Asahi : Consolidated Financial Results for the Second Quarter Ended September 30, 2022

Consolidated Financial Results for the Second Quarter Ended September 30, 2022

Asahi Holdings, Inc. [IFRS]

October 27, 2022

Stock code:

5857

Shares listed:

Tokyo Stock Exchange - Prime Market

URL:

https://www.asahiholdings.com/english

Representative:

Tomoya Higashiura, Representative Director, President & CEO

For further information please contact:

Kunihiko Chogo, General Manager, Corporate Planning &

Communications Department

(Phone) [phone]

Filing date of Quarterly Report:

November 11, 2022

Start of dividend payment:

November 18, 2022

Supplementary materials for the financial results:

Yes

Investor conference for the financial results:

Yes (for institutional investors, analysts)

(Rounded down to the nearest million yen)

1. Results of the six months ended September 30, 2022 (From April 1, 2022 to September 30, 2022)

(1) Results of operations (cumulative)

(Percentage: Changes relative to corresponding previous period)

Revenue

Operating

Profit before

Profit

Profit

Total

profit

tax

attributable to

comprehensive

owners of parent

income

The six months ended

Millions of yen

%

Millions of yen %

Millions of yen %

Millions of yen %

Millions of yen %

Millions of yen %

September 30, 2022

132,653

37.0

11,493

(16.1)

10,241

(24.9)

7,293

(24.4)

7,293

(24.4)

10,523

(28.1)

September 30, 2021

96,861

22.4

13,698

15.8

13,642

14.9

9,653

17.3

9,653

17.3

14,627

123.4

Basic earnings per share

Diluted earnings per share

The six months ended

Yen

Yen

September 30, 2022

93.30

84.63

September 30, 2021

122.62

110.14

(2) Financial Position

Total assets

Total equity

Equity attributable to

Equity attributable to

owners of parent

owners of parent ratio

As of

Millions of yen

Millions of yen

Millions of yen

%

September 30, 2022

285,607

108,094

108,094

37.8

March 31, 2022

298,387

105,137

105,137

35.2

2. Dividend payments

Dividends per share

First quarter

Second quarter

Third quarter

Year-end

Annual

Yen

Yen

Yen

Yen

Yen

Year ended March 31, 2022

-

45.00

-

45.00

90.00

Year ending March 31, 2023

-

45.00

Year ending March 31, 2023

-

45.00

90.00

(Forecast)

(Note) Revisions in dividend forecast in the current quarter: No

3. Forecast (From April 1, 2022 to March 31, 2023)	(Percentage: Changes relative to corresponding previous period)
				Operating	Profit before	Profit		Basic earnings
	Revenue		attributable to
		profit		tax		per share
						owners of parent
	Millions of yen	%	Millions of yen	%	Millions of yen %	Millions of yen	%	Yen
Year ending March 31, 2023	270,000	40.3	24,000	(9.3)	22,600	(14.3)	15,600	(16.7)	201.52
(Note) Revisions in forecast in the current quarter: Yes

• Notes
• 1. Changes in significant subsidiaries during the period: No
  2. Changes in accounting policies and accounting estimates
  3. 1. Changes in accounting policies required by IFRS: No
     2. Changes other than (i) above: No
     3. Changes in accounting estimates: No
  4. Number of issued shares (common stock)
  5. 1. Number of issued shares at the quarter end (including treasury stock)

	As of September 30, 2022	79,708,688 shares
	As of March 31, 2022	79,708,688 shares
(ii) Number of treasury stock at the quarter end
	As of September 30, 2022	3,065,437 shares
	As of March 31, 2022	1,065,437 shares

(iii) Averaged number of shares during the period (quarterly cumulative period)

Six months ended September 30, 2022	78,173,306 shares
Six months ended September 30, 2021	78,723,561 shares

• The quarterly financial statements are not subject to quarterly reviews by accounting auditors.
• Statement regarding the proper use of financial forecasts and other special remarks (Notes on forward looking statements, etc.)
  These forecast performance figures are based on the information currently available to the Company's management and certain assumptions judged rational. Accordingly, there might be cases in which actual results materially differ from forecasts of this report. Please refer to page 3 "1. Qualitative Information (3) Consolidated Performance Forecasts" for the assumptions used and other notes.

【Appendix】
		Table of contents of the appendix
1. Qualitative Information ..................................................................................................................................................	2
(1)	Consolidated Business Performance .........................................................................................................................	2
(2)	Consolidated Financial Position and Cash Flows for the Six Months Ended September 30, 2022........................	2
(3)	Consolidated Performance Forecasts.........................................................................................................................	3
2. Condensed Consolidated Financial Statements ............................................................................................................	4
(1)	Condensed Consolidated Statements of Financial Position .....................................................................................	4
(2)	Condensed Consolidated Statements of Income for the Six Months Ended September 30, 2022 ..........................	6
(3)	Condensed Consolidated Statements of Comprehensive Income for the Six Months Ended September 30, 2022 7
(4)	Condensed Consolidated Statements of Changes in Equity.....................................................................................	8
(5)	Condensed Consolidated Statements of Cash Flows ..............................................................................................	10
(6)	Notes on Assumptions for Going Concern ...............................................................................................................	11
(7)	Notes on Condensed Consolidated Financial Statements ......................................................................................	11
1.	Reporting entity .....................................................................................................................................................	11
2.	Basis of preparation ...............................................................................................................................................	11
3.	Significant accounting policies ..............................................................................................................................	11
4.	Significant accounting estimates and associated judgements .............................................................................	11
5.	Segment information .............................................................................................................................................	12
6.	Subsequent events .................................................................................................................................................	13

－ 1 －

1. Qualitative Information

1. Consolidated Business Performance

The Japanese economy generally showed signs of a mild recovery during the six months ended September 30, 2022. On the other hand, the yen has weakened due to monetary tightening mainly in Europe and the US, while prices of fuels, raw materials, and other commodities have continued to rise, increasing concerns about an economic slowdown. Under these conditions, the Group's results in each business segment were as follows.

