Interim report
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Company name : Listing : Securities code : URL : Representative : Inquiries : Telephone : Consolidated Financial Results for the Three Months Ended June 30 , 2026 ( Under Japanese GAAP ) Kobe Steel , Ltd. Tokyo Stock Exchange / Nagoya Stock Exchange 5406 https://www.kobelco.co.jp/english/ Yoshihiko Katsukawa , President , CEO and Representative Director General Administration and CSR Department +81 ( 0 ) 3 5739-6010 FASF MEMBERSHIP August 5 , 2026 Scheduled date to commence dividend payments : Preparation of supplementary material on financial results : Holding of financial results briefing : Yes Yes ( Yen amounts are rounded down to millions , unless otherwise noted . ) 1. Consolidated financial results for the three months ended June 30 , 2026 ( from April 1 to June 30 , 2026 ) ( 1 ) Consolidated operating results ( cumulative ) ( Percentages indicate year - on - year changes . ) Net sales Operating profit Ordinary profit Profit attributable to owners of parent Three months ended Millions of yen % Millions of yen % Millions of yen % Millions of yen June 30 , 2026 578,349 1.6 June 30 , 2025 569,056 ( 3.7 ) 20,412 31,305 ( 34.8 ) 0.7 22,663 28,759 ( 17.9 ) ( 21.2 ) 12,199 % ( 68.4 ) 38,637 60.7 Note : Comprehensive income For the three months ended June 30 , 2026 : For the three months ended June 30 , 2025 : 13,644 9,731 million yen [ 40.2 % ] million yen [ ( 65.0 ) % ] Basic earnings per share Diluted earnings per share Three months ended June 30 , 2026 Yen 30.87 Yen June 30 , 2025 98.03 Note : Diluted earnings per share is not presented because there are no potentially dilutive securities . ( 2 ) Consolidated financial position Total assets Net assets Equity - to - asset ratio As of June 30 , 2026 March 31 , 2026 Millions of yen 2,830,153 2,865,184 Millions of yen 1,325,109 1,330,453 % 44.4 44.0 Reference : Equity capital As of June 30 , 2026 : As of March 31 , 2026 : 1,257,218 million yen 1,261,325 million yen 2. Cash dividends Fiscal year ended March 31 , 2026 Fiscal year ending March 31 , 2027 Fiscal year ending March 31 , 2027 ( Forecast ) 1Q 2Q Yen Yen 40.00 40.00 Cash dividends per share 3Q 4Q Total Yen Yen Yen 40.00 80.00 Note : Revision to the forecast of cash dividends most recently announced : None - I 40.00 80.00
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(Percentages indicate year-on-year changes.) Net sales Operating profit Ordinary profit Profit attributable to owners of parent Basic earnings per share Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen First-half 1,300,000 10.0 65,000 3.9 50,000 (13.3) 35,000 (44.3) 88.49 Full year 2,690,000 10.4 150,000 15.5 120,000 (1.1) 100,000 6.7 252.09 (i) Changes in accounting policies due to revisions to accounting standards and other regulations:None (ii) Changes in accounting policies due to other reasons: None (iii) Changes in accounting estimates: None (iv) Restatement: None As of June 30, 2026 396,345,963 shares As of March 31, 2026 396,345,963 shares As of June 30, 2026 1,440,289 shares As of March 31, 2026 892,930 shares Three months ended June 30, 2026 395,179,328 shares Three months ended June 30, 2025 394,140,806 shares 3. Consolidated earnings forecast for fiscal 2026 (from April 1, 2026 to March 31, 2027) Note: Revision to the consolidated forecast for fiscal 2026 most recently announced: Yes For more information, please refer to the IR briefing material "Financial Results for the First Quarter of Fiscal 2026 and Forecast for the Full Fiscal Year" announced today. Notes (1) Significant changes in the scope of consolidation during the period: Yes Newly included: None Excluded: One company (Kobe Steel USA Holdings Inc.) (2) Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements: Yes (3) Changes in accounting policies, changes in accounting estimates, and restatement (4) Number of issued shares (common shares) (i) Total number of issued shares at the end of the period (including treasury shares) (ii) Number of treasury shares at the end of the period (iii) Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year) Review of the Japanese-language originals of the attached consolidated quarterly financial statements by certified public accountants or an audit firm: None Explanation on the Appropriate Use of the Forecast and Other Special Notes The above forecast is based on currently available information as of today. Actual results may differ considerably due to various changeable conditions in the future.
