Financial Results for the Fiscal Year Ended March 2024
May 13, 2024
I. FY2023 Full-year Results
II. Full-year Forecasts for FY2024
1
Full-Year performance summary
I. FY2023 Full-year Results
- Net sales remained largely unchanged YoY due to slower demand in the Special Steel Bars business and other factors, despite progress in reflecting higher raw material costs in selling prices.
- Operating income was down YoY due to lower earnings in the Special Steel Bars business, despite significant improvements in the Springs business.
- Net income was down YoY, resulting in a net loss. Contributing factors included lower operating income along with higher non-operating expenses and impairment losses on overseas subsidiaries.
- The year-end exchange rate was $1 = JPY151 vs. an initial forecast of $1 = JPY145.
(JPY100M) | ||||||
FY2022 | FY2023 | |||||
Previous | Difference between | |||||
results | Results | YoY change | ||||
previous forecast | ||||||
forecast* | and results | |||||
Net sales | 1,705 | 1,650 | 1,699 | 49 | △6 | |
Operating | 55 | 45 | 48 | 3 | △7 | |
income | ||||||
Ordinary | 37 | 15 | 19 | 4 | △18 | |
income | ||||||
Net income | ||||||
attributable to | 22 | 1 | △10 | △11 | △32 | |
owners of parent | ||||||
company | ||||||
2 | ||||||
* Announced February 7, 2024 | ||||||
Factors contributing to changes in net sales and operating income (YoY comparison)
I. FY2023 Full-year Results
Net sales
(JPY100M) | ||||||||||||||
+7 | ||||||||||||||
Sales under | ||||||||||||||
sales | ||||||||||||||
Selling prices | Foreign | |||||||||||||
Consolidation | 1,699 | |||||||||||||
volumes | contract*1 | exchange | adjustments, etc. | |||||||||||
gains | ||||||||||||||
FY2022 results | FY202324/3results期実績 | ||||||||||||||||||||||
Operating income | * Sales under contract to Nippon Steel Corporation | ||||||||||||||||||||||
(JPY100M) | |||||||||||||||||||||||
Selling prices | |||||||||||||||||||||||
Energy | |||||||||||||||||||||||
Sales | |||||||||||||||||||||||
prices | Production | ||||||||||||||||||||||
volumes | costs | ||||||||||||||||||||||
Inventory | |||||||||||||||||||||||
Raw material | valuation, etc. | ||||||||||||||||||||||
prices | |||||||||||||||||||||||
△4 | |||||||||||||||||||||||
48
FY2022 | FY2023 | |
results | results | |
3 | ||
Results by segment
I. FY2023 Full-year Results
- Net sales grew in the Springs business but fell in the Special Steel Bars business.
- While operating income in the Springs business returned to profitability for the first time in six years, it declined sharply in the Special Steel Bars business.
(JPY100M) | ||||||
FY2022 | FY2023 | |||||
Previous | Difference between | |||||
results | Results | YoY change | ||||
forecast* | previous forecast | |||||
and results | ||||||
Special Steel | Net sales | 1,001 | 865 | 889 | 24 | △112 |
Bars | Operating income | 64 | 18 | 23 | 5 | △41 |
Springs | Net sales | 599 | 685 | 706 | 21 | 107 |
Operating income | △22 | 13 | 10 | △3 | 32 | |
Formed & | Net sales | 102 | 90 | 94 | 4 | △8 |
Fabricated | Operating income | 5 | 7 | 8 | 1 | 3 |
Products | ||||||
Machinery | Net sales | 103 | 100 | 100 | 0 | △3 |
Operating income | 7 | 7 | 7 | 0 | 0 | |
Other | Net sales | 36 | 35 | 34 | △1 | △2 |
Operating income | 1 | 1 | 1 | 0 | 0 | |
Consolidation | Net sales | △135 | △124 | △123 | △1 | 12 |
adjustments | Operating income | 0 | 0 | 0 | 0 | 0 |
Total | Net sales | 1,705 | 1,650 | 1,699 | 49 | △6 |
Operating income | 55 | 45 | 48 | 3 | △7 | |
4 | * Figures announced February 7, 2024 |
Impact of non-operating income/loss and extraordinary
income/loss | I. FY2023 Full-year Results |
- Non-operatingincome/loss worsened YoY due to higher interest payments and losses on foreign exchange (higher forex hedging costs).
- Extraordinary income/loss worsened YoY due to various factors, including the recording of impairment losses (see next page for details) and lower gains on the sale of stock and insurance income than recorded last year.
