Declining profitability and fixed-asset impairment in the wood-based board business

「In light of these circumstances, the company determined that improving performance in the short term would be difficult and recorded an impairment loss of ¥5,147 million at ＥＮボード株式会社 under extraordinary losses.」

「In the wood-based board business, efforts focused on increasing market share among existing customers and developing new sales channels to expand sales. Meanwhile, at consolidated subsidiary ＥＮボード株式会社, thorough efforts to reduce production losses, including line downtime and defect-related losses, gradually improved productivity, but many challenges to stable production remain and profitability has been slow to improve. As a result, sales for the current interim consolidated accounting period were ¥5,290 million, up 12.0% year on year, while the segment loss was ¥976 million, compared with a loss of ¥1,214 million in the same period of the previous year.」

「Sales for the consolidated fiscal year were ¥10,211 million, up 22.5% year on year, while the segment loss was ¥2,271 million, compared with a loss of ¥1,387 million in the previous year.」

「In the wood-based board business, efforts were made to restore confidence following the fire last May, increase market share among existing customers and develop new sales channels. Meanwhile, at consolidated subsidiary ＥＮボード株式会社, continued efforts to improve productivity gradually increased production volumes, but profitability has been slow to improve. As a result, sales for the current interim consolidated accounting period were ¥4,722 million, up 20.3% year on year, while the segment loss was ¥1,214 million, compared with a loss of ¥599 million in the same period of the previous year.」

「As a result, sales increased year on year to ¥8,338 million, up 5.5%, following the start of commercial production by ＥＮボード株式会社 in November 2022. However, sales were below plan due to the impact of the production shutdown following the fire, higher manufacturing costs from external procurement and delays in improving productivity at ＥＮボード株式会社. The segment therefore recorded a loss of ¥1,387 million, compared with a loss of ¥874 million in the previous year.」

「Sales for the cumulative third quarter of the current consolidated fiscal year increased year on year to ¥6,180 million, up 18.3%, following the start of commercial production by ＥＮボード株式会社 in November 2022. However, sales were below plan due to the impact of the production shutdown following the fire and delays in improving productivity at ＥＮボード株式会社. The segment therefore recorded a loss of ¥873 million, compared with a loss of ¥614 million in the same period of the previous year.」

「Sales for the cumulative second quarter of the current consolidated fiscal year increased year on year to ¥3,926 million, up 27.0%, following the start of commercial production by ＥＮボード株式会社 in November 2022. However, partly due to the impact of the production shutdown following the fire, the segment recorded a loss of ¥599 million, compared with a loss of ¥414 million in the same period of the previous year.」

「Sales for the cumulative first quarter of the current consolidated fiscal year were ¥1,904 million, up 29.8% year on year, while the segment loss was ¥283 million, an improvement from a loss of ¥332 million in the same period of the previous year. This was due to higher sales following the start of commercial production by ＥＮボード株式会社 in November 2022, as well as the recording under extraordinary losses of expenses incurred during the production shutdown following the fire.」

「Meanwhile, amid continued surges in raw-material prices, including adhesives and decorative sheets, following the rise in crude oil prices, efforts to reduce costs and revise sales prices had some effect. However, this was not enough to cover the selling, general and administrative expenses of ＥＮボード株式会社, which began commercial production in November 2022. The segment therefore recorded a loss of ¥874 million, compared with a loss of ¥475 million in the previous year.」

「Meanwhile, amid continued surges in raw-material prices, including adhesives and decorative sheets, following the rise in crude oil prices, efforts to reduce costs and revise sales prices had some effect. However, this was not enough to cover the selling, general and administrative expenses of ＥＮボード株式会社, which began commercial production in November 2022. The segment therefore recorded a loss of ¥614 million, compared with a loss of ¥289 million in the same period of the previous year.」

「Meanwhile, amid continued surges in raw-material prices, including adhesives and decorative sheets, following the rise in crude oil prices, efforts to reduce costs and optimize sales prices had some effect. However, this was not enough to cover the selling, general and administrative expenses of ＥＮボード株式会社, which was scheduled to transition to commercial production in November 2022. The segment therefore recorded a loss of ¥414 million, compared with a loss of ¥152 million in the same period of the previous year.」

