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FORM 6-K
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant toRule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of August 2019
Commission FileNumber: 333-228135
NIPPON STEEL CORPORATION
(Translation of registrant’s name into English)
6-1, Marunouchi2-chome
Chiyoda-ku,Tokyo 100-8071
Japan
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under coverForm 20-F orForm 40-F.
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting theForm 6-K in paper as permitted byRegulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting theForm 6-K in paper as permitted byRegulation S-T Rule 101(b)(7): ☐
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Information furnished on this form:
EXHIBIT
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
NIPPON STEEL CORPORATION | ||||||
Date: August 1, 2019 | By: | /s/ Kazumasa Shinkai | ||||
Kazumasa Shinkai | ||||||
Executive Officer, Head of General Administration Division |
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Consolidated Basis
Results for the First Quarter of Fiscal 2019
(April 1, 2019—June 30, 2019)
<under IFRS>
August 1, 2019
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: | Fumiaki Ohnishi, General Manager, Public Relations Center | |
Telephone: | +81-3-6867-2130 | |
Scheduled date to submit Securities Report: | August 8, 2019 | |
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 2019
(April 1, 2019—June 30, 2019) |
(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 income taxes | Profit | ||||||||||||||||||||||||||||||||||||
Millions of yen | % | Millions of yen | % | Millions of yen | % | Millions of yen | % | Millions of yen | % | |||||||||||||||||||||||||||||||
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 | ) | ||||||||||||||||||||||||||
First quarter of Fiscal 2018 | 1,459,992 | — | 90,615 | — | 90,615 | — | 86,270 | — | 89,959 | — | ||||||||||||||||||||||||||||||
Profit attributable to owners of the parent | Total comprehensive income | Basic earnings per share | Diluted earnings per share | |||||||||||||||||||||||||||||||||||||
Millions of yen | % | Millions of yen | % | Yen | Yen | |||||||||||||||||||||||||||||||||||
First quarter of Fiscal 2019 | 33,325 | (61.0 | ) | 28,006 | (35.7 | ) | 36.20 | — | ||||||||||||||||||||||||||||||||
First quarter of Fiscal 2018 | 85,397 | — | 43,539 | — | 96.75 | — |
(*) | 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 Equity in profit of unconsolidated subsidiaries and affiliates and Other operating income. Other operating income and expenses is composed mainly of Dividend income, Foreign exchange gains or losses, Loss on disposal of fixed assets. |
(2) Consolidated Financial Position
Total assets | Total equity | Total equity attributable to owners of the parent | Ratio of total equity attributable to owners of the parent to total assets | |||||||||||||
Millions of yen | Millions of yen | Millions of yen | % | |||||||||||||
First quarter of Fiscal 2019 | 8,011,751 | 3,593,248 | 3,213,507 | 40.1 | ||||||||||||
Fiscal 2018 | 8,049,528 | 3,607,367 | 3,230,788 | 40.1 |
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 2018 | — | 40.00 | — | 40.00 | 80.00 | |||||||||||||||
Fiscal 2019 | — | |||||||||||||||||||
Fiscal 2019 (Forecasts) | 10.00 | — | — | — |
Notes: | Whether the dividends forecasts under review have been revised: Yes |
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3. Consolidated Financial Forecasts for Fiscal 2019 (April 1, 2019—March 31, 2020)
(Percentage figures are changes from the same period of the previous fiscal year.) | ||||||||||||||||||||||||||||
Revenue | Business profit | Profit attributable to owners of the parent | Basic earnings per share | |||||||||||||||||||||||||
Millions of yen | % | Millions of yen | % | Millions of yen | % | Yen | ||||||||||||||||||||||
First half of Fiscal 2019 | 3,000,000 | 2.0 | 70,000 | (55.7 | ) | 30,000 | (74.3 | ) | 33.0 | |||||||||||||||||||
Fiscal 2019 | — | — | 150,000 | (55.5 | ) | — | — | — |
Notes: | 1. | Whether the consolidated financial forecasts for fiscal 2019 under review have been revised: Yes |
2. | For further details, please refer to page 4, “1. Qualitative Information for the First Quarter of Fiscal 2019 (2) Explanation of Information on Future Estimates, Including Consolidated Earnings Forecasts.” |
* Notes
(1) Changes in significant subsidiaries during the period: None
(2) Changes in accounting policies and changes in accounting estimates
(a) Changes in accounting policies required by IFRS: Yes
(b) Changes other than those in (a) above: None
(c) Changes in accounting estimates: None
| Note: | For further details, please refer to page 11, “2. Quarterly Condensed Consolidated Financial Statements and Major Notes (4) Notes to the Quarterly Condensed Consolidated Financial Statements (Changes in Accounting Policies Required by IFRS).” |
(3) Number of shares outstanding (common shares)
(a) Number of shares outstanding at the end of the period (including treasury stock)
| First quarter of Fiscal 2019 | 950,321,402 shares | ||
Fiscal 2018 | 950,321,402 shares |
(b) Number of treasury stock at the end of the period
| First quarter of Fiscal 2019 | 29,905,466 shares | ||
Fiscal 2018 | 29,797,955 shares |
(c) Weighted average number of shares outstanding
| First quarter of Fiscal 2019 | 920,440,643 shares | ||
First quarter of Fiscal 2018 | 882,608,431 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. |
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Nippon Steel Corporation (5401)
The First Quarter of Fiscal 2019
1
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Nippon Steel Corporation (5401)
The First Quarter of Fiscal 2019
1. Qualitative Information for the First Quarter of Fiscal 2019
(1) Explanation of Operating Results
Global and Domestic Economic Conditions in the First Quarter of Fiscal 2019
The global economy was characterized by firm private consumption and capital expenditure in the United States and slower growth in China, particularly for private consumption, against the backdrop of the trade friction between the United States and China, which prompted the Chinese government to focus on infrastructure investment to support the economy. Japanese economic conditions have continued to improve moderately on the back of improving employment and income conditions, but with exports and production activity remaining weak, economic sentiment is still somewhat subdued.
