Toray Indus Inc Unsp/Adr

Thank you very much for joining us today despite your busy schedules. On behalf of Torre Group, I would like to take this opportunity to extend my gratitude towards your continued understanding and your interest in our management and business activities. Now, I would like to report Torre's business results for the first quarter ended June 30, 2023, and the business forecast for the fiscal year ending March 2024. Now, I would like to follow the table of contents shown on page 1. I would like to begin with an overview of business results for the first quarter ended June 30, 2023. Please turn to page 3. Consolidated revenue for the first quarter decreased 4.6% compared with the same period a year earlier to 578.1 billion yen. Corporating income decreased 19.2% to 21.9 billion yen and profit decreased 65.1% to 13.9 billion yen. Special items for the first quarter worsened by 24.9 billion yen to negative 1.1 billion yen. Stage 4 is about assets, liabilities, equity and pre-cash flow. As for financial condition, at the end of June 2023, both assets and liabilities were affected by the increase in translated yen amounts of overseas subsidiaries because of the depreciation of the yen. Total assets stood at 3,347.4 billion yen. At 153.3 billion yen from the end of the previous fiscal year, you primarily to increases in inventories, tangible fixed assets, and other financial assets. Total liabilities increased 41.6 billion yen from the end of the previous fiscal year to 1,599.8 billion yen owing mainly to increases in borrowings. Total equity rose by 111.8 billion yen compared with the end of the previous discovery year to 1,747.6 billion yen. Owners' equity was 1,643.3 billion yen, interest-bearing liabilities was 974.7 billion yen, and the DE ratio was 0.59. Free cash flow was positive at 12.5 billion yen. Stage 5 explains about the capital expenditures, depreciation and amortization and R&D expenditures. Capital expenditures for the first quarter increased by 7.5 billion yen to 23.5 billion yen on a year-to-year comparison. Meanwhile, depreciation and amortization decreased by 0.1 billion yen to 31.9 billion yen. R&D expenditures decreased by 1.2 billion yen to 15.5 billion yen compared with the same period of the previous fiscal year. The table on page 6 describes revenue and cooperating income by segment. In addition, The graph on this page shows the factor analysis of 5.2 billion yen decrease in cooperating income for the current first quarter on the year-to-year comparison. The difference in quantity was minus 6.6 billion yen due to decrease in production and sales volume mainly in the performance chemicals segment. The net change in price was a plus 5.4 billion yen due to the falling raw material prices compared with the same period of the previous fiscal year. Post-variance and etc. was minus 4.2 billion yen mainly due to increase in fixed costs. Using page 7 and after, I would like to explain the results of each segment. First, fibers and textiles. Revenue of the overall segment decreased to 0.9% to 223.8 billion yen compared with the same period a year earlier, and cooperating income increased 25.8% to 10.9 billion yen. Both apparel applications and hygiene material applications were sluggish, respectively due to worsening market conditions in the U.S. and Europe and the impact of the worsening supply-demand balance. Industrial applications witnessed a demand recovery trend in automobile applications, and there was improvement in the spread from the price decline of natural gas, et cetera, in Europe. Page 8 is the performance chemicals segment. Revenue decreased 12.3% to 214.8 billion yen compared with the same period a year earlier, and the cooperating income decreased 56.1% to 7.4 billion yen. I would like to explain the conditions of each business on the next page. The resins business was weak given the declining demand in the Chinese market. The chemicals business was affected by sluggish market conditions and the decrease in demand of caprolactam. Demand declined due to inventory adjustment in supply chains for optical applications and electronic parts in the steel business, as well as circuit materials in the electronic information material business. Page 10 is the carbon fiber composite material segment. Revenue increased 0.2% to 68.7 billion yen compared with the same period a year earlier, and segment posted cooperating profits of 2.7 billion yen, 13.8% increase for the same period a year earlier. I would like to explain the status of each application on the next page. In the aerospace applications, the production rate of commercial aircrafts at the major customer showed a recovery trend. The sports applications was slow due to the full-fledged infantry adjustment, mainly in general-purpose products for outdoor leisure. In the industrial applications, in regular tow, demand for pressure vessels expanded with the rise of environmental awareness, while in large tow, wind turbine blade application entered into an adjustment phase. Stage 12, in the environment engineering segment, revenue increased 10.3% to 56 billion yen compared with the same period a year earlier, and the cooperating income increased 76.4% to 6.2 billion yen. In the water treatment business, shipping to the US and China, the two major markets for reverse osmosis membranes were strong. Further, sales of an engineering subsidiary and a construction subsidiary in Japan were also strong. Page 13 is the life science segment. Revenue decreased 8.4% to 11.3 billion yen compared with the same period a year earlier, and cooperating income decreased by 0.6 billion yen to negative 0.5 billion yen. In the pharmaceutical business, sales of oral antipyretic drug Vemich were affected by the introduction of its generic versions and the NHI drug price revisions, and sales of orally active prostacyclin derivative toner were affected by inventory adjustment overseas. In the medical device business, sales of dialysers were affected by the soaring prices of raw materials and fuel. Stage 14 shows the business results for major sub-series and regions. At Torre International, sales of fibers and textiles, resins, chemicals, and films decreased. At a subsidiary in Southeast Asia, in the fibers and textiles business, apparel applications were affected by the worsening market conditions in the US and Europe. In the performance chemicals business, ABS resins were impacted by demand decrease in China and ASEAN countries. At a subsidiary in China, in the fibers and textiles business, apparel applications were partly affected by sluggish market conditions in the U.S. and Europe. However, sales in the Chinese domestic market were strong. Performance chemical business was affected by the demand decrease in wetting products. As for subsidiaries in the Republic of Korea, in the fibers and textiles business, Although supply-demand balance of non-woven fabrics worsened, spread of pyramids and staple fibers improved. Performance chemical business was affected by the demand decrease in resin products. Electronics and information material business was impacted by the decrease in production volume of LCD panels for TVs. I would like to explain the consolidated business forecast for the fiscal year ending March 2024. Please turn to page 16. The global economy is showing a gradual recovery, but the peace is expected to remain slow due to factors such as the inflation and high interest rates in the US and Europe, dampening consumer spending and capital investment. The process for normalization of economic conditions is likely to be moderate given the slowdown in demand outside China and the sluggish real estate market. The Japanese economy is also expected to show gradual recovery. However, continued monetary tightening in the US and Europe to tackle the sustained inflation is considered to be a downward risk for the global economy. For the fiscal year ending March 31, 2024, TOEI revised its full-year consolidated forecast announced on May 12, 2023, taking into consideration its business performance for the first three months of the fiscal year and the changes of business environment. It now expects revenue of ¥2,560 billion. Corporating income of ¥120 billion and the profit of 76 billion yen remain unchanged. This forecast from July onward is based on an assumed foreign currency exchange rate of 135 yen to the US dollar. Page 17 shows the consolidated business forecast for the fiscal year ending March 2024 by segment. Page 18 shows the comparison of cooperating income between the initial forecast and the new forecast with breakdowns into segments. The factors behind the differences are shown on the right side of the table. This concludes my presentation. Thank you very much.