MIRA INFORM REPORT

 

 

Report Date :

22.02.2008

 

IDENTIFICATION DETAILS

 

Name :

KOBE STEEL LTD

 

 

Registered Office :

2-10-26 Wakihamacho Chuoku Kobe 651-8585

 

 

Country :

Japan

 

 

Financials (as on) :

31/03/2007

 

 

Date of Incorporation :

Jun 1911

 

 

Legal Form :

Limited Company

 

 

Line of Business :

Manufacturing steel, aluminum & copper, machinery, construction materials.

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Aa

 

RATING

STATUS

PROPOSED CREDIT LINE

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

Large

 

Maximum Credit Limit :

Yen 36,511.4 Million

 

 

Status :

Good

 

 

Payment Behaviour :

Regular

 

 

name

 

KOBE STEEL LTD

 

 

REGD NAME

 

KK Kobe Seikosho

 

 

MAIN OFFICE

 

2-10-26 Wakihamacho Chuoku Kobe 651-8585 JAPAN

Tel: 078-261-5111    

Fax: 078-261-4123

 

* The given address is its Tokyo Head Office at: 5-9-12 Kitashinagawa Shinagawaku Tokyo; Tel: 03-5739-6000; Fax: 03-5739-3903

URL:                 http://www.kobelco.co.jp/

E-Mail address: admin@kobelco.co.jp

 

 

ACTIVITIES

 

Mfg steel, aluminum & copper, machinery, construction materials, other

 

 

BRANCH(ES)

 

Tokyo, Osaka, Nagoya, Sapporo, Sendai, Niigata, Toyama, Takamatsu,    Hiroshima, Fukuoka, Okinawa

 

 

OVERSEAS

 

Kobe Steel USA Inc (New York & Detroit), Kobe Steel Asia Pte (Singapore), Kobe Steel Asia Pte Ltd (Hong Kong), Shanghai, Beijing (--subsidiaries)

 

 

FACTORY(IES)

 

Takasago, Kakogawa, Harima (--Hyogo), Kobe, Fujisawa, Hadano, Ibaraki, Mooka, Chofu, Inabe (Mie)

 

 

CHIEF EXEC:   

 

YASUO INUBUSHI, PRES

 

 

Yen Amount

 

In million Yen, unless otherwise stated

 

 

SUMMARY          

 

FINANCES        FAIR                 A/SALES          Yen 1,910,296 M

 

PAYMENTS      REGULAR         CAPITAL           Yen 233,313 M

 

TREND             STEADY           WORTH            Yen 636,431 M

 

STARTED         1911                 EMPLOYES      31,828

 

 

COMMENT          

 

ONE OF LEADING STEEL MAKERS IN JAPAN.  FINANCIAL SITUATION COSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

                       

 

MAX CREDIT LIMIT

 

YEN 36,511.4 MILLION, 30 DAYS NORMAL TERMS.

 

 

Forecast (or estimated) figures for 31/03/2008 fiscal term

 

 

HIGHLIGHTS

 

This is one of the nation’s leading steel makers, with conglomerate operating materials divisions including: steel (4th ranked in blast furnace), aluminum & copper, and machinery. Construction machinery business is undertaken in tie-up with Wisconsin-based CNH Global.  Strengthening wholesale power supply business. 

 

The firm to establish welding firm in China, called Kobe Welding of Qingdao Co Ltd, in Qingdao, Shanghai. This JV will be formed in Apr 2008, with production scheduled to begin one year later. The plant will have a capacity of 1,000 metric tons per month.  The JV will be capitalized at Yen 3,000 million, employing about 90 people. Kobe Steel will have a 90% share in the venture and subsidiary Shinsho Corp 5%.  Sojitz Marine & Engineering Corp & Tokokosen Corp will each have 2.5%.The new company will make flux cored welding wire for welding carbon steel used in shipbuilding.

           

 

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2007 fiscal term amounted to Yen 1,910,296 million, a 14.6% up from Yen 1,667,313 million in the previous term.  Demand for steel products used in automotive industry, shipbuilding & other mfg industries was strong.  By divisions, Iron & Steel up 9.5% to Yen 830,600 million; aluminum & copper up 30.3% to Yen 397,300 million, with rolled copper products rising, aluminum castings & forgings seeing brisk shipments to automotive industry; Machinery up 8.4% to Yen 280,900 million, orders for large waste treatment & sludge treatment projects rising; Construction Machinery up 25.7% to Yen 285,300 million, with domestic demand for hydraulic excavators continuing strong; Electronic Materials up 4.0% to Yen 63,500 million.  The recurring profit was posted at Yen 183,278 million and the net profit at Yen 109,668 million, respectively, compared with Yen 176,932 million recurring profit and Yen 84,559 million net profit, respectively, a year ago. 

