Consolidated Financial Results for the Six Months Ended September 30, 2023
(Japanese Accounting Standards)
November 9, 2023 | |||
Name of Listed Company: Mitsubishi Materials Corporation | Listing: | Tokyo Stock Exchange | |
Stock Code: | 5711 | URL: | https://www.mmc.co.jp/ |
Representative: | Naoki Ono, Chief Executive Officer | ||
Contact: | Chiaki Kubota, General Manager, Corporate Communications Dept. | Tel: +81-3-5252-5206 |
Scheduled date of Quarterly Report: | November 9, 2023 |
Scheduled date of start of dividend payment: | December 8, 2023 |
Supplementary materials for the financial results: | Yes |
Investor conference for the financial results: | Yes (For Institutional Investors) |
(Amounts of less than one million yen are omitted) | |||||||||
1. Results of the Six Months Ended September 30, 2023 (From April 1, 2023 to September 30, 2023) | |||||||||
(1) Consolidated Results of Operations (Figuresin percentages denote the year-on-year change) | |||||||||
Net sales | Operating profit | Ordinary profit | Profit attributable to | ||||||
owners of parent | |||||||||
Millions of yen | % | Millions of yen | % | Millions of yen | % | Millions of yen | % | ||
The six months ended | 716,199 | -13.9 | 11,950 | -59.6 | 18,418 | -20.0 | 11,120 | -52.9 | |
September 30, 2023 | |||||||||
The six months ended | 831,981 | -3.3 | 29,560 | 1.8 | 23,025 | -39.8 | 23,624 | -38.1 | |
September 30, 2022 | |||||||||
(Note) Comprehensive income: The six months ended September 30, 2023: 40,220 million yen (-33.6%) The six months ended September 30, 2022: 60,608 million yen (76.3%)
Profit | Diluted profit per | |
per share | share | |
Yen | Yen | |
The six months ended September 30, 2023 | 85.12 | - |
The six months ended September 30, 2022 | 180.80 | - |
(2) Consolidated Financial Position
Total assets | Total net assets | Shareholders' | |||
equity ratio | |||||
Millions of yen | Millions of yen | % | |||
As of September 30, 2023 | 1,985,027 | 658,656 | 31.5 | ||
As of March 31, 2023 | 1,891,795 | 628,875 | 31.4 | ||
(Reference) Shareholders' equity: As of September 30, 2023: 626,146 million yen | |||||
As of March 31, 2023: 593,324 million yen |
2. Dividend Payments
Dividend per share | ||||||
(Record date) | First quarter | Second quarter | Third quarter | Year-end | Annual | |
Yen | Yen | Yen | Yen | Yen | ||
Year ended March 31, 2023 | - | 25.00 | - | 25.00 | 50.00 | |
Year ending March 31, 2024 | - | 47.00 | ||||
Year ending March 31, 2024 (Forecast) | - | 47.00 | 94.00 | |||
(Note) Revision of dividend forecast published most recently: None
3. Consolidated Earnings Forecast (From April 1, 2023 to March 31, 2024)
Net sales | Operating profit | Ordinary profit | Profit attributable to | Profit per | ||||||
owners of parent | share | |||||||||
Millions of yen | % | Millions of yen | % | Millions of yen | % | Millions of yen | % | Yen | ||
Year ending March 31, | 1,660,000 | 2.1 | 40,000 | -20.1 | 56,000 | 121.3 | 38,000 | 86.9 | 290.89 | |
2024 | ||||||||||
(Note) Revision to forecast published most recently: Yes |
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Notes:
- Significant changes of subsidiaries during the period (changes in specific subsidiaries accompanying a change in the scope of consolidation): None
- Application of special accounting treatment in the preparation of the quarterly consolidated financial statements: Yes (Note) For details, please see "(4) Key notes to consolidated quarterly financial statements, Application of special accounting treatment in the preparation of quarterly consolidated financial statements" under "2. Consolidated Financial Statements and Key Notes" on page 14.
