The financial results briefing for the first quarter of the fiscal year ending December 31, 2023 was held online on May 12, 2023.
Speaker: Kazuhiro Ogawa, Managing Executive Officer
Cautionary statement
This is a summary of the question-and-answer session at the financial results briefing.
This contains forward-looking statements concerning the financial forecasts, plans, strategies of the Company, which are not historical facts. They are based on management's assumptions made in accordance with information available at the time of the briefing (as of May 12, 2023) and are subject to risks and uncertainties. Actual results may differ materially from these forecasts.
Q：Please tell us about the results for the first quarter against the forecast, and your outlook for the first half.
A：In the first quarter, the shortage in parts procurement impacted our ability to supply some new products, which resulted in sales falling short by approximately 5% of the target. The cost of goods sold was lower than our original projection, and a decline in cost ratio has boosted the gross profit ratio. In the first quarter, we focused on sales promotion activities worldwide, such as exhibitions, following the launch new products. As a result, the selling, general and administrative expenses increased year-on-year, albeit 0.2 billion yen lower than the initial plan. While the sales fell short of the target, operating profit was in line with target, owing to our efforts to hold down selling, general and administrative expenses. For the second quarter, we aim to achieve our targets for the first half of the fiscal year by eliminating the order backlogs, which was an issue in the first quarter, and by continuing on with improvement measures.
Q：Please tell us about the state of procurement for parts for which there are shortages.
A：Specifically, we experienced shortages of power supply units —a part used for a range of products —which, in turn, hindered the supply of new products. Since February we have been successful in securing sufficient quantities, through a variety of measures we have taken to address this shortfall. We will strive to clear the order backlogs from the second quarter and onward and look to increase sales.
Q：Please tell us about the status of your order backlogs.
A：The order backlog at the end of March 2023 stood at around 1.1 billion yen, against around 0.15 billion yen at the end of the previous fiscal year, an increase of roughly 1 billion yen in a three-month period. However, as I just explained, we have been able to secure the parts for which we were experiencing a shortfall, and will begin shipping the orders as soon as the products are complete. Further, given the strong levels of demand, we will strive to clear the order backlog by taking measures to accelerate sales from the second quarter and onward, as we look to ensure our sales targets for the full year are met.
