Losses and Restructuring in Overseas Operations

「The decline in the paper business was not fully offset. Revenue for the consolidated fiscal year was ¥298.997 billion, up 0.2% year on year, and operating income was ¥5.818 billion, down 25.0%.」

「Although the paper business benefited from the Xerox paper business acquired through a business transfer last year, revenue and profit fell below the previous year amid continued stagnation in the European economy, weak demand and lower selling prices. Revenue and profit in the packaging business exceeded the previous year, supported by the performance of companies added to the group through M&A. In the packaging business, Signet and Leightons, acquired last year, contributed to performance, and both revenue and profit substantially exceeded the previous year.」

「Revenue from the European and Americas businesses was ¥298.460 billion, up 4.5% year on year, and segment income was ¥7.757 billion, down 25.9%. Revenue from the Asia-Pacific business was ¥66.428 billion, up 26.3%, and segment income was ¥3.000 billion, up 39.5%.」

「In Europe and the Americas, demand for paper was weak and price increases failed to take hold, causing both revenue and profit to fall below the previous year. In the packaging business, revenue declined because of weak demand from manufacturers, but profit increased year on year as 3 newly acquired companies boosted performance. In Asia-Pacific, both revenue and profit increased substantially year on year in the packaging business, owing to the contribution of Signet, acquired in April.」

「Revenue from the European and Americas businesses was ¥285.726 billion, down 5.9% year on year, and segment income was ¥10.474 billion, down 36.3%.」

「In Europe, as usual, revenue and profit were weak in July and August because of the summer holiday season. In the paper wholesale business, declining prices and lower sales volume continued, while the packaging business also failed to reach the expected levels for either revenue or profit. As a result, revenue for the cumulative third quarter of the fiscal year was ¥211.911 billion, down 6.7% year on year, and operating income was ¥5.975 billion, down 57.9%.」

「In Europe, market conditions softened against the economic backdrop described above, and the paper wholesale business performed poorly in both revenue and profit because of lower product prices and weaker demand resulting from inventory reduction. In the ASEAN region, demand remained weak amid economic stagnation, while price competition intensified because of low-priced competition from China, weighing on the paper wholesale business. M&A in Singapore's visual communications field, however, contributed to performance.」

「In Oceania, selling prices for paper, which had risen from the previous year, remained high during the current fiscal year, improving performance in commercial printing. Revenue increased as a result of the effects of M&A conducted to date and expanded sales of office paper, but profit declined partly because goodwill arising from M&A during the cumulative first quarter of the fiscal year was fully amortized.」

「Although the European business was affected in the third quarter by slowing GDP growth and high inflation, among other factors, performance substantially exceeded the previous year, supported by the revival of various events as living with COVID-19 continued and tight supply-demand conditions. Other existing businesses continue to face severe price competition in all regions, but operating income has been improving as a result of business restructuring and integration.」

「In Southeast Asia, meanwhile, overall market activity was sluggish, particularly in Singapore, Malaysia and Thailand, and selling prices declined owing to price competition. Meanwhile, operating income improved as a result of the reorganization and integration of group companies, although revenue fell below the previous year. As a result, overseas revenue for the cumulative second quarter of the fiscal year was ¥186.431 billion, up 28.9% year on year, and operating income was ¥10.287 billion, up 273.8%.」

「As a result, overseas revenue for the cumulative first quarter of the fiscal year was ¥88.032 billion, up 28.5% year on year, and operating income was ¥4.414 billion, up 326.5%.」

「As a result, revenue from the overseas wholesale business for paper, pulp and other products was ¥305.901 billion, and segment income was ¥7.160 billion, compared with a segment loss of ¥10.557 billion in the previous fiscal year.」

「In the overseas paper, pulp and related wholesale business, regional strategies and business portfolio and profit structure reforms proved effective, with both revenue and profit significantly exceeding the previous year and driving the performance of the Group as a whole. As a result, revenue for the 3rd quarter cumulative consolidated period was ¥218.105 billion, and operating profit was ¥4.156 billion, compared with an operating loss of ¥11.456 billion in the same period of the previous year.」

「In Europe, the performance of Antalis S.A.S., acquired in July last year, contributed to a substantial year-on-year increase in both sales volume and revenue. In Oceania, particularly Australia, recovery from last year's COVID-19 disruption and the contribution of newly acquired businesses resulted in a substantial year-on-year increase in both sales volume and revenue at Spicers Limited. As a result, revenue for the cumulative second quarter of the fiscal year was ¥144.647 billion, and operating income was ¥2.752 billion, compared with an operating loss of ¥8.202 billion in the same period of the previous year.」

「The addition of Antalis' results, following its acquisition in July of the previous year, made a significant contribution to earnings, resulting in substantial year-on-year increases in sales volumes and revenue. Consequently, revenue for the cumulative first quarter of the fiscal year was ¥68,489 million, and operating profit was ¥1,035 million, compared with an operating loss of ¥2,710 million in the same period of the previous year.」

「As a result, revenue from the overseas paper and pulp wholesale business was ¥177,052 million, up 97.9% year on year, and the segment loss was ¥10,557 million, compared with segment profit of ¥179 million in the previous fiscal year.」

