TBK : Notice concerning the recording of impairment loss and differences between actual FY2019 results and our consolidated earnings forecast
May 28, 2020 at 02:33 am EDT
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May 22, 2020
TBK Co., Ltd.
Representative: Takaaki Kishi, President
First Section, Tokyo Stock Exchange (Code no.: 7277)
Contact: Masahiko Kuramura, Executive Officer and
General Manager of Business Planning Division
Tel.: +81-42-739-1473
Notice concerning the recording of impairment loss and differences between actual FY2019 results and our consolidated earnings forecast
TBK Co., Ltd. hereby announces that it included impairment loss in its consolidated financial statements for FY2019 (ended March 31, 2020) and that actual FY2019 financial results differed from figures projected in the consolidated earnings forecast it released on November 11, 2019.
1. Recording of impairment loss
TBK and its consolidated subsidiaries have carefully examined the future recoverability of their facilities, equipment, and other fixed assets, incorporating considerations related to the current spread of the novel coronavirus pandemic. These investigations uncovered a decline in the profitability of these assets, and we have accordingly recorded a total impairment loss of ¥3,632 million for FY2019 (ended March 31, 2020). TBK's share of this impairment loss was ¥3,457 million and consolidated TBK subsidiary TBK America, Inc. accounted for ¥141 million.
2. Differences between actual results and our consolidated earnings forecast
Differences between actual results and projected figures in our consolidated earnings forecast for FY2019 (April 1, 2019 through March 31, 2020)
Net
Net income
Operating
Ordinary
income
(loss) per
Net sales
income
income
(loss)
share
Millions of yen
Yen
Previously announced forecast (A)
52,000
900
800
500
17.05
Actual results (B)
51,340
1,261
944
(3,116)
(107.10)
Increase/decrease (B-A)
(659)
361
144
(3,616)
-
Increase/decrease (%)
(1.3)
40.2
18.1
-
-
Ref: Results of FY2018 (ended Mar. 31, 2019)
53,637
1,507
1,554
1,029
35.09
(2) Reasons for differences
Net sales fell somewhat short of expectations due in part to the spread of the novel coronavirus pandemic that lasted through the end of the year. However, both operating and ordinary income exceeded our earlier earnings forecast thanks to thorough cost reduction at all group companies and overall efforts to reduce manufacturing costs and streamline production. Despite higher operating and ordinary income, net loss was ¥3,116 million, substantially higher than our earlier projections, due to impairment loss of ¥3,632 million.
(3) Reduction in compensation for executives
We recognize the seriousness of the impact this impairment loss had on earnings and the tough circumstances currently surrounding TBK. Accordingly, we have decided to withhold bonuses for all executives with the rank of executive officer or higher and to reduce executive compensations by the amounts listed below:
(A)
Reductions to compensation for corporate officers
President
30% reduction to monthly compensation
Member of Board, Managing Executive Officer
25% reduction to monthly compensation
Member of Board
20% reduction to monthly compensation
Managing Executive Officer
20% reduction to monthly compensation
Executive Officer
15% reduction to monthly compensation
(B)
Planned effective period of reductions
Three months spanning from April through June 2020
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TBK Co. Ltd. published this content on 22 May 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 May 2020 06:32:02 UTC
TBK Co., Ltd. is a Japan-based manufacturer of automobile parts. The brakes division manufactures and sells brakes, which are used in small-scale cars, large-scale trucks and buses, among others. The engine component and others division manufactures and sells lube oil pumps and water pumps, which are used for engine cooling purposes in small-scale cars, large-scale trucks and buses, among others.