Raw-Material Price Volatility

「Meanwhile, the impact of US tariff policy on exports, particularly automobiles, together with rising crude oil prices and shortages of naphtha supplies associated with heightened tensions in the Middle East, remains a concern for the future economic outlook.」

「Although the automobile industry has generally remained firm, uncertainty surrounding the business environment has increased as, in addition to developments in trade policy, restrictions on logistics and higher procurement costs associated with heightened tensions in the Middle East, as well as procurement risks for raw materials and supplies, have become evident in some areas.」

「Against this backdrop, automakers are rebuilding their supply chains. We are also negotiating with customers to pass through cost fluctuations, including those for raw materials, logistics and tariffs, while working to ensure continuity of supply by reviewing our distribution channels and procurement policies.」

「This change in the valuation method was made to improve the accuracy of profit and loss measurement for the period, prompted by a review of the Group's optimal production sites and increased volatility in purchase prices.」

「Although our Group is pursuing cost reductions through production improvements and expense cuts, significant fluctuations in raw material prices could affect our Group's operating results and financial position.」

「Operating loss was ¥203 million (operating loss of ¥46 million in the same quarter of the previous year) due to soaring raw material and energy prices.」

「The effects of soaring raw material prices, turmoil in financial markets and the weakening yen have become apparent. Global shortages of components and raw materials have also continued for an extended period, and the uncertain business environment persists. The Group will continue to monitor developments, work to minimize their impact on business activities, and take appropriate action in a timely manner.」

「Russia's invasion of Ukraine has further exacerbated the shortages of semiconductors and other components that have continued since last year, soaring energy and raw material prices, and disruptions to logistics networks, increasing uncertainty surrounding future economic activity and national security.」

「Although operating performance for the current period did not reach pre-COVID-19 levels, performance recovered year on year across all segments. There remain concerns that the impact of COVID-19 will continue, and the Company is reviewing its management targets in order to respond promptly to changes in the business environment, including the automotive industry's rapid shift to EVs, CO2 emissions reductions and initiatives concerning human rights.」

「The uncertain business environment has continued, including soaring raw material prices and higher ocean freight rates resulting from container shortages.」

「In response to purchase price increases that can be addressed, the Company is working to minimize their impact on operating results through cost reductions and passing costs through to selling prices.」

「These prices may fluctuate significantly in response to international prices for crude oil, metals and other commodities, affecting purchase prices.」

「In manufacturing its products, the Group purchases materials including synthetic rubber, reinforcing yarn, metal and rubber components. Their prices may fluctuate significantly in response to international prices for crude oil, metals and other commodities, affecting purchase prices.」