To Our Shareholders & Investors

To Our Shareholders & Investors (Nov 2023)

We would like to express our sincere and heartfelt appreciation to all our shareholders for your understanding and support for our business activities.

We have now completed the second quarter of 33rd fiscal year and would like to explain the state of the Tomen Devices Group.

In the electronics industry, overall conditions remained weak. Although supply shortfalls of automotive semiconductor components have been mitigated, and high demand for high-performance memory for AI servers is continuing, the recovery in demand for the existing data center field and consumer products such as personal computers and smartphones remained moderate due to seasonal factors.

Under these circumstances, the Tomen Devices Group posted net sales of 183,781 million yen (down 17.3% year on year), operating profit of 5,703 million yen (down 22.5% year on year) and ordinary profit of 3,413 million yen (down 5.4% year on year). This reflected a decrease in sales of memory products, the Group's core products, for data center storage, personal computers and smartphones, which was only partly offset by an increase in sales of automotive component business and the SiP (System in Package) business. Moreover, as FCNT LLC, the Group's business partner, filed a petition for the commencement of civil rehabilitation proceedings, there was a risk that claims on FCNT may become unrecoverable or that debt payments may be delayed and that profitability of inventories related to orders for transactions received from FCNT may decrease. Accordingly, the Group posted a special loss (provision of allowance for doubtful accounts and loss on valuation of inventories) of 4,236 million yen, and a loss attributable to owners of parent amounted to 4 million yen (compared to a profit attributable to owners of parent of 2,724 million yen a year ago).

Lastly, we regret to report that we posted a special loss due to the petition filed by a business partner for the commencement of civil rehabilitation proceedings, and that we were forced to revise downward our forecast of business results and cash dividends for the fiscal year ending March 31, 2024. We express our sincerest apologies to our shareholders.

We sincerely request that our shareholders continue to support and guide us.