Tokyo Rope Mfg : Consolidated Financial Results for the First Quarter of Fiscal 2023

Consolidated Financial Results for the First Quarter of Fiscal Year 2023[Japanese GAAP]

				August 10, 2023
Name:	Tokyo Rope MFG Co., Ltd.	Listing:	Tokyo Stock Exchange
Stock code number:	5981		URL http://www.tokyorope.co.jp/
Representative:	Hideyuki Harada, President
Contact:	Koji Kitan, Director and Executive Officer, General Manager of General	(TEL) 03-6366-7777
Affairs Department
Date of issue of Financial Report: August 10, 2023	Start of cash dividend payment:	-
Supplementary financial materials prepared:	None
Financial results information meeting held:	None	(Amounts of less than 1 million yen are rounded down)
1. Fiscal 2023 - First quarter (April 1-June 30, 2023)

1. Results of operations (cumulative total) (Millions of yen, except for per share data, percentage figures denote year-on-year change)

	Net sales		Operating income	Ordinary income	Profit attributable to
		owners of parent
			%		%		%		%
Fiscal 2023 - First quarter	15,598		-2.1	614	-17.7	812	-15.6	688	-7.7
Fiscal 2022 - First quarter	15,926		13.3	746	-	962	470.9	746	382.7

Note: Comprehensive income	Fiscal 2023 - First quarter ¥1,180 million (-9.9%) Fiscal 2022 - First quarter ¥1,309 million (23.2%)
		Earnings per share	Earnings per share
		(fully diluted)
		Yen	Yen
Fiscal 2023 - First quarter		43.20	-
Fiscal 2022 - First quarter		46.29	-

(2) Financial Position

		Total assets	Net assets	Equity ratio
				%
Fiscal 2023 - First quarter		89,025	32,008	35.8
Fiscal 2022		88,753	31,298	35.0
Note: Equity capital at the term-end	Fiscal 2023 - First quarter ¥31,828 million	Fiscal 2022 ¥31,042 million

2. Cash Dividend

		Cash dividend per share
	1st quarter	2nd quarter	3rd quarter	Year-end	Full year
	Yen	Yen	Yen	Yen	Yen
Fiscal 2022	-	0.00	-	35.00	35.00
Fiscal 2023	-
Fiscal 2023 (est.)		0.00	-	40.00	40.00

Note: Revision of latest cash dividend forecast in review: None

3. Forecast for Consolidated Fiscal 2023 (April 1, 2023-March 31, 2024)

(Millions of yen, except for per share data, percentage figures denote year-on-year change)

	Net sales		Operating income	Ordinary income	Profit attributable to	Earnings per share
		owners of parent
		%		%		%		%	Yen
Full year	68,000	1.3	3,600	8.9	3,700	1.3	2,700	-28.6	167.63

Note: Revision of latest earnings forecast in review: None

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*Notes
(1) Changes in important subsidiaries during the period	: None
(Changes in specific subsidiaries due to change in scope of consolidation)
Newly consolidated -	(Company name)		Excluded	-	(Company name)
(2) Application of special accounting treatment	: Yes

Note: This note refers to the adoption of special accounting treatment pertaining to the preparation of quarterly consolidated financial statements.

(3) Changes in accounting policies; changes in accounting estimates; restatements:

1.	Changes in accounting policies resulting from the revision of	:	None
	the accounting standards and other regulations
2.	Other changes in accounting policies			:	None
3.	Changes in accounting estimates			:	None
4.	Restatements			:	None
(4) Shares outstanding (common stock) at the term-end
1.	Number of shares outstanding	Fiscal 2023 - 1st quarter	16,268,242 shares	Fiscal 2022	16,268,242 shares
	(including treasury shares)
2.	Number of treasury shares	Fiscal 2023 - 1st quarter		331,204 shares	Fiscal 2022	331,087 shares
	outstanding
3.	Average number of shares	Fiscal 2023 - 1st quarter	15,937,118 shares	Fiscal 2022 - 1st quarter	16,122,598 shares
	outstanding over the period

Note: Treasury shares that are deducted when calculating the number of treasury shares outstanding at the end of Fiscal 2022 and the average number of shares over the year include shares of the Company owned by Board Benefit Trust (Fiscal 2023 1Q: 130,200 shares).

• This financial report is exempt from audit procedures by a certified public accountant or an auditing firm.
• Appropriate use of business forecasts; other special items
  In this document, performance forecasts and other forward-looking statements are based on information currently available and certain assumptions judged by the Company to be rational. Actual results may differ significantly from forecasts owing to various factors. Please refer to "(3) Performance Forecasts" on page 4 for information on preconditions underlying the above forecasts and other related information.

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Contents

1. Performance and Financial Position	4
(1)	Business Results	4
(2)	Financial Position	4
(3)	Performance Forecasts	4
2. Quarterly Consolidated Financial Statements	5
(1)	Balance Sheet	5
(2)	Statement of Income and Statement of Comprehensive Income	7
(3)	Notes on Consolidated Financial Statements	9
	Notes on Going-concern Assumptions	9
	Notes in the Event of Major Changes in Shareholders' Equity	9
	Application of Special Accounting Treatment	9
	Segment Information, etc	10

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1. Performance and Financial Position

(1) Business Results

Net sales of the Tokyo Rope Group for the first quarter of the current consolidated cumulative period decreased slightly to ¥15,598 million (down 2.1% year on year) owing to a decrease in sales of Product Development segment from the same period of the previous year, when sales in the domestic disaster prevention-related business of this segment increased significantly due to carryforwards from the previous two fiscal years, whereas sales of Wire Rope and Wire segment increased due to factors such as the effect of price revisions of finished goods in response to soaring material and energy prices.

