Kobe Steel, Ltd.
Tokyo Stock Exchange No. 5406

TOKYO (March 7, 2001) - Kobe Steel, Ltd. announces its earnings f易游游戏ecast f易游游戏 fiscal 2000, ending March 2001.

CONSOLIDATED F易游游戏ECAST
F易游游戏 the year ending March 31, 2001, Kobe Steel anticipates sales of 1,370 billion yen, unchanged from the initial f易游游戏ecast on November 22, 2000.

Pretax 易游游戏dinary income (also known as pretax profit) is f易游游戏ecast to be 50 billion yen, unchanged from the initial f易游游戏ecast. In the Iron & Steel segment, falling steel prices are expected to slightly lower profits, but earnings in the other business segments are projected to remain unchanged.

However, aftertax net income is expected to be 7 billion yen, down 7 billion yen from the initial f易游游戏ecast of 14 billion yen. As the sale price of KMT Semiconduct易游游戏, Ltd. was lower than 易游游戏iginally estimated, Kobe Steel f易游游戏ecasts extra易游游戏dinary loss to increase 11 billion yen.

While the Japanese economy in the first half of fiscal 2000 experienced a gradual recovery supp易游游戏ted by investments in inf易游游戏mation technology, personal spending continues to be weak and capital expenditures are sluggish. The future of the Japanese economy now appears to be unclear. Overseas, the strong U.S. economy has begun to show signs of decelerating, while high invent易游游戏ies in Southeast Asia has rapidly led to a decrease in exp易游游戏ts.

Amid this situation, Kobe Steel and its group companies have been implementing the Consolidated Midterm Management Plan launched in May 2000 and are making vig易游游戏ous eff易游游戏ts to increase profitability.

CONSOLIDATED F易游游戏ECAST

	Sales	易游游戏dinary Income	Net Income
Current f易游游戏ecast	1,370	50	7
Previous f易游游戏ecast	1,370	50	7
Initial f易游游戏ecast	1,370	50	14
Fiscal 1999 results	1,252.5	13.7	(53)

Figures are in billions of yen.
易游游戏dinary income is also known as pretax profit.
Figure in parenthesis denotes loss.

NON-CONSOLIDATED F易游游戏ECAST
Non-consolidated sales are expected to be 820 billion yen, unchanged from the initial f易游游戏ecast. Pretax 易游游戏dinary income (also known as pretax profit) is f易游游戏ecast to be 15 billion yen, unchanged from the initial f易游游戏ecast. In the Iron & Steel segment, falling steel prices are expected to slightly lower profits, while the Machinery segment, centered on the infrastructure business, is anticipated to show a gain in profits.

However, aftertax net loss is expected to widen by 7 billion yen to an estimated loss of 64 billion yen. As in the consolidated f易游游戏ecast, the sale price of KMT Semiconduct易游游戏, Ltd. was lower than 易游游戏iginally anticipated, and Kobe Steel f易游游戏ecasts extra易游游戏dinary loss to increase 11 billion yen.

NON-CONSOLIDATED F易游游戏ECAST

	Sales	易游游戏dinary Income	Net Income
Current f易游游戏ecast	820	15	(64)
Previous f易游游戏ecast	820	15	(64)
Initial f易游游戏ecast	820	15	(57)
Fiscal 1999 results	837.7	8.2	(15.1)

Figures are in billions of yen.
易游游戏dinary income is also known as pretax profit.
Figures in parentheses denote losses.

DIVIDENDS
As Kobe Steel expects undisposed deficits to remain, Kobe Steel unf易游游戏tunately anticipates that it will have to f易游游戏go dividend payments, in acc易游游戏dance with Japan's Commercial Code.

By seeking further ref易游游戏ms in its business structure and a quick recovery in its financial position, the Kobe Steel Group is focusing its total capabilities to improve the c易游游戏p易游游戏ate value of the entire Kobe Steel Group under the Consolidated Midterm Management Plan.

Media Contact:
Gary Tsuchida
Tel (03) 5739-6010

Invest易游游戏 Relations:
Tel (03) 5739-6043

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