September 8, 2000
Nisshin Steel Co., Ltd.

Consolidated and Non-consolidated Mid-term Projection for Fiscal 2000

The following is the Company's preliminary report for the first half of fiscal 2000 (ended September, 2000), with the final report to be released pending a formal decision at a meeting of Nisshin Steel's Executive Committee in November. Further, the Company regrets that, in line with projected mid-term performance, mid-term dividends will not be paid for this interim term and asks for the understanding of its shareholders.


1. Projected performance
Although Japan's economic recovery, centering on IT industries, is advancing, the sluggish trend in the securities market and uncertainty about the future persist. In the steel industry, in addition to increased exports, capital investment from the private sector is providing the basis for a recovery in demand; however, the depressed pricing of metal sheet continues.
During this interim term domestic demand-particularly from the automobile, construction, and home electronics industries-for Nisshin Steel's core product, steel sheet, which includes surface-treated steel sheet and stainless steel sheet, shifted to a relatively steady tone. However, due to intensified competition in the metal sheet sector, the Company is operating under extremely harsh conditions with regard to sale prices.
Against this backdrop, thanks to the efforts of the Nisshin Steel Group to preserve profits in the term under review, the Group achieved its two-year medium-term management plan's goals by the end of this interim term, six months earlier than anticipated.
As a result, unconsolidated sales during the term under review are expected to meet initial expectations, reaching approximately 160 billion yen, while operating profit should exceed initial estimates by 50%, reaching the 9 billion yen level.
On the other hand, due to an adjustment to reserves based on accounting for retirement allowances, payment of special retirement benefits, and a write-down of marketable securities, the Company anticipates that it will record a loss of 4 billion yen.
In the second half of the year, domestic demand for steel is expected to be roughly the same as it was in the first half, but with competition in the steel sheet sector intensifying, and the export markets slowing down sales prices both in Japan and overseas are anticipated to be low.
Despite a collective effort by the entire Nisshin Steel Group, including giving the Toyo Works-opened in June 2000-rapid response capabilities, expanding sales of new and application development products, beginning with its new ZAM hot-dip coated steel sheets, and cutting costs, it is predicted that the severity of the sales environment will increase and that profit in the second half of the year will be lower than that of the first half.
As a result, unconsolidated sales for both periods are expected to total 320 billion yen, operating profit will total 15 billion yen, and losses will amount to 2 billion yen.
Looking at the consolidated balance sheets, sales are expected to total 220 billion yen, operating profit will total 8 billion yen, and losses will amount to 5 billion yen. For both periods, anticipated consolidated sales, were 440 billion yen, operating profit totaled 15 billion yen, and losses were expected to amount to 3 billion yen.

(Billion yen)