Stable generation and growth of equity, operating income, ROE, and profit attributable to owners of the parent

「ROE has increased for 3 consecutive years since FY2023, and PBR has also risen accordingly.」

「For the interim consolidated accounting period, revenue was ¥209,107 million, up ¥56,760 million, or 37.3%, year on year, while operating profit was ¥2,226 million, down ¥116 million, or 5.0%, year on year.」

「Operating profit increased year on year to ¥2,343 million, up ¥2,180 million, or 1,337.1%. Ordinary profit was ¥3,240 million, up ¥1,250 million, or 62.9%, year on year. Interim net income attributable to owners of the parent was ¥1,779 million, up ¥1,586 million, or 823.8%, year on year.」

「For the consolidated fiscal year, ROE (return on equity) was 1.1%. ROE was not presented for the previous consolidated fiscal year because net loss attributable to owners of the parent was recorded. We will continue working to improve these indicators.」

「Ordinary income was affected by the recognition of a foreign exchange gain of ¥700 million, interest income of ¥420 million, dividends received of ¥357 million and equity in earnings of affiliates of ¥129 million, among others, as income, while compensation expenses of ¥292 million and other expenses were recognized. As a result, ordinary profit was ¥1,989 million, compared with an ordinary loss of ¥279 million in the same period of the previous year.」

「Ordinary income was affected by the recognition of dividends received of ¥358 million, subsidy income of ¥281 million, interest income of ¥235 million and equity in earnings of affiliates of ¥111 million, among others, as income, while interest expense of ¥179 million and other expenses were recognized. As a result, ordinary profit was ¥1,188 million, compared with an ordinary loss of ¥655 million in the same period of the previous year. Quarterly net income attributable to owners of the parent was ¥494 million, compared with a net loss of ¥462 million in the same period of the previous year. This reflected the recognition of a gain on sales of non-current assets of ¥464 million as extraordinary income, mainly from the sale of a building by a U.S. subsidiary, while an extraordinary loss of ¥47 million was recorded, mainly for special retirement allowances at an Indian subsidiary, and deferred income taxes of ¥281 million affected tax expenses.」

「For the consolidated fiscal year, ROE (return on equity) is not presented in Part I, Corporate Information, Section 1, Overview of the Company, 1. Trends in Major Management Indicators, (1) Consolidated Management Indicators, because net loss attributable to owners of the parent was recorded. We will continue working to improve these indicators.」

「Although operating income was affected by higher material costs due to surging resource and material prices, a sharp increase in procurement costs caused by semiconductor supply shortages, elevated transportation costs resulting from the global container shortage and higher personnel expenses caused by labor shortages, mainly in the United States, the Company worked to secure earnings through increased sales volumes at major customers, cost reductions, higher productivity and expense reductions. As a result, it recorded operating profit of ¥1,468 million, compared with an operating loss of ¥3,282 million in the same period of the previous year. Ordinary income was affected by the recognition of dividends received of ¥583 million, interest income of ¥509 million, equity in earnings of affiliates of ¥235 million and subsidy income of ¥152 million, among others, as income, while interest expense of ¥252 million was recognized as an expense. As a result, ordinary profit was ¥2,839 million, compared with an ordinary loss of ¥1,877 million in the same period of the previous year.」

「Operating income was affected mainly by the delay until after the third quarter in the benefits of sales price revisions in North America to reflect higher component costs, and by the limited effect of labor cost reductions while employment costs were rising. In China, production by major customers remained sluggish due to the semiconductor shortage and stagnant automotive market, while labor costs increased because of measures taken in response to lockdowns before the easing of COVID-19 policies. In Japan, manufacturing costs remained elevated mainly because of higher electricity and component costs. As a result of these factors, profit margins deteriorated and the Company recorded an operating loss of ¥154 million, compared with an operating loss of ¥416 million in the same period of the previous year. Ordinary income was affected by the recognition of interest income of ¥310 million, dividends received of ¥258 million and equity in earnings of affiliates of ¥209 million as income, while a foreign exchange loss of ¥981 million and interest expense of ¥179 million were recognized as expenses. As a result, the Company recorded an ordinary loss of ¥279 million, compared with ordinary income of ¥531 million in the same period of the previous year.」

