To our Shareholders and Investors
We sincerely thank our shareholders for your invaluable support.
Social activities are finally starting to normalize across the world following more than three years of the COVID-19 pandemic, and the economy is showing signs of recovery. However, the business environment that surrounds Mikuni continues to change, such as with ongoing geopolitical tensions and discussion about monetary tightening to curb inflation in the US and Europe. Meanwhile, in addition to a certain degree of recovery in vehicle production in FY2022, there has also been the impact of foreign currency translation, and consolidated net sales increased year-on-year. However, operating income declined due to rising raw material costs and other factors.
Despite the impact of parts shortages in the automobile industry supply chain, there was strong demand for outboard motor products, especially in North America. Furthermore, steady growth continued in the India business, which has been a focus to date, and net sales in India reached a record high. Passenger demand also recovered in conjunction with the normalization of social activities, and net sales in the Aircraft Component Import and Sales Business grew a substantial 58% year-on-year. On the other hand, it was difficult to adequately pass on the increase in costs such as raw material costs, logistical costs, power costs and labor costs to selling prices. In addition to appropriately passing on increased costs to selling prices in FY2023, we are striving to improve profit ratios through further promotion of energy saving activities and cost reduction activities.
As well as responding to the changing business environment, we are reviewing the entire Group’s production structure to build a more rational production structure. In FY2022, we decided to dissolve Mikuni (Chengdu) Machinery & Electronics Co., Ltd. in China and to transfer its production function to Mikuni (Zhejiang) Co., Ltd. in China. This resulted in extraordinary losses including production sites reorganization expenses and we recorded a net loss. However, we are striving to optimize the production structure, including the completion of the business reorganization in China.
Mikuni will celebrate its 100th anniversary in 2023. The entire Company will take this 100th anniversary as an opportunity to reflect on the past, requestion the meaning of our existence, and start on the path towards the next 100 years. We will formulate a new mid-term plan, following on from the framework of our mid-term plan “Vision 2023 Final STAGE, Revised,” which will conclude in FY2023. Regarding the new market segments of the Tokyo Stock Exchange, we plan to make our decision while examining the response together with the formulation of the new mid-term plan.
We are advancing our initiatives to halve greenhouse gas emissions of per unit production as compared to 2016 by 2023 to achieve the long-term goal of carbon neutrality by 2050. Furthermore, we will also commence initiatives for zero-carbon development, which means no greenhouse gas emissions at development bases. We will strive to meet the expectations of all stakeholders not only in relation to the environment, promoting the sustainability management required of companies including ensuring diversity and health and productivity management.
We would like to thank our shareholders for your continued support.
President, CEO & COO