Investor RelationsInvestor Relations

Forecasts

FY2024/3

(As of May 11, 2023 )
In the fiscal year ending in March 2024, the Japanese and overseas economic conditions surrounding the Group will remain unpredictable, partly due to rising prices of resources and other commodities stemming from the prolonged conflict in Ukraine and financial system instability accompanying monetary policy action to hike interest rates, despite socioeconomic activities moving closer to normal following the easing of COVID-19 restrictions and the progress of infection control measures.
In the electronics industry to which the Group belongs, in the medium to long term, the Company continues to maintain that demand is expected to grow with advancements in automotive technologies represented by electronic vehicles and CASE (Connected, Autonomous, Shared & Services, Electric), as well as technical functionality of ICT in areas such as 5G (fifth-generation wireless network technology), IoT, and AI. However, it will still take time for the tight supply/demand conditions for some semiconductors and electronic components in automotive applications to ease. In addition, a temporary decline in demand for semiconductors and electronic components is projected, partly due to a backlash from the substantial increase in demand during the COVID-19 pandemic and inventory adjustments by customers due to the risk of economic recession.
Based on these assumptions and in line with the basic policies of Medium-Term Management Plan 2024, the Group will reinforce profitability by focusing on markets in which high growth and profitability are expected. While pursuing further efficiency and soundness, we strive to strengthen the Group’s management foundation. We will also continue to pursue SDGs management, aiming for a balance between solutions to social issues and sustainable growth as a company.
As a result of these factors, we expect net sales to total 550 billion yen, operating and ordinary income to amount to 25 billion yen, and profit attributable to owners of parent to be 18 billion yen in the fiscal year ending in March 2024.

Forecasts for FY2024/3
(million yen)
Net sales
Operating income
Ordinary income
Profit attributable
to owners of parent
ROE(%)
FY2023/3
608,064
32,249
32,739
23,070
19.6
FY2024/3 (Forecasts)
550,000
25,000
25,000
18,000
13.3



FY2023/3

(As of Feb. 07, 2023 )
In the first nine months of the fiscal year ending March 31, 2023, the mainstay electronics component business recorded high sales in the automotive and medical equipment industries, thanks to the gradual easing of supply/demand conditions for semiconductors and electronic components, which had been tight. As a result, net sales, operating income, ordinary income, and profit attributable to owners of parent all exceeded internal forecasts, and achieved record highs for the first nine months of a consolidated fiscal year.
Since supply/demand trends for semiconductors and electronic components, conflict in Ukraine, and exchange rate fluctuations, make it difficult to predict the outlook, the Company only took earnings trends during the first three quarters of this fiscal year into account in revising the full-year earnings forecasts announced on November 8, 2022 (shown in the table below).
Revision to consolidated earnings forecast for the fiscal year ending March 31, 2023 (from April 1, 2022 to March 31, 2023)
Net sales
Operating
income
Ordinary
income
Profit
attributable
to owners
of parent
Net income
per share
Million yen
Million yen
Million yen
Million yen
yen
Previous forecast (A)
(Announced on November 8, 2022)
570,000
28,000
29,000
20,000
761.70
Revised forecast (B)
585,000
29,500
30,000
21,000
799.78
Difference (B) – (A)
15,000
1,500
1,000
1,000
Percent change (%)
2.6
5.4
3.4
5.0
(Reference)
Results for the fiscal year
ended March 31, 2022
495,827
20,915
21,456
15,401
576.46



(As of Nov. 08, 2022 )
Despite continuing shortages of certain semiconductors and electronic parts in the electronic components business, consolidated net sales, operating income, ordinary income, and profit attributable to owners of parent for the first six months of the fiscal year ending March 31, 2023, all exceeded internal forecasts. This was due to the Group leveraging its procurement competencies as an independent trading company to capture robust demand from a wide range of industries, as well as to greater-than-expected depreciation in the yen forex rate, leading to record consolidated results for the six-month period.
Because factors such as supply and demand trends in semiconductors and electronic parts, the state of COVID-19 infections, the situation in Ukraine, and forex trends indicate that caution is required going forward, we took into account only consolidated performance trends in the first six months when upwardly revising the consolidated earnings forecasts announced on August 4, 2022, for the fiscal year ending March 31, 2023, as shown in the table above. Furthermore, forecasts for the third quarter and beyond are unchanged from the previous outlook.