- Changes in accounting policies, changes of accounting estimates and restatement
(i) | Changes in accounting policies due to amendments to accounting standards: | None |
(ii) | Other changes in accounting policies: | None |
(iii) | Changes in accounting estimates: | None |
(iv) | Restatements: | None |
- Numbers of outstanding shares (common stock)
- Numbers of outstanding shares at the end of period (including treasury shares):
Six months ended September 30, 2023: | 131,489,535 shares |
Year ended March 31, 2023: | 131,489,535 shares |
- Numbers of treasury shares at the end of period:
Six months ended September 30, 2023: | 852,995 shares |
Year ended March 31, 2023: | 857,856 shares |
- Average number of outstanding shares during period (quarterly cumulative period):
Six months ended September 30, 2023: | 130,634,098 shares |
Six months ended September 30, 2022: | 130,661,264 shares |
- This financial results is not subject to an audit by certified public accountants or audit firms.
- Explanation about the proper use of financial forecasts and other special notes.
(Notes concerning forward-looking statements, etc.)
The operating results forecasts and other forward-looking statements contained in this report are based on information currently available to Mitsubishi Materials Corporation ("the Company"), as well as certain assumptions that the Company has judged to be reasonable. As such, they do not constitute an assurance that the Company promises to achieve these projected results. Therefore, readers are advised to note that the actual results may vary materially from the forecasts due to a variety of factors.
Please see "(3) Information on the consolidated earnings forecast and other future forecast" under "1. Qualitative Information on Financial Results" on page 6 for the assumptions about consolidated earnings forecasts.
(Procedure for obtaining supplementary information on annual financial results and annual financial briefing)
The Company plans to hold an annual financial briefing for institutional investors on Thursday, November 9, 2023. The materials used at this briefing are disclosed on the TDnet and the Company's website at the time that the annual financial results are announced.
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Contents
- Qualitative Information on Financial Results…………………………………………………...................................
- Details of operating results ...................................................................................................................................
- Details of financial position ..................................................................................................................................
- Information on the consolidated earnings forecast and other future forecast ………………………….…...…
- Consolidated Financial Statements and Key Notes .....................................................................................................
- Consolidated balance sheet ...................................................................................................................................
- Consolidated statement of profit or loss and consolidated statement of comprehensive income........................
Consolidated statement of profit or loss.............................................................................................................
Consolidated statement of comprehensive income ............................................................................................
- Consolidated statement of cash flows……………………………………………………………………...……
- Key notes to consolidated quarterly financial statements………….....................................................................
Notes ongoing concern assumption ......................................................................................................................
Segment information, etc. …................................................................................................................ ................
Notes on the significant changes in the amount of shareholders' equity, if any….……………………………...
Application of special accounting treatment in the preparation of quarterly consolidated financial statements
Additional information..........................................................................................................................................
Contingent liabilities ………………………………………………………………………………………….…
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1. Qualitative Information on Financial Results
(1) Details of operating results
- Summary of business performance for the current quarter
In the first half of the current fiscal year, the momentum of economic recovery slowed down mainly in China and Europe as monetary tightening continued in each country to suppress the inflation, while the global economy generally showed a moderate recovery trend.
The Japanese economy recovered moderately amid a recovery in inbound demand and a pick-up in personal consumption and corporate capital investment.
As for the business environment surrounding Mitsubishi Materials Group ("the Group"), the recovery trend in automobile production continued, however, demand for our automotive-related products did not recover. Also, demand for our semiconductors-related products also continued weak due to the sluggish semiconductor market. In addition, there were impacts such as a decline in palladium price, an increase in energy costs, and the yen's depreciation.
Under these circumstances, net sales and operating profit decreased in the Metals business, the Advanced Products business, and the Metalworking Solutions business in the first half of the current fiscal year. As a result, consolidated financial results for the period were net sales of ¥716.199 billion (down 13.9% year-on-year) and operating profit of ¥11.950 billion (down 59.6% year-on-year). Ordinary profit was ¥18.418 billion (down 20.0% year-on-year), despite a decrease in dividends received, mainly due to the recording of equity-method investment income. As a result, profit attributable to owners of parent was ¥11.120 billion (down 52.9% year-on-year).
2) Segment Overview
From the first quarter of the current fiscal year, the Company has changed its reporting segment. For more information, see "2. Consolidated Financial Statements and Key Notes, (4) Key notes to quarterly consolidated quarterly financial statements (Segment information, etc.)." For the following year-on-year comparisons, figures for the same period of the previous fiscal year have been reclassified into the revised segmentation.