Operating Results by Business Segment in the First Quarter of Fiscal 2019
The Nippon Steel Corporation Group’s business segments strived to respond to the changing business environment and to improve revenue and profit. An overview of operating results by business segment is shown below.
(Billions of yen) | ||||||||||||||||
Revenue | Business Profit | |||||||||||||||
1Q FY2019 | 1Q FY2018 | 1Q FY2019 | 1Q FY2018 | |||||||||||||
Steelmaking and Steel Fabrication | 1,346.7 | 1,301.8 | 56.0 | 84.1 | ||||||||||||
Engineering and Construction | 78.4 | 70.2 | 3.8 | (0.3 | ) | |||||||||||
Chemicals and Materials* | 54.4 | 59.9 | 3.5 | 6.2 | ||||||||||||
System Solutions | 82.1 | 59.0 | 7.9 | 5.4 | ||||||||||||
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Total | 1,561.7 | 1,491.0 | 71.4 | 95.4 | ||||||||||||
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Adjustments | (39.2 | ) | (31.0 | ) | (10.8 | ) | (4.8 | ) | ||||||||
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Consolidated total | 1,522.4 | 1,459.9 | 60.6 | 90.6 | ||||||||||||
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* | The Chemicals segment and New Materials segment were merged to form the Chemicals and Materials segment after Nippon Steel Chemical & Material Co., Ltd. was established in October 2018 following the merger of Nippon Steel & Sumikin Chemical Co., Ltd. and Nippon Steel & Sumikin Materials Co., Ltd. The figures for the Chemicals and Materials segment in fiscal 2018 are the total sum of the Chemicals segment and the New Materials segment. |
Steelmaking and Steel Fabrication
The Steelmaking and Steel Fabrication segment saw generally solid demand in Japan from the automotive and construction industries but weak demand growth overseas, particularly for flat steel products, owing largely to reduced production of consumer goods in China amid concern regarding deteriorating economic conditions. Steel prices in Japan remained generally at high levels, while the overseas market showed a slower recovery pace from the declines in the second half of the previous fiscal year.
In these conditions, profit declined year on year in the first quarter of fiscal 2019 due to a rise in raw material prices, the impacts from the electricity outage caused by lightning at the Kimitsu Works, inventory valuation difference, and other factors.
The Steelmaking and Steel Fabrication segment recorded revenue of ¥1,346.7 billion (¥1,301.8 billion in the same period of the previous fiscal year) and business profit of ¥56.0 billion (¥84.1 billion).
2
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Nippon Steel Corporation (5401)
The First Quarter of Fiscal 2019
Engineering and Construction
Nippon Steel Engineering Co., Ltd. builds and operates plants in the steelworks, environmental, and energy fields and provides comprehensive engineering technology worldwide for various types of structures, including large steel structure buildings, ultra-high-rise buildings, and pipeline facilities. In the first quarter of fiscal 2019, the company achieved steady progress in projects in various fields through strict project execution management and completed a number of projects in Japan. In addition, its affiliated companies generated improved earnings.
As a result, the Engineering and Construction segment recorded revenue of ¥78.4 billion (¥70.2 billion in the same period of the previous fiscal year) and business profit of ¥3.8 billion (business loss of ¥0.3 billion).
Chemicals and Materials
Nippon Steel Chemical & Material Co., Ltd. continued to attract strong demand for its core needle coke in the coal chemical business and increased sales of carbon fiber composite materials, primarily for repair and reinforcement applications, in the civil engineering and construction fields. Sales were weak in the chemicals business owing to sluggish benzene prices and severe business conditions for smartphone and semiconductor materials amid theUS-China trade friction in the electronics and functional materials field.
The Chemicals and Materials segment posted revenue of ¥54.4 billion (¥59.9 billion in the same period of the previous fiscal year) and business profit of ¥3.5 billion (¥6.2 billion).
System Solutions
Nippon Steel Solutions Co., Ltd. (NS Solutions) provides advanced solution services in the planning, configuration, operation, and maintenance of IT systems for clients in a wide range of business fields to keep pace with the changing business environments. Business conditions continued to be favorable for the company in the first quarter of fiscal 2019 amid active investment in systems of clients. NS Solutions provided preventive maintenance solutions using IoT and AI for facilities and supplied construction support to Nippon Steel for data analysis and AI development platforms using advanced IT technologies.
The System Solutions segment recorded revenue of ¥82.1 billion (¥59.0 billion in the same period of the previous fiscal year) and business profit of ¥7.9 billion (¥5.4 billion).