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- 1 - 1．Overview of Operating Results and Other Items………………………………………………………………………… 2 (1) Consolidated Operating Results for the Three Months Ended June 30, 2026 ………………………………………… 2 (2) Financial Condition …………………………………………………………………………………………………… 2 2．Consolidated Financial Statements ……………………………………………………………………………………… 3 (1) Consolidated Balance Sheets ………………………………………………………………………………………… 3 (2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income ……………………… 5 (3) Notes to Consolidated Financial Statements ………………………………………………………………………… 7 Notes on Accounting Treatment Specific to the Preparation of Quarterly Consolidated Financial Statements ……… 7 Notes on Segment Information………………………………………………………………………………………… 8 Notes on Significant Fluctuations in the Amount of Shareholders' Equity …………………………………………… 10 Notes on Premise of a Going Concern ………………………………………………………………………………… 10 Notes on Consolidated Statements of Cash Flows …………………………………………………………………… 10 Index of Attached Documents
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- 2 - 1. Overview of Operating Results and Other Items (1) Consolidated Operating Results for the Three Months Ended June 30, 2026 The overview of the consolidated operating results is provided in the "Financial Results for the First Quarter of Fiscal 2026 and Forecast for the Full Fiscal Year" made available today on our Company's official website (https://www.kobelco.co.jp/english/). (2) Financial Condition On a consolidated basis, total assets at the end of the first quarter of fiscal 2026 decreased by 35.0 billion yen to 2,830.1 billion yen compared to the end of fiscal 2025, primarily due to the collection of accounts receivable-trade. Liabilities decreased by 29.6 billion yen to 1,505.0 billion yen compared to the end of fiscal 2025, primarily due to the redemption of bonds payable and the repayment of borrowings. Net assets decreased by 5.3 billion yen to 1,325.1 billion yen compared to the end of fiscal 2025, as the recording of quarterly profit attributable to owners of parent was offset by the payment of dividends. As a result, the equity-to-asset ratio at the end of the first quarter of fiscal 2026 was 44.4%, up 0.4 percentage points from the end of fiscal 2025.
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- 3 - ASSETS FY2025 Ended March 31, 2026 FY2026 1Q Ended June 30, 2026 Current assets Cash and deposits 189,233 176,233 Notes and accounts receivable - trade, and contract assets 432,683 362,480 Merchandise and finished goods 256,049 270,763 Work in process 169,624 191,200 Raw materials and supplies 264,552 275,906 Other 79,432 82,092 Allowance for doubtful accounts (5,102) (5,374) Total current assets 1,386,473 1,353,304 Non-current assets Property, plant and equipment Buildings and structures, net 276,047 280,737 Machinery, equipment and vehicles, net 504,752 498,171 Land 164,364 163,147 Other, net 75,736 80,730 Total property, plant and equipment 1,020,901 1,022,786 Intangible assets 57,680 59,743 Investments and other assets Investment securities 215,448 210,994 Other 207,198 205,646 Allowance for doubtful accounts (22,517) (22,321) Total investments and other assets 400,129 394,319 Total non-current assets 1,478,711 1,476,849 Total assets 2,865,184 2,830,153 2. Consolidated Financial Statements (1) Consolidated Balance Sheets (In millions of yen)
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- 4 - LIABILITIES FY2025 Ended March 31, 2026 FY2026 1Q Ended June 30, 2026 Current liabilities Notes and accounts payable - trade 363,837 373,906 Short-term borrowings 143,700 140,946 Commercial papers 26,000 20,000 Current portion of bonds payable 10,000 － Lease liabilities 6,005 5,480 Income taxes payable 11,866 13,605 Provisions 54,945 40,377 Other 234,498 252,247 Total current liabilities 850,853 846,564 Non-current liabilities Bonds payable 135,000 135,000 Long-term borrowings 428,373 411,254 Lease liabilities 20,838 21,321 Retirement benefit liability 45,067 45,057 Provisions 15,092 13,407 Other 39,506 32,439 Total non-current liabilities 683,877 658,480 Total liabilities 1,534,731 1,505,044 NET ASSETS Shareholders' equity Share capital 250,930 250,930 Capital surplus 123,920 124,029 Retained earnings 689,112 685,472 Treasury shares (1,288) (2,311) Total shareholders' equity 1,062,674 1,058,121 Accumulated other comprehensive income Valuation difference on available-for-sale securities 48,959 45,302 Deferred gains or losses on hedges 4,534 5,532 Revaluation reserve for land 4,959 4,959 Foreign currency translation adjustment 74,870 78,518 Remeasurements of defined benefit plans 65,325 64,783 Total accumulated other comprehensive income 198,650 199,097 Non-controlling interests 69,128 67,891 Total net assets 1,330,453 1,325,109 Total liabilities and net assets 2,865,184 2,830,153