Metals Business
(Billions of yen) | ||||
FY March 2023 H1 | FY March 2024 H1 | Change (%) | ||
Net sales | 567.3 | 476.8 | -90.4 | (-15.9%) |
Operating profit | 16.4 | 7.1 | -9.2 | (-56.5%) |
Ordinary profit | 21.2 | 8.4 | -12.7 | (-60.0%) |
In the Metals business, net sales and operating profit decreased year-on-year, mainly due to a decline in palladium price and an increase in energy cost and foreign exchange hedging cost, as well as the impact of PT. Smelting's shift to contract smelting from January 2023. Ordinary profit decreased due to a decrease in operating profit and a decrease in dividends.
Advanced Products Business
(Billions of yen) | ||||
FY March 2023 H1 | FY March 2024 H1 | Change (%) | ||
Net sales | 260.3 | 242.9 | -17.3 | (-6.7%) |
Operating profit | 6.1 | 0.8 | -5.3 | (-86.7%) |
Ordinary profit | 6.1 | 0.1 | -5.9 | (-97.5%) |
In the Copper & Copper Alloy business, sales decreased mainly for automotive products, but there were effects such as price revisions and the yen's depreciation. In the Electronic Materials & Components business, sales of semiconductor-related products decreased due to worsening semiconductor market conditions. As a result, net sales and operating profit decreased year-on-year. In addition, there was also an impact on the transfer of polycrystalline silicon business in March 2023. Ordinary profit decreased due to a decline in operating profit and a decrease in equity-method investment gains.
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Metalworking Solutions Business
(Billions of yen) | ||||
FY March 2023 H1 | FY March 2024 H1 | Change (%) | ||
Net sales | 71.8 | 69.8 | -2.0 | (-2.9%) |
Operating profit | 7.8 | 5.2 | -2.6 | (-33.3%) |
Ordinary profit | 8.8 | 6.3 | -2.4 | (-27.7%) |
In the Metalworking Solutions business, sales of cemented carbide products, our main products, decreased mainly in Japan and China, although there were effects of the yen's depreciation and price hikes. In addition, there was an increase in raw materials and energy costs. As a result, net sales and operating profit decreased year-on year. Ordinary profit decreased due to a decrease in operating profit.
Renewable Energy Business
(Billions of yen) | ||||
FY March 2023 H1 | FY March 2024 H1 | Change (%) | ||
Net sales | 1.7 | 2.2 | 0.5 | (30.4%) |
Operating profit | 0.0 | 0.2 | 0.2 | (380.4%) |
Ordinary profit | 0.3 | 0.3 | -0.0 | (-4.1%) |
In the Renewable Energy business, net sales and operating profit increased year-on-year, mainly due to Komatagawa New Power Plant (hydroelectric power generation) that started commercial operation in December 2022. Ordinary profit decreased due to a decline in equity-method investment income, despite an increase in operating profit.
Other Businesses
(Billions of yen) | ||||
FY March 2023 H1 | FY March 2024 H1 | Change (%) | ||
Net sales | 77.0 | 72.5 | -4.5 | (-5.9%) |
Operating profit | 3.5 | 1.5 | -1.9 | (-55.6%) |
Ordinary profit (loss) | -9.7 | 8.2 | 17.9 | (-%) |
In Other businesses, net sales and operating profit decreased year-on-year due to deterioration in semiconductor market conditions. Ordinary profit increased due to the recording of equity-method investment profit in Mitsubishi UBE Cement Corporation (the same loss was recorded in the same period of the previous fiscal year) that implemented price hikes.
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Details of financial position
Total assets at the end of the first half were ¥1,985.0 billion, an increase of ¥93.2 billion year-on-year. This was mainly due to an increase in inventories and property, plant and equipment.
Liabilities increased by ¥63.4 billion to ¥1,326.3 billion. This was mainly due to an increase in interest-bearing liabilities and deposited gold bullion.
The status of cash flows and their factors for the period are as follows.
(Cash flows from operating activities)
Net cash used in operating activities for the period amounted to ¥16.9 billion (a decrease of ¥12.0 billion year-on- year) due to an increase in inventories and other factors, despite the recording of profit before income taxes.
(Cash flows from investing activities)
Net cash used in investing activities during the period amounted to ¥61.2 billion (an increase of ¥37.6 billion year-on- year), mainly due to expenditures for payment for purchase of property, plant and equipment.
