Financial Analysis

Earnings

The AMADA Group’s business environment during fiscal 2023 (ended March 31, 2024) has been one of lingering uncertainty, with factors including the progression of inflation worldwide, rapid interest rate hikes in the West, the prolonged military invasion of Ukraine by Russia, and geopolitical risks such as the tense situation in the Middle East. Meanwhile, demand for capital investment was stimulated by the restructuring of supply chains in response to geopolitical and geoeconomic risks, and demand for capital investment in the Group’s energy-saving, automation, and high-productivity products remained firm in the face of labor shortages, soaring energy prices, and environmental considerations. Regarding the operating results amid this environment for fiscal 2023, revenue rose to ¥403,500 million, an increase of 10.3% year on year, partly due to progress in processing the order backlog thanks to normalizing materials procurement and production activities. Breaking this down, domestic revenue increased 5.1%, to ¥149,024 million, and overseas revenue increased 13.6%, to ¥254,476 million. As for operating profit, this figure was affected by an ongoing rise in material costs and increasing labor costs due to wage increases, but thanks to factors such as reduced manufacturing costs, improved sales prices, and the depreciation of the yen, operating profit was ¥56,507 million (up 13.3% year on year), and profit attributable to owners of parent was ¥40,638 million (up 19.0%). This shows revenue, operating profit, and profit attributable to owners of parent all reaching record highs.

Financial position

Total assets as of March 31, 2024 increased by ¥33,490 million from the end of the previous fiscal year, to ¥681,053 million, partly affected by exchange rate fluctuations. Current assets increased ¥30,593 million, to ¥429,309 million, mainly due to a rise in inventories and an increase in trade receivables at the end of the period due to the highest revenue ever recorded in the fourth quarter, despite production adjustments from the middle of the period following the normalization of parts procurement. Meanwhile, noncurrent assets increased ¥2,897 million, to ¥251,743 million, mainly due to an increase in property, plant and equipment resulting from capital investment. Liabilities were also affected by exchange rate fluctuations. Total liabilities expanded by ¥7,615 million from the end of the previous fiscal year, to ¥146,656 million, mainly due to a rise in borrowings. Total equity amounted to ¥534,396 million, up ¥25,875 million, due to a rise in retained earnings and an increase in exchange differences on translation of foreign operations resulting from the depreciation of the yen. As a result, the ratio of equity attributable to owners of parent was unchanged from March 31, 2023, at 77.8%.

Cash flows

Cash and cash equivalents as of March 31, 2024 amounted to ¥93,420 million, down ¥5,135 million from March 31, 2023.

Cash flows from operating activities

Net cash provided by operating activities in fiscal 2023 totaled ¥47,595 million, up ¥22,645 million year on year. Main factors included cash inflows of profit before tax of ¥58,066 million and depreciation and amortization of ¥18,450 million, which offset main outflows of an increase in trade and other receivables of ¥4,063 million, a decrease in trade and other payables of ¥2,961 million, and income taxes paid of ¥21,845 million.

Cash flows from investing activities

Net cash used in investing activities in fiscal 2023 totaled ¥15,188 million, an increase in cash outflows of ¥1,865 million compared with the previous fiscal year. This was mainly due to ¥16,046 million spent on purchases of property, plant and equipment and intangible assets.

Cash flows from financing activities

Net cash used in financing activities in fiscal 2023 totaled ¥38,145 million, an increase in cash outflows of ¥17,753 million year on year. Main factors included ¥17,570 million of dividends paid and ¥20,004 million of payments for purchase of treasury shares.