Risk of Funding Constraints Due to Changes in Financial Markets

「Taking our business characteristics into account, we have traditionally maintained a high proportion of long-term funding, including at fixed interest rates, and have adopted a structure that prevents significant short-term impacts, such as a sharp increase in interest expense caused by rising interest rates.」

「We optimized cash and deposits on hand that had been secured in preparation for the impact of the spread of the infectious disease. In addition, we repaid ¥24.0 billion in short-term borrowings and ¥15.1 billion in long-term borrowings, and proceeded with the redemption of ¥20.0 billion in unsecured straight bonds and ¥15.0 billion in commercial paper. As a result, interest-bearing debt excluding lease liabilities decreased by ¥68.6 billion from the end of the previous consolidated fiscal year to ¥249.1 billion.」

「We had maintained a higher level of cash on hand than usual in response to COVID-19, but the need for this has been declining. As interest rates are also expected to rise, we will optimize cash on hand and interest-bearing debt while paying close attention to safety factors, including the course of the infectious disease. In addition, we will support the advancement of sustainability management by diversifying our funding sources, including by considering financing through ESG bonds such as sustainability bonds and ESG loans.」

「At the same time, to ensure business continuity and management stability, we are continuing this fiscal year the measures implemented last fiscal year, including restraining investment, reducing expenses, building up cash on hand, and increasing financing facilities, in preparation for the possibility that the financial impact of the infectious disease could exceed expectations, thereby securing financial stability and liquidity.」

「By continuing this fiscal year the measures implemented last fiscal year, including restraining investment, reducing expenses, building up cash on hand, and increasing financing facilities, the company is securing financial stability and liquidity.」

「The COVID-19 pandemic created a further need to take financing measures, increasing the importance assigned to this risk within our group.」

「In financial matters, we continue to restrain investment and reduce nonessential costs, while taking measures such as building up cash on hand and increasing financing facilities to secure financial stability, liquidity, and working capital for the immediate future.」

「In financial matters, we took measures including restraining investment and making further cost reductions, as well as building up cash on hand and increasing financing facilities, to secure financial stability and liquidity.」

「Against this backdrop, to secure financial stability and liquidity on hand, our group is curbing investment and cutting nonessential costs, while taking measures including building cash reserves and increasing financing capacity to secure working capital for the immediate future.」

「In this environment, securing business stability and continuity through appropriate financing is our group’s most important immediate priority, and is expected to have a very significant impact on future growth.」

「Financial markets have tended to fluctuate significantly amid concerns over a global economic slowdown, and the possibility that the “risk related to financing” will materialize in the medium term is considered to have increased.」

「If financial institutions change terms such as lending limits or credit facility amounts due to changes in financial markets or other factors, if our group’s financial position deteriorates and rating agencies significantly downgrade its credit ratings, or if an economic downturn reduces investors’ willingness to invest, our group may be unable to raise the funds it needs when required and on terms it considers appropriate. This could constrain financing and increase financing costs.」