Flash Report

Consolidated Basis

Results for the First Quarter of Fiscal 2020

(April 1, 2020―June 30, 2020)

under IFRS

August 4, 2020

Company name:

Nippon Steel Corporation

Stock listing:

Tokyo, Nagoya, Sapporo, Fukuoka stock exchanges

Code number:

5401

URL:

https://www.nipponsteel.com/en/index.html

Representative:

Eiji Hashimoto, Representative Director and President

Contact:

Shinnosuke Arita, General Manager, Public Relations Center

Telephone:

+81-3-6867-2135, 2146, 2977, 3419

Scheduled date to submit Securities Report:

August 7, 2020

Scheduled date to pay dividends:

-

Preparation of supplemental explanatory materials:

Yes

Holding of quarterly financial results meeting:

Yes (for investment analysts)

All amounts have been truncated to the nearest millions of Japanese yen.

1. Consolidated Operating Results and Financial Position through the First Quarter of Fiscal 2020 (April 1, 2020―June 30, 2020)

(1) Consolidated Operating Results (Accumulated)

Percentage figures are changes from the same period of the previous fiscal year.

Revenue

Business profit (*)

Operating profit

Profit before

Profit

income taxes

Millions of

%

Millions of

%

Millions of

%

Millions of

%

Millions of

%

yen

yen

yen

yen

yen

First quarter of Fiscal 2020

1,131,604

(25.7)

(27,510)

(27,510)

(32,577)

(41,422)

First quarter of Fiscal 2019

1,522,479

4.3

60,600

(33.1)

60,600

(33.1)

56,241

(34.8)

38,904

(56.8)

Profit attributable to

Total comprehensive

Basic earnings

Diluted earnings

owners of the parent

income

per share

per share

Millions of

%

Millions of

%

Yen

Yen

yen

yen

First quarter of Fiscal 2020

(42,071)

(91,911)

(45.69)

First quarter of Fiscal 2019

33,325

(61.0)

28,006

(35.7)

36.20

(*)Business Profit on Consolidated Statements of Profit or Loss indicates the results of sustainable business activities, and is an important measure to compare and evaluate the Company's consolidated performance continuously. It is defined as being deducted Cost of sales, Selling general and administrative expenses and Other operating expenses from Revenue, and added Share of profit in investments accounted for using the equity method and Other operating income. Other operating income and expenses are composed mainly of Dividend income, Foreign exchange gains or losses, Loss on disposal of fixed assets.

(2) Consolidated Financial Position

Total equity attributable to

Ratio of total equity

Total assets

Total equity

attributable to owners of the

owners of the parent

parent to total assets

Millions of yen

Millions of yen

Millions of yen

%

First quarter of Fiscal 2020

7,361,501

2,902,699

2,552,968

34.7

Fiscal 2019

7,444,965

2,996,631

2,641,618

35.5

2. Dividends

Dividends per share

End of first quarter

End of second quarter

End of third quarter

End of fiscal year

Fiscal year

Yen

Yen

Yen

Yen

Yen

Fiscal 2019

10.00

0.00

10.00

Fiscal 2020

Fiscal 2020 (Forecasts)

0.00

Notes: Whether the dividends forecasts have been revised: Yes

3. Consolidated Financial Forecasts for Fiscal 2020 (April 1, 2020―March 31, 2021)

Percentage figures are changes from the same period of the previous fiscal year.

Revenue

Business profit

Profit attributable to

Basic earnings per share

owners of the parent

Millions of yen

%

Millions of yen

%

Millions of yen

%

Yen

First half of Fiscal 2020

2,200,000

(27.8)

(150,000)

(200,000)

(217.0)

Fiscal 2020

(120,000)

Notes: 1. Whether the consolidated financial forecasts for fiscal 2020 under review have been revised: Yes

  • Notes
    1. Changes in significant subsidiaries during the period: None
    2. Changes in accounting policies and changes in accounting estimates
      1. Changes in accounting policies required by IFRS: None
      2. Changes other than those in (a) above: None
      3. Changes in accounting estimates: Yes
        Note: For further details, please refer to page 7, "Quarterly Condensed Consolidated Financial Statements and Major Notes (4) Notes to the Quarterly Condensed Consolidated Financial Statements (Changes in Accounting Estimates)."
    3. Number of shares outstanding (common shares)
      1. Number of shares outstanding at the end of the period (including treasury stock)

