Nippon Steel (5401): FY2025 Results Summary — Underlying Profit Tops Revised Forecast, FY2026 Outlook Points to U. S. Steel-Led Recovery

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

Nippon Steel Corporation announced its financial results for the fiscal year ended March 2026 (FY2025) on May 13, 2026. Underlying business profit (excl. inventory valuation etc.) reached ¥650.4 bn., exceeding the previous forecast (as of February 5) by ¥30.4 bn., supported by cost reductions at domestic works and improvements at group companies, despite a more challenging environment including tariff impacts, troubles, and one-off effects of -¥70.0 bn. Profit attributable to owners of the parent was ¥17.1 bn. for the year, down ¥333.1 bn. from FY2024 but up ¥87.1 bn. from the previous forecast, lifted in part by inventory valuation and FX gains of +¥63.7 bn. driven by higher raw material prices and yen depreciation. The dividend forecast is unchanged from the previous forecast at ¥24 per share (after stock split), down ¥8 from FY2024.

Consolidated Results (Full-Year Actual)

Revenue increased to ¥10,063.2 bn. (+¥1,367.7 bn. year on year), reflecting the consolidation of U. S. Steel. Underlying business profit excl. U. S. Steel was ¥656.0 bn. (-¥137.7 bn. year on year), while U. S. Steel contributed ¥(5.6) bn. on an underlying-BP basis for the year.

Item	FY2025	FY2024	Change from FY2024
Revenue (¥bn.)	10,063.2	8,695.5	+1,367.7
Underlying BP – Excl. U. S. Steel (¥bn.)	656.0	793.7	-137.7
Underlying BP – U. S. Steel (¥bn.)	(5.6)	–	-5.6
Underlying BP Excl. Inventory valuation etc. (¥bn.)	650.4	793.7	-143.3
Inventory valuation etc. (¥bn.)	(136.3)	(110.5)	-25.8
Consol. BP (¥bn.)	514.1	683.2	-169.1
ROS	5.1%	7.9%	-2.7%
Additional Line Items (¥bn.)	(271.2)	(135.2)	-136.0
Profit *1 (¥bn.)	17.1	350.2	-333.1
ROE	0.3%	6.9%	-4.3%
Dividend (¥/share) *2	¥24	¥32	-¥8
FX (USD/JPY)	150	153	3 yen appreciation

The year-on-year decline in underlying BP (-¥143.3 bn.) reflects business environment deterioration (-¥180.0 bn.) and one-off effects of -¥70.0 bn., including the Muroran Area blast furnace and hot stove issues (combined impact of approx. -¥50.0 bn.: approx. -¥10.0 bn. from the blast furnace issue and approx. -¥40.0 bn. from the hot stove issue, as reported in the FY2025 Q3 release) and issues at U. S. Steel (-¥20.0 bn., including the Clairton Cokes Plant incident, a purchaser’s repudiation of a pellet sale contract, and a winter storm), partly offset by profit improvement through cost reduction and other measures (+¥90.0 bn.). *1 Profit represents profit attributable to owners of the parent. *2 Dividend figures are after the stock split.

Segment Results

By region, Domestic underlying BP was ¥527.6 bn. (-¥37.0 bn. year on year) and Overseas underlying BP was ¥122.8 bn. (-¥106.3 bn. year on year). Within Domestic, the Domestic Steel Business posted ¥246.5 bn. (-¥13.7 bn.), Other Group Companies ¥183.8 bn. (-¥34.9 bn.), and the Three Non-steel Segments ¥90.6 bn. (+¥17.8 bn., the only segment to grow year on year). Within Overseas, the Overseas Steel Business posted ¥38.4 bn. (-¥35.4 bn.) and the Raw Material Business ¥84.4 bn. (-¥70.9 bn.).

Segment	FY2025 (H1)	FY2025 (H2)	FY2025 (Full Year, ¥bn.)	Change from FY2024
Domestic	257.9	269.7	527.6	-37.0
Domestic Steel Business	136.6	109.9	246.5	-13.7
Other Group Companies	80.3	103.5	183.8	-34.9
3 Non-steel Segments	36.0	54.6	90.6	+17.8
Overseas	87.8	35.0	122.8	-106.3
Overseas Steel Business	47.3	(8.9)	38.4	-35.4
Raw Material Business	40.5	43.9	84.4	-70.9
Inventory valuation, etc.	(118.2)	(18.2)	(136.3)	-25.8

FY2026 Forecast

Nippon Steel forecasts FY2026 underlying BP of ¥700.0 bn. or more (H1: ¥300.0 bn., H2: ¥400.0 bn., with H2 on an annualized basis of ¥800.0 bn. or more), with U. S. Steel expected to post a significant increase in underlying BP (+¥106.0 bn. versus FY2025). Even excluding U. S. Steel, underlying BP is expected to reach ¥600.0 bn. Profit is forecast at ¥220.0 bn., reflecting a substantial reduction in one-off, additional line items recorded in FY2025. This forecast excludes the impact of the situation in the Middle East on business performance, which the company states cannot be reasonably quantified at this time; as a direct impact already emerging, an impact on Business Profit of approx. -¥50.0 bn. is expected in Q1 FY2026.

