Risk of Margin Decline Due to Rising Raw Material Prices

「Regarding the crude oil issue associated with the deteriorating situation in the Middle East, we will continue to make every effort to ensure a stable supply of products, including diversifying procurement sources and securing inventories, and will work to minimize the impact. However, if a global supply disruption or severe shortages in the market occur, it may become difficult to secure raw materials reliably, potentially forcing us to suspend production or delaying product deliveries.」

「Although the Japan–U.S. tariff negotiations reached a certain agreement, market conditions have become more uncertain due to higher tariffs on steel and aluminum, as well as persistently high energy and raw material prices.」

「In Japan, although resource prices remained high, the gross profit margin improved by 5.2 percentage points, from 22.4% in the previous fiscal year to 27.6% in the current fiscal year, due to the effects of price adjustments implemented in the previous fiscal year, improved production efficiency and a decline in large-scale projects.」

「In Japan, the gross profit margin deteriorated from 24.0% to 22.4% due to persistently high resource prices and changes in the product mix associated with an increase in large-scale orders. Although selling, general and administrative expenses also increased, operating profit rose by ¥355 million year on year, or 53.3%, to ¥1,021 million, as the increase in gross profit resulting from higher sales more than offset these factors.」

「In Japan, sales increased by ¥2,811 million year on year, or 31.6%, to ¥11,700 million, owing in part to continued firm sales related to lithium-ion batteries for EVs and the recording of sales from large film and sheet-related projects ordered in the previous fiscal year. In terms of earnings, the gross profit margin deteriorated from 23.9% to 21.3% due to persistently high resource prices and changes in the product mix associated with an increase in large-scale orders. Although selling, general and administrative expenses also increased, operating profit rose by ¥185 million, or 48.1%, to ¥571 million, as the increase in gross profit resulting from higher sales more than offset these factors.」

「In Japan, the gross profit margin deteriorated from 24.5% to 21.0% due to rising resource prices and changes in the product mix associated with an increase in large-scale orders. Although selling, general and administrative expenses also increased, operating profit rose by ¥213 million year on year, or 99.5%, to ¥427 million, as the increase in gross profit resulting from higher sales more than offset these factors.」

「In Japan, sales increased by ¥1,030 million year on year, or 40.7%, to ¥3,561 million, owing in part to continued firm sales related to lithium-ion batteries for EVs. In terms of earnings, the gross profit margin deteriorated from 26.0% to 20.3% due to rising resource prices and changes in the product mix associated with an increase in large-scale orders. Although selling, general and administrative expenses also increased, operating profit rose by ¥16 million, or 18.5%, to ¥108 million.」

「In Japan, sales increased by ¥1,757 million year on year, or 15.8%, to ¥12,847 million, owing in part to continued firm orders related to lithium-ion batteries for EVs. In terms of earnings, the gross profit margin deteriorated from 26.2% to 24.0% due in part to soaring resource prices, and operating profit declined by ¥2 million, or 0.3%, to ¥666 million, as this was not enough to absorb the increase in selling, general and administrative expenses.」

「In Japan, sales increased by ¥969 million year on year, or 12.2%, to ¥8,889 million, owing in part to continued firm orders related to lithium-ion batteries for EVs. In terms of earnings, the gross profit margin deteriorated from 27.3% to 23.9% due in part to soaring resource prices, and operating profit declined by ¥165 million, or 30.1%, to ¥385 million, as this was not enough to absorb the increase in selling, general and administrative expenses. Segment profit (ordinary profit) declined by ¥22 million, or 3.5%, to ¥636 million.」

「In Japan, sales increased by ¥509 million year on year, or 10.0%, to ¥5,596 million, owing in part to firm orders centered on daily necessities, containers and logistics-related products, new materials and food sheets, as well as firm orders related to lithium-ion batteries for EVs. In terms of earnings, the gross profit margin deteriorated from 26.0% to 24.5% due in part to soaring resource prices, and operating profit declined by ¥51 million, or 19.4%, to ¥214 million, as this was not enough to absorb the increase in selling, general and administrative expenses.」

「The Japanese economy remains on a recovery trend as the spread of vaccinations and progress with policies for living with COVID-19 have led to the easing of various restrictions. However, the outlook remains uncertain due to downward pressure on the economy from the prolonged semiconductor shortage, rising resource prices and inflation associated with yen depreciation.」

「Production adjustments due to the semiconductor shortage, soaring crude oil and raw material prices, and the ongoing confrontation between China and Russia and Western countries in the international community are also expected to continue for the time being.」

「The global economy remains clouded by uncertainty over the outlook due to the rapid spread of the Omicron variant of COVID-19, the prolonged U.S.–China trade tensions, the global semiconductor shortage and rising resource prices.」

「Some raw materials used in the Group's products, including steel materials, are affected by market conditions. If raw material prices rise by more than can be offset by various cost-reduction measures, the Group will endeavor, where possible, to pass the increase on through sales prices. However, if it is unable to pass on the increase sufficiently, profit margins may decline.」

「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 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.」

「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.」

「Some raw materials used in the Group's products, including steel materials, are affected by market conditions. If raw material prices rise by more than can be offset by various cost-reduction measures, the Group will endeavor, where possible, to pass the increase on through sales prices. However, if it is unable to pass on the increase sufficiently, profit margins may decline.」

「In terms of earnings, we worked to reduce costs, primarily material costs, and cut various expenses, but」

「Some raw materials used in the Group's products, including steel materials, are affected by market conditions. The Group is implementing various cost-reduction measures, but if raw material prices rise by more than these measures can offset, profit margins may decline.」

「In terms of earnings, we worked to reduce costs, primarily material costs, and cut various expenses, but the impact of the decline in gross profit resulting from lower sales was significant,」

「In terms of earnings, we worked to reduce costs, primarily material costs, and cut various expenses, but the impact of the decline in gross profit resulting from lower sales was significant,」

「Some raw materials used in the Group's products, including steel materials, are affected by market conditions. The Group is implementing various cost-reduction measures, but if raw material prices rise by more than these measures can offset, profit margins may decline.」