Declining Product Prices and Deteriorating Profitability Due to Intensifying Competition

「For the third-quarter cumulative consolidated period, there were results from more efficient sales activities through the use of the web and from expense controls, continuing from the second quarter. However, the intensification of competition accompanying restrained capital investment during the COVID-19 pandemic forced a decline in profit margins, resulting in year-on-year declines in operating, ordinary and net income.」

「In each business, intensifying competition with competing companies in the market may relatively reduce the competitiveness of our group's products and adversely affect its operating results and financial position.」

「For the third-quarter cumulative consolidated period, there were results from cost reductions through improved production efficiency and improvements in the gross profit margin. However, owing to the impact of the decline in net sales, operating, ordinary and net income all decreased year on year.」

「For the first-quarter cumulative consolidated period, in addition to the increase in net sales, improvements in the gross profit margin and production efficiency, among other factors, resulted in substantial year-on-year improvements in operating, ordinary and net losses.」

「Assuming that competition in the market will continue, our group will continue to implement measures to improve the cost of sales ratio, develop products capable of prevailing in the competition, and provide solutions that create new value, thereby seeking to improve net sales and earnings.」

「Assuming that competition in the market will continue, our group will continue to implement measures to improve the cost of sales ratio, develop products capable of prevailing in the competition, and provide solutions that create new value, thereby seeking to improve net sales and earnings.」

「Assuming that competition in the market will continue, our group will continue to implement measures to improve the cost of sales ratio, develop products capable of prevailing in the competition, and provide solutions that create new value, thereby seeking to improve earnings.」

「For the consolidated fiscal year, in addition to the increase in net sales, improvements in the cost structure that had been implemented continuously progressed. The results of these improvements were also reflected in major domestic projects, and operating income exceeded the initial forecast of ¥600 million.」

「In terms of earnings, in addition to the increase in net sales, the process of correcting factors related to high-cost projects that had worsened the cost of sales ratio in the same period of the previous year continued to produce some results in the second quarter, substantially improving the cost of sales ratio. As a result, operating income improved by ¥1,488 million year on year, resulting in an operating loss of ¥638 million (operating loss of ¥2,126 million in the same period of the previous year).」

「In terms of earnings, although net sales declined, the process of correcting factors related to high-cost projects that had worsened the cost of sales ratio in the same period of the previous year continued to produce some results in the first quarter. As a result, the cost of sales ratio improved substantially, and operating income improved by ¥726 million year on year, resulting in an operating loss of ¥725 million (operating loss of ¥1,451 million in the same period of the previous year).」

「In terms of earnings, although net sales declined substantially, the process of correcting factors related to high-cost projects that had worsened the cost of sales ratio in the same period of the previous year produced some results. As a result, the cost of sales ratio improved substantially, and operating income improved by ¥68 million year on year, resulting in an operating loss of ¥743 million (operating loss of ¥812 million in the same period of the previous year).」

「In terms of earnings, in addition to the decline in revenue, the cost-of-sales ratio rose due to the delivery of high-cost projects resulting from responses to new technology projects and market price competition. In preparation for an expected increase in demand for next-generation broadcasting equipment and other factors, the Company also recognized an inventory valuation loss from a substantial reduction in inventories to increase the flexibility of its business development from the following fiscal year onward. As a result, operating income and loss declined by ¥3.596 billion from the same period of the previous fiscal year, resulting in an operating loss of ¥3.232 billion, compared with operating income of ¥364 million in the same period of the previous fiscal year.」

「In terms of earnings, although revenue increased, the delivery of multiple high-cost projects due to market price competition and other factors continued from the second quarter, raising the cost-of-sales ratio. Operating income and loss consequently declined by ¥559 million year on year, resulting in an operating loss of ¥2.126 billion, compared with an operating loss of ¥1.567 billion in the same period of the previous fiscal year.」

「In terms of earnings, although revenue increased, the delivery of multiple high-cost projects due partly to market price competition resulted in operating income and loss declining by ¥457 million year on year. The Company consequently posted an operating loss of ¥1.451 billion, compared with an operating loss of ¥994 million in the same period of the previous fiscal year.」

「Across the Group's businesses, product prices have been declining as competition intensifies, and even more intense competition is expected going forward.」