117th
Fiscal Term Interim Business Report
April 1, 2022 to September 30, 2022
NOK CORPORATION
(Securities Code 7240)
Top Message
Masao Tsuru
Representative Director, Chief Executive Officer
To Our Shareholders
We are pleased to report our business results for the interim period of the 117th term (April 1, 2022 to September 30, 2022).
We would like to express our sincere gratitude for your unwavering support again during this term.
The NOK Group has been operating its business based on the management policy that it is important to establish a highly profitable corporate group by making unique and useful products backed by technology, and selling them at competitive prices all over the world.
As to the management environment surrounding the Group during the first half of the fiscal year under review, although there was a temporary decrease in economic activities due to the impact of China's lockdowns, which were implemented due to the spread of COVID-19, and the short supply of components such as semiconductors, signs of a gradual recovery were observed. Meanwhile, on the back of the soaring raw material and energy prices arising from the prolonged Russia-Ukraine conflict and monetary policies implemented by several governments against accelerating inflation, we are facing continued concerns over the weakening yen and deteriorating economy.
Under these circumstances, the Group has promoted various measures with the aim of achieving sustainable growth with an eye toward the future.
In the first half of the fiscal year on a consolidated basis, net sales totaled 352,769 million yen (up 8.8% year on year), operating income was 6,117 million yen (down 58.9% year on year), ordinary income was 16,561 million yen (down 24.1% year on year) and profit attributable to owners of parent was 10,185 million yen (down 21.7% year on year).
Regarding the future business environment surrounding the Group, it is expected that the recovery trend of economic activities will continue with the spread of
Financial Highlight (consolidated)
Net sales | Operating income or loss | ||||||
Interim | Full-year | (Billions of yen) | Interim Full-year | (Billions of yen) | |||
626.8 | 596.4 | 682.5 | 31.3 | ||||
12.0 | 14.5 | 14.9 | |||||
352.8 | |||||||
308.4 | 255.2 | 324.4 | 2.2 | 6.1 | |||
-8.6 | |||||||
114th term | 115th term | 116th term | 117th term | 114th term | 115th term | 116th term | 117th term |
(FY 2019) | (FY 2020) | (FY 2021) | (FY 2022) | (FY 2019) | (FY 2020) | (FY 2021) | (FY 2022) |
Note: Figures in financial highlights (consolidated) are rounded off.
Ordinary income or loss
Interim Full-year | (Billions of yen) | ||
46.2 | |||
17.4 | 18.3 | 21.8 | 16.6 |
4.1 | |||
-8.7 | |||
114th term | 115th term | 116th term | 117th term |
(FY 2019) | (FY 2020) | (FY 2021) | (FY 2022) |
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COVID-19 slowing down. However, the outlook remains uncertain on the back of soaring resource and energy prices and accelerating inflation worldwide, a sharp depreciation of the yen triggered by the monetary policies of foreign countries, concerns over economic recession and the continued Russia-Ukraine conflict and other factors.
In the seal business, while production for automobile applications temporarily decreased due to the impact of China's lockdowns and the supply shortage of semiconductors and other components, signs of a gradual recovery were observed. As to general industrial machinery applications, demand from manufacturers of machine tools and robots in Japan remained firm while demand from manufacturers of construction machinery was negatively affected by China's lockdowns. However, considering that highly uncertain situations are likely to continue in the external environment such as soaring prices of raw materials and energy, concerns over supply of raw materials, and the impact of geopolitical risk all over the world, we will act immediately against these issues. Furthermore, we will strive to establish production systems that enable us to realize more stable quality and more stable supply of products than ever. Concurrently, the development of new businesses and new products is also our focus in response to addressing the medium- to long- term changes in the business environment, such as the electrification of automobiles.
