I would like to express my deep gratitude to all our shareholders for your support. Here is a report on the general status of our business activities in our 113th fiscal year (April 1, 2021 to March 31, 2022), for viewers of this website. The Japanese economy during the fiscal year ended March 31, 2022 showed signs of gradual recovery due to the uptake of vaccination against COVID-19, despite stagnation in economic activities caused by the declaration of states of emergency and the implementation of priority measures to prevent the spread of the virus. However, the outlook remains uncertain, as the impact on corporate earnings caused by stagnation in production activities due to shortages in the supply of semiconductors and other manufactured components, as well as increasing raw material prices, has become apparent. Under such circumstances, the Group has continued its business activities while continuing to take measures to prevent infection, and has focused on parts procurement activities and production activities in order to recover revenue. As a result, revenue for the fiscal year ended March 31, 2022 was ¥23,182 million, up 6.8% from the previous fiscal year. In terms of profits, operating profit was ¥501 million (compared to a loss of ¥968 million in the previous fiscal year), ordinary profit was ¥590 million (compared to a loss of ¥896 million in the previous fiscal year) and profit attributable to owners of parent was ¥595 million (compared to profit of ¥5,233 million in the previous fiscal year).
The main reason for the ¥4,637 million deterioration in profit attributable to owners of parent compared to the previous fiscal year, despite the ¥1,486 million improvement in ordinary profit, was that in the previous fiscal year, a gain on sale of land of ¥8,333 million due to the sales of part of the land and buildings on the site of the Company’s headquarters was recorded as extraordinary income, and the resulting income taxes-current of ¥161 million and income taxes-deferred of ¥2,005 million were also recorded. Based on the above, we decided to pay a year-end dividend per share of ¥25 for the fiscal year under review. Thank you for your understanding. The Group has formulated a new four-year medium-term management plan, “REBORN,” with fiscal 2022 as the starting point for its own reforms, and will promote with unwavering resolve bold cost structure reforms with no reservations, growth strategies that contribute to the realization of a carbon-neutral society through energy conservation and efficiency improvements, and ESG management. As for the future outlook, economic activities are expected to gradually pick up as the COVID-19 pandemic subsides due to the uptake of vaccinations and other factors. On the other hand, the impact on production activities due to increasing raw material prices caused by the prolonging of the situation in Ukraine and shortages in the procurement of manufacturing components, especially semiconductors, is expected to continue, and there are concerns about the impact on business activities in fiscal 2022 onwards. Under these circumstances, for the fiscal year ending March 31, 2023, although revenue is expected to increase, revenue of ¥23,700 million, operating loss of ¥400 million, ordinary loss of ¥350 million and loss attributable to owners of parent of ¥350 million are expected due to a deterioration in the cost of sales ratio caused by increasing raw material prices and one-time expenses aimed towards the future. This will be a recorded loss for the purpose of structural reforms to complete the new medium-term management plan, “REBORN,” and the Group will make a concerted effort to enhance corporate value through the new medium-term management plan. I hope that the IWATSU Group can continue to rely on the support of our shareholders in the future.
Shogo Kimura, President & Chief Executive Officer, June 2022