Sales and Profit for the First Quarter of Fiscal 2019
In the first quarter of fiscal 2019, Nippon Steel posted revenue of ¥1,522.4 billion (¥1,459.9 billion in the same period of the previous fiscal year), business profit of ¥60.6 billion (¥90.6 billion), and profit for the quarter attributable to owners of the parent of ¥33.3 billion (¥85.3 billion).
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Nippon Steel Corporation (5401)
The First Quarter of Fiscal 2019
(2) Explanation of Information on Future Estimates, Including Consolidated Earnings Forecasts
Consolidated Earnings Forecasts
Nippon Steel expects the broadening impact from the prolonged trade friction between the United States and China to lead to ongoing strong concern about an overall economic slowdown, particularly in China. The Company anticipates that conditions in the Japanese economy will reflect heightened concern about future uncertainty stemming from the potential impact of global economic conditions.
Concerning demand and prices for steel, steel demand in Japan for indirect exports are sluggish, as some export industries are showing signs of a slowdown. In addition, there is some concern over potential economic deceleration overseas from prolongedUS-China trade friction and other factors. Future developments will require close monitoring.
In these conditions, Nippon Steel plans to report revenue of ¥3,000 billion, business profit of ¥70 billion, and profit for the first half attributable to owners of the parent of ¥30 billion in its consolidated earnings for the first half of fiscal 2019.
With regard to full-year 2019 consolidated earnings, the Company intends to promote measures to enhance the overall stability of its facilities and operations, to improve the cost structure, and to steadily raise long-term contractual prices amid the heightened uncertain outlook described above. However, the Company is also encountering unexpected developments, such as significant narrowing of profit margins, particularly for export products for spot markets, and a deteriorating product mix associated with a decline in steel demand for indirect exports, both of which are based on the assumption that the current state of high raw material prices and low steel product prices persists, in addition to the impact of the electrical outage caused by lightning at the Kimitsu Works. The Company is also projecting an increased depreciation burden and lower inventory valuation gains. Business profit is therefore likely to reach only ¥150 billion for fiscal 2019.
In these conditions, the Company will take steps to improve its current earnings while also implementing measures geared to medium- and long-term growth. Specific measures include prompt generation of maximum synergies from the integration and reorganization with Nippon Steel Nisshin Co., Ltd., Sanyo Special Steel Co., Ltd. and Ovako AB, and decision on capital expenditure on electrical steel sheet production at the Yawata Works, promoting investment in fields and regions where demand is expected to continue growing and where the Company’s competitive edge can be demonstrated. The Company will also execute cash management (raising efficiency in implementing asset compression and capital expenditures) with a focus on financial discipline. Moreover, the Company will start to work out specific plans onfar-sighted drastic measures to be prepared even for the emergence of new risks and to enhance profit base. Plans will be announced one by one as they are put into concrete shape.
4
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Nippon Steel Corporation (5401)
The First Quarter of Fiscal 2019
Basic Profit Distribution Policy and the Interim Dividend Distribution
Nippon Steel’s basic profit distribution policy is to pay dividends from distributable funds at the end of the first half (interim) and second half(year-end) of the fiscal year, in consideration of the consolidated operating results and such factors as capital requirements for investment and other activities aimed at raising corporate value and performance prospects while also considering the financial structure of the Company on both consolidated andnon-consolidated bases.
The Company has adopted a consolidated payout ratio target of around 30% as the benchmark for the “payment of dividends from distributable funds in consideration of the consolidated operating results.” The level of the first-half dividend is determined based on consideration of interim performance figures and forecasts for the full fiscal year performance.
Regarding the dividend from retained earnings for the end of the second quarter (interim), in accordance with the policy described above, the Company is planning to pay a dividend of ¥10 per share (representing a consolidated dividend payout ratio of around 31%).
5
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Nippon Steel Corporation (5401)
The First Quarter of Fiscal 2019
2. Quarterly Condensed Consolidated Financial Statements and Major Notes
(1) Quarterly Condensed Consolidated Statements of Financial Position
(Millions of Yen) | ||||||||
ASSETS | March 31, 2019 | June 30, 2019 | ||||||
Current assets : | ||||||||
Cash and cash equivalents | 163,176 | 185,370 | ||||||
Trade and other receivables | 968,333 | 847,906 | ||||||
Inventories | 1,567,116 | 1,626,949 | ||||||
Other financial assets | 16,915 | 23,035 | ||||||
Other current assets | 143,669 | 143,567 | ||||||
Total current assets | 2,859,211 | 2,826,829 | ||||||
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Non-current assets : | ||||||||
Property, plant and equipment | 3,246,669 | 3,203,126 | ||||||
Right-of-use assets | — | 78,450 | ||||||
Goodwill | 52,803 | 52,137 | ||||||
Intangible assets | 106,131 | 102,784 | ||||||
Investments accounted for using the equity method | 793,146 | 791,835 | ||||||
Other financial assets | 812,668 | 770,842 | ||||||
Defined benefit assets | 82,247 | 84,520 | ||||||
Deferred tax assets | 88,357 | 92,926 | ||||||
