Aoyama Zaisan : Summary of Consolidated Financial Results for the Six Months Ended June 30, 2022(Based on Japanese GAAP)

Translation

Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Summary of Consolidated Financial Results

for the Six Months Ended June 30, 2022

(Based on Japanese GAAP)

August 4, 2022

Company name:	Aoyama Zaisan Networks Co., Ltd.
Stock exchange listing:	Tokyo
Stock code:	8929	URL https://www.azn.co.jp/
Representative:	President		Masazumi Hasumi
	Director,Deputy Executive Officer,
Inquiries:	General Manager for Management	Masayuki Yagi	TEL [phone]
	Headquarters
Scheduled date to file Quarterly Securities Report:	August 4, 2022
Scheduled date to commence dividend payments:	August 22, 2022
Preparation of supplementary material on quarterly financial results:	Yes
Holding of quarterly financial results meeting:	Yes	(for analysts)

(Amounts less than one million yen are rounded down)

1. Consolidated financial results for the six months ended June 30, 2022 (from January 1, 2022 to June 30, 2022)
(1) Consolidated operating results (cumulative)							Percentages indicate year-on-year changes
	Net sales			Operating profit	Ordinary profit	Profit attributable to
			owners of parent
	Millions of yen	%		Millions of yen		%	Millions of yen		%	Millions of yen	%
Six months ended June 30, 2022	20,232	69.7		1,097		(7.8)	1,044		(10.2)	713	(33.7)
Six months ended June 30, 2021	11,919	25.9		1,190		63.0	1,163		71.5	1,076	147.4
	Earnings per share			Diluted earnings per share
			Yen			Yen
Six months ended June 30, 2022		29.46				29.41
Six months ended June 30, 2021		44.37				44.16
(2) Consolidated financial position
	Total assets			Net assets		Equity ratio		Net assets per share
	Millions of yen			Millions of yen				%		Yen
As of June 30, 2022		20,781					7,637				36.5		312.57
As of December 31, 2021		17,426					7,128				40.8		294.61

2. Cash dividends

		Annual dividends per share
	1st quarter-end	2nd quarter-end	3rd quarter-end	Fiscal year-end	Total
	Yen	Yen	Yen	Yen	Yen
Year ended December 31, 2021	-	22.00	-	17.00	-
Year ending December 31, 2022	-	13.00
Year ending December 31, 2022 (Forecast)			-	18.00	31.00

3. Forecast of consolidated financial results for the year ending December 31, 2022 (from January 1, 2022 to December 31, 2022)

Percentages indicate year-on-year changes

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Earnings per share
		owners of parent
	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Full year	36,500	50.7	2,550	37.4	2,420	34.7	1,690	14.1	69.55

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4. Notes

(1) Changes in significant subsidiaries during the six months ended June 30, 2022

	(changes in specified subsidiaries resulting in the change in scope of consolidation):	No
(2)	Application of special accounting methods for preparing quarterly consolidated financial statements:	No
(3)	Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements
	Changes in accounting policies due to revisions to accounting standards and other regulations:	Yes
	Changes in accounting policies due to other reasons:	No
	Changes in accounting estimates:	No
	Restatement of prior period financial statements:	No
(4)	Number of issued shares (common shares)
	Total number of issued shares at the end of the period (including treasury shares)

	As of June 30, 2022	24,520,859	shares	As of December 31, 2021	24,362,800	shares
Number of treasury shares at the end of the period
	As of June 30, 2022	220,283	shares	As of December 31, 2021	220,248	shares
Average number of shares during the period (cumulative from the beginning of the fiscal year)
	Six months ended June 30, 2022	24,238,203	shares	Six months ended June 30, 2021	24,260,128	shares

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Quarterly consolidated financial statements

Consolidated balance sheets

			(Millions of yen)
		As of December 31, 2021	As of June 30, 2022
Assets
Current assets
Cash and deposits	10,865	13,138
Accounts receivable - trade	567	586
Real estate for sale	118	1,207
Other inventories	5	4
Income taxes receivable	25	-
Other	483	456
Allowance for doubtful accounts	(3)	(3)
Total current assets	12,062	15,389
Non-current assets
Property, plant and equipment
Buildings and structures, net	2,369	2,394
Land	195	195
Other, net	116	122
Total property, plant and equipment	2,681	2,712
Intangible assets
Goodwill	28	23
Software	495	432
Other	27	26
Total intangible assets	551	482
Investments and other assets
Investment securities	1,587	1,671
Shares of subsidiaries and associates	34	39
Deferred tax assets	122	116
Other	386	369
Total investments and other assets	2,131	2,197
Total non-current assets	5,364	5,392
Total assets	17,426	20,781

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			(Millions of yen)
		As of December 31, 2021	As of June 30, 2022
Liabilities
Current liabilities
Accounts payable - trade	189	241
Short-term borrowings	200	200
Current portion of long-term borrowings	1,298	1,924
Current portion of bonds payable	232	180
Income taxes payable	204	317
Accounts payable - other	986	657
Provision for bonuses	-	432
Other	736	463
Total current liabilities	3,846	4,417
Non-current liabilities
Bonds payable	180	90
Long-term borrowings	4,679	6,688
Long-term leasehold and guarantee deposits received	1,528	1,884
Long-term accounts payable - other	57	57
Other	6	6
Total non-current liabilities	6,452	8,726
Total liabilities	10,298	13,144
Net assets
Shareholders' equity
Share capital	1,167	1,210
Capital surplus	1,330	1,374
Retained earnings	4,625	4,929
Treasury shares	(167)	(168)
Total shareholders' equity	6,955	7,346
Accumulated other comprehensive income
Valuation difference on available-for-sale securities	181	182
Foreign currency translation adjustment	(24)	66
Total accumulated other comprehensive income	156	249
Share acquisition rights	11	20
Non-controlling interests	4	21
Total net assets	7,128	7,637
Total liabilities and net assets	17,426	20,781

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Consolidated statements of income (cumulative) and consolidated statements of comprehensive income (cumulative)

Consolidated statements of income (cumulative)

			(Millions of yen)
		Six months ended	Six months ended
		June 30, 2021	June 30, 2022
Net sales	11,919	20,232
Cost of sales	9,529	17,562
Gross profit	2,389	2,669
Selling, general and administrative expenses	1,199	1,572
Operating profit	1,190	1,097
Non-operating income
Foreign exchange gains	25	62
Other	8	11
Total non-operating income	34	73
Non-operating expenses
Interest expenses	33	39
Commission expenses	22	78
Other	4	8
Total non-operating expenses	61	126
Ordinary profit	1,163	1,044
Extraordinary income
Gain on sale of investment securities	23	-
Gain on reversal of share acquisition rights	190	0
Total extraordinary income	213	0
Profit before income taxes	1,377	1,045
Income taxes - current	100	327
Income taxes - deferred	201	5
Total income taxes	301	333
Profit	1,075	711
Loss attributable to non-controlling interests	(1)	(2)
Profit attributable to owners of parent	1,076	713

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