Downside Risk from Supply Constraints on Semiconductors and Other Products and Soaring Resource Prices

「While the Chinese and European economies remained sluggish, the global economy followed a moderate growth path overall, led by the resilient US economy, but」

「The global economy during the current consolidated fiscal year is generally on a moderate growth path, led by the resilient US economy as supply constraints improve, but」

「The global economy during the nine months ended the third quarter of the current fiscal year is generally on a moderate recovery path as supply constraints for semiconductors and other products improve. However, monetary tightening in response to inflation is weighing on economic activity, while the slowdown in the European and Chinese economies is also exerting downward pressure.」

「The global economy during the six months ended the second quarter of the current fiscal year is generally on a moderate recovery path as normalization from the COVID-19 pandemic progresses and supply constraints for semiconductors and other products improve. However, monetary tightening in response to high inflation is weighing on economic activity, while the slowdown in the European and Chinese economies is also exerting downward pressure.」

「The global economy during the cumulative first quarter of the current consolidated fiscal year is generally on a recovery trend as normalization from the COVID-19 pandemic progresses and supply constraints for semiconductors and other products begin to improve. However, the prolongation of the Russia-Ukraine situation and monetary tightening associated with high inflation are weighing on economic activity, and downside risks cannot be ruled out due to concerns over geopolitical risks such as tensions between the United States and China.」

「In terms of profit, operating income was ¥994 million, down 29.0% year on year, and ordinary income was ¥1,152 million, down 24.4%, due to sales shortfalls resulting from the factors above, higher costs including raw materials, subcontracting and logistics, lower gross profit margins due to delayed sales of high-value-added press projects and services, and higher selling, general and administrative expenses.」

「In terms of profit, operating income was ¥716 million, down 10.3% year on year, ordinary income was ¥789 million, down 18.0%, and net income attributable to owners of the parent was ¥495 million, down 10.3%, due to sales shortfalls resulting from the factors above, higher costs including raw materials, subcontracting and logistics, lower gross profit margins due to delayed sales of high-value-added press projects and services, and higher selling, general and administrative expenses.」

「On the profit side, in addition to the sales shortfall resulting from the factors described above, operating loss was ¥121 million, compared with operating profit of ¥270 million in the same period of the previous year, due to higher costs for raw materials, outsourcing and logistics, a lower gross margin resulting from delayed sales of high-value-added press projects and services, and increased selling, general and administrative expenses. Ordinary loss was ¥117 million, compared with ordinary profit of ¥380 million in the same period of the previous year, and net loss attributable to owners of the parent was ¥175 million, compared with net income attributable to owners of the parent of ¥226 million in the same period of the previous year.」

「The global economy during the current consolidated fiscal year is in a recovery phase as economic normalization progresses from the sharp downturn in the previous fiscal year caused by the spread of COVID-19. However, growth has been slowing since the second half due to the effects of logistics disruptions, shortages of semiconductors and electronic components, higher energy and material prices, the Russia-Ukraine situation and other factors. Downside risks are increasing as these issues are expected to persist.」

「In terms of profit, operating income was ¥1,399 million, down 42.5% year on year, ordinary income was ¥1,525 million, down 37.6%, and net income attributable to owners of the parent was ¥859 million, down 30.0%, due to lower gross profit margins resulting from higher material costs, delayed sales of high-value-added projects caused by logistics bottlenecks, increased research and development expenses and other factors, as well as higher selling, general and administrative expenses.」

「Meanwhile, downside risks, including supply constraints for semiconductors and other products and higher resource prices, have also increased, and the situation remains unpredictable.」