Cultivating Domestic Demand and Expanding Overseas Operations in the Machinery Business

「In the marine machinery segment, improved profitability centered on crankshafts for our core marine engines resulted in higher revenue and higher profit year on year.」

「In the marine equipment division operated by 佐世保重工業株式会社, demand for crankshafts for marine engines, its principal product, is expected to expand as demand for new ships increases. We will expand our sales share and build a stable earnings structure by increasing production capacity through improved production efficiency and equipment modernization.」

「In the marine machinery segment, the business environment for crankshafts for our core marine engines also improved, and progress in cost reductions and production-efficiency improvements resulted in higher revenue and higher profit year on year.」

「In the marine machinery division, the business environment for crankshafts for marine engines, the main product, improved and capacity utilization increased. Cost reductions through diversification of raw material suppliers also progressed, resulting in higher revenue and operating profit year on year.」

「In the marine machinery division of the Steel Structures and Machinery Business, we returned to profitability through diversification of material suppliers, improved production efficiency, modernization of equipment, and technological improvements, in addition to the improving business environment.」

「In the marine equipment division operated by 佐世保重工業株式会社, demand from marine engine manufacturers is expected to expand as demand for new ships increases, and we will work to expand production capacity and market share.」

「The marine machinery division was forced to operate at low capacity due to soaring raw material costs, while construction in the steel structures and bridge division was substantially delayed by the bridge girder collapse accident that occurred in July last year. As a result, revenue for the first three quarters of the current consolidated cumulative period was ¥5,032 million, down 7.8% year on year. In terms of earnings, in addition to the weak performance of the marine machinery division, the company recorded approximately ¥500 million in estimated costs related to handling the bridge girder collapse accident, resulting in an operating loss of ¥204 million, compared with operating profit of ¥146 million in the previous corresponding period.」

「In the steel structures and bridge division, production and construction of ordered projects progressed, while sales volume in the marine machinery division expanded as demand increased with the recovery in new ship orders. Revenue for the first quarter of the current consolidated cumulative period was ¥1,822 million, up 26.6% year on year, and operating profit was ¥93 million, compared with an operating loss of ¥2 million in the previous corresponding period. These figures do not reflect the impact of the bridge girder collapse accident.」

「In the marine equipment division operated by 佐世保重工業株式会社, demand is trending higher as the new ship market recovers. We will work to improve earnings through diversification of material suppliers and increased production, while promoting technological improvements, the effective utilization and modernization of production equipment, and strengthening our operating structure.」

「In the steel structures and bridge division, production and construction of projects already won progressed smoothly. Sales volume in the marine machinery division also expanded with the recovery in new ship orders. Revenue for the first three quarters of the current consolidated cumulative period was ¥5,459 million, up 40.3% year on year, while operating profit was ¥146 million, up 2,057.2%, despite the marine machinery division struggling under the impact of soaring steel prices for its principal material.」

「In the marine machinery division, sales volume expanded as demand increased with the recovery in new ship orders. Revenue for the second quarter of the current consolidated cumulative period was ¥3,361 million, up 32.6% year on year, while operating profit was ¥52 million, up 1,323.7%, despite pressure from soaring steel prices, a key material for the marine machinery division.」

「In new fields such as wind power generation, we will also actively develop demand by leveraging the technologies we have cultivated, and aim to improve earnings by expanding orders and sales channels.」

「With the naval vessel repair business, which has been a core operation since the establishment of the former naval arsenal, as a mainstay, we aim to build a stable earnings base by leveraging the combined strengths of that business and the machinery business」

「Revenue for the first three quarters of the current consolidated cumulative period declined to ¥3,756 million, down 53.0% year on year, because the results of オリイメック株式会社, formerly a major subsidiary, were no longer included in the consolidated accounts during the current consolidated fiscal year. Operating profit was ¥304 million, down 53.7%. Business performance remained stable, particularly in the marine equipment field operated by 佐世保重工業株式会社, and excluding the impact of オリイメック株式会社, revenue increased 35.9% and operating profit increased 230.6%, representing substantial improvements.」

「Excluding オリイメック株式会社, revenue in the marine equipment field operated by 佐世保重工業株式会社 increased 47.1% year on year, while earnings also improved substantially from an operating loss of ¥16 million in the previous corresponding period.」

「In light of these changes in the business portfolio, we reviewed the classification of reportable segments from the perspective of the similarity and relevance of the businesses. From the first quarter of the current consolidated accounting period, the marine machinery business of 佐世保重工業株式会社 was integrated into the former steel structures and land machinery business, and the segment was renamed the Steel Structures and Machinery Business.」

「Revenue for the current consolidated fiscal year was ¥7,203 million, down 34.6% year on year, as オリイメック株式会社, whose principal products were industrial machinery, was excluded from the scope of consolidation from the third quarter of the consolidated accounting period. Operating profit was ¥584 million, down 27.7%.」

「In the machinery business, the marine equipment business of 佐世保重工業株式会社 faces a challenging environment in which new ship completions are declining, but we are working to expand orders and sales.」

「On 1 October 2018, we transferred 100% of the issued shares of our consolidated subsidiary, オリイメック株式会社, to Amada Holdings Co., Ltd.」

「Capital investment by the automotive and semiconductor industries, the major customers in the industrial machinery field, remained firm, and revenue for the first quarter of the current consolidated cumulative period rose 8.3% year on year to ¥2,945 million. Operating profit, however, fell 6.7% year on year to ¥349 million, partly because selling prices declined in the marine equipment field.」

「In the marine equipment field operated by 佐世保重工業株式会社, sales volume and selling prices declined during the current consolidated fiscal year. In the industrial machinery field operated by オリイメック株式会社, however, the company actively responded to the growing appetite for capital investment among domestic and overseas customers, covering the decline in marine equipment. Revenue was ¥11,010 million, up 0.7% year on year, and operating profit was ¥807 million, up 5.6%.」

「At the end of the third quarter of the current consolidated accounting period, order backlog was strong in the industrial machinery field, reaching ¥7,206 million, up 48.2% year on year.」

「During the second quarter of the current consolidated cumulative period, capital investment by the automotive industry, a major customer particularly in the industrial machinery field, remained firm, and the spring division also performed well. Revenue was ¥5,131 million, up 1.2% year on year, and operating profit was ¥389 million, up 64.3%.」

「Revenue for the first quarter of the current consolidated cumulative period was ¥2,719 million, down 0.8% year on year. In terms of earnings, however, profits at the overseas sales subsidiary and Chinese manufacturing subsidiary of オリイメック株式会社 improved, resulting in operating profit of ¥375 million, up 104.3% year on year.」

「Under these business conditions, in the domestic business we will seek sustainable growth by increasing our market share, while in the overseas business our top priority will be improving the capacity utilization of our Chinese manufacturing subsidiary by expanding orders and sales.」

「The Machinery Business operated by 佐世保重工業株式会社 and オリイメック株式会社 is working to expand orders and revenue in ship equipment, industrial machinery and related fields.」

「The Machinery Business operated by 佐世保重工業株式会社 and オリイメック株式会社 is working to expand orders and revenue in ship equipment, industrial machinery and related fields.」

「The Machinery Business operated by 佐世保重工業株式会社 and オリイメック株式会社 is working to expand its market share in ship equipment, industrial machinery and related fields.」

「Under these business conditions, in Japan we will strengthen a structure capable of securing stable profits by promoting measures such as cultivating new and replacement demand through sales promotion for new products. Overseas, we will strengthen the competitiveness of overseas production subsidiaries, clarify sales strategies suited to the market needs of each country, and work to expand orders and revenue.」