■Performance Trends

1. Financial Summary for the Fiscal Year Ending March 31, 2024

Mitsui Matsushima Holdings' consolidated financial results for the fiscal year ended 2024/3 were sales down 3.2% from the previous fiscal year to 77,472 million yen, operating profit down 29.7% to 25,170 million yen, ordinary profit down 27.6% to 26,004 million yen, and net income attributable to parent company shareholders down 34.2% to 15,117 million yen. The lifestyle-related business, which the company is focusing on as a new profit base to replace coal-related businesses, performed well with an increase in sales and profit, but a decrease in sales and profit in the energy business due to a decline in coal prices and a decrease in sales volume had an impact on business results. Coal prices (general coal) temporarily increased rapidly to 344.0 US dollars, an increase of 227.3 US dollars from the previous fiscal year in the 2023/3 fiscal year due to tight global energy demand due to a special factor called the Russia-Ukraine conflict. Although the 2024/3 fiscal year was still at a high level of 250.6 US dollars based on past trends, it looks like it received a reaction from the previous fiscal year. In fact, while sales volume in the coal production sector decreased 7.3% from the previous fiscal year, sales in the same field decreased by 28.5%. From this, it can be seen that it was greatly affected by the fall in coal prices. Also, regarding the full-year earnings forecast for 2024/3, the company made upward revisions in 2024/11 and 2024/2. This is mainly due to an increase in coal sales volume and an increase in prices. Although sales and profit declined compared to the previous fiscal year due to the fall in the effects of the sharp rise in coal prices, it can be said that the impact on business results is still significant. Also, it was still at a large level as an absolute amount of profit.

Regarding lifestyle-related businesses, the establishment and expansion of a new profit base showed steady progress. Plus One Techno (2023/8), Japan Chain Holdings (December of the same year), and Saunders & Associates (2024/1) were newly consolidated subsidiaries through M&A. Also, the performance of existing businesses was generally steady, with MOS, Nippon Catan, and Meiko Shokai as drivers.

Financial results by segment are as follows.

(1) Lifestyle-related businesses

Net sales increased 39.5% from the previous fiscal year to 41,168 million yen, and segment profit increased 32.4% to 4923 million yen. In addition to the strong performance of Meiko Shokai, MOS, and Nippon Katan, the performance of Nippon Straw also showed a steady trend. Also, the fact that MOS, which was acquired in the previous fiscal year, contributed to business results throughout the year also boosted performance in the same segment. Additionally, with the conversion of Japan Chain Holdings into a consolidated subsidiary, the incorporation of profit and loss into consolidated financial results from the fourth quarter also contributed.

a) Nippon Straws

Although there was a profit pressure factor such as a rise in raw material prices, unit price increases due to high added value were steadily carried out, and profits were secured. Furthermore, while focusing on expanding sales of environmentally friendly material straws with high added value, technological superiority was enhanced.

b) Hanabishi

Although various measures were steadily implemented, including HP renewal and SEO measures aimed at developing new customers, it was affected by changes in the external environment, such as shrinking markets and intensifying competition. Among them, profits were secured.

c) Meiko Shokai

Although there was a negative factor in the external environment, such as a rise in raw materials, cost increases were absorbed by steadily implementing price increases. Additionally, the strategy to focus on selling highly profitable high-cost products also showed steady progress, leaving results that exceeded expectations.

d) KMT

In addition to the impact of high raw materials, since the production contractor is the United States, it was affected by exchange rates, but price increases were steadily implemented, and cost increases were firmly absorbed. In addition, exports to China and Hong Kong, China have also begun. Although local needs are strong, progress was not as expected due to the influence of the external environment, starting with US-China friction, etc. Although external environmental factors became restrictions on exports, profits were secured through domestic business activities for that reason.

e) Systec Kyowa

As the severe business environment continued, such as a decrease in the number of detached housing starts, business performance was also affected. Among them, profits were secured by steadily implementing sales strategies such as maintaining existing customers and increasing share by acquiring new customers.

f) MOS

In addition to the penetration of cashless payments and the recovery in inbound traffic, business performance was strong in response to the transfer of processing and sales business from Katsumata.

g) CST

It was affected by weak semiconductor market conditions. Amid the sluggish external environment, although expansion of the top line was difficult, profitability was increased by withdrawing from production of unprofitable products.

h) Sansei Electronics

Profits were secured despite being affected by sluggish semiconductor market conditions. It is expected that it will be affected by sluggish semiconductor market conditions from the beginning of the fiscal year, and progress was as expected in that sense.

i) Japan Catan

Both sales and profits remained stable. In addition to the fact that demand for replacement of transmission lines and fittings has been generated stably, profitability has also increased in response to the fact that orders from customers have been leveled.

Note, with regard to Plus One Techno and Japan Chain Holdings, both companies have taken in profit and loss from the second half of the year, but full-scale performance contributions are expected from the 2025/3 fiscal year.

(2) Energy business

Net sales decreased 28.5% from the previous fiscal year to 35,094 million yen, and segment profit fell 34.1% to 22,343 million yen. Sales and profits declined in both the coal production field and the coal sales field in response to a decline in coal prices and a decrease in sales volume.

(3) Other businesses

It includes the real estate business and port business, etc., and sales decreased 13.6% from the previous fiscal year to 1,349 million yen, and segment profit increased 19.0% to 176 million yen.

(Written by FISCO Visiting Analyst Yoichiro Shimizu)