Tess : Consolidated Financial Results for the Six Months Ended December 31, 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.

February 14, 2022

Consolidated Financial Results

for the Six Months Ended December 31, 2021

(Under Japanese GAAP)

Company name:	TESS Holdings Co., Ltd.
Listing:	Tokyo Stock Exchange
Securities code:	5074
URL:	https://www.tess-hd.co.jp/
Representative:	Hideo Ishiwaki, President
Inquiries:	Kazuki Yamamoto, Executive Managing Director, General Manager of the Administration
	Department
Telephone:	[phone]

Scheduled date to file quarterly securities report:	February 14, 2022
Scheduled date to commence dividend payments:	-
Preparation of supplementary material on quarterly financial results:	Yes
Holding of quarterly financial results briefing:	Yes
	(for institutional investors and analysts)

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

1. Consolidated financial results for the six months ended December 31, 2021 (from July 1, 2021 to December 31, 2021)

(1) Consolidated operating results (cumulative)		(Percentages indicate year-on-year changes.)
	Net sales		Operating profit	Ordinary profit	Profit attributable to
		owners of parent
Six months ended	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%
December 31, 2021	18,310		14.3	4,158	67.0	3,773	76.2	2,396	95.9
December 31, 2020	16,021		-	2,490	-	2,141	-	1,223	-

Note:	Comprehensive income	For the six months ended December 31, 2021:	¥2,499 million	[83.3%]
			For the six months ended December 31, 2020:	¥1,364 million		[-%]
		Basic earnings	Diluted earnings
		per share		per share
Six months ended		Yen		Yen
December 31, 2021		68.72		67.73
December 31, 2020		47.23		-
Note:	The Company carried out a ten-for-one share split of its common shares on February 1, 2021. Basic earnings per share
	were calculated as though the share split had been conducted at the beginning of the previous fiscal year.
(2) Consolidated financial position
			Total assets		Net assets		Equity-to-asset ratio
As of			Millions of yen	Millions of yen			%
December 31, 2021		89,209	24,787		27.6
June 30, 2021		100,724	22,813		22.6
Reference: Equity
	As of December 31, 2021:		¥24,659 million
	As of June 30, 2021:		¥22,734 million

2. Cash dividends

			Annual dividends per share
		First quarter-end	Second quarter-end	Third quarter-end		Fiscal year-end	Total
		Yen	Yen	Yen		Yen	Yen
Fiscal year ended	-	0.00	-		20.52	20.52
June 30, 2021
Fiscal year ending	-	0.00
June 30, 2022
Fiscal year ending			-		21.00	21.00
June 30, 2022
(Forecast)
Note:	Revisions to the cash dividends forecasts most recently announced: None

3. Forecast of consolidated financial results for the fiscal year ending June 30, 2022 (from July 1, 2021 to June 30, 2022)

(Percentages indicate year-on-year changes.)

		Net sales		Operating profit	Ordinary profit		Profit attributable to	Basic earnings
				owners of parent	per share
		Millions of yen	%	Millions of yen	%	Millions of yen		%	Millions of yen	%	Yen
Fiscal year
ending		29,790	(13.0)	4,905	11.5	4,000		4.3	2,497	25.5	71.55
June 30, 2022
Note:	Revisions to the consolidated financial results forecasts most recently announced: None

The Company has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020), etc., from the beginning of the fiscal year ending June 30, 2022. Therefore, the above forecast of consolidated financial results represents the amounts calculated by applying the said accounting standard, etc.

* Notes

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of consolidation): Yes

Newly included:	2 companies (Kumamoto Nishiki Green Power LLC, Imari Green Power Co., Ltd.)
Excluded:	- companies

1. Application of specific accounting for preparing quarterly consolidated financial statements: Yes
   Note: For details, please refer to "2. Quarterly consolidated financial statements (4) Notes to quarterly consolidated financial statements (Application of specific accounting for preparing quarterly consolidated financial statements)" on page 14 of the attached material.
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 refer to "2. Quarterly consolidated financial statements (4) Notes to quarterly consolidated financial statements (Notes - Changes in accounting policies)" on page 14 of the attached material.

(4) Number of issued shares (common shares)

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

As of December 31, 2021	35,069,100 shares
As of June 30, 2021	35,069,100 shares

(ii) Number of treasury shares at the end of the period

As of December 31, 2021	156,070 shares
As of June 30, 2021	219,000 shares

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

Six months ended December 31, 2021	34,874,822 shares
Six months ended December 31, 2020	25,899,100 shares

Note: The Company carried out a ten-for-one share split of its common shares on February 1, 2021. "Average number of shares outstanding during the period" was calculated as though the share split had been conducted at the beginning of the fiscal year ended June 30, 2021.