Othernon-current assets | 8,292 | 8,297 | ||||||
Totalnon-current assets | 5,190,316 | 5,184,922 | ||||||
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Total assets | 8,049,528 | 8,011,751 | ||||||
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Nippon Steel Corporation (5401)
The First Quarter of Fiscal 2019
(Millions of Yen) | ||||||||
March 31, 2019 | June 30, 2019 | |||||||
LIABILITIES | ||||||||
Current liabilities : | ||||||||
Trade and other payables | 1,611,403 | 1,456,564 | ||||||
Bonds, borrowings and lease liabilities | 515,355 | 619,452 | ||||||
Other financial liabilities | 1,017 | 4,465 | ||||||
Income taxes payable | 38,719 | 22,309 | ||||||
Other current liabilities | 34,042 | 44,838 | ||||||
Total current liabilities | 2,200,538 | 2,147,631 | ||||||
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Non-current liabilities : | ||||||||
Bonds, borrowings and lease liabilities | 1,853,876 | 1,886,314 | ||||||
Other financial liabilities | 6,501 | 6,413 | ||||||
Defined benefit liabilities | 186,755 | 186,105 | ||||||
Deferred tax liabilities | 28,253 | 29,987 | ||||||
Othernon-current liabilities | 166,235 | 162,049 | ||||||
Totalnon-current liabilities | 2,241,622 | 2,270,871 | ||||||
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Total liabilities | 4,442,160 | 4,418,503 | ||||||
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EQUITY | ||||||||
Common stock | 419,524 | 419,524 | ||||||
Capital surplus | 393,917 | 391,737 | ||||||
Retained earnings | 2,300,175 | 2,303,032 | ||||||
Treasury stock | (58,831 | ) | (59,030 | ) | ||||
Other components of equity | 176,000 | 158,242 | ||||||
Total equity attributable to owners of the parent | 3,230,788 | 3,213,507 | ||||||
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Non-controlling interests | 376,579 | 379,741 | ||||||
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Total equity | 3,607,367 | 3,593,248 | ||||||
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Total liabilities and equity | 8,049,528 | 8,011,751 | ||||||
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Nippon Steel Corporation (5401)
The First Quarter of Fiscal 2019
(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 Fiscal 2018 | First quarter of Fiscal 2019 | |||||||
Revenue | 1,459,992 | 1,522,479 | ||||||
Cost of sales | (1,261,736 | ) | (1,349,543 | ) | ||||
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Gross profit | 198,256 | 172,935 | ||||||
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Selling, general and administrative expenses | (141,000 | ) | (148,725 | ) | ||||
Share of profit in investments accounted for using the equity method | 21,451 | 17,287 | ||||||
Other operating income | 22,040 | 32,288 | ||||||
Other operating expenses | (10,133 | ) | (13,185 | ) | ||||
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Business profit | 90,615 | 60,600 | ||||||
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Operating profit | 90,615 | 60,600 | ||||||
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Finance income | 1,516 | 1,513 | ||||||
Finance costs | (5,861 | ) | (5,872 | ) | ||||
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Profit before income taxes | 86,270 | 56,241 | ||||||
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Income tax expense | 3,688 | (17,337 | ) | |||||
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Profit | 89,959 | 38,904 | ||||||
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Profit attributable to : | ||||||||
Owners of the parent | 85,397 | 33,325 | ||||||
Non-controlling interests | 4,561 | 5,578 | ||||||
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Earnings per share | ||||||||
Basic earnings per share (Yen) | 96.75 | 36.20 | ||||||
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Quarterly Condensed Consolidated Statements of Comprehensive Income or Loss | (Millions of Yen) | |||||||
First quarter of Fiscal 2018 | First quarter of Fiscal 2019 | |||||||
Profit | 89,959 | 38,904 | ||||||
Other comprehensive income | ||||||||
Items that cannot be reclassified to profit or loss | ||||||||
Changes in fair value of financial assets measured at fair value through other comprehensive income | (4,179 | ) | (8,713 | ) | ||||
Remeasurements of defined benefit plans | 3,986 | 2,811 | ||||||
Share of other comprehensive income of investments accounted for using the equity method | (284 | ) | (1,398 | ) | ||||
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Subtotal | (477 | ) | (7,300 | ) | ||||
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Items that might be reclassified to profit or loss | ||||||||
Changes in fair value of cash flow hedges | 1,622 | (3,471 | ) | |||||
Foreign exchange differences on translation of foreign operations | (36,094 | ) | (481 | ) | ||||
Share of other comprehensive income of investments accounted for using the equity method | (11,469 | ) | 355 | |||||
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Subtotal | (45,941 | ) | (3,596 | ) | ||||
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Total other comprehensive income, net of tax | (46,419 | ) | (10,897 | ) | ||||
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Total comprehensive income | 43,539 | 28,006 | ||||||
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Comprehensive income attributable to: | ||||||||
Owners of the parent | 42,290 | 21,979 | ||||||
Non-controlling interests | 1,249 | 6,026 | ||||||
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Nippon Steel Corporation (5401)
The First Quarter of Fiscal 2019
(3) Quarterly Condensed Consolidated Statements of Changes in Equity
First quarter of Fiscal 2018 | (Millions of Yen) | |||||||||||||||||||||||
Equity attributable to owners of the parent | ||||||||||||||||||||||||
Other components of equity | ||||||||||||||||||||||||
Common stock | Capital surplus | Retained earnings | Treasury stock | Changes in fair value of financial assets measured at fair value through other comprehensive income | Remeasurements of defined benefit plans | |||||||||||||||||||
