Management Information

In the business environment surrounding the TODA KOGYO Group (the “Group”) during the fiscal year ended March 31, 2024 (the “fiscal year under review”), there was a moderate recovery trend in the economy due to a pickup in personal consumption and improved employment conditions against the backdrop of normalization of socioeconomic activity as a result of the recovery from the COVID-19 pandemic. On the other hand, the economic outlook remains uncertain mainly due to the protracted situation in Ukraine, heightened geopolitical risks surrounding the Middle East, monetary tightening in response to soaring prices in various countries, and the slowdown of the Chinese economy.

Under these circumstances, the Group has been striving to grow and expand each of its businesses to achieve the goals of its medium-term business plan Vision 2023. The Company has also concentrated on measures such as product pricing correction activities, continuous cost reduction activities, and expense reduction as initiatives to improve profitability.

However, net sales and operating profit for the fiscal year under review fell year on year mainly due to fluctuations in demand in the functional pigments segment and electronic materials segment and the transfer of equity in Toda United Industrial (Zhejiang) Co., Ltd. in the previous fiscal year. Toda United Industrial (Zhejiang) Co., Ltd.’s net sales recorded in the consolidated statement of income for the previous fiscal year were ¥5,352 million and its operating profit was ¥470 million.

For non-operating income and expenses, despite the Company having encountered factors with a positive effect on earnings such as a shift in exchange rates to a weakening yen, revenues from associates accounted for using the equity method declined. Moreover, in extraordinary income and losses, in the previous fiscal year the Company recorded gain on sale of investments in capital of subsidiaries and associates of ¥933 million due to the transfer of its shareholding in Toda United Industrial (Zhejiang) Co., Ltd., while in the fiscal year under review, it recorded impairment losses of ¥4,869 million due to impairment of business assets and assets for common use, etc. held by the Company.

As a result of the above, net sales came to ¥26,234 million (down 24.9% year on year), operating profit came to ¥117 million (down 91.4% year on year), ordinary profit came to ¥1,168 million (down 65.1% year on year), and loss attributable to owners of parent came to ¥3,581 million (compared to profit attributable to owners of parent of ¥3,268 million in the previous fiscal year).

Regarding the future economic outlook, the uncertain situation is expected to continue for the time being mainly due to the rising geopolitical risks surrounding the situation in Ukraine and the Middle East, the risk of a downturn in overseas economies due to continued monetary tightening in various countries, and the slowdown of the Chinese economy.

To achieve the vision the Group for the fiscal year ending March 31, 2031 (fiscal 2030), set out in its materiality, the Group has formulated a medium-term management plan, Vision2026, covering the period from the fiscal year ending March 31, 2025 (fiscal 2024) to the fiscal year ending March 31, 2027 (fiscal 2026).

During this period, the company will strengthen its business portfolio management. It will promote (1) business strategies, (2) financial strategies, and (3) human resource strategies for accelerating selection and concentration aimed at achieving the plan.

Under these conditions, in the fiscal year ending March 31, 2025, despite continued high prices for raw materials and energy, the Company expects to see a gradual recovery in market demand for both the functional pigments segment and the electronic materials segment. The Company also expects the conversion of TODA ISU CORPORATION into a consolidated subsidiary to contribute to increases in net sales and operating profit.

Based on such conditions, for its consolidated operating results forecast for the fiscal year ending March 31, 2025, the Group is forecasting net sales of ¥32,000 million, operating profit of ¥700 million, ordinary profit of ¥1,100 million, and profit attributable to owners of parent of ¥600 million.