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To all shareholders

I would like to express my gratitude to our shareholders for your continued support.

 In the management conditions during the 109th term (the fiscal year from April 1, 2022 to March 31, 2023), there was a gradual recovery from the impact of COVID-19 on economic activities and some regions saw a marked recovery in market demand. On the other hand, the recovery was hampered by various factors such as the production adjustment by vehicle manufacturers due to semiconductor shortages, high energy prices caused by the military tension between Russia and Europe and the United States over Ukraine, and also the effects of the stagnation of the Chinese economy in the second half of the fiscal year.

 The reduced production by automotive manufacturers due to reasons such as the semiconductor shortage had an impact on our group as orders for car air conditioners and engines declined. However, this was offset by increased demand for air conditioning, particularly in the ASEAN region, and the overall sales increased slightly from the previous fiscal year.

 In terms of earnings, although we focused on cost improvements, such as reducing inspection man-hours and reconsidering processes, we experienced a significant decline from the previous fiscal year due to the impact of rising energy prices, the promotion of investment in future growth, and a rapid decline in the orders received in the second half of the fiscal year.

 In the area of automotive electrification, which is a priority sector, although there was an impact from the shortage of semiconductors, factors such as the starting up of items in new orders meant that the final result was a 1.9% increase from the previous fiscal year. Air conditioning components remained strong, with an increase of 9.1% from the previous fiscal year as the requirements for energy-saving and to respond to climate change led to an increase in the introduction of heat pumps and market expansion.

 The current business environment remains uncertain due to the stagnation of the Chinese economy and the worsening effects of the prolonged situation in Ukraine. However, during the 110th term (from April 1, 2023 to March 31, 2024), we will strengthen cooperation with our parent company, Ferrotec Holdings Corporation, and will aim to increase sales and profit from the previous fiscal year by promoting growth in our focus areas, by promoting sales globally, and by strengthening our business structure through rationalization and automation.

 With regards to the year-end dividend, with a view to maintaining a stable dividend over the long term and investing for future growth, we paid a dividend of 8 yen per share, which was the same amount as in the previous fiscal year.

 I would like to thank the shareholders for the great support they continue to provide for our group.




June 2023
President and CEO, Katsuhiko Tsubo
President and CEO, Yuichi Naito
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