Fluctuations in Raw Material and Crude Oil Prices

「In addition to lower sales of housing equipment and other products, the substantial increase in procurement prices, including for raw materials, is expected to result in performance below the initial forecast.」

「Because procurement of raw materials, components and other items is affected by international political and economic developments, commodity market conditions and exchange-rate fluctuations, the Group recognises that the risk of these fluctuations materialising and causing higher procurement costs or procurement constraints has increased compared with previously.」

「In terms of profit, although housing equipment performed steadily, lower selling prices and volumes for air-conditioning and home appliances, as well as increases in purchasing prices for raw materials and other items and in selling, general and administrative expenses such as personnel and logistics costs, resulted in an operating loss of ¥599 million, compared with operating profit of ¥38 million in the previous interim consolidated accounting period, an ordinary loss of ¥364 million, compared with ordinary profit of ¥203 million, and an interim net loss attributable to owners of the parent of ¥259 million, compared with interim net profit attributable to owners of the parent of ¥142 million.」

「Although the company proceeded with cost reduction and productivity improvement initiatives, higher raw material prices and changes in the product sales mix caused the cost of sales ratio to rise by 0.4 percentage points from the previous period to 78.4%.」

「During the current interim consolidated accounting period, Japan's economy saw a gradual improvement in employment and income conditions, while the effects of persistently high raw material and energy prices and rising prices on economic activity and people's lives continued.」

「In terms of earnings, operating income was ¥2,472 million, down 16.6% year on year, ordinary income was ¥2,822 million, down 13.9%, and quarterly net income attributable to owners of the parent was ¥2,045 million, down 11.8%, due to higher raw material and energy prices and lower sales of residential, air-conditioning, and home appliance equipment.」

「In terms of earnings, operating loss was ¥181 million (operating income of ¥390 million in the same quarter of the previous year), ordinary income was ¥23 million, down 96.0% year on year, and quarterly net income attributable to owners of the parent was ¥16 million, down 96.0%, due to soaring raw material and energy prices and lower sales of residential, air-conditioning, and home appliance equipment.」

「In terms of earnings, operating loss was ¥359 million (operating loss of ¥129 million in the same quarter of the previous year), ordinary loss was ¥257 million (ordinary loss of ¥27 million in the same quarter of the previous year), and quarterly net loss attributable to owners of the parent was ¥212 million (quarterly net loss attributable to owners of the parent of ¥50 million in the same quarter of the previous year), due to soaring raw material and energy prices and lower sales of air-conditioning, home appliance, and residential equipment.」

「The cost of sales ratio rose by 0.1 percentage points from the previous fiscal year to 78.0% due to soaring raw material prices and other factors.」

「In terms of earnings, operating income was ¥390 million, up 280.0% year on year, ordinary income was ¥601 million, up 120.7%, and quarterly net income attributable to owners of the parent was ¥410 million, up 110.9%, helped by strong sales of residential equipment, the pass-through of soaring raw material prices into product prices, and expense reduction efforts.」

「As a result, net sales for the first quarter of the current consolidated cumulative period amounted to ¥19,319 million, up 6.9% year on year. In terms of profit, although soaring raw material prices and other factors had an impact, strong sales of housing equipment and other factors resulted in an operating loss of ¥129 million, compared with an operating loss of ¥252 million in the same quarter of the previous year, an ordinary loss of ¥27 million, compared with an ordinary loss of ¥167 million, and a quarterly net loss attributable to owners of the parent of ¥50 million, compared with a quarterly net loss attributable to owners of the parent of ¥145 million.」

「Although the company worked to reduce expenses on a group-wide basis, soaring raw material prices and other factors caused the cost of sales ratio to rise by 0.8 percentage points from the previous period to 77.9%.」

「In terms of earnings, although the company pursued company-wide expense cuts, operating income was ¥1,952 million, down 3.6% year on year, and ordinary income was ¥2,231 million, down 3.3%, due to soaring raw material prices and lower sales of heating, air-conditioning, and home appliance equipment.」

「In terms of profit, the company was affected by soaring raw material prices and shortages of electronic components worldwide, among other factors, but」