Balance at beginning of the year | 419,524 | 386,867 | 2,141,658 | (132,162 | ) | 334,701 | — | |||||||||||||||||
Changes of the year | ||||||||||||||||||||||||
Comprehensive income | ||||||||||||||||||||||||
Profit | 85,397 | |||||||||||||||||||||||
Other comprehensive income | (5,309 | ) | 4,172 | |||||||||||||||||||||
Total comprehensive income | — | — | 85,397 | — | (5,309 | ) | 4,172 | |||||||||||||||||
Transactions with owners and others | ||||||||||||||||||||||||
Cash dividends | (35,355 | ) | ||||||||||||||||||||||
Purchases of treasury stock | (10 | ) | ||||||||||||||||||||||
Disposals of treasury stock | 0 | 1 | ||||||||||||||||||||||
Changes in ownership interests in subsidiaries | 1,854 | |||||||||||||||||||||||
Transfer from other components of equity to retained earnings | 8,885 | (4,712 | ) | (4,172 | ) | |||||||||||||||||||
Business combinations and others | (3 | ) | ||||||||||||||||||||||
Subtotal | — | 1,854 | (26,470 | ) | (13 | ) | (4,712 | ) | (4,172 | ) | ||||||||||||||
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Balance as of June 30, 2018 | 419,524 | 388,722 | 2,200,586 | (132,175 | ) | 324,679 | — | |||||||||||||||||
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Equity attributable to owners of the parent | Non-controlling interests | Total equity | ||||||||||||||||||||||
Other components of equity | Total equity attributable to owners of the parent | |||||||||||||||||||||||
Changes in fair value of cash flow hedges | Foreign exchange differences on translation of foreign operations | Total | ||||||||||||||||||||||
Balance at beginning of the year | (6,600 | ) | (6,998 | ) | 321,101 | 3,136,991 | 387,905 | 3,524,896 | ||||||||||||||||
Changes of the year | ||||||||||||||||||||||||
Comprehensive income | ||||||||||||||||||||||||
Profit | 85,397 | 4,561 | 89,959 | |||||||||||||||||||||
Other comprehensive income | 1,958 | (43,929 | ) | (43,107 | ) | (43,107 | ) | (3,312 | ) | (46,419 | ) | |||||||||||||
Total comprehensive income | 1,958 | (43,929 | ) | (43,107 | ) | 42,290 | 1,249 | 43,539 | ||||||||||||||||
Transactions with owners and others | ||||||||||||||||||||||||
Cash dividends | (35,355 | ) | (4,533 | ) | (39,888 | ) | ||||||||||||||||||
Purchases of treasury stock | (10 | ) | (10 | ) | ||||||||||||||||||||
Disposals of treasury stock | 1 | 1 | ||||||||||||||||||||||
Changes in ownership interests in subsidiaries | 1,854 | (1,857 | ) | (3 | ) | |||||||||||||||||||
Transfer from other components of equity to retained earnings | (8,885 | ) | — | — | ||||||||||||||||||||
Business combinations and others | (3 | ) | (45 | ) | (49 | ) | ||||||||||||||||||
Subtotal | — | — | (8,885 | ) | (33,513 | ) | (6,436 | ) | (39,950 | ) | ||||||||||||||
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| |||||||||||||
Balance as of June 30, 2018 | (4,641 | ) | (50,928 | ) | 269,109 | 3,145,767 | 382,717 | 3,528,485 | ||||||||||||||||
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9
Table of Contents
Nippon Steel Corporation (5401)
The First Quarter of Fiscal 2019
First quarter of Fiscal 2019 | (Millions of Yen) | |||||||||||||||||||||||
Equity attributable to owners of the parent | ||||||||||||||||||||||||
Other components of equity | ||||||||||||||||||||||||
Common stock | Capital surplus | Retained earnings | Treasury stock | Changes in fair value of financial assets measured at fair value through other comprehensive income | Remeasurements of defined benefit plans | |||||||||||||||||||
Balance at beginning of the year | 419,524 | 393,917 | 2,300,175 | (58,831 | ) | 248,020 | — | |||||||||||||||||
Changes of the year | ||||||||||||||||||||||||
Comprehensive income | ||||||||||||||||||||||||
Profit | 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 to retained earnings | 6,412 | (3,329 | ) | (3,083 | ) | |||||||||||||||||||
Business combinations and others | (228 | ) | ||||||||||||||||||||||
Subtotal | — | (2,180 | ) | (30,468 | ) | (199 | ) | (3,329 | ) | (3,083 | ) | |||||||||||||
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| |||||||||||||
Balance as of June 30, 2019 | 419,524 | 391,737 | 2,303,032 | (59,030 | ) | 233,682 | — | |||||||||||||||||
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Equity attributable to owners of the parent | Non-controlling interests | Total equity | ||||||||||||||||||||||
Other components of equity | Total equity attributable to owners of the parent | |||||||||||||||||||||||
Changes in fair value of cash flow hedges | Foreign exchange differences on translation of foreign operations | Total | ||||||||||||||||||||||
Balance at beginning of the year | (4,433 | ) | (67,585 | ) | 176,000 | 3,230,788 | 376,579 | 3,607,367 | ||||||||||||||||
Changes of the year | ||||||||||||||||||||||||
Comprehensive income | ||||||||||||||||||||||||
Profit | 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 to retained earnings | (6,412 | ) | — | — | ||||||||||||||||||||
Business combinations and others | (228 | ) | (326 | ) | (554 | ) | ||||||||||||||||||
Subtotal | — | — | (6,412 | ) | (39,260 | ) | (2,865 | ) | (42,126 | ) | ||||||||||||||
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Balance as of June 30, 2019 | (7,471 | ) | (67,968 | ) | 158,242 | 3,213,507 | 379,741 | 3,593,248 | ||||||||||||||||
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10
Table of Contents
Nippon Steel Corporation (5401)
The First Quarter of Fiscal 2019
(4) Notes to the Quarterly Condensed Consolidated Financial Statements
None
(Changes in Accounting Policies Required by IFRS)
From the beginning of the first quarter of Fiscal 2019 (April 1, 2019—June 30, 2019), the Group has adopted IFRS 16 “Leases” (Issued in January 2016)(“IFRS 16”). In adopting IFRS 16, the Group has applied an approach of recognizing the cumulative effect of applying the standard as an adjustment to the beginning balance at the date of initial application, which is approved as a transitional measure.
