Higher production costs and lower production efficiency caused by soaring component prices and procurement delays

「Procured items used in the products of our Group, including semiconductors, electrical components and materials, may be subject to delivery delays and price increases due to the global supply-demand balance, energy prices, foreign exchange rates and other factors. We are working to mitigate these risks by securing multiple procurement sources and using alternative procured items.」

「Although demand related to EVs, renewable energy and improvements in labor productivity was expanding against a backdrop of accelerating global efforts to address social issues such as decarbonization, conditions remained challenging due in part to persistently high material and energy prices and economic stagnation in China, the United States and elsewhere.」

「Although demand related to EVs, renewable energy and improvements in labor productivity was expanding against a backdrop of accelerating global efforts to address social issues such as decarbonization, conditions remained challenging due in part to persistently high material and energy prices and economic stagnation in China, the United States and elsewhere.」

「The economic environment surrounding the group remained challenging due to persistently high component and energy prices and the impact of economic weakness in China, the United States and elsewhere.」

「Supply chain disruptions, including tight supply and demand for components and higher energy prices, continued due to the impact of COVID-19 and Russia's invasion of Ukraine. In addition, the stagnation of economic activity in China and inflation and monetary tightening in the United States and other countries caused the economy to show increasingly clear signs of slowing toward the latter half of the cumulative third quarter of the current consolidated fiscal year.」

「In addition to the impact of COVID-19, lockdowns in China and Russia's invasion of Ukraine, further supply chain disruptions, including tight supply and demand for components and higher energy prices, have occurred, and the outlook remains uncertain.」

「During the three-month period ended the first quarter, the global economy maintained a recovery trend, led by developed countries such as the United States. However, the effects of COVID-19, lockdowns in China and Russia's invasion of Ukraine caused further supply chain disruptions, including tight supply and demand for components and surging energy prices, further increasing uncertainty over the outlook.」

「During the nine-month period ended the third quarter, the global economy remained on a recovery trend, led by developed countries such as the United States, but the pace of recovery slowed in the latter half of the period due to China's stalled recovery, the renewed spread of COVID-19 and supply chain disruptions caused by a sharp increase in demand.」

「During the three-month period ended the first quarter, the global economy generally remained on a recovery trend, led by China and the United States. Japan's economy also continued to show signs of recovery in exports and production. However, the outlook became uncertain due to supply chain disruptions caused by the renewed spread of COVID-19 and a sharp increase in demand.」

「Operating income was ¥3,529 million, down 8.0% from the previous consolidated fiscal year, due mainly to the increase in research and development expenses and the recognition of an allowance for doubtful accounts based on the collection status of accounts receivable related to overseas projects.」

「Operating profit totaled ¥3.834 billion, down 17.4% from the previous consolidated fiscal year, due to adjustments to the sales timing of certain large products, a deterioration in the cost ratio from higher component prices, continued delays in procuring components, and initial efficiency losses associated with relocating production sites.」

「In addition to adjustments to the sales timing of certain large products, a deterioration in the cost ratio due to higher component prices, and lower production efficiency caused by delays in procuring components, higher costs to establish the production system resulted in operating profit of ¥1.619 billion, down 8.1% year on year.」

「As for profit and loss, operating loss was ¥324 million, compared with an operating loss of ¥152 million in the same period of the previous year, due to deterioration in the cost ratio resulting from higher component prices and deterioration in production efficiency caused by delays in procuring components, among other factors.」