           

(Apr/Dec/2007 results): Sales Yen 1,539,127 million (up 13.3%), operating profit Yen 140,966 million (down 3.6%), recurring profit Yen 112,560 million (down 11.9%), net profit Yen 68,691million(down 9.6%).(% compared with the corresponding period a year ago.)  Firm        demand for steel, construction machinery and other products continued.  Steel demand was            robust particularly for high-grade products sold to automotive, shipbuilders & machinery mfrs.  Profits, on the other hand, declined due to higher materials costs.

 

For the current term ending Mar 2008 the recurring profit is projected at Yen 150,000 million and the net profit at Yen 90,000 million, on a 1.5% rise in turnover, to Yen 2,130,000 million.  Steel, aluminum & copper growing firmly, led by those for automobiles. But change in depreciation method & absence of valuation gains on nonferrous metal inventories posing heavy burden.  Both recurring profit and net profit will drop. Construction plan for first commercial blast furnace in N America in final stage.  Producing high-purity steel from low-quality materials at low cost.

 

The financial situation is considered FAIR and good for ORDINARY business          engagements.    Max credit limit is estimated at Yen 36,511.4 million, on 30 days normal terms.

 

 

REGISTRATION

 

Date Registered:            Jun 1911

Legal Status:                 Limited Company (Kabushiki Kaisha)

Authorized:                    6,000 million shares

Issued:                          3,115,061,100 shares

Sum:                            Yen 233,313 million

 

           

Major shareholders (%)

 

Japan Trustee Services T (5.0), Master Trust Bank of Japan T (4.8), Nippon Life Ins (4.0), Mizuho Corporate Bank (2.2), Nippon Steel (2.0), Sumitomo Metal Ind (2.0), Company’s Treasury Stock (2.0), Mitsubishi UFJ Trust (1.6), MUFG (1.5),Japan Trustee Services T4 (1.3); foreign owners (17.1).

 

           

No. of shareholders

 

171,608

 

 

Listed on the S/Exchange (s) of

 

Tokyo, Osaka, Nagoya

 

 

Managements

 

Koshi Mizukoshi, ch; Yasuo Inubushi, pres & CEO; Hiroshi Sato, v pres; Toshio Kimura, v pres; Shigeto Kotani, v pres; Keiji Koyama, v pres; Hiroyuki Nakayama, s/mgn dir; Takeashi Matsutani, s/mgn dir; Isao Aida, s/mgn dir

           

Nothing detrimental is known as to the commercial morality of executives.

 

 

Related companies

 

Nippon Koshuh Steel, Kobelco Construction Machinery, Shinko Pantec, Kobelco Eco-Solutions, other (Tot 207 subsidiaries & 71 affiliates)

           

 

OPERATION

           

Activities: Manufactures steel, aluminum & copper, machinery, construction machinery, electronics materials, wholesales power supply, others:

 

(Sales Breakdown by Divisions):

 

Iron & Steel Div (42%):                         re rods & bars, steel sheets, castings & forging, titanium products, steel powder & powder products, welding electrodes, welding wires, welding robots, others;

 

Wholesale Power Supply Div (4%):      Shinko Kobe Power Station has electricity generation capacity of 1.4 million kilowatts;

 

Aluminum & Copper Div (21%):            rolled aluminum products, aluminum alloy & magnesium alloy casting, aluminum processed products, rolled copper products;

 

Machinery Div (14%):                            screw compressors, centrifugal compressors, reciprocating compressors, refrigeration compressors, uninterruptible power sources, hot isostatic presses, cold isostatic presses, surface modification systems, inspection & analysis systems, crushers, plastic processing machinery, tire & rubber machinery, high pressure anneal equipment, supercritical CO2 equipment;

 

Construction Machinery Div (15%):       hydraulic excavators, mini excavators, wheel loaders, crawler cranes, rough terrain cranes, work vessels, electric mining shovels;

 

Electronics & Information Div (2%):      electronics equipment, communication systems, superconductive products, specialty alloy & other new materials, semiconductor-related equipment, information services;

 

Real Estate Div (2%):                            community & urban development, real property services, building                                                                    management, others.

