■Tensho Electric Industries ＜6776＞ Performance Trends

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

(1) Profit and loss situation

Consolidated financial results for the fiscal year ending 2024/3 were net sales of 26,905 million yen (up 12.6% from the previous fiscal year), operating income of 1,062 million yen (up 75.7% from the same period), ordinary income of 1,322 million yen (up 75.8% from the same period), and net income attributable to parent company shareholders of 948 million yen (up 55.0% from the same period).

In addition to the recovery in production and sales of automobile manufacturers, which are the main destinations, consolidated sales increased drastically due to strong sales performance at American subsidiaries that have been actively making capital investments in the past few years.

The reason why the gross profit margin improved 0.4 points to 16.1% (15.7% in the previous fiscal year) is mainly due to an increase in the operating rate of the main automobile products. As a result, gross profit increased 15.3% from the previous fiscal year, while SG&A expenses only increased 3.7% from the same period, so operating profit increased drastically compared to the previous fiscal year. Since active investments have been made mainly in molds, depreciation and amortization expenses were 2,233 million yen (up 340 million yen from the previous fiscal year), but this was absorbed to secure an increase in operating income. As a result, operating income before amortization was 3,295 million yen (up 32.0% from the same period). Ordinary income increased 75.8% from the same period due to an increase in interest income and the recording of exchange gains due to non-operating income. Since subsidy income was recorded as special income in the previous fiscal year, net income attributable to parent company shareholders increased 55.0% from the same period, which is lower than the rate of increase in ordinary profit.

(2) Segment Status

In the Japanese molding-related business, sales were 20,247 million yen (up 5.0% from the previous fiscal year) and segment profit was 568 million yen (up 34.1% from the same period) due to a recovery in production at automobile manufacturers, which are major customers.

In the Chinese molding-related business, sales were 445 million yen (down 38.9% from the same period) and segment profit was 9 million yen (down 86.2% from the same period) due to the stalling of orders for IC trays, which had been relatively strong until the previous fiscal year.

In the American molding-related business, in addition to a drastic increase in production capacity due to capital investments made in the past few years, sales improved significantly to 5,927 million yen (up 65.0% from the same period) as demand for logistics has recovered on the demand side. Although there was a burden of depreciation and amortization expenses due to capital investment, this was absorbed to result in segment profit of 240 million yen (loss of 132 million yen in the previous fiscal year), and profitability improved significantly.

(3) Capital investment and depreciation

The capital investment amount (tangible fixed asset acquisition amount) for the fiscal year ending 2024/3 decreased drastically to 2,733 million yen (4,122 million yen in the previous fiscal year) on a cash flow basis since investment in the second Mexican plant went round. Meanwhile, depreciation and amortization expenses increased significantly to 2,233 million yen (same 1,893 million yen).

(Written by FISCO Visiting Analyst Noboru Terashima)