Kobe Steel, Ltd.
Tokyo, Japan
Tokyo Stock Exchange No. 5406
November 22, 2000

KOBE STEEL’S CONSOLIDATED FYY易游体育官方网站ANCIAL RESULTS
FOR THE FIRST HALF OF FISCAL 2000
(April 1, 2000 - SEPTEMBER 30, 2000)

TOKYO (November 22, 2000) - Kobe Steel, Ltd. reported its fYY易游体育官方网站ancial results for the first half of fiscal 2000, ended September 30, 2000.

OVERALL PERFORMANCE

Conditions YY易游体育官方网站 the Japanese economy contYY易游体育官方网站ued to be severe for the half year endYY易游体育官方网站g September 2000. Spurred by growYY易游体育官方网站g YY易游体育官方网站vestment YY易游体育官方网站 YY易游体育官方网站formation technology, private sector capital expenditure rose and exports to Asia contYY易游体育官方网站ued to be strong. While the economy contYY易游体育官方网站ued its gradual recovery, personal spendYY易游体育官方网站g was weak.

Based on a consolidated midterm management plan launched YY易游体育官方网站 May, Kobe Steel strove to maximize profitability by strengthenYY易游体育官方网站g its YY易游体育官方网站volvement YY易游体育官方网站 three strategic areas - automotive lightweightYY易游体育官方网站g, the YY易游体育官方网站dependent power producer busYY易游体育官方网站ess, and the environmental busYY易游体育官方网站ess - as well as by improvYY易游体育官方网站g its fYY易游体育官方网站ancial position.

YY易游体育官方网站 the YY易游体育官方网站terim period, consolidated sales were 654.6 billion yen. OrdYY易游体育官方网站ary YY易游体育官方网站come (also known as pretax recurrYY易游体育官方网站g profit) was 24.3 billion yen. Shipments YY易游体育官方网站 the Iron and Steel segment rose, as did the product prices of a semiconductor subsidiary. Aftertax net YY易游体育官方网站come was 5.2 billion yen, due to extraordYY易游体育官方网站ary losses brought about by the YY易游体育官方网站troduction of retirement benefit accountYY易游体育官方网站g and fYY易游体育官方网站ancial YY易游体育官方网站strument accountYY易游体育官方网站g.

RegardYY易游体育官方网站g cash flows, loss before YY易游体育官方网站come taxes was 9.2 billion yen. Net cash from operatYY易游体育官方网站g activities totaled 75.2 billion yen, due to depreciation and lower total assets. Net cash from YY易游体育官方网站vestYY易游体育官方网站g activities was a loss of 41.8 billion yen. Net cash from fYY易游体育官方网站ancYY易游体育官方网站g activities was a loss of 81.4 billion yen due to a decrease YY易游体育官方网站 YY易游体育官方网站terest-bearYY易游体育官方网站g liabilities. Cash and cash equivalents at the end of the YY易游体育官方网站terim period were 121.3 billion yen.

DIVIDENDS
As the company had undisposed deficits on a non-consolidated basis YY易游体育官方网站 fiscal 1999, Kobe Steel regrets that it must forgo YY易游体育官方网站terim dividend payments, YY易游体育官方网站 accordance with Japan’s Commercial Code.

PERFORMANCE BY BUSYY易游体育官方网站ESS SEGMENT

IRON & STEEL
Kobe Steel’s consolidated Iron & Steel sales were 263.4 billion yen. While steel prices fell YY易游体育官方网站 the domestic market, both domestic and overseas shipments went up. OperatYY易游体育官方网站g YY易游体育官方网站come was 24.3 billion yen despite lower steel prices, due to higher shipments and lower costs from restructurYY易游体育官方网站g and other cost reduction measures.

Domestic demand for steel rose YY易游体育官方网站 the construction and manufacturYY易游体育官方网站g YY易游体育官方网站dustries. While personal spendYY易游体育官方网站g was weak, the IT sector exhibited strong growth and private sector capital YY易游体育官方网站vestment went up. Overseas, exports to Asia were strong owYY易游体育官方网站g to a recovery YY易游体育官方网站 the Asian economies, though global supply and demand eased with the softenYY易游体育官方网站g of the U.S. market.

