This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.
Consolidated Financial Results | |
for the Six Months Ended September 30, 2023 | |
(Under IFRS) | |
October 27, 2023 | |
Company name: | NS Solutions Corporation |
Listing: | Tokyo Stock Exchange |
Securities code: | 2327 |
URL: | https://www.nssol.nipponsteel.com |
Representative: | Kazuhiko Tamaoki, Representative Director & President |
Inquiries: | Hideki Komatsu, Director, Accounting & Finance Department |
Telephone: | +81-3-6899-6000 |
Scheduled date of filing quarterly securities report: | November 6, 2023 |
Scheduled date of commencing dividend payments: | December 1, 2023 |
Preparation of supplementary material on quarterly financial results: | Yes |
Holding of quarterly financial results briefing: | Yes (for analysts) |
(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Six Months Ended September 30, 2023 (April 1, 2023 to September 30, 2023)
(1) Consolidated Operating Results (cumulative)
Revenue | Operating profit | Profit before tax | Profit attributable to | |||||
owners of parent | ||||||||
Six months ended | Million yen | % | Million yen | % | Million yen | % | Million yen | % |
September 30, 2023 | 144,774 | 7.5 | 14,642 | 4.6 | 15,012 | 5.5 | 9,500 | 1.1 |
September 30, 2022 | 134,685 | 3.0 | 14,004 | (1.2) | 14,236 | (1.8) | 9,397 | (0.7) |
Total comprehensive | Basic earnings | Diluted earnings | ||||||
income | per share | per share | ||||||
Six months ended | Million yen | % | Yen | Yen | ||||
September 30, 2023 | 16,339 | - | 103.84 | - | ||||
September 30, 2022 | 1,067 | (95.0) | 102.71 | - |
(2) Consolidated Financial Position
Ratio of equity | ||||
Total assets | Total equity | Equity attributable | attributable to | |
to owners of parent | owners of parent to | |||
total assets | ||||
As of | Million yen | Million yen | Million yen | % |
September 30, 2023 | 337,009 | 220,178 | 212,739 | 63.1 |
March 31, 2023 | 319,908 | 207,800 | 200,523 | 62.7 |
Copyright (C) 2023 NS Solutions Corporation, All rights reserved.
2. Cash Dividends
Annual dividends | |||||||||
1st quarter-end | 2nd quarter-end | 3rd quarter-end | Year-end | Total | |||||
Yen | Yen | Yen | Yen | Yen | |||||
Fiscal year ended | - | 35.00 | - | 40.00 | 75.00 | ||||
March 31, 2023 | |||||||||
Fiscal year ending | - | 40.00 | |||||||
March 31, 2024 | |||||||||
Fiscal year ending | - | 40.00 | 80.00 | ||||||
March 31, 2024 (Forecast) | |||||||||
(Note) Revision to the forecast for dividends announced most recently: None
3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2024 (April 1, 2023 to March 31, 2024)
(% indicates changes from the previous corresponding period.)
Revenue | Operating profit | Profit before tax | Profit attributable | Basic earnings | |||||
to owners of parent | per share | ||||||||
Million yen | % | Million yen | % | Million yen | % | Million yen | % | Yen | |
Full year | 305,000 | 4.6 | 33,500 | 5.5 | 34,000 | 5.9 | 22,800 | 3.6 | 249.21 |
(Note) Revision to the financial results forecast announced most recently: None
Copyright (C) 2023 NS Solutions Corporation, All rights reserved.
