Sanix Incorporated : Consolidated Financial Results for the Six Months Ended September 30, 2021 (Under Japanese GAAP)

Note: 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.

November 12, 2021

Consolidated Financial Results

for the Six Months Ended September 30, 2021

(Under Japanese GAAP)

Company name:	SANIX INCORPORATED
Listing:	Tokyo Stock Exchange / Fukuoka Stock Exchange
Securities code:	4651
URL:	https://sanix.jp/lang_en/
Representative:	Hiroshi Munemasa, President and Representative Director
Inquiries:	Hiroshi Soga, Executive officer, Division manager of Corporate Planning Division
Telephone:	[phone]

Scheduled date to file quarterly securities report:	November 15, 2021
Scheduled date to commence dividend payments:	-
Preparation of supplementary material on quarterly financial results:	Yes
Holding of quarterly financial results briefing:	Yes (for Institutional investor)

(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the Six months ended September 30, 2021 (from April 1, 2021 to September 30, 2021)

(1) Consolidated operating results (cumulative)		(Percentages indicate year-on-year changes.)
		Net sales		Operating Income	Ordinary Income	Profit attributable to
			owners of parent
	Six months ended	Millions of yen		%	Millions of yen		%	Millions of yen	%	Millions of yen	%
	September 30,	23,145		(3.4)	589		(64.6)	490	(68.6)	132	(90.6)
	2021
	September 30,	23,947		(2.4)	1,664		7.3	1,562	9.3	1,410	23.7
	2020
Note: Comprehensive income For the Six months ended September 30, 2021: ¥146 million [(89.7)%]
		For the Six months ended September 30, 2020:¥ 1,425 million	[31.4%]
		Basic earnings	Diluted earnings
		per share		per share
	Six months ended			Yen			Yen
	September 30,			2.76			-
	2021
	September 30,			29.51			-
	2020

Note: From the beginning of the first quarter of fiscal year ending March 31, 2022, the Company began adopting the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29. March 31, 2020), etc. The figures for the second quarter of the fiscal year ending March 31, 2022 are the figures after the application of the relevant accounting standards.

(2) Consolidated financial position

		Total assets		Net assets	Equity-to-asset ratio	Net assets
			per share
	As of	Millions of yen		Millions of yen	%	Yen
	September 30,	34,235		8,238	24.0	171.82
	2021
	March 31, 2021	32,940		8,097	24.5	168.84
Reference: Equity
	As of September 30, 2021:	¥8,213 million
	As of March 31, 2021:	¥8,071 million

Note: From the beginning of the first quarter of fiscal year ending March 31, 2022, the Company began adopting the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29. March 31, 2020), etc. The figures for the second quarter of the fiscal year ending March 31, 2022 are the figures after the application of the relevant accounting standards.

2. Cash dividends

		Annual dividends per share
	First quarter-end	Second quarter-		Third quarter-end		Fiscal year-end		Total
	end
	Yen	Yen		Yen		Yen		Yen
Fiscal year ended	0.00	0.00	0.00	0.00	0.00
March 31, 2021
Fiscal year ending	0.00
March 31, 2022
Fiscal year ending
March 31, 2022		0.00	0.00	0.00	0.00
(Forecast)

Note: Revisions to the forecast of cash dividends most recently announced: None

3. Consolidated financial forecasts for the fiscal year ended March 31, 2022(from April 1, 2021 to March 31, 2022)

								Profit attributable	Basic earnings
	Net sales		Operating Income	Ordinary Income	to owners of	per share
								parent
	Millions of		%	Millions of	%	Millions of	%	Millions of		%
	Yen		Yen	Yen	Yen		Yen
Full Year	50,318		1.8	1,827	(21.4)	1,621	(22.5)	819		(58.3)	17.15

Note

1.Revision from the most recently announced forecast of consolidated business results: Yes

2.From the beginning of the first quarter of fiscal year ending March 31, 2022, the Company began adopting the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29. March 31, 2020), etc.

The figures for the first quarter of the fiscal year ending March 31, 2022 are the figures after the application of the relevant accounting standards.

* Notes

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

Newly included: - companies (Company name)

Excluded:

- companies (Company name)

1. Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements: None
2. Changes in accounting policies, changes in accounting estimates, and restatement
3. 1. Changes in accounting policies due to revisions to accounting standards and other regulations: Yes
   2. Changes in accounting policies due to other reasons: None
   3. Changes in accounting estimates: None
   4. Restatement: None

Note :For details, please see 2. Quarterly Consolidated Financial Statements and Main Notes to the Statements (3) Notes on Consolidated Financial Statements (Changes in Accounting Policies) on page 9 of the attachment.

