JFE Holdings, Inc
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March 2, 2006

  Earnings Forecast and Dividends for Fiscal Year ending March 31, 2006

Name of company: JFE Holdings, Inc.
Representative: Fumio Sudo, President and CEO
Listings: Tokyo, Osaka and Nagoya stock exchanges in Japan
Code number: 5411
Contact: Shuichiro Hayashi, Manager
Public Relations Sec., General Administration Dept.
Tel:+81-3-3217-4030, Fax: +81-3-3214-6111

TOKYO — JFE Holdings, Inc. today announced its most recent forecast for consolidated and non-consolidated results for the fiscal year ending March 31, 2006.

1. Consolidated results forecast

The company continues to maintain high earnings in the steel business. JFE Steel has responded to a buildup in inventories, primarily of steel sheets in the domestic and East Asian markets, by cutting production. Despite this production cut’s adverse effect on earnings, JFE Steel will be able to maintain high earnings by meeting strong demand in major manufacturing sectors, particularly the automotive sector, and by keeping sales and production volume at levels commensurate with actual demand, while continuing to reduce costs. JFE Steel’s subsidiaries and affiliates also continue their strong performance. As a result, both net sales and ordinary income are projected to be on par with the previous forecast released in November 2005.

For the engineering, urban development and LSI businesses, the company also expects net sales and ordinary income to be in line with the previous forecast.

As a result, JFE Holdings’ consolidated forecast is unchanged from the previous forecast of net sales of 3,050.0 billion yen and ordinary income of 500.0 billion yen.

Factoring in extraordinary profits on the sale of investment securities and extraordinary losses on asset disposal, the company forecasts net income of 310.0 billion yen, unchanged from the previous forecast.

(Unit: billion yen)
  Net Sales Operating Income Ordinary Income Net Income
Current forecast 3,050.0 510.0 500.0 310.0
Previous forecast
(November 7, 2005)
3,050.0 520.0 500.0 310.0
Note: FY ended
March 31, 2005
2,803.6 467.2 460.6 160.0

2. Non-consolidated earnings forecast

(Unit: billion yen)
  Operating Revenue Operating Income Ordinary Income Net Income
Current forecast 115.0 105.0 105.0 105.0
Previous forecast
(November 7, 2005)
115.0 105.0 105.0 105.0
Note: FY ended
March 31, 2005
36.7 30.2 30.2 29.8

3. Dividends

This fiscal year marks the final year of the first medium-term business plan, whose targets the company has greatly exceeded; the current forecast of 500.0 billion yen in consolidated ordinary income is actually double the plan's target. In addition to improving income, the company has worked aggressively to maximize free cash flow by disposing of assets etc., which will result in substantial improvement of its financial structure.

Accordingly, the Board of Directors plans to propose at the next General Meeting of Shareholders a 55 yen increase in the dividend for the current fiscal year to 100 yen per share, up 122% from the previous fiscal year. This higher dividend is unchanged from the target announced on November 7, 2005 together with the previous earnings forecast.

The company is now formulating its second medium-term business plan based upon the stronger earnings base achieved during the first medium-term plan. JFE will aggressively and flexibly make strategic investments, while carefully monitoring their impact on its financial structure. The company's highest priority is providing returns to its shareholders.

Note: These forecasts are based upon management's conclusions in light of information available at the date of publication. Actual results may differ materially from these forecasts.

pdf Supplementary Information for Earnings Forecast for Fiscal Year ending March 31, 2006



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