T.RAD Co., Ltd. Business Report FY ended Mar. 2019
Financial Overview |
(in millions of JPY) |
| FY ended Mar. 31, 2019 | FY ended Mar. 31, 2018 | Rate of Change (%) | Factors | |
| Overall | ||||
| Sales | 136,125 | 124,490 | 9.4 | -Business results were higher year-over-year in Japan and other regions, except for Europe and some regions |
| Operating profit | 5,092 | 5,792 | (12.1) | |
| Profit before tax | 5,572 | 6,445 | (13.6) | -Profit fell because of losses incurred from selling investment securities, increased impairment losses, and increased corporate taxes, even though settlement costs dealing with anti-trust laws decreased. |
| Profit for the year attributable to owners of the parent | 1,735 | 3,691 | (100.0) | |
Factors
Sales at the automotive heat-exchanger business
-Japan: Increased because of strong sales resulting from more product orders.
-USA: Increased because production launched of products that the Company won new orders for.
-Europe: Increased because customers in the Czech Republic placed more product orders.
-Asia: Increased because of strong sales resulting from more product orders placed by customers in Thailand, Indonesia, and Vietnam.
-China: Significantly increased because of the sales generated by a subsidiary, Qingdao Toyo Heat-Exchanger Co., Ltd., starting from the 3rd quarter.
Business Developments
-The company will boost production of heat exchangers that correspond to high fuel efficiency and electrification. It will start mass production of a new inverter cooler in 2019, and gradually increase production capacity for the oil coolers for motors and continuously variable transmissions, as well as exhaust gas recirculation (EGR) coolers, by the fiscal year that ends in March 2022 (FY 2021), when the popularity of electrified vehicles is expected to grow dramatically. The company will actively invest in plants and facilities to improve production efficiency, and introduce a cloud manufacturing business management system that is under development by its group company. The company improved the cooling performance and weight of oil coolers more than 10% by adopting high-performance fins, and produces oil coolers for sales in Japan, China, and North America. Demand for oil coolers is expected to grow in Europe and Southeast Asia, and the company will raise its annual production capacity for them by 70% from the FY 2017 figure to 11 million units. It developed a new EGR cooler by adopting a tank-less structure that uses less components and is more cost effective compared with existing header-less structures. The company currently produces the new EGR cooler in Japan, and will start mass-producing in North America this autumn. The company aims to raise EGR cooler sales for FY 2021 by 60% from the FY 2017 results. (From an article in the Nikkan Jidosha Shimbun on July 2, 2018)
Mid-term Management Plan “T.Rad-11”
-The Company set the following targets for FY2021
- Ordinary profit: JPY 10.5 billion
- Ordinary profit margin: 7.2%
- Sales: JPY 146.0 billion
- ROE: 10.7%
-Regional Strategies
- Japan: Improve productivity based on IT, automation, zero accidents, improved quality, and cost reductions. Japanese productions plants support production operations at production plants overseas.
- North America: Install a new inventory-control system. Launch commercial production of small-sized EGR coolers for automobiles and radiators for small-sized trucks.
- Europe: Focus on returning to profitability by improving processes for producing heat-exchangers for heavy-duty trucks that are currently being built, and EGR coolers.
- Asia: Prepare production facilities to manufacture motorcycle heat-exchangers based on water-cooling technology, and casing oil-coolers that are environmentally friendly products.
- China: Commercially produce environmentally friendly products for 6 country emissions-controlled vehicles and the Chinese electric-vehicle market.
-Improved Operating Procedures
- Manufacture products meeting the needs for electrification, commoditization, larger sizes, and specialty high-mix/small-lot products. Make use of IT expertise at T-RAD Connect that was established in April 2018.
Licensing of Technology to Other Companies |
(As of Mar. 31, 2019) |
| Partner (Country) |
Contract | Contract period |
| PT. Batarasura Mulia (Indonesia) |
Manufacturing technology for radiators | Dec. 2014 - Dec. 2019 |
| Tata Toyo Radiator Ltd. (India) |
Manufacturing technology for radiators | Jan. 2013 - Dec. 2019 |
| Torc Co., Ltd. (Thailand) |
Manufacturing technology for radiators | Jan. 2019 - Dec. 2019 |
R&D Expenditure |
(in millions of JPY) |
| FY ended Mar. 31, 2019 | FY ended Mar. 31, 2018 | FY ended Mar. 31, 2017 | |
| Japan | 2,835 | 2,737 | 2,558 |
| USA | 55 | 33 | 63 |
| Europe | 17 | 44 | 9 |
| Asia | 23 | 12 | 27 |
| China | 117 | - | - |
| Total | 3,049 | 2,827 | 2,659 |
Product Development
-In the clean-vehicle field, the Company is developing cooling systems that respond to the increasing electrification of hybrid, electric, and fuel-cell vehicles.
Capital Expenditure |
(in millions of JPY) |
| FY ended Mar. 31, 2019 | FY ended Mar. 31, 2018 | FY ended Mar. 31, 2017 | |
| Japan (parent basis) | 3,778 | 3,619 | 2,358 |
| USA | 956 | 1,105 | 1,962 |
| Europe | 714 | 433 | 523 |
| Asia | 935 | 495 | 408 |
| China | 375 | 198 | 233 |
| Other | 124 | 122 | 67 |
| Overall | 6,882 | 5,975 | 5,551 |
Planned Capital Investment |
(As of Mar. 31, 2019) |
| Facility (Location) |
Equipment to be installed | Planned investment amount (million JPY) |
Starting | Planned completion |
| Hatano Works (Kanagawa, Japan) |
Equipment to produce radiators, etc. | 359 | Nov. 2018 | Mar. 2020 |
| Nagoya Works (Aichi, Japan) |
Equipment to produce radiators, etc. | 860 | Nov. 2018 | Mar. 2020 |
| Shiga Works (Shiga, Japan) |
Equipment to produce radiators, etc. | 1,075 | Jun. 2017 | Mar. 2020 |
| T.RAD North America Inc. (Kentucky, U.S) |
Equipment to produce radiators, etc. | 1,984 | Apr. 2018 | Dec. 2019 |
| T.RAD (Vietnam) Co., Ltd. (Hanoi, Vietnam) |
Equipment to produce radiators, etc. | 487 | Dec. 2018 | Dec. 2019 |
| T.RAD (Thailand) Co., Ltd. (Chachoengsao, Thailand) |
Equipment to produce radiators, etc. | 981 | Mar. 2019 | Dec. 2019 |
| PT. T.RAD Indonesia (Bekasi, Indonesia) |
Equipment to produce radiators, etc. | 165 | Sep. 2018 | Dec. 2019 |
| T.RAD (Zhongshan) Co., Ltd. (Guangdong, China) |
Equipment to produce radiators, etc. | 119 | Apr. 2018 | Dec. 2019 |
| T.RAD Czech s.r.o. (Unhost, Czech Republic) |
Equipment to produce radiators, etc. | 118 | May. 2018 | Dec. 2019 |
>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)