Ahresty Corp. Business Report FY ended Mar. 2016
Financial Overview |
(in million JPY) |
| FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | Rate of Change (%) |
Factors | |
| Overall | ||||
| Sales | 144,451 | 138,727 | 4.1 | - |
| Operating income | 5,385 | 2,521 | 113.6 | - |
| Ordinary income | 4,077 | 1,622 | 151.4 | - |
| Net income | 3,062 | 1,054 | 190.3 | - |
| Die Casting Division - Japan | ||||
| Sales | 63,583 | 63,226 | 0.6 | -Sales at OEMs continued to remain sluggish after the consumption-tax hike. Sales in Japan slowed after the tax was increased on minicars. -Exports, especially to the North American market, continued to be strong. Orders were on the same level as they were the previous year. |
| Operating income | 2,769 | 3,230 | (14.3) | -Higher amortization and depreciation expenses. |
| Die Casting Division - North America | ||||
| Sales | 45,760 | 40,654 | 12.6 | -The Company received more orders in line with record new-car sales. -Sales rose due to the sales launch of some new parts and due to favorable currency translation because of the weak yen. |
| Operating income | 1,521 | (1,295) | - | -Income recovered at the U.S. and Mexican production plants as a result of product-improvement initiatives and others initiatives. |
| Die Casting Division - Asia | ||||
| Sales | 27,594 | 27,584 | 0.0 | -The Company received fewer orders in China due to targeted sales strategies by model type, implemented by Japanese OEMs, its major customer base in the country. -Sales increased in India, in line with the launch of production of new types of auto parts. -Favorable currency translation contributed to business results. |
| Operating income | 573 | 662 | (13.5) | -Income was lower due to significantly fewer orders in China, even though profitability at the Indian plant improved and efforts to lower costs were successful in China. |
| Aluminum Division | ||||
| Sales | 4,921 | 5,015 | (1.9) | -The number of orders was slightly lower year-on-year. |
| Operating income | 338 | 5 | - | -Income was affected by changes in the cost of raw materials and the results of efforts to lower costs. |
Mid-term Management Plan
1618 Mid-term Plan (from FY ending in March 2017 through FY ending in March 2019)
-Achieve Highest Customer Satisfaction Rating for Hard-to-Develop Products
- Business environment: Increasing use of lighter weight, aluminum die-cast products. Increasing automotive demand mainly in emerging countries. Stimulating demand in developed countries. Decreasing automotive sales in Japan because of an aging population.
- Initiatives: Conducting sales activities worldwide. Promoting sales activities to European- and US-based OEMs so as to win them as new customers. Setting up new production lines worldwide, which are highly efficient in terms of investment and productivity, keeping all production facilities on an even level.
-Establish product-creation processes based on global standards
-Financial Targets: Sales (JPY 150 billion), Operating profit margin (5.5%)
Ahresty 10-year Vision
-Quest for Reliability 2025: Create products that reduce vehicle weight worldwide, with sales over JPY 200 billion.
- 2009-2010: Improve corporate structure to remain in business.
- 2010-2012: Strengthen foundations especially to improve quality.
- 2013-2015: Improve profitability by focusing on product creation.
- 2016-2018: Achieve same level of product creativity and quality worldwide.
Contracts
-In June 2014, Guangzhou Ahresty Casting in China started delivering products to the Volkswagen Group.
-In April 2015, Ahresty India started delivering 2-cylinder diesel blocks, which were developed jointly with Maruti Suzuki.
