Margin Pressure from Higher Production Capacity, Labor Costs and Energy Prices
First written in FY2023-Q2. 5 of 9 entries say "Materialised", first in FY2023-Q3. Latest entry: FY2026.
Enomoto moved to the "Worse" side of this theme in 2023, 4 years after the typical company in this theme (2019).
The whole theme swung hardest in 2019: 7 of 14 companies on the "Worse" side.
11 other companies' latest entry also says "Mitigated".
- FY2026MitigatedAnnual report
「In terms of profit, although conditions for lead frames for power semiconductors remain uneven, profit margins improved substantially from the previous year as other fields clearly bottomed out and capacity utilization increased.」
While pressure on profit from higher depreciation and labor costs associated with increased production capacity, rising energy prices and upfront costs continued, profit margins improved substantially as other fields bottomed out and capacity utilization increased. Operating profit rose 166.8% year on year. - 2026-05-11MaterialisedEarnings presentation
「1. Labor costs will increase due to wage increases and higher production volumes. 2. Electricity and consumables expenses will increase due to higher production volumes.」
Increases in labor costs, electricity expenses and consumables expenses are cited as fixed-cost factors reducing profit. Ordinary profit, however, increased. - FY2024MaterialisedAnnual report
「For the fiscal year, our group's revenue was ¥25.244 billion, down 13.7% year on year, mainly due to the impact of inventory adjustments for consumer and industrial equipment. Operating profit was ¥160 million, down 89.7%, mainly because the sharp market adjustment reduced production volume and lowered capacity utilization, while depreciation and labor costs increased as a result of upfront investment in equipment and human resources.」
In addition to lower capacity utilization caused by the market adjustment, higher depreciation and labor costs associated with upfront investment in equipment and human resources were actual factors pressuring full-year operating profit, which declined 89.7%. - FY2024-Q3WorsenedAnnual report
「In addition, orders for molds, a leading indicator of our performance, are extremely strong. Since supporting the mold-production division and strengthening the production system after the transition to mass production have become urgent issues, upfront costs are being incurred and are pushing down profit. For the nine months ended 31 December, revenue was ¥19.19 billion, down 15.4% year on year, operating profit was ¥240 million, down 84.0%, ordinary profit was ¥279 million, down 83.0%, and profit attributable to owners of the parent was ¥117 million, down 90.3%.」
Upfront costs associated with addressing strong mold orders continued to be a factor pushing down profit, and operating profit decreased 84.0% year on year. - FY2024-Q2MaterialisedAnnual report
「Orders for molds, a leading indicator of our performance, are extremely strong. Since supporting the mold-production division and strengthening the production system after the transition to mass production have become urgent issues, upfront costs are being incurred and are pushing down profit.」
The company explains that upfront costs associated with addressing strong mold orders and strengthening the production system after the transition to mass production have actually been incurred and are pushing down profit. - FY2024-Q1WorsenedAnnual report
「The business environment surrounding our group has been strongly affected on the cost side by surging prices, particularly energy prices, and higher labor costs resulting from wage increases, and on the demand side by the slowdown in the Chinese economy.」
The company explicitly identifies surging energy and other prices and higher labor costs resulting from wage increases as cost pressures, and states that it has also been strongly affected by the slowdown in the Chinese economy. - FY2023MaterialisedAnnual report
「Operating profit decreased 22.4% year on year to ¥1.561 billion, owing to higher depreciation and labor costs associated with increased production capacity, higher expenses resulting from rising energy prices, and a temporary change in the product mix caused by the adjustment in the smartphone market.」
The company explains that higher depreciation and labor costs associated with increased production capacity, rising energy prices, and changes in the product mix caused by the adjustment in the smartphone market were reflected in the 22.4% year-on-year decline in full-year operating profit. - FY2023-Q3MaterialisedAnnual report
「Revenue for the nine months ended 31 December increased 9.5% year on year to ¥22.69 billion, reflecting stable demand for lead frames for power semiconductors and the increase in the yen-converted amounts of overseas subsidiaries due to the weaker yen. Operating profit decreased 7.3% to ¥1.514 billion, owing to higher depreciation and labor costs associated with increased production capacity and higher expenses resulting from rising energy prices.」
The company explains that higher depreciation and labor costs associated with increased production capacity, together with higher expenses resulting from rising energy prices, were reflected in the 7.3% year-on-year decline in operating profit. - FY2023-Q2First statedAnnual report
「Revenue for the six months ended 30 September increased 6.8% year on year to ¥14.65 billion, reflecting stable demand for lead frames for power semiconductors, progress in passing higher raw-material prices through to selling prices, and the increase in the yen-converted amounts of overseas subsidiaries due to the weaker yen. Operating profit decreased 18.4% to ¥938 million, owing to higher depreciation and labor costs associated with increased production capacity and higher expenses resulting from rising energy prices.」
The company explains that higher depreciation and labor costs associated with increased production capacity, together with higher expenses resulting from rising energy prices, contributed to the 18.4% year-on-year decline in operating profit.