In the electronic product business, a highly uncertain external environment is anticipated as in the seal business. Meanwhile, we must consider how we should respond to the changes in demand for high-end smartphones, a decrease in demand related to HDDs, and the changes in the structure of industries arising from the electrification of automobiles.To address these issues, we will strive to build a corporate structure on which the impact of changes will
not be significant by further increasing sales of electric carrelated products, and expanding our business domains in which demand does not fluctuate considerably. Concurrently, we will promote production at optimum locations in response to the increasing demand for electric cars all over the world based on the concept of local production for local consumption.
In other businesses, while sales of special lubricants temporarily declined due to a reduction of car production and other factors, we expect they will gradually recover. With respect to products for office equipment, there is a concern that a decrease in demand for printers and supplies will continue due to work-style reforms triggered by the impact of COVID-19, in addition to the continuing deceleration of growth of the office equipment market. Accordingly, we must ensure that our corporate structure is appropriate and commensurate with demand. In order to respond to these challenges, we will unite the efforts of our Sales Division, Technology Division and Production Division to promote greater competitiveness in the aspects of productivity, quality and cost, and further improve management efficiency to enhance profitability.
By steadily promoting these measures, the entire group will work together in order to achieve sustainable growth.
With regard to the interim dividend for this six-month period, we have decided to set it at 25 yen per share.
We are earnest in our determination to endeavor to meet the expectations of our shareholders.
We ask for your understanding of the current business climate and our management direction, as well as our commitment. The NOK Group greatly appreciates your continued support and guidance.
December 2022
Net income per share, or net loss per share
Total assets/Net assets
Total | Net | (Billions of yen) |
assets | assets |
Interim Full-year | (Billions of yen) |
25.8 |
Interim | Full-year | (yen) |
149.37
728.7
803.0
857.3 894.4
13.0 | 10.2 | |
1.4 | ||
-2.2 | -1.4 | |
-10.5 |
59.02
7.92-7.87 75.17
-12.83
-60.50
447.2
502.1 554.4 571.0
114th term | 115th term | 116th term | 117th term |
(FY 2019) | (FY 2020) | (FY 2021) | (FY 2022) |
114th term | 115th term | 116th term | 117th term |
(FY 2019) | (FY 2020) | (FY 2021) | (FY 2022) |
114th term | 115th term 116th term | 117th term | |
(FY 2019) | (FY 2020) | (FY 2022 | ) |
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Business Overview (consolidated)
Seal business
Net sales | 171,423 million yen | ||||||
Breakdown | |||||||
of net sales | |||||||
Year on year growth rate 3.7% | |||||||
48.6% | |||||||
8,715 million yen | |||||||
Operating income | |||||||
Year on year growth rate 52.3% | |||||||
Sales for automobile applications increased as a result of foreign exchange rate | |||||||
movement and the impact of passing on the soaring prices of raw materials to | |||||||
selling prices, | despite | the impact of China's | lockdowns and a shortage of | Oil seals |
components including semiconductors in the first quarter of the fiscal year under review. As to general industrial machinery applications, demand from manufacturers of machine tools and robots in Japan remained firm while demand from manufacturers of construction machinery was negatively affected by China's lockdowns. Sales increased as a result of foreign exchange rate movements as well as the impact of passing on soaring raw material prices to selling prices.
As a result, net sales stood at 171,423 million yen (up 3.7% year on year).Operating income was 8,715 million yen (down 52.3% year on year) due to soaring prices of raw materials, etc.
Electronic product business
Net sales | 166,622 million yen | Breakdown | ||||
of net sales | ||||||
Year on year growth rate 14.0% | ||||||
47.2% | ||||||
3,412 million yen | ||||||
Operating loss | ||||||
Operating loss of 3,995 million yen in the same period of the previous fiscal year | ||||||
Demand for components used in automobiles and high-end smartphones increased | ||||||
despite the negative impact of China's lockdowns and the shortage of | ||||||
semiconductors and other components. Demand related to HDDs decreased. | ||||||
Overall, sales increased reflecting the positive | effect of foreign exchange rate | Flexible printed circuits (FPC) | ||||
movements. | ||||||
As a result, net sales grew to 166,622 million yen (up 14.0% year on year). Operating loss was 3,412 million yen (compared to an operating loss of 3,995 million yen in the same period of the previous fiscal year) due to a reduction of personnel expenses and the impact of foreign exchange rate movements.
