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Message from the President

Report on the Business Performance and Business Activities in the Second Quarter of the Fiscal Year Ending March 2024.

I would like to express my sincere appreciation for our shareholders’ continued patronage. Asahi Yukizai Corporation released today our business results as well as the summary of business performance by business segment on a consolidated basis in the second quarter of the fiscal year ending March 2024. We would like to report its summary as follows:

Kazuya Nakano
President
ASAHI YUKIZAI CORPORATION

1. Consolidated Business Performance for the Second Quarter of the Fiscal Year Ending March 2024

  1) Business Environment in the Second Quarter Cumulative Period
Regarding, in the first place, the Valve and Piping Systems Business Segment, domestic capital investment related to primary products remained to be strong as a whole. Overseas, demand for construction of semiconductor-related factories continued growing, meanwhile demand continued declining since the second half of the preceding fiscal year in the markets for semiconductor-manufacturing equipment which are related to Dymatrix products.
Secondly, in the Resin Business Segment, the market for semiconductor devices which are in relation to electronic material products continued stagnant since the second half of the preceding fiscal year, resulting in a slowdown in demand. Concerning the markets related to foundry products, the number of cars manufactured in Japan surpassed that of the preceding year, thanks to the decreasing difficulties in procuring parts supplied from overseas and to the adverse effects of the shortage of semiconductors being gradually declining. Domestic construction starts, which have connection with the foaming material products, also increased over the preceding year.
  2) Consolidated Business Performance
Sales as well as profits of all types posted increases, due to such factors as the increase in sales to the electronics-related industry centering at semiconductors.
Sales 43.84 billion yen An increase of 7.91 billion yen year-on-year (up 22.0%)
Operating profit 8.29 billion yen An increase of 2.95 billion yen year-on-year (up 55.3%)
Ordinary profit 8.56 billion yen An increase of 2.72 billion yen year-on-year (up 46.6%)
Net profit for the quarter attributable to owners of parent 5.47 billion yen An increase of 1.66 billion yen year-on-year (up 43.5%)

2. Summary of Business Activities by Business Segment


  1) Valve and Piping Systems Business Segment
<Thermoplastic valves, piping, pipe fittings and engineering businesses, etc.>
● Promotion of sales activities in which we endeavored to be helpful to our customers by developing the products about which we pursued solution of the corrosion problems and the functionality of plastic piping materials.
  • Sales of primary products including thermoplastic valves continued to be strong supported by the large-scale construction projects related to semiconductors.
  • Overseas, demand continued to be strong in the U.S. and China, mainly in relation to the capital investment for construction of factories by the electronics-related industries centering at semiconductors.
  • The engineering business that makes use of the thermoplastic piping materials and others also remained strong.
As a result, the segment saw an increase in sales over the preceding fiscal year.

<Dymatrix products to be used in semiconductor-manufacturing equipment>
● Contribution to the increase in sophistication of semiconductors through development of miniature precision valves that correspond to the increasing sophistication of the semiconductor manufacturing process.
  • Sales of Dymatrix products to be used in semiconductor-manufacturing equipment were adversely affected by the continuously stagnant demand in Korea along with the slowed investment in China resulting from the friction between America and China.

As a result, sales posted a decrease from the preceding year.

<Concerning the profits>
  • In the face of the adverse effects of increased personnel expenses and higher raw material costs, profits turned out to be greater than in the preceding year, due to the favorable effects of the yen’s depreciation in addition to the increase in sales mainly in overseas.
Sales 29.74 billion yen Up 30.5% year-on-year
Operating profit 7.63 billion yen Up 51.1% year-on-year
Operating profit margin 25.7%  

  2) Resin Business Segment
<Products for foundry materials>
● Endeavors to be helpful to our customers by making proposals concerning products most suitable for diversified casting processes, in relation to the manufacturing of castings which are necessary for automobiles, construction machines and others.
  • We aggressively made proposals to our customers which should lead to the improvement of product quality and the increase in productivity, along with the improvement of work environment by reducing the smell for existing customers. We also carried out aggressive sales activity for new customers.
  • Segmental sales continued to be strong as the number of automobiles produced was increasing.
As a result, sales posted an increase over the preceding year.

<Foaming material products>
● Provision of safety and security to our customers by, in addition to the easiness of application of the foaming material products, endeavoring to further raise the quality of products after being sprayed.
  • With regard to the spot foaming heat insulation materials, we concentrated energy on the sales activity aiming at increasing acceptance of our products in the customers’ planning regarding heat-insulation construction for commercial buildings, condominiums, and others.
  • With regard to the materials used in civil engineering work, we engaged in the sales activity in which we made proposals concerning the products most suitable for respective construction sites.
As a result, sales posted an increase over the preceding year.

<Electronics material products>
● Pursuance of development of the low-metal refinement technology, which is needed in manufacturing the most advanced semiconductors to be used in semiconductor devices, to contribute to the increase of sophistication of semiconductors.
  • The electronics material product sales were adversely affected by the stagnant demand for semiconductor devices and the inventory adjustment carried out by purchasing parties.
As a result, sales posted a decrease from the preceding year.

<Concerning the profits>
  • The electronics material products proved to be less profitable than in the preceding year; however, profits derived from foundry product and foaming material product sales increased: Profits from the overall resin business were greater than in the preceding year.
Sales 10.73 billion yen Up 11.1% year-on-year
Operating profit 0.66 billion yen Up 199.6% year-on-year
Operating profit margin 6.2%  

  3) Water Treatment & Natural Resources Development Business Segment
<Water treatment business>
● Implementation of designing and construction of water treatment facilities to meet our customers’ needs as well as water regeneration systems which are intended to efficiently use water resources.
  • In both the government-office and private construction projects, the number of construction completes increased and construction was making steady progress.

As a result, sales posted an increase over the preceding year.

<Natural resources development business>
● Contribution to the efficient use of resources by excavating steam wells for geothermal power generation as well as engaging in construction for development of thermal springs.
  • Although thermal spring development projects, which had been postponed, made steady progress, projects of geothermal power excavation were delayed.
As a result, sales posted a decrease from the preceding year.

<Maintenance and management service business and chemicals business>
● Provision of services for stable operation of facilities and equipment, as well as the chemicals for water treatment.
  • In the maintenance service section, maintenance/management as well as repairing projects made progresses as scheduled.
  • In the environmental chemical business, an increase was posted in the volume of products shipped.
As a result, sales posted an increase over the preceding year.

<Concerning the profits>
  • Due to the increases in sales derived from government-office and private construction and thermal spring construction projects in the water treatment business as well as those derived from the environmental chemical business, profits were greater than in the preceding year.
Sales 3.37 billion yen Down 3.4% year-on-year
Operating profit 30 million yen Up 20.6% year-on-year
Operating profit margin 0.8%  

It is our intention that we will continue endeavoring to create added value by concentrating our energy in promoting digital transformation in our operation and in fostering human resources, aiming at sustainable growth of the Asahi Yukizai group.
We would highly appreciate it if our shareholders continue to believe in the growth of Asahi Yukizai group in the future and extend a continuous support and guidance to us.

October 31, 2023
Kazuya Nakano
President