On October 30, we announced our financial results for the second quarter of this fiscal year.
In the first quarter of the April-June period, the new coronavirus infection spread around the world, which led to a decline in demand and forced us to adjust our production volume, thus, the impact was very big.
However, in the second quarter from July to September, the demand recovery trend became clearer than we had initially expected.
I know it was very difficult for you to deal with production during the hot months while also preventing infection.
I am grateful for the hard work of everyone.
Thanks to your efforts, we were able to return to profitability in the second quarter (July-September) in terms of business profit, which represents the performance of our core business.
We didn’t expect to return to profitability until after October, so it can be said that our diligent response to customer orders and our efforts to improve profitability, such as reducing overhead costs and other cost reduction efforts as a whole, have paid off.
However, due to the significant decline in the first quarter (April to June), sales and profits declined compared to the same period last year.
Gross sales: 167.2 billion yen (year-on-year: -27%)
Business profit: −7.5 billion yen (vs. a 5.2 billion yen profit in the same period last year)
Profit attributable to owners of the parent company: −12.7 billion yen (vs. a loss of 0.3 billion yen in the same period last year)
China is recovering at a faster rate than we had originally expected, and the rest of the world is coming back at a faster-than-expected pace in car production volume.
In addition, demand for general industrial products, such as hydraulicigh hoses continued to grow in the first quarter.
Products such as seismic control systems for buildings and residences, which are related to social and environmental infrastructure, also contributed to supporting earnings.
Revisions to the FY2020 Forecast 修正2020年度预测
In conjunction with the announcement of the second quarter results, we have revised upward our forecast for the fiscal year ending March 31, 2021.
Consolidated sales: 375 billion yen (−16% year on year)
Business profit: −2.0 billion yen (11.3 billion yen profit in the previous year)
Profit attributable to owners of the parent company: −12.5 billion yen (0.9 billion yen profit in the previous year)
Unfortunately, the full-year deficit will not change, as the results of the first quarter were greatly affective.
On the other hand, looking only at the second half of the fiscal year (October to March), we expect to return to surplus in ” business profit” and even in net profit attributable to owners of the parent company.
However, concerns about the re-spreading of coronavirus infections in Europe and the Americas, as well as political turmoil in Thailand, make it hard for us to be optimistic.
Therefore, even if the next economic downturn does occur and sales decline, I think we have to continue our efforts to transform our organizational structure into a streamlined & lean one that will be able to generate revenue.
To dear employees 致各位员工
I am aware that with the rapid recovery of production volume, we are getting busier and busier.
The word “busy” in Japanese is written as “losing one’s mind”.
At times like these, it’s a must for you to remember “Safety First” and “S.E.C.-Q. (Safety, Environment, Compliance, Quality)” once again.
There are only two months left in 2020.
While valuing communication, let’s face our daily work with the spirit of “”Banji-nissei”.