Models Featuring the Company's Products (Based on information released in June 2016)
- Subaru: Legacy, Legacy Outback, Impreza, Forester, XV (including HV version), BRZ, WRX S/4 STI, Levorg, Exiga
- Nissan: Altima, Cima, March, Fuga, Elgrand, Murano, Serena, GT-R, Skyline, Teana, DAYZ, Infiniti, X-Trail
- Mitsubishi: Galant Fortis, Delica D:5, RVR, Outlander, Lancer Evolution X, eK Wagon, eK Space, TRITON
- Honda: Legend, Fit (including HV and EV versions), Freed, CR-Z, StepWGN, Accord (including HV version), N-Box, N-One, N-WGN, Odyssey, Vezel, Grace, Shuttle, S660
- Acura: RDX, MDX, TLX
- Suzuki: MR Wagon, Palette, Alto, Kizashi, Wagon R, Swift, SX4, Spacia, Hustler, Celerio
- Toyota: MIRAI, Etios, Vitz, Ractis, Mark X, Century, Land Cruiser, Tundra, Estima Hybrid, Vellfire, RAV4, SAI, Harrier, Crown (including HV version), Corolla US, 86
- Lexus: HS250, RX450h, LS600h, IS, NX300h, RC/RC F
- Daihatsu: Atrai, Hijet
- Hino: Dutro (including HV version), Ranger
- Chrysler: Grand Cherokee, Cherokee
- Ford: Fiesta, Focus
- GM: Chevrolet Silverado, GMC Sierra
- Mercedes-Benz: M-Class (including HV version), GLA
- Audi: A4L, Q5, A3
- VW: Golf 7
R&D Activities
-Development of higher quality and stronger durability auto-body parts such as powertrain parts, based on using the Company's proprietary vacuum technology.
-Further enhance development technologies along with enhancing production plants.
-Development of production technology that can produce high-quality powertrain and auto-body parts.
-Development of technology that reduces vehicle weight and improves fuel efficiency.
R&D Expenditure |
(in million JPY) |
| FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | FY ended Mar. 31, 2014 | |
| Total | 493 | 448 | 457 |
R&D Facilities
| Name | Location |
| Technical Center | Aichi Pref., Japan |
Capital Investment in Japan
-In March 2015, the Company began a project to add another casting plant at Ahresty Tochigi, in order to increase capacity and be able to cope with greater numbers of orders. This plant, the 6th plant, was completed in September 2015, with facilities expected to be installed by November 2016. However, the die-cast machine was completed earlier, and has since commenced operating. The monthly capacity will be increased from the current 2,800 tons, to 3,000 tons.
Capital Investment outside Japan
-April 2014: Started project to expand the casting plant building at Ahresty Mexicana, which was completed in September the same year.
-July 2014: Completed a plant-expansion project at Ahresty India.
-September 2014: Completed the second phase of a plant-construction project next to Guangzhou Ahresty Casting in China.
-November 2014: Started a project to expand the facilities at Ahresty Wilmington in the U.S., which was completed in June 2015. As a result, with the addition of two casting machines, the casting area was increased. Plus, the expansion added more warehouse space.
Capital Expenditure |
(in million JPY) |
| FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | FY ended Mar. 31, 2014 | |
| Total | 9,064 | 9,841 | 10,518 |
| -Die Casting Division | 9,015 | 9,631 | 10,492 |
-Capital investment in the fiscal year that ended in March 2016: Total of JPY 15.7 billion (JPY 9.1 billion for other than die-casting; and JPY 6.6 billion for dies)
-Planned capital investment in the fiscal year ending in March 2017: Total of JPY 19.5 billion (JPY 12.7 billion for other than die-casting; and JPY 6.8 billion for dies)
Facilities completed in the FY ended in Mar. 2016 (Die-cast business)
| Company Name (Location) |
Details/Activities |
| Ahresty Wilmington Corporation (U.S.) |
Additional production facilities and equipment |
| Ahresty Mexicana S.A. de C.V. (Mexico) |
Additional production facilities and equipment |
| Ahresty Tochigi Co., Ltd. (Tochigi Pref., Japan) |
Additional production facilities and equipment |
Planned Capital Investment |
(As of Mar. 31, 2016) |
| Name | Location | Type of facility | Planned investment (in million JPY) |
