Impact of Natural and Accidental Disasters on Production and Sales Activities

「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 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 first quarter of the current fiscal year, the global economy continued to face an uncertain outlook. While economic normalization from the COVID-19 pandemic progressed as countries' living-with-COVID policies took hold, concerns about an economic slowdown in Europe and the United States persisted against a backdrop of the prolonged situation in Ukraine, soaring resource prices and prolonged monetary tightening.」

「The company recorded ¥101 million and other COVID-19-related losses at a Chinese subsidiary as extraordinary losses」

「At a consolidated subsidiary in the Group's East Asia segment, temporary suspension of factory operations was implemented in connection with the Shanghai lockdown imposed by the Chinese government and local authorities to prevent the spread of COVID-19. Accordingly, manufacturing fixed costs incurred during the suspension, including personnel expenses, depreciation and rent, were recorded as extraordinary losses related to COVID-19.」

「In East Asia, orders related to lithium-ion batteries for electric vehicles (EVs) and lenses for smartphones and VR devices remained firm. However, in addition to longer lead times for molding machines and peripheral equipment due to semiconductor shortages and other factors, logistics disruptions and lower factory utilization from the latter half of the first quarter, resulting from China's zero-COVID policy, caused sales to fall to ¥979 million, down ¥409 million, or 29.5%, year on year.」

「Due to the impact of the lockdown in Shanghai, China, 川田機械製造(上海)有限公司, a subsidiary, suspended its activities for a certain period. Following the lifting of the lockdown, it has now resumed operations.」

「In Southeast Asia, the economic recovery was delayed by the spread of COVID-19 associated with the emergence of variants and other factors, although signs of a recovery in capital investment were seen in some areas. Sales were ¥833 million, up ¥115 million, or 16.0%, year on year.」

「In Southeast Asia, although restrictions on economic activity continued in Indonesia as the spread of COVID-19 remained unchecked, signs of a recovery in capital investment were seen in other Southeast Asian countries. As a result, sales were ¥418 million, up ¥50 million, or 13.7%, year on year.」

「In Southeast Asia, in addition to the decline in appetite for capital investment, primarily in the automotive sector in Thailand and Indonesia, which had continued since the second half of the previous fiscal year, the spread of COVID-19 continued in many areas. As a result, sales were ¥1,424 million, down ¥985 million, or 40.9%, year on year.」

「In East Asia, although economic activity in China resumed as the spread of COVID-19 subsided following the prolonged U.S.-China trade friction, private-sector capital investment had not yet recovered. As a result, sales were ¥2,446 million, down ¥618 million, or 20.2%, year on year.」

「In East Asia, revenue declined by ¥780 million year on year, or 40.0%, to ¥1,169 million, owing largely to the impact of prolonged US-China trade friction and restrictions on economic activity in China associated with the spread of COVID-19.」

「If a natural disaster such as an earthquake or typhoon, or an accidental disaster such as a fire, occurs, or if a serious infectious disease spreads, it may directly or indirectly affect the Group's production and sales activities, potentially worsening its earnings and financial position.」

「During the cumulative second-quarter consolidated period, there were no significant changes in the matters described in the quarterly report concerning business conditions and financial information that could materially affect investors’ decisions, or in the business risks described in the securities report for the previous fiscal year.」

「During the cumulative first-quarter consolidated period, there were no material changes in matters described in this quarterly report concerning the status of the business, financial information and other matters that could materially affect investors' decisions, or in the business and other risks described in the annual securities report for the previous fiscal year.」

「During the cumulative second-quarter consolidated period, there were no significant changes in the matters described in the quarterly report concerning business conditions and financial information that could materially affect investors’ decisions, or in the business risks described in the securities report for the previous fiscal year.」

「During the cumulative first-quarter consolidated period, there were no material changes in matters described in this quarterly report concerning the status of the business, financial information and other matters that could materially affect investors' decisions, or in the business and other risks described in the annual securities report for the previous fiscal year.」

「If a natural disaster such as an earthquake or typhoon, or an accidental disaster such as a fire, occurs, it may directly or indirectly affect the Group's production and sales activities, potentially worsening its earnings and financial position.」

「During the cumulative first-quarter consolidated period, there were no material changes in matters described in this quarterly report concerning the status of the business, financial information and other matters that could materially affect investors' decisions, or in the business and other risks described in the annual securities report for the previous fiscal year.」

「If a natural disaster such as an earthquake or typhoon, or an accidental disaster such as a fire, occurs, it may directly or indirectly affect the Group's production and sales activities, potentially worsening its earnings and financial position.」

「During the cumulative third-quarter consolidated period, there were no material changes in matters described in this quarterly report concerning the status of the business, financial information and other matters that could materially affect investors' decisions, or in the business and other risks described in the annual securities report for the previous fiscal year.」

「During the cumulative second-quarter consolidated period, there were no significant changes in the matters described in the quarterly report concerning business conditions and financial information that could materially affect investors’ decisions, or in the business risks described in the securities report for the previous fiscal year.」

「If a natural disaster such as an earthquake or typhoon, or an accidental disaster such as a fire, occurs, it may directly or indirectly affect the Group's production and sales activities, potentially worsening its earnings and financial position.」