During the first nine months (October 1, 2022 to June 30, 2023) of the consolidated fiscal year ending September 30, 2023, the full-scale resumption of economic activities was accelerated due to the downgrading of the legal status of COVID-19 to the same category as seasonal influenza, but the future of the Japanese economy remained uncertain, mainly due to the persistent impact of soaring energy and raw material prices, supply constraints, the depreciation of the yen against the dollar, and fluctuations in the financial and capital market. The outlook for the global economy remained uncertain given concerns rising concerns about a recession in countries around the world, mainly reflecting the delay in the recovery of the Chinese economy, the prolonged Russian invasion of Ukraine, surging raw material and energy costs, and the continued inflation.
Under such conditions, consolidated results for the first nine months under review were net sales of ¥91,433 million (up 15.3% year on year), operating profit of ¥5,336 million (up 26.8% year on year), ordinary profit of ¥5,635 million (up 10.9% year on year), and profit attributable to owners of the parent of ¥3,732 million (up 3.5% year on year).

The operating results for each business segment are described below.

(i) Chemicals
Sales of rubber-related merchandise remained above the year-ago level due to an increase in unit selling prices that had continued since last year. However, profit from merchandise decreased year on year, affected by steep rises in the purchase prices of items imported from Europe and the United States, which are attributable mainly to the weak yen. In chemical-related merchandise, sales increased year on year mainly due to the contribution of the launch of products which the Company began to handle at the beginning of the year. However, profit remained flat year on year due to steep rises in purchase prices that resulted from the weak yen. In life science-related merchandise, the import business including fragrances and dyes remained on a strong note, and lithium-ion battery-related materials were recovering. However, both sales and profit decreased year on year because the business of exporting the mainstay electronic materials, functional food materials, and others performed poorly. As a result, the Chemicals segment recorded net sales of ¥29,279 million (up 5.2% year on year) and operating profit of ¥1,667 million (down 11.5% year on year).

(ii) Machinery & Industrial Products
Both sales and profit of merchandise related to industrial products remained strong compared to the year-ago levels due to progress in recovery of production at Japanese-affiliated auto manufacturers. Merchandise related to machinery and the environment performed poorly, despite solid sales of wearing parts related to feed processing machines that resulted from an increase in prices. This was due to the recording of weak sales from projects for main units, with moves to refrain from large-scale capital investment reflecting the slump in the overall feed industry. The wood biomass-related business continued to perform poorly due to the posting of weak sales from projects for main units, but the Company enhanced sales activities for maintenance and parts services. In merchandise related to scientific equipment, the delivery of main units exceeded the expected level in April, when delivery is usually weak. Thereafter, however, the delivery of main units did not progress as expected due in part to a delay in the arrival of goods, which resulted in a weak performance. In merchandise related to resource development handled by Cosmos Shoji Co., Ltd., sales of equipment related to geothermal heat were strong. Performance remained strong in relation to the biotech products carried by Scrum Inc., contributing to the year-on-year growth of profit. The business of functional feed raw materials handled by YPTECH Co., Ltd. performed better than in the same period of the previous fiscal year as prices of raw materials hardened. As a result, the Machinery & Industrial Products segment recorded net sales of ¥34,766 million (up 37.7% year on year) and operating profit of ¥3,570 million (up 71.4% year on year).

(iii) Overseas Subsidiaries
The performance of Sanyo Corporation of America improved from the previous year, although automobile-related merchandise was weak, more than offset by solid demand for rubber- and film-related merchandise. The performance of SANYO TRADING (SHANGHAI) CO., LTD. was below the year-ago level, affected by the sluggish domestic economy of China, although demand for lithium-ion battery-related materials and other merchandise was recovering. At Sanyo Trading Asia Co., Ltd. (Thailand), automobile-related merchandise sales grew due to special demand. However, results remained unchanged year on year due in part to an increase in selling expenses for other merchandise. The performance of Sun Phoenix Mexico, S.A. de C.V. declined year on year due in part to the impact of foreign exchange losses, more than offsetting an increase in orders reflecting a recovery in the domestic automotive industry of Mexico. Performance was strong at Sanyo Trading India Private Limited, reflecting the steady performance of existing business in rubber-related merchandise. Sanyo Trading (Viet Nam) Co., Ltd.’s results were poor given the impact of an overall industrial decline in Vietnam. Performance was poor at PT. Sanyo Trading Indonesia, affected by the termination of sales of automotive-related merchandise for a specific customer. As a result, the Overseas Subsidiaries segment recorded net sales of ¥26,558 million (up 1.9% year on year) and operating profit of ¥1,030 million (down 5.6% year on year).

