Lower plant utilization and fixed-cost burden

「Cost reductions progressed through reductions in domestic and overseas headcount, including recruitment for voluntary retirement, cuts in personnel expenses from lower bonuses for officers and employees, and lower factory expenses following the end of production at the Tottori and Mobara plants. The operating loss narrowed year on year to ¥18,692 million, compared with a loss of ¥37,068 million in the previous fiscal year.」

「Although the company reduced costs by reviewing research and development expenses, reducing shipping costs due to lower shipments, and cutting personnel expenses, the impact of the sharp decline in revenue was substantial,」

「Due to the increase in the fixed-cost ratio accompanying the contraction in sales and higher material and processing costs, the operating loss was ¥37,068 million, compared with a loss of ¥34,145 million in the previous fiscal year, and the company remained in the red.」

「In addition to reducing manufacturing fixed costs by cutting LCD panel production capacity at the Mobara Plant, the Group advanced its withdrawal from unprofitable businesses and products. As a result, EBITDA was negative ¥13,446 million, compared with negative ¥18,096 million in the previous interim consolidated accounting period, and the operating loss was ¥15,481 million, compared with a loss of ¥21,441 million, representing year-on-year improvement.」

「Although manufacturing fixed costs were reduced by stopping production at the former Higashiura Plant in March 2023 and reducing liquid-crystal panel production capacity at the Mobara Plant, the operating loss was ¥34,145 million, compared with a loss of ¥44,386 million in the previous fiscal year, due to lower revenue, higher research and development expenses, and delays in passing through higher energy, materials and processing costs to selling prices.」

「Although weaker yen effects, productivity improvements, fixed-cost reductions and the return to profitability of the OLED business supported earnings, EBITDA was negative ¥22,981 million, compared with negative ¥16,002 million in the same period of the previous year, and the operating loss was ¥27,664 million, compared with a loss of ¥22,380 million, due to lower sales and surging material, processing and energy costs.」

「However, due to the decline in revenue and higher materials, processing and energy costs, EBITDA was negative ¥18,096 million (negative ¥7,485 million in the same period of the previous year), and the operating loss was ¥21,441 million (a loss of ¥11,779 million in the same period of the previous year).」

「Although fixed-cost savings were achieved by suspending production at the Higashiura Plant and reducing smartphone LCD production capacity at the Mobara Plant, lower sales and higher materials and energy costs resulted in EBITDA of negative ¥12,165 million, compared with negative ¥4,711 million in the same period of the previous year, and an operating loss of ¥13,883 million, compared with a loss of ¥6,872 million.」

「EBITDA, calculated by adding depreciation and amortization of goodwill, both operating expenses, to operating income (loss), was negative ¥36,198 million, compared with positive ¥161 million in the previous fiscal year.」

「In terms of profit and loss, the company worked to reduce costs and also benefited from the weaker yen, but these effects were insufficient to offset the impact of lower net sales and higher component, energy and transportation costs. EBITDA was negative ¥16,002 million (negative ¥3,688 million in the same period of the previous year), and operating loss was ¥22,380 million (¥10,117 million in the same period of the previous year).」

「Although the Company worked to reduce expenses and pass on higher costs and benefited from yen depreciation, it was unable to offset surging component, energy and transportation costs. EBITDA was negative ¥7,485 million and the operating loss was ¥11,779 million, both worsening year on year.」

「Although revenue declined, improvements in the product mix, continued cost reductions and product price increases were effective, and the weaker yen also contributed. As a result, the operating loss narrowed by ¥17,650 million year on year to ¥8,576 million.」

「Although sales declined substantially, EBITDA improved by ¥4,123 million year on year to negative ¥3,688 million and the operating loss narrowed by ¥8,509 million to ¥10,117 million, as the break-even point improved significantly through a better product mix, cost reductions and price increases.」

「Although sales declined substantially, EBITDA deteriorated by only ¥600 million year on year to negative ¥2,761 million, and the operating loss narrowed by ¥2,846 million to ¥7,033 million, as the break-even point improved significantly through a better product mix and cost reductions.」

「Although revenue declined, the operating loss narrowed by ¥1,134 million to ¥5,872 million, due to continued cost reductions and the effects of impairment losses on fixed assets recorded in the previous fiscal year, among other factors.」