In adopting IFRS 16, the Group has elected to apply the practical expedient detailed in paragraph C3 of IFRS 16 in determining whether a contract is, or contains, a lease by maintaining its previous assessment under IAS 17 “Leases” (“IAS 17”) and IFRIC 4 “Determining whether an Arrangement Contains a Lease”. On and after the date of initial application, the Group has determined whether a contract is, or contains, a lease in accordance with IFRS 16.
For leases previously classified as finance leases under IAS 17 and in which the Group is a lessee, the carrying amounts of theright-of-use assets and lease obligations as of the date of initial application have been respectively measured at the carrying amounts of the leased assets and lease liabilities under IAS 17 immediately before the date of initial application.
For leases previously classified as operating leases under IAS 17 and in which the Group is a lessee, the Group has recognized theright-of-use assets and lease liabilities as of the date of initial application. The lease liabilities are measured at the present value of the minimum lease payments as of the date of initial application discounted by the lessee’s incremental borrowing rate. The weighted average of the incremental borrowing rate is 0.5%. Theright-of-use assets are measured at the carrying amounts computed under the assumption of applying the standard at the commencement date of the contract. The discount rate applied is the lessee’s incremental borrowing rate as of the date of initial application.
The breakdown of difference between the amount ofnon-cancellable operating lease contracts under IAS 17 as of the end of the Fiscal 2018 and the amount of lease liabilities recognized in the Quarterly Condensed Consolidated Statements of Financial Position as of the date of initial application is as follows.
(Millions of Yen) | ||||
Non-cancellable operating lease contracts as of March 31, 2019 | 45,800 | |||
Finance lease liabilities as of March 31, 2019 | 46,754 | |||
Non-cancellable lease contracts effective on or after the date of initial application | (12,226 | ) | ||
Lease liabilities as of the date of initial application (April 1, 2019) | 80,328 |
Theright-of-use assets recognized at the date of initial application in the Quarterly Condensed Statements of Financial Position is ¥79,770 million.
In adopting IFRS 16, the Group has applied the following practical expedients.
— | As an alternative of performing an impairment review, the Group relies on a previous assessment of whether leases are onerous in accordance with IAS 37 “Provisions, Contingent Liabilities and Contingent Assets” immediately before the date of initial application. |
— | Exclusion of initial direct costs from the measurement of theright-of-use assets as of the date of initial application. |
— | Use of hindsight in determining the lease term if the contract contains options to extend or terminate the lease. |
11
Table of Contents
Nippon Steel Corporation (5401)
August 1, 2019
Nippon Steel Corporation
Code Number: 5401
Listings: Tokyo, Nagoya, Sapporo and Fukuoka Stock Exchanges
Contact: Fumiaki Ohnishi, General Manager, Public Relations Center-Tel: +81-3-6867-2130
Supplementary Information on the Financial Results
for the First Quarter of Fiscal 2019
Japanese Steel Industry
1. Crude Steel Production
(million tons) | ||||||||||||||||||||||||||||
1st quarter | 2nd quarter | 1st half | 3rd quarter | 4th quarter | 2nd half | total | ||||||||||||||||||||||
2018FY | 26.56 | 25.65 | 52.22 | 25.70 | 24.97 | 50.67 | 102.89 | |||||||||||||||||||||
2019FY | 26.10 | (*) Approx.25.89 | Approx.51.99 | |||||||||||||||||||||||||
(*)METI forecast |
2. Inventory Volume
At the end of: | Inventory at manufacturers and distributors | Inventory /shipment ratio | Rolled sheets*1 | H-flange beams*2 | ||||||||||||||||
(million tons) | (%) | (million tons) | (million tons) | |||||||||||||||||
June | 2017 | 5.56 | (139.9 | ) | 4.01 | 0.193 | ||||||||||||||
July | 2017 | 5.42 | (142.0 | ) | 3.95 | 0.189 | ||||||||||||||
Aug. | 2017 | 5.66 | (158.4 | ) | 4.14 | 0.179 | ||||||||||||||
Sep. | 2017 | 5.70 | (145.4 | ) | 4.16 | 0.182 | ||||||||||||||
Oct. | 2017 | 5.83 | (150.1 | ) | 4.11 | 0.176 | ||||||||||||||
Nov. | 2017 | 5.66 | (139.2 | ) | 4.00 | 0.173 | ||||||||||||||