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(Cash flows from financing activities)
Net cash provided by financing activities for the period was ¥22.9 billion (a decrease of ¥37.1 billion year-on-year), mainly due to borrowings and commercial paper.
In addition to the above, taking into account the effect of exchange rate changes and other factors, the balance of cash and cash equivalents at the end of the period was ¥93.5 billion (a decrease of ¥47.5 billion year-on-year).
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Information on the consolidated earnings forecast and other future forecast
With regard to the consolidated earnings forecast for the fiscal year ending March 2024, the Company has revised the figures previously announced on May 12, 2023 as follows.
Although there is ongoing effect of the yen's depreciation, net sales are expected to be in line with the previous forecast, and operating profit is expected to decrease compared to the previous forecast due to the sluggish semiconductor market, the drop in the palladium price and a decrease in sales of our semiconductor-related products.
Ordinary profit and profit attributable to owners of parent are expected to decrease slightly compared to the previous forecast due to lower operating profit than the previous forecast, despite an improvement in equity-method investment profit in Mitsubishi UBE Cement Corporation and an increase in foreign exchange gains.
There is no revision to the dividend forecast accompanying the revision of this earnings forecast.
Revision of Consolidated Earnings Forecast for the Fiscal Year Ending March 31, 2024 (April 1, 2023 - March 31, 2024)
(Billions of yen) | |||
Previous Forecast | Current Forecast | Change (%) | |
Net sales | 1,670.0 | 1,660.0 | (-0.6%) |
Operating profit | 50.0 | 40.0 | (-20.0%) |
Ordinary profit | 58.0 | 56.0 | (-3.4%) |
Profit attributable to | 41.0 | 38.0 | (-7.3%) |
owners of parent | |||
(Note) The above forecasts are based on economic conditions, market trends, and other factors that can be assumed as of the date of the announcement, and may differ from the forecasts due to various factors in the future.
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2. Consolidated Financial Statements and Key Notes
(1) Consolidated balance sheet
(Millions of yen) | ||
As of March 31, 2023 | As of September 30, 2023 | |
Assets | ||
Current assets | ||
Cash and deposits | 142,126 | 95,215 |
Notes receivable - trade | 30,301 | 32,032 |
Accounts receivable - trade | 158,197 | 167,969 |
Merchandise and finished goods | 120,135 | 142,240 |
Work in process | 127,368 | 125,255 |
Raw materials and supplies | 130,171 | 176,803 |
Leased gold bullion | 234,896 | 229,810 |
Other | 173,420 | 171,357 |
Allowance for doubtful accounts | (578) | (613) |
Total current assets | 1,116,040 | 1,140,070 |
Non-current assets | ||
Property, plant and equipment | ||
Machinery and equipment, net | 147,293 | 159,601 |
Land, net | 87,904 | 88,273 |
Other, net | 191,016 | 209,113 |
Total property, plant and equipment, net | 426,214 | 456,989 |
Intangible assets | ||
Goodwill | 9,224 | 8,924 |
Other | 19,545 | 21,465 |
Total intangible assets | 28,769 | 30,390 |
Investments and other assets | ||
Investment securities | 256,544 | 277,269 |
Other | 69,528 | 85,609 |
Allowance for doubtful accounts | (5,302) | (5,300) |
Total investments and other assets | 320,770 | 357,577 |
Total non-current assets | 775,754 | 844,957 |
Total assets | 1,891,795 | 1,985,027 |
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(Millions of yen) | ||
As of March 31, 2023 | As of September 30, 2023 | |
Liabilities | ||
Current liabilities | ||
Notes and accounts payable - trade | 85,211 | 85,398 |
Short-term borrowings | 146,972 | 145,816 |
Current portion of bonds payable | - | 10,000 |
Commercial papers | 25,000 | 55,000 |
Income taxes payable | 4,638 | 5,175 |
Provisions | 12,600 | 12,371 |
Deposited gold bullion | 439,204 | 466,950 |
Other | 104,734 | 98,530 |
Total current liabilities | 818,361 | 879,243 |
Non-current liabilities | ||
