JFE : ’ Financial Results for Fiscal Year 2020 ended March 31, 2021

JFE Holdings' Financial Results for Fiscal Year 2020

ended March 31, 2021

- All financial information has been prepared in accordance with International Financial Reporting Standards (IFRS) -

(Note: The following is an English translation of an original Japanese document)

	May 7, 2021
Official name:	JFE Holdings, Inc.
Listings:	Tokyo and Nagoya stock exchanges
Code:	5411
English URL:	www.jfe-holdings.co.jp/en
Representative:	Koji Kakigi, President and CEO
Contact:	Hiroki Watanabe, Manager, Public Relations Section
	Investor Relations and Corporate Communications
	Department
Phone:	[phone]
Annual shareholders meeting (planned):	June 25, 2021
Dividend payment starting date:	June 28, 2021
Scheduled date to submit securities report:	June 25, 2021
Preparation of supplementary materials on results:	Yes
Results briefing:	Yes
	(Figures are rounded down to the nearest million yen)

1. Consolidated Results for Fiscal 2020 (April 1, 2020 to March 31, 2021)

(1) Consolidated Operating Results (cumulative total)

(Percentages indicate year on year change)

								Profit		Compre-
Revenue		Business		Profit before		Profit		attributable
%	profit	%	tax	%	%	to owners	%	hensive	%
(million yen)	(million yen)
	(million yen)		(million yen)			of parent		income
								(yen)

FY 2020	3,227,285	(13.5)	(12,911)	-	(4,930)	-	(19,063)	-	(21,868)	-	63,231	-
FY 2019	3,729,717	(3.7)	37,899	(83.7)	(213,473)	-	(193,290)	-	(197,744)	-	(259,172)	-
			Basic earnings per	Diluted earnings per	Profit ratio to equity	Profit before tax ratio	Business profit ratio
				share			share		attributable to	to total assets		to revenue
				(yen)			(yen)		owners of parent		(%)		(%)
											(%)
FY 2020				(37.98)			(37.98)			(1.3)		(0.1)		(0.4)
FY 2019				(343.39)			(343.39)			(11.1)		(4.6)		1.0
(Reference): Equity in earnings of affiliates: FY 2020: 14,239 million yen FY 2019: 8,782 million yen
Note: Business profit is profit before tax excluding financial income and one-time items of a materially significant value.
(2) Consolidated Financial Position
			Total assets		Total equity	Equity attributable to	Total equity	Equity attributable to
				(million yen)			(million yen)		owners of parent	attributable to	owners of parent per
										(million yen)	owners of parent		share
													(%)		(yen)
FY 2020				4,654,972		1,760,154			1,679,223		36.1		2,916.37
FY 2019				4,646,120		1,706,552			1,627,026		35.0		2,825.50
(3) Consolidated Cash Flows
			Cash flows from		Cash flows from		Cash flows from	Cash and cash
			operating activities		investing activities		financing activities	equivalents at end of
				(million yen)			(million yen)		(million yen)		year
													(million yen)
FY 2020				247,274		ሺ164,221)			ሺ30,092)		142,416
FY 2019				261,070		ሺ358,378)			103,900		86,704

2. Dividends

	Dividend per share (yen)						Dividend ratio of
						Total dividend	Dividend	equity attributable
	Annual	End on 1st	Interim	End on 3rd	Yearend	payout	payout ratio	to owners of
	(million yen)	(consolidated, %)	parent
	quarter	quarter
						(consolidated %)
FY 2019	20.00	-	20.00	-	0.00	11,532	-	0.6
FY 2020	10.00	-	0.00	-	10.00	5,765	-	0.3
FY 2021	-	-	-	-	-		-
(forecast)
Note: Fiscal	2021 dividends are yet to be determined.

3. Forecasts of Consolidated Financial Results in Fiscal 2021 (April 1, 2021 to March 31, 2022)

							Profit		Basic
			Business		Profit before		attributable
	Revenue					earnings
	%	profit	%	tax	%	to owners	%
	(million yen)	per share
		million yen		(million yen)		of parent
						(yen)
							(million yen)
FY 2021	3,930,000	21.8	200,000	-	190,000	-	130,000	-	225.78

Notes

1. Changes in significant subsidiaries during the term (changes in designated subsidiaries resulting in changes in consolidated structure): No
2. Changes in accounting policies and accounting estimates
3. 1. Changes in the accounting policies required by IFRS: No
   2. Changes in the accounting policies other than 1) above: No
   3. Changes in accounting estimates: No
4. Number of outstanding shares (common stock)
5. 1. Outstanding shares at the end of the term (including treasury stock) As of March 31, 2021: 614,438,399 shares
      As of March 31, 2020: 614,438,399 shares
   2. Treasury stock at the end of the term
      As of March 31, 2021: 38,646,342 shares

As of March 31, 2020: 38,601,655 shares

1. Average number of shares during the term FY 2020: 575,829,040 shares
   FY 2019: 575,854,137 shares

This report is not subject to auditing by a certified public accountant or an audit corporation. Explanation of Appropriate Use of Results Forecasts, and Other Matters of Note

1. Forecasts and other forward-looking statements herein are based on information available on the date of publication of this document as well as rational assumptions that we have made regarding certain factors. Actual results may vary significantly from these forecasts due to a wide range of circumstances. For a description of the results forecasts, see "1. Qualitative Information
   (4) Outlook for Fiscal 2021" on Page 3 of the attachments.
2. The supplementary financial data will be disclosed today via TDnet and published on our website.

