Country risks in overseas operations

「利益面におきましては、中国やアセアン地区での価格競争激化による粗利率低下や、現地での販管費増の影響を受けたものの」

「Profit declined mainly because gross margins fell in North America and Mexico due to the impact of tariffs.」

「Revenue increased to ¥3,702 million, up 5.7% from the previous interim consolidated accounting period, while segment profit fell to ¥15 million, down 87.0%, resulting in higher revenue and lower profit. Although market development in India and North America, both growth markets, progressed steadily, sales increased only slightly against the backdrop of the continuing slowdown in China's economy. Profit declined because tariffs lowered gross margins in North America and Mexico, and the yen was relatively stronger against the US dollar during the interim consolidated accounting period.」

「Revenue was ¥7,291 million, down 1.2% from the previous consolidated fiscal year, and segment profit was ¥192 million, down 32.2%, resulting in lower revenue and lower profit.」

「The main factors were the weaker yen, steady progress in further developing the markets in India and North America, which are growth markets, and the effects of initiatives such as cost reductions in response to China's economic weakness.」

「The overseas business posted revenue of ¥7,380 million, up 0.5% from the previous consolidated fiscal year, and segment profit of ¥284 million, down 35.8%, resulting in higher revenue but lower profit. The main factors were the steady progress in developing markets in India and North America, as well as the favorable performance of mineral resources sales, including tungsten, in addition to the weaker yen. However, these factors were not sufficient to offset the impact throughout the year of the prolonged downturn in China's economy, China being our main operating market.」

「Revenue increased to ¥5,414 million, up 0.4% year on year, while segment profit fell to ¥178 million, down 48.9%, resulting in higher revenue and lower profit. The main factors were the weaker yen and strong sales in some countries of operation, including India, a growth market, as well as sales of mineral resources such as tungsten. However, these were insufficient to offset the prolonged economic downturn in China, one of the company's principal countries of operation.」

「The main factor was that, although orders remained strong in some countries of operation, including India, where growth is expected, amid a global economic slowdown caused by uncertainty in the international situation, this was insufficient to offset the impact of the economic downturn in China, one of the company's principal countries of operation.」

「In the overseas business, although inflation rates have been trending down globally, high inflation has continued. Performance remained solid in some of the countries where we operate, including Mexico and India, while sales stagnated in China, a major operating market, against a backdrop of a rapid economic slowdown.」

「In the overseas business, the risk of a slowdown in industrial production remains due to a sharp increase in infections following China's shift away from its zero-COVID policy. However, as a result of accelerating the Cominix Group's global expansion, performance remained solid, particularly in China and the United States.」

「In the overseas business, orders expanded in China and the United States as the Cominix Group accelerated its global expansion, helped in particular by the recovery following the easing of movement restrictions in China and the weaker yen. As a result, revenue increased to ¥3,432 million, up 28.6% year on year, and segment profit increased to ¥207 million, up 27.9%, resulting in higher revenue and profit.」

「When expanding overseas operations, our Group formulates business plans and makes decisions based on thorough preliminary information gathering. We have also established a system for promptly considering responses, including withdrawal, if changes in the business environment or other factors make it necessary to review a business plan, thereby reducing risk.」

「In the overseas business, concerns remained regarding supply disruptions in response to increased demand accompanying the resumption of economic activity, rising and prolonged inflationary pressure, labor shortages and other factors. However, demand expanded in most of the countries where we operate, including China and the United States. As a result, sales were ¥4,024 million, up 49.0% year on year, and segment profit was ¥237 million, compared with a segment loss of ¥127 million in the same period of the previous year.」

「In the overseas business, concerns remained regarding prolonged US-China trade friction and shortages of semiconductors and other materials. However, the global economic recovery, led by China and the United States, continued, and demand expanded in most of the countries where we operate. As a result, sales were ¥2,670 million, up 53.0% year on year, and segment profit was ¥163 million, compared with a segment loss of ¥86 million in the same period of the previous year.」

「In the overseas business, sales and segment profit remained sluggish mainly because the countries where we operate were substantially affected by COVID-19. As a result, sales were ¥1,745 million, down 25.1% year on year, and the segment loss was ¥86 million, compared with segment profit of ¥8 million in the same period of the previous year.」

「However, sales and segment profit remained sluggish, mainly because lower exports from China to the United States resulting from US-China trade friction led to lower production by major customers and sales at the local subsidiary remained weak compared with the previous consolidated fiscal year. As a result, sales were ¥4,834 million, down 6.6% from the previous consolidated fiscal year, and segment profit was ¥28 million, down 79.8%.」

「In the overseas business, we pursued initiatives to accelerate global expansion, including establishing a sales office in Bandung, Indonesia, in October 2019. However, sales and segment profit remained sluggish, mainly because lower exports from China to the United States, resulting from US-China trade friction, contributed to lower production by major customers.」

「In the overseas business, we pursued initiatives to accelerate global expansion, including expanding our workforce and opening a new location in India, the Neemrana office, in July. However, sales and segment profit remained sluggish, mainly because automotive-related demand declined in Asia and North America due to the prolonged US-China trade friction and other factors. As a result, sales were ¥2,331 million, down 7.8% year on year, and segment profit was ¥8 million, down 87.6%.」

「In the overseas business, sales and segment profit remained sluggish mainly because of the impact of US-China trade friction, including a substantial decline in sales to the automotive industry by our local subsidiary in China, one of the business's major countries.」

「Our Group is actively expanding its overseas operations, but risks related to market trends, competition, political, economic and legal conditions, and foreign exchange rates in the countries where we operate may affect our future business strategies and the operating results and financial position of our Group. In addition, as overseas transactions expand, new regulations imposed by supervisory authorities, including tax rates and tariffs, may increase losses and expenses.」

「In the overseas business, sales at overseas subsidiaries excluding the Philippines remained strong, including strong sales to the automotive industry in Mexico. However, segment profit remained sluggish because sales declined due to foreign exchange effects and selling, general and administrative expenses increased as the US local subsidiary had only recently been established. As a result, sales were ¥3,668 million, down 7.6% from the previous consolidated fiscal year, and the segment loss was ¥43 million, compared with segment profit of ¥108 million in the previous consolidated fiscal year.」

「In the overseas business, sales and segment profit remained sluggish due to weak performance at our consolidated subsidiary in China resulting from the slowdown in the Chinese economy and the effects of foreign exchange rates at our overseas subsidiaries.」

「Market trends, competition, political, economic and legal conditions, foreign exchange rates and other risks in the countries where we operate may affect our future business strategies and the operating results and financial position of our Group.」