Impact of COVID-19 on Operations, Supply Chains and Demand

「Our group has implemented risk diversification, measures to ensure employee safety and measures to prevent disasters and infectious diseases in preparation for situations requiring production stoppages due to natural disasters such as earthquakes and typhoons or outbreaks of infectious diseases such as viruses.」

「Although movement of people recovered following the reclassification of COVID-19 as a Class 5 disease, consumption failed to grow and results fell below the previous year due to consumers refraining from purchases following successive price increases for daily necessities and a decline in stay-at-home demand.」

「In the domestic economy, restrictions related to COVID-19 were gradually eased from the second half of 2022, and the movement of people became more active in the transition to the post-COVID era, with the weaker yen also contributing to a substantial increase in foreign tourists.」

「During the cumulative third quarter under review, sales increased, particularly in the mineral water and sports drink categories, due to the recovery in foot traffic following the easing of various activity restrictions and the exceptionally hot weather from late June onward, resulting in performance above the previous year.」

「Sales increased, particularly in the mineral water and sports drink categories, due to the recovery in foot traffic following the easing of various activity restrictions, as well as the early end of the rainy season and exceptionally hot weather. Although rainy weather continued from mid-July onward due to weather fronts and typhoons, and there was a resurgence of the Omicron variant, the result for the cumulative second quarter under review as a whole was above the previous year.」

「Sales increased, particularly in the mineral water and unsweetened tea beverage categories, due to the recovery in foot traffic following the lifting of priority preventive measures and the early end of the rainy season, as well as the exceptionally hot weather, resulting in performance above the previous year.」

「In addition to the emergence of geopolitical risks, soaring raw material prices and energy costs, and the rapid depreciation of the yen, the economy remained in a difficult situation, with signs of stagnation in the recovery of capital investment and corporate production activity.」

「During the cumulative third quarter under review, all categories remained firm due to the rebound from the sharp sales decline caused by requests to refrain from going out during the previous year's state of emergency, resulting in performance above the previous year.」

「During the cumulative second quarter under review, all categories remained firm due to the rebound from the sharp sales decline caused by requests to refrain from going out during the previous year's state of emergency. However, the prolonged state of emergency and the effects of persistent rain across the country in summer meant that results were only slightly above the previous year.」

「In Indonesia, PT.HOKKAN DELTAPACK INDUSTRI（ホッカン・デルタパック・インダストリ社） achieved higher results than in the previous year as demand recovered from the previous year's decline. PT.HOKKAN INDONESIA（ホッカン・インドネシア社） also achieved higher results than in the previous year as orders from major customers remained strong. In Vietnam, NIHON CANPACK(VIETNAM)CO.,LTD.（日本キャンパック・ベトナム社） reported lower results than in the previous year due to tighter restrictions in the country related to COVID-19.」

「Under these conditions, our group worked to ensure stable operations, expand sales channels by developing new customers and reduce fixed costs, with employee safety as its first priority. However, due to the disappearance of inbound demand, a substantial decline in tourism-related demand and the spread of behaviors avoiding going out, such as telework, the group's consolidated revenue for the fiscal year was ¥109,367 million, down 14.4% from the previous fiscal year.」

「During the cumulative third quarter under review, personal consumption declined due to restrictions on activities, including requests to refrain from going out, resulting in an overall decline below the previous year, including in categories such as mineral water and unsweetened tea beverages.」

「Regarding conditions in the soft drinks industry during the six months ended the second quarter, sales at vending machines and convenience stores declined sharply due to the impact of travel, events and other restrictions on going out. Sales were also affected by heavy rainfall in the first half of the summer, resulting in a decline from the previous year. Under these conditions, the group's business performance for the six months ended the second quarter reflected a substantial overall decline in sales, in line with trends in the industry, despite increased household consumption driven by stay-at-home demand. Revenue was ¥55,256 million, down 18.7% year on year, operating profit was ¥931 million, down 81.2%, ordinary profit was ¥1,543 million, down 51.2%, and profit attributable to owners of the parent was ¥921 million, down 50.8%.」

「Sales at vending machines and convenience stores declined sharply due in part to the impact of COVID-19, resulting in an overall decline from the previous year, including in categories such as unsweetened tea beverages and coffee beverages.」

「The global spread of COVID-19, which became evident at the beginning of 2020, continues worldwide. To prevent further spread, our group has implemented thorough hygiene controls and efficient operating measures, including staggered working hours and telework. However, if the infection spreads further, the group's operations and business performance may be affected by production stoppages caused by employee infections and supply chain disruptions.」