Fair Value Losses on FX Forward Contracts and Foreign-Currency Balances Due to Yen Appreciation

「The company outsources production to overseas factories, and the related manufacturing costs and purchase payments are primarily denominated in US dollars. If the market exchange rate moves toward a weaker yen or stronger dollar than the rate used when prices were set, costs will rise and there is a risk of pressure on profit. In addition, fluctuations in the Chinese yuan-to-US dollar exchange rate affect purchase prices themselves. US dollar fluctuations also affect export sales, creating a risk that a weaker dollar year on year will directly reduce sales.」

「Foreign exchange losses 4,508 174」

「Foreign exchange losses 130 4,508」

「Foreign exchange losses 2,729 13,702」

「Foreign exchange losses 11,300」

「Foreign exchange losses 3,072 130」

「Foreign exchange losses 3,072」

「Non-operating expenses Foreign exchange losses 8,886 16,150」

「Foreign exchange losses 7,814 14,254」

「Foreign exchange losses 5,733 11,236」

「Foreign exchange losses 6,716」

「Foreign exchange losses 8,886」

「Foreign exchange losses 7,814」

「Foreign exchange losses 5,733」

「Foreign exchange losses amounted to ¥593 thousand.」

「The group outsources production to overseas factories, and the related manufacturing costs and purchase payments are primarily denominated in US dollars. If the market exchange rate moves toward a weaker yen or stronger dollar than the rate used when prices were set, costs will rise and there is a risk of pressure on profit.」

「Foreign exchange losses 10,363」

「Foreign exchange losses 4,795」

「Foreign exchange losses 2,266」

「Because foreign currency holdings were close to zero at the end of the consolidated fiscal year, foreign exchange valuation gains and losses on foreign currency under fair value accounting were recognized as non-operating items to the extent they fluctuated during the period」

「Foreign exchange losses 13,473」

「Foreign exchange losses 12,675」

「The company held US dollar cash and deposits from export sales at the end of fiscal year 40, and the difference between their fair value and the prevailing exchange rate during the quarter was recognized as a non-operating loss. Consequently, ordinary profit was ¥100 million, down 42.9% from the same period of the previous year, and net profit was ¥69 million, down 40.7%.」

「Ordinary profit declined 14.8% year on year, as the fair value measurement of US dollar deposits continued to reflect a stronger yen and weaker dollar, while foreign exchange effects, including non-operating losses, were recognized when overseas purchases were settled. The earnings structure remained largely unchanged from the first half.」

「Because the US dollar cash and deposits held at the end of the second quarter had weakened against the yen from the time of receipt, temporary fair value losses have been recognized as non-operating losses each time they arose. By the end of the fiscal year, these funds will be applied to any shortfall in forward contracts when purchases are settled, helping to reduce costs and narrowing the non-operating losses. However, because temporary fair value losses on cash and deposits were recognized as non-operating losses in the second quarter, ordinary profit for the cumulative period through the second quarter (first half) was ¥208 million, down 15.0% from the same period of the previous year, while net profit for the second quarter was ¥138 million, down 11.6%.」