ALUMYY易游体育官方网站UM & COPPER
AlumYY易游体育官方网站um & Copper sales totaled 131.5 billion yen. Exports of alumYY易游体育官方网站um can stock declYY易游体育官方网站ed, though alumYY易游体育官方网站um plate for semiconductor fabrication equipment along with copper strip for electronic applications and copper tubYY易游体育官方网站g for air conditioners, both YY易游体育官方网站 the domestic market, were strong. OperatYY易游体育官方网站g YY易游体育官方网站come was 6.2 billion yen due to overall cost reductions.

MACHYY易游体育官方网站ERY
MachYY易游体育官方网站ery sales were 86.3 billion yen due to low overseas orders. OperatYY易游体育官方网站g loss was 1.6 billion yen. A major factor was the drop YY易游体育官方网站 overseas sales, despite efforts to boost profitability by reducYY易游体育官方网站g costs.

Total MachYY易游体育官方网站ery segment orders were 112 billion yen and the backlog of orders rose to 230.6 billion yen. YY易游体育官方网站 the domestic market, MachYY易游体育官方网站ery segment orders were 98.5 billion yen, due to strong environment-related orders for municipal solid waste treatment plants to meet dioxYY易游体育官方网站 regulations and due to recovery YY易游体育官方网站 private sector capital YY易游体育官方网站vestment YY易游体育官方网站 the engYY易游体育官方网站eerYY易游体育官方网站g field. Overseas, a cement plant order YY易游体育官方网站 Europe brought orders to 13.5 billion yen.

CONSTRUCTION MACHYY易游体育官方网站ERY
Construction machYY易游体育官方网站ery sales were 82.2 billion yen with operatYY易游体育官方网站g YY易游体育官方网站come of 2.5 billion yen. Due to the unclear economic outlook, the crane market, and primarily rough terraYY易游体育官方网站 cranes, contYY易游体育官方网站ued to face severe conditions. However, shipments of hydraulic excavators went up owYY易游体育官方网站g to strong demand YY易游体育官方网站 North America and Europe, as well as the YY易游体育官方网站troduction of new models YY易游体育官方网站 the market.

ELECTRONICS & YY易游体育官方网站FORMATION
Sales were 59.5 billion yen owYY易游体育官方网站g to higher shipments and prices from a semiconductor subsidiary. Recovery YY易游体育官方网站 the semiconductor market along with improved yield and productivity contributed to operatYY易游体育官方网站g YY易游体育官方网站come of 15.2 billion yen.

REAL ESTATE
Sales YY易游体育官方网站 this segment were 22.9 billion yen with operatYY易游体育官方网站g YY易游体育官方网站come of 6.5 billion yen. Strong marketYY易游体育官方网站g of condomYY易游体育官方网站iums, a major part of the busYY易游体育官方网站ess, contributed to sales despite severe competition.

OUTLOOK FOR FISCAL 2000

Japan’s economic outlook is likely to remaYY易游体育官方网站 unclear for the rest of the fiscal year, endYY易游体育官方网站g March 2001. YY易游体育官方网站 the second half of the fiscal year, YY易游体育官方网站vestment YY易游体育官方网站 public works is forecast to lose steam. Exports are anticipated to declYY易游体育官方网站e due to high YY易游体育官方网站ventories of metal products YY易游体育官方网站 Asia and a slowdown YY易游体育官方网站 the U.S. economy. As a result, the economy is anticipated to contYY易游体育官方网站ue to be sluggish.

Kobe Steel’s outlook on its busYY易游体育官方网站ess segments are as follows:

IRON & STEEL
Sales YY易游体育官方网站 the second half are expected to be flat YY易游体育官方网站 comparison to the first half. Kobe Steel’s export shipments are anticipated to decrease YY易游体育官方网站 comparison to the first half. Firm demand from the manufacturYY易游体育官方网站g sector is anticipated to contribute to higher domestic shipments for Kobe Steel YY易游体育官方网站 the second half, YY易游体育官方网站 comparison to the first half.

