Godo Steel,Ltd.

Business Details

This segment centers on the manufacture and sale of wire rods, various large and medium-sized shapes, rails, structural bars, and rebar, and also handles the sale of Processed Bar and Wire Rod Products, screw-thread rebar, machinery, steelmaking raw materials, and other items. In addition to Godo Steel's own operations, the segment encompasses multiple manufacturing sites including Asahi Kogyo Co., Ltd., Sanshin Metal Industry Co., Ltd., and Tokai Co., Ltd., forming an integrated group-wide optimal production and shipping system. Major customers include Hanwa Co., Ltd., ITOCHU Marubeni-Sumisho Techno-Steel Corporation, and MM Kenzai Co., Ltd. Over 90% of sales are domestic.

Recent Overview

Segment ordinary income declined 32.5% year on year amid the triple burden of sluggish demand, falling prices, and surging scrap prices.

In the Steel Business for FY2026 (ending March 2026), in addition to declining sales prices and lower sales volume caused by sluggish demand in the domestic construction sector, the price of iron scrap, the main raw material, surged in the latter half of the fiscal year, narrowing the metal spread. Segment sales decreased by ¥14,218 million year on year to ¥174,307 million, and segment ordinary income decreased by ¥4,970 million year on year to ¥10,289 million. On the other hand, capital expenditure increased by ¥3,098 million year on year to ¥7,814 million, becoming more aggressive as growth investment toward the Mid-term Vision 2030 gathers momentum. Non-consolidated export sales rose by ¥1,915 million year on year to ¥3,663 million, partially offsetting the sluggish domestic demand.

Key Products

Growth Drivers

• Expansion of exports of steel billets and steel products by utilizing surplus production capacity (non-consolidated export sales of ¥3,663 million in FY2026, up ¥1,915 million year on year)
• Improved profitability through promotion of integrated operations at the three Kanto mills and the top-runner approach at the four rebar mills
• Improved profitability through expanded sales of high value-added products such as screw-thread rebar and high-strength rebar
• Promotion of quality improvement in wire rods and structural steel in response to increasingly sophisticated customer needs
• Reduction of energy costs and response to carbon neutrality through continued energy-saving capital investment (manufacture and sale of "GODO Green" steel products using non-fossil-fuel electricity)
• Expansion of the business foundation through ongoing consideration of M&A
• Strengthening of competitiveness through a capital expenditure plan of ¥400 million per year over five years under Mid-term Vision 2030

Risks

• Continued sluggish demand in the domestic construction sector (prolonged construction periods, rising logistics costs, and the normalization of postponements and cancellations of construction projects)
• Narrowing of the metal spread due to a sharp rise in the price of iron scrap, the main raw material (a surge that is continuing at present)
• Rising energy costs due to persistently high electricity prices and the continued weak yen
• Increases in various costs due to the impact of the situation in the Middle East
• Impact on the export environment due to uncertainty over US trade policy (tariffs, etc.)
• Deterioration in market conditions due to geopolitical risks (the Russia-Ukraine situation, the Middle East situation) and the slowdown of the Chinese economy
• Sluggish domestic demand is expected to continue in the first half of FY2027 (ending March 2027) as well, and the profit environment for the Steel Business is expected to deteriorate further

Business Details

This segment comprises certain subsidiaries engaged in the manufacture and sale of fertilizer, seeds/seedlings, dried forage, and other products. Its main products are organic and chemical fertilizers, and it is positioned as "a fertilizer manufacturer with a specialty in seeds and forage." Although it accounts for a relatively small share of consolidated sales, at approximately 6.6% (¥12,716 million out of ¥191,772 million for the current consolidated fiscal year), it plays a role in business diversification into the agricultural field, distinct from the Steel Business. In FY2026 (ending March 2026), segment ordinary income turned profitable.

Recent Overview

In FY2026 (ending March 2026), the segment achieved higher sales and a turnaround to profit at the ordinary income level, an improvement of ¥500 million year on year.

In the Agricultural Materials Business for FY2026 (ending March 2026), sales increased by ¥520 million year on year to ¥12,716 million, and segment ordinary income/loss turned from a loss of ¥225 million in the prior year to income of ¥275 million (an improvement of ¥500 million year on year). Equity in earnings of affiliates also turned from a loss of ¥34 million in the prior year to income of ¥173 million. On the other hand, segment assets decreased by ¥655 million from the end of the prior fiscal year to ¥14,402 million, and the increase in tangible and intangible fixed assets was negative, indicating a continued contraction in the asset base. Under Mid-term Vision 2030, the company plans to continue expanding the use of organic fertilizer as a growth investment theme.

Key Products

Growth Drivers

• Strengthening cost competitiveness through the shift of management resources toward organic fertilizer (a key initiative under Mid-term Vision 2030)
• Improved earnings at equity-method affiliates (turning from a loss of ¥34 million in the prior year to income of ¥173 million)
• Improved production efficiency and cost reduction through integrated operation of multiple plants
• Response to expanding demand for organic fertilizer in the agricultural sector

Risks

• Segment assets decreased by ¥655 million from the end of the prior fiscal year, continuing a trend of asset base contraction
• The increase in tangible and intangible fixed assets turned negative, indicating a low level of capital expenditure
• Pressure on profitability due to persistently high raw material and energy costs
• External environmental changes such as demand trends in the agricultural materials market and weather risk
• The possibility that a deteriorating cost environment across the group, such as the sharp rise in iron scrap prices, could indirectly affect the allocation of management resources

Business Details

This category aggregates businesses not included in the Godo Steel Group's reportable segments (Steel Business and Agricultural Materials Business), and mainly consists of the crushed stone and crushed sand business, etc. Although it accounts for a relatively small share of consolidated sales in FY2026 (ending March 2026), at approximately 2.5% (¥4,748 million out of ¥191,772 million), it recorded segment profit of ¥539 million and remained profitable.

Recent Overview

Both sales and profit increased, continuing an improving trend compared to the prior period.

In FY2026 (ending March 2026), sales to external customers in the Others segment were ¥4,748 million (prior year ¥4,477 million, up 6.1% year on year), and segment profit was ¥539 million (prior year ¥460 million, up 17.2% year on year), achieving increases in both sales and profit. Segment assets also increased to ¥4,996 million (prior year ¥4,754 million), while capital expenditure decreased year on year to ¥280 million (prior year ¥446 million). Intersegment internal sales were ¥359 million (prior year ¥335 million).

Key Products

Growth Drivers

• Solid sales growth of 6.1% year on year (from ¥4,477 million to ¥4,748 million)
• Improved profitability with segment profit up 17.2% year on year (from ¥460 million to ¥539 million)
• Expansion of the business foundation through an increase in segment assets (from ¥4,754 million to ¥4,996 million)
• Capture of demand within the group through an increase in intersegment internal sales (from ¥335 million to ¥359 million)

Risks

• As the segment accounts for only about 2.5% of consolidated sales, its impact on the group as a whole is limited
• Should the slump in construction and civil engineering demand continue, there is a risk of it spilling over into demand for crushed stone and crushed sand
• Capital expenditure decreased by 37.2% year on year (from ¥446 million to ¥280 million), warranting attention to the continuity of medium- to long-term business infrastructure development
• The presence of intersegment internal sales (¥359 million) warrants attention to the degree of dependence on intragroup transactions