Stagnant orders in the domestic market and pyrotechnics industry

「However, demand for defense equipment overall remained strong, and increased order volumes for some of the company's products offset declines in other products.」

「Demand for defense equipment overall remains high, and higher order volumes for some of our products offset declines in others.」

「Demand for defense equipment overall increased, and order volumes rose for some of the Company’s products. In addition, commissioned combustion disposal services for pyrotechnic products increased, resulting in sales above the previous fiscal year.」

「Although orders for combustion disposal of pyrotechnic products are trending upward as a result of higher defense spending, a significant increase in demand for the core defense equipment cannot be expected.」

「The indirect impact of the increased defense budget emerged, with order volumes increasing for certain products. In addition, commissioned services, including combustion disposal of pyrotechnic products and evaluation testing of high-energy substances in general, increased, and sales exceeded the plan.」

「Against the backdrop of higher defense spending under government policy, demand is expected to expand in the defense-related market. Although a significant increase in orders cannot be expected for the training and lifesaving defense equipment handled by the Company, business is expected to remain solid for the time being. Orders for the core products sold to the Ministry of Defense increased from the previous fiscal year in line with the higher defense budget.」

「A decline in orders for the core products sold to the Ministry of Defense was expected from the beginning of the fiscal year. Although the Company continued organized sales activities and persistent negotiations, sales decreased from the previous fiscal year. Meanwhile, the pyrotechnic products business posted higher sales because commissioned combustion disposal services for pyrotechnic products and chemical products increased significantly.」

「The industry to which the Company belongs faced a difficult business environment, and because a decline in orders for existing products could not be avoided, the Company focused on commissioned testing, combustion disposal and securing orders for new services by leveraging its expertise. It also worked to optimize profitability, including passing higher costs through to prices, but sales and profit declined from the previous fiscal year. Net sales for the cumulative third quarter were ¥912 million, down 5.1% year on year.」

「Although the industry surrounding pyrotechnic products faced a difficult business environment, the Company increased sales through contract work for private-sector companies and other activities, and results remained solid.」

「Although the defense budget was increased substantially under contracts with the Ministry of Defense, which accounts for most of the Company’s sales, the impact on orders was expected to emerge from the second half onward. In addition, delivery of other major products was postponed, resulting in sales for the cumulative first quarter below the previous fiscal year.」

「Although order volumes for products sold to private-sector customers increased, sales declined from the previous fiscal year because of the impact of significant declines in orders for pyrotechnic products and chemical products sold to the Ministry of Defense.」

「Although costs continued to rise in the pyrotechnic products field and the Company worked to pass on appropriate price increases, mainly for products sold to private-sector customers, net sales declined because orders for the core products sold to the Ministry of Defense fell significantly.」

「Although orders for products sold to private-sector customers increased as the market recovered, net sales decreased from the previous fiscal year because orders for the core products sold to the Ministry of Defense declined significantly.」

「Sales increased from the previous fiscal year, mainly because order volumes for products sold to the Ministry of Defense increased.」

「In addition to an increase in order volumes for pyrotechnic products sold to the Ministry of Defense, delivery of certain products scheduled for January was brought forward to December, resulting in sales above the initial plan. Orders for chemical products and commissioned services, including evaluation testing using the Company’s facilities, were also strong in the private-sector business, resulting in higher sales from the pyrotechnic products business than in the previous fiscal year.」

「Although demand in the pyrotechnic products industry did not recover and difficult conditions continued, the Company continued investing in production facilities and other areas and worked to improve the efficiency of its manufacturing processes.」

「Orders for chemical products sold to private-sector customers decreased slightly from the year-earlier level.」

「In the core pyrotechnic products business, sales remained sluggish because the market for products sold to private-sector customers was affected by the spread of infectious diseases. Although sales of products sold to the Ministry of Defense also declined from the previous fiscal year, the Company secured sales in line with the initial plan and received new orders for chemical products, resulting in higher sales than in the previous fiscal year.」

