Takamatsu Construction : Summary of Consolidated Financial Results For the First Quarter of Fiscal Year Ending March 31, 2022

August 05, 2021

Summary of Consolidated Financial Results

For the First Quarter of Fiscal Year Ending March 31, 2022 [Japan GAAP]

Company: Takamatsu Construction Group Co., Ltd.

Stock exchange listing: Tokyo Stock Exchange (First Section)

Stock code: 1762

URL: https://www.takamatsu-cg.co.jp/

Representative: Hirotaka Takamatsu, President and Representative Director of the Board

Contact: Masahiro Shimabayashi, Senior Director, Group Integration Division

Contact: 06-6303-8101,[e-mail]

Date of filing of quarterly securities report:	August 05, 2021
Date of commencement of dividend payment:	―
Supplementary explanatory documents:	Yes
Earnings presentation:	No

(Yen in millions, rounded down, figures in parentheses indicate negative amounts or percentages)

1. Financial results for the first quarter of the fiscal year ending March 2022 (April 1, 2021 - June 30, 2021)

	(1) Consolidated result of operations											(Percentage figures represent year on year changes)
					Net sales						Operating profit		Ordinary profit		Profit attributable to
												owners of parent
					Million yen	%			Million yen	%		Million yen	%			Million yen	%
	First quarter ended June 2021	61,377			(7.2)	1,437			2.1				1,464	5.8					847	38.7
	First quarter ended June 2020	66,123			10.6			1,407			6.4				1,384	2.7					610		44.5
	Note: Comprehensive income: First quarter of FYMar.2022: 1,216million yen, 51.4% vs. last year	First quarter of FYMar.2021: 803million yen, 94.0% vs. last year
					Earnings per share			Earnings per share
								(diluted)
										Yen								Yen
	First quarter ended June 2021			24.33								－
	First quarter ended June 2020			17.55								－
	(2) Consolidated financial position
					Total assets						Net assets				Equity ratio
					Million yen					Million yen							%
	As of June 30, 2021			222,991						115,575								51.8
	As of March 31, 2021			220,831						115,756								52.4
	(Reference) Shareholders' equity:	As of June 30, 2021: 115,538 million yen		As of March 31, 2021: 115,715 million yen
2. Dividends
																		Dividend per share
					End of						End of	End of						End of		Annual
					1Q									2Q						3Q						FY
							Yen								Yen					Yen					Yen					Yen
	FY3/21				－										23.00					－								40.00				63.00
	FY3/22				－
	FY3/22 (Est.)														23.00					－								40.00				63.00
	Note: Change in the estimation of divided from the latest announcement: No
3. Consolidated forecast for the fiscal year ending March 31, 2022 (April 1, 2021 - March 31, 2022)
																		(Percentage figures represent year on year changes)
		Orders received	Net sales					Operating profit	Ordinary profit		Profit attributable to	Earnings
							owners of parent	per share
		Million yen	% Million yen	%			Million yen	%	Million yen	%		Million yen	%			Yen
	First half	152,000	48.5		137,000		0.2					3,700	2.8	3,700	2.5	2,100		5.8		60.31
	Full year	320,000	24.8		290,000		2.4					13,000		6.6	13,000		7.3		7,700		3.1		221.15

Note: Change in the forecast from the latest announcement: No

• Notes
• 1. Changes in significant subsidiaries (Changes of specific subsidiaries that accompanies scope change of consolidation): No

Included －

(company name) Excluded － (company name)

1. Use of accounting methods specifically for the preparation of the quarterly consolidated financial statements: No
2. Changes in accounting principles and estimates, and retrospective restatement
3. 1. Changes due to revision of accounting standards: Yes
   2. Changes other than (a): No
   3. Changes in accounting estimates: No
   4. Retrospective restatement: No
4. Number of shares outstanding (ordinary shares)
5. 1. Shares outstanding (including treasury shares)

As of June 30, 2021:	38,880,000	As of March 31, 2021:	38,880,000
(b) Treasury shares
As of June 30, 2021:	4,061,382	As of March 31, 2021:	4,061,341
(c) Average number of shares (quarterly cumulative period)
Period ended June 30, 2021:	34,818,632	Period ended June 30, 2020:	34,818,673

• Auditing of financial statements by CPA and/or CPA firm is not conducted to this summary of financial results.
• Cautionary statement regarding forecasts and special notes

(Note on forward looking statements)

Forward-looking statements in this material are based on the information available to management at the time this report was prepared. Actual results may differ significantly from these statements for number of reasons.

