Risk of a decline in order volumes from customers

「高級インナー向け紡績糸は前期の需要期に対応するため増産を実施いたしましたが、販売が想定を下回ったことから在庫が高水準となっております。」

「In the Middle Eastern market, the Company raised selling prices against a backdrop of recent cost increases, but demand slowed and sales volumes declined as the price gap with products from third countries widened. In addition, logistics constraints caused by the situation in the Middle East since the end of February led to higher domestic inventories, and revenue fell below the previous fiscal year.」

「Production of the Company's main aramid fiber products declined substantially due to the discontinuation of large-volume product numbers for spun yarn for government demand, including protective clothing applications. Total production, including industrial applications for automotive parts, was 194.3t, down 19.1% from the previous corresponding period (April to September 2024).」

「Other spun yarns remained firm, with spun yarn for luxury innerwear at 68.5t, the same level as in the previous corresponding period. However, production of other materials such as polyester declined substantially to 41.8t, down 51.1% year on year, due to lower competitiveness resulting from the price gap with imported products.」

「Production of other spun yarns declined from the previous corresponding period, mainly due to stagnation in customers' production. Production was limited to 26.5t for spun yarn for luxury innerwear and 28.1t for other materials such as polyester. Meanwhile, recovery from the COVID-19 pandemic continued steadily in the Middle Eastern and East Asian markets, as in the previous consolidated fiscal year, and strong orders resulted in a substantial increase in revenue.」

「In Ishikawa Prefecture, where the Company's head office is located, the 2024 Noto Peninsula Earthquake occurred at the beginning of the year, causing severe damage mainly in the Noto region. Fortunately, the Company's production facilities escaped damage, and it decided to donate disaster-relief funds to local governments in order to fulfill its responsibility as a long-established company to contribute to the local community.」

「Although local demand exceeded supply in the Middle Eastern and East Asian markets, dyeing and shipping operations were delayed due to shortages of space and labor at contract processors, and the Company was unable to process the desired sales volume.」

「During the cumulative second quarter of the current consolidated fiscal year, local demand exceeded supply in the Middle Eastern and East Asian markets. Dyeing and shipping operations continued to be delayed due to space and labor shortages at contract processors.」

「During the cumulative first quarter of the current consolidated fiscal year, production fell short of plan due to the impact of customers' inventory adjustments, but revenue is trending upward as price revisions progressed. In the main aramid fiber products, production for material applications was cut below plan due to competition with overseas companies.」

「During the current consolidated accounting year, automotive-use products showed signs of reaching a plateau due to continued uncertainty over the outlook caused by the semiconductor shortage. Overall, however, inquiries for orders remained firm.」

「During the cumulative third quarter of the current consolidated fiscal year, some products were seeing demand moderate from its earlier level due to continued uncertainty over the outlook caused by the semiconductor shortage. Overall, however, inquiries for orders remained firm.」

「Demand, primarily for automotive applications, remained firm, and total production in the spinning business increased 5.24% year on year to 342t. Strong inquiries, primarily for spun yarn for automotive applications, continued for the main aramid fiber products from the beginning of the period, and production increased 5.22% year on year to 252t.」

「The recovery trend in the business has continued, led by spun yarn for automotive applications. Although concerns remain about production cuts due to the semiconductor shortage, operations are currently progressing steadily.」

「The spinning business has progressed steadily, supported by a recovery in production of its main aramid fiber, particularly for automotive applications. However, the textile business fell substantially short of plan due to continued lower demand in overseas markets resulting from COVID-19 and delays in the domestic supply system caused by difficulties securing personnel.」

「The operating environment for the Group also saw a V-shaped recovery in the spinning business, with substantial improvement in demand, particularly in the automotive industry, the downstream industry for its main products.」

「The operating environment for the Group also saw a V-shaped recovery in the spinning business, with substantial improvement in demand, particularly in the automotive industry, the downstream industry for its main products.」

「Recovery became pronounced in the Company's main aramid fiber products, led by spun yarn for automotive applications, and orders began to return for products for which inventory adjustments had run their course. Inventory adjustments for spun yarn for luxury innerwear also progressed smoothly, and demand is recovering.」