「In the pyrotechnic products business, although sales of chemical products newly ordered during the current fiscal year increased, net sales decreased from the previous fiscal year because delivery of a large contract was postponed to the fourth quarter and the market for products sold to private-sector customers stagnated due to the spread of infectious diseases.」

「In terms of profitability, sales of products for private-sector customers remained sluggish as economic activity stagnated because of the spread of infectious diseases. However, net sales increased from the previous fiscal year because delivery dates for products sold to the Ministry of Defense that had been scheduled for the third quarter were brought forward, and sales of chemical products newly ordered during the current fiscal year contributed.」

「Under these conditions, orders in the Company’s pyrotechnic products business declined from the year-earlier level as the Ministry of Defense continued to restrain its budget for training pyrotechnic products. In addition, sales of products for private-sector customers fell below the year-earlier level because business activity in Japan and overseas was affected by the spread of infectious diseases and delivery dates were pushed back to the second quarter and later.」

「In the pyrotechnic products business, although commissioned evaluation testing and new orders for chemical products increased, these gains could not offset the decline in orders for the Company’s core products, including training pyrotechnic products sold to the Ministry of Defense. Net sales were ¥1,381 million, down 6.8% year on year.」

「Under these conditions, although the Company’s core pyrotechnic products business benefited from increased sales of products for private-sector customers and new orders for hydrazine nitrate-based chemical products, the impact of continued defense budget restrictions for training pyrotechnic products and other items persisted. Orders for products sold to the Ministry of Defense declined significantly, and net sales decreased from the previous fiscal year.」

「However, the impact of restrictions on the defense budget for training pyrotechnic products and other items was significant, and net sales decreased slightly from the previous fiscal year.」

「In the pyrotechnic products business, although restrictions on the defense budget for training pyrotechnic products and other items continued, sales during the cumulative first quarter were in line with the initial plan. In addition, the private-sector business benefited from an increase in commissioned evaluation testing, among other factors. Net sales were ¥278 million, up 13.3% year on year, and segment profit was ¥24 million, down 10.4%.」

「Although a significant increase in orders could not be expected in the pyrotechnic products industry, order volumes were gradually increasing amid favorable economic conditions.」

「Net sales for the cumulative third quarter increased from the year-earlier level as order volumes expanded, while the review and streamlining of the work environment resulting from strengthened production engineering capabilities at manufacturing sites also helped reduce costs, thereby improving the profit margin.」

「Under these conditions, net sales for the cumulative second quarter were significantly above the year-earlier level because order volumes for pyrotechnic products sold to private-sector customers increased.」

「Although the domestic economy was on a recovery trend, the situation in the pyrotechnic products industry was such that a significant increase in orders could not be expected.」

「Under these conditions, net sales for the cumulative second quarter were slightly above the year-earlier level. However, margins were low relative to order volumes, and higher development costs for new pyrotechnic products and other factors caused operating profit and below to fall below the year-earlier level. As a result, results for the cumulative second quarter were net sales of ¥526 million, up 3.1% year on year, operating profit of ¥14 million, down 48.0%, ordinary profit of ¥15 million, down 44.1%, and quarterly net profit of ¥9 million, down 46.5%.」

「Although stock prices showed an upward trend in the pyrotechnic products industry, the situation remained such that large orders could not be expected. Under these conditions, full-year net sales fell below the previous fiscal year because orders from the Ministry of Defense declined and orders for pyrotechnic products sold to private-sector customers also remained sluggish.」

「Under these conditions, net sales were slightly above the year-earlier level, but during the cumulative third quarter, order volumes declined for relatively high-margin products among the pyrotechnic products sold to private-sector customers, resulting in a lower profit margin than in the same period of the previous year.」

「The Company was significantly affected by a decline in orders resulting from changes to the Ministry of Defense budget and other factors, with the result that sales were ¥115 million below the year-earlier level.」

「The Company was unable to expect large orders, particularly from private-sector companies, during the first quarter, and net sales were below the year-earlier level.」

「Although there is a certain level of demand in the pyrotechnic products industry, the situation continues in which further orders cannot be expected.」