KOBE STEEL'S FINANCIAL RESULTS ESTIMATES FOR FISCAL 1996

TOKYO (September 4, 1996) -- Kobe Steel, Ltd. anticipates non-consolidated 
net sales of 555 billion yen for the first half of fiscal 1996 (April 1-Sept. 30, 
1996).  Ordinary income is estimated to be 10 billion yen with net income of 
12 billion yen.

The Japanese economy has seen a correction in the high yen, reductions in 
interest rates, and increased public works spending under the government's 
economic measures.  The economy is recovering at a modest rate, but full 
recovery is still far off.

In this environment, Kobe Steel implemented measures to increase its 
profitability.  The company is aiming to increase sales volume, while 
rationalizing the work force and lowering overall costs.

Despite these efforts, non-consolidated net sales in the first half of fiscal 
1996 are estimated at 555 billion yen, down in comparison to the second half 
of fiscal 1995.  In the Iron and Steel Sector, sales prices and sales volume 
are forecast to decrease.  While sales in the Machinery and Information 
Sector were firm in the previous fiscal period, they are anticipated to 
decrease in the first half of fiscal 1996.

Ordinary income (also known as pretax recurring profit) for the first half of 
fiscal 1996 is forecast to be 10 billion yen, down 5 billion yen from the 
previous estimate.  The company has benefited from overall cost savings 
including rationalization, lower production costs, lower cost of financial 
activities, and other reduction in expenditures.  However, profitability from 
industrial machinery is expected to be low, and steel production and sales 
volume are forecast to decrease in this fiscal year.

Net income for the first half of fiscal 1996 is anticipated to be 12 billion yen, 
after extraordinary income from the sale of fix assets. 

In the second half of fiscal 1996, Kobe Steel does not foresee a sharp recovery 
of the economy.  Although the company hopes the business environment 
will improve, it views the situation as difficult.

In this operating environment, Kobe Steel forecasts non-consolidated net 
sales for the full fiscal year ending March 1997 at 1,130 billion yen.  
Ordinary income (also known as pretax recurring profit) is estimated at 30 
billion yen.

Under these circumstances, Kobe Steel decided that no interim dividends 
can be paid for the first half of fiscal 1996, a decision reached at a board of 
directors' meeting yesterday.  The company sincerely regrets having to take 
this measure and hopes that shareholders will understand the decision.  

NON-CONSOLIDATED FINANCIAL RESULTS ESTIMATES 
FOR FISCAL 1996

                    Current estimates    Previous estimates      Fiscal 1995
                   1st half  full year   1st half  full year     2nd half  

Net sales             555      1,130        565      1,160         596.2
Ordinary income        10         30         15         40          22.7
Net income             12                                           43.4
Dividends              -0-                                            -0-


CONSOLIDATED FINANCIAL RESULTS ESTIMATES FOR FISCAL 1996

Due to the revision in non-consolidated financial results estimates, 
consolidated financial results estimates are forecast as follows:

                    Current estimates   Previous estimates
Net sales                 1,490              1,520
Ordinary income              45                 55

(Note:  Figures are in billions of yen)

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MEDIA CONTACT
Gary Tsuchida, Publicity Dept.
Kobe Steel, Ltd., Tokyo
tel (03) 3218-6055
fax (03) 5252-7961
e-mail  www-admin@kobelco.co.jp

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