Raw-material procurement and pricing risks from livestock disease, abnormal weather, market conditions and foreign exchange

「• Distribution If infectious diseases caused by unknown viruses or other factors result in the shutdown of raw material production plants in Japan or overseas, or if domestic or overseas distribution networks are disrupted by disasters, accidents, conflicts, strikes or other events, raw material prices are expected to rise and procurement may become difficult. • International Affairs If major changes in the supply-demand balance occur due to changes in international affairs, such as conflicts, the imposition of protective tariffs, terrorism or war, raw material prices are expected to rise and procurement may become difficult. • Suppliers If problems arise in product supplies due to deterioration in a supplier's financial condition, closure of a supplier's business, violations of laws or regulations, major equipment failures or other factors, this may adversely affect the performance and financial condition of the Group.」

「Although the food industry has also shown signs of recovery because of increased inbound demand and other factors, the operating environment remains challenging. Repeated price increases resulting from higher raw-material and labour costs and persistently high energy prices, as well as soaring rice prices, have heightened consumers' awareness of saving on food expenses.」

「• International Affairs If major changes in the supply-demand balance occur due to changes in international affairs, such as conflicts or the imposition of protective tariffs, raw material prices are expected to rise and procurement may become difficult. • Suppliers If problems arise in product supplies due to deterioration in a supplier's financial condition, closure of a supplier's business, violations of laws or regulations, major equipment failures or other factors, this may adversely affect the performance and financial condition of the Group.」

「Although the food industry has continued to show signs of recovery, particularly in food service, the operating environment remains challenging, as growing consumer awareness of saving on food expenses has made it difficult to pass higher raw-material and energy costs on to selling prices.」

「Although the food industry has continued to show signs of recovery, particularly in food service, the operating environment remains challenging, as growing consumer awareness of saving on food expenses has made it difficult to pass higher raw-material and energy costs on to selling prices.」

「Although the food industry has continued to show signs of recovery, particularly in food service, companies have continued to pass higher raw-material and energy costs on to selling prices. In addition, customers have continued to prefer low prices, while avian influenza has caused supply restrictions for certain products, resulting in a continuing challenging operating environment.」

「Although efforts to pass on higher raw material and energy costs to selling prices are under way, changes in demand, as well as disruptions to the supply of some products due to avian influenza, have made the operating environment even more challenging.」

「Meanwhile, as the impact of the yen's depreciation continues, in addition to the prolonged situation in Ukraine, energy prices, including raw material prices, fuel prices and electricity charges, have risen, and supply chains have become unstable due to global logistics disruptions, resulting in continued uncertainty about the outlook.」

「Although the food industry has continued to show signs of recovery, particularly in food service, a full-scale recovery has yet to be achieved. While companies have begun passing higher raw-material and energy costs on to selling prices, changes in demand have also occurred, and the operating environment has become increasingly challenging.」

「In terms of profit, operating loss was ¥46 million, compared with operating profit of ¥235 million in the same period of the previous year, and ordinary loss was ¥25 million, compared with ordinary profit of ¥257 million in the same period of the previous year, due mainly to surging raw material prices and energy costs.」

「In terms of profit, although the impact of higher raw material prices and other factors continued, operating profit increased 13.5% year on year to ¥843 million, due to higher sales and cost controls, while ordinary profit decreased 0.2% to ¥908 million.」

「In addition, eating occasions have changed as telework has become more widespread, while the operating environment has become increasingly challenging due in part to surging raw material prices, crude oil prices and electricity charges.」

「Although there were no nationwide school closures such as those implemented in April and May of the previous year, school closures were implemented at individual schools. In addition, changes in eating occasions resulting from the spread of telework, continued stagnation in the food-service industry and elsewhere following repeated states of emergency, and soaring raw-material prices have left the food industry in a continuing challenging situation.」

「If infectious diseases caused by unknown viruses or other agents result in production stoppages at domestic or overseas raw material factories, or if domestic or overseas distribution networks are disrupted by disasters, accidents, conflicts or other events, raw material prices are expected to rise and procurement is expected to become difficult.」

「In addition, the supply situation for imported raw materials has been changing as the virus spreads worldwide.」

「If livestock diseases such as BSE, avian influenza, foot-and-mouth disease or ASF (African swine fever) occur in a country or region producing the raw materials used by the Group, procurement of meat raw materials is expected to become difficult and prices are expected to rise due to reduced supply resulting from measures such as bans on raw material imports.」

「In terms of profit, operating profit was ¥948 million, down 30.8% year on year, due to higher raw material prices, fuel costs and logistics expenses, among other factors.」

「Operating profit was ¥746 million, down 44.5% year on year; ordinary profit was ¥831 million, down 40.9%; and profit attributable to owners of the parent for the quarter was ¥587 million, down 38.1%, owing to lower revenue and higher raw material, fuel, and logistics costs.」

「Operating profit was ¥180 million, down 69.8% year on year; ordinary profit was ¥247 million, down 62.1%; and profit attributable to owners of the parent for the quarter was ¥182 million, down 62.3%, owing to lower revenue and higher raw material, fuel, and logistics costs.」

「Operating profit was ¥107 million, down 67.9% year on year; ordinary profit was ¥170 million, down 56.2%; and profit attributable to owners of the parent for the quarter was ¥117 million, down 56.9%, owing to lower revenue and soaring raw material prices.」

「If the market supply of raw materials falls below demand due to livestock diseases, abnormal weather, changes in consumption resulting from economic conditions and policies in various countries, or increased demand for agricultural products as energy resources, procurement is expected to become difficult and market prices are expected to rise. In addition, higher crude oil prices are expected to adversely affect the prices of raw materials for packaging containers and film. If safeguards are imposed due to a sharp increase in raw material import volumes, raw material procurement costs will increase.」

「The procurement and prices of raw materials used by the Group could adversely affect its operating results and financial condition due to the following factors. ・Livestock diseases If livestock diseases such as BSE or avian influenza occur in a country or region producing the raw materials used by the Group, procurement of meat raw materials is expected to become difficult and prices are expected to rise due to reduced supply resulting from measures such as bans on raw material imports. ・Weather If crop yields of agricultural and marine products deteriorate due to abnormal weather, including cool summers, warm winters and typhoons, procurement of raw materials is expected to become difficult and prices are expected to rise. ・Market prices If the market supply of raw materials falls below demand due to livestock diseases, abnormal weather, increased consumption in emerging economies or greater demand for agricultural products as energy resources, procurement is expected to become difficult and market prices are expected to rise. ・Foreign exchange If the yen weakens sharply against the US dollar beyond the exchange rate assumed by the company, raw material procurement costs will increase.」