JFE : Q1 Financial Results Briefing for the Fiscal Year Ending March 2023

JFE Holdings, Inc.

Q1 Financial Results Briefing for the Fiscal Year Ending March 2023

August 3, 2022

Presentation

Moderator: Ladies and gentlemen, we would now like to begin the financial results briefing of JFE Holdings, Inc.

Today's speakers are Mr. Masashi Terahata, Representative Director and Executive Vice President, and Mr. Toshihiro Tanaka, Senior Vice President.

The duration of the briefing will be 60 minutes, consisting of a 30-minute presentation and a 30-minute Q&A session. Questions and answers will be received in a lump after the presentation.

First, Mr. Terahata, Representative Director and Executive Vice President, will give an overview of the financial results and business outlook announced today.

Terahata: I am Terahata. Thank you very much for joining us today. Let me briefly explain the key points.

First of all, Q1 financial results showed an increase of JPY116.6 billion from the same period of the previous year due to improved sales prices in the steel business and inventory valuation gains resulting from the impact of the sharp rise in coking coal prices.

For the full year of FY2022, we are projecting a business profit of JPY235 billion, a decrease of JPY181.4 billion from the previous year.

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The current business environment has become very unfavorable due to the prolonged situation in Ukraine, softening of the overseas steel market, soaring commodity prices, and the sharp depreciation of the yen during this period.

On the other hand, we expect a gradual recovery in the supply and demand of steel products in the future. However, it is also true that there are some points that require close attention, such as trends in crude steel production and demand in China, and the future impact of restrictions on the supply of parts for automobile production.

Although the business environment is quite challenging, the steel business is implementing various measures to improve profitability, such as improving domestic sales prices.

In the engineering and trading businesses, earnings have remained stable, despite the impact of soaring prices.

As for dividends, the Board of Directors has resolved to pay an interim dividend of JPY40. The year-end dividend is undecided at this time, as the Company will consider this issue while also monitoring future performance trends.

At this investors meeting, we would like to make some supplementary explanations of carbon neutrality initiatives, a roadmap and process structure for carbon neutrality in 2050.

We are planning to hold another meeting on September 1 to explain the carbon neutral strategy from JFE Steel.

That is all for my explanation.

Now, I would like to hand over to Senior Vice President Tanaka.

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Tanaka: My name is Tanaka. I will now give a detailed explanation of our financial results and outlook.

The table of contents is as shown.

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First, I would like to present our financial results for Q1 and the outlook for the full year.

As shown in the table, business profit for Q1 was JPY116.6 billion.

As for the annual forecast, revenue is expected to exceed JPY5 trillion, reaching JPY5.37 trillion. Revenue is expected to increase by JPY1 trillion compared to last year.

On the other hand, business profit for the year is expected to be JPY235 billion, a JPY181.4 billion decrease from the previous year.

For the first half of the year, we forecast business profit of JPY165 billion. Net profit for the first half of the year is expected to be JPY100 billion, and for the full year JPY140 billion.

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