KOBE STEEL'S FINANCIAL HIGHLIGHTS FOR FISCAL 1996
Kobe Steel, Ltd. Media contact: Gary Tsuchida
Tokyo, Japan tel (03) 3218-6055
Tokyo Stock Exchange No. 5406 fax (03) 5252-7961
e-mail www-admin@kobelco.co.jp
NON-CONSOLIDATED FINANCIAL SUMMARY
| Net sales | 1,141,965 | 1,146,356 | (0.4%) |
| Operating income | 80,030 | 100,012 | (20.0%) |
| Ordinary income* | 26,665 | 36,043 |
(26.0%) |
| Net income | 21,689 |
69,324 |
(68.7%) |
CONSOLIDATED FINANCIAL SUMMARY
| Net sales | 1,533,459 | 1,476,968 | 3.8% |
| Operating income | 97,534 |
137,293 |
(29.0%) |
| Ordinary income* | 20,980 |
58,795 |
(64.3%) |
| Net income | 17,505 |
90,313 |
(80.6%) |
* also known as pretax recurring profit
Figures in parentheses denote decreases.
Figures are in millions of yen unless otherwise
noted.
KOBE STEEL'S
NON-CONSOLIDATED FINANCIAL RESULTS FOR FISCAL 1996
TOKYO (May 22, 1997) -- The Japanese
economy continued its modest recovery
supported by government economic stimulus measures in the first
half of the fiscal year,
record low interest rates, and a correction in the high yen.
Despite these positive factors,
full recovery did not materialize.
In this environment, Kobe Steel focused
on maximizing sales, rapidly recovering from the
Great Hanshin Earthquake, and eliminating its accumulated deficit
under the 1995-1997
Management Plan. Through lowering production costs, decreasing
the workforce, and
reducing total assets, Kobe Steel was able to achieve its cost
reduction goals one year
ahead of schedule. In fiscal 1996, Kobe Steel was able to eliminate
its accumulated
deficit incurred in the quake.
Non-consolidated net sales were 1,141,965
million yen, nearly the same as in the previous
fiscal period, despite the steel tube and cutting tool businesses
having become
subsidiaries. Ordinary income (also known as pretax recurring
profit) decreased to
26,665 million yen due to lower performance in the Machinery and
Information Sector.
Extraordinary loss on the revaluation
of marketable securities and other items was offset
by a gain on the sale of assets. As a result, net income amounted
to 21,689 million yen.
Kobe Steel was able to eliminate its accumulated deficit of 16,298
million yen and
recorded unappropriated retained earnings of 5,391 million yen
in the period under
review.
In fiscal 1997, the Japanese economy
is expected to be stimulated by firm capital
investment spending. However, weak personal spending following
the April, 1997
consumption tax increase and the discontinuation of special tax
reductions, combined
with a shrinking public works budget, will hinder prospects for
a full-scale recovery.
From a global perspective, the rise
of China and Southeast Asia in the world market has
produced an era of great competition, encompassing Japan as well
as western nations.
Within Japan, stiff price competition, the hollowing out of the
industrial base, and market
deregulation are causing the nation's
economic structure to change rapidly.
Responding to these changes, Kobe
Steel implemented a new management plan in April
called "KOBELCO-21,"
incorporating the 1997-1999 Action Plan.
Through this plan, Kobe Steel aims
for product excellence in its current businesses.
Cost reduction, rationalization of distribution systems, and optimum
production systems
both in and outside Japan are aimed at strengthening its international
competitiveness
and maintaining stable profitability. The company also places
a high priority on
fostering new businesses with future potential, applying management
resources to fields
in which the company excels.
By applying the new management plan
to all areas of its operations, Kobe Steel is aiming
to create a solid management base capable of facing the challenges
of the 21st century.
NON-CONSOLIDATED SECTOR PERFORMANCE
Sales in the Iron and Steel Sector
were 506,008 million yen, up 1.2% from 499,949 million yen
in the previous period. In the domestic market, demand in the
first half of the year was
lackluster as inventory adjustments continued. In the second
half, the increase in the
consumption tax from April, 1997 boosted demand and a moderate
rise in capital
investment also contributed to firm demand, primarily in the automotive
and
construction markets.
Sales volume rose slightly owing to
higher shipments in the domestic market. Exports
declined as shipments to mainly China fell. Domestic sales prices
went down in
comparison to the same period last year due to the sluggish market
primarily in the first
half of the fiscal year. Although export prices on a dollar basis
went down due to the soft
overseas market, they rose in yen terms owing to the weaker yen.
