Nippon Steel’s consolidated and non-consolidated business results for the 76th term (FY2000) and the term-end dividend payment will be formally determined at the Board of Directors’ meeting to be held towards the end of May. In the meantime， we hereby inform you of the following prospects so far obtained.
Prospects for consolidated and non-consolidated business results
Japan’s economy during the term saw gradual improvement in the first half such as increased exports mirroring buoyant overseas markets and the picking-up of domestic private-sector capital investment. Later， however， the economy entered a recessionary phase. More recently， the sentiment of opacity of future prospects is rapidly mounting under the effects of a depressed stock market and the slowing down of the U.S. economy.
National crude steel production in FY2000 will probably exceed the FY1999 level， amounting to around 106 or 107 million tons. This is because steel exports continued upward until the middle of FY2000 supported by the recovery of Asian economies， while domestic shipments remained strong to meet increasing steel demand.
Price-wise， domestic levels declined in harshening competition， while firming export prices peaked out in the latter part of the first half， registering only a slight rise for the full year. Regarding raw materials， adverse effects on profitability are anticipated such as cost rise due mainly to higher crude oil prices. Under these circumstances， greater income and profits are expected for the term through the steady implementation of cost reduction under the medium-term consolidated business plan.
Sales by engineering businesses declined as the receipt of orders had decreased in FY1999 due to the weak demand both at home and abroad. Order receipts in FY2000 are likely to exceed the previous term result by a wide margin owing to the aggressive marketing effort paid mainly in the environment-protection-related plant and energy sector. Demand in the urban development businesses was brisk， while the market was also firm for chemicals and non-ferrous metals， which materialized in greater sales in these areas.
The electronics and information sector is expected to better the result attained in the previous term， reflecting high-levels of IT-related investment in Japan. To provide even fuller client services， Nippon Steel’s Electronics &； Information Systems Division and its 100% subsidiary， Nippon Steel Information &； Communications Systems Inc. (ENICOM)， will integrate their operations in April 2001 to form NS Solutions. The new company aims to be listed on the stock exchange in the autumn of 2002.
Under these circumstances， each of the Nippon Steel group companies did its best to improve profitability. As a result， the consolidated sales and ordinary profit are expected to be approximately 2，740 billion and 103 billion， respectively.
Net income for the term， however， is likely to be around 22 billion because of the burden arising from the decommissioning of the medium- and small-diameter seamless pipe mill at Yawata Works and the amortization of deficiencies in the corporate pension plan， and the lump-sum retirement allowance funds following the application of retirement benefit cost accounting.
As for the non-consolidated figures， sales， ordinary profit and net income are expected to be approximately 1，840 billion， 75 billion and 15 billion， respectively. The non-consolidated ordinary profit， which is 5 billion below the previously announced 80 billion， reflects the occurrence of unforeseen operational trouble of a blast furnace in February. The profits of the group companies， on the other hand， surpassed the earlier expectations. Consequently， the consolidated ordinary profit for the term came out to be 2 billion below the previously announced figure.
Term-end dividend payment
Taking these situations into consideration， Nippon Steel intends to pay 1.50 per share， the same amount as that for the previous (75th) term.
Outlook for FY2001
The outlook for the steel sector in the coming term is likely to be trying， in view of the falling export prices and the growing sentiment of excess inventories in the domestic market. Other sectors are also expected to continue to experience a harsh business environment.
The company， in accordance with its medium-term consolidated business plan， will keep on making every effort to improve profitability. We look forward to receiving your continued understanding and support.
(in billion yen)
