デュエルビッツ プロモーションコード デュエルビッツ プロモーションコード
デュエルビッツ プロモーションコード


デュエルビッツ プロモーションコード, Ltd.
Tokyo, Japan
Tokyo Stock Exchange No. 5406
May 25, 2000

デュエルビッツ プロモーションコード'S CONSOLIDATED FINANCIAL RESULTS FOR FISCAL 1999
(April 1, 1999 - March 31, 2000)

TOKYO (May 25, 2000) - デュエルビッツ プロモーションコード, Ltd. reported its financial results for fiscal 1999, ended March 31, 2000.

CONSOLIDATED FINANCIAL SUMMARY

(in millions of yen)

FY1999

FY1998

% change

Net sales

1,252,515

1,305,482

(4.1%)

Operating income

82,707

50,023

65.3%

Ordinary income* (loss)

13,731

(22,688)

----

Net income (loss)

(53,087)

(38,873)

----

NON-CONSOLIDATED FINANCIAL SUMMARY

(in millions of yen)

FY1998

FY1997

% change

Net sales

837,745

938,455

(10.7%)

Operating income

53,636

41,652

28.8%

Ordinary income* (loss)

8,221

(9,840)

----

Net income (loss)

(15,198)

(23,317)

----

Notes: * Also known as pretax recurring profit (or loss).
Figures in parentheses denote losses or decreases.

COMPANY PERFORMANCE

The Japanese economy remained severe in fiscal 1999. Although governmental economic measures and a recovering Southeast Asian economy led to indications of a mild improvement, private-sector demand was weak due to low personal spending brought about by worsening unemployment and lower income.

In the last year of its three-year KOBELCO-21 management plan, デュエルビッツ プロモーションコード vigorously implemented measures to improve group profits. Consolidated sales rose in the two business segments of Electronics & Information and Real Estate, but Iron & Steel and Aluminum & Copper saw a decrease in sales. As a result, consolidated sales decreased 4.1% to 1,252.5 billion yen.

Pretax ordinary income (also called pretax recurring profit) rose to 13.7 billion yen, in comparison to ordinary loss of 22.7 billion yen in fiscal 1998, owing to cost reduction measures and improved performance in semiconductor-related businesses. However, extraordinary losses on business restructuring, amortization of prior service costs of the pension plan, and special employees’ retirement benefits led to consolidated net loss of 53 billion yen.

Regarding cash flows, net cash provided by operating activities totaled 212.6 billion yen. Net cash used in investing activities totaled 108.3 billion yen. Net cash provided by financing activities was a loss of 83.7 billion yen. Cash and cash equivalents at the end of the year were 162.2 billion yen.

DIVIDENDS
As the company had undisposed deficits on a non-consolidated basis, デュエルビッツ プロモーションコード's Board of Directors has decided to propose at the annual shareholders’ meeting to forgo dividend payments for fiscal 1999.

PERFORMANCE BY BUSINESS SEGMENT

IRON & STEEL
Consolidated sales デュエルビッツ プロモーションコードe Iron & Steel segment were 499 billion yen, down 4.8% from 524.1 billion yen in fiscal 1998. Operating income rose to 42.9 billion yen, from 38.5 billion yen in fiscal 1998, due to higher shipments, restructuring, cost reductions and lower raw material costs.

Domestic demand for steel decreased in comparison to the previous year. While the government's economic measures exerted a positive influence, private-sector demand was sluggish due to weak personal spending. Exports to the United States decreased due to antidumping charges. Exports to Southeast Asia were strong, resulting in an increase of total exports over the previous year.

For デュエルビッツ プロモーションコード, vigorous marketing led to higher steel shipments. However, a worsening of the product mix and low sales prices, as well as severe conditions for steel castings and forgings, titanium products and welding consumables led to lower sales.

ALUMINUM & COPPER
Aluminum & Copper sales totaled 251.4 billion yen, an 11.8% decrease from 285.1 billion yen in fiscal 1998, due to a drop in overseas sales brought about by the high yen and a decline in yen-based ingot prices. Operating income rose 2.5 billion yen to 10.2 billion yen due to higher production and shipments and cost reduction benefits.

