Nippon Steel (5401) Q4 2026 earnings summary

Executive summary

• FY2025 revenue rose 15.7% year-over-year to ¥10,063.2bn, while underlying business profit reached ¥650.4bn, exceeding forecasts despite a challenging environment and one-off effects of -¥70.0bn.

• Profit attributable to owners was ¥62.1bn, up ¥87.1bn from the previous forecast but down sharply year-over-year due to one-time costs related to the U.S. Steel acquisition.

• Major strategic moves included the acquisition of U.S. Steel, expansion in India and Thailand, and significant investments in carbon neutrality and digital transformation.

• Structural reforms, cost reductions, and group company improvements offset global steel market pressures and incidents at production sites.

• Overseas expansion, including the acquisition of U.S. Steel and capacity growth in India, contributed to a resilient business structure.

Financial highlights

• FY2025 revenue was ¥10,063.2bn, up ¥1,367.7bn year-over-year.

• Underlying BP for FY2025 was ¥650.4bn, down ¥143.3bn year-over-year but ¥30.4bn above the previous forecast.

• Operating profit dropped 55.7% year-over-year to ¥242.9bn.

• Total assets increased to ¥14,660.6bn, up from ¥10,942.5bn, driven by the U.S. Steel merger.

• Interest-bearing debt rose to ¥5,174.2bn, up ¥2,666.8bn, mainly for the U.S. Steel acquisition.

• Free cash flow was an outflow of ¥2,120.2bn, compared to an inflow of ¥516.1bn the previous year.

• Dividend for FY2025 is ¥24 per share, with a payout ratio of about 30% (excluding one-time losses).

Outlook and guidance

• FY2026 underlying BP is forecast at ¥700.0bn or more, with H2 annualized at ¥800.0bn, driven by U.S. Steel earnings recovery.

• FY2026 profit forecast is ¥220.0bn, reflecting reduced one-off losses.

• Dividend for FY2026 is planned at ¥24 per share, maintaining a minimum payout policy.

• Fiscal 2027 revenue forecast is ¥11,000bn (+9.3% YoY), with business profit of ¥530bn (+3.1%).

• Underlying business profit for fiscal 2027 targeted at ¥700bn, with U.S. Steel expected to contribute over ¥100bn.

• The impact of the Middle East situation is excluded from forecasts due to uncertainty, but a -¥50.0bn impact is anticipated in Q1 FY2026.