Shortages and Rising Prices of Raw Materials and Other Supplies

「As geopolitical risks increased due to the worsening situation in the Middle East and other factors, uncertainty in the supply of commodities, including crude oil and energy, spread across a wide range of industries, and market prices for various commodities fluctuated significantly. We are working to minimize the impact by diversifying sources of raw-material procurement, considering alternative materials and continuously monitoring supply conditions and price trends across relevant departments.」

「In addition, geopolitical factors, including the recent escalation of tensions in the Middle East, may cause fluctuations in raw material and energy prices and destabilize the supply of some raw materials.」

「The Group implemented management reforms, including passing on surging material and labor costs through sales prices, reducing production losses at manufacturing sites and continuing to control personnel expenses by optimizing staffing structures, in an effort to improve the Group's earnings power.」

「The Group implemented decisive management reforms, including negotiations with customers to revise selling prices and volumes, passing higher material costs resulting from market fluctuations and higher labor costs through to selling prices, reducing production losses at manufacturing sites, and continuing to control personnel costs by optimizing staffing levels, with the aim of improving the Group’s earnings power.」

「The Group implemented management reforms, including passing on surging material and labor costs through sales prices, reducing production losses at manufacturing sites and continuing to control personnel expenses by optimizing staffing structures, in an effort to improve the Group's earnings power.」

「Meanwhile, the rise in raw material costs began to ease, and improvement initiatives also had an effect on labor and logistics costs. As a result, the segment loss was ¥3.862 billion, compared with a segment loss of ¥14.387 billion in the same quarter of the previous year.」

「Meanwhile, the rise in raw material costs began to ease, and improvement initiatives also had an effect on labor and logistics costs. As a result, the segment loss was ¥4.058 billion, compared with a segment loss of ¥10.501 billion in the same quarter of the previous year.」

「Due to increased production volumes at major customers and foreign exchange movements, revenue was ¥24,707 million, an increase of ¥7,362 million year on year (+42.4%). However, in addition to higher raw material costs resulting from rising crude oil prices and higher logistics and labor costs due to changes in the external environment, the foreign exchange impact resulted in a segment loss of ¥1,694 million, compared with a segment loss of ¥5,196 million in the same quarter of the previous year.」

「The operating loss was ¥14,790 million, compared with an operating loss of ¥12,185 million in the previous consolidated fiscal year, due to surging expenses such as labor, material, logistics and electricity costs resulting from a sharp rise in inflation, increased costs related to launching new vehicle models and the foreign exchange impact.」

「In addition to higher raw material costs resulting from rising crude oil prices, higher logistics and labor costs due to changes in the external environment, and increased costs related to launching new vehicle models, the foreign exchange impact resulted in a segment loss of ¥12,166 million, compared with a segment loss of ¥8,484 million in the same quarter of the previous year.」

「In addition to higher raw material costs resulting from rising crude oil prices, higher logistics and labor costs due to changes in the external environment, and increased costs related to launching new vehicle models, the foreign exchange impact resulted in a segment loss of ¥8,616 million, compared with a segment loss of ¥4,597 million in the same quarter of the previous year.」

「In addition to higher raw material costs resulting from rising crude oil prices, higher logistics and labor costs due to changes in the external environment, and increased costs related to launching new vehicle models, the foreign exchange impact resulted in a segment loss of ¥3,890 million.」

「The operating loss was ¥12,185 million due to the impact of reduced production resulting from sudden shutdowns and production adjustments at customers, in addition to surging expenses such as labor, material and logistics costs due to abnormal inflation and higher costs related to launching new vehicles.」

「In the automotive industry related to the Group, automakers that are major customers continue to be forced to adjust production due to shortages of semiconductors and procured parts resulting from the spread of COVID-19 in Southeast Asia, and production volumes are expected to take more time to recover.」

「To prepare for unforeseen circumstances, the Group has established multiple supply networks and implemented measures to address shortages of raw materials and other supplies.」

「However, if supply is interrupted or becomes unstable due to an unforeseen accident at a supplier, an earthquake or other event, the Group's business may be adversely affected. In addition, although the Group and its suppliers determine supply prices contractually, the prices of raw materials and parts may surge due to rising crude oil prices and other factors, which may affect the Group's operating results and other aspects of performance.」

「However, if supply is interrupted or becomes unstable due to an unforeseen accident at a supplier, an earthquake or other event, the Group's business may be adversely affected. In addition, although the Group and its suppliers determine supply prices contractually, the prices of raw materials and parts may surge due to rising crude oil prices and other factors, which may affect the Group's operating results and other aspects of performance.」