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  5. Ahresty Corp. Business Report FY ended Mar. 2015

Ahresty Corp. Business Report FY ended Mar. 2015

Financial Overview

 (in million JPY)
FY ended Mar. 31, 2015 FY ended Mar. 31, 2014 Rate of Change
(%)		 Factors
Overall
Sales 138,727 126,783 9.4 -
Operating income 2,521 4,449 (43.3) -
Ordinary income 1,622 4,012 (59.6) -
Net income 1,054 6,272 (83.2) -
Die Casting Division - Japan
Sales 63,226 62,228 1.6 -Sales were higher year-on-year, thanks to favorable currency translation and higher production and exports to mainly North America, even though sales in Japan continued their downward trend because of the increase in the consumption tax.
Operating income 3,230 3,656 (11.7) -Higher depreciation expenses for facilities and equipment and high labor costs in line with wage increases.
Die Casting Division - North America
Sales 40,654 33,906 19.9 -Increased product orders as a result of strong automotive sales in North America, the launch of new products, favorable conditions in the metals market, and favorable currency translation.
Operating income (1,295) 509 - -Lower productivity in the U.S. production plant
Die Casting Division - Asia
Sales 27,584 24,143 14.3 -On the negative side, lower sales in China than originally expected because sales at Japanese OEMs, the major customers of the Company, decreased. On the positive side, commercial production of new parts was launched and currency translation was favorable.
Operating income 662 180 267.8 -Sales increased at the Hefei Plant in China, which turned a profit because of higher sales, even though the amount of sales was not as high as initially planned.
Aluminum Division
Sales 5,015 4,657 7.7 -Adjustments to selling prices.
Operating income 5 (6) - -Adjustments to selling prices and effective cost cutting initiatives helped the Company turn a profit.



Business Plan

Mid-term management plan
-The Company announced its new mid-term management plan. Under the plan, the company aims to achieve operating profit ratio of 5.0 percent (an increase of 1.5 percentage point from the fiscal year ended in March 2014 (FY 2013)) on sales of JPY 143 billion in 2017 (up 12.8 percent from FY 2013). The Company will expand sales of aluminum die-cast parts to North America and Asia where demand is growing. In an effort to increase profitability, the Company will enhance productivity at its plants in China and India while increasing orders for products with appropriate prices. (From an article in the Nikkan Jidosha Shimbun on May 30, 2014)

Outlook for FY ending Mar. 31, 2016

(in million JPY)
FY ending Mar. 31, 2016
(Forecast)		 FY ended Mar. 31, 2015
(Actual Results)		 Rate of Change
(%)
Sales 146,200 138,727 5.4
-Die Casting Division - Japan 62,600 63,226 (1.0)
-Die Casting Division - North America 44,500 40,654 9.5
-Die Casting Division - Asia 32,100 27,584 16.4
-Aluminum Division 5,200 5,015 3.7
Operating income 4,250 2,521 68.6
Ordinary income 3,300 1,622 103.5
Net income 2,000 1,054 89.8

>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)

R&D Expenditure

 (in million JPY)
FY ended Mar. 31, 2015 FY ended Mar. 31, 2014 FY ended Mar. 31, 2013
Total 448 457 489



R&D Facilities

Name Location
Technical Center Aichi Pref.,
Japan



R&D Activities

-Developing production technology that improves productivity for the Company to serve as a die-cast maker and be able to supply high-quality powertrain and auto-body parts in order to compete globally.

-Making use of proprietary vacuum technology, developing suspension parts and auto-body frame parts that lighten auto-body weight and improve fuel efficiency

-The engineering department and production plant are working in collaboration so as not to miss any opportunities to expand their new technology worldwide.

