Ichimasa Kamaboko : Consolidated Financial Results for the Six Months Ended December 31, 2021

Consolidated Financial Results

for the Six Months Ended December 31, 2021

[Japanese GAAP]

February 10, 2022

Company name: ICHIMASA KAMABOKO Co., Ltd.

Stock exchange listing: Tokyo Stock Exchange

Code number: 2904

URL: https://www.ichimasa.co.jp/global/en/

Representative: Masahiro Nozaki, President & CEO

Contact: Masaki Takashima, Director and Managing Executive Officer, General Manager of Corporate Planning Department

Phone: [phone]

Scheduled date of filing quarterly securities report: February 14, 2022

Scheduled date of commencing dividend payments: -

Availability of supplementary explanatory materials on quarterly financial results: Available

Schedule of quarterly financial results briefing session: Not scheduled

(Amounts of less than one million yen are rounded down.)

1. Consolidated Financial Results for the Six Months Ended December 31, 2021 (July 1, 2021 - December

31, 2021)
(1) Consolidated Operating Results			(% indicates changes from the previous corresponding period.)
			Net sales			Operating profit	Ordinary profit	Profit attributable to
					owners of parent
	Six months ended		Million yen	%	Million yen	%	Million yen	%	Million yen	%
	December 31, 2021	17,593	-	777	(50.0)	831	(47.6)	631	(48.5)
	December 31, 2020	19,571	(1.5)	1,553	31.1	1,585	29.7	1,225	70.8
	(Note) Comprehensive income: Six months ended December 31, 2021: ¥508 million [(62.1) %]
			Six months ended December 31, 2020: ¥1,340 million [100.5 %]
			Basic earnings			Diluted
					earnings
			per share
					per share
	Six months ended		Yen		Yen
	December 31, 2021		34.28		－
	December 31, 2020		66.50		－

(Note) "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and related guidelines have been adopted effective the beginning of the first quarter of the current fiscal year. Key financial data for the six months ended December 31, 2021 above is figures after the adoption of these accounting standards, etc. and the change in net sales from the previous corresponding period is not presented.

(2) Consolidated Financial Position

	Total assets	Net assets	Equity ratio
	Million yen	Million yen	%
As of December 31, 2021	26,106	13,858	53.1
As of June 30, 2021	22,216	13,585	61.2

(Reference) Equity: As of December 31, 2021: ¥13,858 million As of June 30, 2021: ¥13,585 million

(Note) "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and related guidelines have been adopted effective the beginning of the first quarter of the current fiscal year. Key financial data for the six months ended December 31, 2021 above is figures after the adoption of these accounting standards, etc.

2. Dividends

				Annual dividends
		1st quarter-end	2nd quarter-end		3rd quarter-end	Year-end	Total
		Yen	Yen		Yen	Yen	Yen
Fiscal year ended		-	0.00		-	10.00	10.00
June 30, 2021
Fiscal year ending		-	0.00
June 30, 2022
Fiscal year ending
June 30, 2022					-	12.00	12.00
(Forecast)

(Note) Revision to the forecast for dividends announced most recently: None

3. Consolidated Financial Results Forecast for the Fiscal Year Ending June 30, 2022 (July 1, 2021 - June 30, 2022)

(% indicates changes from the previous corresponding period.)

								Profit attributable	Basic earnings
		Net sales		Operating profit	Ordinary profit	to owners of
			per share
								parent
		Million yen	%	Million yen	%	Million yen	%	Million yen	%	Yen
Full year		34,000	-	1,400	(19.4)	1,400	(22.5)	950	(64.6)	51.54
(Notes)	1. Revision to the financial results forecast announced most recently: None

2. As "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and related guidelines have been adopted, the consolidated financial results forecasts above are figures after the adoption of these accounting standards, etc. and the changes in net sales from the previous full year and corresponding period of the previous year are not presented.

* Notes:

1. Changes in significant subsidiaries during the period under review: None (Changes in specified subsidiaries resulting in changes in scope of consolidation):

Newly included: - (

), Excluded: - (

)

1. Accounting methods adopted particularly for the preparation of quarterly consolidated financial statements: None
2. Changes in accounting policies, changes in accounting estimates and retrospective restatement
3. 1. Changes in accounting policies due to the revision of accounting standards: Yes
   2. Changes in accounting policies other than 1) above: None
   3. Changes in accounting estimates: None
   4. Retrospective restatement: None
4. Total number of issued and outstanding shares (common shares)
5. 1. Total number of issued and outstanding shares at the end of the period (including treasury shares):

As of December 31, 2021:	18,590,000 shares
As of June 30, 2021:	18,590,000 shares
2) Total number of treasury shares at the end of the period:
As of December 31, 2021:	215,288 shares
As of June 30, 2021:	158,688 shares

3) Average number of shares during the period (cumulative quarterly accounting period):

Six months ended December 31, 2021:	18,415,141 shares
Six months ended December 31, 2020:	18,428,732 shares

Note: The Company has introduced the Board Benefit Trust (BBT) and the number of treasury shares at the end of each period includes shares of the Company held by the BBT (150,200 shares as of December 31, 2021 and 93,600 shares as of June 30, 2021). The number of treasury shares deducted in the calculation of the average number of shares during each period includes shares of the Company held by the BBT (109,771 shares for the six months ended December 31, 2021 and 96,200 shares for the six months ended December 31, 2020).

