Toray Indus Inc Unsp/Adr

Thank you very much for joining us today despite your busy schedule. 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 second quarter ended September 30, 2023, and the business results 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 a brief summary of business results for the second quarter ended September 30, 2023. Please turn to page 3. Consolidated revenue for the second quarter decreased 4.9% compared with the same period a year earlier to 1,199.4 billion yen. Corporating income decreased 10.6% to 48.7 billion yen and profit decreased 51.2% to 28.9 billion yen. Stage 4 is about special items. Special items for the second quarter worsened by 23.6 billion yen to negative 4.2 billion yen compared with the same period of the previous fiscal year. Stage 5 is about assets, liabilities, equity, and free cash flow. As for financial condition at the end of September 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 3,416.3 billion yen, up 222.3 billion yen from the end of the previous fiscal year due primarily to an increase in trade and other receivables, inventories, and tangible fixed assets. Total liabilities increased 59.7 billion yen from the end of the previous fiscal year to 1,617.9 billion yen owing mainly to increases in borrowings. Total equity rose by 162.6 billion yen compared with the end of the previous fiscal year to 1,798.4 billion yen. Owners' equity was 1,693.3 billion yen, interest-bearing liabilities was 986 billion yen, and DE ratio was 0.58. Pre-cash flow was positive at 8.3 billion yen. Page 6 explains about capital expenditures, depreciation and amortization, and R&D expenditures. Capital expenditures for 6 months increased by 12.8 billion yen to 55.1 billion yen on year-to-year comparison. Depreciation and amortization increased by 0.1 billion yen to 65 billion yen. R&D expenditures decreased by 0.1 billion yen to 32.8 billion yen compared with the same period of the previous fiscal year. The table on page 7 describes revenue and cooperating income by segment. In addition, the graph on this page shows the factor analysis of 5.8 billion yen decrease in cooperating income for the six months on a year-to-year comparison. The difference in quantity was minus 10.1 billion yen due to decrease in production and sales volume, mainly in performance chemicals segments. The net change in price was a plus 11.7 billion yen due to the falling raw material prices compared with the same period of the previous fiscal year. Cost of alliance, etc. was minus 7.8 billion yen mainly due to increase in fixed cost. Using page 8 and after, I would like to explain the results of each segment. First, fibers and textiles. Revenue of the overall segment decreased 5.5% to 481.2 billion yen compared with the same period a year earlier, and the cooperating income increased 13.9% to 27.2 billion yen. Apparel applications were impacted by the worsening market conditions in the US and Europe, but the trading subsidiaries in Japan performed strongly. Highly material applications were sluggish due to the worsening supply-demand balance. Industrial applications witnessed a continued 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 9 is the performance chemicals segment. Revenue decreased 8.5% to 413.1 billion yen compared with the same period a year earlier, and cooperating income decreased 42.2% to 14.5 billion yen. I would like to explain the conditions of each business on the next page. In the resins and chemicals businesses, the resins business was weak given the impact of demand declines in the Chinese markets and other factors. In the fumes business, demand declined due to inventory adjustment in supply chains for electronic parts. In the electronic information materials business, demand for OLED-related materials and circuit materials saw some recovery. Page 11 is the carbon fiber composite materials segment. Revenue increased 0.8% to 141.1 billion yen compared with the same period a year earlier and the segment posted co-operating income of 7.6 billion yen, 35.9% increase from the same period a year earlier. I would like to explain the status of each application on the next page. In the aerospace application, The production rate of commercial aircrafts at major customers showed a recovery trend. The sports applications were slow due to the full-fledged inventory adjustment, mainly in general-purpose products for outdoor leisure. In the industrial applications, in regular toll, demand for pressure vessels expanded with the rise of environmental awareness, while in large-toll, wind turbine blade application has entered into an adjustment phase. Page 13, in the environment and engineering segment, revenue increased 5.2% to 111.5 billion yen compared with the same period a year earlier, and cooperating income increased 23.3% to 10.2 billion yen. In the water treatment business, Shipment to the US and China, the two major markets for reverse osmosis membranes was strong. Further, sales of a construction subsidiary in Japan was also strong. Page 14 is the life science segment. Revenue decreased 4.3% to 24.8 billion yen compared with the same period a year earlier and cooperating income decreased by 0.9 billion yen to negative In the pharmaceutical business, sales of oral antipyretic drug Remich were affected by the introduction of its generic versions and the NHI drug price revision and sales of orally active prostacyclin derivative donor were affected by inventory adjustment overseas. In the medical devices business, sales of dialysers were affected by the soaring prices of raw materials and fuels. Page 15 shows the business results of major subsidiaries and regions. At Torre International, sales of fibers and textiles, resins, chemicals, and fumes decreased. At our subsidiaries in Southeast Asia, in the fibers and textile business, apparel applications were affected by the worsening market conditions in the US and Europe. In the performance chemicals business, sales of ABS resins and polyester fumes decreased. At our subsidiaries in China, in the fibers and textiles business, apparel applications were affected by the sluggish market conditions in the US and Europe. The performance chemicals business was affected by the demand decrease in resin products. As for our subsidiaries in the Republic of Korea, In the 5,000 textiles, supply and demand balance of nonwoven fabric worsened. Meanwhile, in the performance chemical business, sales of polyester films, battery separator films, and circuit materials expanded. Next, I would like to explain the consolidated business forecast for the fiscal year ending March 2024. Please turn to page 17. The pace of recovery in the global economy is expected to remain slow due to factors such as the inflation and high interest rates in the US and Europe, sampling consumer spending and capital investment, the slow recovery in the Chinese economy, and the situation in the Middle East. The Japanese economy is also expected to show a gradual recovery. However, the deepening real estate recession in China, unstable prices of primary commodities, including food and energy, and continued monetary tightening in the U.S. and Europe to tackle the sustained inflation are among downward risks for the economy in Japan and abroad. For the fiscal year ending March 31, 2024, Tore revised its three-year consolidated forecast announced on August 7, 2023, taking into consideration its business performance for the six months of the fiscal year and the changes of business environment. It now expects revenue of 2,540 billion yen and profit of 71 billion yen. Corporating income of 120 billion yen remain unchanged. These forecasts from October onwards is based on an assumed foreign currency exchange rate of 140 yen to the U.S. dollar. Page 18 shows the consolidated business forecast for the fiscal year ending March 2024 by segment. Page 19 shows the comparison of cooperating income between the forecast announced on August 7th 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.