 

Clients

 

[Mfrs, wholesalers] Shinsho Corp, Toyota Tsusho Corp, Mitsui & Co, Sumitomo Corp, Metal One, other.

 

 

No. of accounts

 

2,000

 

 

Domestic areas of activities

 

Nationwide

 

           

Suppliers

 

[Mfrs, wholesalers] Shinsho Corp, Sojitz Corp, Mitsubishi Corp, Kansai Coke & Chemicals, Shinko Engineering & Maintenance, other.

 

 

Payment record

 

Regular

 

 

Location

 

Business area in Kobe. Office premises at the caption address are owned and maintained satisfactorily.

 

 

Bank References

 

Mizuho Corporate (H/O)

MUFG (H/O)

Relations: Satisfactory

 

 

 

Financials

 

FINANCES: (Consolidated in million yen)

 

　

　

Terms Ending:

31/03/2007

31/03/2006

INCOME STATEMENT

 

 

 

  Annual Sales

　

1,910,296

1,667,313

 

  Cost of Sales

1,543,158

1,297,291

 

      GROSS PROFIT

367,138

370,021

 

  Selling & Adm Costs

158,513

149,626

 

      OPERATING PROFIT

208,624

220,395

 

  Non-Operating P/L

-25,346

-43,463

 

      RECURRING PROFIT

183,278

176,932

　

      NET PROFIT

109,668

84,559

BALANCE SHEET

 

 

 

 

  Cash

　

99,667

96,187

 

  Receivables

 

332,204

318,199

 

  Inventory

 

367,332

303,003

 

  Securities, Marketable

　

　

 

  Other Current Assets

84,275

84,878

 

      TOTAL CURRENT ASSETS

883,478

802,267

 

  Property & Equipment

1,004,769

961,873

 

  Intangibles

 

16,791

15,166

 

  Investments, Other Fixed Assets

336,532

294,935

 

      TOTAL ASSETS

2,241,570

2,074,241

 

  Payables

 

492,969

417,407

 

  Short-Term Bank Loans

170,266

176,332

 

　

 

　

　

 

  Other Current Liabs

257,210

291,835

 

      TOTAL CURRENT LIABS

920,445

885,574

 

  Debentures

 

233,187

215,363

 

  Long-Term Bank Loans

315,337

278,862

 

  Reserve for Retirement Allw

46,919

52,980

 

  Other Debts

　

89,250

72,869

 

      TOTAL LIABILITIES

1,605,138

1,505,648

 

      MINORITY INTERESTS

 

38,593

 

Common stock

233,313

233,313

 

Additional paid-in capital

83,282

83,145

 

Retained earnings

239,182

157,275

 

Evaluation p/l on investments/securities

75,564

68,999

 

Others

 

36,609

(11,406)

 

Treasury stock, at cost

(31,519)

(1,327)

 

      TOTAL S/HOLDERS` EQUITY

636,431

529,999

　

      TOTAL EQUITIES

2,241,570

2,074,241

CONSOLIDATED CASH FLOWS

 

 

 

 

Terms ending:

31/03/2007

31/03/2006

 

Cash Flows from Operating Activities

　

172,785

198,181

 

Cash Flows from Investment Activities

-128,557

-94,214

 

Cash Flows from Financing Activities

-48,823

-93,593

　

Cash, Bank Deposits at the Term End

　

98,162

95,485

ANALYTICAL RATIOS            Terms ending:

31/03/2007

31/03/2006

 

 

Net Worth (S/Holders' Equity)

636,431

529,999

 

 

Current Ratio (%)

95.98

90.59

 

 

Net Worth Ratio (%)

28.39

25.55

 

 

Recurring Profit Ratio (%)

9.59

10.61

 

 

Net Profit Ratio (%)

5.74

5.07

 

 

Return On Equity (%)

17.23

15.95

 

 

RATING EXPLANATIONS

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

 

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

26-40

B

Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average.

 

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

 

Credit not recommended

NR

In view of the lack of information, we have no basis upon which to recommend credit dealings

No Rating

 

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                 Payment record (10%)

Credit history (10%)                    Market trend (10%)                                Operational size (10%)

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions