Nippn : Consolidated Financial Results for the First Quarter of FY2023 471KB

Consolidated Financial Results for the First Quarter of FY2023 [J-GAAP]

				August 4, 2022
Listed company name:	NIPPN CORPORATION
Listing:	The Prime Market of Tokyo Stock Exchange
Code number: 2001	URL:	https://www.nippn.co.jp/	TEL:	03-3511-5307
Representative:	Toshiya Maezuru, President and Chief Operating Officer
Contact:	Koichiro Fukuyama, General Manager of Corporate Communications Group

Filing date of quarterly financial report:	August 5, 2022
Start of cash dividend payments:	―
Supplementary quarterly materials prepared:	None
Quarterly results information meeting held:	None
	*Amounts less than one million yen have been rounded down.

1. Consolidated financial results for the first quarter of FY2023 (From April 1, 2022 to June 30, 2022)

(1) Consolidated operating results (cumulative)

(Millions of yen, percentage figures show the rate of change from the same period of the previous year.)

		Net Sales		Operating Income		Ordinary Income	Profit Attributable to
					Owners of Parent
1Q of FY2023		86,205	10.6%		2,500	(5.1)%		3,828	0.6%		2,726	4.6%
1Q of FY2022		77,958	11.4%		2,634	57.6%		3,807	44.9%		2,607	53.1%
(Note) Comprehensive income:		1Q of FY2023:	¥4,399 million (114.6%)
			1Q of FY2022:	¥2,050 million (-25.5%)
	Profit per Share (Yen)	Fully Diluted Profit
		per Share (Yen)
1Q of FY2023			35.52			30.98
1Q of FY2022			34.00			29.66
(2) Consolidated financial position
	Total Assets		Net Assets		Equity Ratio
1Q of FY2023			327,734			181,043				54.0%
FY2022			325,869			178,697				53.4%
(Reference) Equity capital:		1Q of FY2023:	¥176,858 million
			FY2022:		¥174,120 million
2. Dividends
						Dividends per Share (Yen)
	1Q-end			2Q-end		3Q-end			Year-end			Full Year
FY2022		-				18.00		-			20.00			38.00
FY2023		-
FY2023 (Forecast)						19.00		-			19.00			38.00

(Note) Adjustment for the most recent forecast of the dividends in the current term: None

3. Forecast of the consolidated financial results for FY2023 (From April 1, 2022 to March 31, 2023)

(Millions of yen, percentage figures show the rates of changes from the same period of the previous year.)

							Profit Attributable	Profit per Share
	Net Sales	Operating Income	Ordinary Income	to Owners of
	(Yen)
							Parent
Half year	173,000	9.8%	4,600	(21.6)%	5,700	(22.6)%	3,900	(25.5)%	50.81
Full year	355,000	10.5%	10,100	(10.5)%	12,200	(14.5)%	8,300	(11.0)%	108.13

(Note) Adjustment for the most recent forecast of the consolidated financial results in the current term: None

* Notes

1. Significant changes in subsidiaries during the current quarter (changes in specified subsidiaries in accordance with changes in the scope of consolidation): None
2. Adoption of special accounting methods for preparation of quarterly consolidated financial information: None
3. Changes in accounting policies, accounting estimates and retrospective restatements

1)	Changes in accounting policies due to revisions of accounting standards:	Yes
2)	Changes other than 1):	None
3)	Changes in accounting estimates:	None
4)	Retrospective restatements:	None

(Note) For details, please refer to "2. Quarterly Consolidated Financial Statements and Principal Notes (3) Notes on quarterly consolidated financial information (Changes in accounting policies)" on page 10.

(4) Number of shares issued and outstanding (common stock)

1. Number of shares outstanding at the end of each period (including treasury shares):
2. Number of treasury shares at the end of each period:
3. Average number of shares (quarterly consolidated cumulative period):

1Q of FY2023	78,824,009	shares	FY2022	78,824,009	shares
1Q of FY2023	2,021,431	shares	FY2022	2,021,404	shares
1Q of FY2023	76,762,585	shares	1Q of FY2022	76,693,645	shares

• These consolidated financial results are outside the scope of quarterly review procedures by certified public accountants or an audit corporation.
• Explanation regarding the appropriate use of projected financial results and other special instructions
  Descriptions regarding the future, including the financial outlook contained in this material, are based on certain information currently available to the Company and particular assumptions, which are, at the discretion of the Company, deemed reasonable, and actual financial results may significantly vary due to various factors. Please refer to "1. Qualitative Information on Quarterly Consolidated Financial Results, (3) Information on forecast of the consolidated financial results" on page 5 for information on preconditions underlying the above outlook and other related information.

NIPPN CORPORATION (2001) Consolidated Financial Results for the First Quarter of FY2023

Contents

1. Qualitative Information on Quarterly Consolidated Financial Results .....................................................	2
(1)	Overview of business results .................................................................................................................	2
(2)	Overview of financial position ..............................................................................................................	5
(3)	Information on forecast of the consolidated financial results................................................................	5
2. Quarterly Consolidated Financial Statements and Primary Notes.............................................................	6
(1)	Quarterly consolidated balance sheets...................................................................................................	6
(2)	Quarterly consolidated statements of income and comprehensive income ...........................................	8
	(Quarterly consolidated statements of income) .....................................................................................	8
	(Quarterly consolidated statements of comprehensive income) ............................................................	9
(3)	Notes on quarterly consolidated financial information .......................................................................	10
	(Notes on going concern assumption) .................................................................................................	10
	(Notes to significant changes in the amount of shareholders' equity) .................................................	10
	(Changes in accounting policies).........................................................................................................	10
	(Segment information, etc.) ..................................................................................................................	11

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NIPPN CORPORATION (2001) Consolidated Financial Results for the First Quarter of FY2023

1. Qualitative Information on Quarterly Consolidated Financial Results

(1) Overview of business results

				(Millions of yen)
	First three months of	First three months of	Difference	Change
	Fiscal 2022	Fiscal 2023
Net sales	77,958	86,205	8,246	110.6%
Operating income	2,634	2,500	(133)	94.9%
Ordinary income	3,807	3,828	21	100.6%
Profit attributable	2,607	2,726	118	104.6%
to owners of parent

During the first three months of the fiscal year ending March 31, 2023, the business environment remained challenging owing to the sharp depreciation of the yen in addition to the soaring prices of grains and resources caused by the Russo-Ukraine situation and other factors. With regard to the impact of COVID-19, the emergence of new mutant strains followed by containment has been repeated, and the outlook remains difficult to predict.

In the food industry, changes in personal consumption influenced by the spread of COVID-19 are continuing, but demand is beginning to recover, centering on the restaurant sector, as crowds are returning to tourist destinations and downtown areas. On the other hand, manufacturing and transportation costs are rising due to soaring raw materials prices and energy costs, and the impact on the business environment is unpredictable.

In these circumstances, in May 2022, the Group formulated its new management philosophy and management policy together with a long-term vision for the future. In order to secure our position as a comprehensive food company of high repute, we are working with our customers, employees, shareholders, society, and other stakeholders to create future-focused value with the goal of realizing our management philosophy of "contributing to the realization of a sustainable society by pursuing the well- being (happiness, health, and smiles) of people."

In this context, the Group is promoting R&D of sustainability-conscious products, such as plant-based foods. For example, Soylpro is a soy-based material for which tofu processing technology is applied. We are also undertaking R&D in new fields, such as the use of Soylpro in existing home-use foods and frozen foods. In addition to these initiatives, we are reinforcing the existing business by reducing costs and beefing up sales and are vigorously investing in promising fields in an effort to strengthen the business foundation even in a business environment where the outlook remains uncertain.

Consolidated net sales for the first three months of fiscal 2023 increased by 10.6% year on year to ¥86,205 million, reflecting a recovery in demand following the relaxation of restrictions on activities and the implementation of sales price revisions in response to rising wheat market prices and raw materials prices. In terms of profit, despite an increase in shipments due to a recovery in demand, raw materials prices and energy costs rose more than expected, and strategic costs for sales expansion increased. As a result, operating income decreased by 5.1% to ¥2,500 million, ordinary income increased by 0.6% to ¥3,828 million, and profit attributable to owners of parent increased by 4.6% to ¥2,726 million.

The performance of individual business segments was as follows.

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NIPPN CORPORATION (2001) Consolidated Financial Results for the First Quarter of FY2023

1) Flour Milling

				(Millions of yen)
	First three months of	First three months of	Difference	Change
	Fiscal 2022	Fiscal 2023
Net sales	22,991	28,003	5,012	121.8%
Operating income	1,194	1,512	317	126.6%

The Group is strengthening quality control in response to the growing preoccupation with the safety and security of food throughout society. At the same time, to address customer needs and diversifying food preferences, the Group promoted sales initiatives with a view to resolving the issues that concern customers. Despite operating in an environment in which the impact of COVID-19 is difficult to predict, we strove to strengthen initiatives in partnership with customers, and enhance sales capabilities and brand power, and promoted sales activities, while flexibly responding to changing demand.

As a result, in the Flour Milling business, sales of wheat flour and sales of wheat bran, a by-product, were higher than the levels for the same period of the previous year, mainly because of the revision of wheat flour sales prices and the recovery in demand following the relaxation of the restrictions on activities.

In line with the increase of government sales prices (tax inclusive) of imported wheat by 17.3% on average for the five key products in April 2022, we revised the prices of wheat flour products for professional use for shipments on and after June 20, 2022.

As a result, net sales of the Flour Milling segment increased by 21.8% year on year to ¥28,003 million, and operating income increased by 26.6% to ¥1,512 million.

2) Food

				(Millions of yen)
	First three months of	First three months of	Difference	Change
	Fiscal 2022	Fiscal 2023
Net sales	45,777	48,346	2,568	105.6%
Operating income	1,254	858	(395)	68.5%

In the professional-use category, demand showed a tendency to recover owing to the relaxation of the restrictions on activities and in reaction to the fact that the government requested large commercial facilities, restaurants, etc. to shorten opening hours in the previous year, and as a result, sales of products in this category were higher than the level for the same period of the previous year.

In the home-use product category, although demand for products for consumption at home associated with people refraining from going out ran its course, sales of products in this category were higher than the level for the same period of the previous year, owing to price revisions in January and February 2022 in line with cost increases, such as for raw materials.

In the frozen foods category, demand for home-use frozen foods, such as the One Plate Meal series of complete meals consisting of a main dish and staples and the Imadoki Gohan series of rice dishes, was brisk. In addition, the price revision in February 2022 also contributed to higher sales. As a result, sales of products in this category were higher than the level for the same period of the previous year.

In the ready-made meals business, sales were higher than the level for the same period of the previous year because demand is recovering in line with the relaxation of the restrictions on activities.

As a result, net sales of the Food segment increased by 5.6% year on year to ¥48,346 million, while operating income decreased by 31.5% to ¥858 million.

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