For shareholders and investors
Toward further development
PIOLAX group has been strengthening its competitiveness in technology, quality , and price by introducing SBU (Strategic Business Unit) in FY2002, which encourages clarification of strategies and a consistent system of development, production, and sales of each business unit.
Approved by the Tokyo Stock Exchange, PIOLAX was listed on its first section on Sep. 1st, 2004.
With regard to the automotive industry, one of the Group's most important markets, domestically we saw a production decline from the previous year, which was caused by natural disasters, and sluggish sales as a result of the increased consumption tax. In the overseas markets, production has continued to decline, particularly in North America, Europe and China.
Under such market demand, the PIOLAX group securely provided for our business partners' needs. At the same time, we have been continuously promoting sales expansion efforts, mainly in Japan, North America and emerging countries. Nonetheless, due to the negative effects of the reduced production in Japan, Europe, North America and China, our net sales were 62,480 million yen, a decrease in profit of 5,818 million yen (8.5%) compared to the previous fiscal year.
In terms of profits, although we promoted further streamlining of operations, the cost burden due to factors such as materials and labor increased. As such, our operating income was 6,753 million yen, a decrease of 2,558 million yen (27.5%) compared to the previous fiscal year, and our ordinary income was 7,396 million yen, a decrease of 2,925 million yen (28.3%) versus the previous fiscal year. Our current net income attributable to owners of PIOLAX Inc. was 5,231 million yen, a decrease of 2,190 million yen (29.5%) from the previous fiscal year.
With regard to the future economic outlook, while the Japanese government and Bank of Japan are expected to continue their economic policies and monetary easing, sluggish growth in consumer spending and slowdown in capital investment have been observed, and the costs of raw materials and labor are surging globally, so the market is likely to remain unpredictable. Moreover, as the effect of the COVID-19 pandemic lingers and movement of people and goods as well as economic activity are restricted, production and sales continue to drop sharply, having a serious impact on the real economy. The global market is expected to remain even more uncertain.
In the automotive industry, there are some new developments such as the rise of electric vehicles, but domestic automobile production is not projected to grow significantly due to slow domestic sales. In addition, for overseas, while we expect a certain level of recovery once COVID-19 is over, we believe that competition will become even more intense in the emerging markets like ASEAN with the rise of local automobile manufacturers.
The consolidated earnings forecast is yet to be determined since it is difficult to calculate earnings forecasts because of the effects of the COVID-19 pandemic. We will carefully assess the impact on the earnings and intend to promptly disclose the relevant earnings forecast when such disclosure becomes possible.