Japanese FA companies report strong Q1 results for FY ending Nov/Dec 2022

By: Masanobu Nishizuka, Staff Editor, SEISANZAI Japan

First quarter results for the FY ending Nov/Dec 2022

The first-quarter financial results for fiscal years ending November and December 2022 have been released by 10 major companies in Japan’s factory automation (FA) sector. Compared to the same period last year, nearly all companies posted increases in both sales and earnings. Market conditions were broadly favorable, despite uncertainties related to COVID-19, the war in Ukraine, and currency fluctuations.

Favorable demand outweighs global headwinds

The global economy showed signs of recovery during the first quarter, both in Japan and abroad. As pandemic-related restrictions eased, production activity rebounded worldwide. Despite new challenges such as the Japanese yen’s depreciation and geopolitical instability caused by the Russian invasion of Ukraine, many FA companies reported solid growth.

Strong performance from DMG MORI and THK

Two companies that adopt International Financial Reporting Standards (IFRS)—DMG MORI and THK—posted increases in both revenue and pre-tax profit. DMG MORI stated that “demand for automation, particularly for 5-axis and multi-tasking machines, has accelerated,” and reported a record-high quarterly order intake. THK noted strong performance in sectors such as semiconductors, robotics, and electric vehicles.

Sales increased across all reporting companies

Seven of the 10 companies, excluding MARUKA FURUSATO, adopted Japan’s new revenue recognition accounting standard, making direct year-on-year comparisons difficult. However, all companies reported monetary sales growth regardless of the accounting change.

Both domestic and overseas markets were favorable. Still, future outlooks remain cautious. MARUKA FURUSATO warned, “Be alert to risks such as rising raw material prices, fluctuations in financial markets, and supply-side restrictions.”