■Future outlook

● Earnings forecast for the fiscal year ending 2024/12

The consolidated financial results for the fiscal year ending 2024/12 of Apple International ＜2788＞ anticipate sales falling 4.4% from the previous fiscal year to 29,563 million yen, operating income falling 17.6% to 904 million yen, ordinary profit falling 17.5% to 1,048 million yen, and net income attributable to parent company shareholders falling 22.4% to 781 million yen.

The forecast for a decline in sales and profit is due to concerns that production of new cars will be suspended due to misconduct by automobile-related manufacturers, unstable supply conditions, and distribution of used cars will stagnate. Daihatsu Motor Co., Ltd. revealed 174 new cases of fraud in certification tests related to vehicle safety in 2023/12. Production at finished car plants was stopped, and shipments of all vehicles (27 models) were stopped at 4 domestic plants. From mid-2024/2, production has gradually resumed starting with models for which the Ministry of Land, Infrastructure, Transport and Tourism's instructions to stop shipping have been lifted. Currently, there are car models whose production will resume is undecided. In 2024/2, Daihatsu Motor overhauled its management team in response to certification fraud. The chairman and president have retired, and a new president has taken office from Toyota Motor Corporation ＜7203＞.

In 2024/1, it was discovered that fraud was carried out in exhaust gas performance tests of 3 automobile diesel engine models outsourced by Toyota Motor Corporation to Toyota Industries ＜6201＞ for certification application procedures. Shipments of diesel engines made by Toyota Industries were stopped, and Toyota Motor Corporation's production line was also stopped. Production and shipments, including the Land Cruiser 300, were resumed from 3/4 in response to the cancellation of the shipment suspension by the Ministry of Land, Infrastructure, Transport and Tourism. Shipments of Hilux in Thailand have also resumed. At Toyota Group companies, fraud related to domestic engine emissions and fuel efficiency of Hino Motors ＜7205＞ was discovered in 2022/3. Japanese manufacturing is being shaken due to successive quality fraud issues.

The level of the company's initial forecast for the fiscal year ending 2024/12 has risen one level compared to before COVID-19 and during COVID-19. The initial forecast for operating income was 577 million yen and 342 million yen for the fiscal year ending 2018/12 and the fiscal year ending 2019/12 before COVID-19, and 226 million yen, 256 million yen, 203 million yen, and 480 million yen for the 4 periods from the 2020/12 fiscal year to the 2023/12 fiscal year during COVID-19, respectively. Since it was in 2023/5 that the novel coronavirus was transferred from class 2 equivalent to “class 5,” which is a classification of seasonal influenza, etc., it was not reflected in the initial forecast for the 2023/12 fiscal year. The initial forecast for operating profit for the fiscal year ending 2024/12 is 904 million yen, which is a higher level than before. It was based on the fact that performance significantly exceeded initial forecasts for the past 2 periods. Also, the fact that the level of product inventory was raised at the beginning of the fiscal year confirmed the outlook for business results. Malaysia issues import permits (APs) for used cars every 3 months. Inventory was accumulated and increased until the end of December in line with the issuance on January 1. We have entered the 2024/12 fiscal year, and inventory has been handled smoothly. The number of FC member stores in the used car purchase and sale business has increased to 259 stores as of March.

(Written by FISCO Guest Analyst Ken Segawa)