ARE HOLDINGS, INC. ARE Holdings, Inc.
Financial Results for Q2 for fiscal year ending March, 2024
(FY 2023)
October 26, 2023
These forecast performance figures are based on information currently available to the company's management and certain assumptions judged rationally. Accordingly, there might be cases in which actual results materially differ from forecasts of this report.
Copyright © ARE Holdings, Inc. All rights reserved.
- Financial Results for Q2 FY2023
(April 1, 2023 ～ September 30, 2023)
- Appendix
Copyright © ARE Holdings, Inc. All rights reserved.
01 Key Points of Q2 Financial Results
Overview
Sales revenue | ¥151.9bn | （YoY+¥19.2bn） | |
Operating profit | ¥7bn | （YoY (¥4.5bn)) | |
• Compared to Q1, rhodium price in 2Q seems more stable, but its price fell more than 70% | |||
Impact of rhodium | from the | end of last September, and YoY is ¥2.6 billion which is the negative impact. | |
• | Forward contract and alternative hedging to mitigate the risk of rhodium price fluctuation are | ||
right on the track. | |||
• Paradigm price fell 40% from the end of last September. | |||
• | Inventory adjustment of clients in electronics and catalyst sector takes longer than our | ||
Other factors | estimate. | ||
• | The change in accounting due to the spin off | ||
• North American refining business is steady and smooth. | |||
Revision to financial | Made a revision to full year financial forecast because of the gold sales volume and selling price | ||
forecast | are higher than our initial assumption. | ||
Japan Waste | Reached a basic agreement on a share exchange with Renatus who has excellent companies in | ||
industrial waste management business under its umbrella. | |||
Copyright © ARE Holdings, Inc. All rights reserved.
02 Business Overview of Q2 （YoY）
Precious Metals Business
(Asahi Pretec Corp., ASAHI METALFINE, Inc., Asahi Refining)
The jewelry sector was strong on the back of the elevated gold price. The catalyst sector is struggling because of the price fall of paradigm. For North American refining business, trading and advance trading went well, but product processing and sales decreased.
Business field
Dentistry
Jewelry
Catalyst
Electronic
North American refining
Business environment
Maintained the same volume of collection as the last year even though the spread of alternative products continued by increasing the number of patient and our strong sales efforts.
Collection rose due to the increasing demands for jewelry recycling because of the higher gold price.
Collection fell in Japan due to the falling PGM price; overseas, collection from catalyst manufactures was reduced.
Even though AI and EV related product demands pushed the market, collection decreased due to sluggish Chinese market.
Refining ,Trading and advance trading were steady, but product processing and sales decreased.
Environmental Preservation Business (Japan Waste Corporation)
Handling volume of liquid waste increased YoY due to the large one time business, for medical waste, made up the loss of COVID19 related wastes with alternative medial wastes, wood waste fell significantly due to the impact of the business conversion of the Yokohama Plant.
Items
Liquid waste
Waste reagents
Medical waste
Waste plastics
Other
Business environment
Even though some of the industries are on the recovery trend, electronic and electrical equipment related products, printed circuit board related products and others are still short of the full recovery.
Even though there is no major change in waste reagents from educational institutions, our handling volume rose YoY thanks to the withdrawal from business of some of our competitors.
Besides last year's special demand from COVID19-related wastes, handling volume of medical waste is growing.
Our handling volume of waste plastics shows a little decline due to the low emission of waste plastic and strong demand from cement related and RFP handlers.
Handling volume of sludge and wood waste fell significantly due to the impact of the business conversion of the Yokohama Plant .