* Notes:
- Changes in significant subsidiaries during the period under review (changes in specified subsidiaries resulting in changes in scope of consolidation): None
- Changes in accounting policies and changes in accounting estimates
- Changes in accounting policies required by IFRS: None
- Changes in accounting policies other than 1) above: None
- Changes in accounting estimates: None
- Total number of issued shares (common stock)
- Total number of issued shares at the end of the period (including treasury shares):
As of September 30, 2023: | 91,501,000 shares |
As of March 31, 2023: | 91,501,000 shares |
2) Total number of treasury shares at the end of the period: | |
As of September 30, 2023: | 8,504 shares |
As of March 31, 2023: | 4,845 shares |
3) Average number of shares outstanding during the period: | |
Six months ended September 30, 2023: | 91,489,154 shares |
Six months ended September 30, 2022: | 91,493,140 shares |
- This quarterly consolidated financial results report is exempt from the quarterly review conducted by certified public accountants or an audit corporation.
- Explanation of the proper use of financial results forecast and other notes
- The forecasts stated above are based on information available as of the date of publication of this document. Actual results may differ from these forecasts due to a wide range of factors hereafter.
Copyright (C) 2023 NS Solutions Corporation, All rights reserved.
Table of Contents - Attachments | ||
1. Qualitative Information on Quarterly Financial Results | 2 | |
(1) | Operating Results | 2 |
(2) | Financial Position | 3 |
(3) | Consolidated Financial Results Forecast and Other Forward-looking Information | 5 |
2. Condensed Quarterly Consolidated Financial Statements and Primary Notes | 6 | |
(1) | Condensed Quarterly Consolidated Statements of Financial Position | 6 |
(2) Condensed Quarterly Consolidated Statements of Profit or Loss and Condensed Quarterly Consolidated | ||
Statements of Comprehensive Income | 8 | |
(3) | Condensed Quarterly Consolidated Statements of Changes in Equity | 12 |
(4) | Condensed Quarterly Consolidated Statements of Cash Flows | 14 |
(5) | Notes to Condensed Quarterly Consolidated Financial Statements | 15 |
Going concern assumption | 15 |
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Copyright (C) 2023 NS Solutions Corporation, All rights reserved.
1. Qualitative Information on Quarterly Financial Results
-
Operating Results Analysis of operating results
Japan saw signs of a mild economic recovery during the six months ended September 30, 2023, but the outlook remains uncertain. There is a risk of a slowdown in the Japanese economy as it faces downward pressure from slowing overseas economies, such as with the impact associated with global monetary tightening and concerns about the outlook for the Chinese economy. In addition, close attention should be paid to the impact of rising prices and financial market fluctuations.
Corporate earnings have generally improved, and system investment by client companies has remained firm.
Based on the Medium-term Business Strategy 2021-2025 published in April 2021, NS Solutions Corporation (hereinafter, the "Company," and the Company and its subsidiaries are collectively referred to as the "Group") defined four focus areas for business growth: digital transformation (DX) in the manufacturing industry, digital platformer, digital workplace solutions, and IT outsourcing. We are endeavoring to expand our business by capturing customer needs for DX to the greatest extent possible.
As part of our efforts to promote customers' DX, the Company has introduced an "AI-powered demand forecasting system" to improve the efficiency and sophistication of demand forecasting operations for a beverage company, as well as a supply and demand management system that leverages "PPPlan," the Company's supply chain management cloud service for the food industry. Also, for educational institutions, the Company has started offering "CampusSquare S Edition," an administrative work system for universities and colleges, which has been provided to more than 100 schools nationwide since 1995, made available via subscription.
Moreover, in the AI domain, where the Company has accumulated knowledge, we have started to offer support services powered by generative AI and ChatGPT. The Company has also entered into a business alliance with AI startup company ExaWizards Inc., and commenced collaboration with AI platform companies Kore.ai Inc. and FastLabel Inc. in efforts to strengthen and expand our initiatives.
In addition, our virtual desktop service "M³DaaS@absonne" ranked first in the "DaaS market share" for the 10th consecutive year (referencing from Fuji Chimera Research Institute, Inc., "2023 Current Trends and Future Prospects of Cloud Computing") and the cumulative number of documents registered on "CONTRACTHUB," an electronic transaction and contract service, exceeded 30 million at the end of April 2023. We are striving for growth in our focus areas.
