Reforming the Profitability of the Domestic Business

「Looking at recent business performance, sales in Japan exceeded the results for the same period of the previous year for the second consecutive quarter, partly due to a recovery in orders as the effects of rebuilding the sales structure began to emerge. Domestic sales were ¥6,125 million, up 14.9% year on year.」

「In Japan, revenue fell below the previous year due to the ongoing rebuilding of the sales structure following the management rationalization in October 2023 and the effects of sluggish personal consumption caused by higher prices.」

「In Japan, revenue fell below the same period of the previous year because the effects continued of more employees than anticipated leaving after the management rationalization in October 2023 who were not eligible for early voluntary retirement, while rebuilding the operating framework, including recruitment and training, still requires more time, and sluggish personal consumption due to higher prices also continued.」

「In terms of profits, operating profit was ¥692 million, up 32.7% year on year, due to the effects of management rationalization implemented in fiscal 2023 and other factors.」

「Under this plan, which identifies the “restructuring of the domestic business” and “growth in overseas operations” as key management priorities, the company pursued management rationalization in Japan as part of its business structure reform, including dissolving consolidated subsidiary Pintech and recruiting applicants for voluntary retirement in Japan.」

「In terms of profit, operating profit was ¥934 million, down 55.2% year on year, due to deterioration in plant utilization resulting from lower revenue in China and Japan, higher energy costs and other factors.」

「Under “VC2024 Revival,” the company set “restructuring the domestic business” as its top-priority initiative, with a policy of specializing further in high-value-added made-to-order products to achieve sustained profit growth, and will consolidate and close production and sales sites. In September 2023, the company also carried out management rationalization, including recruitment of voluntary retirees and dissolution of consolidated subsidiaries.」

「Under “VC2024 Revival,” the company decided to pursue management rationalization, including the consolidation and closure of production and sales sites, recruitment of voluntary retirees, and dissolution of consolidated subsidiaries, with “restructuring the domestic business” as its top-priority initiative and a policy of specializing further in high-value-added made-to-order products to achieve sustained profit growth.」

「Due to the impact of higher sales, an improved cost ratio resulting from higher plant utilization, and lower depreciation and amortization expenses following the recognition of impairment losses in previous fiscal years, operating profit was ¥3,041 million, up 88.5% from the previous fiscal year; ordinary profit was ¥3,007 million, up 79.4%; and net income attributable to owners of the parent was ¥2,040 million, up 327.2%. As a result, the company posted record-high profit since listing.」

「In terms of profits, although selling, general and administrative expenses increased in line with higher sales, operating profit was ¥2,570 million, up 175.5% year on year; ordinary profit was ¥2,543 million, up 153.0%; and net income attributable to owners of the parent was ¥1,778 million, compared with a net loss attributable to owners of the parent of ¥80 million in the same period of the previous year. This reflected the impact of higher sales, an improved cost ratio resulting from higher plant utilization, and lower depreciation and amortization expenses following the recognition of impairment losses in previous fiscal years. As a result, the company again posted record-high profit since listing for the nine-month cumulative consolidated period, following the second quarter.」

「Although selling, general and administrative expenses increased in line with sales, the effects of higher sales, improved cost ratios resulting from better factory utilization and lower depreciation following impairment losses recorded in prior fiscal years contributed to operating income of ¥1,768 million (up 464.7% year on year), ordinary income of ¥1,736 million (up 365.7%), and quarterly net income attributable to owners of the parent of ¥1,258 million, compared with a quarterly net loss attributable to owners of the parent of ¥544 million in the same period of the previous year. This represented the highest profit since listing for the six-month period of the second quarter of the consolidated fiscal year.」

「In terms of profit, selling, general and administrative expenses rose in line with the increase in revenue, but the effect of higher revenue, an improved cost ratio resulting from better plant utilization, and lower depreciation following impairment losses recognized in prior years contributed to operating profit of ¥796 million, compared with ¥24 million in the same period of the previous year, ordinary profit of ¥761 million, compared with ¥6 million, and net income attributable to owners of the parent of ¥526 million, compared with a net loss attributable to owners of the parent of ¥76 million.」

「In terms of profit, although revenue declined substantially, operating profit increased to ¥932 million, up 286.0% year on year, and ordinary profit increased to ¥1,005 million, up 443.5% year on year, due to lower depreciation following the impairment loss recognized in the previous consolidated fiscal year and the group's efforts to reduce expenses. Mainly due to the impairment loss recognized at domestic plants and other facilities in the second quarter, the quarterly net loss attributable to owners of the parent was ¥80 million, compared with a quarterly net loss attributable to owners of the parent of ¥2,713 million in the same period of the previous year.」

「In terms of profits, although sales declined significantly from the same period of the previous year, operating profit was ¥313 million, up 290.5% year on year, and ordinary profit was ¥372 million, compared with ordinary profit of ¥2 million in the same period of the previous year, due to lower depreciation and amortization expenses following the recognition of impairment losses in the previous consolidated fiscal year and company-wide cost-cutting efforts.」

