JFE Holdings Seeks Stable Growth under New 3-Year Plan

JFE Holdings announced on Thursday the firm enforces return to shareholders and aggressive investment under the 3-year plan to fiscal 2008 ending March 2009. The firm tries to secure more than 500 billion yen of consolidated recurring profit for fiscal 2008 while the firm reduces interest bearing debt to around 800 billion yen decreasing the debt equity ratio to less than 50%. The firm will increase the dividend payout to 25% for the 3 year from around 18% in 3 years to fiscal 2005. The firm will increase the output and sales of high-valued steel products by 3 million tonnes in fiscal 2008 to meet higher demand for the high-end products. The firm tries to improve the profitability enough to post more than 500 billion yen of consolidated recurring profit continuously by allocating the operating cash flow in 3 years into better financial position, return to shareholders and strategic investment appropriately. The firm targets 500 billion yen of consolidated recurring profit for JFE Steel, 20 billion yen for JFE Engineering and 10 billion yen for Kawasaki Microelectronics in fiscal 2008. The firm expects 800 billion yen of total net profit and 580 billion yen of depreciation for fiscal 2006-2008. With the 1.38 trillion yen of cash, the firm uses 780 billion yen for investment and financing, 400 billion yen for repayment of interest bearing debt and 200 billion yen for distribution of dividend. The firm increases the investment and financing by 50% to 780 billion yen for the 3 years from 530 billion yen in payment base in 3 years to fiscal 2005. The firm expends 620 billion yen for capital expenditure including expansion of high-valued steel products output capacity. The steel unit tries to expand the output and sales of high-valued steel products for automobile, appliances and energy industry by expanding capacity to meet growing demand. The firm increases the high-end products output by 2.5 million tonnes at the West Japan works and by 500,000 tonnes at the East Japan works. The firm also accelerates the start up of Guangzhou JFE Steel Sheet, which is galvanizing steel making joint venture in China. The firm improves the advantage in cost and quality at West and East Japan works while the firm improves the environmental actions including lower carbon dioxide emissions. The firm enforces better alliances at home and abroad to improve the supply ability of high-end products. The firm expects the consolidated raw steel output is 34 million tonnes including 30 million tonnes for the parent company in fiscal 2008.