Securing profits through improved production efficiency and quality control and cost reductions

「Segment profit (operating profit) was ¥674 million, up 500.7% year on year, driven by revised selling prices, a lower defect rate, cost-structure reforms and improved profitability at the Mexican subsidiary, among other factors.」

「Kitagawa Material Technology Company (metal products business): The Company's sales were ¥24,319 million, down 1.6% from the previous fiscal year. Domestic production remained firm on growing demand for automotive engine parts, but production volumes at the Mexican subsidiary declined due to the impact of production cuts by automakers stemming from the semiconductor shortage and lower demand for cast parts. Segment profit (operating profit), however, rose to ¥606 million, compared with a segment loss (operating loss) of ¥128 million in the previous fiscal year, as the Company improved fixed-cost efficiency through higher line utilization, pursued cost-structure reforms including yield improvements and process rationalization, and worked to improve the efficiency of indirect operations.」

「Segment profit was ¥112 million as we worked to secure profits through cost-reduction initiatives and selling-price revisions, compared with a segment loss (operating loss) of ¥242 million in the same period of the previous year.」

「The Company's sales were ¥24,725 million, down 17.0% year on year, due to lower sales following the closure of the Thailand plant and a decline in orders for automotive and agricultural machinery parts. Although profitability gradually improved through cost reduction initiatives and selling price revisions, the impact of lower order volumes was substantial, resulting in a segment loss (operating loss) of ¥128 million, compared with segment profit (operating profit) of ¥102 million in the previous fiscal year.」

「The Company's sales were ¥12,929 million, down 10.9% year on year, due to lower sales following the closure of the Thailand plant and a decline in orders for automotive and agricultural machinery parts. Although profitability gradually improved through cost reduction initiatives and selling price revisions, the impact of lower order volumes was substantial, resulting in a segment loss (operating loss) of ¥242 million, compared with segment profit (operating profit) of ¥205 million in the same period of the previous year.」

「Under these circumstances, the Company worked to secure earnings by advancing the pass-through of surging raw material and energy costs to selling prices and reducing production costs.」

「Under these circumstances, the Company worked to secure earnings by advancing the pass-through of surging raw material and energy costs to selling prices and reducing production costs.」

「In the first half of the fiscal year, the Company's sales were ¥14,503 million, up 11.0% year on year, as it passed on higher energy costs to selling prices, automotive parts sales recovered with the recovery in automakers' production volumes, and agricultural and construction machinery parts remained firm. Segment profit (operating profit) also improved with the increase in automotive parts sales, resulting in segment profit of ¥205 million, compared with a segment loss (operating loss) of ¥883 million in the same period of the previous year.」

「In the first quarter of the fiscal year, the Company's sales were ¥7,066 million, up 13.4% year on year, as sales of automotive parts increased with the recovery in automakers' production and sales of agricultural machinery parts also remained strong. Segment profit (operating profit) also improved with the increase in sales, resulting in segment profit of ¥122 million, compared with a segment loss (operating loss) of ¥370 million in the same quarter of the previous year.」

「As a result, consolidated sales for the fiscal year were ¥59,700 million for the Group as a whole, up 1.7% year on year, operating income was ¥194 million, down 90.7%, ordinary income was ¥1,034 million, down 66.2%, and net loss attributable to owners of the parent was ¥418 million, compared with a net loss attributable to owners of the parent of ¥951 million in the previous fiscal year.」

「Although we pursued these initiatives, production adjustments by automakers due to the semiconductor shortage and lockdowns in China prevented us from securing sufficient production volumes, increasing the fixed-cost burden. In addition, we were unable to fully pass on surging raw material and energy costs to selling prices, resulting in a significant year-on-year decline in operating income. As a result, the Company's sales were ¥19,496 million, down 1.4% year on year, and its segment loss (operating loss) was ¥1,713 million, compared with a segment loss (operating loss) of ¥268 million in the same quarter of the previous year.」

「Although the company pursued these initiatives, it was unable to secure sufficient production volume because automakers adjusted production in response to semiconductor shortages and lockdowns in China, increasing the burden of fixed costs. In addition, delays in passing higher raw material and energy costs through to product prices caused sales and operating profit to decline substantially year on year. As a result, sales for the company were ¥13,072 million, down 3.0% year on year, and the segment operating loss was ¥883 million, compared with segment operating profit of ¥125 million in the year-earlier period.」

「Against this backdrop, the company worked to improve earnings power by strengthening coordination among domestic and overseas production sites and improving productivity through automation, while considering ways to address business challenges, including identifying business opportunities and risks associated with the transition to a decarbonized society and developing high-value-added materials. Despite these initiatives, sales increased year on year, but profitability remained under pressure because automakers adjusted production in response to shortages of automotive parts and the company was slow to pass higher raw material costs through to selling prices. As a result, sales for the company were ¥19,769 million, up 22.5% year on year, and the segment operating loss was ¥268 million, compared with a segment operating loss of ¥997 million in the year-earlier period.」

「Against this backdrop, the company worked to improve earnings power by strengthening coordination among domestic and overseas production sites and improving productivity through automation, while considering ways to address business challenges, including identifying business opportunities and risks associated with the transition to a decarbonized society and developing high-value-added materials. Although sales of automotive parts fell short of the plan, sales of agricultural and construction machinery parts exceeded pre-COVID levels. As a result, sales for the company were ¥13,482 million, up 42.3% year on year, and segment operating profit was ¥125 million, compared with a segment operating loss of ¥1,207 million in the year-earlier period.」