Revision to consolidated earnings forecast for the fiscal year ending March 31, 2023 (from April 1, 2022 to March 31, 2023)
Net sales
Operating
income
Ordinary
income
Profit
attributable
to owners
of parent
Net income
per share
Million yen
Million yen
Million yen
Million yen
yen
Previous forecast (A)
(Announced on August 4, 2022)

540,000
24,000
24,500
16,000
609.58
Revised forecast (B)
570,000
28,000
29,000
20,000
761.70
Difference (B) – (A)
30,000
4,000
4,500
4,000
Percent change (%)
5.6
16.7
18.4
25.0
(Reference)
Results for the fiscal year
ended March 31, 2022

495,827
20,915
21,456
15,401
576.46
 
 
(As of Aug. 04, 2022 )
In the first quarter of the consolidated fiscal year ending March 31, 2023, amid continued supply shortages of certain semiconductors and electronic components, the Group worked to capture robust demand from a wide range of industries using its procurement capabilities as an independent trading company, and also benefited from the yen’s exchange rate which depreciated more than the level assumed in the earnings forecasts set at the beginning of the fiscal year. Steady progress was made toward achieving the Group plan, with net sales and profits both exceeding the plan. As presented above, an upward revision has been made to the full-year consolidated earnings forecasts for the fiscal year ending March 31, 2023, announced on May 12, 2022. Given the uncertainties in the outlook, due to future trends in supply and demand of semiconductors and other electronic components, the COVID-19 situation, the situation in Ukraine, and exchange rate fluctuations, the revision only factors in the earnings trend in the first quarter under review. Forecasts for the second quarter and beyond are unchanged from the initial forecasts.

Revision to consolidated earnings forecast for the fiscal year ending March 31, 2023 (from April 1, 2022 to March 31, 2023)
Net sales
Operating
income

Ordinary
income
Profit
attributable
to owners
of parent
Net income
per share
Million yen
Million yen
Million yen
Million yen
yen
Previous forecast (A)
(Announced on May 12, 2022)

510,000
21,200
21,200
14,500
552.42
Revised forecast (B)
540,000
24,000
24,500
16,000
609.58
Difference (B) – (A)
30,000
2,800
3,300
1,500
Percent change (%)
5.9
13.2
15.6
10.3
(Reference)
Results for the fiscal year
ended March 31, 2022
495,827
20,915
21,456
15,401
576.46
 

(As of May 12, 2022 )
In the fiscal year ending in March 2023, we expect economic activity in Japan and overseas to normalize due to the spread of vaccines in developed countries and regions such as the US and Europe and economic stimulus measures. However, we believe that the outlook will remain uncertain due to concerns about inflation stemming from a spike in the price of oil and other resources and Russia’s prolonged conflict in Ukraine.
In the electronics industry to which the Group belongs, it will still take time for the tight global supply/demand conditions caused by turmoil in the supply chain for semiconductors and other products to ease, but in the medium to long term, we continue to maintain that demand for electronic components will increase. Specifically, in the ICT sector, we expect smartphone functions to become more advanced as 5G (fifth-generation wireless network technology) is introduced in earnest; also, the data center market will expand, and greater sophistication of IoT and AI will create new demand. In the automotive field, we expect electronic vehicles to be increasingly popular as an eco-friendly initiative and that advancements with CASE (Connected, Autonomous, Shared & Services, Electric) will result in the introduction of more electronic components and cyber technology to cars.
Based on these assumptions and in line with the basic policies of Medium-Term Management Plan 2024, which begins in the fiscal year ending on March 31, 2023, the Group will further reinforce profitability by focusing on markets in which high growth and profitability are expected while also actively utilizing venture investments and mergers and acquisitions to create new businesses and strengthen resilience against changes in the external environment. While pursuing further efficiency and soundness, we will strengthen the Group’s management foundation while also pursuing SDGs management, aiming for a balance between solutions to social issues and sustainable growth as a company.
As a result of these factors, we expect net sales to total 510 billion yen, operating and ordinary income to amount to 21.2 billion yen, and profit attributable to owners of parent to be 14.5 billion yen in the fiscal year ending in March 2023.
Forecasts for FY2023/3
(million yen)