During the first six months (October 1, 2022 to March 31, 2023) of the consolidated fiscal year ending September 30, 2023, the Japanese economy moved toward a normalization of social activity with a government policy of relaxing COVID-19 regulations. Even so, the environment remained uncertain, largely reflecting the tightening of monetary policy in many countries due to global inflation, the prolonged Russian invasion of Ukraine, the delay in the recovery of the Chinese economy, and fluctuations in exchange rates. The Company’s businesses were also affected by a range of factors such as increased purchase prices due to surging raw material prices and supply shortages, and rising prices of imported inventories linked to the depreciation of the yen. On the other hand, as indicated in its slogan, “Challenging ourselves for the BEST solution,” the Company accelerated its future-oriented initiatives, including the launch of environmentally conscious new products and investments in technologies and businesses in decarbonization-related fields.
Under such conditions, consolidated results for the first six months under review were net sales of ¥61,918 million (up 22.5% year on year), operating profit of ¥3,790 million (up 28.7% year on year), ordinary profit of ¥3,751 million (up 2.3% year on year), and profit attributable to owners of parent of ¥2,517 million (down 7.0% year on year).
The operating results for each business segment are described below.

(i) Chemicals
Sales of rubber-related merchandise were affected by steep rises in the purchase prices of items imported from Europe and the United States and the temporarily weak performance of certain products, although synthetic rubber and compounding agents continued to perform strongly. In chemical-related merchandise, sales remained steady, mainly reflecting the January launch of products which the Company began to handle following the transfer of the business of another company. However, profit remained flat from the previous year due to certain mainstay products being affected by surging purchasing prices due to the weak yen. In life science-related merchandise, the mainstay electronic materials, fragrances and dyes recorded strong performances, while sales of lithium-ion battery-related materials were slow, affected by weakening business confidence in the Chinese economy.
As a result, the Chemicals segment recorded net sales of ¥19,975 million (up 9.8% year on year) and operating profit of ¥1,157 million (down 7.2% year on year).

(ii) Machinery & Industrial Products
Sales of merchandise related to industrial products remained solid. This was attributable to the weakening impact of reductions in production at Japanese-affiliated auto manufacturers, which in turn was chiefly due to shortages of semiconductors and parts. Merchandise related to machinery and the environment performed poorly with the recording of weak sales from projects for main units, despite solid sales of wearing parts related to feed processing machines. Results in the wood biomass-related business were also sluggish due to the posting of weak sales from projects for main units. In merchandise related to scientific equipment, the delivery of orders in large projects and the delivery of main units in quantities that surpassed those expected in March contributed to profitability. Performance was strong in relation to the biotech products carried by Scrum Inc., the shares in which the Company acquired in February 2022, contributing to the year-on-year growth of profit. In merchandise related to resource development handled by Cosmos Shoji Co., Ltd., sales of geothermal development equipment continued to be strong, and the performance of oil and gas-related equipment was also robust. In the ocean development field, growth was achieved related to equipment related to offshore wind power generation. There was a turnaround in the business of functional feed raw materials handled by YPTECH Co., Ltd., enabling a return to profitability as surging prices of raw materials for mainstay items reached a plateau.
As a result, the Machinery & Industrial Products segment recorded net sales of ¥24,103 million (up 43.9% year on year) and operating profit of ¥2,625 million (up 62.8% year on year).

