Toray Indus Inc Unsp/Adr

Thank you very much for joining us today despite your busy schedule. On behalf of Tore Group, I would like to take this opportunity to extend my gratitude towards your continued understanding and your interest in the management and business activities. Now, I would like to report Tore's business results for the third quarter ended December 31, 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 a brief summary of business results for the third quarter ended December 31, 2023. Please turn to page 3. Consolidated revenue for the 9-month period decreased 3.8% compared with the same period a year earlier to ¥1,829.4 billion. Corporating income decreased 4% to 77.2 billion yen and profit decreased 38.8% to 45.7 billion yen. Page 4 is about special items. Special items for the 9-month period worsened by 24 billion yen to negative 5.8 billion yen compared with the same period of the previous fiscal year. Page 5 is about assets, liabilities, equity, and free cash flow. As for financial condition at the end of December 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 3,388.4 billion yen at 194.3 billion yen from the end of the previous fiscal year due primarily to increases in trade and other receivables, inventories, and tangible fixed assets. Total liabilities increased 67.4 billion yen from the end of the previous fiscal year to 1,625.6 billion yen, owing mainly to increases in bonds and borrowings. Total equity increased by 127 billion yen compared with the end of the previous fiscal year to 1,762.8 billion yen. Owner's equity was 1,655.9 billion yen. Interest-bearing liabilities was 998.1 billion yen, and DE ratio was 0.6. Free cash flow was positive at 19.3 billion yen. Page 6 explains about capital expenditures, depreciation and amortization, and R&D expenditures. Capital expenditures for the 9 months increased by 26.6 billion yen to 95 billion yen on a year-to-year comparison. Meanwhile, depreciation and amortization increased by 1.3 billion yen to 99 billion yen. R&D expenditures increased by 0.8 billion yen to 50.2 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 3.3 billion yen decrease in cooperating income for the 9 months on a 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 plus 15.7 billion yen compared with the same period of the previous fiscal year due mainly to maintain and expansion of spread in addition to proceeding passing on cost increases to sales prices amid the downward trend in raw material prices. Cost variance, etc. was minus 13.4 billion yen mainly due to increase in fixed costs. 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% to 745.4 billion yen compared with the same period a year earlier, and the cooperating income increased 10.7% to 43.8 billion yen. Applied applications were impacted by worsening market conditions, and the hygiene material applications were sluggish from the worsening supply-demand balance. Industrial applications maintain the recovery trend on the back of continued demand recovery in automobile applications and expansion in EV applications. Stage 9 is the performance chemicals segment. Revenue decreased 5.5% to 659.6 billion yen compared with the same period a year earlier, and the cooperating income decreased 18.8% to 24.3 billion yen. I would like to explain the conditions of each business on the next page. In the Regions and Chemicals business, given the impact of demand decline in the Chinese market and other factors, while automobile applications in Japan showed signs of improvement. In the Films business, the impact of inventory adjustment persisted in supply chains for electronic parts. In the electronic and information materials business, demand for OLED-related materials and circuit materials saw some recoveries. Page 11 is the carbon fiber composite materials segment. Revenue decreased 0.9% to 209.3 billion yen compared with the same period a year earlier, and segment posted a cooperating profit of 11.4 billion yen 3.7% decrease from 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 aircraft as the major customer has steadily recovered. The sports application was slow due to the full-fledged inventory adjustment mainly in general-purpose products for outdoor leisure. The wind turbine blade applications entered into an adjustment phase and demand for the industrial applications including pressure-vested software. Page 13. In the environment and engineering segment, revenue increased 5.7% to 165 billion yen compared with the same period a year earlier and cooperating income increased 13.4% to 14.6 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 were also strong. Page 14 is the life science segment. Revenue decreased 4.5% to 38.4 billion yen compared with the same period a year earlier, and cooperating income decreased by ¥1.4 billion to negative ¥0.8 billion. 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 overly active prostacyclin derivative donor were affected by inventory adjustment overseas. In the medical devices business, Although sales of dialyzers were affected by the soaring prices of raw materials and fuels, shipment of dialyzers for Himalayan filtration in Japan was strong. Page 15 shows the business results of major sub-series and regions. At Tora International, sales of fibers and textiles, resins, chemicals, and fumes decreased. At a sub-series in Southeast Asia, in the fibers and textile business, Apparel applications were affected by the worsening market conditions, while in the industrial applications, automobile applications were on the recovery trend. The performance chemicals business, mainly in resins business, was affected by the sluggish Chinese market conditions, but the spread showed a trend toward improvement. Out of sub-series in China, in the 5% textile business, The apparel applications were affected by the sluggish market conditions in the US and Europe. However, domestic sales were strong. In the industrial applications, automobile applications showed a recovery trend. The performance chemical business was affected by the demand decrease in resin products. As for subsidiaries in the Republic of Korea, in the fibers and textiles, supply and demand balance of nonwoven fabric worsened. Meanwhile, in the performance chemicals business, sales of film and electronic information material products expanded. Next, I would like to explain a consolidated business forecast for the fiscal year ending March 2020 poll. Please turn to page 70. The pace of recovery in the global economy is expected to remain slow due to factors such as the high interest rates in the US and Europe, sampling consumer spending and capital investment, and the slow recovery in the Chinese economy. The Japanese economy is also expected to show a gradual recovery. However, the prolonged real estate recession in China unstable prices of primary commodities including food and energy slowdown in consumption in the u.s and europe owing to the delay in start of interest rates cuts and foreign exchange fluctuations caused by a change in the bank of japan's monetary policy are among downward risks for the economy in japan and abroad for the fiscal year ending march 31st 2024 Torre revised its full-year consolidated forecast announced on November 8, 2023, taking into consideration its business performance for the nine months of the fiscal year and the changes of business environment. It now expects revenue of ¥2,470 billion, incorporating income of ¥105 billion and a profit of ¥58 billion. This forecast from January onward is based on an assumed foreign currency exchange rate of ¥140 to the US 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 November 8th 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.