• 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 (Caution regarding forward-looking statements)
  Forward-looking statements in this document, including the results forecasts, etc., are based on the information available as of the date of the release of this document and the preconditions that the Company deemed to be reasonable; they are not meant to be a commitment by the Company, and a variety of factors in the future may cause actual results to differ materially from these forecasts. Please refer to "1. Qualitative information on the quarterly financial results (3) Explanation of forward-looking statements such as forecast of consolidated financial results" on page 7 of the attached material for the preconditions for the earnings forecasts and items to exercise caution in the use of these earnings forecasts.

Attached Material
	Index
1. Qualitative information on the quarterly financial results ........................................................................	2
(1)	Explanation of operating results.........................................................................................................	2
(2)	Explanation of financial position........................................................................................................	6
(3)	Explanation of forward-looking statements such as forecast of consolidated financial results..........	7
2. Quarterly consolidated financial statements .............................................................................................	8
(1)	Quarterly consolidated balance sheet .................................................................................................	8
(2)	Quarterly consolidated statement of income and quarterly consolidated statement of comprehensive
	income ..............................................................................................................................................	10
	(Quarterly consolidated statement of income)..................................................................................	10
	(Quarterly consolidated statement of comprehensive income) ........................................................	11
(3)	Consolidated statement of cash flows ..............................................................................................	12
(4)	Notes to quarterly consolidated financial statements .......................................................................	14
	Uncertainties of entity's ability to continue as going concern .........................................................	14
	Notes when there are significant changes in amounts of equity.......................................................	14
	Application of specific accounting for preparing quarterly consolidated financial statements........	14
	Notes - Changes in accounting policies............................................................................................	14
	Segment information ........................................................................................................................	15
	Significant events after reporting period ..........................................................................................	16

- 1 -

1. Qualitative information on the quarterly financial results

1. Explanation of operating results
   During the six months ended December 31, 2021, the impact of the novel coronavirus disease (COVID-19) that began spreading around the world in early 2020 led to polarization in corporate earnings and personal consumption in the Japanese economy, and it remains difficult to predict business conditions going forward. At the global level, the spread of COVID-19 has also resulted in significant restrictions on economic activities in many countries, and just as in Japan, the outlook continues to be uncertain.
   With regard to the worldwide energy situation, developments such as the advocacy of sustainable development goals (SDGs)*1 by the United Nations in 2015, and the negotiation of the Paris Agreement*2 have led to an acceleration of initiatives to continue the global decarbonization of energy sources.
   In this external environment, the Group has used its "Total Energy Saving & Solution" management philosophy as a base on which to continue developing its operations, with a focus on the three business areas of "renewable energy as main power source," "energy efficiency maximization," and "intelligent energy infrastructure."
   As a result of the above, for the six months ended December 31, 2021, net sales were ¥18,310 million (up 14.3% year on year), operating profit was ¥4,158 million (up 67.0% year on year), ordinary profit was ¥3,773 million (up 76.2% year on year), and profit attributable to owners of parent was ¥2,396 million (up 95.9% year on year).
   Operating performance by segment was as follows.

							(Millions of yen)
		Reportable segments		Adjustment	Total
	Engineering		Energy Supply
			Total	(Note 1)	(Note 2)
	Segment		Segment
Net sales
Goods transferred at a point in	317		7,208		7,526	-	7,526
time
Goods transferred over time	8,884		1,899		10,784	-	10,784
Revenue from contracts with	9,202		9,108		18,310	-	18,310
customers
Revenues from external	9,202		9,108		18,310	-	18,310
customers
Intersegment sales and transfers	-		-		-	-	-
Total	9,202		9,108		18,310	-	18,310
Segment profit	2,102		1,884		3,987	170	4,158

Notes: 1. Adjustment for segment profit includes eliminations of intersegment transactions and corporate expenses that are not allocated to reportable segments.

2. Segment profit has been reconciled with operating profit in the quarterly consolidated statement of income.

1. Engineering Segment Commissioned type
   This segment consists of EPC (Engineering, Procurement and Construction) commissioned by customers, such as engineering services to address customer needs for energy-saving facilities, cost reductions and environmental initiatives. It also includes engineering for power generation facilities and facilities for in-house consumption of generated power, using FIT certification*3 obtained by customers using part of renewable energy facilities.
2. • 2 -