First quarter of Fiscal 2020

950,321,402 shares

Fiscal 2019

950,321,402 shares

(b) Number of treasury stock at the end of the period

First quarter of Fiscal 2020

29,641,883 shares

Fiscal 2019

29,638,468 shares

(c) Weighted average number of shares outstanding

First quarter of Fiscal 2020

920,681,631 shares

First quarter of Fiscal 2019

920,440,643 shares

  • This quarterly flash report is not subject to quarterly review procedures.
  • Explanation of the appropriate use of performance forecasts and other related items (Explanation of the appropriate use of performance forecasts)
    The forward-looking statements included in this flash report are based on the assumptions, forecasts, and plans of the Company as of the date on which this document is made public. The Company's actual results may differ substantially from such statements due to various risks and uncertainties.

Nippon Steel Corporation (5401)

The First Quarter of Fiscal 2020

Index of Attached Documents

Quarterly Condensed Consolidated Financial Statements and Major Notes....................................................................

2

(1)

Quarterly Condensed Consolidated Statements of Financial Position ....................................................................

2

(2)

Quarterly Condensed Consolidated Statements of Profit or Loss and

Quarterly Condensed Consolidated Statements of Comprehensive Income or Loss ..............................................

4

(3)

Quarterly Condensed Consolidated Statements of Changes in Equity....................................................................

5

(4)

Notes to the Quarterly Condensed Consolidated Financial Statements ..................................................................

7

(Going Concern Assumption) ..............................................................................................................................

7

(Changes in Accounting Estimates) .....................................................................................................................

7

1

Nippon Steel Corporation (5401)

The First Quarter of Fiscal 2020

Quarterly Condensed Consolidated Financial Statements and Major Notes

(1) Quarterly Condensed Consolidated Statements of Financial Position

(Millions of Yen)

ASSETS

March 31, 2020

June 30, 2020

Current assets :

Cash and cash equivalents

289,459

390,616

Trade and other receivables

826,596

669,953

Inventories

1,532,181

1,508,352

Other financial assets

17,340

20,868

Other current assets

119,396

109,550

Total current assets

2,784,974

2,699,340

Non-current assets :

Property, plant and equipment

2,812,542

2,824,549

Right-of-use assets

93,663

97,903

Goodwill

45,486

44,934

Intangible assets

96,677

91,616

Investments accounted for using the equity method

878,271

854,327

Other financial assets

481,117

493,302

Defined benefit assets

58,643

71,160

Deferred tax assets

186,457

177,418

Other non-current assets

7,132

6,948

Total non-current assets

4,659,990

4,662,160

Total assets

7,444,965

7,361,501

2

Nippon Steel Corporation (5401)

The First Quarter of Fiscal 2020

(Millions of Yen)

LIABILITIES

March 31, 2020

June 30, 2020

Current liabilities :

Trade and other payables

1,449,801

1,211,967

Bonds, borrowings and lease liabilities

376,900

509,274

Other financial liabilities

2,189

3,077

Income taxes payable

27,323

22,392

Other current liabilities

38,978

47,836

Total current liabilities

1,895,192

1,794,547

Non-current liabilities :

Bonds, borrowings and lease liabilities

2,111,841

2,224,417

Other financial liabilities

4,621

4,953

Defined benefit liabilities

236,758

228,663

Deferred tax liabilities

27,765

30,489

Other non-current liabilities

172,154

175,729

Total non-current liabilities

2,553,141

2,664,254

Total liabilities

4,448,333

4,458,802

EQUITY

Common stock

419,524

419,524

Capital surplus

394,404

396,340

Retained earnings

1,870,948

1,849,083

Treasury stock

(58,505)

(58,508)

Other components of equity

15,245

(53,471)

Total equity attributable to owners of the parent

2,641,618

2,552,968

Non-controlling interests

355,013

349,731

Total equity

2,996,631

2,902,699

Total liabilities and equity

7,444,965

7,361,501

3

Nippon Steel Corporation (5401)

The First Quarter of Fiscal 2020

(2) Quarterly Condensed Consolidated Statements of Profit or Loss and Quarterly Condensed Consolidated Statements of Comprehensive Income or Loss

Quarterly Condensed Consolidated Statements of Profit or Loss

(Millions of Yen)

