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

JFE HOLDINGS, INC.

(5411)
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Japan's JFE books record loss, aims to cut costs and sell assets

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05/12/2020 | 05:21am EDT
A man walks past a signboard of JFE Holdings Inc. outside its headquarters in Tokyo

By Yuka Obayashi

JFE Holdings Inc on Tuesday signalled plans to shore up cash flow, as higher raw materials costs and weaker demand from a global economy that was slowing even before the coronavirus pandemic drove it to a record net loss.

The 197.7 billion yen ($1.84 billion) year to March loss and a further drop in demand linked directly to the outbreak mean Japan's second-biggest steelmaker face "the highest risk since our foundation" in 2002, Executive Vice President Masashi Terahata said.

To ride out the COVID-19 crisis, it aims to trim annual costs by 100 billion yen while stepping up selling its stakes it holds in other companies, reviewing investment plans and slashing inventories, he told a news conference.

The steelmaker did not give earnings guidance for the current financial year, saying it was difficult to predict the full impact of the outbreak on its business.

The record loss, due to weaker export prices and a hefty impairment loss on its local plants, compared with a revised March forecast of a 190 billion yen loss and a net profit of 163.5 billion yen a year earlier.

JFE Steel, a flagship steel unit of JFE Holdings, has already announced plans to curb output by temporarily suspending two blast furnaces, cutting 25% of its capacity, to meet a coronavirus-related slump in steel demand.

Terahata said the company would be able to manage without shutting any additional furnaces.

Even before the COVID-19 crisis, Japanese steelmakers had been suffering weaker demand amid the U.S.-Sino trade war and higher prices of raw materials such as iron ore due to strong appetite from China, forcing Nippon Steel Corp and JFE to cut their facilities permanently by 10-13%.

They are also struggling to cope with waning local demand amid a declining population, while the coronavirus epidemic has led to widespread disruptions of industrial activity, especially in automakers, their key customers.

JFE's bigger rival Nippon Steel on Friday reported a record 426 billion yen annual net loss as a massive restructuring charge dampened its earnings, and said it would idle two more blast furnaces from July in response to slumping demand.

($1 = 107.6000 yen)

(Reporting by Yuka Obayashi; editing by John Stonestreet)

Stocks mentioned in the article
ChangeLast1st jan.
DEERE & COMPANY -0.46% 157.65 Delayed Quote.-8.40%
JFE HOLDINGS, INC. -1.77% 778 End-of-day quote.-44.86%
LETS HOLDINGS GROUP CO., LTD. 2.68% 11.86 End-of-day quote.96.36%
LINE CORPORATION 0.91% 5530 End-of-day quote.3.36%
LOOK HOLDINGS INCORPORATED -0.85% 702 End-of-day quote.-43.93%
NIPPON STEEL CORPORATION -2.44% 993.2 End-of-day quote.-39.95%
THE GLOBAL LTD. -4.50% 212 End-of-day quote.-54.99%
THE NEW HOME COMPANY INC. -0.92% 3.24 Delayed Quote.-29.83%
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Financials
Sales 2021 3 014 B 28 090 M 28 090 M
Net income 2021 -41 862 M -390 M -390 M
Net Debt 2021 1 670 B 15 564 M 15 564 M
P/E ratio 2021 -10,7x
Yield 2021 0,57%
Capitalization 448 B 4 178 M 4 176 M
EV / Sales 2020
EV / Sales 2021 0,70x
Nbr of Employees 64 009
Free-Float 84,1%
Chart JFE HOLDINGS, INC.
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Technical analysis trends JFE HOLDINGS, INC.
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TrendsBearishBearishBearish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 9
Average target price 1 009,44 JPY
Last Close Price 778,00 JPY
Spread / Highest target 92,8%
Spread / Average Target 29,7%
Spread / Lowest Target -6,17%
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.-44.86%4 243
POSCO-20.30%12 771
ARCELORMITTAL-36.66%12 257
NUCOR-26.83%11 943
NIPPON STEEL CORPORATION-39.95%8 721
MAGNITOGORSK IRON & STEEL WORKS-8.68%6 006