Start month | Planned completion |
| Ahresty Tochigi Corporation | Tochigi Pref., Japan |
Die-cast production facilities/equipment | 1,270 | Apr. 2016 |
Mar. 2017 |
| Die-cast processing facilities/equipment | 1,050 | Apr. 2016 |
Mar. 2017 |
||
| Ahresty Wilmington Corporation | Ohio, USA |
Die-cast production facilities/equipment | 480 | Apr. 2016 |
Mar. 2017 |
| Die-cast processing facilities/equipment | 1,120 | Apr. 2016 |
Mar. 2017 |
||
| Ahresty Mexicana S.A. de C.V. | Zacatecas, Mexico |
Die-cast production facilities/equipment | 920 | Apr. 2016 |
Mar. 2017 |
| Die-cast processing facilities/equipment | 1,560 | Apr. 2016 |
Mar. 2017 |
||
| Guangzhou Ahresty Casting Co., Ltd. | Guangdong, China |
Die-cast production facilities/equipment | 440 | Apr. 2016 |
Mar. 2017 |
| Die-cast processing facilities/equipment | 540 | Apr. 2016 |
Mar. 2017 |
||
| Hefei Ahresty Casting Co., Ltd. | Anhui, China |
Die-cast production facilities/equipment | 860 | Apr. 2016 |
Mar. 2017 |
| Die-cast processing facilities/equipment | 220 | Apr. 2016 |
Mar. 2017 |
||
| Ahresty India Private Limited | Haryana, India |
Die-cast production facilities/equipment | 260 | Apr. 2016 |
Mar. 2017 |
Outlook for FY ending March 2017 |
(in million JPY) |
| FY ending in Mar. 2017 (Forecast) *1 |
FY ended in Mar. 2016 (Actual results) |
Rate of Change (%) |
FY ending in Mar. 2017 (Forecast) *2 |
Rate of Change (%) |
|
| Sales | 136,000 | 144,451 | (5.9) | 134,400 | (1.2) |
| -Die-cast business in Japan | 63,900 | 63,583 | 0.5 | 63,900 | 0.5 |
| -Die-cast business in North America | 39,400 | 45,760 | (13.9) | 38,600 | (15.6) |
| -Die-cast business in Asia | 26,200 | 27,594 | (5.1) | 25,400 | (8.0) |
| -Aluminum business | 4,300 | 4,921 | (12.6) | 4,300 | (12.6) |
| Operating profit | 5,500 | 5,385 | 2.1 | 6,000 | 9.1 |
| Ordinary profit | 4,700 | 4,077 | 15.3 | 5,200 | 10.6 |
| Profit for the year attributable to owners of the parent | 3,100 | 3,062 | 1.2 | 3,750 | 21.0 |
>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)
*1) Initial Forecast (announced on May 9, 2016)
-Die-cast business in Japan: Orders are forecast to increase, even though automotive sales are slowing down due the consumption-tax hike and the tax hike on minicars. In addition, sales are forecast to barely increase because of the situation of the ingot market.
-Die-cast business in North America: Sales and income is forecast to be lower due to downsizing in the USA, fewer orders from some customers in Mexico, the situation of the ingot market, and negative currency translation due to the high valuation of the yen.
-Die-cast business in Asia: Sales are forecast to increase because of a gradual recovery in sales and greater number of orders from customers, even though there were fewer orders in China due to targeted sales strategies by model type, implemented by Japanese OEMs in the first half of the fiscal year. In addition, sales are forecast to decrease because of the situation of the ingot market and negative currency translation due to the high valuation of the yen.
*2) Revised Forecast (announced on Aug. 8, 2016)
-Sales at the die-cast businesses in Japan, the USA, and China are still predicted to be at the same level as initially forecast; however, sales in India and Mexico are forecast to decrease.
-Taking into account the fact that sales will be lower due to the situation of the ingot market and the fact that currency exchange rates are predicted to change, sales in Japan will be at the same level as initially announced. However, sales are forecast to be lower in North America and Asia. Consolidated sales are now forecast to be lower than initially announced.
-Due to cost-cutting initiatives combined with increased sales, consolidated profit is forecast to be higher than initially announced. Note, however, the Company plans to record an extraordinary profit of JPY 500 million in the second half of the fiscal year that is expected to result from the sale of fixed assets such as some investment securities.