「As a result, net sales for the first quarter of the current consolidated cumulative period amounted to ¥18,079 million, down 10.9% year on year. In terms of profit, although higher raw material prices and other factors had an impact, strong sales of housing equipment and other factors resulted in an operating loss of ¥252 million, compared with an operating loss of ¥321 million in the same quarter of the previous year, an ordinary loss of ¥167 million, compared with an ordinary loss of ¥229 million, and a quarterly net loss attributable to owners of the parent of ¥145 million, compared with a quarterly net loss attributable to owners of the parent of ¥473 million.」

「The company is working to minimise the impact of price fluctuations through measures such as planned procurement of raw materials and reviews of material specifications. However, if fluctuations in raw material and crude oil prices become significant, they may affect the Group's business, results of operations and financial position.」

「During the cumulative third quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that management recognizes could materially affect the financial position, operating results and cash flows of the consolidated companies, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」

「During the three-month period ended 30 June, there were no new risks that management recognizes as having the potential to materially affect the financial position, operating results or cash flows of the consolidated companies, and no material changes to the business risks described in the annual securities report for the previous fiscal year.」

「Although the company pursued production cost reductions and company-wide expense cuts, the cost of sales ratio rose by 0.3 percentage points from the previous fiscal year to 76.5% due to higher component prices for heating equipment and increased depreciation associated with capital investments.」

「During the cumulative third quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that could materially affect investors’ decisions, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」

「Although the company pursued thorough cost reduction, including production cost reduction activities, the cost of sales ratio rose by 1.5 percentage points from the previous fiscal year to 76.2% due to higher raw material prices and increased depreciation associated with dies and capital investments.」

「In terms of earnings, although the company pursued production cost reductions and company-wide expense cuts, operating income was ¥3,137 million, down 22.4% year on year, ordinary income was ¥3,390 million, down 20.6%, and quarterly net income attributable to owners of the parent was ¥2,388 million, down 22.6%, due to higher raw material prices, logistics costs, and depreciation associated with dies and capital investments.」

「In terms of earnings, although the company pursued production cost reductions and company-wide expense cuts, operating income was ¥407 million, down 42.4% year on year, ordinary income was ¥560 million, down 32.3%, and quarterly net income attributable to owners of the parent was ¥384 million, down 40.4%, due to higher raw material prices, logistics costs, and depreciation associated with dies and capital investments.」

「As a result, net sales for the first quarter of the current consolidated cumulative period amounted to ¥17,679 million, up 2.2% year on year. In terms of profit, despite efforts to reduce costs and company-wide expenses, the impact of higher raw material prices and other factors resulted in an operating loss of ¥430 million, compared with an operating loss of ¥219 million in the same quarter of the previous year, an ordinary loss of ¥341 million, compared with an ordinary loss of ¥145 million, and a quarterly net loss attributable to owners of the parent of ¥270 million, compared with a quarterly net loss attributable to owners of the parent of ¥115 million.」

「Although the company was affected by higher raw material prices, the cost of sales ratio improved by 0.4 percentage points from the previous fiscal year to 74.7% as a result of introducing rationalized production equipment, improving productivity through work improvements, and pursuing thorough cost reduction, including production cost reduction activities.」

「During the cumulative third quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that could materially affect investors’ decisions, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」

「During the cumulative second quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that could materially affect investors’ decisions, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」

「During the first quarter of the current consolidated cumulative period, there were no occurrences of matters that could materially affect investors’ investment decisions among the matters relating to the business and financial position described in this quarterly report, nor were there any material changes to the “Business and Other Risks” described in the annual securities report for the previous fiscal year.」

「The company is working to minimise the impact of price fluctuations through measures such as planned procurement of raw materials and reviews of material specifications. However, if fluctuations in raw material and crude oil prices become significant, they may affect the Group's business, results of operations and financial position.」

「During the cumulative third quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that could materially affect investors’ decisions, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」

「During the cumulative second quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that could materially affect investors’ decisions, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」

「The Group is working to minimise the impact of price fluctuations through measures such as planned procurement of raw materials and reviews of material specifications. However, if fluctuations in raw material and crude oil prices become significant, they may affect the Group's business, results of operations and financial position.」