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03 Consolidated Results
Q2 |
FY2022 |
Q2
FY2023
Unit：billion yen
FY2023
Results | ||
Revenue | 132.7 | |
Operating profit | 11.5 | |
Ratio | 8.7% | |
Profit before tax | 10.2 | |
Profit※1 | 7.3 | |
Results
151.9
7.0
4.6%
7.2
5.3
YoY
Change
19.2
(4.5)
(4.1%)
(3.0)
(2.0)
Revised
Forcasst
290.0
19.0
6.6%
18.5
13.2
YoY
Change
(2.4)
(0.3)
(0.1%)
2.4
2.3
Capex | 2.1 | |
Depreciation | 1.6 |
※1 Profit attributable to owners of parent
2.9 | 0.9 | |
1.8 | 0.2 |
12.4 | 7.5 |
3.1 (0.2)
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04 Precious Metals Business
Precious metals recycling business (Japan and Asia)
Q2 FY2023 Results
As collection amount from jewelry sector increased, gold sales volume and its price also increased.
On the other hand, price decline of rhodium and paradigm and inventory adjustment of our partner clients of electric and catalyst, caused a decrease of the collection amount.
- Increase in revenue and decrease in profit
North American refining business
Q2 FY2023 Results
Refining,trading and advance trading fee increased.
- Increase in revenue and profit
Precious | Q2 FY2022 | ||||
Metals | |||||
Results* | |||||
Revenue | 123.9 | ||||
Operating Profit | 10.5 | ||||
Ratio | 8.5% | ||||
[Unit: billion yen] | |||||||||
Q2 FY2023 | FY2023 | ||||||||
Results | YoY Change | Forecast | YoY Change | ||||||
143.9 | 20.0 | 272.0 | (2.2) | ||||||
6.1 | (4.4) | 16.7 | (3.1) | ||||||
4.2% | (4.3%) | 6.1% | (1.1%) | ||||||
*The actual achievement in FY2022 was processed retroactively due to the changes in Segment Accounting Standard which became effective since FY 2023
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05 Impact of Gold Collection
- Gold share in revenue is increasing on YoY because both collection amount and selling price increased.
Breakdown of revenues | Breakdown of Au collected |
Sales of Au | Unit: : billion yen |
Sales of Others |
96.9
Jewelry sector | Unit：kg |
Other sectors | |
12,986 | 13,354 |
7,573
151.9
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06 Ref: Volume of Precious Metals Collected
- Collection amount of gold is on a positive trend, but collection amount of palladium and platinum is declining mainly from catalyst.
Au | Pd | Pt |
Unit：kg
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07 Rhodium Trend
- Rhodium price was relatively stable but it still remained low in Q2 after its price plummeted in 1Q.
- The negative impact of the price decline was about 2.6 billion yen (YoY).
- Expect to be able to lower the impact of rhodium price fluctuation with actual hedging in forward contract and alternative hedging which we have started since July this year.
Rhodium Prices
FY2022 | FY2023 | |
2022/9/30
13,500
2023/9/29
3,850
※Ref：Metals Week NY Dealer Prices
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08 Environmental Preservation Business
Environmental Preservation Business
Q2 FY2023 Results
Although operational rate of the facility keeps high level, could not avoid getting the negative impact from the fall of unit price of medical waste due to a decrease in COVID19 related waste, and business conversion for the purpose of constructing a new incinerator at the Yokohama plant.
- Decrease in revenue and profit
Environmental Preservation
Revenue
Operating Profit
Ratio
Q2 FY2022
Results*
8.8
1.7
19.5%
[Unit: billion yen] | |||||||||
Q2 FY2023 | FY2023 | ||||||||
Results | YoY Change | Forecast | YoY Change | ||||||
8.0 | (0.8) | 18.0 | (0.2) | ||||||
1.1 | (0.6) | 2.3 | (1.5) | ||||||
13.7% | (5.8%) | 12.8% | (8.3%) | ||||||
The actual achievement in FY2022 was processed retroactively due to the changes in Segment Accounting Standard which became effective since FY2023.
Copyright © ARE Holdings, Inc. All rights reserved.
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Asahi Holdings Inc. published this content on 26 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 October 2023 06:52:39 UTC.
