We would like to express our sincere gratitude to our shareholders for your continued support. We would also like to thank your kind support and cooperation with the Kanto Denka Kogyo Group.
In FY2024, the Japanese economy showed signs of a gradual recovery due to the positive effects of various government policies under an improving employment and income environment. However, severe conditions continued to prevail. Overseas, the outlook remained uncertain due to the need for caution amid downside risks stemming from high interest rates in Europe and the United States and the stagnation of the real estate market in China, as well as inflation, US policy developments, geopolitical tensions in the Middle East, and fluctuations in financial and capital markets.
The chemical industry also continued to face a challenging business environment, with rising raw material, fuel, and logistics prices coupled with the impact of production adjustments in the semiconductor and electronic materials industries.
Against this backdrop, the Kanto Denka Group has focused on strengthening the profitability of its Fundamental Chemicals Division, Fine Chemicals Division, and Ferrochemicals Division, while also advancing the development of new products that leverage its strength in fluorine-related technologies.
Net sales amounted to ¥62,351 million, down ¥2,417 million, or 3.7%, year on year. On the profit front, the Group recorded an ordinary profit of ¥4,507 million and profit attributable to owners of parent of ¥3,248 million. In the previous fiscal year, the Group recorded an ordinary loss of ¥1,304 million, primarily due to persistently high costs of sales for battery materials and the recognition of a loss on valuation of inventories. In addition, impairment losses were recorded reflecting the decline in profitability of battery materials, resulting in a net loss attributable to owners of parent of ¥4,610 million.
Looking ahead, the economy is expected to continue rebounding moderately on the back of an improving employment and income environment and the effects of various governmental policies. Nonetheless, attention must be paid to factors such as the ongoing impact of price increases on personal consumption, the effects of US policy trends, including trade policies, on the global economy, worldwide geopolitical risks, and the risk of fluctuations in financial and capital markets. As such, the future remains highly uncertain, and the business environment is expected to remain a challenging one.
Against this backdrop, the Group launched its new medium-term management plan, “Dominate 1000,” in the fiscal year ended March 31, 2023, with the goal of achieving ¥100 billion in consolidated net sales in the fiscal year ending March 31, 2025. However, taking into account the evolving business landscape and performance trends, we have reevaluated the plan and extended it by two years. We will implement new strategies and measures in addition to the initially planned key strategies to enhance corporate value. Specifically, we will expand business, predominantly in the Fine Chemicals Division, reform our business portfolio, pursue management leveraging return on invested capital (ROIC), strengthen investor relations activities, and reduce cross-shareholdings. These and other efforts seek to revitalize profitability while also prioritizing management mindful of capital costs.
As we look ahead to the society we envision in 2030, we are committed to providing a safe work environment that fosters job satisfaction and supporting technologies that are cutting-edge on a global stage with our superior, original products. By building on a stable management foundation, we aim to grow into an innovative, development-driven company that contributes to a sustainable society.
Continued support from our shareholders is greatly appreciated.
June 2025
President
Jun’ichi Hasegawa