Asahi : Consolidated Financial Results for the Third Quarter Ended December 31, 2023

Consolidated Financial Results for the Third Quarter Ended December 31, 2022

Asahi Holdings, Inc. [IFRS]

January 31, 2023

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:

February 13, 2023

Start of dividend payment:

-

Supplementary materials for the financial results:

Yes

Investor conference for the financial results:

No

(Rounded down to the nearest million yen)

1. Results of the nine months ended December 31, 2022 (From April 1, 2022 to December 31, 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 nine months ended

Millions of yen

%

Millions of yen %

Millions of yen %

Millions of yen %

Millions of yen %

Millions of yen

%

December 31, 2022

205,827

42.5

17,506

(9.4)

14,380

(25.4)

10,174

(25.0)

10,174

(25.0)

13,200

5.6

December 31, 2021

144,487

20.4

19,318

12.0

19,271

11.2

13,567

13.4

13,567

13.4

12,505

(13.1)

	Basic earnings per share	Diluted earnings per share
The nine months ended	Yen	Yen
December 31, 2022	131.01	118.94
December 31, 2021	172.40	155.31

(2) Financial Position

	Total assets	Total equity
As of	Millions of yen	Millions of yen
December 31, 2022	361,433	107,364
March 31, 2022	298,387	105,137

2. Dividend payments

Equity attributable to

owners of parent

Millions of yen

107,364

105,137

Equity attributable to owners of parent ratio

%

29.7

35.2

				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: No

• 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 December 31, 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 December 31, 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)

Nine months ended December 31, 2022	77,661,433 shares
Nine months ended December 31, 2021	78,696,714 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 Nine Months Ended December 31, 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 Nine Months Ended December 31, 2022	6
(3)	Condensed Consolidated Statements of Comprehensive Income for the Nine Months Ended December 31, 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 was generally on a mild recovery trend during the nine months ended December 31, 2022. On the other hand, global monetary tightening continues, and due to rising prices of raw materials and fuel and other factors, concerns about an economic slowdown have been growing. 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 increased from the same period of the previous fiscal year mainly in the jewelry sector, the volume of precious metals collected from the dental and automotive catalyst sectors decreased from the same period of the previous fiscal year. In addition, expenses increased from the same period of the previous fiscal year due to depreciation associated with establishing the new plant in Bando-shi, Ibaraki prefecture, rising fuel prices and other factors. In the precious metals refining business in North America, the various value-added business transactions that serve as the base of the refining business 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 mild recovery in the domestic industrial production activities, the volume of industrial waste handled by the Group increased from the same period of the previous fiscal year as sales activities were strengthened in all business sectors. In addition, we succeeded in improving operating margins from the same period of the previous fiscal year by maintaining high utilization rates throughout the various treatment facilities. On the other hand, there was an impact due to the removal of JW Glass Recycling Co., Ltd. from the scope of consolidation in May 2022, and this segment reported a decrease in revenue and increase in profit from the same period of the previous fiscal year.

At the same time, the Company and Johnson Health Tech, Co., Ltd. entered into a share transfer agreement on December 9, 2022 regarding shares of the equity method affiliate Fuji Medical Instruments MFG. Co., Ltd., and the transfer of all the shares held by the Company was completed on December 14, 2022. As a result, the Company recorded a loss on transfer of shares of 1,779 million yen in "Other non-operating expenses."

As a result of the above, revenue during the nine months ended December 31, 2022 was 205,827 million yen, a year-on-year increase of 61,339 million yen (+42.5 percent). Operating profit was 17,506 million yen, a year-on-year decrease of 1,811 million yen (-9.4 percent). Profit before tax was 14,380 million yen, a year-on- year decrease of 4,890 million yen (-25.4 percent). Profit was 10,174 million yen, a year-on-year decrease of 3,393 million yen (-25.0 percent). Profit attributable to owners of parent for the period was therefore 10,174 million yen, a year-on-year decrease of 3,393 million yen (-25.0 percent). By segment, revenue in the Precious Metals business was 192,428 million yen, a year-on-year increase of 61,454 million yen (+46.9 percent). In the Environmental Preservation business, revenue was 13,397 million yen, a year-on-year decrease of 116 million yen (-0.9 percent).

(2) Consolidated Financial Position and Cash Flows for the Nine Months Ended December 31, 2022

As of December 31, 2022, total assets amounted to 361,433 million yen, up 63,045 million yen from the previous fiscal year end. This was due mainly to a decrease of 3,657 million yen in investments accounted for using equity method, a decrease of 3,038 million yen in deferred tax assets, an increase of 3,271 million yen in cash and cash equivalents, an increase of 59,447 million yen in trade and other receivables, an increase of 3,277 million yen in other financial assets and an increase of 5,546 million yen in other current assets.

Total liabilities amounted to 254,068 million yen, up 60,817 million yen from the previous fiscal year end. This was due mainly to a decrease of 6,348 million yen in trade and other payables, a decrease of 3,535 million yen in other financial liabilities and an increase of 74,313 million yen in bonds and loans payable.

Total equity amounted to 107,364 million yen, up 2,227 million yen from the previous fiscal year end. This was due mainly to an increase of 13,200 million yen in comprehensive income, a decrease of 4,106 million yen used for purchase of treasury stock and a decrease of 6,987 million yen used for dividends.

－ 2 －

As a result, the equity attributable to owners of parent ratio changed to 29.7%, from 35.2% at the end of the previous fiscal year.

Net cash provided by operating activities amounted to 7,409 million yen due mainly to 14,380 million yen of profit before tax, 2,467 million yen of depreciation and amortization, 1,510 million yen of increase in inventories, 62,992 million yen of increase in trade and other receivables, 61,108 million yen of increase in trade, loans and other payables, 7,620 million yen of income taxes paid and 4,139 million yen of income taxes refunded.

Net cash used in investing activities amounted to 2,376 million yen due mainly to 2,491 million yen of proceeds from sales of investments in associates, 2,944 million yen of purchase of property, plant and equipment and 2,504 million yen of payments into time deposits.

Net cash used in financing activities amounted to 4,722 million yen, mainly due to a net decrease in short- term loans payable of 287 million yen, proceeds from long-term loans payable of 2,000 million yen, proceeds from issuance of bonds of 4,924 million yen, purchase of treasury stock of 4,106 million yen, and cash dividends paid of 6,985 million yen.

As a result, cash and cash equivalents as of December 31, 2022 increased 3,271 million yen from March 31, 2022, to 9,398 million yen.

(3) Consolidated Performance Forecasts

No changes have been made to the forecasts going forward as they are in line with the financial forecast for the fiscal year ending March 31, 2023 announced in the "Consolidated Financial Results for the Second Quarter Ended September 30, 2022" made public on October 27, 2022.

－ 3 －