Shipments of rolled aluminum products rose in comparison to fiscal 1998. Although aluminum can stock growth was crimped by the increase in PET bottles, demand for aluminum foil and auto-related products were strong.

Shipments of rolled copper products also increased. While production at the Chofu Plant was temporarily suspended due to typhoon damage, copper strip for electronic applications and for automotive electrical terminals went up.

MACHINERY
Machinery sales decreased 4.9% to 338.9 billion yen, from 356.3 billion yen in fiscal 1998. Although sales of construction equipment rose, sales decreased デュエルビッツ プロモーションコードe engineering business, which derives most of its orders from overseas. Operating income was 505 million yen, a decrease of 6.5 billion yen. While operating income デュエルビッツ プロモーションコードe construction equipment business increased, engineering saw a decrease.

Total Machinery segment orders rose to 304.1 billion yen and the backlog of orders was 198 billion yen. デュエルビッツ プロモーションコードe domestic market, Machinery segment orders were 229.4 billion yen, an increase of 23.2%, due to high demand for municipal solid waste treatment plants デュエルビッツ プロモーションコードe urban infrastructure business. Overseas, the Engineering business faced tough competition, resulting in a decrease of 9.1% to 74.7 billion yen.

ELECTRONICS & INFORMATION
Sales rose 17.1% to 87.8 billion yen, versus 74.9 billion yen in fiscal 1998, owing to strong increases in production and shipment of semiconductor-related products. Operating income increased by 19.3 billion yen to 7.4 billion yen owing to increased shipments and cost reductions.

REAL ESTATE
Sales デュエルビッツ プロモーションコードis segment doubled to 43.9 billion yen, in comparison to 21.3 billion yen in fiscal 1998, due to higher real estate sales for urban development and a larger number of group companies under consolidation. Operating income rose by 15.3 billion yen to 19.6 billion yen.

OUTLOOK FOR FISCAL 2000

Consolidated net sales are forecast to increase slightly to 1,310 billion yen in fiscal 2000. Pretax ordinary income (also called pretax recurring profit) is estimated to rise to 30 billion yen. Contributing to the higher profit forecast is cost reductions, the formation of Kobelco Construction Machinery, Co., Ltd., and the improved performance of other consolidated subsidiaries and equity-valued affiliates.

Although デュエルビッツ プロモーションコード anticipates an extraordinary loss from the amortization of unrecognized net obligations at transition of retirement benefit accounting, the company predicts aftertax net income of 5 billion yen.

OUTLOOK BY BUSINESS SEGMENT

デュエルビッツ プロモーションコード forecasts that market conditions will continue to be severe. The economy is showing indications of improving, but difficult conditions are expected to remain. In the overseas markets, competition will continue to be severe.

IRON & STEEL
Domestic demand is forecast to rise slightly owing to growing recovery in manufacturing industries, although demand from the construction industry is likely to be flat. Overseas, high inventories デュエルビッツ プロモーションコードe Asian region are anticipated to lead to a decrease in exports. In fiscal 2000, Nippon Koshuha Steel Co., Ltd. will be included as a subsidiary and will therefore contribute to higher segment sales.

ALUMINUM & COPPER
デュエルビッツ プロモーションコード expects demand for rolled aluminum products to be nearly the same as in the previous year. Can stock demand is anticipated to be dull, while automotive, telecommunications, and the information fields will continue to be strong. Rolled copper products are also anticipated to be flat. Due to the high yen, sales are expected to decrease in comparison to fiscal 1999.

MACHINERY
Large overseas plant orders are anticipated to recover from fiscal 2001, but urban infrastructure orders are expected to be strong in fiscal 2000. Demand for hydraulic excavators is anticipated to rise. As a result, the Machinery segment anticipates sales to increase.

ELECTRONICS & INFORMATION
High growth デュエルビッツ プロモーションコードe semiconductor market is forecast to lead to higher sales.

REAL ESTATE
Sales デュエルビッツ プロモーションコードis segment are expected to be flat.