(4) Number of issued shares (common shares)

1. Total number of issued shares at the end of the period (including treasury shares)

As of September 30,2021	48,919,396 shares
As of March 31,2021	48,919,396 shares

1. Number of treasury shares at the end of the period

As of September 30,2021	1,114,838 shares
As of March 31,2021	1,114,693 shares

1. Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year)

Six months ended September 30, 2021	47,804,647 shares
Six months ended September 30, 2020	47,804,939 shares

• Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation.
• Proper use of earnings forecasts, and other special matters

The forward-looking statements, including results forecasts, included in this material are based on the information that the Company has obtained and certain assumptions that the Company considers reasonable. Actual results may differ significantly for a range of factors. The assumptions for the results forecasts and cautions in the use of the forecasts are described in 1. Qualitative Information for the Six months ended September 30, 2021, (3) Information on the Future Outlook, Including the Forecasts of Consolidated Business Results on page 5 of the Attachment

Index of the attachment
1. Qualitative Information for the Six months ended September 30, 2021 ...............
		2
(1)	Information of Consolidated Business Results .............................................................................	2
(2)	Information of Consolidated Financial Position ............................................................................
		5
(3)	Information on the Future Outlook,
	Including the Forecasts of Consolidated Business Results ........................................................	6
2. Quarterly Consolidated Financial Statements and the Primary Notes for the Six
months ended September 30, 2021 ...........................................................................................	7
(1)	Quarterly Consolidated Balance Sheets........................................................................................
		7
(2)	Quarterly Consolidated Statements of Income and Comprehensive Income ..........................
		9
	Quarterly Consolidated Statements of Income
	Quarterly Consolidated Statements of Comprehensive Income
(3)	Quarterly Consolidated Statements of Cash Flows .....................................................................
		11
(4)	Notes regarding the Quarterly Consolidated Financial Statements ..........................................
		13
	Notes on matters related to going concern assumption........................................................
		13
	Notes to Remarkable Changes in the amount of Shareholders' Equity..............................
		13
	Changes in accounting policies ................................................................................................
		14
	Segment Information, etc. ........................................................................................................
		16
3. Others ....................................................................................................................................................	19
Consolidated Net Sales by Division................................................................................................
		19

2

1. Qualitative Information for the Six months ended September 30, 2021

1. Information of Consolidated Business Results

In the first half under review (April 1, 2021 to September 30, 2021), the outlook for the Japanese economy remained uncertain with the continuation of a state of emergency in some regions due to the spread of COVID-19, even though signs of recovery were observed in certain businesses as a result of measures taken for the incremental resumption of economic activities, including the promotion of vaccinations. In this situation, SANIX INCORPORATED and its consolidated subsidiaries (hereinafter the "Group") continued their respective operations, prioritizing prevention of the infection's spread.

In May 2021, the Group formulated the SANIX Long-Term Vision 2030 to clarify its direction toward 2030 and its goals to achieve a carbon-neutral society and a recycling-based economy. Under the corporate philosophy, "A comfortable environment for the next generation," we will continue our efforts to create a sustainable society.

Net sales for the Home Sanitation (HS) Division and the Establishment Sanitation (ES) Division increased firmly year on year. However, net sales for the Solar Engineering (SE) Division declined year on year, reflecting a smaller number of photovoltaic system installations under the effects of the Feed-in Tariff (FIT) System revision in the solar electric power systems business. Net sales for the Environmental Resources Development (ERD) Division also decreased given the effects of accounting standard changes, in addition to the suspension of SANIX ENERGY's Tomakomai power plant's operation in April for biennial legal inspections. As a result, the Group's consolidated net sales for the first half under review came to ¥23,145 million (down 3.4% year on year).

Consolidated operating income decreased 64.6% year on year, to ¥589 million, attributable to the effects of the decline in net sales for the SE Division and repair expenses posted in connection with the legal inspections of Tomakomai power plant in the ERD Division. Consolidated ordinary income fell 68.6% year on year, to ¥490 million. Profit attributable to owners of parent plunged 90.6% year on year, to ¥132 million.

The Company began applying the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29. March 31, 2020), etc. from the first quarter of the current fiscal year. Year-on-year increases (decreases) and percentage changes from the results for the first half of the previous fiscal year based on the previous accounting method are stated to explain consolidated business results. For details, please see 2. Quarterly Consolidated Financial Statements and Main Notes to the Statements (4) Notes on Consolidated Financial Statements (Changes in Accounting Policies).

Consolidated results of individual divisions for the first half were as follows:

a. SE (Solar Engineering) Division

In the SE Division, net sales for photovoltaic systems decreased 28.5% year on year,