Attachments
1.	Qualitative Information	2
	(1)	Overview of Business Results	2
	(2)	Overview of Financial Position	3
	(3)	Overview of Cash Flow in Fiscal 2020	3
	(4)	Outlook for Fiscal 2021	3
2.	Basic Rationale for Selection of Accounting Standards	3
3.	Consolidated Financial Statements	4
	(1)	Consolidated Statement of Financial Position	4
	(2)	Consolidated Statement of Profit or Loss and Consolidated Statement of Comprehensive Income	6
	(3)	Consolidated Statement of Changes in Equity	8
	(4)	Consolidated Statement of Cash Flow	10
	(5)	Notes to Consolidated Financial Statements	12
		Notes pertaining to the presumption of a going concern	12
		Segment information	12
		Per-share information	14
		Material subsequent events	14
4.	Supplementary Information	15

1

1. Qualitative Information

(1) Overview of Business Results

JFE Holdings, Inc., guided by its corporate mission of contributing to society with world-leading technology, continued to achieve sustainable growth and improved corporate value for shareholders and other stakeholders.

Economic conditions during the reporting period were affected by the worldwide COVID-19 pandemic; in particular, business activities were severely restricted in the first half of the fiscal year. Recovery was seen in exports and personal consumption in the second half. Overseas, business rebounded fastest in China and recovered or at least bottomed out in the U.S. and the rest of Asia.

Under the circumstances, JFE, particularly its steel business, steadily strengthened the manufacturing capabilities of its domestic foundries and factories and steadily improved productivity through digital transformation. The company also took emergency measures to reduce costs by 100.0 billion yen, restricted capital investment and made efforts to improve cash flow.

Business profit and profit attributable to owners of the parent company were in the black in the second half due primarily to recovered production of automobiles, the major source of demand for steel. The first-half slump was so great, however, that the fiscal year ended in the red.

Operating results by segment are presented below.

In steel business, levels of activity fell off in many industries, particularly in the first half, resulting in significant decreases in demand for iron and steel. In response, JFE implemented emergency measures such as temporarily shutting down two blast furnaces. Consolidated annual crude steel production amounted to 23.96 million tons, down significantly from the previous fiscal year. Revenue fell significantly to 2,255.2 billion yen as sales dropped dramatically. A profit was earned in the second half thanks to efforts to thoroughly minimize operational costs by optimizing production. Also, we captured recovered demand by using data science technology to swiftly restart blast furnaces. In addition, sales prices rose as demand recovered and export conditions improved. Nevertheless, poor profitability in the first half was too large to overcome, so the segment ended the year with a loss of 65.4 billion yen, much worse than in the previous fiscal year.

In engineering business, corporate acquisitions helped to boost revenue, but the COVID-19 pandemic caused delays in construction that held down revenue to 485.7 billion yen, a decrease from the prior fiscal year. Despite decreased revenue, however, efforts to cut costs and maintain profitability resulted in a profit of 24.0 billion yen, up from the previous fiscal year.

In trading business, demand recovered in the second half and market conditions improved in the U.S. and worldwide by the end of the fiscal year, enabling profitability to rebound significantly against the first half. However, decreased demand for steel materials in the first half was huge, so revenue for the full fiscal year came to 932.5 billion yen and segment profit ended at 20.0 billion yen, both down from the prior fiscal year.

Our equity-method affiliate Japan Marine United Corporation suffered a loss due to low prices amid a sluggish recovery in the new-ship market as well as delays in business negotiations due to COVID-19. Due to such factors, JFE recorded an equity-method loss of 4.1 billion yen.

The above results and earnings of the parent combined for consolidated revenue of 3,227.2 billion yen, down from the prior year. The business loss came to 12.9 billion yen, also worse than the prior year. Furthermore, exceptional items totaling 20.4 billion yen, such as profit on sales of fixed assets, were realized. JFE recorded a loss before tax of 4.9 billion yen and a loss attributable to owners of the parent company of 21.8 billion yen.

Note: Business income (loss) is profit (loss) before tax, excluding financial income and one-time items of a materially significant value. It is a benchmark indicator of the company's consolidated earnings. The operating performance of each segment is presented in terms of segment profit, a measure including financial income in business profit. Exceptional items are one-time items of a materially significant value.

2