MANAGEMENT STRATEGIES

デュエルビッツ プロモーションコード intends to concentrate on three major business fields. These fields are 1) materials (steel, welding, aluminum and copper); 2) the independent power producer (IPP) business, which utilizes the infrastructure of the Iron & Steel segment; and 3) the machinery and engineering businesses (urban infrastructure, engineering and machinery). The company intends to improve the corporate value of the entire デュエルビッツ プロモーションコード group. デュエルビッツ プロモーションコード will focus on becoming a unified company centered on high ROA and on business units with high cash flow.

In April 1999, デュエルビッツ プロモーションコード turned its business divisions into internal companies, appointed corporate officers, and implemented other measures to improve its management structure. The aim was to quickly and aggressively rebuild the business structure by improving ROA, one of management’s priorities. While strengthening the company by channeling management resources into core businesses, デュエルビッツ プロモーションコード has been divesting and selling businesses without synergy or those that are unprofitable under a policy called “selective consolidation.”

Earlier this month, デュエルビッツ プロモーションコード unveiled a three-year consolidated management plan to decisively and rapidly deal with changes in the business environment.

The plan is centered on reducing interest-bearing liabilities by increasing cash flow and ROA. By improving its financial position and by building a solid business base, デュエルビッツ プロモーションコード intends to increase its corporate value, an issue of highest importance. Priority areas, in which it excels, are automotive lightweighting, the IPP business and the environmental business. Foreseeing high growth and increasing cash flow in these three priority areas, the company plans to focus its management resources in the three areas, under its policy of selective consolidation. In addition, companywide themes that デュエルビッツ プロモーションコード will pursue include utilizing information technology to implement changes in its business processes.

At the end of June 2000, the Iron & Steel Company will be merged into the head office. This step is in anticipation of a possible move to a holding company structure.

Foremost in management’s mind is dividend payments. Improving its internal reserves and financial performance, the company aims for an early resumption of dividend payments to its shareholders.

1. SUMMARY OF FISCAL 1999 CONSOLIDATED FINANCIAL RESULTS
(April 1, 1999 - March 31, 2000)

(in millions of yen)

FY1999

FY1998

% change
FY99/98

% change
FY98/97

Net sales

1,252,515

1,305,482

(4.1%)

(15.0%)

Operating income

82,707

50,023

65.3%

(40.7%)

Ordinary income* (loss)

13,731

(22,688)

----

----

Extraordinary gains

6,325

26,219

Extraordinary losses

66,314

63,759

Aftertax net income (loss)

(53,087)

(38,873)

----

----

Net income (loss) per share

(18.76 yen)

(13.71 yen)

Fully diluted earnings per share

----

----

Return on average equity

(17.7%)

(11.2%)

Ordinary income/total liabilities
& stockholders’ equity

0.6%

(1.0%)

Ordinary income/net sales

1.1%

(1.7%)

Notes
i. Figures are in millions of yen unless otherwise indicated.
ii. The equity value of the net loss of affiliates was 6,630 million yen in fiscal 1999. In fiscal 1998, the equity value of the net loss was 1,244 million yen.
iii. The difference between the market value of marketable securities and the balance sheet amount of the securities as of March 31, 2000 was 32,161 million yen of unrealized gain.
iv. The difference between the market value of derivatives and the contract amount as of March 31, 2000 was an unrealized loss of 9,875 million yen.
v. No changes have been made in accounting policies.
vi. Figures in parentheses denote losses or decreases.
vii. * Also known as pretax recurring profit (or loss).

2. FINANCIAL POSITION

FY1999

FY1998

Total assets

2,124,794

2,270,278

Total stockholders’ equity

271,462

327,055

Stockholders’ equity/total assets

12.8%

14.4%

Stockholders’ equity per share

95.93 yen

115.35 yen

3. CONSOLIDATED CASH FLOWS

FY1999

FY1998

Net cash provided by operating activities

212,620

----

Net cash used in investing activities

(108,388)

----

Net cash provided by financing activities

(83,724)

----

Cash & cash equivalents at end of year

162,213

----

4. SCOPE OF CONSOLIDATION
Consolidation is based on 125 significant, majority-owned subsidiaries and 48 significant , equity-valued affiliates.

