Deterioration in Timber Business Profitability Due to Higher Raw Material Prices and Delays in Passing Them Through to Selling Prices
First written in FY2018-Q1. 15 of 26 entries say "Worsened", first in FY2023-Q2. Latest entry: 2026-10-13.
T.O. Holdings moved to the "Worse" side of this theme in 2017, 4 years before the typical company in this theme (2021).
The whole theme swung hardest in 2021: 18 of 27 companies on the "Worse" side.
10 other companies' latest entry also says "Worsened".
- 2026-10-13WorsenedEarnings
「Although we strengthened sales efforts focused on existing customers and worked to reduce expenses, both sales and operating profit were below the same period of the previous year.」
In the timber business, sales and operating profit fell below the same period of the previous year despite stronger sales efforts and expense reductions amid higher material prices and transportation costs. - FY2026WorsenedAnnual report
「Material prices and transportation costs continued to rise, while uncertainty surrounding the situation in the Middle East further weakened consumers’ willingness to purchase homes during the fiscal year.」
Higher material prices and transportation costs and weaker willingness to purchase homes continued. Sales in the timber business fell 10.1% from the previous fiscal year, and the operating loss widened from ¥12 million to ¥32 million. - FY2026-H1WorsenedAnnual report
「Housing prices continued to rise nationwide due to soaring material prices and other factors, with no improvement in consumers' willingness to purchase homes. Housing starts remained sluggish, particularly in the Tohoku region and areas farther north, the Group's primary market. As a result, both net sales and operating income fell below the year-earlier period.」
Declining demand due to surging material prices and weak housing starts continued, and the timber business recorded sales of ¥1,602 million and an operating loss of ¥7 million. - FY2025WorsenedAnnual report
「Housing starts nationwide trended downward as material prices surged. Sales fell below the previous fiscal year, and although the company worked to reduce selling, general and administrative expenses, profit also fell below the previous fiscal year due to higher transportation costs and the impact of rising prices. As a result, sales were ¥3,417 million, down 13.6% from the previous fiscal year, and the operating loss was ¥12 million, compared with operating profit of ¥38 million in the previous fiscal year.」
Higher timber and material prices, transportation costs, and general prices reduced sales in the timber business, which moved from operating profit to an operating loss of ¥12 million. - FY2025-H1WorsenedAnnual report
「Demand in both the residential and non-residential sectors continued to trend downward, and conditions remained difficult as the movement of construction materials and other goods stayed weak. The company worked to strengthen sales, including by seeking new products to handle, but sales fell below the same period of the previous year. Although it worked to reduce selling, general and administrative expenses, profit fell below the same period of the previous year because gross profit declined as sales fell.」
Declining demand in the residential and non-residential sectors and weak movement of construction materials continued. Despite efforts to reduce selling, general and administrative expenses and strengthen sales, the timber business posted lower sales and profit. - FY2024WorsenedAnnual report
「Timber prices, which had surged due to the global wood shock, continued to trend downward and then remained weak. Timber demand declined as housing starts and capital investment fell, causing sales to fall below the previous fiscal year. Gross profit also contracted as sales declined, and operating profit fell below the previous fiscal year.」
Weak timber prices and declining demand due to decreases in housing starts and capital investment reduced sales in the timber business. Operating profit was ¥38 million, down 71.3% from the previous fiscal year. - FY2024-Q3WorsenedAnnual report
「Timber prices, which had surged due to the global wood shock, remained in a correction phase, although the downward trend has paused. Sales fell below the same period of the previous year as timber demand declined due to lower timber prices and decreases in housing starts and capital investment. In terms of profitability, gross profit contracted because sales declined and the company continued to adjust inventories on hand, causing operating profit to fall below the same period of the previous year. As a result, sales were ¥3,053 million, down 18.7% year on year, and operating profit was ¥38 million, down 72.9% year on year.」
A downward trend in timber prices, declining demand due to decreases in housing starts and capital investment, and inventory adjustments reduced sales in the timber business, while operating profit fell 72.9% year on year. - FY2024-Q2WorsenedAnnual report
「Sales fell below the same period of the previous year as timber demand declined due to lower timber prices and decreases in housing starts and capital investment. Although the company continued to reduce selling, general and administrative expenses, operating profit fell below the same period of the previous year because gross profit contracted as sales declined and the company continued to adjust inventories on hand.」
Lower timber prices, declining demand due to decreases in housing starts and capital investment, and inventory adjustments combined to reduce the timber business's operating profit by 58.0% year on year. - FY2024-Q1WorsenedAnnual report
「Timber prices continued to trend downward. Demand for timber declined as housing starts fell, and sales fell below the same period of the previous year. Although the company continued to reduce selling, general and administrative expenses, operating profit fell below the same period of the previous year because gross profit declined as sales fell.」
Timber prices continued to trend downward and demand declined as housing starts fell. Despite continued reductions in selling, general and administrative expenses, the timber business's operating profit fell 68.3% year on year. - FY2023-Q3WorsenedAnnual report
