TOKYO — JFE Holdings, Inc. announced today its revised forecasts for consolidated and non-consolidated earnings for the fiscal year ending March 31, 2005 (the third reporting term since the company was formed in September 2002). This announcement also constitutes disclosure of the quarterly results summary as required in the Tokyo Stock Exchange's timely disclosure regulations.

1. Consolidated Earnings Forecast

The Japanese economy has continued to recover during the fiscal year, with increases in both private-sector capital investment and exports providing support for improved corporate earnings. The domestic economy has generally remained firm, despite some factors for weakness such as inventory corrections in the IT industries, rising raw materials and oil prices and the yen's appreciation against the US dollar.

JFE's newly revised consolidated earnings forecast, compared to the forecast issued in November 2004, expects increased net sales and income for its steel business. Amid continued high levels of production, steel sales prices are projected to improve thanks to booming demand in domestic and foreign markets. Group companies also forecast higher income for steel.

In the engineering business, net sales were revised down in the face of an increasingly difficult business environment. Ordinary income, however, is roughly unchanged from the previous forecast. The urban development business forecasts slightly higher income compared to the previous forecast. LSI sales were revised down, as were forecasts for both net sales and income.

As a result, JFE Holdings forecasts total consolidated net sales of 2,820.0 billion yen, roughly on par with the previous forecast. Operating income and ordinary income forecasts were increased to 460.0 billion yen and 450.0 billion yen, respectively.

Factoring in extraordinary losses on the amortization of transitional obligation on accrued retirement benefits, losses on impairment of fixed assets and other expenses, JFE Holdings now forecasts net income of 150.0 billion yen for the fiscal year.

2. Non-consolidated Earnings Forecast

3. Dividends

JFE Holdings considers the return of profits to shareholders to be among its top management priorities and has a policy of distributing dividends in line with results and needs for retained earnings to bolster the operational base of the group as a whole.

In light of the forecasted results and retained earnings for the year, the Board of Directors today decided to propose to the General Meeting of Shareholders the payment of a dividend of 45 yen per share for the current fiscal year, up 15 yen from the previous fiscal 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.

Supplementary information on the financial forecasts