Earnings Transcript for 7012.T - Q4 Fiscal Year 2023

Katsuya Yamamoto: My name is Yamamoto. Thank you for your participation. Now I would like to present financial highlights. As announced today at 11

Yasuhiko Hashimoto: I am President Hashimoto. I will now explain the specifics of our announcement of financial results for fiscal year 2023 and the outlook for achieving a business profit margin of 10% as described in our Group Vision 2030. First, in financial results for fiscal year 2023, there was year-on-year growth in sales but a decrease in profits. This was due to the recording of expenses pertaining to the PW1100G-JM engine. Had it not been for this item, I believe we would have achieved our highest ever profits with business profits for Aerospace Systems recovering to pre-COVID levels and company-wide business profits exceeding about ¥100 billion. Now, let's look at each business sector. In our made [Phonetic] to order business, major contributors to increased profits included not only Aerospace Systems, but also Energy Solution & Marine, in particular improved profitability of our Ship & Offshore structure business. Factors underlying this are a strong improvement in profits due not only to favorable performance of the shipbuilding business of our equity method affiliate in China, but also to the start in Japan of continuous construction of 13 LPG ammonia carriers. For Rolling Stock, profits have stabilized due to the shift to full scale mass production of the R211 project for the New York subway. In our mass production business, on the other hand, Precision Machinery & Robots booked a loss for fiscal year 2023 due in particular to worsening of the market in China. However, starting from this fiscal year, our previous efforts to pass through prices and reduce costs should contribute to improving profits. In the Chinese construction machinery market, progress has been made in clearing out inventory and orders this year are expected to exceed those of last year. We also expect to see growth in our semiconductor robot business and make steady improvements in other areas. In our Powersports & Engine business, we expect to see strong growth in our four wheel business due to the start of operations at our new plant in Mexico. Our defense business has recently been garnering attention and we are performing at a level higher than indicated at last year's Group Vision 2030 progress report meeting. For example, we have seen greatly increased orders in both fiscal year 2023 and 2024. In light of these circumstances, we expect as the outlook for our company's results in fiscal year 2024, presented today to set new all time records for orders received, sales, profit and dividends, however, the business profit margin of 5.8% will only slightly exceed the figure of 5%, which our company has set as a minimum. As we move toward realizing our Group Vision 2030, we will strive through our business to achieve a business profit margin of 8% in fiscal year 2027 and a business profit margin of at least 10% in all business fields in 2030. We hope you will provide us with even greater guidance and encouragement in the future. Thank you for listening.

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