Precious Metals business

In the precious metals recycling business, although the volume of precious metals collected and sales increased significantly mainly in the jewelry sector, the volume of precious metals collected from the dental and catalyst sectors decreased, and there was an increase in temporary costs due to the start-up of the new plant in Ibaraki Prefecture. In the precious metals refining business in North America, processing and sales volume of products utilizing metals were strong. As a result of the above, this segment reported an increase in revenue and decrease in profit from the same period of the previous fiscal year.

Environmental Preservation business

In line with the recovery in the domestic industrial production activities, the volume of industrial waste handled by the Group increased as sales activities were strengthened in all business sectors. In addition, high utilization rates were maintained throughout the various treatment facilities. As a result of the above, this segment reported an increase in revenue and profit from the same period of the previous fiscal year.

At the same time, Fuji Medical Instruments MFG. Co., Ltd., an equity-method affiliate of the Company, incurred a loss from damages based on a judgment in a patent infringement lawsuit filed by Family Inada Co., Ltd. In addition, when the Company and Johnson Health Tech, Co., Ltd. entered into a share transfer agreement on December 20, 2019 regarding shares of Fuji Medical Instruments MFG. Co., Ltd., it was agreed that the Company would bear a portion of this compensation for damages, and the Company recorded expenses based on the amount for which it bore responsibility under the agreement. As a result of these factors, profit at all levels declined.

As a result of the above, revenue during the six months ended September 30, 2022 was 132,653 million yen, a year-on-year increase of 35,792 million yen (+37.0 percent). Operating profit was 11,493 million yen, a year- on-year decrease of 2,205 million yen (-16.1 percent). Profit before tax was 10,241 million yen, a year-on-year decrease of 3,401 million yen (-24.9 percent). Profit was 7,293 million yen, a year-on-year decrease of 2,360 million yen (-24.4 percent). Profit attributable to owners of parent for the period was therefore 7,293 million yen, a decrease of 2,360 million yen (-24.4 percent) year-on-year. By segment, revenue in the Precious Metals business was 123,895 million yen, a year-on-year increase of 35,673 million yen (+40.4 percent). In the Environmental Preservation business, revenue was 8,757 million yen, a year-on-year increase of 118 million yen (+1.4 percent).

(2) Consolidated Financial Position and Cash Flows for the Six Months Ended September 30, 2022

As of September 30, 2022, total assets amounted to 285,607 million yen, down 12,779 million yen from the previous fiscal year end. This was mainly due to an increase of 4,016 million yen in cash and cash equivalents, an increase of 5,979 million yen in inventories, an increase of 6,509 million yen in other current assets, a decrease of 24,493 million yen in trade and other receivables and a decrease of 3,596 million yen in income tax receivables.

Total liabilities amounted to 177,513 million yen, down 15,736 million yen from the previous fiscal year end. This was due mainly to a decrease of 6,740 million yen in trade and other payables and a decrease of 8,298 million yen in bonds and loans payable.

Total equity amounted to 108,094 million yen, up 2,956 million yen from the previous fiscal year end. This was due mainly to an increase of 10,523 million yen in comprehensive income, purchase of treasury stock of 4,106 million yen and a decrease of 3,538 million yen used for dividends.

As a result, the equity attributable to owners of parent ratio changed to 37.8%, from 35.2% at the end of the previous fiscal year.

－ 2 －

Net cash provided by operating activities amounted to 4,474 million yen due mainly to 10,241 million yen of profit before tax, 1,601 million yen of depreciation and amortization, 6,003 million yen of increase in inventories, 34,808 million yen of decrease in trade and other receivables, 34,287 million yen of decrease in trade, loans and other payables, 4,199 million yen of income taxes paid and 4,146 million yen of income taxes refunded.

Net cash provided by investing activities amounted to 46 million yen due mainly to 2,202 million yen of purchase of property, plant and equipment and 1,371 million yen of proceeds from sales of shares of subsidiaries.

Net cash used in financing activities amounted to 2,100 million yen due mainly to 5,727 million yen of net increase in short-term loans payable, 4,106 million yen of purchase of treasury stock and 3,543 million yen of cash dividends paid.

As a result, cash and cash equivalents as of September 30, 2022 increased 4,016 million yen from March 31, 2022, to 10,143 million yen.

(3) Consolidated Performance Forecasts

The consolidated financial forecast for the year ending March 31, 2023, as announced on April 27, 2022, has been revised as follows. For details, please refer to the "Notice of Difference between Financial Forecast and Actual Financial Results for the Six Months Ended September 30, 2022 and Revision to Financial Forecast for the Year Ending March 31, 2023" released today (October 27, 2022).

Revisions of the consolidated financial forecast for the year ending March 31, 2023 (April 1, 2022 to March 31, 2023)

		Operating	Profit before	Profit	Basic earnings
	Revenue	attributable to
	profit	tax	per share
		owners of parent
	Millions of yen	Millions of yen	Millions of yen	Millions of yen	Yen
Previous forecast (A)	200,000	24,000	23,500	16,000	203.45
Revised forecast (B)	270,000	24,000	22,600	15,600	201.52
Change (B-A)	70,000	-	(900)	(400)	-
Change (%)	35.0	-	(3.8)	(2.5)	-
(Ref.)
Results for the previous FY	192,442	26,446	26,372	18,735	238.11
(FY ended March 31, 2022)

－ 3 －