Kobe Steel (5406) Q4 2025 earnings summary

Executive summary

• Achieved record-high profit attributable to owners of parent at 120.1 billion yen in fiscal 2024, with ordinary profit of 157.1 billion yen and ROIC of 6.9%, despite a challenging environment.

• Fiscal 2024 net sales rose 0.5% year-over-year to 2,555.0 billion yen, with operating profit down 15% to 158.7 billion yen due to higher fixed costs and reduced temporary gains in electric power.

• Profit attributable to owners of parent increased 9.7% year-over-year to 120.1 billion yen, aided by lower tax expenses and a gain on bargain purchase.

• Free cash flow was positive at 34.3 billion yen, and financial stability improved with a D/E ratio of 0.76 and net assets ratio of 42.8%.

• Fiscal 2025 forecast expects ordinary profit of 120.0 billion yen and profit attributable to owners of parent at 100.0 billion yen, with free cash flow projected at 90.0 billion yen.

Financial highlights

• Fiscal 2024 net sales were 2,555.0 billion yen, up 11.8 billion yen year-over-year; ordinary profit decreased by 3.7 billion yen.

• Operating profit decreased by 27.9 billion yen year-over-year, mainly due to cost increases and reduced gains in electric power.

• Free cash flow was 34.3 billion yen; cash flows from operating activities were 148.3 billion yen, down from 205.3 billion yen the previous year.

• Annual dividend for fiscal 2024 was 100 yen per share (32.8% payout), with fiscal 2025 planned at 80 yen (31.6% payout).

• Fiscal 2025 net sales forecast is 2,550.0 billion yen, with ordinary profit expected to decrease by 37.1 billion yen year-over-year.

Outlook and guidance

• Fiscal 2025 expects stable earnings in electric power and increased earnings in machinery, but lower temporary gains and continued challenging environment.

• ROIC is expected to be around 5%, below the mid-term target of 6%.

• Free cash flow is projected to rise to 90.0 billion yen, supported by asset-light strategies.

• U.S. tariff policy impact is uncertain and may affect exports, especially in automotive-related businesses.

• Dividend forecast for fiscal 2025 is 80 yen per share.