Income Analysis
Non-Consolidated net sales edged down 0.2% in fiscal
1994, to ¥1,065.6 billion, as a 1.0% rise in domestic
sales, to ¥876.3 billion, offset a 5.4% decline in 
exports, to ¥189.3 billion.
 In the Iron and Steel Sector, which includes Kobe
Steel's welding operations, sales fell 7.5%, to ¥477.5
billion. Sales in this sector thus accounted for 44.8% of
net sales, down from 48.3 % in fiscal 1993. Sales in the
Aluminum and Copper Sector rose 9.6%, to ¥238.3
billion, representing 22.4% of net sales, up from 20.4%
a year earlier. In the Machinery Sector, sales climbed
4.6%, to ¥349.8 billion, accounting for 32.8% of net
sales, as compared with 31.3% in the previous term.
 Operating income was up a sharp 59.0%, to ¥57.1
billion, boosting the profit margin 2.0 percentage
points, to 5.4%.
 Net other expenses came to ¥160.1 billion, an
increase of 324.5% from fiscal 1993, reflecting losses
incurred in the earthquake. As a result, the Company
posted a loss before income taxes of ¥103.0 billion.
With a special ¥7.7 billion earthquake-related tax
refund adding ¥7.3 billion in income, the net loss for
the period was ¥97.5 billion, compared with a loss of
¥1.0 billion in fiscal 1993. The net loss per share was 
thus ¥33.75, leading the Company to again suspend
payment of cash dividends.
 Return on average assets was -5.0%, down from
-0.1% in fiscal 1993 and 0.6% in fiscal 1992. Return
on average equity was -30.1%, compared with -0.2%
and 2.8%, respectively, in the previous two fiscal years.