Index for Supplementary Information

1. Analysis of Results of Operations and Financial condition..……………………………………. 2

1. Overview of operating results……...……………………………….………………………....... 2
2. Overview of financial condition…………………………………..……………………………... 2
3. Explanation Regarding the Forecasts for the Consolidated Financial Results ….……... 3

2. Quarterly Consolidated Financial Statements and Major Notes………………………………	4
(1)	Quarterly consolidated balance sheet................................................................................	4
(2)	Quarterly consolidated statement of income and consolidated statements of comprehensive income...................	6
	Quarterly consolidated statement of income.....................................................................	6
	Quarterly consolidated statement of comprehensive income………………………………	7
(3)	Notes to consolidated financial statements.......................................................................	8
	(Going concern assumptions)...............................................................................................	8
	(Significant change in shareholders' equity)........................................................................	8
	(Changes in Accounting Policies).........................................................................................	8
3. Consolidated Orders Received and Net Sales……………………………………………..........	9

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1. Analysis of Results of Operations and Financial condition

1. Overview of operating results

During the first quarter of the fiscal year ending March 31, 2022, the Japanese economy was still affected by the new coronavirus infection, and socioeconomic activities were curtailed due to the issuance of priority measures to prevent the spread of the disease and the third declaration of a state of emergency. However, some parts of the Japanese economy began to show signs of recovery. As for the recent future of the Japanese economy, we can expect a pickup in the economy as the vaccination rate for the new coronavirus increases, but on the other hand, the new coronavirus infection is spreading again, and there is still no prospect of its cessation. We believe that the search for a way to coexist with the new coronavirus will continue for some time to come.

In the construction industry, public construction investment, including the national resilience plan, is expected to remain firm. Private construction investment is expected to recover in the manufacturing industry, etc., with favorable performance as a tailwind. However, the outlook for material price trends remains uncertain and cannot be optimistic, such as soaring prices of materials such as iron and rising global timber prices called the "wood shock." At the TCG Group, material and lumber price hikes are not currently a factor that is putting pressure on profits. However, we will continue to focus on the price trend of materials.

TCG Group's business results for the first quarter of the fiscal year ended March 31, 2021, were significantly down 43.3% compared to the first quarter of the fiscal year ended March 31, 2020, due to the refrain from face-to-face sales to private customers, temporary stagnation in order placement by corporate customers due to an increase in telecommuting, and postponement of order placement by corporate customers due to concerns about the economic downturn. In the first quarter of the fiscal year ending March 31, 2022, orders received increased significantly to 68,268 million yen (up 58.8% vs. previous Q1) due to the rebound from the previous fiscal year. Net sales were 61,377 million yen (down 7.2% vs. previous Q1) due to weak orders in the previous fiscal year. As for profits, operating profit was 1,437 million yen (up 2.1% vs. previous Q1), ordinary profit was 1,464 million yen (up 5.8% vs. previous Q1), and profit attributable to owners of parent was 847 million yen (up 38.7% vs. previous Q1).

Results by business segment are as follows.

Segment profit is adjusted with operating profit on the quarterly consolidated profit statement. Adjustments to segment profit include -901 million yen in general and administrative expenses that do not belong to any reportable segment and -17 million yen in other adjustments.

(Architecture)

Orders received were 36,256 million yen (up 134.0% vs. previous Q1) and net sales were 28,716 million yen (down 19.7% vs. previous Q1), resulting in segment profit of 185 million yen (down 80.0% vs. previous Q1).

(Civil engineering)

Orders received were 23,908 million yen (up 7.0% vs. previous Q1) and net sales were 24,557 million yen (down 2.5% vs. previous Q1), resulting in segment profit of 1,467 million yen (up 25.3% vs. previous Q1).

(Real estate)

Net sales from real estate sales and leasing were 8,102 million yen (up 57.0% vs. previous Q1), and segment profit were 703 million yen (up 189.1% vs. previous Q1).

1. Overview of financial condition (Assets)
   Total assets at the end of the first quarter of the fiscal year ending March 31,2022, increased by 2,159 million yen compared to the end of the previous fiscal year to 222,991 million yen. This was mainly due to an increase of 2,033 million yen in real estate for sale.
   (Liabilities)
   Total liabilities increased by 2,340 million yen from the end of the previous fiscal year to 107,415 million yen.
   This was mainly due to an increase of 6,240 million yen in advances received on uncompleted construction contracts, while accounts payable for construction contracts decreased by 2,824 million yen and profit taxes payable decreased by 1,913 million yen.

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(Net assets)

Net assets decreased by 180 million yen compared to the end of the previous fiscal year to 115,575 million yen.

The main reason for this was a decrease of 545 million yen in retained earnings due to the payment of 1,392 million yen in dividends, despite the recording of 847 million yen in Profit attributable to owners of parent.

As a result of the above, the amount of shareholders' equity, which is net assets minus non- controlling interests, amounted to 115,538 million yen, and the shareholders' equity ratio decreased by 0.6 percentage points from the end of the fiscal year ended March 2021 to 51.8%.

1. Explanation Regarding the Forecasts for the Consolidated Financial Results

There is no change to the first-half and full-year consolidated earnings forecast announced on May 12, 2021.

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