MIRA INFORM REPORT

 

 

Report No. :

330835

Report Date :

06.07.2015

 

IDENTIFICATION DETAILS

 

Name :

KOBE STEEL LTD

 

 

Registered Office :

2-10-26 Wakihamacho Chuoku Kobe 651-8585

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2015

 

 

Date of Incorporation :

June 1911

 

 

Com. Reg. No.:

1400-01-005714

 

 

Legal Form :

Limited Company

 

 

Line of Business :

Manufactures steel, aluminum & copper, machinery, construction machinery, electronics materials, wholesales power supply, others: Steel (40%), welding (5%), Aluminum & copper (17%), machinery (8%), engineering (3%), subsidiaries (23%), others (3%)

 

 

No. of Employees :

36,420

 

 

RATING & COMMENTS

 

MIRA’s Rating :

A

 

RATING

STATUS

PROPOSED CREDIT LINE

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

 

Status :

Good

Payment Behaviour :

Regular

Litigation :

Clear

 

NOTES:

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

 

 

ECGC Country Risk Classification List – March 31, 2015

 

Country Name

Previous Rating

(31.12.2014)

Current Rating

(31.03.2015)

Japan

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

JAPAN - ECONOMIC OVERVIEW

 

In the years following World War II, government-industry cooperation, a strong work ethic, mastery of high technology, and a comparatively small defense allocation (1% of GDP) helped Japan develop an advanced economy. Two notable characteristics of the post-war economy were the close interlocking structures of manufacturers, suppliers, and distributors, known as keiretsu, and the guarantee of lifetime employment for a substantial portion of the urban labor force. Both features are now eroding under the dual pressures of global competition and domestic demographic change. Scarce in many natural resources, Japan has long been dependent on imported raw materials. Since the complete shutdown of Japan’s nuclear reactors after the earthquake and tsunami disaster in 2011, Japan's industrial sector has become even more dependent than it was previously on imported fossil fuels. A small agricultural sector is highly subsidized and protected, with crop yields among the highest in the world. While self-sufficient in rice production, Japan imports about 60% of its food on a caloric basis. For three decades, overall real economic growth had been impressive - a 10% average in the 1960s, a 5% average in the 1970s, and a 4% average in the 1980s. Growth slowed markedly in the 1990s, averaging just 1.7%, largely because of the aftereffects of inefficient investment and an asset price bubble in the late 1980s that required a protracted period of time for firms to reduce excess debt, capital, and labor. Modest economic growth continued after 2000, but the economy has fallen into recession four times since 2008. Government stimulus spending helped the economy recover in late 2009 and 2010, but the economy contracted again in 2011 as the massive 9.0 magnitude earthquake and the ensuing tsunami in March of that year disrupted manufacturing. The economy has largely recovered in the four years since the disaster, although reconstruction in the affected Tohoku region has lagged, in part due to a shortage of labor in the construction sector. Japan enjoyed a sharp uptick in growth in 2013 on the basis of Prime Minister Shinzo Abe’s “Three Arrows” economic revitalization agenda - dubbed “Abenomics” - of monetary easing, “flexible” fiscal policy, and structural reform. Abe’s government has replaced the preceding administration’s plan to phase out nuclear power with a new policy of seeking to restart nuclear power plants that meet strict new safety standards, and emphasizing nuclear energy’s importance as a base-load electricity source. Japan joined the Trans-Pacific Partnership (TPP) negotiations in 2013, a pact that would open Japan's economy to increased foreign competition and create new export opportunities for Japanese businesses. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, Japan in 2014 stood as the fourth-largest economy in the world after second-place China, which surpassed Japan in 2001, and third-place India, which edged out Japan in 2012. While seeking to stimulate and reform the economy, the government must also devise a strategy for reining in Japan's huge government debt, which amounts to more than 230% of GDP. To help raise government revenue, Japan adopted legislation in 2012 to gradually raise the consumption tax rate to 10% by 2015, beginning with a hike from 5% to 8% implemented in April 2014. That increase had a contractionary effect on GDP, however, so PM Abe in late 2014 decided to postpone the final phase of the increase until April 2017 to give the economy more time to recover. Led by the Bank of Japan’s aggressive monetary easing, Japan is making progress in ending deflation, but demographics - low birthrate and an aging, shrinking population - pose major long-term challenges for the economy.

