Management's Discussion & Analysis

Tsuyoshi ANDO
Representative Director, President & CEO

　I would like to extend my sincerest appreciation for your patronage of TOKYO KEIKI.

　In the first half of the fiscal year, the global economy saw steady growth in the United States, while in Europe, domestic demand was sluggish after the summer demand cycle ended. Amid these conditions, concerns persisted over the impact of the sluggish Chinese economy, the prolonged situation in Ukraine, and the escalating tension in the Middle East.
　In Japan, the economy is on a gradual recovery trend. However, the outlook remained uncertain due to factors such as the continued yen depreciation against the backdrop of the interest rate differential between Japan and the United States and price increases due to the impact of persistently high energy prices.
　Under these business conditions, our group's performance for the interim consolidated accounting period showed an increase in sales by ¥1,382 million year on year to ¥20,582 million, and operating loss improved by ¥294 million to ¥105 million. This was mainly due to the strong performance of Marine Systems Business for the delivery of equipment for new ships and maintenance services as well as the favorable exchange rate trend of yen depreciation. Ordinary profit improved by ¥287 million to ¥28 million and profit attributable to owners of parent improved by ¥300 million to ¥63 million.

　Regarding the full-year consolidated earnings forecast, we expect an increase in sales by \1,000 million to \58,300 million compared to the forecast announced on May 10. This is due to the continued demand for equipment for new ships and maintenance services in Marine Systems Business.
　Profits are expected to exceed the previously announced forecast at all profit levels. Operating profit is forecast to increase by ¥540 million to ¥4,100 million, a record high, reflecting the increase in sales and an upturn in the cost of sales ratio due to the depreciation of the yen in Marine Systems Business and the steady progress of Defense & Communications Equipment Business as planned. Ordinary profit is expected increase by ¥500 million to ¥4,280 million, and profit attributable to owners of parent is expected to increase by ¥240 million to ¥3,090 million.

　For the dividend for the current fiscal year, we plan to increase the ordinary dividend by ¥2.50 to ¥35.00 per share. This is the second consecutive year of record highs since FY2000.

　We hope that all of our stakeholders will continue to provide further support and guidance.