日本冶金工业株式会社

Dear Shareholders

I would like to extend my heartfelt gratitude for the continued support and patronage of our shareholders.
In presenting the Annual Report for our 144th year (from April 1, 2025 to March 31, 2026), I would like to offer a few words.
In the fiscal year under review, Japan’s economy was on a gradual recovery trend as employment and income conditions improved.
However, unstable conditions persisted due to the rise in geopolitical risks and developments in US trade policy.

In the stainless and high nickel alloy industry, demand for shipbuilding remained strong, and demand for semiconductor manufacturing equipment began showing signs of recovery from the beginning of the year.

President and
Representative Director
Shigemi Urata

On the other hand, there was no improvement in the stagnant demand for construction materials due mainly to high prices and labor shortages, and the challenging circumstances persisted.

Additionally, the influx of inexpensive imported materials from the East Asia region persisted at a high level.

With regard to the Group’s strategic field of high-performance alloys, demand related to semiconductor production has increased against the backdrop of global expansion in AI investments. However, the stagnation of the Chinese economy and the postponement of investments in environment-related fields have impacted the quantity, leading to continued sluggishness.

In terms of cost, although raw materials prices remained relatively stable, increases in fixed costs, such as personnel expenses and depreciation, have exerted pressure on earnings.

As a result, sales volume of the Company for the fiscal year under review decreased 6.8% year on year (a decrease of 9.9% in high-performance alloys and a decrease of 5.0% in stainless steel), and consolidated net sales were ¥150,866 million, a decrease of ¥21,231 million year on year.

As for profits, consolidated operating profit was ¥10,973 million, a decrease of ¥5,994 million year on year, consolidated ordinary profit was ¥9,657 million, a decrease of ¥6,542 million year on year, and profit attributable to owners of parent was ¥7,215 million, a decrease of ¥4,363 million year on year.

Regarding the business environment surrounding the Group, semiconductor-related demand is expected to remain strong, the influx of imported materials is showing signs of a downward trend compared to its peak, and the current order status for stainless steel is on a recovery trend.

Meanwhile, geopolitical risks, such as soaring energy prices attributable to the situation in the Middle East and a slowdown of economic activities, are increasing, though it is difficult to quantitatively predict the impact of these factors.

Based on this recognition, we will steadily implement the various measures set out in the Medium-Term Management Plan 2026-2028 and strive to strengthen our earnings base and financial standing.

We humbly request the support and cooperation of our shareholders as we move forward.

June 2026