In terms of profit, operating income was ¥614 million (down 17.7% year on year), ordinary income was ¥812 million (down 15.6% year on year), and profit attributable to owners of parent was ¥688 million (down 7.7% year on year), mainly due to the impact of a decline in sales of Product Development, whereas Wire Rope and Wire segment absorbed the high prices of various materials and energy and mitigated the impact of the high prices owing to the effects of sales differences and product price revisions

Results by business segment of the Group were as follows: Wire Rope and Wire

Net sales for this segment increased compared with the same period of the previous fiscal year due to an increase in sales of wire rope products with relatively high added value and a revision of product prices in the previous fiscal year. In addition, as a result of our efforts to secure appropriate margins, we were able to absorb the high prices of various materials and energy, and also to improve margins to a certain extent. As a result, profit also increased from the same period last year. Net sales for this segment were ¥7,164 million (up 12.2% year on year), and operating income was ¥669 million (up 37.8% year on year).

Steel Cord

Since the end of last year, sales of steel cord for tires, which have been under adjustment due to the economic slowdown in North America, have decreased. As a result, net sales for this segment decreased to ¥2,289 million (down 5.6% year on year). In terms of profit, despite efforts to reduce costs through operational improvements, we have not been able to fully absorb the impact of rising energy costs due to the impact of persistently high electricity charges and other factors, resulting in an operating loss of ¥137 million (compared with an operating loss of ¥178 million in the same period last year).

Product Development

In the first quarter of the previous fiscal year, sales in the domestic disaster prevention-related increased significantly due to the impact of carryover projects from the previous two fiscal years, but in this first quarter under review, both sales and profit decreased due to the same level of projects as usual. Net sales for this segment were ¥3,709 million (down 14.7% year on year), while operating loss was ¥28 million (compared with an operating income of ¥272 million in the same period last year).

Industrial Machinery

Both sales and profit in Industrial Machinery decreased due to a decrease in sales in the powder metallurgy-related business. Net sales for this segment were ¥893 million (down 5.1% year on year), and operating income was ¥24 million (down 49.3% year on year).

Energy & Real Estate

As crude oil prices remained low compared with the previous fiscal year, sales of petroleum products decreased, resulting in net sales for this segment of ¥1,541 million (down 15.5% year on year). In terms of profit, operating income was ¥86 million (down 27.0% year on year), mainly due to an increase in operating expenses such as repair expenses for commercial facilities.

(2) Financial Position

Assets, Liabilities and Net Assets

Total assets at the end of the first quarter of the current consolidated fiscal year increased by ¥272 million from the end of the previous consolidated fiscal year to ¥89,025 million, partly owing to the expansion of cash on hand and an increase in the valuation of investment securities, while trade receivables accumulated at the end of the previous fiscal year decreased significantly owing to progress in collection.

Liabilities decreased by ¥437 million from the end of the previous fiscal year to ¥57,016 million due to the repayment of borrowings in connection with the collection of trade receivables.

Net assets increased by ¥710 million from the end of the previous fiscal year to ¥32,008 million due to an increase in retained earnings as a result of the recording of quarterly profit attributable to owners of parent and an increase in foreign currency translation adjustment due to the depreciation of the yen, despite the payment of dividends to shareholders for the previous fiscal year.

(3) Performance Forecasts

There is no change from the forecast announced at the time of the financial results announcement on May 12, 2023.

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2.	Quarterly Consolidated Financial Statements
(1)	Balance Sheet
				(Millions of yen, rounded down)
			Fiscal 2022	Fiscal 2023 - First quarter
			(March 31, 2023)	(June 30, 2023)
ASSETS
	Current assets
		Cash and deposits	5,740	6,696
		Notes and accounts receivable - trade, and contract	16,299	14,044
		assets
		Merchandise and finished goods	7,637	7,966
		Work in process	4,652	4,819
		Raw materials and supplies	4,772	5,117
		Other	1,508	1,705
		Allowance for doubtful accounts	-17	-17
		Total current assets	40,592	40,332
	Non-current assets
		Property, plant and equipment
		Buildings and structures, net	6,881	6,889
		Machinery, equipment and vehicles, net	4,994	4,927
		Land	18,183	18,184
		Leased assets, net	989	961
		Construction in progress	335	311
		Other, net	504	505
		Total property, plant and equipment	31,890	31,780
		Intangible assets	477	498
		Investments and other assets
		Investment securities	7,359	7,981
		Retirement benefit asset	1,162	1,250
		Deferred tax assets	3,369	3,154
		Other	4,155	4,279
		Allowance for doubtful accounts	-253	-251
		Total investments and other assets	15,792	16,414
		Total non-current assets	48,161	48,692
	Total assets	88,753	89,025

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