「Although revenue declined, gross profit was ¥4,894 million, compared with a gross loss of ¥4,754 million in the same period of the previous year, due to the effect of fixed-cost reductions from the structural reforms carried out in the first half of the previous fiscal year and the results of thorough cost-cutting efforts. The operating loss improved by ¥13,997 million year on year to ¥18,627 million.」

「Although sales declined, manufacturing fixed costs, personnel expenses and other fixed costs were reduced through the structural reforms implemented since the first half of the previous fiscal year, and various expense-reduction measures were effective. As a result, gross profit improved by ¥21,319 million year on year and turned positive, while the operating loss improved by ¥25,290 million to ¥9,879 million.」

「Although operating losses continued because sales remained low, the fixed-cost savings from the structural reforms implemented in the first half of the previous fiscal year and other factors improved the result by ¥20,066 million year on year.」

「As a result, consolidated sales for the fiscal year decreased 20.8% from the previous consolidated fiscal year to ¥504,022 million. Although fixed costs and other expenses were reduced as described above, these reductions could not offset the decline in profit caused by lower sales, and the operating loss was ¥38,536 million, compared with a loss of ¥27,230 million in the previous fiscal year.」

「Operating loss for the cumulative period was ¥32,624 million, widening from the operating loss of ¥7,423 million in the same period of the previous year.」

「Operating profit deteriorated both year on year and quarter on quarter due to lower gross profit resulting from the decline in sales and deterioration in the cost ratio associated with lower factory utilization, resulting in an operating loss 27,475 million」

「As the profitability of certain asset groups declined due to factors including a major customer adding smartphones equipped with OLED displays to its lineup, the slowdown in the Chinese smartphone market, slower global growth in the smartphone market and intensified competition in the display market, the carrying amounts were reduced to recoverable amounts, and the resulting reduction of ¥75,189 million was recorded as an extraordinary loss.」

「Operating profit improved year on year due to the results of structural reforms implemented in the previous consolidated fiscal year and other factors, but the Company still recorded an operating loss of ¥10,626 million, compared with an operating loss of ¥38,897 million in the cumulative period of the previous year, and did not achieve profitability.」

「Although the scale of sales resulted in an operating loss, the loss improved year on year owing in part to the results of the structural reforms implemented in the previous consolidated fiscal year, to ¥14,475 million, compared with an operating loss of ¥26,806 million in the same cumulative period of the previous year.」

「Although operating profit turned into an operating loss because of lower sales, the loss improved both year on year and quarter on quarter, to ¥9,806 million, owing in part to the results of the structural reforms implemented in the previous consolidated fiscal year. The operating loss was ¥14,442 million in the same quarter of the previous year and ¥22,851 million in the previous quarter.」

「Operating loss was ¥61,749 million, compared with operating profit of ¥18,502 million in the same period of the previous year, due mainly to lower revenue and higher fixed costs, including depreciation at the Hakusan Plant and R&D expenses related to OLED development.」

「Operating loss was ¥38,897 million, compared with operating income of ¥10,475 million in the same period of the previous year, due to lower net sales and higher fixed costs, including depreciation at the Hakusan Plant and R&D expenses related to OLED development.」

「The operating loss was ¥26,806 million, compared with an operating loss of ¥2,176 million in the same cumulative period of the previous year, as fixed costs including depreciation related to operation of the Hakusan Plant and research and development expenses related to OLED development increased year on year.」

「Against this backdrop, we determined that production capacity had become excessive and was imposing a substantial fixed manufacturing-cost burden. We therefore decided to review the production structure in line with market changes, reduce fixed costs, rationalize management through sweeping structural reforms, and improve profitability.」

「The small- and medium-sized display business operated by the Group has a relatively high fixed-cost ratio, as it requires large-scale factories, the acquisition and maintenance of production equipment, and the employment of a large number of workers.」

「This is a business with a relatively high fixed-cost ratio that requires the acquisition and maintenance of large-scale factories and production equipment, as well as the employment of a large number of people. Accordingly, if the utilization rate of the Group’s factories declines due to reduced orders from major customers, fluctuations in demand, overproduction or competition from other companies, this could affect the Group’s performance.」