Net sales
Operating income
Ordinary income
Profit attributable
to owners of parent
ROE(%)
FY2022/3
495,827
20,915
21,456
15,401
15.7
FY2023/3
510,000
21,200
21,200
14,500
13.0



FY2022/3

(As of May 09, 2022 )
In the consolidated fiscal year ended March 31, 2022, despite facing various issues, including the resurgence of the spread of COVID-19 as a result of variants, stagnation in international distribution networks, and rising raw materials prices, there was a notable recovery in production activities in the electronics industry, to which the Company belongs. Amid these trends, strong demand continued for semiconductors and electronic components in various product fields, although there were supply chain disruptions caused by supply shortages of some materials.
In the electronic components business, which is the Group’s core business, strong sales continued throughout the year, particularly for automotive, medical, and industrial equipment applications, as a result of the Company’s early efforts to capture the requests of customers from a broad range of industries. Furthermore, the Company utilized the strengths of its procurement network as an independent trading company to enable it to maintain widespread sales quantities, which supported performance in the consolidated fiscal year under review. In addition, performance was also positively affected by the fact that foreign exchange rates trended more toward a weaker yen than was initially expected, and accordingly, the Company now expects net sales as well as all profit items, including operating income, ordinary income, and profit attributable to owners of parent, to exceed the previous forecasts and reach new record highs.
Taking into consideration the aforementioned circumstances, the earnings forecasts announced on February 3, 2022, have been revised upward.

Net sales
Operating
income
Ordinary
income
Profit
attributable
to owners of
parent
Net income
per share
Million yen
Million yen
Million yen
Million yen
yen
Previous forecast (A)
(Announced on February 3, 2022)
475,000
17,500
18,000
12,000
449.13
Revised forecast (B)
495,000
20,900
21,400
15,300
572.65
Difference (B) – (A)
20,000
3,400
3,400
3,300
Percent change (%)
4.2
19.4
18.9
27.5
(Reference)
Results for the fiscal year ended March 31, 2021
422,365
11,467
11,241
11,399
415.07



(As of Feb. 03, 2022 )
In the third quarter of the consolidated fiscal year ending March 31, 2022, the electronic components business, which was the driver of the Group’s earnings in the first half, continued to enjoy strong performance led notably by automotive, medical, and industrial equipment.
While constraints on supplies such as electronic parts were identified as a downside risk and a cause for concern when the previous forecasts were announced, there has to date been no tangible impact on net sales, which are projected to exceed the previous forecasts based foremost on prioritizing the securing of volume by leveraging the Company's procurement capabilities as an independent trading company. Further, operating income, ordinary income, and profit attributable to owners of parent are also expected to exceed the previous forecasts as a result of continued efforts regarding the promotion of teleworking and other measures for work style reform amid the COVID-19 pandemic, as well reduction and control of expenses, combined with increases in net sales and gross profit.
Note that of the inventories that the Company protects in relation to the rotary-wing aircraft business for use in disaster prevention by government agencies, as announced in the “Notice Regarding the Possibility of Claims against EuroTec Japan, Inc. Becoming Uncollectible” dated September 1, 2021, the sales agreement between the Ishikawa Prefectural Government and the said company was canceled, effective January 19, 2022, following which a re-evaluation of the relevant inventory and in-process equipment was conducted to ensure that the foregoing will have no future impact on the Company’s earnings. The amounts are reflected reasonably and conservatively on earnings of the third quarter of the consolidated fiscal year under review and forecasts for the fourth quarter.
Taking into consideration the aforementioned circumstances, full-year earnings forecasts have been revised upward as presented above.
Net sales
Operating
income
Ordinary
income
Profit attributable
to owners of parent
Net income
per share
Million yen
Million yen
Million yen
Million yen
yen
Previous forecast (A)
(Announced on November 4, 2021)
470,000
15,000
14,500
9,000
336.84
Revised forecast (B)
475,000
17,500
18,000
12,000
449.13
Difference (B) – (A)
5,000
2,500
3,500
3,000
Percent change (%)
1.1
16.7
24.1
33.3
(Reference)
Results for the fiscal year ended March 31, 2021
422,365
11,467
11,241
11,399
415.07



