Risks Associated with Overseas Business Expansion and Exchange-Rate Fluctuations

「Amid the conflict involving Iran, the business environment has changed completely, and Japan and the global economy are being pressed to respond to the crisis. In addition, economic blocs have advanced, making this a year in which international cooperation became difficult.」

「The impact of US tariff policies on the global economy is expected to be prolonged, making the outlook increasingly uncertain.」

「Geopolitical risks, including worsening conditions in the Middle East, have recently intensified, and the outlook has become uncertain as political conditions in the US and Japan have grown unstable.」

「During the nine months ended 31 December 2023, global fragmentation intensified, and the impact of geopolitical risks, including the prolonged Ukraine crisis and worsening conditions in the Middle East, continued. Monetary tightening in Europe and the US and the contraction of the Chinese economy also became obstacles to the recovery of the global economy.」

「During the six months ended 30 September 2023, the global economy was affected by geopolitical risks, including the protracted Russian invasion of Ukraine and rising tensions in the Middle East, which became major factors delaying the global economic recovery. Monetary tightening continued in Europe and the US, while US-China friction and the contraction of the Chinese economy contributed to continued stagnation in the global economy.」

「The slowdown continued amid persistent inflation and high interest rate policies in Europe and the US and a delayed recovery in the Chinese economy, and the global economy remained stagnant. Although some recovery was seen in sectors such as services, manufacturing remained weak and the path to future recovery was uncertain.」

「During the consolidated fiscal year ended March 2023, the global economy was recovering from the COVID-19 pandemic, but the situation in Ukraine remained deadlocked. As soaring energy and resource prices, advancing inflation, and monetary tightening became intertwined, signs of a slowdown grew stronger.」

「During the nine months ended 31 December 2022, the global economy became unstable. Against a backdrop of energy and resource price inflation triggered by the Ukraine crisis, expanding inflation across economic regions, and monetary tightening, the economy was sharply braked during the third quarter, amid foreign exchange fluctuations.」

「During the six months ended 30 September, the global economy remained unstable. While the social impact of COVID-19 was easing, the situation in Ukraine remained confused, energy and raw material prices rose and fell sharply, and the economy slowed as global inflation accelerated and interest rates rose, amid a substantial depreciation of the yen.」

「However, in addition to the prolonged situation in Ukraine and soaring raw material and fuel prices, the impact of the Shanghai lockdown in China from the latter half of the first quarter, historically high inflation and monetary tightening in Europe and the US, foreign exchange fluctuations, and continuing supply chain disruptions have combined, making the outlook increasingly uncertain.」

「Vinyl chloride resin and caustic soda recorded declines in net sales and operating income due to the impact of India's lockdown.」

「The economic slowdown in the overseas markets targeted by the company became a major trigger for its business performance.」

「During the six months ended 30 September 2019, the Group's performance was affected by slowing demand in Asia and Europe, weakness in the automotive and electronics industries, and the impact of the stronger yen. Net sales were ¥299,855 million, down 2.0% year on year, and operating income was ¥12,817 million, down 28.9%.」

「The global economy has seen a pronounced slowdown as escalating US-China trade friction stemming from US protectionist policies has affected not only the Chinese economy but also technology-linked global supply chains.」

「An unstable political and economic environment, including escalating US-China trade friction stemming from US protectionist policies, geopolitical risks in the Middle East and Asia, and the UK's exit from the EU.」

「In addition to escalating trade friction stemming from the US protectionist policies, concerns have spread over global geopolitical risks extending beyond the Middle East and East Asia.」

「The fiscal year under review was strongly affected by the appreciation of the yen. Compared with the previous consolidated fiscal year, net sales decreased by ¥7,004 million, or 1.3%, to ¥548,222 million, while operating income decreased by ¥5,055 million, or 13.2%, to ¥33,164 million.」

「Although some recovery has been seen in areas such as residential investment, private consumption remains sluggish, and the rapid appreciation of the yen is affecting corporate earnings in Japan as well.」

「The Japanese economy has also begun to feel the impact on corporate earnings from the rapid appreciation of the yen and falling share prices.」

「Overseas business activities entail risks including unexpected changes in laws, regulations and tax systems, taxation under transfer-pricing rules, and social and political disruption caused by terrorism, war and other factors. If these risks materialise, they may adversely affect the financial position and operating results of the group.」