「Although the Group worked together to reduce costs, operating profit was ¥148 million, up ¥29 million, or 24.6%, year on year, mainly because resource and material prices and logistics costs remained elevated amid global inflation, the resulting higher costs were reflected in selling prices with a delay, and labor costs rose because of a tight labor market. Ordinary income was affected by the recognition of dividends received of ¥255 million and interest income of ¥163 million as income, while a foreign exchange loss of ¥1,326 million was recognized as an expense. As a result, the Company recorded an ordinary loss of ¥655 million, compared with ordinary income of ¥662 million in the same period of the previous year.」

「For the consolidated fiscal year, ROE (return on equity) is not presented in Part I, Corporate Information, Section 1, Overview of the Company, 1. Trends in Major Management Indicators, (2) Management Indicators of the Filing Company, because net loss attributable to owners of the parent was recorded (ROE was 3.0% in the previous consolidated fiscal year). We will continue working to improve these indicators.」

「The company recorded an operating loss of ¥3,282 million, compared with operating income of ¥3,285 million in the same period of the previous year, due to higher material costs resulting from surging resource and raw material prices, a sharp increase in procurement costs caused by the semiconductor shortage, persistently high transportation costs caused by the global container shortage and other factors, tight labor markets mainly in the United States, and lower production efficiency resulting from customers' plant shutdowns and production cuts.」

「The company recorded an operating loss of ¥416 million, compared with operating income of ¥3,494 million in the same period of the previous year, due to higher material costs resulting from surging resource and raw material prices, persistently high transportation costs caused by the global container shortage and other factors, and sluggish production efficiency and higher labor costs amid tight labor markets, mainly in the United States.」

「Operating income was ¥119 million, down ¥1,927 million, or 94.2%, year on year, due to higher material costs resulting from surging global resource and raw material prices, persistently high transportation costs caused by the global container shortage and other factors, and sluggish production efficiency and higher labor costs amid tight labor markets, mainly in the United States.」

「Although operating income increased year on year as sales recovered, it deteriorated because the effects of higher material costs, driven mainly by surging global prices for steel, non-ferrous metals and resin materials, persistently high transportation costs resulting from the global container shortage and other factors, and the sharp-than-expected deterioration from the third quarter onward in production efficiency and labor costs due to labor shortages, particularly in the United States, substantially exceeded initial assumptions. Operating income for the cumulative third quarter of the current consolidated fiscal year was therefore limited to ¥3,285 million, compared with an operating loss of ¥1,340 million in the same period of the previous year.」

「Operating profit was constrained in North America, mainly by higher labor and fixed costs in the United States, and in Europe, where profit improved as sales recovered but was affected by higher transportation costs due to container shortages and other factors. In Southeast Asia and South America, profit remained sluggish due in part to weak sales. In Japan, however, earnings were secured through cost reductions, higher productivity and expense reductions, while in China and South Korea, profit improved as sales recovered from the decline caused by the impact of the infectious disease in the previous fiscal year. As a result, operating profit was ¥3,494 million, up ¥2,207 million, or 171.4%, year on year.」

「For the consolidated fiscal year, ROE (return on equity) is not presented in Part I, Corporate Information, Section 1, Overview of the Company, 1. Trends in Major Management Indicators, (2) Management Indicators of the Filing Company, because net loss attributable to owners of the parent was recorded (ROE was 2.1% in the same period of the previous year). We will continue working to improve these indicators.」

「For the consolidated fiscal year, ROE (return on equity) decreased by 1.3 percentage points year on year to 2.1%. The main factor behind the change was a decrease in the net profit margin on sales. We will continue working to improve these indicators.」

「Our group places importance on the stable securing and expansion of the following indicators: ① equity and operating profit, which indicate the soundness of the business; and ② ROE (return on equity), which indicates profitability for shareholders, and net income attributable to owners of the parent, which is the source of dividends.」