Restructuring the Business Model to Address Changes in the Business Environment

「これらの結果、当期の売上高は123億39百万円（前年同期比13.2％増）、営業利益は３億13百万円（前年同期は１億29百万円の営業損失）、経常利益は８億17百万円（前年同期比154.2％増）、親会社株主に帰属する四半期純利益は４億51百万円（前年同期比77.8％増）となりました。」

「We began reorganizing the production system by suspending some factories, consolidating production lines and shifting to businesses with stronger demand, while also working to reduce cross-shareholdings.」

「The company decided to reorganize its production system, including suspending some plants, consolidating manufacturing lines, and shifting to businesses with stronger demand,」

「Although we pursued the expansion of sales channels, research and development, and IT investment, which were priority issues under the 2024 Medium-Term Management Plan formulated in May 2024, our share and production volume declined and earnings deteriorated amid a harsh competitive environment. In addition, profitability in the segment business within the civil engineering products business did not recover sufficiently, so we recorded an impairment loss on some fixed assets, including production equipment, of that business.」

「Against this backdrop, because the group recorded a net loss for the previous fiscal year and paid no dividend, it formulated a business improvement plan, announced on 19 May 2023, to achieve an early recovery in performance and resume dividend payments, and steadily implemented measures including cost reductions, improved construction profitability, and the establishment of appropriate prices. As a result, sales and profit increased from the previous fiscal year, enabling the company to pay a dividend of ¥13.」

「Against this backdrop, because the group recorded a net loss for the previous fiscal year and paid no dividend, it formulated a business improvement plan, announced on 19 May 2023, to achieve an early recovery in performance and resume dividend payments, and steadily implemented measures including cost reductions, improved construction profitability, and the establishment of appropriate prices. As a result, for the cumulative third quarter of the consolidated fiscal year, sales were ¥40.306 billion, up 5.8% year on year, operating profit was ¥1.844 billion, up 700.9%, and ordinary profit was ¥2.142 billion, up 309.7%, while profit attributable to owners of the parent was ¥938 million, compared with a quarterly net loss of ¥71 million in the same period of the previous year.」

「Under these circumstances, because our group recorded a loss and paid no dividend in the previous fiscal year, we formulated a management improvement plan, announced on 19 May 2023, to achieve an early recovery in business performance and resume dividend payments. We are steadily implementing the measures set out in the plan, including establishing appropriate prices and expanding sales and reducing costs, and have achieved some results.」

「Because the company recorded a loss and paid no dividend in the previous fiscal year, it formulated a management improvement plan, announced on 19 May 2023, to achieve an early recovery in business performance and resume dividend payments. It is working to establish appropriate prices reflecting higher raw material costs, expand sales and reduce costs. As a result, revenue for the period was ¥12.644 billion, up 20.3% year on year, and operating income was ¥436 million, compared with an operating loss of ¥79 million in the same period of the previous year.」

「For our group, the next fiscal year will be the final year of the 2021 Medium-Term Management Plan. However, the business environment has changed substantially from when the plan was formulated, including higher raw material prices and a sharp decline in COP shipments, making it difficult to achieve the plan. Under these circumstances, we formulated a management improvement plan to achieve an early recovery in business performance.」

「For the nine months ended Q3, revenue was ¥38,093 million, up 9.4% year on year; operating income was ¥230 million, down 78.3%; ordinary income was ¥522 million, down 64.0%; and, due to the tax burden of subsidiaries, net loss attributable to owners of the parent was ¥71 million, compared with net income attributable to owners of the parent of ¥1,190 million in the year-earlier period.」

「Revenue for the cumulative second quarter of the current consolidated fiscal year was ¥24.608 billion, up 16.5% year on year, and operating income was ¥40 million, down 83.3% year on year.」

「Revenue for the cumulative first quarter of the current consolidated fiscal year was ¥10.511 billion, up 18.1% year on year, while operating loss was ¥79 million, compared with an operating loss of ¥22 million in the same period of the previous year.」

「Although the core business showed signs of recovery after receiving civil engineering orders in the second half, plant utilization declined over the full fiscal year because intensified competition resulted in the loss of large projects. In addition, all businesses were affected by higher raw material and energy costs, and the company failed to meet its initial earnings plan.」

