Posted on 09 Aug 2023
Summary of Financial Results for the First Quarter of Fiscal 2023
ØDespite a year-on–year increase in the production volume of automobiles, a major demand sector, along with the easing semiconductor shortage, etc., sales volumes of steel products and aluminum rolled products decreased due to a decline in demand in the IT and semiconductor sectors, which are in a correction phase, and sluggish demand in the construction and civil engineering sectors.
ØOrdinary profit increased by 5.9 billion yen to 35.9 billion yen year on year, due to a significant improvement in steel metal spreads, the start of operation of Kobe Power Plant No. 4 unit, and the improvement of the effect of time lags in fuel cost adjustments, despite a decrease in sales volumes of steel products and aluminum rolled products, a decline in inventory valuation gains, and a decline in compensation income related to the engine certification problem in the construction machinery business.
Summary of Revisions to Fiscal 2023 Full-Year Earnings Forecast
ØCompared to the previous forecast, the business environment is becoming more challenging in terms of demand, due to factors such as a delay in demand recovery in the IT and semiconductor sectors and a decrease in Japanese automobile manufacturers’ overseas production along with the rise in China’s EV sector, etc. On the other hand, procurement costs are expected to improve due to a decline in energy prices.
ØOrdinary profit is expected to increase by 15.0 billion yen from the previous forecast to around 145.0 billion yen (ROIC: 6.7%), mainly due to steel metal spreads that are maintained/improved at a proper level, the improvement in procurement costs and progress in selling price improvement for aluminum rolled products, advanced materials, and construction machinery, and the improvement of the effect of time lags in fuel cost adjustments along with a decline in thermal coal prices in the electric power business, despite a decrease in sales volumes in the materials businesses .
ØProfit attributable to owners of parent is expected to increase by 20.0 billion yen from the previous forecast to a record high of about 120.0 billion yen due to an increase in ordinary profit and gains on the transfer of fixed assets in subsidiaries.
Source:Kobelco