「The spinning business remained in extremely difficult conditions due to lower demand caused by the spread of COVID-19. Automotive production trends, the main application for the Company's aramid fiber, entered a recovery trend in the third quarter, but spinning orders did not recover because of a lag of several months. Orders for spun yarn for luxury innerwear also declined rather than increased due to excess inventories.」

「Automotive production, the main application for the Company's aramid fiber, entered a recovery trend, but the recovery in spinning orders did not materialize because of a lag of several months. Although spun yarn for luxury innerwear entered its demand season, orders declined rather than increased due to excess inventories.」

「The spinning business remained in extremely difficult conditions as demand continued to decline due to the spread of COVID-19, as in the first quarter. Automotive production trends, the main application for the Company's aramid fiber, were more difficult than expected and, although recovery began from the bottom in the second quarter, the situation remains unpredictable. In addition, orders for spun yarn for luxury innerwear declined substantially due to the mild winter and excess inventories.」

「Orders for core aramid fibre declined again because of the economic deterioration in the automotive industry, while orders for spun yarns for premium innerwear also remained weak because of the mild winter. In addition, order-related activities stagnated as customer companies refrained from sales activities due to the impact of COVID-19, resulting in an extremely difficult business environment.」

「For aramid fiber, the Company's main product, signs of the end of Olympic-related special demand and a slowdown in the automotive industry began to emerge. Orders totaled ¥333.157 million, down 24.8% year on year, while the order backlog was ¥76.412 million, down 30.5% year on year.」

「Orders for aramid fiber, the Company's main product, lost the momentum seen through September and began to slow due to the slowdown in the automotive industry and the end of Olympic-related special demand. In addition, orders for vinyl chloride winter apparel materials declined due to the effects of the mild winter.」

「During the cumulative second-quarter period, no new business or other risks arose. In addition, there were no significant changes to the business and other risks described in the securities report for the previous fiscal year.」

「During the cumulative first quarter of the current fiscal year, there were no occurrences of matters concerning the business situation, accounting situation or other matters described in the quarterly report that could have a material impact on investors’ decisions, and no material changes to the “Business and Other Risks” described in the annual securities report for the previous fiscal year.」

「Order volumes from customers may gradually decline at the ordering companies' discretion due to exchange-rate fluctuations, unforeseen accidents involving companies selling final products, natural disasters and other factors.」

「No new business or other risks arose during the cumulative third quarter. In addition, there were no material changes to the business and other risks described in the annual securities report for the previous fiscal year.」

「Earthquakes, torrential rain and Typhoon No. 21 in various areas caused numerous concerns, including disruptions to logistics and a decline in foreign visitors, hampering the economic recovery.」

「In Japan, the Northern Osaka Earthquake occurred, and is expected to affect personal consumption going forward.」

「Order volumes from customers may gradually decline at the ordering companies' discretion due to exchange-rate fluctuations, unforeseen accidents involving companies selling final products, natural disasters and other factors.」

「No new business or other risks arose during the cumulative third quarter. In addition, there were no material changes to the business and other risks described in the annual securities report for the previous fiscal year.」

「During the cumulative second-quarter period, no new business or other risks arose. In addition, there were no significant changes to the business and other risks described in the securities report for the previous fiscal year.」

「Order volumes from customers may gradually decline at the ordering companies' discretion due to exchange-rate fluctuations, unforeseen accidents involving companies selling final products, natural disasters and other factors.」

「Meanwhile, orders for dope-dyed yarn for uniforms (yarn dyed at the raw-material stage) increased because a spinning mill affected by the Kumamoto earthquake remains shut down and production-space shortages have continued.」

「At the company, several spinning mills temporarily ceased operations following the Kumamoto earthquakes in Kyushu in April 2016, resulting in a very large number of orders and inquiries and substantial volumes inquired about. However, the company was forced to accommodate delivery schedules and small-lot orders, which reduced production efficiency and prevented it from achieving its planned production volume and sales.」

「Order volumes from customers may gradually decline at the ordering companies' discretion due to exchange-rate fluctuations, unforeseen accidents involving companies selling final products, natural disasters and other factors.」