I would like to begin with a financial summary of the fiscal year ended March 2022.

In the last fiscal year, while demand expanded rapidly with the recovery from the COVID-19 pandemic, growing environmental awareness toward achieving carbon neutrality and the progress of digitalization spurred a tightening of the supply-demand balance for steel materials and semiconductors, resulting in soaring prices and shortage of resources and materials.

This, combined with disruptions in supply chains and logistics caused by the re-spread of the coronavirus mutations, and the emergence of geopolitical risks of Russia's military invasion of Ukraine, which had been feared, accelerated inflation due to higher resource prices, and interest rate hikes to control this inflation cooled the economy, raising concerns about an economic recession toward the end of the fiscal year.

Under these circumstances, at the time of the announcement of the third quarter financial results, we left our earnings forecast unchanged and said that there was a possibility of an upward or downward swing due to supply chain risks and associated constraints on order receiving and sales activities. In the end, revenue was JPY312.6 billion, up 24.8% from the previous year, operating profit was JPY38.5 billion, up 44.3%, and net profit was JPY27.7 billion, up 49.6%, all of which were higher than our forecast.

Orders received were strong, especially from overseas, due to a combination of the effects of subsidies and real demand for automation and efficiency, and amounted to JPY375 billion, up 47% from the previous fiscal year and a record high, about 12% higher than the highest level in FY2018 to date.

As I mentioned, revenue increased 24.8% from the previous year to JPY312.6 billion. Compared to the revised forecast announced at the time of the second quarter earnings announcement, which is shown on the right, the result was an upward swing of about 1%, partly due to the impact of foreign exchange rates.

Gross profit was JPY133.6 billion, an increase of 34.7% over the same period last year, and the gross profit margin increased by 3.1 percentage points from 39.6% to 42.7%. This is also a 0.4 percentage point improvement over the revised forecast of 42.3%.

The main reasons for the increase in the gross profit margin were 1.9 percentage points from increased capacity utilization due to higher production output, 0.7 percentage points from improved selling prices, and

0.3 percentage points from manufacturing cost rationalization, despite the impact of higher prices for steel and other materials.

SG&A expenses were JPY94.4 billion, an increase of JPY12.8 billion YoY, but the SG&A ratio improved to 30.2% from 32.6% in the previous year. The variable cost ratio increased by 0.4% due to an increase in the ratio of exports to overseas subsidiaries and the impact of rising logistics costs.

In addition, fixed costs increased JPY9 billion from the previous year, but only JPY6.6 billion when taking foreign exchange into account.

The main factors of increase were personnel expenses and sales-related costs associated with the increase in sales revenue and R&D expenses. We will explain the details later.

As a result, operating profit was JPY38.5 billion, an increase of 44.3% from the previous year. However, since a gain of about JPY10 billion from the sale of fixed assets was recorded in the previous year, operating profit

under Japanese GAAP, excluding this special factor, was 2.2 times that of the previous year, a significant increase, since the cost reduction and rationalization effects from the previous year have also continued.

At the beginning of last fiscal year, we announced that it would not be a good idea to reduce expenses excessively, which would lead to a decline in selling power, and that we would focus on expanding sales revenue while remaining conscious of the JPY200 billion breakeven point. The break-even point was JPY210 billion, due in part to the expansion of revenue from JPY280 billion in our initial guidance to JPY312.6 billion.

The yen weakened against the US dollar to JPY112.38, the Euro to JPY130.56, and the Chinese yuan to JPY17.51.

As mentioned about the order trends at the beginning, orders received totaled JPY375 billion, up 47% from JPY255.1 billion in the previous fiscal year.

Of this total, the Sheet-metal Fabrication Machines division, shown in the center bar graph, accounted for JPY278.3 billion, a YoY increase of 49% from JPY186.9 billion. In the Sheet-metal Fabrication Machines division, sales of machinery totaled JPY204.7 billion, a significant increase of 64% from JPY125 billion in the previous fiscal year.

Orders received by region are shown on the right. Orders received in Japan totaled JPY152.9 billion, up 41% from JPY108.7 billion in the previous year, while overseas orders totaled JPY222 billion, up 52% from JPY146.4 billion in the previous year, with record highs in Japan, North America, and Europe.

Next is about the results by segment.

As shown in the bar graph on the left, revenue in the Metal Working Machinery segment was JPY255.8 billion, up 26% from the previous year, and operating profit was JPY31.1 billion, up only 45% from the previous year, due to the impact of special factors in the previous fiscal year, as reported earlier.

On the other hand, in the Metal Machine Tools segment shown on the right side, revenue was JPY55.5 billion, up 20% from the previous fiscal year, and operating profit was JPY6.6 billion, up a substantial 85% from the previous fiscal year.

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Amada Co. Ltd. published this content on 28 May 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 May 2022 05:25:05 UTC.