JFE : 3Q Financial Results Briefing for the Fiscal Year Ending March 2023

JFE Holdings, Inc.

3Q Financial Results Briefing for the Fiscal Year Ending March 2023

February 6, 2023

Presentation

Moderator: Ladies and gentlemen, thank you for your patience. We would like to begin JFE Holdings, Inc.'s Investors Meeting.

In attendance today is Masashi Terahata, Representative Director, Executive Vice President.

Terahata: Thank you.

Moderator: Toshihiro Tanaka, Senior Vice President.

Tanaka: Thank you.

Moderator: Well then, regarding the financial results announced today, Executive Vice President Terahata will first explain the main points of the announcement.

Terahata: I'm Terahata. We have key points of today's announcement here.

The business profit for the 3Q cumulative period was JPY231 billion. The FY2022 forecast for business profit is JPY235 billion, a downward revision of JPY20 billion from the previous forecast.

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In particular, due to the deteriorating environment in 3Q and 4Q, we expect demand for steel products to be even lower than our previous forecast due to stagnant activity and reluctance to buy in the domestic market, as well as the delayed recovery of market conditions in overseas markets.

Despite this environment, we have maintained our focus on selling prices. As a result, crude steel production has decreased from the previous forecast, and is now projected at 24 million tons per year, about 1 million tons lower than the previous forecast.

Due to a decrease in crude steel production, we have revised downward our forecast for the steel business by JPY15 billion to JPY150 billion. However, due to efforts to improve sales prices, the spread improvement has progressed further than the previous forecast.

In the engineering business, we have revised our forecast downward, partly because we have posted losses on separate construction projects in Europe. The current forecast has been lowered by JPY7 billion from the previous forecast to JPY13 billion.

For the trading business, we expect a record high of JPY60 billion, which is in line with our previous forecast.

In the above manner, profit attributable to owners of parent was JPY150 billion, a decrease of JPY5 billion from the previous announcement, and the annual dividend was set at JPY80, taking into consideration a dividend payout ratio of 30%. Since we have already paid an interim dividend of JPY50, we plan to propose a year-end dividend of JPY30 to the general meeting of shareholders.

Today, we also issued a press release regarding our consideration of capacity expansion of non-oriented electrical steel sheets, which will be explained later.

That is all from me.

Moderator: Now, Senior Vice President Tanaka will explain the details of the financial results and forecast.

We will have a question-and-answer session after the briefing.

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Tanaka: I am Tanaka. I will now explain the results and forecast based on the materials. First, I would like to present the 3Q financial results and outlook for the JFE Group as a whole.

Here are the financial results for 3Q.

Inside the blue line are the results for this fiscal year. The results include revenue of JPY3,908.5 billion, business profit of JPY231 billion, segment profit of JPY220 billion, and profit attributable to owners of parent of JPY143.9 billion.

Cumulative business profit for the entire JFE Group is JPY231 billion. Compared to the same period last year, profit decreased by JPY91.8 billion.

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On the next page is a table itemized by segment.

The upper row shows revenue, and the lower row shows segment profit. Looking at segment income, the steel business had JPY170 billion, the engineering business had minus JPY2.1 billion, and the trading business had JPY55.7 billion, for a total result of JPY220 billion.

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