First quarter of

First quarter of

Fiscal 2019

Fiscal 2020

Revenue

1,522,479

1,131,604

Cost of sales

(1,349,543)

(1,040,808)

Gross profit

172,935

90,796

Selling, general and administrative expenses

(148,725)

(121,386)

Share of profit in investments accounted for using the equity method

17,287

14,748

Other operating income

32,288

13,243

Other operating expenses

(13,185)

(24,912)

Business profit(loss)

60,600

(27,510)

Operating profit(loss)

60,600

(27,510)

Finance income

1,513

971

Finance costs

(5,872)

(6,038)

Profit(loss) before income taxes

56,241

(32,577)

Income tax expense

(17,337)

(8,844)

Profit(loss)

38,904

(41,422)

Profit(loss) attributable to :

Owners of the parent

33,325

(42,071)

Non-controlling interests

5,578

648

Earnings(loss) per share

Basic earnings(loss) per share (Yen)

36.20

(45.69)

Quarterly Condensed Consolidated Statements of Comprehensive Income or Loss

(Millions of Yen)

First quarter of

First quarter of

Fiscal 2019

Fiscal 2020

Profit(loss)

38,904

(41,422)

Other comprehensive income

Items that cannot be reclassified to profit or loss

Changes in fair value of financial assets measured at fair value

(8,713)

15,483

through other comprehensive income

Remeasurements of defined benefit plans

2,811

10,543

Share of other comprehensive income of investments accounted

(1,398)

6,079

for using the equity method

Subtotal

(7,300)

32,107

Items that might be reclassified to profit or loss Changes in fair value of cash flow hedges

Foreign exchange differences on translation of foreign operations Share of other comprehensive income of investments accounted

for using the equity method

(3,471)

(1,456)

(481)

(41,033)

355

(40,107)

Subtotal

(3,596)

(82,596)

Total other comprehensive income, net of tax

(10,897)

(50,489)

Total comprehensive income

28,006

(91,911)

Comprehensive income attributable to:

Owners of the parent

21,979

(90,583)

Non-controlling interests

6,026

(1,328)

4

Nippon Steel Corporation (5401)

The First Quarter of Fiscal 2020

(3) Quarterly Condensed Consolidated Statements of Changes in Equity

First quarter of Fiscal 2019

(Millions of Yen)

Equity attributable to owners of the parent

Other components of equity

Changes in fair

Common

Capital

Retained

Treasury

value of financial

assets measured at

Remeasurements of

stock

surplus

earnings

stock

fair value through

defined benefit

other

plans

comprehensive

income

Balance as of March 31, 2019

419,524

393,917

2,300,175

(58,831)

248,020

Changes of the year

Comprehensive income

Profit(loss)

33,325

Other comprehensive income

(11,008)

3,083

Total comprehensive income

33,325

(11,008)

3,083

Transactions with owners and others

Cash dividends

(36,880)

Purchases of treasury stock

(11)

Disposals of treasury stock

(10)

40

Changes in ownership interests in subsidiaries

(2,169)

Transfer from other components of equity

6,412

(3,329)

(3,083)

to retained earnings

Changes in scope of consolidation

(228)

Subtotal

(2,180)

(30,468)

(199)

(3,329)

(3,083)

Balance as of June 30, 2019

419,524

391,737

2,303,032

(59,030)

233,682

Equity attributable to owners of the parent

Other components of equity

Foreign

Total equity

Non-controlling

exchange

Total equity

Changes in fair

attributable to

interests

differences on

value of cash

Total

owners of the

translation of

flow hedges

parent

foreign

operations

Balance as of March 31, 2019

(4,433)

(67,585)

176,000

3,230,788

376,579

3,607,367

Changes of the year

Comprehensive income

Profit(loss)

33,325

5,578

38,904

Other comprehensive income

(3,037)

(382)

(11,345)

(11,345)

448

(10,897)

Total comprehensive income

(3,037)

(382)

(11,345)

21,979

6,026

28,006

Transactions with owners and others

Cash dividends

(36,880)

(4,656)

(41,537)

Purchases of treasury stock

(11)

(11)

Disposals of treasury stock

29

29

Changes in ownership interests in subsidiaries

(2,169)

2,117

(52)

Transfer from other components of equity

(6,412)

to retained earnings

Changes in scope of consolidation

(228)