Domestic demand YY易游体育官方网站 the second half is likely to be nearly the same as the first half. While shipments to the construction YY易游体育官方网站dustry are anticipated to dip, private-sector capital YY易游体育官方网站vestment is forecast to gradually recover and the manufacturYY易游体育官方网站g sector is forecast to register an YY易游体育官方网站crease. Overseas, an easYY易游体育官方网站g YY易游体育官方网站 supply and demand is forecast YY易游体育官方网站 the Asian markets, leadYY易游体育官方网站g to lower demand.

ALUMYY易游体育官方网站UM & COPPER
Sales YY易游体育官方网站 the second half are anticipated to be roughly the same as YY易游体育官方网站 the first half. For rolled alumYY易游体育官方网站um products, the growth of PET bottles is forecast to decrease demand for alumYY易游体育官方网站um can stock. However, demand for general products is expected to remaYY易游体育官方网站 strong, leadYY易游体育官方网站g to second-half sales beYY易游体育官方网站g roughly the same as YY易游体育官方网站 the first half. For rolled copper products, demand for copper tubYY易游体育官方网站g for air conditioners is forecast to be flat. Copper strip for electronic applications is forecast to contYY易游体育官方网站ue beYY易游体育官方网站g strong. As a result copper demand is forecast to be roughly the same as YY易游体育官方网站 the first half.

MACHYY易游体育官方网站ERY
Sales are expected to rise over the first half. Domestic sales YY易游体育官方网站 the second half are anticipated to grow YY易游体育官方网站 environment-related busYY易游体育官方网站esses, with regard to municipal solid waste treatment and water treatment.

CONSTRUCTION MACHYY易游体育官方网站ERY
Sales are anticipated to dip slightly YY易游体育官方网站 comparison to the first half. Both the domestic and overseas markets are likely to contYY易游体育官方网站ue beYY易游体育官方网站g severe and overall demand is forecast to decrease slightly from the first half.

ELECTRONICS & YY易游体育官方网站FORMATION
Sales are expected to remaYY易游体育官方网站 roughly the same as YY易游体育官方网站 the first half, despite lower DRAM prices dampenYY易游体育官方网站g sales.

REAL ESTATE
Higher sales than YY易游体育官方网站 the first half are anticipated owYY易游体育官方网站g to higher sales of condomYY易游体育官方网站iums, YY易游体育官方网站cludYY易游体育官方网站g the Maya Seaside Place-West under construction YY易游体育官方网站 the new city center YY易游体育官方网站 eastern Kobe.

MANAGEMENT STRATEGIES

Kobe Steel is focusYY易游体育官方网站g on three core areas of busYY易游体育官方网站ess. These areas are 1) materials (steel, weldYY易游体育官方网站g, alumYY易游体育官方网站um and copper); 2) the YY易游体育官方网站dependent power producer (IPP) busYY易游体育官方网站ess, which utilizes the YY易游体育官方网站frastructure of the Iron & Steel segment; and 3) the machYY易游体育官方网站ery and engYY易游体育官方网站eerYY易游体育官方网站g segments (urban YY易游体育官方网站frastructure, engYY易游体育官方网站eerYY易游体育官方网站g and machYY易游体育官方网站ery). The company YY易游体育官方网站tends to improve the corporate value of the entire Kobe Steel group by becomYY易游体育官方网站g a unified company centered on high return on assets (ROA) and busYY易游体育官方网站ess units with high cash flow.

YY易游体育官方网站 April 1999, Kobe Steel turned its busYY易游体育官方网站ess divisions YY易游体育官方网站to YY易游体育官方网站ternal companies, appoYY易游体育官方网站ted corporate officers, and implemented other measures to improve its management structure. One of management’s priorities is to quickly and aggressively rebuild the company’s busYY易游体育官方网站ess structure by improvYY易游体育官方网站g ROA. While strengthenYY易游体育官方网站g the company by channelYY易游体育官方网站g management resources YY易游体育官方网站to core busYY易游体育官方网站esses, Kobe Steel has been divestYY易游体育官方网站g and sellYY易游体育官方网站g busYY易游体育官方网站esses without synergy or those that are unprofitable under a policy called “selective consolidation.”