「Meanwhile, amid continued surges in raw-material prices, including adhesives and decorative sheets, following the rise in crude oil prices, efforts were made to reduce costs and optimize sales prices. However, this was not enough to cover the selling, general and administrative expenses of ＥＮボード株式会社, which was scheduled to transition to commercial production in November 2022. The segment therefore recorded a loss of ¥332 million, compared with a loss of ¥57 million in the same period of the previous year.」

「Meanwhile, efforts were made to reduce costs, pass higher adhesive prices caused by surging crude oil prices through to sales prices, and expand sales of high-value-added products, but the segment recorded a loss of ¥475 million, compared with segment profit of ¥45 million in the previous year.」

「Meanwhile, efforts were made to improve the gross margin through thorough cost reductions, sales at appropriate prices and expanded sales of high-value-added products. However, due to the impact of selling, general and administrative expenses at ＥＮボード株式会社 and higher adhesive prices, the segment recorded a loss of ¥289 million, compared with segment profit of ¥33 million in the same period of the previous year.」

「Meanwhile, efforts were made to improve the gross margin through thorough cost reductions, expanded sales at appropriate prices and expanded sales of high-value-added products. However, due to the impact of selling, general and administrative expenses at ＥＮボード株式会社, which was preparing to begin equipment operations in January 2022, as well as higher adhesive prices, the segment recorded a loss of ¥152 million, compared with a loss of ¥6 million in the same period of the previous year.」

「As a result of focusing on sales expansion, including developing new customers, sales for the cumulative first quarter of the current consolidated fiscal year were ¥1,148 million, up 10.4% year on year. Meanwhile, efforts to improve the gross margin included thorough cost reductions and expanded sales of high-value-added products. However, due to the impact of selling, general and administrative expenses at ＥＮボード株式会社, which was preparing to begin equipment operations in January 2022, as well as higher adhesive prices, the segment recorded a loss of ¥57 million, compared with a loss of ¥1 million in the same period of the previous year.」

「In the wood-based board business, in addition to the impact of closing the particleboard plant at the Yamaguchi and Hirao facilities at the end of September 2019 following the establishment of ＥＮボード株式会社, the business was affected by the spread of COVID-19. As a result, sales for the cumulative third quarter of the current consolidated fiscal year were ¥3,484 million, down 20.5% year on year.」

「Sales for the cumulative second quarter of the current consolidated fiscal year were ¥2,183 million, down 26.3% year on year. Although improving the gross margin and reducing selling expenses had some effect, this was not enough to absorb personnel and other costs at ＥＮボード株式会社, which was preparing to begin operations. The segment therefore recorded a loss of ¥6 million, compared with segment profit of ¥141 million in the same period of the previous year.」

「As a result, sales for the cumulative first quarter of the current consolidated fiscal year were ¥1,039 million, down 26.5% year on year, while the segment recorded a loss of ¥1 million, compared with segment profit of ¥52 million in the same period of the previous year.」

「As a result, sales in the wood-based board business were ¥5,598 million, down 15.6% year on year, while segment profit was ¥320 million, down 25.4%.」

「As a result, sales for the cumulative third quarter of the current consolidated fiscal year were ¥4,383 million, down 12.1% year on year, while segment profit was ¥248 million, down 21.2%.」

「Meanwhile, efforts were made to reduce the costs of raw materials such as adhesives and wood chips and to cut fixed costs. As a result, sales for the cumulative first quarter of the current consolidated fiscal year were ¥1,414 million, down 7.5% year on year, while segment profit was ¥52 million, up 34.3%.」

「As the assets held for the wood-based board business showed signs of declining profitability, the carrying amount of the asset group was reduced to its recoverable amount, and the reduction of ¥139 million was recorded as an impairment loss under extraordinary losses.」

「As the assets held for the wood-based board business showed signs of declining profitability, the carrying amount of the asset group was reduced to its recoverable amount, and the reduction of ¥537 million was recorded as an impairment loss under extraordinary losses.」