SK Electronics : Summary Report of Consolidated Financial Statements for the Third Quarter of the Fiscal 2021

Third Quarter, FYE September 2021 Financial Report [Japan GAAP] (Consolidated)

			August 10, 2021
Company Name	SK-Electronics Co., Ltd.	Stock Exchange Listing: Tokyo Stock Exchange
Code No.	6677	URL http://www.sk-el.co.jp
Representative	(Title) President	Masanori Ishida
Contact	(Title) Director	Yasuhisa Mukaida	(Tel) [phone]
Third Quarter Earnings Report August 10, 2021	Scheduled Date for Commencement of Dividend Payments －
Preparation of Summary Supplementary Explanatory Materials: Yes
Quarterly Earnings Presentations: No

(Rounded down to the nearest ¥ million)

1. Consolidated Results of Operations for the Third Quarter Fiscal Year Ending (FYE) 9/2021 (October 1, 2020 through June 30, 2021)

(1) Consolidated Results of Operations (cumulative)		(% indicates increase/decrease from the same period the prior year)
										Net income
	Net sales	EBITDA	Operating Income	Ordinary Income	attributable to
	owners of the
										parent
	¥millions	%			%	¥millions	%	¥millions	%	¥millions	%
3Q FYE 9/2021	14,470	(2.6)		3,155	(8.4)	876	－	606	－	434		－
3Q FYE 9/2020	14,854	(27.6)		3,443	(53.6)	(140)	－	(187)	－	(432)		－

(Note) Comprehensive Income	3Q FYE 9/2021: ¥1,376 millions(%) 3Q FYE 9/2020: ¥(9) millions (－%)
		Net Income per Share	Diluted Net Income per Share
		Yen		Yen
3Q FYE 9/2021	41.39		－
3Q FYE 9/2020		(41.26)		－
(Note) EBITDA = Operating Income + Depreciation
(2) Consolidated Financial Position
		Total Assets	Net Assets	Equity Ratio	Net Assets per Share
		¥millions	¥millions	%	Yen
3Q FYE 9/2021	32,551	23,655			72.7	2,225.39
FYE 9/2020		31,778	22,385			70.4	2,134.25

(Reference) Equity Ratio 3Q FYE 9/2021: ¥23,655 millions FYE 9/2020: ¥22,385 millions

2. Dividends

			Dividend per Share
	First Quarter	Second Quarter	Third Quarter	Fiscal Year End		Total
		Yen	Yen	Yen	Yen		Yen
FYE 9/2020		－	0.00	－	10.00	10.00
FYE 9/2021		－	0.00	－
FYE 9/2021 (Projected)					20.00		20.00

(Note) Revisions to most recently announced dividend forecast: No

3. Projected Consolidated Results of Operations for FYE 9/2021 (October 1, 2020 through September 30, 2021)

(% indicates increase/decrease compared to the prior year)

											Net income
	Net sales		EBITDA		Operating Income	Ordinary Income	attributable to	Net Income
			owners of the	per Share
											parent
	¥millions	%	¥millions	%	¥millions	%	¥millions	%	¥millions	%	Yen
Full Year	20,000		4.7	4,500		7.6	1,400	-	1,200	-	800		-	76.27

(Note) Revisions to most recently announced earnings projection: Yes

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*Notes

(1) Changes in significant subsidiaries during the period			:	No
(2) Adoption of special accounting treatment for the preparation of quarterly consolidated financial statements	:	No
(3) Changes in accounting policies and changes in accounting estimates and retrospective restatements
<1> Changes in accounting policies in conjunction with revisions of accounting standards		:	No
<2> Changes in accounting policies other than those in <1>			:	Yes
<3> Changes in accounting estimates			:	No
<4> Retrospective restatements			:	No
(4) Number of shares issued and outstanding (common stock)
<1> Number of shares issued and outstanding at the end
	3Q FYE 9/2021	11,368,400 shares	FYE 9/2020		11,368,400 shares
of the period (including treasury stock)
<2> Number of shares of treasury stock at the end of the
	3Q FYE 9/2021	879,782 shares	FYE 9/2020		879,782 shares
period
<3> Average number of shares during the period	3Q FYE 9/2021	10,488,618 shares	3Q FYE 9/2020		10,486,682 shares
(Quarterly cumulative)

(Note) The number of treasury shares deducted when calculating the number of shares of treasury stock at the end of the period includes shares held in trust for the director stock-based compensation system.

(Reference) Projected Unconsolidated Results of Operations for FYE 9/2021 (October 1, 2020 through September 30, 2021)

(% indicates increase/decrease vs. the prior year)

	Net sales		EBITDA		Operating Income	Ordinary Income	Net Income	Net Income
			per Share
	¥millions	%	¥millions	%	¥millions	%	¥millions	%	¥millions	%	Yen
Full Year	14,800		7.8	2,300		66.8	700	-	1,200	-	900	-	85.81

(Note) Revisions to most recently announced earnings projection: Yes

*This quarterly earnings report is exempt from quarterly review procedures by either a certified public accountant or an audit firm.

*Explanation concerning appropriate use of the projected operating results and other special remarks

The forward-looking statements, including the operating income forecasts, contained in these materials are based on information currently available to the Company and on certain assumptions deemed reasonable. Actual business results may differ substantially for a number of reasons. Please see page 2, section 1 "Qualitative Information on the Consolidated Operating Results for the Third Quarter of FYE September 2021, (3) Qualitative Explanation on Consolidated Earnings Projections" concerning the assumptions used as the basis for the projected operating income and matters to note before using the projected operating income.

