Message from the President

Dear Shareholders

I would like to extend my heartfelt gratitude for the continued support and patronage of our shareholders.
In presenting the Annual Report for our 141st year (from April 1, 2022 to March 31, 2023), I would like to offer a few words.
In the fiscal year under review, the Japanese economy remained unstable due to factors such as protracted geopolitical risks in Europe, global inflation that led to monetary tightening in Europe and the U.S., and significant fluctuations in exchange rates.
In our business, demand for standard grade stainless steel, which had been strong in the first half of the fiscal year, entered an adjustment phase in the second half of the fiscal year due to oversupply in the market inventory resulting from a slow recovery in the vehicle and other transportation equipment field as well as a slowdown in the semiconductor field.

Hisashi Kubota President
Hisashi Kubota

With regard to the Group’s strategic field of high-performance alloys, an adjustment phase continued in the durable consumer goods field, including sheathed heaters and bimetals for home appliances, due to a decline in housing starts in the U.S. and other factors, while the renewable energy field, including solar power generation in China, was favorable.

In addition, rising price trends for raw materials, materials, energy, and electricity continued to be factors in chronic rising costs.

In response to this type of external environment, the Group has steadily implemented measures set forth in the Medium-Term Management Plan 2021, securing roll margins in response to rising raw material prices and implementing thorough cost reduction measures.

As a result, sales volume of the Company for the fiscal year under review decreased 3.9% year on year (a decrease of 9.7% in high-performance alloys and a decrease of 2.7% in stainless steel), but net sales were ¥199,324 million, an increase of ¥50,398 million year on year.

As for profits, operating profit was ¥29,256 million, an increase of ¥15,289 million year on year, ordinary profit was ¥27,738 million, an increase of ¥14,931 million year on year, and profit attributable to owners of parent was ¥19,703 million, an increase of ¥11,231 million year on year.

On the subject of dividends of surplus, our basic policy is one of paying stable dividends while taking into account the investments necessary to maintain the business foundation and the outlook for business results, in addition to working to further improve the financial condition of the Company.

With regard to the year-end dividend for the fiscal year under review, the dividend was ¥130 per share.
Accordingly, including the interim dividend with the record date of September 30, 2022 (¥70 per share), the annual dividend per share for the fiscal year totaled ¥200 per share.

The future business outlook has been undergoing significant changes in recent years, including sharp fluctuations in LME nickel prices and rising raw material prices due to the fragmentation of the global economy caused by Russia’s invasion of Ukraine, and an increase in supply volume due to overcapacity in East Asia and other factors, and the challenges to be overcome in the future are becoming increasingly apparent.

While demand is expected to remain solid in China and elsewhere in the environmental field, including the renewable energy field, the outlook for inventory adjustments and demand trends in the overall market for other high-performance alloys and stainless steel is expected to remain uncertain.

In light of these changes in the business environment and the unpredictable operating environment, we formulated the three-year Medium-Term Management Plan 2024 commencing in FY2024, which started in April of this year, to achieve sustainable growth with sights set on 2025, the 100th anniversary of our founding, and beyond.

We humbly request the continued support and cooperation of our shareholders as we move forward.

June 2023

Net Sales
Ordinary Profit
Profit Attributable to Owners of Parent
Earnings Per Share