(JPY100M) | |||||||
FY2022 | FY2023 | ||||||
Previous | Difference between | ||||||
results | Results | YoY change | |||||
forecast* | previous forecast | ||||||
and results | |||||||
Operating income | 55 | 45 | 48 | 3 | △7 | ||
Non-operating income/loss | △18 | △30 | △29 | 1 | △11 | ||
Translation (exchange profit and loss) | △9 | △14 | △13 | 1 | △4 | ||
Interest paid | △12 | △17 | △17 | 0 | △5 | ||
37 | 15 | 19 | 4 | △18 | |||
Ordinary income | |||||||
Extraordinary income/loss | 10 | 1 | △12 | △13 | △22 | ||
Gain on sale of investment securities | 6 | 1 | 1 | 0 | △5 | ||
Insurance income*2 | 9 | 1 | 1 | 0 | △8 | ||
Impairment losses | △6 | 0 | △13 | △13 | △7 | ||
Net income before income taxes and other adjustments | 47 | 16 | 7 | △9 | △40 | ||
Tax expenses | △24 | △13 | △14 | △1 | 10 | ||
Net income attributable to non-controlling interests | △1 | △2 | △3 | △1 | △2 | ||
Net income attributable to owners of parent company | 22 | 1 | △10 | △11 | △32 |
5 | *1 | Figures announced February 7, 2024 |
*2 | Insurance income consists of insurance compensation for fire losses at MSSC |
Ahle GmbH.
Recording of impairment losses
I. FY2023 Full-year Results
- In FY2023 4Q, the Company recorded an extraordinary loss of 1.3 billion yen for impairment losses related to fixed assets at overseas subsidiaries
O u t l i n e o f i m p a i r m e n t
Target location | Target impairment | Amount |
MSSC Ahle GmbH (German spring subsidiary) | Fixed assets | JPY 1.1 billion |
MSM Ningbo Spring Co., Ltd. (Chinese spring subsidiary) | Fixed assets | JPY 0.2 billion |
B a c k g r o u n d o f
i m p a i r m e n t
(MSSC Ahle GmbH)
The business environment for this company remains challenging due to rising costs, including energy prices, and the sluggish European economy.
Despite efforts to improve selling prices, the company continues to struggle to receive orders and remains in the red, resulting in the recording of impairment losses.
(MSM Ningbo Spring Co., Ltd.)
Although the Chinese automobile market is recovering overall, the Japanese automobile manufacturers in the region, our main customers, are still struggling. They are facing weak sales, market withdrawal, and other challenging conditions, as the local automobile manufacturers are gaining a larger market share.
As a result, the Company has also experienced a slowdown in orders, which has led to the recording of impairment losses on production facilities for stabilizer products as these products have been significantly impacted and the future prospects for receiving orders remain uncertain.
6
I. FY2023 Full-year Results
II. Full-year Forecasts for FY2024
7
Full-year performance forecast summary II. Full-yearForecasts for FY2024
- Net sales are projected to grow due to various factors, including progress in reflecting higher costs in selling prices and the planned sales contributions of certain strategic businesses, although demand conditions in the Special Steel Bars business are expected to be challenging.
- Operating income is projected to grow thanks to profit contributions from strategic businesses and other factors.
- Net income is projected to increase dramatically and return to profitability, as a result of increased operating income, reduction in non-operating expenses due to the implementation of financial restructuring in North America, and resolution of special factors such as impairment losses recorded in the previous period.
- We project an exchange rate of $1 = JPY150.
(JPY100M) | |||||
FY2023 | FY2024 forecasts | ||||
results | 1H | 2H | Full-year | YoY change | |
Net sales | 1,699 | 830 | 920 | 1,750 | 51 |
Operating | 48 | 15 | 40 | 55 | 7 |
income | |||||
Ordinary | 19 | 7 | 33 | 40 | 21 |
income | |||||
Net income | △10 | 7 | 23 | 30 | 40 |
attributable to owners | |||||
of parent company | |||||
8 |
Factors contributing to changes in net sales and operating income (YoY comparison)
II. Full-year Forecasts for FY2024
Net sales
(JPY100M)
Consolidation | |||||||||
Foreign | |||||||||
adjustments, etc. | |||||||||
Sales under | |||||||||
Sales | Selling prices | exchange | 1,750 | ||||||
contract* | |||||||||
volumes | gains | ||||||||
FY2023 results | FY20245/3期forecast予想 | ||
Operating income | * Sales produced under contract to Nippon Steel Corporation | ||
(JPY100M)
90
80
70
60
50
40
30
20
10
0
+31 | △29 | ||||||||||||||||||
0 | △4 | +3 | |||||||||||||||||
+6 | |||||||||||||||||||
Raw material | Inventory | ||||||||||||||||||
Selling prices | |||||||||||||||||||
Energy | |||||||||||||||||||
Sales | |||||||||||||||||||
prices | Production | valuation, etc. | 55 | ||||||||||||||||
48 | volumes | prices | |||||||||||||||||
costs | |||||||||||||||||||
FY2023 results | |||||||||||||||||||
FY2024 forecast |
9
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Mitsubishi Steel Mfg. Co. Ltd. published this content on 13 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 May 2024 06:13:04 UTC.