Item	FY2026 (H1, f)	FY2026 (H2, f)	FY2026 Forecast (Full Year)	Change from FY2025
Underlying BP – Excl. U. S. Steel (¥bn.)	230.0	370.0	600.0	-56.0
Underlying BP – U. S. Steel (¥bn.)	70.0	30.0	100.0	+105.6
Underlying BP Excl. Inventory valuation etc. (¥bn.)	300.0	400.0	700.0	+49.6
Inventory valuation etc. (¥bn.)	(80.0)	(90.0)	(170.0)	-33.7
Consol. BP (¥bn.)	220.0	310.0	530.0	+15.9
ROS	4.1%	5.5%	4.8%	-0.3%
Additional Line Items (¥bn.)	–	(30.0)	(30.0)	+241.2
Profit *1 (¥bn.)	90.0	130.0	220.0	+202.9
Dividend (¥/share) *2	¥12	¥12	¥24	–
FX (JPY/USD)	155	155	155	5 yen depreciation

Shareholder Returns

Nippon Steel’s FY2025 dividend forecast is ¥24 per share (after stock split), unchanged from the previous forecast but down ¥8 from FY2024’s ¥32 per share, in line with the dividend policy of a target consolidated payout ratio of approx. 30%. For FY2026, the company currently plans a dividend of ¥24 per share. Under the 2030 Medium- to Long-term Management Plan (FY2026-FY2030), Nippon Steel is maintaining its current dividend policy (target payout ratio of approx. 30%) while introducing a minimum annual dividend of ¥24 per share. The company states that, although the impact of the Middle East situation on business results cannot be reasonably assessed, the FY2026 dividend of ¥24 per share is currently planned based on this minimum dividend level and other considerations.

Medium-Term Plan / Topics

Under the 2030 Medium- to Long-term Management Plan, Nippon Steel targets underlying business profit of ¥1 trillion or more per year, with Domestic and Overseas each targeting ¥500.0 bn. or more in underlying business profit (Domestic FY2026(f): ¥470.0 bn. or more; Overseas FY2026(f): ¥230.0 bn. or more). Synergies from the reorganization of domestic group companies (wholly-owned subsidiary conversions, absorption mergers, and integration of strategic companies) are targeted to reach ¥30.0 bn./year on a full-run basis by FY2030, up from ¥16.0 bn. generated in FY2025.

Following the completion of the U. S. Steel acquisition in June 2025, Nippon Steel is targeting large-scale growth investments and EBITDA improvement at U. S. Steel of $3.0 bn. versus FY2024 by 2030 ($0.5 bn. from synergies and $2.5 bn. from benefits of capital investments), based on planned large-scale growth investments of over $14 bn. (of which $11 bn. in the U.S. by the end of 2028) and a mid- to long-term management plan of 8 pillars and 66 initiatives outlined in November 2025. Cumulative approved capital investment projects at U. S. Steel totaled approx. $3.2 bn. as of May 2026, including relining of the No.14 blast furnace at Gary and a new DRI plant at Big River. Nippon Steel also announced on May 13, 2026 plans to transition Nippon Steel Slovakia (former U. S. Steel Košice) and Ovako to direct ownership, planned for October 2026, ahead of a planned integration of Ovako with Sanyo Special Steel in April 2027.

In India, AM/NS India is expanding integrated steelmaking capacity at Hazira Works (crude steel capacity increasing by approx. 6 Mt/Y, from approx. 9 to 15 Mt/Y, scheduled to start operation in H2 of FY2026) and, following a groundbreaking ceremony on March 24, 2026, has commenced land development for a new integrated steel works in Rajayyapeta, Andhra Pradesh (site area approx. 890 ha; Phase I capacity of approx. 7.0 MT/year of crude steel).

On decarbonization under Carbon Neutral Vision 2050, Nippon Steel confirmed a 45% reduction in CO2 emissions through hydrogen reduction tests (Super COURSE50) at the Kimitsu pilot-scale blast furnace in March 2026, and achieved 72-hour continuous hydrogen reduction operation at the Hasaki R&D Center’s pilot-scale shaft furnace. The company also commenced construction of EAF conversion facilities at Kyushu Works, Yawata Area following a groundbreaking ceremony on April 15, 2026, targeting the start of operations in the second half of FY2029.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.