Kobe Steel’s Consolidated Financial Results For Third Quarter of Fiscal 2013

KOBELCOIn the latest fiscal report from Kobe Steel, the company states that Japan’s economy continued to recover in the first nine months of fiscal 2013 (April 1 to December 31, 2013). On the back of monetary, fiscal, and other government economic measures, export industries began to pick up owing to a correction in the yen, which remained high until last year. Public investment, including recovery demand from the Great East Japan Earthquake, also increased. In overseas markets, while the economy in the United States gradually continued to recover, Europe remained weak. Although China maintained economic growth, the economy continued to decelerate.

In this economic environment, the Kobe Steel Group increased its sales volume of steel products (in terms of tons sold) compared with the same period last year. A correction in the high yen brought about an improvement in the export environment, enabling Kobe Steel to steadily address overseas demand. The sales volume of aluminum rolled products was similar to the same period last year due to continued strong demand from the automotive sector.

The sales volume of copper rolled products increased over the same period last year owing to a recovery in demand for automotive terminals and semiconductors. Unit sales of hydraulic excavators increased compared with the same period last year. Although demand remained sluggish in China and Southeast Asia, domestic demand increased owing to reconstruction demand from the Great East Japan Earthquake and a late surge in demand prior to the implementation of stricter exhaust gas emission regulations. In North America, sales continued to increase.

As a result, Kobe Steel’s consolidated net sales in the nine months to December 31, 2013 increased 77.5 billion yen compared with the same period last year to 1,325.2 billion yen. Owing to progress in reducing overall costs, a change in the depreciation method for fixed assets, and a favorable change in inventory valuation, operating income increased 79.0 billion yen compared with the same period last year to 85.5 billion yen.

Ordinary income (also known as pretax recurring profit) increased 83.6 billion yen compared with the same period last year to 67.3 billion yen. In addition, Kobe Steel posted a gain on the sale of investments in securities as extraordinary income, namely the sale of shares held in Nabtesco Corporation.

On the other hand, having decided to transfer upstream production from the Kobe Works to the Kakogawa Works to reform the structure of its steel business, Kobe Steel posted an impairment loss taken as an extraordinary loss on facilities planned for shutdown at the Kobe Works. As a result, net income increased 86.5 billion yen compared with the same period last year to 63.8 billion yen.

Kobelco Construction Machinery

Unit sales of hydraulic excavators increased in the nine months to December 31, 2013.

Although demand remained sluggish in China and Southeast Asia, the Japanese market was strong due to reconstruction demand from the Great East Japan Earthquake and higher demand prior to the implementation of stricter exhaust gas emission regulations. In addition, sales steadily expanded in North America.

As a result, consolidated segment sales in the nine months to December 31, 2013 increased 13.6 percent compared with the same period last year to 235.8 billion yen. Ordinary income increased 4.6 billion yen compared with the same period last year to 12.0 billion yen.

Kobelco Cranes

Unit sales of crawler cranes in the nine months to December 31, 2013 increased compared with the same period last year.

Unit sales increased in Japan on the back of monetary, fiscal, and other government economic measures and reconstruction demand from the Great East Japan Earthquake. In overseas markets, unit sales decreased in Europe, but increased in Southeast Asia.

As a result, consolidated segment sales in the nine months to December 31, 2013 increased 21.8 percent compared with the same period last year to 39.8 billion yen. Ordinary income increased 3.8 billion yen compared with the same period last year to 2.5 billion yen due to an improvement in export profits brought about by a correction in the high yen.