 

Source : CIA

 

Company 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

 

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

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

 

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

BRANCHES:     Tokyo, Osaka, Nagoya, Sapporo, Sendai, Niigata, Toyama, Takamatsu, Hiroshima, Fukuoka, Okinawa (Tot 11)

OVERSEAS:     USA (2), Singapore, Hong Kong, Thailand, China (2) (--subsidiaries)

FACTORIES:    Takasago, Kakogawa, Harima (--Hyogo), Kobe, Fujisawa, Hadano, Ibaraki, Mooka, Chofu, Inabe (Mie), Fukuchiyama, other (Tot 13)

 

CHIEF EXEC:   HIROYA KAWASAKI, PRES

 

Yen Amount:     In million Yen, unless otherwise stated

 

 

SUMMARY

 

FINANCES        FAIR                             A/SALES          Yen 1,886,894 M

PAYMENTS      REGULAR                     CAPITAL           Yen 250,930 M

TREND             STEADY                       WORTH            Yen 851,785 M

STARTED         1911                             EMPLOYES      36,420

 

COMMENT:      STEEL MAKER. FINANCIAL SITUATION COSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

                       

 

Notes: Unit: In Million Yen

Forecast (or estimated) figures for 31/03/2016 fiscal term

 

 

HIGHLIGHTS

 

This is one of the nation’s leading steel makers, with conglomerate operating materials divisions including: steel (3rd ranked in blast furnace), aluminum & copper, and machinery.  Steel business controls 40% of sales.  Construction machinery business is undertaken in tie-up with Wisconsin-based CNH Global.  Strengthening wholesale power supply business.  Eager for diversification and globalization of businesses.  Construction machinery business (Kobelco Construction Machinery), which promotes local production in China, is growing as new core business due to energy-saving solutions.  Core plant in Wakinohama area of Kobe has own thermal power plant.  Electricity sale to Kansai Electric Co is yielding stable earnings.  Commercial production based on new steelmaking approach ITmk3 Process has started in Minnesota, USA.  The company decided to stop own blast furnaces in Kobe works.

 

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2015 fiscal term amounted to Yen 1,886,894 million, a 3.4% up from Yen 1,824,698 million in the previous term.  Brisk demand for construction machinery contributed to earnings, covering a drop of inventory valuation profit in steel business.  The recurring profit was posted at Yen 101,688 million and the net profit at Yen 86,540 million, respectively, compared with Yen 85,044 million recurring profit and Yen 70,191 million net profit, respectively, a year ago. 

           

For the current term ending Mar 2016 the recurring profit is projected at Yen 95,000 million and the net profit at Yen 60,000 million, respectively, on a 5.5% rise in turnover, to Yen 1,990,000 million.

 

The financial situation is considered FAIR and good for ORDINARY business engagements.       

 

 

REGISTRATION

 

Date Registered:           Jun 1911

Regd No.:                     1400-01-005714 (Kobe-Chuoku)

Legal Status:               Limited Company (Kabushiki Kaisha)

Authorized:                  6,000 million shares

Issued:                        3,643,642,100 shares

Sum:                            Yen 233,313 million

           

Major shareholders (%): Master Trust Bank of Japan T (3.3), Japan Trustee Services T (2.9), Nippon Steel & Sumitomo Metal (2.9), Nippon Life Ins (2.7), Mizuho Bank (1.7), Mitsubishi UFJ Trust Bank (1.4), MUFG (1.2), CBNY Government of Norway (1.2), Sojitz Corp (1.2), State Street Bank West Treaty 505234 (1.2); foreign owners (32.0)

           

No. of shareholders: 144,162

 

Listed on the S/Exchange (s) of: Tokyo, Nagoya

 

Managements: Hiroshi Satoh, ch; Hiroya Kawasaki, pres; Kazuhide Naraki, v pres; Yoshinori Onoe, v pres; Akira Kaneko, v pres; Naoto Umehara, v pres; Yasuaki Sugizaki, s/mgn dir; Shohei Manabe, s/mgn dir; Fusaki Koshiishi, 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, Kobelco Crane, other    

 

 

