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MarketScreener Homepage  >  Equities  >  Tokyo Stock Exchange  >  JFE Holdings, Inc.    5411   JP3386030005

JFE HOLDINGS, INC.

(5411)
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JFE to cut 13% steel capacity by March 2024, predicts record loss

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03/27/2020 | 03:13am EDT
Logo of JFE Holdings Inc is seen at Keihin industrial zone in Kawasaki

JFE Holdings Inc, Japan's second-biggest steelmaker, said on Friday it would cut its steel capacity by 13% by shutting a blast furnace by March 2024 due to weakening demand from manufacturers hit by the U.S.-China trade war.

"We are facing an unprecedented and extremely challenging operating environment due to slumping steel demand from manufacturing industries hit by the U.S.-China trade war and rising prices of raw materials driven by China's increased output of steel," JFE Steel President Yoshihisa Kitano told a news conference.

The company forecast an impairment loss of about 220 billion yen ($2 billion) on its production facilities in Chiba and Kawasaki, near Tokyo, in the current business year ending this month.

As a result, the steelmaker slashed its full-year earnings forecast, predicting a record 190 billion yen ($1.75 billion) in net loss, compared with its prior estimate of a net profit of 13 billion yen.

Under the restructuring plans, it will close a blast furnace and other facilities at the East Japan Works (Keihin) in Kawasaki in the year that ends March 2024.

Japanese steelmakers are also facing waning domestic demand due to a decline in population.

Last year, crude steel output in Japan, the world's third-biggest steel producer, fell 4.8% to 99.28 million tonnes from a year earlier, edging below 100 million tonnes for the first time in 10 years, the Japan Iron and Steel Federation said.

In February, Nippon Steel Corp unveiled a plan to shut nearly 10% of its production capacity, an unprecedented move in the once-dominant Japanese steel industry hit by falling demand at home and competition from China.

(Reporting by Yuka Obayashi; Editing by Shri Navaratnam and Subhranshu Sahu)

Stocks mentioned in the article
ChangeLast1st jan.
JFE HOLDINGS, INC. 3.54% 789 End-of-day quote.-44.08%
LETS HOLDINGS GROUP CO., LTD. -1.89% 10.88 End-of-day quote.80.13%
NIPPON STEEL CORPORATION 3.73% 1010.5 End-of-day quote.-38.91%
WORLD CO., LTD. 2.39% 1541 End-of-day quote.-42.74%
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Financials (JPY)
Sales 2020 3 674 B
EBIT 2020 -37 149 M
Net income 2020 -198 781 M
Debt 2020 1 717 B
Yield 2020 2,53%
P/E ratio 2020 -2,29x
P/E ratio 2021 -12,6x
EV / Sales2020 0,59x
EV / Sales2021 0,70x
Capitalization 454 B
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Technical analysis trends JFE HOLDINGS, INC.
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Income Statement Evolution
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Mean consensus OUTPERFORM
Number of Analysts 9
Average target price 975,00 JPY
Last Close Price 789,00 JPY
Spread / Highest target 115%
Spread / Average Target 23,6%
Spread / Lowest Target -11,3%
EPS Revisions
Managers
NameTitle
Koji Kakigi President, CEO & Representative Director
Masashi Terahata CFO, Representative Director & Executive VP
Masao Yoshida Independent Outside Director
Naosuke Oda Director
Hajime Ohshita Director
Sector and Competitors
1st jan.Capitalization (M$)
JFE HOLDINGS, INC.-44.08%4 215
NUCOR-26.24%12 500
POSCO-22.83%11 444
ARCELORMITTAL-43.65%10 483
NIPPON STEEL CORPORATION-38.91%8 334
MAGNITOGORSK IRON & STEEL WORKS-5.40%6 221