Nippon Steel Corporation (ticker 5401), Japan's largest integrated steelmaker, released consolidated FY2025 results (year ended March 31, 2026) under IFRS. The year was defined by the completion of the U.S. Steel acquisition against a backdrop of Chinese overcapacity, weak base demand outside AI/power/defense niches, and intensifying global trade-protection measures.
Consolidated revenue increased 15.7% year-on-year to ¥10,063.2 billion, reflecting U.S. Steel's first-time consolidation. Profitability, however, declined sharply across the P&L: business profit fell 24.8% to ¥514.1 billion, operating profit dropped 55.7% to ¥242.9 billion (weighed down by ¥271.2 billion of business restructuring losses), pre-tax profit fell 67.0% to ¥172.8 billion, and net profit attributable to owners of the parent collapsed 95.1% to ¥17.2 billion. Basic EPS was ¥3.28 (post 5-for-1 stock split effective October 1, 2025), versus ¥70.18 prior. ROE fell to 0.3% from 6.9%. EBITDA reached ¥1,088.0 billion.
The U.S. Steel deal: ¥2.06 trillion of cash, ¥140 billion of goodwill
The U.S. Steel acquisition closed on June 18, 2025 at a total cash consideration of ¥2,062.5 billion, generating goodwill of ¥140.4 billion and contributing ¥1,933.1 billion of revenue and ¥21.2 billion of net income from the acquisition date. Restructuring losses related to the AM/NS Calvert JV divestment (approximately ¥232.1 billion) and the Usiminas equity sale (approximately ¥17.6 billion) drove the impairment line.
Total assets expanded to ¥14,660.6 billion (from ¥10,942.5 billion). Interest-bearing debt rose to ¥5,174.2 billion from ¥2,507.4 billion, financed via a ¥500 billion committed subordinated term loan, ¥600 billion convertible bonds, and an approximately ¥900 billion JBIC syndicated facility. The D/E ratio reached 0.94× (0.71× adjusted for subordinated capital). Operating cash flow was ¥716.9 billion; free cash flow was negative ¥2,120.2 billion after the acquisition outlay.
Segment divergence: AI/semis lift Chemicals and Systems
The Steelmaking segment generated revenue of ¥9,221.7 billion with business profit of ¥439.9 billion, down sharply from ¥621.0 billion on weaker domestic margins, lower volumes and U.S. Steel's modest near-term contribution. Engineering delivered ¥394.4 billion in revenue and ¥23.1 billion in business profit (up from ¥14.6 billion). Chemicals & Materials and System Solutions both improved, supported by AI-related demand for functional resins, semiconductor materials, and the 2025-2027 mid-term plan progress.
FY26 guidance: a strong recovery, dividend floor at ¥24
For FY2026 (year ending March 2027), guidance — on pre-Middle East-conflict assumptions — projects revenue of ¥11,000.0 billion (+9.3%), business profit of ¥530.0 billion (+3.1%), underlying business profit of at least ¥700.0 billion, and profit attributable to owners of the parent of ¥220.0 billion with EPS of ¥42.00. U.S. Steel is expected to contribute at least ¥100.0 billion in underlying business profit. The dividend forecast is ¥24 per share (¥12 interim, ¥12 final), reflecting the floor introduced under the 2030 mid-term plan, which targets underlying business profit exceeding ¥1 trillion and global crude steel capacity above 100 million tons. Strategic initiatives include the Nagoya Works hot strip mill (commercial start August 2026), Yawata electric furnace conversion, AM/NS India Hazira expansion, the Big River DRI plant in the U.S., and direct ownership of Nippon Steel Slovakia and Ovako.
| Metric | FY2025 | FY2024 | YoY |
|---|---|---|---|
| Revenue (¥ billion) | 10,063.2 | 8,695.5 | +15.7% |
| Business profit (¥ billion) | 514.1 | 683.2 | -24.8% |
| Operating profit (¥ billion) | 242.9 | 548.2 | -55.7% |
| Net profit attrib. to owners (¥ billion) | 17.2 | 350.2 | -95.1% |
| Basic EPS (¥, post-split) | 3.28 | 70.18 | -95.3% |
| ROE | 0.3% | 6.9% | -6.6pp |
| Total assets (¥ billion) | 14,660.6 | 10,942.5 | +34.0% |
JapanStockPulse provides informational content only and does not constitute investment advice. Figures are taken from the company's published earnings short report and may be subject to subsequent revision.