「Under these circumstances, the Company worked to improve profitability by strengthening cooperation among production sites in Japan and overseas and improving productivity through automation, while considering ways to address business challenges, including identifying business opportunities and risks associated with the transition to a decarbonized society and developing high-value-added materials.」

「Although sales and segment profit remained under pressure because the impact of COVID-19 could not be overcome, both exceeded the year-earlier period in the third and fourth quarters as a result of the initiatives described above. As a result, sales for the company were ¥23,190 million, down 15.8% year on year, and the segment operating loss was ¥664 million, compared with segment operating profit of ¥297 million in the previous fiscal year.」

「Against this backdrop, the company pursued its existing measures, including strengthening coordination among domestic and overseas production sites, improving production efficiency and increasing product value added, while focusing particularly on quality improvements for key products such as automotive transmission components to enhance earnings power. Although cumulative sales and segment profit declined year on year because the impact of COVID-19 could not be overcome, both sales and segment profit exceeded the year-earlier period in the third quarter. As a result, sales for this business for the cumulative third quarter of the fiscal year under review were ¥16,135 million, down 22.4% year on year, and the segment operating loss narrowed from ¥1,207 million in the cumulative second quarter to ¥997 million, compared with segment operating profit of ¥415 million in the year-earlier period.」

「To respond to production adjustments by automakers, the company worked to reduce fixed costs by controlling operating hours and through other measures. These initiatives were intended to improve profitability, but the impact of deteriorating market conditions, including the suspension of operations at the Mexican subsidiary due to lockdowns, was severe. Sales declined substantially year on year, and profitability remained under considerable pressure.」

「To respond to lower order volumes caused by production adjustments by automakers, the company worked to reduce fixed costs by controlling operating hours and through other measures. These initiatives were intended to improve profitability, but the impact of deteriorating market conditions was severe, sales declined substantially year on year, and profitability remained under considerable pressure.」

「The company also actively negotiated price revisions for unprofitable products. In production, it pursued stable production of automotive transmission components on the Fukuyama Plant's processing line and expansion of the line. These initiatives were intended to improve profitability, but sales declined substantially year on year and profitability remained under pressure because of the impact of Typhoon No. 19 and weak demand for automotive parts.」

「Amid rising costs caused by increased staffing and higher prices for some casting materials, the company pursued negotiations to revise prices to reflect costs, production-efficiency gains through lower defect rates and improved yields, procurement-cost reductions by partially bringing outsourced products in-house, stable production of automotive transmission components on the Fukuyama Plant's processing line, and expansion of the line. These initiatives lifted sales above the year-earlier period, but profitability remained under pressure because domestic price-revision negotiations were delayed and defect rates remained high.」

「Amid rising costs caused by increased staffing and higher prices for core materials used in molding, the company pursued production-efficiency gains through lower defect rates and improved yields, procurement-cost reductions through partially bringing core-material production in-house, stable production of automotive transmission components on the Fukuyama Plant's processing line, and expansion of the line. These initiatives secured sales, but profitability remained under pressure because the defect rate for domestically produced automotive parts remained high.」

「Although raw material prices surged, the company continued improving profitability through production-efficiency gains from lower defect rates and improved yields, procurement-cost reductions and passing higher costs through to selling prices. As a result, for the cumulative third quarter of the fiscal year under review, group-wide sales were ¥43,631 million, up 11.0% year on year; operating profit was ¥4,102 million, up 24.4%; ordinary profit was ¥4,507 million, up 18.2%; and quarterly net profit attributable to owners of the parent was ¥3,067 million, up 26.7%.」

「Although raw material prices surged, the company continued improving profitability through production-efficiency gains from lower defect rates and improved yields and through procurement-cost reductions. As a result, for the cumulative second quarter of the fiscal year under review, group-wide sales were ¥28,868 million, up 12.9% year on year; operating profit was ¥2,788 million, up 25.2%; ordinary profit was ¥3,150 million, up 22.0%; and quarterly net profit attributable to owners of the parent was ¥2,167 million, up 29.9%.」

「The company continued passing higher raw material costs through to selling prices, improving production efficiency, reducing procurement costs and improving profitability. As a result, for the cumulative first quarter of the fiscal year under review, group-wide sales were ¥14,032 million, up 13.8% year on year; operating profit was ¥1,469 million, up 36.7%; ordinary profit was ¥1,602 million, up 28.4%; and quarterly net profit attributable to owners of the parent was ¥1,125 million, up 43.7%.」

「Against this backdrop, we continued to improve profitability by focusing on increasing our share of customers’ component demand, including responding to existing customers’ global expansion, pursuing new orders for high-value-added products that leverage our strengths, improving production efficiency through higher productivity, fewer defects and improved yield, and reducing procurement costs.」

「Against this backdrop, the Company continued product development based on needs identified through orders for customer-specific products (customized products). It also began launching some new products and worked to expand orders.」

「Amid this business environment, we will pursue the business with securing profits as an essential target by improving production efficiency and quality control, pursuing all possible cost reductions including expense cuts, closely monitoring raw material price trends, selecting suppliers and strengthening our ability to procure at appropriate prices.」

「We have continued working to improve profitability through higher productivity, lower defect rates, improved yields, lower procurement costs and improved production efficiency, although the effect has been limited by lower production volumes.」

「The company also worked to improve profitability by improving production efficiency through lower defect rates and improved yields and by reducing procurement costs.」

「The company also worked to improve production efficiency through higher productivity, lower defect rates and improved yields, and to reduce procurement costs.」

「In this business environment, we will raise production efficiency and quality control, pursue every possible cost reduction including expense cuts, monitor raw-material price trends, select suppliers and strengthen our ability to procure at appropriate prices, while operating the business with securing profit as a non-negotiable objective.」