5. CHANGES IN CONSOLIDATION
New consolidated subsidiaries: 19
Consolidated subsidiaries exclude 9
New equity-valued affiliates 12
Equity-value affiliates excluded: 12
Equity-value affiliates excluded: 12

6. CONSOLIDATED FORECAST FOR FISCAL 2000 (ending March 2001)
First half Full year
Estimated net sales 630,000 1,310,000
Estimated ordinary income* 5,000 30,000
Estimated net income (loss) -0- 5,000
Estimated net income per share 1.76 yen

7. SEGMENT INFORMATION (in millions of yen)

FY1999

FY1998

Sales to outside customers

Iron & Steel

499,083

524,156

Aluminum & Copper

251,453

285,118

Machinery

338,915

356,347

Electronics & Information

87,807

74,996

Real Estate

43,948

21,336

Other Businesses

31,307

43,525

Consolidated net sales

1,252,515

1,305,482

Inter-segment sales

Iron & Steel

10,181

6,632

Aluminum & Copper

666

1,076

Machinery

18,080

8,317

Electronics & Information

12,490

13,706

Real Estate

7,088

4

Other Businesses

34,591

27,391

Total

83,097

57,128

Total sales

Iron & Steel

509,264

530,789

Aluminum & Copper

252,119

286,195

Machinery

356,995

364,665

Electronics & Information

100,297

88,702

Real Estate

51,037

21,340

Other Businesses

65,898

70,916

Eliminations

(83,097)

(57,128)

Consolidated net sales

1,252,515

1,305,482

Operating costs & expenses

Iron & Steel

466,363

492,201

Aluminum & Copper

241,897

278,561

Machinery

356,490

357,623

Electronics & Information

92,846

100,553

Real Estate

31,382

17,050

Other Businesses

61,955

65,905

Eliminations

(81,128)

(56,437)

Consolidated operating costs

1,169,807

1,255,458

Operating income

Iron & Steel

42,900

38,587

Aluminum & Copper

10,222

7,633

Machinery

505

7,041

Electronics & Information

7,450

(11,850)

Real Estate

19,654

4,290

Other Businesses

3,942

5,010

Eliminations

(1,969)

(690)

Consolidated operating income

82,707

50,023

Assets

Iron & Steel

891,818

890,258

Aluminum & Copper

298,797

327,611

Machinery

330,957

479,805

Electronics & Information

114,951

146,390

Real Estate

184,453

35,962

Other Businesses

79,855

181,572

Corporate & Eliminations

223,961

208,675

Total

2,124,794

2,270,278

Depreciation

Iron & Steel

55,451

55,280

Aluminum & Copper

15,049

19,112

Machinery

11,835

12,169

Electronics & Information

16,799

12,741

Real Estate

3,471

1,222

Other Businesses

12,763

12,299

Corporate & Eliminations

2,315

2,632

Total

117,686

115,458

Capital expenditures

Iron & Steel

41,237

66,908

Aluminum & Copper

7,737

13,771

Machinery

7,961

10,548

Electronics & Information

15,282

24,822

Real Estate

3,980

1,789

Other Businesses

25,451

22,867

Corporate & Eliminations

3,620

(1,047)

Total

105,271

139,659

8. SEGMENT INFORMATION BY REGION FY1999

FY1998

(in millions of yen)
Sales to outside customers Japan 1,149,645 1,167,718
Asia 16,437 15,996
North America 51,424 78,863
Other areas 35,008 42,903

Total

1,252,515

1,305,482


Inter-segment sales

Japan

36,353

27,721

Asia 4,138 6,107
North America 1,901 6,204
Other areas 88 610
Total 42,481 40,644

Total sales Japan 1,185,998 1,195,439
Asia 20,576 22,104
North America 53,325 85,067
Other areas

35,096

43,514

Eliminations

(42,481)

(40,644)

Total

1,252,515

1,305,482


Operating costs & expenses

Japan

1,102,729

1,152,798

Asia

19,609

21,877

North America

51,619

78,841

Other areas

38,362

43,415

Eliminations

(42,512)

(41,473)

Total

1,169,807

1,255,458

Operating income

Japan

83,269

42,641

Asia 966 227
North America 1,706 6,226
Other areas

(3,266)

