Overview of the latest financial information

Overview of business results of the First quarter of the Fiscal Year ending December 31, 2020

In global economy during the 1st quarter consolidated term, the Chinese economy slowed down due to the rise in uncertainty, including the Sino-U.S. trade friction, and a deterioration in the perception of economic conditions in the U.S. However, the rapid spread of the infection of COVID-19 in March brought a further contraction in economic activities.

In Japan's economy, demand showed a trend for recovery, as exports had gradually recovered from the beginning of the year to February. However, due to the spread of the infection, exports decreased significantly. In addition, private consumption also declined as a result of people staying home, and the slowdown in the economy has become noticeable.

In this economic environment, although our group was affected by a decrease in demand due to the spread of infections and a curtailment of operations in production bases, high-value-added connectors for laptop PCs and smartphones continued to shore up. All in all, our business has remained robust.

Electrical and Electronic Components Business has remained strong, particularly in connectors that have excellent high-frequency and high-speed transmission characteristics, which are our core products. Micro Coaxial connectors continues to grow, thanks to an ongoing demand for updating PCs following the end of Windows 7 support, as well as an urgent demand for laptop PCs with needs for remote work. Micro Radio Frequency (RF) Coaxial connectors had strong sales for laptop PCs, despite growth being sluggish for smartphones. As for Board-to-Board (FPC) connectors, the use of shield connectors with excellent high-frequency transmission has increased for communication modules on 5G-enabled smartphones. HDD-related components was stagnant due to continued production adjustments by HDD manufacturers, although demand for servers remained firm.

In Automotive Components Business, demand for automotive parts was sluggish due to the decline in automobile sales amid the prevalent infection of COVID-19. However, more SMT connectors which have excellent vibration and heat resistance have been adopted in different models and continued to perform strongly due to the high function of LED headlights. Although there was a limited decline in demand for parts in the automotive parts business in the 1st quarter, orders are generally weak nowadays.

In Equipment Business, shipments of semiconductor resin molding machines and molds supported the company's firm trend, which it had received orders for in the last quarter. However, these days, semiconductor manufacturers are deferring their capital investment as the economic slowdown has become noticeable.

As a result, sales of the first quarter of the current consolidated fiscal year increased 6.6 % to 12,721 million yen, compared with the prior year, also our operating income 291 million yen (We had operating loss of 557 million yen prior year), ordinary income 602 million yen (We had ordinary loss of 580 million yen prior year), and net income attributable to owners of parent was 452 million yen (We had net loss attributable to owners of parent 606 million yen prior year.).