(326)

(554)

Subtotal

(6,412)

(39,260)

(2,865)

(42,126)

Balance as of June 30, 2019

(7,471)

(67,968)

158,242

3,213,507

379,741

3,593,248

5

Nippon Steel Corporation (5401)

The First Quarter of Fiscal 2020

First quarter of Fiscal 2020

(Millions of Yen)

Equity attributable to owners of the parent

Other components of equity

Changes in fair

Common

Capital

Retained

Treasury

value of financial

assets measured at

Remeasurements of

stock

surplus

earnings

stock

fair value through

defined benefit

other

plans

comprehensive

income

Balance as of March 31, 2020

419,524

394,404

1,870,948

(58,505)

111,924

Changes of the year

Comprehensive income

Profit(loss)

(42,071)

Other comprehensive income

15,272

14,045

Total comprehensive income

(42,071)

15,272

14,045

Transactions with owners and others

Cash dividends

Purchases of treasury stock

(4)

Disposals of treasury stock

(0)

1

Changes in ownership interests in subsidiaries

1,936

Transfer from other components of equity

20,205

(6,160)

(14,045)

to retained earnings

Changes in scope of consolidation

Subtotal

1,935

20,205

(2)

(6,160)

(14,045)

Balance as of June 30, 2020

419,524

396,340

1,849,083

(58,508)

121,036

Equity attributable to owners of the parent

Other components of equity

Foreign

Total equity

Non-controlling

exchange

Total equity

Changes in fair

attributable to

interests

differences on

value of cash

Total

owners of the

translation of

flow hedges

parent

foreign

operations

Balance as of March 31, 2020

(4,821)

(91,857)

15,245

2,641,618

355,013

2,996,631

Changes of the year

Comprehensive income

Profit(loss)

(42,071)

648

(41,422)

Other comprehensive income

(2,792)

(75,037)

(48,511)

(48,511)

(1,977)

(50,489)

Total comprehensive income

(2,792)

(75,037)

(48,511)

(90,583)

(1,328)

(91,911)

Transactions with owners and others

Cash dividends

(3,816)

(3,816)

Purchases of treasury stock

(4)

(4)

Disposals of treasury stock

0

0

Changes in ownership interests in subsidiaries

1,936

(131)

1,805

Transfer from other components of equity

(20,205)

to retained earnings

Changes in scope of consolidation

(6)

(6)

Subtotal

(20,205)

1,933

(3,953)

(2,020)

Balance as of June 30, 2020

(7,613)

(166,894)

(53,471)

2,552,968

349,731

2,902,699

6

Nippon Steel Corporation (5401)

The First Quarter of Fiscal 2020

4Notes to the Quarterly Condensed Consolidated Financial Statements Going Concern Assumption

None

Changes in Accounting Estimates

Effective from the beginning of the first quarter of fiscal 2020, Nippon Steel changed the depreciation method for property, plant and equipment from the declining-balance to the straight-line method.

The Company's domestic steelworks have been operating for about 50 years, and their workforce is experiencing a transition to the next generation. In the midst of this trend, the Company is working to rebuild its "strength in manufacturing" and this includes the prevention of facility troubles. The Company also strives to rebuild a profit base that can be sustainable as a business. To achieve that, the Company takes up major structural reforms that can be described as the "second foundation stage" by promoting manufacturing infrastructure development including the refurbishing of core facilities. In addition, the Company is implementing thorough preventive and planned maintenance to prevent operational and facility troubles from taking place and has been striving to maximize the use of current production capacity to ensure stable production volume and reduced cost. The Company's future plans for facilities stipulate large-scale investment projects such as refurbishment of coke ovens and relining of blast furnaces. The Company expects that large-scale investment for aging facilities may increase and represent a larger portion of the total capital investments. Accordingly, the Company considers that the straight-line method, which equalizes the annual amount of depreciation cost over the useful life, is more in line with the actual situation of recent Nippon Steel compared to the declining-balance method.

With this change, compared to the previous method, depreciation expenses decreased by ¥15,412 million and business profit, operating profit, and profit before income taxes increased by ¥8,374 million, respectively, during the first quarter of fiscal 2020.

7

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Nippon Steel & Sumitomo Metal Corporation published this content on 04 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 August 2020 06:06:17 UTC