「In Hong Kong and China, the Chinese economy performed strongly after emerging from the impact of COVID-19, and sales of containerboard remained solid. However, a significant operating loss was recorded because a substantial provision for doubtful accounts was recognized amid concerns that trade receivables might become uncollectible or collection might be delayed. The operating loss was ¥11,456 million, compared with operating profit of ¥113 million in the same period of the previous year.」

「In Hong Kong and China, sales of coated paper and containerboard remained solid as China was among the first countries to emerge from the impact of the COVID-19 pandemic. However, a significant operating loss was recorded because a substantial provision for doubtful accounts was recognized amid concerns that trade receivables from Samson might become uncollectible or collection might be delayed.」

「In the United States, sales volumes and revenue exceeded the previous year, mainly due to growth in import sales of coated paper and export trading of recovered paper. In Hong Kong, increased sales of coated paper and containerboard contributed to year-on-year increases in both sales volumes and revenue. In Australia, both sales volumes and revenue substantially exceeded the previous year due to the acquisition of Spicers Limited. Operating profit increased 1,553.7% to ¥113 million.」

「In other parts of Asia, revenue in South Korea exceeded the previous year, but profits declined, particularly in Southeast Asia, where price competition intensified. Consequently, revenue for the cumulative second quarter increased 16.4% year on year to ¥38,465 million, while the operating loss was ¥76 million, compared with operating profit of ¥1 million in the same period of the previous year.」

「On the other hand, profits generally declined due to intense price competition and other factors, resulting in lower overall profit year on year. Consequently, revenue for the cumulative first quarter of the fiscal year increased 3.2% year on year to ¥18,399 million, while operating profit declined 93.0% to ¥4 million.」

「Revenue from the overseas paper and pulp wholesale business was ¥71,474 million, up 7.0% year on year, and segment profit was ¥30 million, compared with a segment loss of ¥91 million in the same period of the previous year.」

「In the United States, although paperboard sales slowed slightly, sales of coated paper grew substantially and newly launched recovered paper trading steadily built up a track record, resulting in revenue exceeding the previous year. In East Asia, performance remained solid, particularly due to strong growth in coated paper and paperboard sales in Hong Kong. As a result, revenue increased 5.8% year on year to ¥52,046 million, and operating profit was ¥6 million, compared with an operating loss of ¥30 million in the same period of the previous year.」

「As a result, revenue declined 1.2% year on year to ¥33,059 million, and operating profit declined 79.7% to ¥1 million.」

「As a result, revenue increased 1.8% year on year to ¥17,832 million, and operating profit was ¥64 million, compared with an operating loss of ¥0 million in the same period of the previous year.」

「As a result, revenue from the overseas paper and pulp wholesale business was ¥66,810 million, up 21.0% year on year, and the segment loss was ¥91 million, compared with a segment loss of ¥1,008 million in the same period of the previous year.」

「In East Asia, sales of coated paper, paperboard and other products increased across the board in Hong Kong, while sales of fine paper, coated paper and paperboard expanded in China. As a result, revenue increased 30.8% year on year to ¥49.194 billion, and the operating loss was ¥30 million, compared with an operating loss of ¥624 million in the same period of the previous year.」

「In the United States, exports were sluggish, but strong import sales of coated paper and containerboard, among other products, resulted in overall solid performance. In East Asia, sales of coated paper, paperboard and other products increased broadly in Hong Kong, while in China, strong sales of fine paper, coated paper, paperboard and specialty paper were accompanied by the launch of film sales to an investment company. As a result, revenue increased 31.6% year on year to ¥33,461 million, and operating profit was ¥7 million, compared with an operating loss of ¥166 million in the same period of the previous year.」

「Sales were strong at almost all locations, accompanied by improved profit. Performance improved particularly significantly in China, where market conditions recovered, and in the United States, where both exports and imports were strong, as well as in Hong Kong, Australia and elsewhere. As a result, revenue increased 30.9% year on year to ¥17.521 billion, and the operating loss was zero, compared with an operating loss of ¥90 million in the same quarter of the previous year.」

「In East Asia, sales in China declined sharply due in part to customer selection associated with business structure reforms. In Hong Kong, sales, mainly of paper, declined, and bad debts and other factors also resulted in a loss. Consequently, revenue declined 24.9% year on year to ¥37.6 billion, and the operating loss was ¥624 million, compared with an operating loss of ¥200 million in the same period of the previous year.」

「In East Asia, overall weak demand caused sales in Hong Kong, mainly of paper, to decline. Sales in China also fell sharply due in part to the selection of customers as part of business structure reforms. As a result, revenue declined 26.5% year on year to ¥25,421 million, and the operating loss was ¥166 million.」

「Although sales in Hong Kong, China and Singapore were relatively strong, revenue declined partly due to the stronger yen. Other parts of the Asia-Pacific region and the United States were affected by weak demand and falling market conditions. As a result, revenue declined 23.9% year on year to ¥13,387 million, and the operating loss was ¥90 million, compared with an operating loss of ¥55 million in the same period of the previous year.」

「Although sales volumes and value in the United States, Australia and Southeast Asia were below the previous year, sales volumes and value increased steadily in East Asia, including Hong Kong and China, mainly in the paper and paperboard business. However, losses were recorded due in part to bad debts and other factors. The Company recorded ¥200 million in business structure improvement expenses as an extraordinary loss, mainly comprising enhanced retirement benefits and other costs associated with the restructuring of overseas operations.」