Financial information for fiscal 2017

Summary

During the consolidated fiscal year, the Japanese economy drifted toward a gradual recovery on the economic policies of the government and the Bank of Japan. At the same time, and despite uncertainties in some economies like China and other emerging countries in Asia, the global economy was also on the rise.

Net sales stood at 236,237 million yen for the current consolidated fiscal year, an 11.0% increase from the previous consolidated fiscal year of 212,837 million yen. Profit also increased from the previous consolidated fiscal year. The main factors behind this were increased sales volumes, increased selling prices, and the fact that compared to the previous consolidated fiscal year, there were no negative pressures on prices or supplier logistics charges resulting from the January 8, 2016 explosion. As a result, the Aichi Steel Group posted an operating profit of 11,813 million yen, a 63.7% increase from the previous consolidated fiscal year of 7,218 million yen, despite increased costs of raw materials, energy and other purchased goods, increased expenses and other negative pressures on profit. In addition, we posted an ordinary profit of 11,774 million yen, a 71.6% increase from the previous consolidated fiscal year of 6,863 million yen, and profit attributable to owners of parent of 8,182 million yen, a 60.9% increase from the previous consolidated fiscal year of 5,084 million yen.

Assets, liabilities and net assets

Total assets at the end of the consolidated fiscal year were 277,847 million yen, which was an increase of 4,740 million yen from the previous consolidated fiscal year.

Current assets were 125,740 million yen, which was a decrease of 5,057 million yen.
Property, plant and equipment increased by 4,658 million yen from the previous consolidated fiscal year. In the current consolidated fiscal year, we made total capital investments of 19,020 million yen. Depreciation and amortization totaled 13,818 million yen.

Current liabilities were 51,300 million yen, which was a decline of 8,637 million yen from the previous consolidated fiscal year, mainly because the current portion of long-term loans payable decreased by 8,853 million yen.

Non-current liabilities were 65,741 million yen, which was an increase of 3,844 million yen from the previous consolidated fiscal year. Net assets were 160,806 million yen, which was an increase of 9,533 million yen from the previous consolidated fiscal year. Also, net assets per share stood at 7,716.77 yen (7,266.42 yen in the previous consolidated fiscal year), while the capital adequacy ratio was 54.7% (52.4% in the previous consolidated fiscal year).

Consolidated cash flows

Net cash provided by operating activities increased by 186 million yen from the previous consolidated fiscal year to a total of 13,164 million yen. Profit before income taxes increased by 4,326 million yen, and cash increased by 2,699 million yen due to an increase in notes and accounts payable-trade (cash decreased by 3,819 million yen in the previous consolidated fiscal year due to a decrease in notes and accounts payable-trade). Despite this, cash decreased by 3,600 million yen due to an increase in inventories (159 million yen in the previous consolidated fiscal year), and cash increased by 2,316 million yen due to a decrease in other current liabilities (cash increased by 4,722 million yen in the previous consolidated fiscal year due to an increase in other current liabilities).

Net cash used in investing activities decreased by 20,954 million yen, which was an increase of 1,277 million yen from the previous consolidated fiscal year. The main factor was a decrease of 1,604 million yen in income due to the sale of investment securities compared to the previous consolidated fiscal year.

Net cash used in financing activities decreased by 9,509 million yen (cash increased by 15,231 million yen in the previous consolidated fiscal year). This was due to income of 20,000 million yen through a corporate bond issue in the previous consolidated fiscal year.

As a result, cash and cash equivalents at the end of the current consolidated fiscal year amounted to 27,439 million yen, a decrease of 17,292 million yen from the end of the previous consolidated fiscal year (44,732 million yen).

Capital investments

Capital investments totaled 19,000 million yen, mainly for the purposes of increasing production capacity on steel or electro-magnetic product manufacturing equipment, and for streamlining, updating and functionally improving steel and forged product manufacturing equipment.

Financing

U.S. forging subsidiary Aichi Forge USA repaid a long-term loan of 16 million U.S. dollars (approximately 1,700 million yen) in September 2017, so in light of forecasts for future capital investments and cash flow, it received new financing from a local Japanese bank in December 2017 in the form of a long-term loan for 23.5 million U.S. dollars (approximately 2,500 million yen).

Sales by segment

In April 2017, Aichi Steel Group adopted an in-house company system and changed its organizational structure to achieve the steady growth it is targeting. With this change, we revised the reporting segmentation we use from this consolidated fiscal year. Instead of the previous four categories of Specialty Steel Business, Forged Products Business, Electro-magnetic Products Business and Other Businesses, we are now using the categories of Hagane Company, Kitaeru Company, Smart Company and Other Businesses.

Hagane Company

As a result of increased sales volumes and sales prices in our core product areas of specialty steel and stainless steel, we achieved net sales of 110,974 million yen during the current consolidated fiscal year (96,225 million yen in the previous consolidated fiscal year), which was a 15.3% increase from last year.

Kitaeru Company

As a result of increased sales volumes and sales prices in our core product area of closed-die forged products for automobiles, we achieved net sales of 107,352 million yen during the current consolidated fiscal year (99,599 million yen in the previous consolidated fiscal year), which was a 7.8% increase from last year.

Smart Company

As a result of increased sales volumes of our electronic components, we achieved net sales of 14,786 million yen during the current consolidated fiscal year (13,820 million yen in the previous consolidated fiscal year), which was a 7.0% increase from last year.

Other businesses

We achieved net sales of 3,123 million yen during the current consolidated fiscal year (3,191 million yen in the previous consolidated fiscal year), which was a 2.1% decrease from last year.

Net sales breakdown Smart

Net sales breakdown Smart

Five-year summary (consolidated)

Five-year summary (consolidated)

*1 Every 10 shares in the Company were consolidated into one share effective of October 1, 2016. Net profit per share and net profit per share (diluted) were calculated in anticipation of this share consolidation at the beginning of the 110th Term.

*2 The cash dividend for the fiscal year ended March 31, 2017 was 55.00 yen per share, comprising an interim dividend of 5.00 yen and a final dividend of 50.00 yen. Because every 10 shares in the Company were consolidated into one share effective of October 1, 2016, the interim dividend of 5.00 yen was pre-consolidation and the final dividend of 50.00 yen was post-consolidation. When making calculations related to the share consolidation, the full-year dividend is considered to be 100.00 yen per share, comprising an interim dividend of 50.00 yen and a final dividend of 50.00 yen.

Financial/business information and highlights