Stagnation of Economic Activity and Deterioration in Profitability Due to COVID-19

「While COVID-19 restrictions have been substantially eased and economic activity is moving toward normalization, the outlook remains uncertain due to the prolonged geopolitical issues surrounding Ukraine and the Middle East, as well as rising prices against the backdrop of yen depreciation.」

「During the third quarter cumulative period, Japan's economy was moving toward normalization as COVID-19 restrictions were substantially eased, but the outlook remained uncertain due to the prolonged geopolitical issues surrounding Ukraine and the Middle East, the weaker yen, and surging materials prices and resulting inflation.」

「During the second quarter cumulative period, Japan's economy was moving toward normalization as COVID-19 restrictions were substantially eased, but the outlook remained uncertain due to downside risks to overseas economies from monetary tightening centered in the United States and Europe, the prolonged international situation surrounding Ukraine, and surging materials prices and resulting inflation against the backdrop of the weaker yen.」

「During the first quarter cumulative period, Japan's economy was moving toward normalization as COVID-19 restrictions were substantially eased, but the outlook remained uncertain due to the prolonged international situation surrounding Ukraine, surging materials prices caused by the weaker yen and other factors, and the resulting increase in prices.」

「During the first nine months of the fiscal year, Japan’s economy remained in an extremely difficult situation. While restrictions on activity related to COVID-19 were eased and economic activity showed signs of recovery, geopolitical risks surrounding the situation in Ukraine increased, and the yen weakened partly due to differences between the monetary policies of Western countries and Japan, driving up energy and other material prices.」

「During the first nine months of the fiscal year, Japan’s economy remained in a difficult situation, with personal consumption sluggish and economic activity restricted due to the spread of COVID-19. Looking ahead, encouraging signs emerged, including a higher vaccination rate in Japan, a decline in the number of infections and the lifting of the state of emergency, but the outlook remains uncertain as infections began to spread again in some countries and regions due to the Omicron variant.」

「Against this backdrop, in the three-year medium-term management plan “ISHIZUKA 2021—Toward the Next 100 Years—,” with the current period as its final year, the Group is continuing to promote the “Further Strengthening of Functions Across the Group” from the previous medium-term management plan and working to achieve a 5% operating profit margin and expand non-container businesses to 10% of consolidated net sales. However, the business environment has changed substantially because of the spread of COVID-19, making achievement of the quantitative targets difficult, although we will continue pursuing the operating profit margin, expansion of non-container business sales, and further strengthening of functions across the Group.」

「However, sales declined in most major segments due to restrictions on going out and sluggish consumption associated with the spread of COVID-19. Group-wide sales were ¥64,940 million, down 11.9% year on year, operating profit was ¥852 million, down 65.9%, and ordinary profit was ¥1,153 million, down 46.7%. In addition, due to the recognition of an impairment loss in the glass bottle-related business, the Company reported a net loss attributable to owners of the parent of ¥3,023 million, a substantial decline from the ¥1,180 million net profit attributable to owners of the parent recorded in the previous fiscal year.」

「However, sales declined in most major segments due to restrictions on going out and sluggish consumption associated with the spread of COVID-19. Group-wide sales were ¥50,170 million, down 13.3% year on year, operating profit was ¥933 million, down 61.8%, ordinary profit was ¥1,046 million, down 53.5%, and quarterly net profit attributable to owners of the parent was ¥155 million, down 89.2%.」

「However, in the second quarter, sales declined in most major segments due to requests to refrain from going out and sluggish consumption associated with the COVID-19 pandemic. Group-wide revenue was ¥33,161 million, down 14.8% year on year, operating profit was ¥264 million, down 83.1%, ordinary profit was ¥286 million, down 80.1%, and the net loss attributable to owners of the parent was ¥93 million, compared with net income attributable to owners of the parent of ¥979 million in the same quarter of the previous year, resulting in a substantial decline from the previous year.」

「However, net sales in most major segments declined due to people refraining from going out and sluggish consumption associated with COVID-19. Consolidated net sales were ¥16,212 million, down 17.3% year on year; operating profit was ¥218 million, down 72.6%; ordinary profit was ¥167 million, down 78.9%; and quarterly net income attributable to owners of the parent was ¥27 million, down 95.5%, all substantially below the previous year.」

「If the downturn in economic activity continues for an extended period before COVID-19 subsides, or if the economic environment changes significantly due to a new lifestyle unlike that of the past, the profitability of the Group may deteriorate. This could affect the Group’s operating results and financial position, including through the risk of impairment of fixed assets.」