Net sales were ¥2,180.8 billion, up 14.7% year on year.
While socio-economic and production activities despite the resurgence of COVID-19 in some areas remained on a recovery trend, the global economy slowed due to the continued inflation associated with the protraction of the war in Ukraine, as well as policy rate hikes in the United States and Europe, among other factors. Since the beginning of the fourth quarter, financial instability triggered by the collapse of U.S. banks and concerns over the management failure of a European financial institution have further intensified uncertainty surrounding the global economy. In addition, the gap in interest rates between Japan and other countries significantly affected the foreign exchange market and the yen depreciated sharply against other currencies.
Under such an operating environment, in the electronics market, which has a large bearing on the consolidated performance of TDK, demand remained sluggish in the ICT market in particular, while EX demand related to xEVs and industrial equipment remained robust.
In the ICT market, while demand for PCs and tablets, which had been brisk amid the COVID-19 pandemic, fell significantly below initial forecasts, sales of Rechargeable Batteries and Sensors for new smartphone models expanded. On the other hand, as investment in data centers slowed rapidly, sales of HDD Heads and HDD Suspension Assemblies decreased considerably.
In the automotive market, there were signs of a moderate recovery on the whole, despite ongoing constraints in supply chains such as the shortage of semiconductors. In particular, sales of Passive Components and Sensors expanded on the back of solid component demand reflecting the increasing number of components installed per vehicle as a result of an increase in the ratio of xEVs and the spread of ADAS.
Sales of medium capacity rechargeable batteries and power supplies for industrial equipment increased as demand related to renewable energy, energy-saving equipment and residential energy storage systems continued to expand due to concerns over global energy supply and the impact of soaring energy prices reflecting growing geopolitical risks.
Operating Profit was ¥168.8 billion, up 1.2% year on year.
Operating profit was 168.8 billion yen, up 2.1 billion yen, or 1.2% year on year.
This is primarily attributable to the following factors. First, operating profit decreased sharply by 83.4 billion yen due to changes in sales, reflecting a decline in the sales volume of HDD heads, HDD suspension assemblies and rechargeable batteries which were significantly affected by a drop in demand from the ICT market.
On the other hand, operating profit was boosted by about 28.2 billion yen on an actual basis from the previous fiscal year as a result of the promotion of rationalization and cost reduction efforts mainly for rechargeable batteries and passive components, as well as the benefits from restructuring during the previous fiscal year and streamlining of SG&A expenses, in addition to the positive effect of the yen’s depreciation amounting to 69.2 billion yen, which offset the negative impact on profit to a certain extent.
Meanwhile, in light of the changing demand environment surrounding HDD Heads, restructuring was carried out during the fourth quarter as well as the third quarter. One-time expenses amounted to 35.7 billion yen on a full-year basis, an increase of 26.1 billion yen from the previous fiscal year.
Net profit was ¥114.2 billion, down 13.0% year on year.
Net profit was 114.2 billion yen, decreased by 17.1 billion yen, or 13.0% year on year.