Dec. | 2017 | 5.67 | (149.2 | ) | 4.04 | 0.175 | ||||||||||||||
Jan. | 2018 | 5.86 | (157.5 | ) | 4.15 | 0.185 | ||||||||||||||
Feb. | 2018 | 5.81 | (154.4 | ) | 4.12 | 0.196 | ||||||||||||||
Mar. | 2018 | 5.83 | (140.8 | ) | 4.21 | 0.200 | ||||||||||||||
Apr. | 2018 | 5.79 | (145.8 | ) | 4.15 | 0.196 | ||||||||||||||
May | 2018 | 5.88 | (150.2 | ) | 4.34 | 0.200 | ||||||||||||||
June | 2018 | 5.93 | (149.3 | ) | 4.41 | 0.207 | ||||||||||||||
July | 2018 | 5.68 | (143.0 | ) | 4.20 | 0.208 | ||||||||||||||
Aug. | 2018 | 6.01 | (170.7 | ) | 4.39 | 0.204 | ||||||||||||||
Sep. | 2018 | 6.23 | (176.5 | ) | 4.40 | 0.198 | ||||||||||||||
Oct. | 2018 | 5.87 | (132.0 | ) | 4.26 | 0.184 | ||||||||||||||
Nov. | 2018 | 5.59 | (133.8 | ) | 4.14 | 0.184 | ||||||||||||||
Dec. | 2018 | 5.74 | (151.6 | ) | 4.17 | 0.187 | ||||||||||||||
Jan. | 2019 | 5.98 | (154.4 | ) | 4.40 | 0.195 | ||||||||||||||
Feb. | 2019 | 5.93 | (152.5 | ) | 4.41 | 0.208 | ||||||||||||||
Mar. | 2019 | 5.93 | (141.6 | ) | 4.47 | 0.219 | ||||||||||||||
Apr. | 2019 | 6.02 | (160.6 | ) | 4.54 | 0.227 | ||||||||||||||
May | 2019 | 6.11 | (164.8 | ) | 4.62 | 0.227 | ||||||||||||||
June*3 | 2019 | 6.09 | (158.8 | ) | 4.57 | 0.220 |
*1 | Hot-rolled, cold-rolled and coated sheets |
*2 | Inventories of distributors dealing withH-flange beams manufactured by Nippon Steel Corporation |
*3 | Preliminary report |
- 1 -
Table of Contents
Nippon Steel Corporation (5401)
August 1, 2019
Nippon Steel Corporation
3. Pig Iron Production
(million tons) | ||||||||||||||||||||||||||||
1st quarter | 2nd quarter | 1st half | 3rd quarter | 4th quarter | 2nd half | total | ||||||||||||||||||||||
2018FY | 10.25 | 10.24 | 20.49 | 10.24 | 10.13 | 20.37 | 40.86 | |||||||||||||||||||||
2019FY | 10.33 | Approx.10.90 | Approx.21.20 | |||||||||||||||||||||||||
Including Hokkai Iron & Coke Co., Ltd.
4. Crude Steel Production
(Consolidated basis (The Company and its consolidated subsidiaries))
|
| |||||||||||||||||||||||||||
(million tons) | ||||||||||||||||||||||||||||
1st quarter | 2nd quarter | 1st half | 3rd quarter | 4th quarter | 2nd half | total | ||||||||||||||||||||||
2018FY | 11.89 | 11.76 | 23.65 | 12.13 | 12.06 | 24.19 | 47.84 | |||||||||||||||||||||
2019FY | 12.44 | Approx.12.00 | Approx.24.50 | Approx.24.50 | Approx.49.00 | |||||||||||||||||||||||
(Non-consolidated basis)
|
| |||||||||||||||||||||||||||
(million tons) | ||||||||||||||||||||||||||||
1st quarter | 2nd quarter | 1st half | 3rd quarter | 4th quarter | 2nd half | total | ||||||||||||||||||||||
2018FY | 10.29 | 10.21 | 20.50 | 10.29 | 10.22 | 20.50 | 41.00 | |||||||||||||||||||||
2019FY | 10.27 | Approx.10.20 | Approx.20.50 | Approx.20.50 | Approx.41.00 | |||||||||||||||||||||||
5. Steel Products Shipment
|
| |||||||||||||||||||||||||||
(million tons) | ||||||||||||||||||||||||||||
1st quarter | 2nd quarter | 1st half | 3rd quarter | 4th quarter | 2nd half | total | ||||||||||||||||||||||
2018FY | 9.57 | 8.99 | 18.56 | 9.92 | 9.48 | 19.41 | 37.97 | |||||||||||||||||||||
2019FY | 9.11 | Approx.9.80 | Approx.18.90 | Approx.18.90 | Approx.37.80 | |||||||||||||||||||||||
6. Average Price of Steel Products
|
| |||||||||||||||||||||||||||
(thousands of yen / ton) | ||||||||||||||||||||||||||||
1st quarter | 2nd quarter | 1st half | 3rd quarter | 4th quarter | 2nd half | total | ||||||||||||||||||||||
2018FY | 87.2 | 90.2 | 88.7 | 91.5 | 90.9 | 91.2 | 89.9 | |||||||||||||||||||||
2019FY | 88.1 | Approx.88 | Approx.88 | |||||||||||||||||||||||||
7. Export Ratio of Steel Products (Value basis)
|
| |||||||||||||||||||||||||||
(%) | ||||||||||||||||||||||||||||
1st quarter | 2nd quarter | 1st half | 3rd quarter | 4th quarter | 2nd half | total | ||||||||||||||||||||||
2018FY | 41 | 41 | 41 | 40 | 37 | 39 | 40 | |||||||||||||||||||||
2019FY | 40 | Approx.42 | Approx.41 |
- 2 -
Table of Contents
Nippon Steel Corporation (5401)
August 1, 2019
8. Foreign Exchange Rate
|
| |||||||||||||||||||||||||||
(¥ / $) | ||||||||||||||||||||||||||||
1st quarter | 2nd quarter | 1st half | 3rd quarter | 4th quarter | 2nd half | total | ||||||||||||||||||||||
2018FY | 108 | 111 | 109 | 113 | 110 | 112 | 111 | |||||||||||||||||||||
2019FY | 111 | Approx.110 | Approx.110 |
9. Amount of Capital Expenditure and Depreciation
