Risk of market fluctuations in steel, crude oil and other commodities

「Operating profit was 34.6% below the previous forecast due to lower operating levels resulting from sluggish customer markets in China, Southeast Asia, and Europe, as well as higher raw material prices.」

「In addition to key materials, we have negotiated with each customer to pass on increases in the prices of consumables, auxiliary materials, electricity, gas and labor, and have recovered a certain amount. Although full recovery remains difficult with some customers, we will continue to negotiate persistently so that we can recover appropriate costs.」

「The domestic economy remained sluggish as price increases caused by the weak yen continued to weigh on the economy, except in areas benefiting from inbound tourism, compounded by an unstable political situation.」

「Against the backdrop of recently elevated resource prices and a historically weak yen, as well as labor shortages and the 2024 problem, prices of goods have tended to rise. If market fluctuations cause significant changes in the Group's procurement prices or in the prices of scrap such as iron, this may affect the Group's operating results and financial position.」

「In Japan, the yen remained weak as monetary easing continued, and increases in the prices of goods and services associated with higher resource prices and inflation became the norm. Excluding the effects of the weak yen, the manufacturing sector remained sluggish.」

「In the domestic economy, prices continued to rise amid an excessively weak yen that appeared to have become entrenched. Infrastructure costs, particularly gasoline and electricity, rose sharply as they were directly affected, and this was repeatedly countered by lowering those costs through subsidies.」

「Operating profit fell sharply to ¥160 million, down 85.7% year on year, due to the substantial increase in electricity and other costs during the first three quarters of the consolidated fiscal year, particularly the slow progress in passing higher raw material and other costs through to prices overseas, and lower production efficiency amid production cuts.」

「Operating profit fell sharply to ¥178 million, down 81.6% year on year, due to higher expenses resulting from increases in the prices of raw materials and other items, as well as lower production efficiency amid production cuts.」

「Operating loss was ¥38 million, compared with operating profit of ¥618 million in the same period of the previous year, due to sluggish plant operations associated with customer shutdowns and increases in material costs and all other expenses.」

「We negotiate with each customer to reflect increases in procurement prices for key materials such as steel and resin in selling prices and have recovered those increases, but customer responses vary, with some customers from whom it is difficult to recover the full amount and others for whom the recovery period is delayed.」

「The global economy during the cumulative third quarter contracted period was on a recovery trend as vaccination against COVID-19 progressed, but recovery remained incomplete due to supply-chain disruptions and inflation. From the end of last year, the Omicron variant spread rapidly around the world, while geopolitical risks also increased as Russia appeared poised to invade Ukraine and North Korea frequently launched missiles. These developments may continue for some time, including by driving up resource prices, and conditions are likely to remain unstable.」

「However, supply chains were disrupted by the sharp expansion in demand in countries recovering economically and the shift in energy use associated with efforts to achieve carbon neutrality, causing raw material prices and other prices to surge and undermining the recovery trend.」

「Since last year, production increases and cuts associated with the COVID-19 pandemic and supply chain disruptions have made significant fluctuations in the market prices of materials and other items increasingly pronounced.」

「During the cumulative third quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that management recognizes could materially affect the financial position, operating results and cash flows of the consolidated companies, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」

「No new business or other risks arose during the cumulative first quarter of the current consolidated fiscal year. In addition, there were no significant changes to the business and other risks described in the annual securities report for the previous fiscal year.」

「Operating profit was ¥1,256 million, down 38.1% from the previous consolidated fiscal year, due to the rise in resource prices and decline in scrap prices, increases in labor costs and depreciation of property, plant and equipment, among other factors.」

「Operating profit was ¥962 million, down 43.2% year on year, due to the rise in raw material costs and decline in ferrous scrap prices, increases in labor costs and depreciation, and deteriorating profitability at overseas subsidiaries, among other factors.」

「Operating income declined to ¥705 million, down 38.8% year on year, due to higher raw material costs, lower iron scrap prices, increases in labor costs and depreciation expenses, and deteriorating profitability at overseas subsidiaries, among other factors.」

「No new business or other risks arose during the cumulative first quarter of the current consolidated fiscal year. In addition, there were no significant changes to the business and other risks described in the annual securities report for the previous fiscal year.」

「The procurement prices of ordinary and special steel, the principal materials used in the Group's vehicle-related parts, are significantly affected by iron market conditions. Many of the consumables required for production are also affected by crude oil and other raw material market conditions. If these market fluctuations cause significant changes in the Group's procurement prices, or if scrap prices such as those for iron fluctuate significantly, they may affect the Group's operating results and financial condition.」

「No new business or other risks arose during the cumulative first three quarters of the current consolidated fiscal year. In addition, there were no significant changes to the business and other risks described in the annual securities report for the previous fiscal year.」

「The dollar strengthened as US interest rates rose against a backdrop of a strong economy, while higher crude oil prices resulting from political instability in oil-producing countries and sanctions on Iran compounded the situation, affecting the economies of countries with fragile economic foundations.」

「No new business or other risks arose during the cumulative first quarter of the current consolidated fiscal year. In addition, there were no significant changes to the business and other risks described in the annual securities report for the previous fiscal year.」

「Although conditions improved in Japan and overseas at about the usual pace, operating income declined 1.5% due to higher raw material prices, increased depreciation expenses and higher personnel and labor costs associated with wage improvements, among other factors.」

「Against the backdrop of this global economic boom, resource prices rose and resource-rich countries also recovered, creating conditions globally described as a “Goldilocks economy.”」

「As expenses including material costs increased, operating income was ¥530 million, down 16.3% year on year,」

「The procurement prices of ordinary and special steel, the principal materials used in the Group's vehicle-related parts, are significantly affected by iron market conditions. Many of the consumables used in production are also affected by crude oil and other raw material market conditions.」