In the Aluminum and Copper Sector,
sales dipped 2.2% to 264,678 million yen, from
270,558 million yen in fiscal 1995. Rolled aluminum sales were
nearly the same as in
the previous fiscal period with firm demand for can stock and
aluminum computer disk
blanks. Rolled copper products registered a slight decline, as
demand in the
semiconductor field went down.
In the Machinery and Information Sector,
sales dipped 1.2% to 371,278 million yen,
versus 375,848 million yen in fiscal 1995. Sales rose for overseas
plant projects and
construction machinery. However, turning the cutting tool business
into a subsidiary
and lower demand in the semiconductor field contributed to the
overall decrease in sales.
DIVIDENDS
Kobe Steel's
Board of Directors has decided to propose at the annual shareholders'
meeting that no year-end dividends be paid. While the accumulated
deficit has been
eliminated, the amount of unappropriated retained earnings is
deemed to be insufficient.
Kobe Steel regrets having to take this measure and aims for the
early resumption of
dividend payments.
Notes
i. Sums of less than 1 million have
been omitted.
ii. Average number of shares in FY1996 and FY1995: 2,835,437,000
iii. Number of shares issued in FY1996 and FY1995: 2,835,437,000
iv. No changes have been made in accounting policies.
v. Under the Commercial Code and in common with most of the Japanese
companies
whose shares are listed on Japanese stock exchanges, Kobe Steel
has adopted 1,000
shares as 1 unit of shares.
vi. The difference between the market value of marketable securities
and the balance
sheet amount of the securities as of March 31, 1997 was 42,804
million yen of unrealized
gain.
vii. The difference between the market value of derivatives and
the contract amount as
of March 31, 1997 was an unrealized loss of 2,267 million yen.
1.1 SUMMARY OF FISCAL 1996 NON-CONSOLIDATED
FINANCIAL RESULTS
(in millions of yen)
| Net sales | 1,141,965 | 1,146,356 | (0.4%) | 7.6% |
| Export sales | 210,067 | 196,423 | 6.9% | |
| Percentage of export
sales to net sales | 18.4% | 17.1% |
||
| Operating income | 80,030 | 100,012 | (20.0%) | 75.1% |
| Ordinary income* | 26,665 | 36,043 | (26.0%) | |
| Income before income taxes | 27,689 | 71,624 | ||
| Net income | 21,689 | 69,324 | (68.7%) | |
| Net income per share | 7.64 yen | 24.44 yen | ||
| Fully diluted earnings per share | ||||
| Return on average equity | 5.4% | 19.6% | ||
| Ordinary income/total liabilities & stockholders' equity |
1.5% | 1.9% | ||
| Ordinary income/net sales | 2.3% | 3.1% |
| SALES BY SECTOR | |||
| Iron & Steel | 506,008 | 499,949 | 1.2% |
| Aluminum & Copper | 264,678 | 270,558 | (2.2%) |
| Machinery & Information | 371,278 | 375,848 | (1.2%) |
| Total | 1,141,965 | 1,146,356 |
| 1.2 DIVIDENDS | ||
| Dividends per share | ||
| Dividends | ||
| Payout ratio | ||
| Dividends/stockholders' equity |
| 1.3 FINANCIAL POSITION | ||
| Total assets | 1,777,349 | 1,824,211 |
| Total stockholders' equity | 409,165 | 387,475 |
| Stockholders' equity/total assets | 23.0% | 21.2% |
| Stockholders' equity per share | 144.30 | 136.65 |
2. NON-CONSOLIDATED FORECAST FOR
FISCAL 1997 (ending March 1998)
| Net sales | 560,000 | 1,150,000 |
| Ordinary income* | 10,000 | 27,000 |
Notes
* Ordinary income is also
known as pretax recurring profit.
Figures in parentheses denote decreases.
TOKYO (May 22, 1997) -- Kobe Steel,
Ltd.'s
consolidated net sales for fiscal 1996 rose to
1,553,459 million yen, an increase of 3.8% over the previous fiscal
period. Sales from
US-based companies increased, while decreasing for semiconductor-related
firms.
Ordinary income (also known as pretax
recurring profit) dropped to 20,980 million yen.
Lower parent-company profits as well as sharp decreases in the
performance of
semiconductor-related companies contributed to the lower profitability.
Consolidated
net income was 17,505 million yen.
1.1 SUMMARY OF FISCAL 1996 CONSOLIDATED
FINANCIAL RESULTS