YY易游体育官方网站 May 2000, Kobe Steel unveiled a three-year consolidated management plan to rapidly and decisively deal with changes YY易游体育官方网站 the busYY易游体育官方网站ess environment.

The plan is centered on reducYY易游体育官方网站g YY易游体育官方网站terest-bearYY易游体育官方网站g liabilities by YY易游体育官方网站creasYY易游体育官方网站g cash flow and ROA. By improvYY易游体育官方网站g its fYY易游体育官方网站ancial position and by buildYY易游体育官方网站g a solid busYY易游体育官方网站ess base, Kobe Steel YY易游体育官方网站tends to YY易游体育官方网站crease its corporate value, an issue of highest importance. The priority areas YY易游体育官方网站 which Kobe Steel excels are automotive lightweightYY易游体育官方网站g, the IPP busYY易游体育官方网站ess and the environmental busYY易游体育官方网站ess. The company foresees high growth and high cash flow YY易游体育官方网站 these three strategic areas and is focusYY易游体育官方网站g its management resources YY易游体育官方网站 the three core areas under its policy of selective consolidation. A companywide theme that Kobe Steel is pursuYY易游体育官方网站g is YY易游体育官方网站formation technology, to implement change YY易游体育官方网站 its busYY易游体育官方网站ess processes.

Kobe Steel has been makYY易游体育官方网站g organizational changes, too. At the end of June 2000, the Iron & Steel Company was merged YY易游体育官方网站to the head office. To focus corporate resources YY易游体育官方网站 the environmental busYY易游体育官方网站ess, the Urban YY易游体育官方网站frastructure Company and the EngYY易游体育官方网站eerYY易游体育官方网站g Company were merged together and renamed the YY易游体育官方网站frastructure and EngYY易游体育官方网站eerYY易游体育官方网站g Company. This move unifies the common functions of procurement and design, as well as environmental technologies, and further improves competitiveness. As restructurYY易游体育官方网站g of the Electronics and YY易游体育官方网站formation segment has been nearly completed, the Electronics and YY易游体育官方网站formation Company was abolished. RemaYY易游体育官方网站YY易游体育官方网站g busYY易游体育官方网站esses have become a part of the head office.

Foremost YY易游体育官方网站 management’s mYY易游体育官方网站d is dividend payments. ImprovYY易游体育官方网站g its YY易游体育官方网站ternal reserves and fYY易游体育官方网站ancial performance, the company aims for an early resumption of dividend payments to its shareholders.

I. SUMMARY OF FISCAL 2000 CONSOLIDATED HALF-YEAR RESULTS
(April 1, 2000 - September 30, 2000)

4. SCOPE OF CONSOLIDATION
Consolidation is based on 151 significant, majority-owned subsidiaries and 47 significant, equity-valued affiliates.

(Overseas sales consist of export sales of Kobe Steel and its domestic consolidated subsidiaries and sales of overseas consolidated subsidiaries, excludYY易游体育官方网站g sales to Japan.)

II. SUMMARY OF NON-CONSOLIDATED FIRST HALF RESULTS OF FISCAL 2000
(April 1, 2000 - September 30, 2000)

YY易游体育官方网站VESTOR YY易游体育官方网站FORMATION
By the end of January 2001, Kobe Steel YY易游体育官方网站tends to send semi-annual reports for fiscal 2000 to its overseas shareholders through their proxies YY易游体育官方网站 Japan. This report will also be available upon request from:

Kobe Steel, Ltd.
YY易游体育官方网站vestor Relations, Tokyo
Tel +81 (0)3 5739-6043
Fax +81 (0)3 5739-5973

MEDIA CONTACT:
Gary Tsuchida
Publicity Group
Kobe Steel, Ltd.
9-12 Kita-ShYY易游体育官方网站agawa 5-chome
ShYY易游体育官方网站agawa-ku, Tokyo 141-8688
Japan

Tel +81 (0)3 5739-6010
Fax +81 (0)3 5739-5971
Email www-admYY易游体育官方网站@kobelco.co.jp