Accelerate expansion of business areas for sustainable growth in 2030
Representative Director of the Board,
President and CEO
During the fiscal year under review (January 1, 2022 to December 31, 2022), the Japanese economy continued to recover from the Covid impact. However, the economy was hit hard by the lockdown in China and the prolonged conflict in Ukraine, along with soaring costs of energy and raw materials amid the rapid depreciation of the yen.
Against this backdrop, we continued working on our third medium-term plan, Field Expansion 2024, in which we tweak existing business and expand our business fields as part of our long-term vision, CCC 2030. To expand business fields, we reallocated resources from existing businesses and actively deployed strategic expenditures.
Despite a turbulent business climate, we maintained our competitiveness by flexibly adapting to the changing business conditions and shifting customer needs.
Net sales increased only marginally, to ¥300.9 billion (up 2.8% year on year). The lack of significant sales growth reflected the fact that furniture business performed less well than initially forecasted. Another factor was the impact of the Shanghai lockdown on the stationery business. With price revisions for our products absorbing increases in prices for steel and other raw materials, gross profit totaled ¥116.6 billion (up 2.8% year on year) and gross profit ratio maintained the high level of last year, at 38.8%. Selling, general and administrative expenses totaled ¥97.3 billion, up 4.0% year-on-year. Expense ratio (selling, general, and administrative expenses to net sales) rose 0.4 points year-on-year to 32.2%. These increases enabled active strategic expenditures for expanding the business fields.
Reflecting these results, operating income decreased to ¥19.3 billion (down 2.9% year on year). Ordinary income increased to ¥21.3 billion (up 30.1% year on year). This increase represents a bounce-back from the recording, in the previous consolidated fiscal year, of ¥5.0 billion following impairment in equity-method affiliate Pentel Co., Ltd. Profit attributable to owners of parent increased to ¥18.3 billion (up 34.1% year on year). The main contributor was the sale of investment securities in Pentel.
As of the period under review, we now apply the ASBJ Accounting Standard for Revenue Recognition. To enable year-on-year comparisons, we have retroactively applied the standard to the results for the previous fiscal year.