「Timber prices, which had surged due to the global wood shock, gradually began to decline during the third quarter consolidated accounting period. Sales exceeded the same period of the previous year as sales remained firm, but higher procurement prices reduced margins, causing operating profit to fall below the same period of the previous year.」
Timber prices gradually began to decline, while higher procurement prices reduced margins, causing operating profit to fall 32.1% year on year. - FY2023-Q2WorsenedAnnual report
「Selling prices for timber and plywood remained at high levels due to the global wood shock, lifting sales above the same period of the previous year. However, higher procurement prices reduced margins, and operating profit fell below the same period of the previous year.」
Selling prices for timber and plywood remained high and lifted sales, but higher procurement prices reduced margins, causing operating profit to fall below the same period of the previous year. - FY2023-Q1Timber prices remained high, driving higher sales and profitAnnual report
「Selling prices for timber and plywood remained at high levels due to the global wood shock. As a result, sales and operating profit exceeded the same period of the previous year as selling prices increased.」
Timber prices remained high, driving higher sales and profit in the timber business through higher selling prices in the current quarter. - FY2022Profitability improved despite continued procurement constraintsAnnual report
「Although procurement of some products was constrained by the impact of the global demand squeeze known as the wood shock, profitability improved substantially, including through the sale of inventories on hand.」
The global shortage of timber demand and continued procurement constraints persisted, but sales in the timber business were ¥4,687 million and operating profit was ¥251 million, up 146.2% year on year. - FY2022-Q3Tight supply and demand continued, while margins improvedAnnual report
「The global supply-demand squeeze caused by the wood shock continued through the nine-month period of the third quarter of the current consolidated fiscal year. Sales exceeded the same period of the previous year due to higher prices, and margins improved.」
Prices remained high and supply and demand remained tight due to the wood shock, but in the current quarter these factors are described as drivers of higher sales and improved margins. - FY2022-Q2Higher prices due to tight supply and demand, and improvement in the timber businessAnnual report
「Amid a global supply-demand squeeze caused by the wood shock, selling prices rose. In addition, sales of inventories on hand and other factors lifted sales above the same period of the previous year, while cost reductions from structural reforms, including the consolidation and closure of branches, lifted profit above the same period of the previous year.」
The company states that surging timber prices increased selling prices and sales, and, together with cost reductions from the consolidation and closure of branches, led to improved profitability in the timber business. - FY2019-Q3MaterialisedAnnual report
「In terms of profitability, the loss increased due to the impact of lower sales and surging raw material prices, among other factors.」
Surging raw material prices have again appeared in actual results as an increase in the timber business's loss. - FY2019-Q2RestatedAnnual report
「In terms of profitability, the loss narrowed as manufacturing costs declined.」
The company continues to explain that the timber business's loss narrowed as manufacturing costs declined. - FY2019-Q1Narrower loss due to lower manufacturing costsAnnual report
「In terms of profitability, the loss narrowed as manufacturing costs declined.」
The company states that the timber business's operating loss narrowed from ¥62 million in the same period of the previous year to ¥38 million due to lower manufacturing costs. There is no new explanation regarding raw material prices or the passing on of higher prices. - FY2018MaterialisedAnnual report
「In the timber business, the plywood segment exceeded the same period of the previous year despite difficult market conditions. However, sales fell below the same period of the previous year, partly because the number of orders for flooring (floorboard) construction declined as public works decreased. Profit also fell below the same period of the previous year because raw material prices remained high and the allowance for doubtful accounts for business partners increased. As a result, sales were ¥10,135 million, down 2.2% year on year, and the operating loss was ¥210 million, compared with a loss of ¥133 million in the same period of the previous year.」
Raw material prices remained high, and the timber business's operating loss widened from ¥133 million in the previous year to ¥210 million. The risk of higher prices is having an actual impact on full-year results. - FY2018-Q3RestatedAnnual report
「In the timber business, sales fell below the same period of the previous year because the number of orders for flooring (floorboard) construction declined as public works decreased. In terms of profitability, margins remained low, partly because the increase in costs, including higher raw material prices, was passed on to selling prices with a delay.」
The company continues to explain that higher raw material prices and delays in passing higher costs on to selling prices kept margins in the timber business low. - FY2018-Q2MaterialisedAnnual report
「In the timber business, sales of building materials remained solid as housing starts increased. However, profit margins remained low because the increase in costs, including higher raw material prices, was passed through to selling prices with a delay.」
The company states that higher raw material prices and delays in passing increased costs through to selling prices kept profit margins in the timber business low. - FY2018-Q1MaterialisedAnnual report
「In the timber business, sales of building materials remained solid as housing starts increased. However, operating profit fell below the year-earlier level because the increase in costs, including higher raw material prices, was passed through to selling prices with a delay.」
The company has for the first time stated that higher raw material prices and delays in passing increased costs through to selling prices actually led to a year-on-year decline in operating profit.