Soaring Raw Material Prices for Copper Alloys and Other Materials

「Depending on the pace of China's economic recovery, copper prices may remain elevated. In addition, heightened tensions in the Middle East, including the situation in Iran, and developments in U.S. trade policy may further increase global uncertainty, while soaring crude oil prices and shortages of crude oil-derived materials may cause the prices of raw materials and purchased components to rise.」

「原材料費、物流費、燃料費等のさらなる上昇に伴う製造コスト増加が避けられない状況を踏まえ」

「To secure stable earnings despite these changes in the business environment, the Group will eliminate waste and pursue cost reductions under its integrated production system, while passing on higher raw material costs to product prices in a timely and appropriate manner when necessary.」

「During the six-month period of the current fiscal year, the economy was gradually recovering, with signs of a rebound in personal consumption and corporate capital investment as economic activity normalized following the reclassification of COVID-19 to Category 5. However, uncertainty remained due to the effects of global monetary tightening, concerns about the outlook for the Chinese economy, and soaring resource, energy and raw material prices resulting from the prolonged Russia-Ukraine situation.」

「During the first quarter of the current fiscal year, socioeconomic activity showed a gradual recovery, with signs of improvement in personal consumption and employment and income conditions following the reclassification of COVID-19 to Category 5. However, the business environment remained uncertain due to downside risks to the domestic economy resulting from overseas economic uncertainty caused by the prolonged Russia-Ukraine situation and global monetary tightening, as well as inflation resulting from soaring raw material and energy prices.」

「To secure stable earnings despite these changes in the business environment, the Group will eliminate waste and pursue cost reductions under its integrated production system, while passing on higher raw material costs to product prices in a timely and appropriate manner when necessary.」

「In terms of profit, the company raised product prices from October, and the gross margin has been improving, but procurement costs continue to rise because of persistently high raw material prices and inflation. Operating profit was ¥1,412 million, down 28.7% year on year.」

「In terms of profit, although the company raised the prices of some products in April, it was unable to fully absorb the increase in procurement costs caused by raw material prices rising further after the price increases were calculated and by inflation. Operating profit was ¥793 million, down 49.9% year on year, and ordinary profit was ¥843 million, down 46.2%.」

「During the first quarter of the current fiscal year, although there were signs of a move toward leaving socioeconomic activity unrestricted amid expectations of a seventh wave of COVID-19 infections, the business environment remained uncertain due to persistently high raw material and energy prices resulting from the prolonged conflict over Ukraine and a sharp depreciation of the yen in the foreign exchange market.」

「Global demand for copper for electric vehicles is growing as part of the transition to decarbonization, and long-term growth in demand is expected. In addition, concerns about the supply of Russian copper resulting from Russia's invasion of Ukraine may cause copper prices to remain elevated.」

「In terms of profit, although the company worked to reduce costs through higher productivity, it was unable to fully absorb the increase in manufacturing costs caused by surging raw material prices and the weaker yen. Operating profit was ¥1,980 million, down 15.1% year on year, and ordinary profit was ¥1,975 million, down 17.4%.」

「In terms of profit, higher manufacturing costs resulting from soaring raw material prices resulted in operating profit of ¥1,582 million, down 2.8% year on year, and ordinary profit of ¥1,566 million, down 6.8%.」

「In terms of profit, despite the impact of higher copper procurement prices, operating profit was ¥992 million, up 24.6% year on year, and ordinary profit was ¥1,014 million, up 21.4%, on higher revenue.」

「Operating profit exceeded the target because net sales surpassed the target, efficiencies from the integrated production system and the effects of automation initiatives gradually emerged, the yen remained stronger against the yuan than assumed, and raw material prices remained stable.」

「In terms of profit, although the Group worked together to reduce fixed and variable costs, it was unable to fully absorb the increase in manufacturing costs resulting from soaring raw material prices, and operating profit was ¥1,368 million, down 10.3% year on year」

「The benchmark price for copper remained elevated, with its average rising approximately 7.2% from the same period a year earlier, causing our raw material prices to remain high.」

「The average benchmark price for copper during the period rose approximately 18.5% from the same period a year earlier, causing our raw material prices to soar. Competition in the faucet industry has intensified, making it difficult to pass the increase in raw material prices on to selling prices. Although we have also pursued internal cost reductions, we were unable to cover the full increase in costs, and operating profit declined.」

「The Group manufactures faucets and related fittings using copper alloys and other materials. Material prices have been rising as a result of soaring commodity prices, and the Group is seeking to absorb the increase through cost reductions and by passing it on to selling prices. However, further-than-expected increases in material prices may affect the Group's operating results and financial position.」

「For the nine-month period of the current fiscal year, consolidated net sales were ¥18,028 million, up 2.7% year on year. In terms of profit, although the Group worked together to reduce fixed and variable costs, it was unable to fully absorb the increase in manufacturing costs resulting from soaring raw material prices, and operating profit was ¥1,525 million, down 24.5% year on year」

「In China, following a review of selling prices, revenue was ¥2,279 million, up 6.4% year on year. However, operating profit was ¥12 million, down 95.5% year on year, due to higher manufacturing costs resulting from surging raw material prices and the yen’s depreciation.」

「The Group was unable to fully absorb the increase in manufacturing costs resulting from soaring raw material prices. Operating profit was ¥483 million, down 20.2% year on year, ordinary profit was ¥502 million, down 26.6%, and quarterly net profit attributable to owners of the parent was ¥316 million, down 33.0%.」

「In terms of profit, since November last year, raw material prices have risen sharply, and as a result of the Group's concerted efforts to reduce total costs,」

「The Group manufactures faucets and related fittings using copper alloys and other materials. Material prices have been rising as a result of soaring commodity prices, and the Group is seeking to absorb the increase through cost reductions and by passing it on to selling prices. However, further-than-expected increases in material prices may affect the Group's operating results and financial position.」