Capital Expenditure

 (in million JPY)
FY ended Mar. 31, 2015 FY ended Mar. 31, 2014 FY ended Mar. 31, 2013
Total 9,841 10,518 11,472
-Die Casting Division 9,631 10,492 11,457


-Major facilities completed in FY ended Mar. 31, 2015 (Die-Cast Business)

Company Name
(Location)		 Details/Activities
Ahresty Wilmington Corp.
(USA)		 Additional production facilities
Ahresty Mexicana, S.A. de C.V.
(Mexico)		 Additional production facilities
Guangzhou Ahresty Casting Co., Ltd.
(Guangdong China)		 Additional production facilities
Hefei Ahresty Casting Co., Ltd.
(Anhui, China)		 Additional production facilities
Ahresty India Private Limited
(Haryana, India)		 Additional production facilities



Investments outside Japan

<U.S.>
-The Company will improve production efficiency of its U.S. plant in order to meet strong demand for aluminum die-cast parts in the U.S. For the Company sales in North America including Mexico account for nearly 30% of its entire sales, making North America the Company's second largest market. Particularly since the fiscal year ended in March 2013 (FY2012), economic recoveries of North American market and a rise in use of aluminum parts for automobiles significantly boosted the Company's intake of orders for aluminum die-cast parts in the U.S. As a result, the Company's production volume in the U.S. almost doubled in FY2013 compared to the FY2011 level, and increased even further in the first half of FY2014. This caused an imbalance in its plant operations in North America, forcing the U.S. plant to experience a temporally fall in profit due to an increase in costs incurred for the temporary increase in production to cover shortage of production at other plants. The Company is planning to retrain its engineers while introducing additional casting machines to save labor costs. By reshaping the U.S. plant by the end of March 2015, the Company hopes to strengthen its revenue base in North America and secure production capacity to meet expected growing needs. (From an article in the Nikkan Jidosha Shimbun on December 2, 2014)

<India>
-The Company will increase its aluminum die-cast parts production capacity at its subsidiary, Ahresty India Private Limited, in Haryana in India. The capacity will be expanded to meet the growing needs from Japanese automakers, which are now expanding their production in India. The Company will enlarge the plant building and add three casting machines at the subsidiary's plant, which currently has 14 casting machines. The additional facility will start its operations in July 2014 and reach its full-scale production in early 2015. (From an article in the Nikkan Jidosha Shimbun on May 26, 2014)

Planned Capital Investment

 (As of Mar. 31, 2015)
Name Location Type of facility Planned investment
(in million JPY)		 Start month Planned completion Increased capacity upon completion
Ahresty Tochigi Corporation Tochigi Pref.,
Japan		 Facility producing die-cast products 1,300 Apr.
2015		 Mar.
2016		 6% increase
Facility processing die-cast products 1,510 Apr.
2015		 Mar.
2016		 -
Ahresty Wilmington Corp. Ohio,
USA		 Facility producing die-cast products 840 Apr.
2015		 Mar.
2016		 6% increase
Facility processing die-cast products 1,210 Apr.
2015		 Mar.
2016		 -
Ahresty Mexicana, S.A. de C.V. Zacatecas,
Mexico		 Facility producing die-cast products 1,260 Apr.
2015		 Mar.
2016		 8% increase
Facility processing die-cast products 500 Apr.
2015		 Mar.
2016		 -
Guangzhou Ahresty Casting Co., Ltd. Guangdong,
China		 Facility producing die-cast products 360 Apr.
2015		 Mar.
2016		 -
Facility processing die-cast products 1,100 Apr.
2015		 Mar.
2016		 -
Hefei Ahresty Casting Co., Ltd. Anhui,
China		 Facility producing die-cast products 1,150 Apr.
2015		 Mar.
2016		 32% increase
Facility processing die-cast products 300 Apr.
2015		 Mar.
2016		 -
Ahresty India Private Limited Haryana,
India		 Facility producing die-cast products 300 Apr.
2015		 Mar.
2016		 8% increase
Facility processing die-cast products 150 Apr.
2015		 Mar.
2016		 -