To promote sustainability management, we have organized our value creation process based on our goals to achieve the purpose of our existence in society, defined five material issues, and are working to address them. The Company has been committed to fostering a corporate culture in which everyone can work with vigor and enthusiasm, including the promotion of D&I. Continuing from the last year, the Company supported and co- sponsored "TOKYO RAINBOW PRIDE 2023" and is engaged in various business activities from an ESG perspective to create a prosperous society, such as with the establishment of "GRID BOX," an incubator that promotes the training of top-level IT engineers and the creation of employment opportunities in regional areas jointly with Izumo City in Shimane Prefecture and companies in that prefecture. As a result of these efforts, the Company was selected again as an index component of the FTSE4Good Index Series, FTSE Blossom of Japan Index, and FTSE Blossom Japan Sector Relative Index, which are ESG investment benchmarks.
Revenue for the six months ended September 30, 2023 amounted to 144,774 million yen, an increase of 10,088 million yen compared to 134,685 million yen for the same period of the previous fiscal year. This was due to
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Copyright (C) 2023 NS Solutions Corporation, All rights reserved.
favorable conditions in digital workplace solutions, the cloud services and Oracle solutions, in addition to higher sales to major banks and Nippon Steel Corporation. Operating profit amounted to 14,642 million yen, an increase of 637 million yen compared to 14,004 million yen for the same period of the previous fiscal year. This was due to increased gross profit including an improved gross profit margin, despite a rise in selling, general and administrative expenses as a result of the implementation of measures to strengthen human capital, including recruiting and training, and the promotion of internal infrastructure improvement in addition to enhancing sales capability.
An overview of the six months ended September 30, 2023 by service field (Business Solutions and Consulting & Digital Service) is as follows.
Business Solutions
In Business Solutions, revenue for the six months ended September 30, 2023 totaled 110,643 million yen, an increase of 6,617 million yen compared to 104,026 million yen in the same period of the previous fiscal year.
Manufacturing, Nippon Steel Group
Revenue in the Manufacturing, Nippon Steel Group field increased compared to the same period of the previous fiscal year owing to higher sales to Nippon Steel Corporation.
Retail and Service, Digital Platformer
Revenue in the Retail and Service, Digital Platformer field rose from the same period of the previous fiscal year.
Financial Service
Revenue in the Financial Service field increased from the same period of the previous fiscal year on increased sales to major banks.
Consulting & Digital Service
In Consulting & Digital Service, revenue for the six months ended September 30, 2023 was 34,130 million yen, an increase of 3,471 million yen from 30,659 million yen in the same period of the previous fiscal year owing to favorable sales in digital workplace solutions, the cloud services and Oracle solutions.
- Financial Position
-
Analysis of financial position
Total assets at the end of the six months ended September 30, 2023 amounted to 337,009 million yen, an increase of 17,100 million yen compared to 319,908 million yen at the end of the previous fiscal year. This was mainly due to increases of 11,612 million yen in cash and cash equivalents, 8,592 million yen in inventories, 6,769 million yen in contract assets, and 5,409 million yen in other financial assets, partly offset by a decrease of 13,639 million yen in trade and other receivables.
Total liabilities at the end of the six months ended September 30, 2023 amounted to 116,831 million yen, an increase of 4,722 million yen compared to 112,108 million yen at the end of the previous fiscal year. This was mainly due to increases of 8,448 million yen in contract liabilities and 1,526 million yen in deferred tax liabilities, partly offset by a decrease of 2,707 million yen in consumption tax payable etc. included in other current liabilities and a decrease of 2,215 million yen in lease liabilities.
Total equity at the end of the six months ended September 30, 2023 amounted to 220,178 million yen, an increase of 12,377 million yen compared to 207,800 million yen at the end of the previous fiscal year. The breakdown mainly includes 9,920 million yen of profit, 6,419 million yen of other comprehensive income, and minus 3,659 million yen of dividends paid. As a result, the ratio of equity attributable to owners of parent to total assets was 63.1%.