(Consolidated basis)
(billions of yen) | ||||||||
Capital Expenditure | Depreciation | |||||||
2018FY | 440.8 | 408.6 | ||||||
2019FY | Approx.500.0 | Approx.450.0 |
- 3 -
Table of Contents
For Immediate Release | August 1, 2019 |
Company name: | Nippon Steel Corporation | |
Representative: | Eiji Hashimoto, Representative Director and President | |
Code number: | 5401 | |
Contact: | Fumiaki Ohnishi, General Manager, Public Relations Center | |
Telephone: | +81-3-6867-2130 |
Announcement of Forecasts for Performance
In view of recent trends in performance, Nippon Steel Corporation (“the Company”) today announced its forecasts for the first half and the full fiscal year ending March 31, 2020, which had been undetermined at the time of the announcement of results for the fiscal year ended March 31, 2019 (on May 9, 2019).
Consolidated Financial Forecasts for the First Half of Fiscal 2019 (April 1, 2019-September 30, 2019)
(Millions of yen, except per share figures) | ||||||||||||||||
Revenue | Business profit | Profit attributable to owners of the parent | Earnings per share (¥) | |||||||||||||
Previous forecasts (A) | — | — | — | — | ||||||||||||
Current forecasts (B) | 3,000,000 | 70,000 | 30,000 | 33.00 | ||||||||||||
Change (B–A) | — | — | — | |||||||||||||
% change | — | — | — | |||||||||||||
(For reference)Actual for the first half of the previous fiscal year ended March 31, 2019(ø) | 2,941,586 | 157,990 | 116,795 | 132.33 |
(ø) | In the second quarter of the previous fiscal year, rough figures based on IFRS were released, but actual values based on IFRS are stated above. |
Consolidated Financial Forecasts for Fiscal 2019 (April 1, 2019-March 31, 2020)
(Millions of yen) | ||||
Business profit | ||||
Previous forecasts (A) | — | |||
Current forecasts (B) | 150,000 | |||
Change (B–A) | — | |||
% change | — | |||
(For reference) Actual for the previous fiscal year ended March 31, 2019 | 336,941 |
Non-Consolidated Financial Forecasts for Fiscal 2019 (April 1, 2019-March 31, 2020)
(Millions of yen) | ||||
Ordinary profit | ||||
Previous forecasts (A) | — | |||
Current forecasts (B) | (65,000 | ) | ||
Change (B–A) | — | |||
% change | — | |||
(For reference) Actual for the previous fiscal year ended March 31, 2019 | 112,319 |
Reason for the Announcement
The Company has determined its forecasts for the performance of the first half and the full fiscal year ending March 31, 2020, which had not been estimated at the time of the previous announcement of results. For fiscal 2019 the Company is forecasting consolidated business profit of ¥150.0 billion andnon-consolidated ordinary loss of ¥65.0 billion, partly due to significant narrowing of profit margins, particularly for export products for spot markets, assuming that the current state of high raw material prices and low steel product prices persists.
Table of Contents
August 1, 2019
Company name: | Nippon Steel Corporation | |
Representative: | Eiji Hashimoto, Representative Director and President | |
Code number: | 5401 | |
Contact: | Fumiaki Ohnishi, General Manager, Public Relations Center | |
Telephone: | +81-3-6867-2130 |
Announcement of Forecasts for Dividend
The Board of Directors of Nippon Steel Corporation (“the Company”) held on August 1, 2019 has decided to announce the forecasts for the halfyear-end dividend from retained earnings as follows.
1. Reason for the Announcement
When the previous fiscal year results were announced on May 9, 2019, the Company had not determined a halfyear-end dividend distribution amount for the current fiscal year ending March 31, 2020. After due consideration of the earnings forecasts for the year and other factors, in accordance with the basic profit distribution policy previously announced, the Company is planning to pay a dividend of ¥10 per share (representing a consolidated dividend payout ratio of around 31%).
2. Details for the Announcement
(yen) | ||||||||||||
Dividends per share | ||||||||||||
End of the first half | End of the second half | Full fiscal year | ||||||||||
Previous forecasts (released on May 9, 2019) | — | — | — | |||||||||
Current forecasts | 10 | — | — | |||||||||
Actual for the current fiscal year ending March 31, 2020 | ||||||||||||
Actual for the previous fiscal year ended March 31, 2019 | 40 | 40 | 80 |