|
To Our Shareholders
During the first half of fiscal 1996, ended September 30,
1996, an improvement デュエルビッツ 入金不要ボーナスe Japanese economy was sup-
ported by a correction デュエルビッツ 入金不要ボーナスe value of the high yen and
the positive effects of such government economic stimu-
lus measures as low interest rates and increased public
works spending. Nevertheless, the overall economy lacked
vigor, and a full-scale recovery failed to materialize.
Under these conditions, Kobe Steel, Ltd., concentrated
on maximizing sales volume while vigorously imple-
menting its 1995-1997 Management Plan aimed at
strengthening the profitability of its businesses.
Accordingly, we worked to lower production costs, ratio-
nalized the workforce, and reduced total assets. As a
result, we achieved the overall cost-reduction goals of
the plan ahead of schedule.
Interim net sales were 1.2 billion, approximately
the same as デュエルビッツ 入金不要ボーナスe first half of fiscal 1995, while opera-
ting income fell 19.7%, to .8 billion, owing to a
decline in steel prices and a decline デュエルビッツ 入金不要ボーナスe profitability of
the Engineering and Machinery Division. Net income for
the first half of the fiscal year amounted to .6 billion.
As a result, Kobe Steel was able to reduce its undisposed
deficit at the end of the interim period to .7 billion,
from the retained deficit of .3 billion at the end of fis-
cal 1995.
In view of the preceding factors, management has
decided to forgo the payment of interim dividends. We
regret having to take this measure and hope that our
shareholders understand this decision.
Performance by Sector
Sales デュエルビッツ 入金不要ボーナスe Iron and Steel Sector improved 1.4% from
the first half of the previous fiscal year, to 4.7 billion.
デュエルビッツ 入金不要ボーナスe domestic market, housing starts were firm, and
manufacturing industries began to recover, particularly
the automotive industry. The overall market, however,
remained sluggish as the pace of inventory adjustments
was slow. Overseas, exports to China decreased sharply.
デュエルビッツ 入金不要ボーナスis environment, we stepped up our marketing efforts
and maintained the same sales volume of steel as that of
the first half of the previous fiscal year. We achieved an
increase in orders for steel castings and forgings and tita-
nium products from the first half of the previous fiscal
year. In welding materials, sales decreased in comparison
with the same period of fiscal 1995, as exports fell and
users continued to relocate their manufacturing bases
overseas.
Sales デュエルビッツ 入金不要ボーナスe Aluminum and Copper Sector declined
3.4% from the first half of the previous fiscal year, to
4.0 billion. Shipments of rolled aluminum products
were firm, owing to steady sales of aluminum can stock
for beverage cans and aluminum substrates for computer
memory disks. On the other hand, the overall sales volume
of rolled copper products declined due to lackluster sales
of copper sheets for electronic applications.
Sales デュエルビッツ 入金不要ボーナスe Machinery and Information Sector
rose 1.5%, to 2.5 billion. デュエルビッツ 入金不要ボーナスe domestic market,
industrial machinery and plant orders declined due to
a slow recovery in private-sector capital investment.
Nevertheless, favorable orders for large-scale plant pro-
jects and construction machinery from overseas under-
pinned a 1.2% increase in orders from the same period in
the previous fiscal year, to 8.7 billion.
Outlook for the Second Half
デュエルビッツ 入金不要ボーナスe second half of the fiscal year, a rapid recovery of
the domestic economy appears unlikely, and a difficult
management environment is expected to persist. Against
this background, Kobe Steel intends to step up efforts to
maximize sales volume while progressing with measures
to strengthen the profitability of its businesses and striv-
ing for the rapid elimination of its retained deficit. Also,
to respond to the significant changes in Japan's industri-
al structure, we are working to quickly formulate the
1997-1999 Midterm Management Plan. This plan will
serve as a basic guideline as we strive to enhance prof-
itability by fortifying the international competitiveness
of our existing businesses; establish and cultivate busi-
nesses in promising new sectors as well as in fields in
which we excel; and achieve further growth and prof-
itability of the entire Kobe Steel Group. Through the
implementation of this plan, we aim to establish a solid
corporate structure that will ensure stable profits in each
business sector for the 21st century.
In July, we submitted a tender to supply electricity to
The Kansai Electric Power Co., Inc., and were selected as
a potential supplier in October. We plan to construct a
700,000kW, coal-fired generator at our Kobe Works and
to use recycled heat from coke dry quenching equipment
that will be installed at our Kakogawa Works to generate
another 58,000kW. デュエルビッツ 入金不要ボーナスe second half of fiscal 1996, we
intend to work out the details of the project and form a
contract. Through this and other projects, we aim to
contribute to the reconstruction and growth of industry
デュエルビッツ 入金不要ボーナスe Kobe area.
As we pursue these objectives, we offer our thanks to
you, our shareholders, for your continued support.
December 1996
Masahiro Kumamoto
President and
Chief Executive Officer
|