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Copyright (C) 2023 NS Solutions Corporation, All rights reserved.
-
Cash flows
Statement of cash flows
The balance of cash and cash equivalents at the end of the six months ended September 30, 2023 was 112,935 million yen. Net increase in cash and cash equivalents for the first two quarters of the current fiscal year was 11,612 million yen, compared to a net increase of 1,183 million yen for the same period of the previous fiscal year. Cash flows by activity type are as follows.
- Cash flows from operating activities
Cash flows from operating activities for the six months ended September 30, 2022 resulted in a cash inflow of 10,916 million yen. This mainly consists of 14,236 million yen of profit before tax and 6,200 million yen of depreciation and amortization, a 9,855 million yen decrease in trade and other receivables, a 6,171 million yen increase in contract assets, a 7,095 million yen increase in inventories, a 3,526 million yen increase in trade and other payables, a 2,561 million yen decrease in consumption tax payable etc., and 6,210 million yen of income taxes paid. On the other hand, cash flows from operating activities for the six months ended September 30, 2023 resulted in a cash inflow of 17,602 million yen. This mainly consists of 15,012 million yen of profit before tax and 5,990 million yen of depreciation and amortization, a 13,018 million yen decrease in trade and other receivables, a 6,757 million yen increase in contract assets, and a 8,536 million yen increase in inventories, an 8,259 million yen increase in trade and other payables, a 2,736 million yen decrease in consumption tax payable etc., and income taxes paid of 6,571 million yen. - Cash flows from investing activities
Cash flows from investing activities for the six months ended September 30, 2022 resulted in a cash outflow of 2,362 million yen. This mainly consists of 2,119 million yen of purchase of property, plant and equipment, and intangible assets, and 3,345 million yen of purchase of other financial assets, and 3,199 million yen of proceeds from sale and redemption of other financial assets. On the other hand, cash flows from investing activities for the six months ended September 30, 2023 resulted in a cash inflow of 1,564 million yen. This mainly consists of cash outflows of 2,035 million yen of purchase of property, plant and equipment, and intangible assets, and 2,250 million yen of purchase of other financial assets, 5,911 million yen of proceeds from sale and redemption of other financial assets. - Cash flows from financing activities
Cash flows from financing activities for the six months ended September 30, 2022 resulted in a cash outflow of 7,635 million yen. This mainly consists of 4,084 million yen of repayments of lease liabilities and 3,294 million yen of dividends paid. On the other hand, cash flows from financing activities for the six months ended September 30, 2023 resulted in a cash outflow of 7,717 million yen. This mainly consists of 3,742 million yen of repayments of lease liabilities and 3,659 million yen of dividends paid.
Information on capital resources and liquidity of funds
-
Basic policy
The Group believes that it is important to continuously maintain and strengthen its competitiveness and increase its corporate value into the future.
Therefore, we seek to maintain sufficient internal reserves to prepare for capital requirements for business growth and business risks such as wide-area disasters. The capital requirements include those for initiatives to steadily capture evolving DX needs, continuously enhance high-value-added businesses and overall corporate value, further strengthen acquisition and training of excellent human resources, and conduct
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Copyright (C) 2023 NS Solutions Corporation, All rights reserved.
thorough internal controls and risk management. At the same time, regarding profit distribution, our basic policy is to implement appropriate and stable distribution of dividends to shareholders.
We aim for a consolidated dividend payout ratio of 30%, with a focus on returning profits to shareholders in line with consolidated performance.
-
Capital requirements and financing
Major capital requirements of the Group include capital expenditures and operating expenses such as material costs, outsourcing costs, labor costs, overhead costs, and selling, general and administrative expenses. Those capital requirements are satisfied by own funds.
