Nippon Steel (5401) Q1 2025 earnings summary

Executive summary

• FY2024 underlying business profit forecast raised to ¥780.0 bn, up ¥30.0 bn from previous guidance, despite a harsh global steel demand environment.

• Net profit for FY2024 projected at ¥340.0 bn, with EPS of ¥340 per share, and ROE at 12.9%.

• Dividend for FY2024 maintained at ¥160 per share, reflecting a payout ratio of approximately 30%.

• U.S. Steel acquisition progressing, with regulatory approvals expected in H2 2024; transaction valued at $14.1 bn.

• Q1 FY2024 revenue was ¥2,191.5 bn, down 0.4% year-over-year; business profit was ¥236.9 bn, down 4.7%.

Financial highlights

• FY2024 revenue forecast at ¥8,800.0 bn, slightly down from FY2023.

• Underlying business profit for FY2024 expected at ¥780.0 bn, down ¥155.0 bn year-over-year.

• Net profit for FY2024 forecast at ¥340.0 bn, a decrease of ¥209.3 bn compared to FY2023.

• ROE projected at 12.9% for FY2024.

• D/E ratio improved to 0.48 in Q1 FY2024, but expected to rise to 0.8x post-U.S. Steel acquisition, with a target to return to below 0.7x.

Outlook and guidance

• FY2025 targets underlying business profit nearing ¥1 trillion and crude steel production capacity of 100 Mt, driven by robust profit structure and U.S. Steel consolidation.

• Business profit expected to recover in FY2025, with most losses from structural reorganization measures eliminated.

• Dividend policy aims for a payout ratio of approximately 30% on a consolidated basis.

• Dividend payout ratio is expected to be about 47%.