Other businesses
Net sales | 14,724 million yen | Breakdown | |||||
of net sales | |||||||
Year on year growth rate 13.9% | 4.2% | ||||||
Operating income | 821 million yen | ||||||
Year on year growth rate 36.7% | |||||||
Development rollers, charge rollers | Specialty lubricants | ||||||
Sales grew thanks to a recovery of demand related to office equipment and the significantly favorable impact of foreign exchange movements, despite a decrease in demand for special lubricants.
As a result, net sales were 14,724 million yen (up 13.9% year on year). Operating income was 821 million yen (up 36.7% year on year).
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Topics
Sustainable raw materials Biomass materials
Ethylene propylene rubber (EPDM) with 30% biomass content
While social efforts to realize carbon neutrality are attracting attention, environment-friendly materials that use naturally-derived raw materials are also required for machine parts. Therefore, NOK has developed ethylene propylene rubber (EPDM) using raw materials derived from biomass. Our proprietary compounding technology has achieved properties equivalent to those of conventional general-purpose EPDM.
Compared to conventional general-purpose EPDM, this developed material can reduce CO2 emissions in the manufacturing process of the raw material (polymer) used by approximately 40%, contributing to the realization of carbon neutrality.
Biomass
The rubber material
"E3000" is a
biomass mark
certified product.
EPDM material comparison | Estimation of CO2 emissions*3 | |||||||||||||||||||||||||||
40% | ||||||||||||||||||||||||||||
General-purpose | Biomass EPDM | |||||||||||||||||||||||||||
Material properties | EPDM (conventional | |||||||||||||||||||||||||||
"E3000" | ||||||||||||||||||||||||||||
Biomass rate*1 | reduction | |||||||||||||||||||||||||||
(%) | 0 | |||||||||||||||||||||||||||
30 | ||||||||||||||||||||||||||||
material) | ||||||||||||||||||||||||||||
(Duro-A) | 70 | |||||||||||||||||||||||||||
Hardness | 72 | |||||||||||||||||||||||||||
Normal physical | Tensile strength | (Mpa) | 18.5 | 17.0 | ||||||||||||||||||||||||
properties | ||||||||||||||||||||||||||||
Breaking elongation | (%) | 210 | 170 | |||||||||||||||||||||||||
150℃×70h | ||||||||||||||||||||||||||||
Hardness change | (Points) | +1 | +2 | |||||||||||||||||||||||||
Air heat aging | ||||||||||||||||||||||||||||
Tensile strength change | (%) | -2 | -14 | |||||||||||||||||||||||||
rate | (%) | -8 | -5 | |||||||||||||||||||||||||
Compression permanent deformation*2 | 150℃×70h | (%) | 18 | 14 | General-purpose | Biomass EPDM | ||||||||||||||||||||||
Low temperature properties | TR-10 | (℃) | -49 | -48 | EPDM | "E3000" (biomass- | ||||||||||||||||||||||
(conventional | derived polymer) | |||||||||||||||||||||||||||
*1 | Biomass rate = Weight of | biomass used / Weight of product x 100 (%) (According to the biomass mark certification criteria | ||||||||||||||||||||||||||
issued by the Japan Organics Recycling Association) | polymer) | |||||||||||||||||||||||||||
*2 The compression permanent deformation test was performed with an O-ring (thickness: φ3.10). | (According to NOK's research) | |||||||||||||||||||||||||||
*3 CO2 emissions during raw material manufacturing |
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Nok Corporation published this content on 01 December 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 December 2022 07:43:06 UTC.