■Financial Results for the Current Fiscal Year

During the fiscal year under review, the environment surrounding our Company Group has remained uncertain despite the global semiconductor supply shortage easing and automobile production recovering, as the rapid electric vehicles (EVs) shift in China causing significant changes in market needs, and concerns for unstable global situations due to heightened geopolitical risks still in place.

Under such circumstances, net sales for the fiscal year under review increased by 20.2% year-on-year to 124.2 billion yen, despite a decline due to the impact of sales difficulties by Japanese automotive manufacturers in China, due to the recovery in customer production resulting from the easing of semiconductor supply shortages, the effect of new vehicle launches, progress in passing on sales prices such as soaring raw material prices, and the impact of increased sales due to currency translation. In terms of profit and loss, despite the impact of a decrease in sales in China, an increase in labor costs due to wage increases, and the recording of provisions for doubtful accounts, operating income was 2.8 billion yen (an operating loss of 0.9 billion yen in the previous fiscal year) due to the impact of increased sales in other regions, improvement in profitability due to rationalization, the stabilization of soaring raw material prices, and the improvement of production losses due to recovery in production at customers. Ordinary income was 2.9 billion yen (ordinary loss of 0.7 billion yen in the previous fiscal year) due to the recording of foreign exchange gains based on the valuation of foreign currency-denominated receivables and loans to overseas consolidated subsidiaries at the year-end exchange rate, and net income attributable to owners of parent was 2.4 billion yen (net loss attributable to owners of parent of 3.6 billion yen in the previous fiscal year) due to the recording of a reversal of the provision for product warranties as extraordinary income and an impairment loss as an extraordinary loss.

■Outlook for the Next Fiscal Year

As for the outlook for the next fiscal year, net sales are expected to remain almost unchanged at 122.0 billion yen, down 1.8% year-on-year, operating income is expected to decrease 28.9% year-on-year to 2.0 billion yen, ordinary income is expected to decrease 52.1% year-on-year to 1.4 billion yen, and net income attributable to owners of parent is expected to decrease 63.7% year-on-year to 0.9 billion yen.

Although this outlook incorporates the latest information as of the end of April, the outlook for the environment surrounding our Company Group remains uncertain, and actual results may fluctuate due to various uncertainties.

The exchange rate is assumed to be 145 yen to the dollar.

■Dividends

Our company recognizes return of profits to shareholders as one of our important management issues, while securing necessary internal reserves for future business outlook and to strengthen our business structure and has made it our basic policy to continuously pay stable dividends taking into account the corporate performance and dividend payout ratios.

The year-end dividend for the current consolidated fiscal year will be 7.5 yen per share. Combined with the interim dividend of 7.5 yen per share, the annual dividend will be 15 yen per share.

The interim dividend will be 7.5 yen per share and the year-end dividend will be 7.5 yen per share, bringing the annual dividend to 15 yen per share.

In accordance with the above basic policy, our Company has paid dividends even in the past three years despite the continuous loss. Although we were able to break out of the deficit in the current consolidated fiscal year, we have kept our announced dividend forecast unchanged in light of the increase in borrowings in the difficult environment that we have been in so far, such as the coronavirus pandemic and the shortage of semiconductor supply.

For the next fiscal year, due to the forecast for consolidated earnings is expected to be severe with a decrease in sales and profits etc., we have decided to keep the dividend amount unchanged from the previous fiscal year, but the dividend payout ratio will be 31.6%.

Going forward, we are considering to continuously implement shareholder returns with a dividend payout ratio of 30%.

We will continue to focus on improving profitability through company-wide management rationalization and strive to continuously strengthen our management structure for future growth and development.

We would like to ask our shareholders for your continued support and encouragement.

June 2024