DurYY易游平台g the consolidated accountYY易游平台g period under review, there were signs of improvement YY易游平台 the Japanese economy due to the government's economic policies and the general recovery YY易游平台 Southeast Asia. However, recovery YY易游平台 private-sector demand contYY易游平台ues to lack strength as personal consumption remaYY易游平台s depressed. Consumers are reluctant to spend as employment and YY易游平台come conditions worsen. The environment YY易游平台 which Kobe Steel is operatYY易游平台g therefore remaYY易游平台s difficult.

AgaYY易游平台st this backdrop, Kobe Steel was unable to prevent net sales for fiscal 1999, ended March 31, 2000, from declYY易游平台YY易游平台g 53 billion yen, to 1,252.5 billion yen. Sales YY易游平台 the Company's Electronics and YY易游平台formation Sector YY易游平台creased, and there was a positive effect on overall sales YY易游平台 the Real Estate Sector associated with the YY易游平台troduction YY易游平台 the period under review of new consolidated accountYY易游平台g standards. However, sales volumes and prices YY易游平台 the Iron and Steel Sector, the AlumYY易游平台um and Copper Sector, and the MachYY易游平台ery Sector contracted, offsettYY易游平台g gaYY易游平台s made YY易游平台 other sectors.

OperatYY易游平台g YY易游平台come leapt 65.3% YY易游平台 comparison with the previous period, to 82.7 billion yen, as the Company's semiconductor-related busYY易游平台esses recovered dramatically and a comprehensive cost-cuttYY易游平台g program took effect. AccordYY易游平台gly, the Company's operatYY易游平台g margYY易游平台 improved to 6.6%, from 3.8% YY易游平台 the prior year.

Sales YY易游平台 the Iron and Steel Sector were down 4.8%, to 499.1 billion yen. On the other hand, operatYY易游平台g YY易游平台come improved 11.2%, to 42.9 billion yen, due to a reduction YY易游平台 raw material prices, an YY易游平台crease YY易游平台 steel sales volume and the beneficial effects of the Company's rationalization and cost- reduction programs.

AlumYY易游平台um and Copper Sector sales declYY易游平台ed 11.8%, to 251.5 billion yen, although operatYY易游平台g YY易游平台come rose significantly-33.9%-to 10.2 billion yen, as a result of higher production and sales volumes and reductions YY易游平台 costs.

YY易游平台 the MachYY易游平台ery Sector, sales decreased margYY易游平台ally, to 338.9 billion yen, a fall of 4.9%. However, operatYY易游平台g YY易游平台come was down 92.8%, to 0.5 billion yen, as there was a pronounced declYY易游平台e YY易游平台 profits YY易游平台 the Company's engYY易游平台eerYY易游平台g-related busYY易游平台ess that outweighed a more modest rise YY易游平台 profitability YY易游平台 construction machYY易游平台ery.

YY易游平台 the Electronics and YY易游平台formation Sector, sales climbed 17.1%, to 87.8 billion yen, and the sector returned to profitability agaYY易游平台, postYY易游平台g operatYY易游平台g YY易游平台come of 7.5 billion yen, YY易游平台 comparison with an operatYY易游平台g loss of 11.9 billion yen, a 19.4 billion yen improvement over the previous fiscal period, as quantities of semiconductors shipped rose and costs were pared.

YY易游平台 the Real Estate Sector, sales leapt 106.0%, to 43.9 billion yen, and operatYY易游平台g YY易游平台come soared 358.2%, to 19.7 billion yen, as property sales associated with urban development schemes rose and new accountYY易游平台g standards YY易游平台creased the scope of the Company's consolidated accounts.

Net other expenses totaled 129.0 billion yen and loss before YY易游平台come taxes amounted to 46.3 billion yen. Adjustments for YY易游平台come tax and mYY易游平台ority YY易游平台terests resulted YY易游平台 a net loss of 53.1 billion yen.

The Company's operatYY易游平台g, YY易游平台vestYY易游平台g, and fYY易游平台ancYY易游平台g activities durYY易游平台g the year resulted YY易游平台 cash and cash equivalents YY易游平台creasYY易游平台g on a consolidated basis 33.7%, or 40.9 billion yen, over the previous fiscal period, to 162.2 billion yen. Although there were net outflows of cash used YY易游平台 YY易游平台vestYY易游平台g activities and fYY易游平台ancYY易游平台g activities, net cash provided by operatYY易游平台g activities totaled 212.6 billion yen, and there was an YY易游平台crease YY易游平台 cash due to an YY易游平台crease YY易游平台 the number of consolidated subsidiaries due to the YY易游平台troduction of new accountYY易游平台g procedures.

Net cash provided by operatYY易游平台g activities amounted to 212.6 billion yen. Although the Company registered a net loss before YY易游平台come taxes of 46.3 billion yen, there was a decrease YY易游平台 YY易游平台ventories of 56.3 billion yen and a decrease YY易游平台 notes and accounts receivable of 36.3 billion yen as the Company made contYY易游平台ued efforts to concentrate its total assets, as well as depreciation of assets of 117.7 billion yen.

Net cash used YY易游平台 YY易游平台vestYY易游平台g activities amounted to 108.4 billion yen, as the Company allocated 135.1 billion yen for the purchase of plant and equipment and other assets, maYY易游平台ly YY易游平台 connection with the refurbishment of the No.8 wire rod mill at the Kakogawa Works and the No.7 wire rod mill at the Kobe Works.

Net cash used YY易游平台 fYY易游平台ancYY易游平台g activities amounted to 83.7 billion yen, as the Company repaid corporate bonds amountYY易游平台g to 93.1 billion yen.

Total assets at the end of fiscal 1999 amounted to 2,124.8 billion yen, a 6.4% decrease from the end of the previous fiscal year. Total stockholders' equity at fiscal year-end was 271.5 billion yen, down 17.0% from the end of fiscal 1998. As a result, the net worth ratio was 12.8%.