While tracking changes in the business environment, the DAIDO METAL GROUP executes a flexible and appropriate financial strategy.
The DAIDO METAL GROUP, including its major sales locations around the world, uses a system of notional pooling involving multiple currencies to share funds among affiliated companies within the Group. This not only improves capital efficiency but also acts as a risk hedge against currency risks associated with accounts receivable and accounts payable.
The Group considers resolving issues associated with environmental changes caused by working towards a sustainable society to be a business opportunity. It is therefore pivoting away from the previous business model, which was based on the internal combustion engine and fossil fuels, and making investments towards carbon neutral business (as epitomized by electric vehicles) and renewable energy such as wind and hydroelectric power.
Within this context, as it seeks to maintain its competitive advantage versus global competition the DAIDO METAL GROUP will continuously implement capital investment, and will provide necessary financing while ensuring financial soundness with an equity ratio of around 35%.
In addition to diversifying risk by developing multiple businesses with different levels of profitability and profit, we will strive for a balance of profitability, stability, and growth potential for the Group as a whole, optimizing the DAIDO METAL GROUP’s business portfolio with
the aim of achieving a portfolio mix that enables an ROE of 9%.
The DAIDO METAL GROUP uses the consolidated capital to asset ratio as an indicator of financial structure, and aims for at least 35%. The Group has implemented continuous programs of capital investment and M&A in order to optimize its business portfolio in response to changes in society.
By considering a variety of funding sources, we will build a stable financial structure that targets a consolidated capital to asset ratio of at least 35%, even in cases where we implement significant M&A or other investments as part of modifications to the business portfolio.
It is the Company’s policy to pay appropriate dividends to our shareholders, based on the results of operation and payout ratio, and to maintain a stable and sustainable level of dividend in overall consideration of the internal reserve for future business development, expansion of research and development, strengthening of business foundations and changes to the business environment.
The company has a fundamental policy of making a dividend of surplus twice a year, i.e. an interim dividend and a year-end dividend. The decision-making bodies for these dividends of surplus are the Shareholders’ Meeting for the Year-end dividend, and the Board of Directors for the interim dividend in accordance with the provisions of the Company’s Articles of Incorporation.