OPERATION

           

Activities: Manufactures steel, aluminum & copper, machinery, construction machinery,   electronics materials, wholesales power supply, others: Steel (40%), welding (5%), Aluminum & copper (17%), machinery (8%), engineering (3%), subsidiaries (23%), others (3%)

 

Overseas Sales Ratio (38%)

 

Clients: [Mfrs, wholesalers] Shinsho Corp, Toyota Tsusho Corp, Mitsui & Co, Sumitomo             Corp, Metal One, Daiwa Can Co, Kobelco Compressor, Kobe Medical Care Partners, 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, Mitsui Bussan Metals, Sojitz Corp,             Mitsui & Co, Sumitomo Corp, Marubeni Corp, Toyota Tsusho Corp, Shimabun Corp, Seika Corp, other.

 

Payment record: Regular

 

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

 

Bank References:

Mizuho Bank (Uchisaiwaicho)

SMBC (H/O)

Relations: Satisfactory

 

 

FINANCIALS

 

FINANCES: (Consolidated in million yen)

　

　

　

Terms Ending:

31/03/2015

31/03/2014

INCOME STATEMENT

　

　

  Annual Sales

　

1,886,894

1,824,698

　

  Cost of Sales

1,581,527

1,537,249

　

      GROSS PROFIT

305,366

287,448

　

  Selling & Adm Costs

185,906

172,900

　

      OPERATING PROFIT

119,460

114,548

　

  Non-Operating P/L

-17,772

-29,504

　

      RECURRING PROFIT

101,688

85,044

　

      NET PROFIT

86,549

70,191

BALANCE SHEET

　

　

  Cash

　

103,181

151,930

　

  Receivables

355,579

363,514

　

  Inventory

442,674

400,737

　

  Securities, Marketable

　

　

　

  Other Current Assets

152,572

151,416

　

      TOTAL CURRENT ASSETS

1,054,006

1,067,597

　

  Property & Equipment

926,994

913,016

　

  Intangibles

20,038

19,952

　

  Investments, Other Fixed Assets

299,203

288,071

　

      TOTAL ASSETS

2,300,241

2,288,636

　

  Payables

424,269

410,895

　

  Short-Term Bank Loans

221,371

249,835

　

　

　

　

　

  Other Current Liabs

217,815

230,527

　

      TOTAL CURRENT LIABS

863,455

891,257

　

  Debentures

131,000

151,000

　

  Long-Term Bank Loans

304,974

360,411

　

  Reserve for Retirement Allw

59,573

72,653

　

  Other Debts

　

89,454

78,636

　

      TOTAL LIABILITIES

1,448,456

1,553,957

　

      MINORITY INTERESTS

　

　

Common stock

250,930

250,930

　

Additional paid-in capital

100,782

100,742

　

Retained earnings

392,652

322,347

　

Evaluation p/l on investments/securities

27,097

13,266

　

Others

83,320

50,377

　

Treasury stock, at cost

(2,996)

(2,983)

　

      TOTAL S/HOLDERS` EQUITY

851,785

734,679

　

      TOTAL EQUITIES

2,300,241

2,288,636

CONSOLIDATED CASH FLOWS

　

　

Terms ending:

31/03/2015

31/03/2014

　

Cash Flows from Operating Activities

　

154,078

194,294

　

Cash Flows from Investment Activities

-73,674

-62,105

　

Cash Flows from Financing Activities

-156,027

-138,501

　

Cash, Bank Deposits at the Term End

　

101,654

170,926

ANALYTICAL RATIOS            Terms ending:

31/03/2015

31/03/2014

　

Net Worth (S/Holders' Equity)

851,785

734,679

　

Current Ratio (%)

122.07

119.79

　

Net Worth Ratio (%)

37.03

32.10

　

Recurring Profit Ratio (%)

5.39

4.66

　

Net Profit Ratio (%)

4.59

3.85

　

　

Return On Equity (%)

10.16

9.55

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.63.40

UK Pound

1

Rs.98.94

Euro

1

Rs.70.33

 

 

INFORMATION DETAILS

 

Analysis Done by :

KAS

 

 

Report Prepared by :

TPT

 

               

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

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

 

--

NB

New Business

--

 

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

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.