Bonds payable | 70,000 | 60,000 |
Long-term borrowings | 291,589 | 305,156 |
Provision for environmental measures | 14,388 | 13,096 |
Other provisions | 1,103 | 1,080 |
Retirement benefit liability | 24,350 | 23,441 |
Other | 43,127 | 44,353 |
Total non-current liabilities | 444,558 | 447,127 |
Total liabilities | 1,262,919 | 1,326,371 |
Net assets | ||
Shareholders' equity | ||
Share capital | 119,457 | 119,457 |
Capital surplus | 81,917 | 81,916 |
Retained earnings | 338,867 | 346,722 |
Treasury shares | (2,897) | (2,882) |
Total shareholders' equity | 537,345 | 545,214 |
Accumulated other comprehensive income | ||
Valuation difference on available-for-sale | 4,193 | 7,838 |
securities | ||
Deferred gains or losses on hedges | 1,631 | (1,303) |
Revaluation reserve for land | 16,702 | 16,696 |
Foreign currency translation adjustment | 33,786 | 57,109 |
Remeasurements of defined benefit plans | (335) | 591 |
Total accumulated other comprehensive | 55,978 | 80,932 |
income | ||
Non-controlling interests | 35,550 | 32,509 |
Total net assets | 628,875 | 658,656 |
Total liabilities and net assets | 1,891,795 | 1,985,027 |
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- Consolidated statement of profit or loss and consolidated statement of comprehensive income Consolidated statement of profit or loss
(Millions of yen) | ||
Six Months Ended | Six Months Ended | |
September 30, 2022 | September 30, 2023 | |
(Apr. 1, 2022 - Sept. 30, 2022)(Apr. 1, 2023 - Sept. 30, 2023) | ||
Net sales | 831,981 | 716,199 |
Cost of sales | 741,587 | 642,702 |
Gross profit | 90,394 | 73,496 |
Selling, general and administrative expenses | 60,834 | 61,545 |
Operating profit | 29,560 | 11,950 |
Non-operating income | ||
Interest income | 391 | 1,632 |
Dividend income | 6,754 | 1,168 |
Exchange gain | 2,702 | 4,568 |
Share of profit of entities accounted for using | - | 4,511 |
equity method | ||
Rental income from non-current assets | 2,144 | 2,104 |
Other | 961 | 1,529 |
Total non-operating income | 12,954 | 15,513 |
Non-operating expenses | ||
Interest expenses | 2,786 | 3,244 |
Expense for the maintenance and management | 1,988 | 2,131 |
of abandoned mines | ||
Share of loss of entities accounted for using | 9,793 | - |
equity method | ||
Other | 4,921 | 3,670 |
Total non-operating expenses | 19,489 | 9,045 |
Ordinary profit | 23,025 | 18,418 |
Extraordinary income | ||
Gain on sales of investment securities | 1,331 | 659 |
Gain on change in equity | 11,007 | - |
Other | 242 | 22 |
Total extraordinary income | 12,581 | 682 |
Extraordinary losses | ||
Loss on liquidation of affiliated companies | - | 382 |
Impairment loss | - | 271 |
Loss on changes in equity | 640 | - |
Other | 260 | 128 |
Total extraordinary losses | 901 | 781 |
Profit before income taxes | 34,705 | 18,319 |
Income taxes | 8,004 | 6,277 |
Profit | 26,700 | 12,042 |
Profit attributable to non-controlling interests | 3,076 | 922 |
Profit attributable to owners of parent | 23,624 | 11,120 |
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Consolidated statement of comprehensive income
(Millions of yen) | |
Six Months Ended | Six Months Ended |
September 30, 2022 | September 30, 2023 |
(Apr. 1, 2022 - Sept. 30, 2022)(Apr. 1, 2023 - Sept. 30, 2023)
Profit
Other comprehensive income Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges Foreign currency translation adjustment Remeasurements of defined benefit plans Share of other comprehensive income of entities accounted for using equity method
Total other comprehensive income
Comprehensive income (Break down)
Comprehensive income attributable to owners of parent
Comprehensive income attributable to non- controlling interests
26,700 | 12,042 |
(8,667) | 3,200 |
(2,308) | (3,151) |
26,061 | 16,568 |
316 | 989 |
18,505 | 10,571 |
33,907 | 28,177 |
60,608 | 40,220 |
52,525 | 36,079 |
8,082 | 4,141 |
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Mitsubishi Materials Corporation published this content on 09 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 November 2023 14:58:04 UTC.