「In terms of profit, although lower sales reduced profit, the company reduced selling, general and administrative expenses through group-wide expense reductions, while depreciation and amortization also declined following the recognition of impairment losses in the previous fiscal year. Operating profit was ¥24 million, compared with an operating loss of ¥29 million in the same period of the previous year, and ordinary profit was ¥6 million, compared with an ordinary loss of ¥90 million.」

「In terms of profits, the group as a whole worked to reduce expenses, and selling, general and administrative expenses declined from the same period of the previous year. However, due to a higher cost ratio resulting from an overall deterioration in plant operating conditions accompanying lower orders, operating profit was ¥241 million, down 88.9% year on year, and ordinary profit was ¥184 million, down 91.4%. In addition, the company recorded impairment losses at 2 domestic plants as extraordinary losses and reversed deferred tax assets, resulting in a quarterly net loss attributable to owners of the parent of ¥2,713 million, compared with net income attributable to owners of the parent of ¥1,583 million in the same quarter of the previous year.」

「In terms of profits, the group as a whole worked to reduce expenses, and selling, general and administrative expenses declined from the same period of the previous year. However, due to a higher cost ratio resulting from an overall deterioration in plant operating conditions accompanying lower orders, operating profit was ¥80 million, down 94.2% year on year, and ordinary profit was ¥2 million, down 99.8%. The company posted a quarterly net loss attributable to owners of the parent of ¥121 million, compared with net income attributable to owners of the parent of ¥1,005 million in the same quarter of the previous year.」

「In terms of profits, the group as a whole worked to reduce expenses, and selling, general and administrative expenses declined from the same period of the previous year. However, due to a higher cost ratio resulting from an overall deterioration in plant operating conditions accompanying lower orders, the operating loss was ¥29 million, compared with operating profit of ¥714 million in the same quarter of the previous year. The ordinary loss was ¥90 million, compared with ordinary profit of ¥682 million in the same quarter of the previous year, and the net loss attributable to owners of the parent was ¥126 million, compared with net income attributable to owners of the parent of ¥511 million in the same quarter of the previous year.」

「Operating profit was ¥2,578 million, down 9.3% from the previous fiscal year, due to a higher cost ratio resulting from an overall deterioration in plant operating conditions accompanying lower orders, increased depreciation and other expenses resulting from research and development investment, and higher upfront investment costs at the plants.」

「In terms of profit, although the cost ratio improved, selling, general and administrative expenses increased due to depreciation of capital investment and R&D investment associated with the expansion of the digital engineering business, while the cost ratio was also pushed up by the increased burden of upfront investment in plants and other factors. Operating profit was ¥2,181 million, down 2.0% year on year, and ordinary profit was ¥2,158 million, down 1.1%. Profit for the quarter attributable to owners of the parent was ¥1,583 million, up 15.9%, due mainly to a decrease in losses on the disposal and sale of fixed assets.」

「In terms of profit, selling, general and administrative expenses increased due to depreciation of capital investment and R&D investment associated with the expansion of the digital engineering business, while the cost ratio rose due to the increased burden of upfront investment in plants and other factors. Operating profit was ¥1,374 million, down 2.2% year on year.」

「In terms of profit, although SG&A expenses increased due to depreciation and amortization on capital expenditure and R&D investment associated with the expansion of the digital engineering business, operating profit increased with higher sales and an improved cost of sales ratio resulting from higher factory utilization, reaching ¥714 million, up 2.0% year on year.」

「In terms of profit, although selling, general and administrative expenses increased due to capital investment, R&D investment and other expenses associated with the expansion of the reverse-engineering business, operating profit increased on higher sales and an improvement in the cost ratio resulting from higher plant utilisation. Operating profit was ¥2,225 million, up 58.3% year on year; ordinary profit was ¥2,182 million, up 62.8%; and profit for the quarter attributable to owners of the parent was ¥1,366 million, up 50.3%.」

「In terms of profit, although selling, general and administrative expenses increased due to capital investment and R&D investment associated with the expansion of the reverse engineering business, operating profit increased as a result of higher sales and improved the cost ratio due to higher plant utilization. Operating profit was ¥1,404 million, up 67.0% year on year; ordinary profit was ¥1,398 million, up 76.6%; and net profit for the quarter attributable to owners of the parent was ¥921 million, up 67.6%.」

「In terms of profits, although selling, general and administrative expenses increased due to research and development investment and investment in employee training accompanying the launch of Punch Academy, operating profit increased on higher sales and an improved cost ratio resulting from higher plant utilization. Operating profit was ¥701 million, up 111.7% year on year; ordinary profit was ¥711 million, up 115.4%; and net income attributable to owners of the parent was ¥422 million, up 103.5%.」

「We will continue to make active capital investments, including the reorganization of the production structure centered on the Vietnam factory, automation and the shift to higher value-added production at existing production bases, and R&D for the future.」

「In domestic processes as well, the Group will continue efforts to reduce costs through labor saving, automation, and shorter processing times, while further refining its precision machining capabilities and expanding its adoption of high-value-added products.」