Message to Shareholders
We would like to take this opportunity to offer our deepest gratitude to our shareholders for their continued support of our company.
Despite some sectors of the nation's economy recovering this fiscal year from the global economic slowdown, we still face a rather severe economic outlook.
Household income and the employment have yet to recover, and the economy is falling deeper into a deflationary spiral.
With less money to spend, consumers are dining out less and eating at home more.
Although this trend has had a positive effect on the food retailing industry, the industry still faces an uphill struggle because of steady demand for cheaper items.
The FP Corporation Group, however, has enjoyed record-high profits stemming from increased sales volumes and significant cost improvements.
This is in spite of the increased pressure on profit margins caused by a rise in raw material prices in the second quarter of the last fiscal year.
Although product sales volumes increased by 4.4 percent from the previous fiscal year, boosted by increased sales of multipurpose containers and lightweight products, actual sales fell slightly by 1.1 percent due to lower product prices caused by a drop in raw material prices.
Merchandise sales also were lower than in the previous fiscal year as a result of a review of underperforming operations.
As a result, total sales fell by 3.325 billion yen (2.6 percent) to 124.918 billion yen.
However, if excluding 1.333 billion yen in temporary merchandise sales from the disposal of sales assets included in sales figures for the previous fiscal year, sales fell 1.991 billion yen (1.6 percent).
Variations in the cost of raw materials, which fell in the fourth quarter of the previous fiscal year but rose in the second quarter of this fiscal year, boosted profits by 3.4 billion yen from the previous fiscal year.
The subsequent drop in product prices, meanwhile, brought in an additional 3.8 billion yen in profit.
Furthermore, a range of factors - such as an increase in product sales volumes, the sale of lighter products, the use of different materials, and a reduction in the number of product types - and a series of group-wide cost-cutting decisions in manufacturing, distribution, and other areas helped profits rise by an extra 5 billion yen.
Although product prices were frozen despite an increase in the price of raw materials in the second quarter of this fiscal year, 1.27 billion yen in additional costs were absorbed, leaving ordinary profits at 12.22 billion yen, up 2.922 billion yen from the previous fiscal year.
Accounting for the 405 million yen in temporary ordinary profits from the disposal of sales assets in the previous fiscal year, profits rose year-on-year by 3.327 billion yen.
Once again, we would like to thank all our shareholders for their continued openness of their opinions and their generous cooperation.