Message to shareholders

Image: Takashi Kurita, President and CEO

We aim to contribute to the future of communities around the world by continually generating innovations in anticipation of market trends.

Takashi Kurita, President and CEO

We aim to contribute to the future of communities around the world by continually generating innovations in anticipation of market trends.

Please allow me to extend our sincere gratitude to you for your ongoing support of the Moriroku Group.

As a global chemicals specialty company with 360 years of history, the Moriroku Group has always pursued new frontiers in anticipation of the needs of each era and preserved its unbroken tradition of taking on challenges.
To build a firmer management base with a view to becoming a company with 400 years of history, in May 2022, we formulated our Long-Term Management Vision and our 13th Medium-Term Business Plan. As we aim to realize our vision by the year 2030, we will simultaneously do our part for a sustainable society and grow our business, and will keep on creating new value.

Fiscal 2022 Business Results

In fiscal 2022, while the chemicals industry progressed on a robust note, the automotive industry faced difficult conditions due to prolonged production adjustments by finished car manufacturers caused by the shortage of semiconductors and the lockdown in China. Although we has been striving to build a flexible production system that can respond to production fluctuations, the external environment, including soaring raw material and energy prices and rising labor costs, especially in North America, resulted in higher costs.
As a result, net sales increased 10.2% from the previous year to 142.0 billion yen due to the impact of foreign exchange rates, despite production cutbacks by major customers. Operating income decreased 53.1% from the previous year to 1.3 billion yen and ordinary income declined 46.2% to 1.5 billion yen due to increased production costs caused by inflation and soaring labor costs, in addition to operating loss caused by production cutbacks and production fluctuations. Net income attributable to shareholders of the parent company fell 68.4% from the previous year to 1.3 billion yen due to impairment losses at overseas subsidiaries, despite gains on sales of investment securities.

Forecast for Fiscal 2023

In fiscal 2023, we expect automobile production to turn toward recovery in the second half of the year, although the impact of the semiconductor shortage will remain in the first half of the year. Raw material and energy price hikes are expected to continue, however, we will strive to secure earnings while closely monitoring demand and supply chain trends.
For the full year, we forecast 144 billion yen, operating income of 4.6 billion yen, ordinary income of 4.9 billion yen, and net income attributable to owners of the parent of 1.7 billion yen.

Return of Profits to Shareholders

For fiscal 2023, we intend to pay a full-year dividend of 100 yen (interim dividend of 50 yen; year-end dividend of 50 yen). We will continue endeavoring to make satisfactory returns of profit to our shareholders while bearing the stability and continuity of dividends in mind.

Outlook for the Future

Recently, the Moriroku Group formulated its long-term management vision with “CREATE THE NEW VALUE” as its slogan. We will pursue anew our major transformation into “a global corporate group that contributes to a sustainable society by creating value through leveraging its advantage of proprietary technologies” by the year 2030. We have positioned our 13th Medium-Term Business Plan, which spans the three-year period starting fiscal 2022, as the sowing of the seeds to realize that vision, and have adopted the establishment of a stable fiscal base and the strengthening of our earning power, the creation of value through stronger research and development and the improvement of management resilience through promoting sustainable activities as our basic strategies under that plan.
In terms of our business results, we will adopt fiscal targets of 143 billion yen in net sales, 11 billion yen in operating profit and an ROE of 9% or more for fiscal 2024, and are planning to invest 10 billion yen in strategic businesses. Furthermore, for non-fiscal targets, we have set forth numerical targets for the following three items: reductions of greenhouse gas emissions, implementation ratios for renewable energy, and the improvement of employee engagement.
We will work towards simultaneously doing our part for a sustainable society and growing our business as we aim to become a corporate group that our stakeholders place their expectations on, and hope to benefit from your further support as we move forward.