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○ Attachments Table of Contents

1. Qualitative Information on the Consolidated Operating Results for the First Quarter of FYE September 2021..............................	4
(1)	Qualitative Explanation of the Consolidated Results of Operations...............................................................................................	4
(2)	Qualitative Explanation of the Consolidated Financial Position ....................................................................................................	4
(3)	Qualitative Explanation on Consolidated Earnings Projections .....................................................................................................	4
2. Quarterly Consolidated Financial Statements & Notes....................................................................................................................	5
(1)	Quarterly Consolidated Balance Sheets .........................................................................................................................................	5
(2)	Quarterly Consolidated Statements of Income and Consolidated Statements of Comprehensive Income .....................................	7
(3)	Notes to the Quarterly Consolidated Financial Statements ............................................................................................................	9
(Notes relating to the assumptions of going concerns) ......................................................................................................................	9
(Notes in the event of Significant Changes in Shareholders' Equity) ................................................................................................	9
(Changes in accounting policies that are difficult to distinguish from changes in accounting estimates) ..........................................	9
(Additional Information)....................................................................................................................................................................	9

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1. Qualitative Information on the Consolidated Operating Results for the First Quarter of FYE September 2021

(1) Qualitative Explanation of the Consolidated Results of Operations

During the consolidated cumulative third quarter under review, despite a recovering trend in economic activity as the COVID- 19 vaccination progressed in Japan, the domestic and overseas economic outlook remains uncertain in light of such factors as the priority measures that include the declaration of new states of emergency and extensions of states of emergency in some regions and the fifth wave of the COVID-19 pandemic.

In the flat panel display industry, active development of OLED panels for use in new smartphone models, including 5G models, led to considerable growth in demand for OLED photomasks. At the same time, as the prices of LCD panels continued to rise, various panel makers remained on a mass-production footing. Even under such conditions, the firm establishment of remote working and distance learning in the market led to strong sales of IT devices, such as laptop computers, tablets, and monitors, and demand was strong for development of LCD photomasks for use in such products.

Amid the conditions described above, the Group recorded considerable revenue growth compared to the consolidated second quarter through proactive efforts to target demand for photomasks for use in OLED panels used in the development of smartphones.

A look at Group consolidated business results shows net sales of ¥14,470 million (down 2.6% YoY), operating income of ¥876 million (vs. an operating loss of ¥140 million in the same period of the previous year), ordinary income of ¥606 million (vs. an ordinary loss of ¥187 million in the same period of the previous year), and net income attributable to owners of the parent of ¥434 million (vs. a net loss attributable to owners of the parent of ¥432 million in the same period of the previous year).

(2) Qualitative Explanation of the Consolidated Financial Position

At the end of the third quarter of the consolidated FYE September 2021, total assets came to ¥32,551 million, an increase of ¥773 million versus the end of the prior consolidated fiscal year. This was due mainly to increases in notes and accounts receivable - trade and in construction in progress, despite decreases in cash and deposits and in raw materials and supplies.

Total liabilities stood at ¥8,895 million, a decrease of ¥497 million versus the end of the prior consolidated fiscal year. This primarily reflects an increase in notes and accounts payable - trade but a decrease in long-term loans payable.

Total net assets were ¥23,655 million, an increase of ¥1,270 million versus the end of the prior consolidated fiscal year. This was due mainly to increases in retained earnings and in foreign currency translation adjustment.

(3) Qualitative Explanation on Consolidated Earnings Projections

The earnings projections announced November 9, 2020, have been revised due to the lengthening of the impact of COVID-19 and projections of lower than expected sales of photo masks for use in TV LCD panels and OLED panels.

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2. Quarterly Consolidated Financial Statements & Notes

(1) Quarterly Consolidated Balance Sheets

					(Unit: ¥ thousands)
				Prior consolidated fiscal year	Third Quarter FYE 9/2021
				(FYE 9/2020)	(Ended June 30, 2021)
Assets
	Current assets
		Cash and deposits	10,331,416	8,480,045
		Notes and accounts receivable - trade	3,940,395	5,123,678
		Merchandise and finished goods	79,406	55,988
		Work in process	217,444	298,679
		Raw materials and supplies	2,471,882	2,187,114
		Other	704,251	756,393
		Allowance for doubtful accounts	(1,116)	(1,701)
		Total current assets	17,743,680	16,900,198
	Noncurrent assets
		Property, plant, and equipment
		Buildings and structures, net	3,205,604	3,145,043
		Machinery, equipment, and vehicles, net	5,852,577	5,473,335
		Land	1,667,702	1,667,702
		Construction in progress	2,142,603	4,127,865
		Other, net	184,569	169,083
		Total property, plant, and equipment	13,053,058	14,583,031
		Intangible assets
		Software	266,237	167,438
		Other	242	5,152
		Total intangible assets	266,479	172,591
		Investments and other assets
		Other	848,816	1,041,036
		Allowance for doubtful accounts	(133,273)	(144,949)
		Total investments and other assets	715,542	896,087
		Total noncurrent assets	14,035,080	15,651,709
	Assets	31,778,761	32,551,908

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