(As of Nov. 04, 2021 )
In the first half of the fiscal year ending March 31, 2022, sales recovered notably in the Electronic Components business, led by automotive equipment, medical products, and industrial equipment. Meanwhile, income exceeded the initial plan as a result of an increase in gross profit that reflected higher sales and improved gross profit margin, combined with efforts to curb and reduce expenses through facilitation of remote working, online conferencing, and other tools.
Regarding the full-year earnings forecast, the previous forecast for net sales is maintained, in light of the tight supply/demand balance of semiconductors and electronic components. On the other hand, the operating income forecast has been revised upward to 15 billion yen, up 2 billion yen from the previous forecast, which factors in the upside given the steady earnings progress in the first half and taking into account a certain degree of downside risk. In line with this revision, forecasts for ordinary income and profit attributable to owners of the parent have also been revised upward, to 14.5 billion yen and 9 billion yen, respectively.
Net sales
Operating
income
Operating
income
Profit
attributable to owners of parent
Net income
per share

Million yen
Million yen
Million yen
Million yen
yen
Previous forecast (A)
(Announced on May 13, 2021)
470,000
13,000
12,000
8,000
291.20
Revised forecast (B)
470,000
15,000
14,500
9,000
336.8
Difference (B) – (A)
2,000
2,500
1,000
Percent change (%)
15.4
20.8
12.5
(Reference)
Results for the fiscal year ended March 31, 2021
422,365
11,467
11,241
11,399
415.07



(As of May 13, 2021 )
In the fiscal year ending in March 2022, we remain concerned about the effects of COVID-19 on the global economy, particularly the spread of variants around the world. We expect economic activity to gradually normalize as vaccines become more available in each country, treatments are developed, and preventive systems are established. That said, we must take into account the risk of another surge in COVID-19 cases caused by variants; this and other factors make the economic outlook for Japan and the rest of the world uncertain.
In the electronics industry, to which the Group belongs, there has been turmoil in some parts of the supply chain, such as tight supply/demand conditions for semiconductors. However, we continue to expect that in the medium to long term, demand for electronic components will increase. Specifically, in the ICT sector, we expect smartphone functions to become more advanced as 5G (fifth-generation wireless network technology) is introduced in earnest, the data center market will expand, and the greater sophistication and integration of IoT and AI will create new demand. Moreover, in the automotive field, we anticipate that electronic vehicles will become part of a major trend as an eco-friendly measure and that electronic components and cyber technology will be increasingly introduced in cars, as with CASE (Connected, Autonomous, Shared & Services, Electric).
Based on these assumptions, our forecasts for earnings in the fiscal year ending in March of 2022, which will be the final year of Medium-Term Management Plan 2021, are shown below.
At this point, we do not expect to meet the management target of 500 billion yen in net sales since the Group has been affected by the termination of sales agency contracts with major suppliers and the global spread of COVID-19—factors that were not considered when this plan was established. However, we have not lowered our target, and will continue to work hard to meet it We succeeded in making progress with “profit-focused management,” even during this period of adversity, and expect to set a record high for a third straight fiscal year and also achieve the management target of 13 billion yen in operating income. We reached the target for ROE one year earlier than expected, in this fiscal year, but will continue to pursue management that allows us to consistently achieve ROE of 8% or higher in the fiscal year ending in March 2022 as well.
(Reference) Medium-term Management Plan 2021 Numerical Targets

Forecasts FY2022/3
Management Targets FY2021
Medium Term Management Plan
Net Sales
422,365 million yen
470.0 billion yen
500.0 billion yen
Operating Income
 11,467 million yen
 13.0 billion yen
 13.0 billion yen
Ordinary Income
 11,241 million yen
 12.0 billion yen
         -
Profit attributable to owners of parent
 11,399 million yen
  8.0 billion yen
         -
ROE
         13.5%
       8.5%
 8.0% or higher