• These quarterly consolidated financial results are outside the scope of quarterly review by certified public accountants or an audit firm.
• Explanation of the proper use of financial results forecast and other notes

The financial results forecasts and other forward-looking statements contained herein are based on the information available to the Company and certain assumptions deemed reasonable as of the date of this report and do not constitute a promise by the Company to achieve these forecasts. Actual results may be significantly different from these forecasts due to various factors. For the assumptions on which the financial results forecasts are based and the cautions and other related matters to consider when using thereof, please refer to "1. Qualitative Information on Quarterly Financial Results (3) Explanation of Consolidated Financial Results Forecast and Other Forward- looking Information" on page 4 of the attachment.

Table of Contents - Attachments
1. Qualitative Information on Quarterly Financial Results .........................................................................	2
(1)	Explanation of Operating Results .......................................................................................................	2
(2)	Explanation of Financial Position .......................................................................................................	3
(3)	Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information .....	3
2. Quarterly Consolidated Financial Statements and Principal Notes .........................................................	5
(1)	Quarterly Consolidated Balance Sheets ..............................................................................................	5
(2)	Quarterly Consolidated Statements of Income and Comprehensive Income ......................................	7
	Quarterly Consolidated Statements of Income
	Six Months Ended December 31 .................................................................................................	7
	Quarterly Consolidated Statements of Comprehensive Income
	Six Months Ended December 31 .................................................................................................	8
(3)	Quarterly Consolidated Statements of Cash Flows .............................................................................	9
(4)	Notes to Quarterly Consolidated Financial Statements .....................................................................	10
	(Notes on going concern assumption) ..........................................................................................	11
	(Notes in case of significant changes in shareholders' equity) .....................................................	11
	(Accounting methods adopted particularly for the preparation of quarterly consolidated financial
	statements) ....................................................................................................................................	11
	(Changes in accounting policies) ...................................................................................................	11
	(Additional information) ................................................................................................................	11
	(Segment information, etc.) ..........................................................................................................	12

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1. Qualitative Information on Quarterly Financial Results

(1) Explanation of Operating Results

In the six months ended December 31, 2021, economic activity remained sluggish with the Tokyo Olympic and Paralympic Games held without spectators, which had been expected to jump-start an economic recovery, and a sharp rise in positive COVID-19 cases with the emergence of new variants, and a prolonged state of emergency and localized priority measures to prevent the spread of COVID-19. Economic activity was on a gradual recovery mode after the state of emergency was lifted in October, but the recovery outlook remained uncertain as the emergence of Omicron, a new coronavirus variant, increased the threat of a rapid spread of infection.

In addition, costs are increasing beyond expectations, such as soaring prices of surimi and other raw materials, rises in energy prices driven by a global economic recovery, and rising labor costs resulting from labor shortages, which are becoming chronic, and the business environment surrounding the Group has become increasingly severe.

Under these circumstances, the Group entered the first year of its 2nd Medium-term Management Plan, which extends from July 2021 to June 2026, with the ICHIMASA30 Vision (the Company's vision for FY2045) as its aim. It is addressing business issues with the basic policy of "establishing the foundations for business growth and earnings capability through daring challenges toward markets in Japan and overseas and the certain achievement of a first-stage 'growth trajectory.'"

Further, the maintenance of the global environment is essential for the sustainable growth and development of corporate activity. With the aim of achieving the Sustainable Development Goals (SDGs), the Group established the ICHIMASA KAMABOKO ESG Management Declaration on July 1, 2021 to promote ESG- oriented management that will both contribute to the realization of a sustainable society and enhance corporate value and is striving to resolve sustainability issues with the cooperation of stakeholders.

As a result, for the six months ended December 31, 2021, the Company posted net sales of ¥17,593 million, operating profit of ¥777 million (down ¥776 million or 50.0% from the same period of the previous fiscal year), ordinary profit of ¥831 million (down ¥754 million or 47.6% from the same period of the previous fiscal year), and profit attributable to owners of parent of ¥631 million (down ¥594 million or 48.5% from the same period of the previous fiscal year).

The performance of each segment is as follows.

(Fish-paste Products and Side Dishes Business)

The Company's mainstay product, kanikama (crab-flavored kamaboko), has enjoyed strong popularity as an easily accessible source of fish meat protein, as health consciousness continues to rise.

Within this category, the time-limited product, "Salad Stick Edamame-Flavor," and "Large Kanikama," a satisfying way to eat quality fish meat protein, both proved very popular, the former as summer snacks to accompany drinks and the latter as a key ingredient for special-day dishes at home.

In terms of products for the "osechi", Japanese traditional New Year's day food, sales grew for the "Jun" series kamaboko and datemaki rolled omelet, whose main and auxiliary ingredients are all made in Japan,

Regarding oden products, due to the effects of unseasonal rainy weather in August and low temperatures resulting from autumn rain fronts and typhoons in September, demand for pre-cooked oden products increased thanks to their convenience but deep-fried products performed poorly.

In terms of profit, due to growing health consciousness around the world and increased demand for processed seafood products driven by economic growth in emerging nations, surimi prices have remained at high levels. A global rise in energy prices driven by an economic recovery from the impact of the COVID-19 pandemic and rising edible oil prices affected by a decreased crop of grains, etc. amid a bad weather resulted in profit falling below that of the same period of the previous fiscal year.

As a result, for the six months ended December 31, 2021, this segment posted net sales of ¥15,205 million and segment profit or operating profit of ¥361 million (segment profit or operating profit of ¥871 million for the same period of the previous fiscal year).

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