Earnings pressure from deliveries of high-cost projects

「Operating results for the consolidated fiscal year declined year on year due to lower revenue, but exceeded the initial forecast of ¥700 million in operating profit by a small margin, owing to improved production efficiency and efforts to control expenses in the fourth quarter.」

「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.」

「For the cumulative third quarter of the current fiscal year, revenue was approximately flat year on year, but improvements in the gross profit margin and production efficiency, among other factors, substantially improved operating, ordinary and net losses compared with the same period of the previous year.」

「For the cumulative second quarter of the current fiscal year, operating income, ordinary income and net income all showed substantial improvements in losses year on year, owing to improved production efficiency, higher profitability in overseas operations, and the acceleration into the second quarter of sales from high-margin projects originally scheduled for the third quarter onward.」

「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).」

「The process of correcting the 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 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, compared with an 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).」

「The reasons the company recorded an operating loss, ordinary loss and net loss attributable to owners of the parent in the consolidated fiscal year were that the substantial decline in revenue prevented it from recovering the deterioration in profitability caused by high-cost projects through the third quarter, and that, as part of reforms to its cost structure aimed at increasing flexibility in business development from the following fiscal year onward in preparation for expected growth in demand for next-generation broadcasting equipment, it recorded an inventory valuation loss in cost of sales resulting from a substantial reduction in inventories.」

「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.」

「In terms of earnings, although revenue increased substantially, operating income improved by only ¥157 million year on year due in part to the overlapping delivery of high-cost projects, resulting in an operating loss of ¥812 million, compared with an operating loss of ¥969 million in the same period of the previous year.」