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JFE Holdings 5411.T plans to ramp up overseas investments as part of a long-term drive to double profits, Japan’s No. 2 steelmaker said on Tuesday, as it posted a 21.4% rise in annual net profit but also flagged a smaller increase for this year.
JFE President Yoshihisa Kitano, who took the helm on April 1, said he would accelerate the company’s strategic shift from quantity to quality, but did not give a timeframe for doubling its business profits, other than saying it would take more than 3-5 years.
“Boosting overseas earnings is essential to our goal of doubling profits,” he told a news conference, highlighting the business growth potential in North America, India, Indonesia and the Middle East.
“We’ll discuss the detailed plans … but we want to consider aggressive investments in overseas,” he said.
JFE’s rival, Nippon Steel 5401.T, aims to finalise a $14.9 billion buyout of U.S. Steel X.N, though the deal faces opposition from several U.S. lawmakers expressing national security concerns and U.S. Steel’s union, which fears job cuts.
JFE’s net profit for the year ended March 31 came to 197.4 billion yen ($1.28 billion), just ahead of analysts’ average forecast of 194.90 billion yen in an LSEG poll, thanks to higher steel margins.
The steelmaker forecast profit for this financial year at 220 billion yen on a higher contribution from value-added products and stronger sale prices. But that fell short of an LSEG consensus estimate from analysts of 231.5 billion yen.
JFE plans to expand sales of electrical steel sheets for electric vehicles and steel plates for offshore wind power equipment, capitalising on Japan’s ongoing efforts to achieve a carbon-neutral economy by 2050.
In February, JFE announced an average increase in steel product sale prices of 10% from April to reflect rising raw material costs and global inflation.
It expects its non-consolidated crude steel output this financial year at 23.4 million metric tons, on par with last year, saying that while activity in the auto sector at home was expected to be robust, labour shortages and soaring materials prices were seen continuing pushing back demand.
“Overseas, the supply/demand balance for steel products continues to loosen and prices continue to stagnate owing to an increase in exports, such as from China,” JFE said.