Message from the President

Updated December 1, 2020

Photo: Motonobu Furuya President & CEO, Corporate Officer / Reliably capture recovering demand

QPlease tell us about the general situation in the first half of the year.

Due to the spread of the COVID-19 infection, the operation of the Japanese automobile industry, which is our main customer industry, was significantly stagnant in the first half of this year. As a result, the Net-Shape Business and Assembly Business, which are closely related to the industry, were sluggish, and both businesses posted ordinary losses. On the other hand, in the Filter Business, which has a wide range of applications, sales and profits increased year on year due to strong sales of products for main users. However, it didn't cover the decline in both businesses, and in the first half of the year, consolidated sales were 5,099 million yen, operating loss was 399 million yen, and ordinary loss was 273million yen and quarterly net loss attributable to owners of the parent company of 208.

QPlease tell us about your full-year outlook.

Demand for automobile production is recovering, although the degree of recovery varies from region to region. In addition, the Filter Business is expected to remain strong and remain at about the same level as in the first half. In view of these circumstances, we expect the Group has consolidated net sales of 10,400 million yen, operating loss of 580 million yen, ordinary loss of 375 million yen, and a net loss attributable to owners of the parent of 300 million yen.

In the future, it will be important to reliably capture the increasing demand as the economy resumes. The announcement of a state of emergency and the inability to visit customers triggered a review of our business style. Especially for overseas customers, we sought to find out how we could provide our technology and services online. In order to capture the detailed needs of users, we will continue to take all possible measures against infectious diseases and develop sales that make effective use of online and face-to-face methods.

QPlease tell us about your overseas strategy and what you would like to focus on in the future.

Sales in China have recovered ahead of the rest of the world, and Japanese automobile manufacturers are increasing their sales volume, and are expanding their market share in China, the world's largest market. In line with this movement, our Net-Shape Business is strengthening sales to the Chinese region. In India, where growth is expected in the future, this year In February, we partnered with a sales agent to strengthen our sales structure.

Our strength is our ability to propose technology. We would like to return to our management philosophy, which is the starting point of this business environment, which "creates new value and contributes to society," and take on the challenge of the automobile industry, which is undergoing change. Currently, we are developing technology to mold the shape of the battery case by combining precision forging technology and rolling technology, which are the conventional core technologies. Although it has not yet been put into practical use, we would like to anticipate the needs of the market and create new demand, not limited to this project.

QPlease tell us about the year-end dividend

NICHIDAI considers returning its profit to its shareholders as its important business issue and is working toward constantly paying them stock dividends while securing internal reserves required for its future business development and stronger management culture. Until the first quarter, we could not forecast the full-year results, so we have not decided on the dividend forecast. However, we are starting to see that the Group's demand will recover as automobile production recovers from the second half of the year. Although the full-year earnings forecast will be a loss, the year-end dividend forecast will be 4 yen.

We would like to ask our shareholders for their continued support.

Overview by Segment

Sales Composition Ratio by Segment
(2021.3 1st half results)

Net-Shape Business

Graph: Sales composition ratio by segment (2021.3 1st half results)

Graph: Net sales, Ordinary income/Income ratio

* Rounded down to the nearest million yen

Operating results of the first half year

Due to the stagnation of the automobile industry both in domestic and overseas, sales in both the Forging Die division and the Precision-forged Products division decreased significantly. Although orders received were on a recovery trend in the second quarter compared to the first quarter, as a result, sales were 2,338 million yen (down 42.4% year-on-year). Ordinary loss was recorded due to sluggish sales in both divisions.

Full-year forecast

The Japanese automobile industry in the second half is expected to recover gradually after hitting the bottom in the second quarter. In response to this trend, the Forging Die division is on a recovery trend, while the Precision-forged Products division is expected to be at the same level as in the first half and in a difficult situation. As a result, full-year sales are expected to be 4,900 million yen (down 32.2% year-on-year).

Assembly Business

Graph: Sales composition ratio by segment (2021.3 1st half results)

Graph: Net sales, Ordinary income/Income ratio

* Rounded down to the nearest million yen

Operating results of the first half year

Similar to the Net-Shape Business, sales of turbocharger parts decreased significantly due to the impact of the stagnation of the automobile industry. The result was that the COVID-19 infection diseases had a significant impact on overseas sales in the second quarter. Net sales were 1,630 million yen (down 40.9% year-on-year), and an ordinary loss was recorded.

Full-year forecast

Automakers are resuming factory operations, although it varies from region to region. Demand for turbocharger parts is expected to gradually recover, and overseas sales, which had been markedly declining, are expected to gradually recover. As a result, full-year sales are expected to be 3,240 million yen (down 38.5% year-on-year).

Filter Business

Graph: Sales composition ratio by segment (2021.3 1st half results)

Graph: Net sales, Ordinary income/Income ratio

* Rounded down to the nearest million yen

Operating results of the first half year

Unlike the other two businesses, the filter business supplies products to various industries, and products for main users performed well. As a result, sales and profits increased, with net sales of 1,130 million yen (up 2.2% year-on-year) and ordinary income of 159 million yen (up 14.1% year-on-year).

Full-year forecast

In the second half of the year, we anticipate that filters for core users will continue to be strong. As a result, sales in the Filter Business are expected to be 2,260 million yen (down 0.5% year-on-year), which is almost the same level as in the first half of the year.

PAGE TOP