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Announcement on Impairment loss
May 29, 2013
TOKYO, May 29, 2013 – Kobe Steel, Ltd. announces that in the first quarter of fiscal 2013, it will post an impairment loss on business assets, which will be taken as an extraordinary loss, in accordance with the decision made at its board of directors’ meeting held today to reform the structure of the steel business by changing the upstream production system.
1.Impairment loss
(1) Reason for impairment loss
Kobe Steel decided to reform the structure of the steel business by changing the upstream production system at its board of directors’ meeting held today. Upstream production at Kobe Works will be transferred to Kakogawa Works and Kobe Steel plans to shut down the blast furnace and other upstream production equipment at Kobe Works around fiscal 2017.
In accordance with this decision, there are the indications of impairment loss on the abovementioned upstream production equipment at Kobe Works, due to a significant change in the reduction of the recoverable amount. Pursuant to the Accounting Standards for Impairment of Fixed Assets, Kobe Steel recognizes impairment loss on these assets, in considering the recoverability of these assets.
(2) Amount of impairment loss in first quarter of fiscal 2013
Kobe Steel will post approximately 18.5 billion yen of impairment loss as an extraordinary loss on a nonconsolidated and consolidated basis in the first quarter of fiscal 2013.
2. Future outlook
Kobe Steel will promptly disclose its earnings forecast for fiscal 2013 if Kobe Steel judges it necessary to modify the earnings forecast.
For more information, please refer to “Kobe Steel to reform structure of steel business” attached to “The Kobe Steel Group’s Fiscal 2013-2015 Medium-Term Business Plan” announced today.
