Presentation Transcripts

First half performance was very strong. There were many negative factors, including the semiconductor shortage, lock-downs in the supply chain, distribution delays, and sharp increases in material prices, but somehow we were able to bounce back. My assessment is that the measures we have been working on so earnestly up to now such as those for cost reduction and productivity improvement have been successful. In September, net sales hit a monthly record-high, finally surpassing 100.0 billion yen. This is an amount that would have been inconceivable at the time I assumed office, so I am very pleased. Our plants did not fully close during the COVID-19 pandemic, but operating rates did drop due to various circumstances, including restrictions on employees coming to work. We also had to make special provisions of supplies like masks and gloves. The lost operations and cost of measures related to COVID-19 amounted to a combined 5.0 billion yen or so in the first half. We also estimate lost profits of around 5.0 billion yen in part because of the increased inventories arising from the semiconductor shortage. Without these, I believe we could have certainly achieved operating income of 55.0 to 56.0 billion yen.

In the second half, we assume the exchange rate to be 110 yen to the U.S. dollar. We also expect to see gradual alleviation of the semiconductor shortage starting around January. Although it was reported that a major Japanese automobile manufacturer will enjoy record production this month, the automobile industry is a mixed bag, due in part to the fact that the effects of the semiconductor shortage are likely to persist a little longer. Considering these things, I believe the forecast for operating income of 90.0 billion yen this year is sufficiently conservative.