Nippon Steel (5401) Q2 2026 earnings summary

Executive summary

• Operating in a challenging global steel environment with high U.S. tariffs, weak demand from increased Chinese exports, and uncertainty in U.S.-China negotiations.

• Strategic cost optimization and asset streamlining improved profitability, with Underlying BP (excluding U.S. Steel) raised by ¥30.0 bn to ¥680.0 bn.

• U.S. Steel's contribution excluded from FY2025 due to market weakness and one-off costs, but strategic investments and technology transfer are underway for future recovery.

• Revenue for the six months ended September 30, 2025, rose 5.8% year-over-year to ¥4,635,647 million, but profit attributable to owners of the parent fell to a loss of ¥113,380 million from a profit of ¥243,347 million a year earlier.

• The period included the completion of the acquisition of United States Steel Corporation, significantly expanding global operations.

Financial highlights

• FY2025 revenue forecast at ¥10,000.0 bn, up ¥1,304.5 bn year-over-year.

• Underlying BP (excluding U.S. Steel) forecast at ¥680.0 bn, up ¥30.0 bn from previous guidance.

• Net profit forecast at ¥200.0 bn, with a ¥21.0 bn loss from Usiminas withdrawal and other one-off effects.

• Business profit dropped 39.4% year-over-year to ¥227,533 million.

• Basic and diluted earnings per share were negative at ¥(21.69), reflecting the net loss.

Outlook and guidance

• Full-year revenue forecast is ¥10,000,000 million, up 15% year-over-year.

• Business profit is projected at ¥450,000 million, down 34.1% year-over-year.

• FY2025 dividend set at ¥120/share pre-split (¥24/share post-split), with a 5-year payout ratio of ~30%.

• U.S. Steel expected to recover in FY2026, driven by capital investments, technology upgrades, and market recovery.

• Profit attributable to owners of the parent is forecast at a loss of ¥60,000 million, with basic EPS of ¥(11.00).