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- 5 - FY2025 1Q Ended June 30, 2025 FY2026 1Q Ended June 30, 2026 Net sales 569,056 578,349 Cost of sales 471,605 486,220 Gross profit 97,451 92,129 Selling, general and administrative expenses 66,146 71,717 Operating profit 31,305 20,412 Non-operating income Interest income 658 710 Dividend income 2,808 2,085 Seconded employees' reimbursement 1,065 1,068 Share of profit of entities accounted for using equity method 3,717 5,048 Foreign exchange gains － 266 Other 3,430 3,643 Total non-operating income 11,681 12,823 Non-operating expenses Interest expenses 3,440 3,074 Seconded employees' salaries 2,703 2,574 Foreign exchange losses 1,410 － Dismantlement expenses 1,871 2,295 Other 4,800 2,628 Total non-operating expenses 14,226 10,573 Ordinary profit 28,759 22,663 Extraordinary income Gain on sale of non-current assets 6,196 2,706 Gain on sale of investment securities 14,417 － Total extraordinary income 20,613 2,706 Extraordinary losses Provision for loss on sale of shares of subsidiaries and associates 3,876 － Total extraordinary losses 3,876 － Profit before income taxes 45,496 25,369 Income taxes 6,702 12,238 Profit 38,794 13,131 Profit attributable to non-controlling interests 156 932 Profit attributable to owners of parent 38,637 12,199 (2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income Consolidated Statements of Income (In millions of yen)
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- 6 - FY2025 1Q Ended June 30, 2025 FY2026 1Q Ended June 30, 2026 Profit 38,794 13,131 Other comprehensive income Valuation difference on available-for-sale securities (13,382) (3,842) Deferred gains or losses on hedges (307) 999 Foreign currency translation adjustment (15,165) 2,908 Remeasurements of defined benefit plans, net of tax (118) (491) Share of other comprehensive income of entities accounted for using equity method (88) 939 Total other comprehensive income (29,062) 513 Comprehensive income 9,731 13,644 Comprehensive income attributable to Comprehensive income attributable to owners of parent 10,746 12,646 Comprehensive income attributable to non-controlling interests (1,015) 998 Consolidated Statements of Comprehensive Income (In millions of yen)
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- 7 - (3) Notes to Consolidated Financial Statements Notes on Accounting Treatment Specific to the Preparation of Quarterly Consolidated Financial Statements Calculation of Income Tax Expenses Income tax expenses are calculated by applying a reasonably estimated effective tax rate to the quarterly profit before income taxes. The effective tax rate is determined by applying deferred tax accounting to the profit before income taxes to the consolidated profit for the fiscal year, including the first quarter under review. However, if applying the estimated effective tax rate to calculate income tax expenses results in a significantly unreasonable outcome, the statutory effective tax rate is used instead.
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- 8 - FY2025 Ended June 30, 2025 FY2026 Ended June 30, 2026 Sales to outside customers: Steel & Aluminum 249,067 241,698 Advanced Materials 72,664 90,907 Welding 22,520 25,981 Machinery 62,313 56,863 Engineering 32,055 39,241 Construction Machinery 83,523 87,498 Electric Power 45,861 34,867 Other 1,024 942 Adjustment 24 347 Total 569,056 578,349 Intersegment sales: Steel & Aluminum 8,753 8,494 Advanced Materials 3,301 1,643 Welding 131 310 Machinery 3,885 2,909 Engineering 302 509 Construction Machinery 25 19 Electric Power － － Other 441 439 Adjustment (16,841) (14,327) Total － － Total sales: Steel & Aluminum 257,821 250,192 Advanced Materials 75,966 92,551 Welding 22,651 26,292 Machinery 66,199 59,772 Engineering 32,357 39,751 Construction Machinery 83,548 87,518 Electric Power 45,861 34,867 Other 1,466 1,382 Adjustment (16,816) (13,979) Total 569,056 578,349 Ordinary profit (loss): Steel & Aluminum 5,488 (2,337) Advanced Materials 73 8,105 Welding 919 2,334 Machinery 10,509 6,276 Engineering 1,173 6,059 Construction Machinery 1,208 916 Electric Power 8,574 1,675 Other 283 1,524 Adjustment 527 (1,892) Total 28,759 22,663 Notes on Segment Information Information about Sales, Profit (Loss), Assets and Other Items of Reportable Segments (In millions of yen)
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- 9 - FY2025 Ended June 30, 2025 FY2026 Ended June 30, 2026 Consolidated profit (loss)* 478 (289) Other adjustments 49 (1,602) Total 527 (1,892) Notes: 1. "Other" segment refers to a business segment outside the reportable segments. It includes operating companies managed by the head office. 2. Adjustments as of June 30, 2025 and 2026 are as follows: (In millions of yen) * Consolidated profit (loss) mainly consists of finance-related gains and losses not attributable to reportable segments. 3. Segment profit (loss) is adjusted for ordinary profit in the quarterly consolidated statements of income.
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- 10 - FY2025 Ended June 30, 2025 FY2026 Ended June 30, 2026 Depreciation 30,049 30,577 Amortization of goodwill 111 120 Notes on Significant Fluctuations in the Amount of Shareholders' Equity None Notes on Premise of a Going Concern None Notes on Consolidated Statements of Cash Flows The quarterly consolidated cash flow statement for the cumulative first quarter of fiscal 2026 is not provided. The following are the depreciation (including the amortization of intangible assets excluding goodwill) and amortization of goodwill for the cumulative first quarter of fiscal 2025 and fiscal 2026. (In millions of yen)