As for working capital on hand, the Company concentrates surplus funds from subsidiaries in the Company for centralized management by implementing the cash management system (CMS) and also having certain of its domestic subsidiaries implement the same system. Note that the Company's CMS is administered by Nippon Steel Corporation with 106,022 million yen deposited in the system as of September 30, 2023 being presented as part of cash and cash equivalents.
For unexpected capital requirements, the Company has overdraft arrangements with major banks and Nippon Steel Corporation, its parent company, to prepare for liquidity risks.
-
Capital requirements and financing
- Consolidated Financial Results Forecast and Other Forward-looking Information
No revisions have been made to the consolidated financial results forecast announced on April 28, 2023.
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Copyright (C) 2023 NS Solutions Corporation, All rights reserved.
2. Condensed Quarterly Consolidated Financial Statements and Primary Notes
- Condensed Quarterly Consolidated Statements of Financial Position
(Millions of yen) | ||||
As of March 31, 2023 | As of September 30, 2023 | |||
Assets | ||||
Current assets | ||||
Cash and cash equivalents | 101,322 | 112,935 | ||
Trade and other receivables | 65,822 | 52,183 | ||
Contract assets | 14,059 | 20,828 | ||
Inventories | 21,526 | 30,118 | ||
Other financial assets | 2,472 | 1,549 | ||
Other current assets | 2,180 | 3,137 | ||
Total current assets | 207,383 | 220,753 | ||
Non-current assets | ||||
Property, plant and equipment | 18,661 | 18,002 | ||
Right-of-use assets | 24,939 | 22,770 | ||
Goodwill | 2,923 | 2,923 | ||
Intangible assets | 3,731 | 3,938 | ||
Investments accounted for using equity method | 181 | 196 | ||
Other financial assets | 58,132 | 64,464 | ||
Deferred tax assets | 3,814 | 3,823 | ||
Other non-current assets | 141 | 136 | ||
Total non-current assets | 112,525 | 116,256 | ||
Total assets | 319,908 | 337,009 | ||
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Copyright (C) 2023 NS Solutions Corporation, All rights reserved.
(Millions of yen) | ||||
As of March 31, 2023 | As of September 30, 2023 | |||
Liabilities | ||||
Current liabilities | ||||
Trade and other payables | 24,656 | 24,601 | ||
Contract liabilities | 16,282 | 24,730 | ||
Lease liabilities | 7,242 | 7,247 | ||
Other financial liabilities | 1,145 | 949 | ||
Income taxes payable | 6,445 | 6,197 | ||
Provisions | 526 | 540 | ||
Other current liabilities | 16,320 | 13,327 | ||
Total current liabilities | 72,619 | 77,594 | ||
Non-current liabilities | ||||
Lease liabilities | 17,786 | 15,565 | ||
Other financial liabilities | 216 | 104 | ||
Retirement benefit liability | 10,944 | 11,234 | ||
Provisions | 3,111 | 3,363 | ||
Deferred tax liabilities | 3,352 | 4,879 | ||
Other non-current liabilities | 4,077 | 4,087 | ||
Total non-current liabilities | 39,489 | 39,236 | ||
Total liabilities | 112,108 | 116,831 | ||
Equity | ||||
Share capital | 12,952 | 12,952 | ||
Capital surplus | 9,951 | 9,927 | ||
Retained earnings | 153,016 | 161,389 | ||
Treasury shares | (17) | (32) | ||
Other components of equity | 24,620 | 28,502 | ||
Total equity attributable to owners of parent | 200,523 | 212,739 | ||
Non-controlling interests | 7,277 | 7,438 | ||
Total equity | 207,800 | 220,178 | ||
Total liabilities and equity | 319,908 | 337,009 | ||
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Copyright (C) 2023 NS Solutions Corporation, All rights reserved.
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NS Solutions Corporation published this content on 02 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 November 2023 06:20:08 UTC.