0 billion yen).

• Free cash flow for FY2024 is expected at negative 10.0 billion yen, a 60.0 billion yen improvement from the previous forecast.

• Basic earnings per share for the period was ¥260.58, down from ¥277.83 year-over-year.

• Cash dividends per share forecast for FY2024 was revised up to ¥100.00.

Outlook and guidance

• Full-year net sales forecast for FY2024 is ¥2,580.0 billion, up 1.4% year-over-year.

• Operating profit is projected at ¥150.0 billion, down 19.6% year-over-year; ordinary profit at ¥140.0 billion, down 13.0%.

• Profit attributable to owners of parent is forecast at ¥130.0 billion, up 18.7% year-over-year, with EPS of ¥329.52.

• ROIC is projected to improve to around 6.5%, and ROE to approximately 12%.

• Demand in materials businesses is expected to remain subdued, while machinery and engineering segments are forecast to benefit from improved order profitability and cost controls.