Japan's largest steel producer has increased its net profit forecast

For the first quarter (April-June) of the financial year, Nippon Steel reported a net profit of JPY157.6 billion (approximately USD1 billion), an 11% decline from the previous year. However, this figure exceeded analyst expectations of JPY 108.7 billion (approximately USD 688 million), according to LSEG data.

The company, the world's fourth-largest steelmaker, has increased its net profit forecast for the fiscal year ending in March 2025 to JPY 340 billion (approximately USD 2.15 billion), up from JPY 300 billion (approximately USD 1.90 billion). Despite this upward revision, the forecast remains below analysts' estimates of JPY 372.6 billion (approximately USD 2.36 billion). Nippon Steel attributes the forecast adjustment to anticipated improvements in its steel business.

Vice Chairman Takahiro Mori stated that despite facing a significant slump in steel demand, the company's restructuring efforts, including the shutdown of steel plants, have started to yield positive results.

Nippon Steel, which secured a USD 14.9 billion deal to acquire U.S. Steel last December, received a second request for information and data from the U.S. Department of Justice as part of the regulatory review process. Mori expressed confidence in closing the deal by year-end, highlighting his numerous visits to the U.S. and interactions with around 700 stakeholders, including U.S. Steel employees, to foster a better understanding of the acquisition.

While both companies have received all necessary regulatory approvals outside the United States, they face political opposition, regulatory scrutiny in the U.S., and objections from the United Steelworkers (USW) union, which is concerned about potential job losses.

Mori noted that although the union has not officially changed its stance, efforts have been made to ensure the correct understanding of the deal's implications. Nippon Steel has pledged not to cut jobs, transfer production overseas, or close plants even after the current agreement between USW and U.S. Steel expires in September 2026.