Strengthening earnings power through sales volume, appropriate pricing and cost reductions

「In the gas-related business, shipment volumes of nitrogen for power plants and argon and petroleum products for industrial use declined. However, revenue and operating income increased because oxygen shipments for industrial use were strong and selling prices for liquefied petroleum gas rose in line with fluctuations in import prices.」

「Although affected by persistently high raw material and energy prices, we revised selling prices and worked to secure earnings. As a result, consolidated revenue for the Group was ¥35,423 million, an increase of ¥1,336 million, or 3.9%, from the previous consolidated fiscal year, while operating income was ¥2,116 million, an increase of ¥594 million, or 39.1%.」

「On the profit side, manufacturing costs increased owing to higher electricity charges, but operating income increased as price revisions for various high-pressure gases took hold and shipments remained strong.」

「Under these conditions, demand from the food-service industry recovered as the infectious disease pandemic subsided. Electricity charges rose from the beginning of the fiscal year and manufacturing costs increased owing to the prolonged situation in Ukraine, but the Group actively revised selling prices across the board and worked to secure earnings.」

「Although demand for dissolved acetylene, oxygen and nitrogen declined, revenue increased owing to revisions to selling prices in response to higher procurement costs, increased demand for argon for power plant construction, hydrogen for quartz processing and food-grade gases for the food-service industry following the easing of movement restrictions, and higher selling prices for liquefied petroleum gas and petroleum products reflecting higher import prices.」

「On the profit side, overall manufacturing costs increased owing to higher electricity charges, and procurement costs for hydrogen also rose. However, operating income increased owing to a substantial rise in shipments of food-grade gases, price increases for various high-pressure gases, and the absence of the large-scale scheduled repairs at the Tagajo Plant carried out in the previous year, among other factors.」

「On the profit side, operating income increased owing to revisions to selling prices in response to higher procurement costs, as well as the absence of the large-scale scheduled repairs at the Tagajo Plant carried out in the same quarter of the previous year.」

「Our basic policy is to create economic value and contribute to society by further strengthening our business base and earnings power through industrial gases and related technologies and equipment, maintaining safe and stable plant operations and a sound financial structure, strengthening diversity management, contributing to the SDGs, and enhancing public relations and investor relations activities.」

「Although demand for dissolved acetylene for pressure welding declined, sales increased following a review of selling prices. Revenue also increased because demand for food-grade gases from existing customers rose and demand for liquefied petroleum gas remained firm, among other factors.」

「As measures to secure earnings, we will advance supply chain optimization to improve competitiveness, modernize filling stations to ensure a stable regional supply, and further develop our logistics network through the integration of delivery operations. We will actively invest in the next strategy, focusing on growth areas and reallocating the management resources generated through these efficiency improvements.」

「In the Other business segment, revenue declined owing mainly to lower orders for ice-making and refrigeration machinery. As a result, revenue in this segment was ¥927 million, down ¥118 million, or 11.3%, from the same quarter of the previous year. However, as a result of efforts to improve the profit margin, operating income was ¥177 million, an increase of ¥113 million, or 175.8%, from the same quarter of the previous year.」

「Operating income was ¥94 million, an increase of ¥41 million, or 77.3%, from the same quarter of the previous year, owing to lower manufacturing costs and selling expenses.」

「We formulated the three-year medium-term management plan “Challenge2018,” with fiscal 2016 as its first year, and are currently working toward achieving its objectives. Through the medium-term management plan, we will further strengthen these initiatives, focus the allocation of management resources on growth areas, and work to improve our corporate structure so that we can generate earnings under any circumstances.」

「We will implement every measure aimed at strengthening earnings power, including expanding sales volume, maintaining appropriate prices and reducing costs, while pursuing business activities rooted in the local communities.」