MORESCO, running operations of R&D, manufacture and sale of chemical goods used in diverse applications with autos as the mainstay, is to move onto a path of recovery in its performance. The Company has been seeing a major adjustment in earnings for FY02/2023 due mainly to soaring raw material prices from the beginning of the fiscal year, while implying a prospective recovery of earnings for FY02/2024. This is expected to realize in line with an improvement in business environment. The prices of naphtha domestically produced, which had been soaring in line with the soaring prices of crude oil (in US dollar terms) and yen’s depreciation, have now shown signs of stabilizing. Naphtha (crude gasoline) is the basic raw material for petrochemical products across the board and the price trend of naphtha domestically produced has a significant impact on the prices of raw materials the Company purchases. So far, the Company has been consistently implementing revision on selling prices of own products in response to the continuous price hikes of raw materials, but it requires a certain time lag for the former to be implemented after the latter in the first place, having resulted in a situation that the impact of the revision has not been sufficient enough for the Company to maintain its profitability. More importantly, however, the Company does suggest that the impact of the revision on selling prices of own products will be gradually enlarging from now on, going for prospective sales of \34,500m (up 13.1% YoY), operating profit of \1,400m (up 180.0% YoY) and operating profit margin of 4.1% (up 2.4% points) for FY02/2024.

On 14 February 2023, EM SYSTEMS, the leading provider of IT systems for dispensing pharmacies, released its FY12/2022 results. It has been revealed that the Company is on track to achieve steady growth through its focus on system usage fee sales from a long-term perspective. Most recently, it is suggested that the Company benefits from growing demand associated with project of online eligibility verification amongst the existing customers, which is to be followed by that of electronic prescriptions, driving short-term performance as a whole. Meanwhile, the Company has announced its key policy to promote sales of “MAPs for PHARMACY DX” with an active spending to do so for the sake of increasing the number of customers and thus further beefing up its share in the market. This is to ensure ever-increasing system usage fee sales (to be consistently gained in line with usage of systems by customers), i.e., a stable source of earnings over the long-term. Further, the Company is looking to a future benefit stemming from its measures to apply the expertise of building IT systems to support operations for dispensing pharmacies to related sectors, i.e., clinics and long-term care/welfare. At the moment, the Company has a rather limited market share for each, implying a huge upside for the future.

NIRAKU GC HOLDINGS, which mainly runs pachinko & pachislot halls in eastern Japan, is showing a trend of recovery for its performance. For FY03/2023, the Company is to see a steady increase in revenue and a steady improvement in earnings. The Company has resumed payment of dividend with ¥0.17 per share for H1 (versus nothing for the previous H1), which is expected to be followed by payment with a target of achieving payout ratio of 30% on a full-year basis. For the H1 actual results, the Company benefited from a factor that the impact of Corona disaster was beginning to run its course, having resulted in a strength for revenue. On top of the mainstay Pachinko & Pachislot Hall Operations, the Company also saw a major contribution from Amusement Arcade Operations in Southeast Asia. By the way, the Company saw operating profit increased sharply in terms of an apple-to-apple comparison, i.e., excluding the impact of booking gain on release of lease liabilities as much as ¥1,349m during the same period of the previous year, which was a factor to have had boosted operating profit then to a corresponding extent. Meanwhile, for H2, the Company is to invest in “smart pachislot”, which is expected to result in operating profit for H2 rather smaller than that of H1. According to the Company, it is indispensable to invest in such new gaming machines to pursue future increase in revenue. In the first place, the market for pachinko & pachislot halls is consistently shrinking, but the Company, drastically streamlining its operations of the halls than ever before, newly opened two halls through acquisitions of ones run by trades with all their furnishings for FY03/2022, while implying its intention to continue doing so for the future as well.