99

Eliminations

30

829

Total

82,707

50,023

Assets

Japan

1,744,948

1,911,175

Asia

22,026

25,965

North America

68,169

100,073

Other areas

53,420

57,299

Corporate & Eliminations

236,229

175,763

Total

2,124,794

2,270,278

9. TOTAL OVERSEAS SALES (in millions of yen)

% of net sales

FY1999

% of net sales

FY1998

Asia

12.4% 155,645 10.9%

142,263

North America

4.4%

54,580

9.1%

118,349

Other areas

5.4%

67,709

5.9%

77,582

Total

22.2%

277,935

25.9%

338,195

Consolidated net sales

1,252,515

1,305,482

(Overseas sales consisted of export sales of デュエルビッツ プロモーションコード and its domestic consolidated subsidiaries and sales of overseas consolidated subsidiaries, excluding sales to Japan.)


10. PRODUCTION (in metric tons)

FY1999

FY1998

Change

% of change

Iron & Steel

Crude steel

5,808,000

5,492,000

(316,000)

5.8%

Aluminum & Copper

Rolled aluminum

389,000

378,000

11,000

2.9%

Rolled copper

125,000

119,000

6,000

5.2%


11. SUMMARY OF FISCAL 1999 NON-CONSOLIDATED FINANCIAL RESULTS

(April 1, 1999 - March 31, 2000)

(in millions of yen) FY1999 FY1998 % change % change
FY99/98 FY98/97
Net sales 837,745 938,455 (10.7%) (15.9%)
Operating income 53,636 41,652 28.8% (48.0%)
Ordinary income* (loss) 8,221 (9,840) ---- ----
Extraordinary gains 8,318 31,111
Extraordinary losses 43,314 61,749
Aftertax net income (loss) (15,198) (23,317) ---- ----
Net income (loss) per share (5.36 yen) (8.22 yen)
Fully diluted earnings per share ---- ----
Return on average equity (4.1%) (5.8%)
Ordinary income/total liabilities 0.5% (0.5%)
& stockholders’ equity
Ordinary income/net sales 1.0% (1.0%)


12. DIVIDENDS

FY1999

FY1998

Dividends per share (yen)

-0-

-0-

Dividends (yen)

-0-

-0-

Payout ratio

-0-

-0-

Dividends/stockholders’ equity

-0-

-0-


13. FINANCIAL POSITION

FY1999

FY1998

Total assets

1,655,620

1,770,791

Total stockholders’ equity

367,251

382,397

Stockholders’ equity/total assets

22.2%

21.6%

Stockholders’ equity per share

129.49 yen

134.86 yen


14. NON-CONSOLIDATED FORECAST FOR FISCAL 2000 (ending March 2001)

First half Full year
Estimated net sales 380,000 800,000
Estimated ordinary income* (loss) 2,000 15,000
Estimated net income (loss) (40,000) (50,000)
Estimated net income per share ---- (17.63 yen)

Notes
ⅰ.Average number of shares at March 31, 2000: 2,835,482,251
Average number of shares at March 31, 1999: 2,835,436,826
ⅱ.No changes have been made in accounting policies.
ⅲ.Number of shares issued at March 31, 2000: 2,835,981,926
Number of shares issued at March 31, 1999: 2,835,436,826
ⅳ.* Ordinary income is also known as pretax recurring profit.
ⅴ.Figures in parentheses denote losses or decreases.


ADDITIONAL INFORMATION

By the end of September 2000, デュエルビッツ プロモーションコード intends to send annual reports for fiscal 1999 to its overseas shareholders through their proxies in Japan. This report will also be available upon request from:

デュエルビッツ プロモーションコード, Ltd.
Investor Relations, Tokyo
Tel +81 (0)3 5739-6043

Media contact:
Gary Tsuchida
Publicity Group
デュエルビッツ プロモーションコード, Ltd.
9-12 Kita-Shinagawa 5-chome
Shinagawa-ku, Tokyo 141-8688
Japan

Tel +81 (0)3 5739-6010
Fax +81 (0)3 5739-5971
Email www-admin@kobelco.co.jp