To Daifuku’s Shareholders and Investors
We would like to begin this message by expressing gratitude to our shareholders and investors for their ongoing support.
1. Operating and financial review
During the first quarter of the fiscal year (the period from April 1, 2018 to June 30, 2018), the global economy benefited from an expansion in the U.S. and generally firm trends in Japan as well as in European and emerging nations. Nonetheless, concerns about trade conflicts, a U.S. interest rate rise, and rising crude oil prices are emerging.
The Daifuku Group’s mainstay material handling systems continued to enjoy robust investments in a broad range of sectors, including distribution, semiconductors, flat-panel displays (FPDs), automobiles, and airports.
Amid these economic and business conditions, the operating results of the Group showed favorable progress.
Orders remained at a high level, backed by large orders from the semiconductor sector in East Asia and the U.S., as well as from the pharmaceutical and e-commerce sectors in Japan, albeit falling short of the record high posted in the first quarter a year ago.
Sales were positive, underpinned by an extensive order backlog.
As a consequence, the Group received orders of 129,172 million yen, down 13.1% from a year earlier, and recorded net sales of 97,278 million yen, up 14.4%.
In terms of profits, operating income significantly surpassed the year-ago figure, reflecting increased earnings strength from higher sales and cost cutting by the parent company, Daifuku Co., Ltd., while also benefiting from the strong performance of an East Asian subsidiary that handles systems for the semiconductor and FPD sectors. In addition, with the transfer of shares of Knapp AG, an equity-method affiliate in Austria, Daifuku posted extraordinary income from a gain on sales of shares in affiliates of 6,948 million yen (balance of consolidated book value), which boosted net income.
Consequently, the Group posted operating income of 8,508 million yen, up 27.7% from a year earlier, and ordinary income of 8,978 million yen, up 27.8%. Net income attributable to shareholders of the parent company was 11,225 million yen, up 123.2%.
2. Outlook for the fiscal year ending March 31, 2019
Daifuku has revised its full-year earnings forecasts for the fiscal year ending March 31, 2019, which were announced on May 11, 2018, as follows.
The earnings forecast for the fiscal year ending March 31, 2019 (April 1, 2018 - March 31, 2019)
|Orders||510 billion yen||(up 4.5% year-on-year)|
|Net sales||470 billion yen||(up 16.1% year-on-year)|
|Operating income||48.0 billion yen||(up 20.2% year-on-year)|
|Ordinary income||48.7 billion yen||(up 18.5% year-on-year)|
|Net income attributable to shareholders of the parent company||32.5 billion yen||(up 12.0% year-on-year)|
3. Basic policy for dividends
Daifuku regards the return of profits to shareholders as its most important management task and adopts a performance-based policy for dividends from surpluses based on consolidated net income, with the aim of achieving additional profit distribution to shareholders. We appropriate the remaining surplus to internal reserves for future growth.
Under its medium-term business plan, Value Innovation 2020, Daifuku aims to achieve a dividend payout ratio of 30% and increase its corporate value through investment in growth.
With respect to dividends for the fiscal year ending March 31, 2019, the Company plans to pay an annual dividend of 75 yen (an interim dividend of 25 yen per share and a year-end dividend of 50 yen), taking into consideration the earnings forecast for the fiscal year ending March 31, 2019 and the basic policy described above.
We respectfully ask our shareholders and investors for their continued support.
Hiroshi Geshiro, President and CEO