TOKYO - JFE Holdings, Inc. today announced its revised forecasts for interim and full-year consolidated results in the fiscal year ending March 31, 2005, the third reporting term since the company was formed in September 2002. The revised forecasts reflect accounting standards for the impairment of fixed assets that the company has decided to adopt in the interim period, ahead of government-mandated implementation. This announcement also constitutes disclosure of the quarterly results summary as required in the timely disclosure regulations of the Tokyo Stock Exchange.

1. Consolidated Results Forecasts and Impact of Application of Impairment Accounting

Private capital spending increased and consumer spending grew modestly in the first half of the fiscal year, leading to a solid recovery in business conditions in the Japanese economy. Within this context, the JFE Group moved steadily forward with the implementation of its First Medium-Term Business Plan and efforts to increase earnings.

The company forecasts interim consolidated net sales of 1,250.0 billion yen and ordinary income of 170.0 billion yen, both higher than the previous forecasts announced in May. Net sales and income forecasts for the steel business have been raised due to increases in sales prices for steel products as a result of strong demand worldwide. In the engineering business, net sales and operating income are unchanged from the previous forecast. In the urban development and LSI businesses, net sales and income forecasts both have been lowered slightly due to declining sales.

The application of impairment accounting will result in a special impairment loss in the interim period, forecast at 80.0 billion yen, which was not included in the previous forecast. As a result of the accounting change, interim net income is forecast at 10.0 billion yen, down from the previous forecast.

For the full year, however, the company now forecasts net sales of 2,740.0 billion yen and ordinary income of 400.0 billion yen, both of which exceed previous forecasts. The increase reflects expectations of sustained recovery in business conditions and salutary effects on earnings from improvements in sales prices for steel. Although the application of impairment accounting will have a negative impact on extraordinary profit/loss, net income for the year is forecast at 120.0 billion yen, slightly higher than the previous forecast.

2. Interim Dividend

In a meeting held today, the board of directors of JFE Holdings announced it would not pay an interim dividend this year.

Note: The forecasts in this document are based upon management's assumptions and beliefs in the light of information available at the date of publication. Actual results may differ materially from these forecasts.