Structural reform through a review of production capacity at the Thai and Guangzhou subsidiaries and fundamental reductions in fixed costs

「In Thailand, sales decreased due to lower production of automotive parts for major customers in both the domestic and export markets, but profit increased due to the continuing effects of structural reforms, including workforce optimisation and the downsizing of the die business implemented by the previous fiscal year, as well as higher selling prices reflecting soaring energy costs. In China, although production cuts by major Japanese OEMs, the main customers, continued, production of electrification components for automotive battery manufacturers continued to increase substantially. Sales and profit both increased significantly due to the continuing effects of structural reforms, including workforce optimisation and the sale of fixed assets, implemented by the previous fiscal year.」

「In Thailand, both domestic and export production of automotive parts and general-purpose engine parts for major customers increased year on year. In addition, the continuing effects of structural reforms implemented through the previous fiscal year, including workforce optimization and cost-reduction activities, resulted in increases in both revenue and profit. In China, revenue increased despite the impact of production cuts by Japanese manufacturers, owing to the results of sales expansion activities in the electrification field and a significant increase in production of electrification parts. Profit also increased due to the continuing effects of structural reforms implemented through the previous fiscal year.」

「In addition to activities to reduce costs, including expenses and transportation costs, we are promoting initiatives such as workforce optimization and production-capacity optimization through the structural reform launched this fiscal year.」

「At Thai Marujun and 広州丸順汽車配件有限公司, our overseas consolidated subsidiaries, we recorded ¥1,058 million in losses on disposal of property, plant and equipment, ¥92 million in impairment losses, ¥681 million in special retirement allowances and ¥54 million in inventory valuation losses as extraordinary losses, as structural-reform expenses for reviewing production capacity and fundamentally reducing fixed costs to strengthen their operating foundations.」

「At Thai Marujun and 広州丸順汽車配件有限公司, our overseas consolidated subsidiaries, we recorded ¥1,041 million in losses on disposal of property, plant and equipment, ¥18 million in impairment losses and ¥671 million in special retirement allowances as extraordinary losses, as structural-reform expenses for reviewing production capacity and fundamentally reducing fixed costs to strengthen their operating foundations. In addition to soliciting voluntary retirements, the structural reform includes the transfer of equipment between plants, layout changes and consolidation of production sites, with the aim of establishing a highly efficient production system that eliminates waste thoroughly.」

「To achieve sustainable growth for our group, we decided to promote structural reform at our consolidated subsidiaries Thai Marujun and 広州丸順汽車配件有限公司. The structural reform is intended to strengthen the companies' operating foundations by reviewing production capacity and fundamentally reducing fixed costs. Impairment losses and structural-reform expenses associated with the business reorganization are expected to arise during the current fiscal year, but the amounts remain undetermined as they are still under detailed review.」