According to the report, the company felt limited impact from the new US import tariffs in the first quarter, but has included a potential negative impact of 5 billion yen in its forecasts for the second quarter and beyond.
Decline in Net Sales and Profitability
Kobe Steel’s net sales in the steel products segment for the first quarter of fiscal 2025 totaled 212 billion yen, down 12.3 billion yen compared to the same period last year. The company revised its full-year sales forecast for steel products downward by 29 billion yen to 836 billion yen.
Operating income was 6 billion yen in the first quarter, a decrease of 6.6 billion yen year-on-year. The annual operating profit forecast for the steel segment was also cut by 15.3 billion yen to 9 billion yen.
Limited Change in Steel Production and Sales Volume
Crude steel production in the first quarter was 1.46 million tons, while sales volume remained steady at 1.15 million tons. Domestic sales accounted for 0.92 million tons, with exports at 0.23 million tons. The export ratio fell 3 percentage points from the previous year to 20%. The average steel sales price dropped by 9,000 yen per ton year-on-year, reaching 138,000 yen per ton.
Overall Group Forecasts Also Revised
On a consolidated basis, Kobe Steel revised its net sales forecast for fiscal 2025 to 2.48 trillion yen, a decrease of 70 billion yen from the previous forecast. Year-end operating income is expected to decline by 10 billion yen to 130 billion yen, while ordinary profit forecasts were lowered to 110 billion yen.
Net profit expectations for the full year remain steady at 100 billion yen.
US Tariffs Begin to Impact Profitability
The company expects the new US import tariffs to pressure profitability starting from the second quarter. The total potential negative impact of 5 billion yen has been included in forecasts.
This impact is expected to break down as follows:
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2 billion yen from direct profit loss in construction machinery exports,
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2.5 billion yen from an anticipated 20% drop in indirect vehicle exports to the US,
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500 million yen from increased import taxes on US-based subsidiaries.
Company officials emphasized that indirect exports to the US from automotive and other sectors represent a larger share than direct exports. Kobe Steel’s local subsidiaries in the US account for approximately 7% of total sales in the machinery segment.
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