Nippon Steel (5401) Q2 2025 earnings summary

Executive summary

• H1 FY2024 consolidated business profit reached ¥375.7bn, exceeding forecasts despite a harsh environment and weak demand.

• Underlying business profit improved from previous forecasts, but overall profit declined due to inventory valuation losses and challenging demand.

• FY2024 net profit forecast is revised down by ¥30.0bn to ¥310.0bn, mainly due to increased inventory valuation losses.

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

• Progress continues on the U.S. Steel acquisition, with regulatory approvals pending and a one-time restructuring loss of approx. ¥230bn expected upon share transfer.

Financial highlights

• H1 FY2024 revenue was ¥4,379.7bn, with consolidated BP at ¥375.7bn, up ¥35.7bn from previous guidance.

• FY2024 revenue forecast is ¥8,600.0bn, down ¥268.0bn year-over-year.

• Underlying BP for FY2024 is forecast at ¥780.0bn (unchanged), while consolidated BP is revised to ¥670.0bn, down ¥199.6bn year-over-year.

• FY2024 net profit is expected at ¥310.0bn, down ¥239.3bn year-over-year.

• EPS forecast for FY2024 is ¥311, with ROE at 7.6%.

Outlook and guidance

• FY2024 underlying BP guidance is maintained at ¥780.0bn, with profit recovery expected in FY2025 and a target of over ¥900.0bn.

• Most losses from structural reorganization are expected to be eliminated in FY2025, supporting profit growth.

• Dividend policy remains at approx. 30% payout ratio, with FY2024 dividend at ¥160 per share.