(iii) Overseas Subsidiaries
Sanyo Corporation of America’s results were partially affected by a decline in the number of automobiles produced. However, its chemicals merchandise contributed to profitability, aided by strong demand, a decline in transportation costs and other factors. Performance of SANYO TRADING (SHANGHAI) CO., LTD. was poor given sluggish economic conditions in China. At Sanyo Trading Asia Co., Ltd. (Thailand), automobile-related merchandise sales grew due to special demand. However, results remained unchanged year on year due in part to an increase in selling expenses for other merchandise. Sun Phoenix Mexico S.A. de C.V. performed poorly partly due to foreign exchange losses. At Sanyo Trading India Private Limited, results improved slightly year on year despite the impact of foreign exchange losses. Sanyo Trading (Viet Nam) Co., Ltd.’s results were poor given the impact of an overall industrial decline in Vietnam, despite strong sales of heat-shielding paint, etc.
As a result, the Overseas Subsidiaries segment recorded net sales of ¥17,367 million (up 11.9% year on year) and operating profit of ¥701 million (down 2.5% year on year).

During the first three months (October 1, 2022 to December 31, 2022) of the consolidated fiscal year ending September 30, 2023, there were signs of a moderate recovery in social activities in Japan amid the prolonged effects of COVID-19. However, there remained uncertainty over the future of the Japanese economy chiefly due to rapid exchange rate fluctuations and price hikes. In the global economy, there were downside risks, including concern over slowdowns in the U.S. economy and economies in Europe due to monetary tightening, rapid changes in exchange rates, continued geopolitical risks caused by the war in Ukraine, and increasing COVID-19 cases in China.
Under such conditions, consolidated results for the first three months under review were net sales of ¥30,919 million (up 28.2% year on year), operating profit of ¥1,904 million (up 27.1%), ordinary profit of ¥1,651 million (down 5.4%), and profit attributable to owners of the parent of ¥1,189 million (up 8.1%).
Results for each business segment are described below.

(i) Chemicals
Results for rubber merchandise were affected by rising purchasing prices for goods imported from Europe and the United States and the weaker yen. However, demand remained firm for synthetic rubber and indirect materials in a wide range of industries, including the automobile, home appliances and information equipment industries.
Sales of chemical-related merchandise hit a record high due to the expansion of sales of eco-friendly merchandise and other merchandise that the Group has started to handle, as well as new sales channels. However, profit from mainstay merchandise was affected by higher purchasing prices due to the weaker yen. Of life science-related merchandise, sales of fragrances and dyes were strong, but the mainstay film business struggled. Results were affected by logistics disruption, including delays in delivery of certain products.
As a result, the Chemicals segment recorded net sales of ¥10,222 million (up 18.4% year on year) and operating profit of ¥587 million (down 1.8% year on year).

(ii) Machinery & Industrial Products
Sales of merchandise related to industrial products were good as reductions in production at Japanese affiliated auto manufacturers chiefly due to shortages of semiconductors and parts mitigated to a certain degree compared to the previous fiscal year. Results for products related to machinery and the environment were sluggish. Sales of main units, which were carried over from the previous fiscal year, were recorded in wood biomass-related businesses, but sales of main units related to feed processing machines were limited. Of merchandise related to scientific equipment, biotechnology equipment contributed to profit. However, results were affected by delays in delivery. In merchandise related to resource development, sales of geothermal development equipment continued to be strong. In the ocean development field, large projects to improve equipment and machine parts for drilling vessels contributed to profit.
As a result, the Machinery & Industrial Products segment recorded net sales of ¥11,536 million (up 36.6% year on year) and operating profit of ¥1,323 million (up 40.5% year on year).

(iii) Overseas Subsidiaries
Sanyo Corporation of America was adversely affected by a labor shortage in the auto industry, but results grew, reflecting strong demand in the chemicals sector. At SANYO TRADING (SHANGHAI) CO., LTD., materials for lithium-ion batteries, among other products, sold well, but overall results were weak due to the spread of COVID-19. At Sanyo Trading Asia Co., Ltd. (Thailand), certain operations were significantly affected by the weak baht, but both sales and profit rose chiefly due to an increase in auto production volume in Thailand. At Sun Phoenix Mexico, S.A. de C.V., sales were strong, chiefly reflecting an increase in auto production volume in North America, but profit declined from a year ago because of higher purchasing prices and an increase in selling, general and administrative expenses. At Sanyo Trading India Private Limited, results were weak due to foreign exchange losses, among other factors. At PT.Sanyo Trading Indonesia, operating profit was strong, but results declined due to the weak rupiah.
As a result, the Overseas Subsidiaries segment recorded net sales of ¥9,043 million (up 28.9% year on year) and operating profit of ¥387 million (up 15.3% year on year).