「For our group, revenue for the cumulative third quarter of the current consolidated fiscal year was ¥34.830 billion, down 2.2% year on year, operating income was ¥1.062 billion, down 48.3%, ordinary income was ¥1.452 billion, down 41.1%, and net income attributable to owners of the parent was ¥1.190 billion, down 16.1%.」

「However, overall business conditions in the near term are more difficult than initially anticipated. Shipments of poles for mobile phone base stations remained strong, and Furii Kogyo Co., Ltd., whose core business is slope reinforcement construction, performed well. However, revenue recognition for RC segments for the Linear Chuo Shinkansen was delayed from the original schedule, while production and shipments in the core business were sluggish and PC wall structures were affected by delays in construction starts. As a result, revenue was below the original plan.」

「As a result, revenue for the cumulative first quarter of the current consolidated fiscal year was ¥8.902 billion, down 18.5% year on year, and operating loss was ¥22 million, compared with operating income of ¥249 million in the same period of the previous year.」

「Although the current fiscal year was the final year of the 2018 Medium-Term Management Plan, amid these conditions we made strengthening the foundation of our existing businesses our top priority in response to the loss recorded in the previous fiscal year, pursued company-wide cost reductions, and focused on an early recovery in business performance.」

「Against this backdrop, our group pursued various measures to fulfill our management philosophy, namely, “Contributing to the creation of a safe, secure and prosperous society through concrete.” Because we recorded a net loss in the previous fiscal year, we made strengthening the foundation of our existing businesses our top priority, while also pursuing company-wide cost reductions and focusing on improving earnings. As a result, revenue for the cumulative third quarter of the current consolidated fiscal year was ¥35.624 billion, up 4.6% year on year, operating income was ¥2.056 billion, compared with an operating loss of ¥305 million in the same period of the previous year, ordinary income was ¥2.467 billion, up 6,091.1% year on year, and net income attributable to owners of the parent was ¥1.418 billion, compared with a net loss attributable to owners of the parent of ¥191 million in the same period of the previous year. Thus, despite only a slight increase in revenue, profits recovered substantially.」

「As a result, revenue for the six months ended Q2 was ¥22,753 million, down 1.7% year on year; operating income was ¥1,037 million, compared with an operating loss of ¥330 million in the year-earlier period; ordinary income was ¥1,368 million, compared with an ordinary loss of ¥61 million; and net income attributable to owners of the parent was ¥747 million, compared with a net loss attributable to owners of the parent of ¥198 million, representing a substantial earnings recovery despite a slight decline in revenue.」

「As a result, revenue for the three months ended Q1 was ¥10,922 million, down 0.1% year on year. Despite recording ¥129 million in provision for doubtful accounts as a selling, general and administrative expense, operating income was ¥249 million, compared with an operating loss of ¥55 million in the year-earlier period; ordinary income was ¥454 million, up 173.1%; and net income attributable to owners of the parent was ¥273 million, up 195.6%.」

「Amid these difficult conditions, our group is proceeding as follows with the aim of restoring business performance. First, we are pursuing company-wide cost reductions without treating any area as off-limits. By business, in our core business we are securing appropriate margins on construction projects and actively pursuing orders, supported by design competitiveness that contributes to stable plant operations. In the pole products business, to respond to changing needs, we are launching new products, changing our production structure, and modifying equipment and production lines to achieve a substantial improvement in productivity. In the civil engineering products business, we are proposing products and construction methods addressing disaster prevention, disaster mitigation and national resilience, and working to secure early orders for large RC segment projects. In the overseas business, we are expanding operations by constructing a second factory in Myanmar to increase concrete pole production capacity. By implementing and steadily advancing these measures, we intend to restructure our business structure to respond to changes in the business environment and improve earnings.」

「Amid these difficult conditions, our group will proceed as follows with the aim of restoring business performance. First, we will pursue company-wide cost reductions without treating any area as off-limits. By business, in our core business we will secure appropriate margins on construction projects and pursue orders while taking into account the balance of plant utilization. In the pole products business, to respond to changing needs, we will launch new products, change our production structure, and modify equipment and production lines to achieve a substantial improvement in productivity. In the civil engineering products business, we will propose products and construction methods addressing disaster prevention, disaster mitigation and national resilience, and work to secure early orders for large RC segment projects. In the overseas business, we will work to launch new businesses promptly. By implementing these measures early, we intend to restructure our business structure to respond to changes in the business environment and improve earnings.」