To Our Shareholders

On behalf of Press Kogyo, I offer my heartfelt appreciation for the continued support of our shareholders. I will now give an overview of the results for FY 2018 (from April 1, 2018 to March 31, 2019), and a report on our business strategy going forward.

Qualitative information on FY 2018 results

The business environment in FY 2018 was generally favorable for us. Domestic demand for medium- and heavy-duty trucks rose by 0.3 thousand units year on year to 91,500 units, and light-duty truck demand increased by 5,100 units to 109,200 units. However, exports for both medium- and heavy-duty trucks and light-duty trucks posted a year-on-year decline. Overseas, demand in Thailand for 1-ton pickup trucks was firm. Also overseas, demand for pickups and SUVs in the US and demand for commercial vehicles in Indonesia, which was stimulated by the continuation of public works and other factors, were both robust. In the construction machinery-related business, export demand for hydraulic excavators bound for North America and Europe was firm, and demand in China increased sharply. It was under these circumstances that the Group made every effort to promote a range of initiatives related to the final year of the medium-term business plan.
As a result, including the Japanese parent company, revenue rose at every location, except Sweden, with Thailand and the US making particularly significant contributions to the increase in sales. At the Japanese parent, the main factors driving higher sales were the production of cabins for construction machinery, which grew primarily as a result of exports to the US and Europe; continued strong demand from the logistics sector in Japan; and an increase in the production of parts for light-duty trucks, where robust sales were maintained due to a surge in last-minute demand before the tightening of emission regulations. The Thai market was supported by sustained domestic replacement demand for 1-ton pickup trucks and increases in exports, leading to a substantial rise in net sales. In the US, in addition to robust demand, the ramping up of new orders for axle parts and door reinforcement parts led to higher sales. In China, a significant increase in demand led to higher revenues. The rise in profits was driven by 1-ton pickup trucks in Thailand and, at the parent company, by production increases for parts for light-duty trucks. The shift in Indonesia from losses to profitability also helped results. For the automotive and construction machinery-related businesses, our assessment is that this was a year when, in many cases, we were able to make a solid connection between our ability to accurately grasp market trends and needs, on the one hand, and sales and profits, on the other hand.

Profit Return

Maintaining shareholders' equity at a level necessary to grow the business of the Company, while generating sustainable, consistent returns for shareholders is an essential management policy.
Because net income attributable to owners of the parent is expected to decline in FY 2019, we have planned  the annual dividends per share will be ¥13, but our intention is to work as one to exceed our plan for sales and profits. In addition, the target for total shareholder return in the new medium-term business plan is 25% (five-year average). The Press Kogyo Group will continue to work for continual profit growth, pay out sustainable, stable dividends, as well as acquire treasury shares, etc. to maximize shareholder value.