Material procurement constraints and production disruption at the North American subsidiary

「Although sales at MSSC CANADA were strong, costs deteriorated due to equipment problems, tariffs and other external factors. The company recorded an operating loss during the consolidated fiscal year and identified indications of impairment.」

「Although the North American subsidiaries' results improved substantially due to progress in passing higher costs through to selling prices and the resolution of production disruptions, they recorded an operating loss in the third quarter, partly due to strikes by automakers and the fact that some selling price negotiations remained unresolved.」

「The North American subsidiaries' results improved substantially due to progress in passing higher costs through to selling prices and the resolution of production disruptions, resulting in a return to operating profitability.」

「Operating profit was an operating loss of ¥295 million, with the loss narrowing by ¥810 million year on year, compared with an operating loss of ¥1,105 million in the same period of the previous year. Although the North American subsidiaries' results improved substantially due to the resolution of production disruptions and progress in passing higher costs through to selling prices, they still recorded a loss because the recovery did not reach the expected level, partly because material markets had recently risen again.」

「At the North American subsidiary, losses continued to widen through the third quarter due to the impact of production disruption and other factors, but efforts to resolve the disruption have progressed recently through measures such as securing stable inventories.」

「Operating profit in the springs business as a whole declined by ¥1,787 million year on year to an operating loss of ¥2,817 million, compared with an operating loss of ¥1,029 million in the same period of the previous year. This was due to additional costs, including lower productivity and emergency transportation, resulting from production disruptions that had continued since the second half of the previous fiscal year, as well as the increase in losses at the North American subsidiaries caused by the weaker yen.」

「At the North American subsidiary, the Company is pursuing reconstruction measures, including securing stable inventories to resolve the production disruption, ending transactions involving unprofitable products and passing higher manufacturing costs through to selling prices.」

「At the North American subsidiary, production disruption caused by abrupt changes in orders from automakers and other factors has continued since the second half of the previous fiscal year, along with lower productivity and emergency transportation measures, and the impact of the disruption expanded further.」

「In addition to temporary air freight costs incurred in the first half as an emergency response to material supply problems in North America, the Company was affected by higher ocean freight costs and other factors resulting from a global shortage of shipping containers.」

「Although sales volumes increased as demand for automobiles and construction machinery recovered, production cuts caused by the semiconductor shortage, rising raw material prices and temporary air freight costs associated with material procurement in North America limited the improvement in the loss to ¥839 million year on year. The Company therefore posted a loss of ¥219 million, compared with an operating loss of ¥1,059 million in the same period of the previous year.」

「Multiple suppliers have been secured to address supplier supply risks, and in emergencies material from 三菱製鋼室蘭特殊鋼㈱ can be used.」

「At the North American subsidiary, from the first half of the fiscal year, production disruption occurred as material procurement became constrained amid higher material costs caused by rising market prices and the impact of additional tariffs resulting from US and Canadian restrictions on steel imports. In response, the Company pursued measures including applications for tariff exclusions, negotiations to reflect the increases in product selling prices, expansion of material suppliers and dispatch of a support team to improve production. Although signs of improvement emerged, the effects remained very limited, resulting in an operating loss of ¥714 million, a year-on-year deterioration of ¥1,573 million.」