Toyobo : Consolidated Financial Report for the Three Months Ended June 30, 2023 (254KB)

	August 7, 2023
Consolidated Financial Report for the Three Months Ended June 30, 2023
TOYOBO Co., Ltd.	URL https://ir.toyobo.co.jp/en/ir.html
Stock Code: 3101 (Prime Market, Tokyo Stock Exchange)

Representative: Ikuo Takeuchi, President & Representative Director

Contact Person: Sonoko Ishimaru, Executive Officer, General Manager, Corporate Communication Department

TEL: [phone]

Planned Filing Date of a Quarterly Report: August 10, 2023

(Figures are rounded to the nearest million yen.)

1. Consolidated Business Performance

1. Consolidated Operating Results

Three months ended June 30					Percentages indicate year-on-year increase/ (decrease)
		Net sales	Operating profit	Ordinary profit	Profit attributable to
		owners of parent
		Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
2023		97,058	(3.9)	(85)	―	(317)	―	(508)	―
2022		101,048	6.8	4,621	(50.0)	4,331	(42.0)	7,797	26.4
(Note) Comprehensive Income:	Three months ended June 30, 2023: ¥2,344 million (78.7%)
			Three months ended June 30, 2022: ¥11,021 million 28.4%
	Net profit per	Net profit per share
		share	after dilution
		Yen		Yen
2023	(5.77)		―
2022	87.71		―

1. Consolidated Financial Position

	Total assets	Net assets	Equity ratio	Net assets per share
	Millions of yen	Millions of yen	%	Yen
June 30, 2023	569,465	219,915	33.1	2,144.03
March 31, 2023	588,906	221,422	32.2	2,146.46

(Reference) Total shareholders' equity: June 30, 2023: ¥188,698 million, March 31, 2023: ¥189,588 million

2.Dividends

Years ended/ending March 31

			Dividends per share
	1st Quarter	2nd Quarter	3rd Quarter	Year-	Total
Record date	end
	Yen	Yen	Yen	Yen	Yen
2023	―	0.00	―	40.00	40.00
2024	―
2024		0.00	―	40.00	40.00
(Forecast)
(Note) Revision of dividends forecast for this period: None

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3.Forecasts for Fiscal Year Ending March 31, 2024

Percentages indicate year-on-year increase/ (decrease)

	Net sales		Operating profit		Ordinary profit
	Millions of yen	%	Millions of yen	%	Millions of yen	%
Fiscal year	430,000	7.5	15,000	49.1	11,000	66.9
	Profit attributable to		Net profit per share
	owners of parent
	Millions of yen	%	Yen
Fiscal year	4,000	―	45.00

(Note) Revision of earnings forecast for this period: None

4.Other

1. Significant changes in subsidiaries during the subject fiscal year (Transfer of particular subsidiaries following a change in the scope of consolidation): None

1) New company

: None

1. 1. Excluded company : None
2. Adoption of simplified and special accounting methods: None
3. Changes from accounting methods, procedures and the presentation of the consolidated financial statements:

1) Changes based on revision of accounting standards	: None
2) Changes other than 1) above	: None
3) Changes due to accounting estimation change	: None
4) Error correction	: None

4. Number of shares issued and outstanding (common stock):

1. Number of shares outstanding (including treasury stock):

June 30, 2023:	89,048,792 shares	March 31, 2023:	89,048,792 shares
2) Number of treasury stock:
June 30, 2023:	1,037,894 shares	March 31, 2023:	723,040 shares

3) Average number of shares outstanding for each period (cumulative term): Three months ended June 30, 2023: 88,089,714 shares

2022: 88,896,148 shares

• Quarterly Financial Results reports are exempt from Quarterly review.
• Explanation regarding the appropriate use of forecasts of business results

The forward-looking statements made in this document, including the aforementioned forecasts, are based on all information available to the management at the time of this document's release. Actual results may differ from the results anticipated in the statements.

(How to obtain supplementary document on earnings)

The supplementary document on earnings is disclosed on the same day as the Quarterly Financial Results report, and it is made available on the Company's website.

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1.Qualitative Information and Financial Statements

(1) Qualitative Information on Consolidated Results

The business environment surrounding the Toyobo Group (hereinafter "the Group") in the three months ended June 30, 2023 saw a moderate recovery in economic activity in the United States, supported by robust consumption. In China, the lifting of the zero-COVID policy has led to an economic recovery, but this current trend is slowing. On the other hand, in Japan, economic activity has begun to normalize after the COVID-19 pandemic, and the economy has recovered moderately. Although there has been a pickup in automobile production due to the resolution of the semiconductor shortage, there are concerns about downside effects from overseas economies, such as reduced demand due to monetary tightening policies in the United States and Europe and the slowdown of the Chinese economy.

Under this business environment, sales of polarizer protective films for LCDs "COSMOSHINE SRF" increased significantly as demand recovered. On the other hand, sales of reagents for PCR testing dropped sharply due to winding down of COVID-19 infections, and sales of packaging film and mold releasing film for multilayer ceramic capacitors (MLCC) were sluggish due to a slow recovery in demand.

As a result, net sales in the three months ended June 30, 2023 decreased ¥4.0 billion (3.9%) from the same period of the previous fiscal year to ¥97.1 billion, operating loss was ¥0.1 billion (compared with operating profit of ¥4.6 billion for the same period of the previous fiscal year), ordinary loss was ¥0.3 billion (compared with ordinary profit of ¥4.3 billion for the same period of the previous fiscal year), loss attributable to owners of parent was ¥0.5 billion (compared with profit of attributable to owners parent of ¥7.8 billion for the previous fiscal year).

Results by business segment were as follows:

The Group changed its reporting segment classification from the three months ended June 30, 2023. Accordingly, in the following segment information, the figures for the three months ended June 30, 2022, have been restated in accordance with the classification existing after the aforesaid change for the purpose of comparing them with those of the three months ended June 30, 2023.

Films

In this segment, sales and operating profit decreased due to a weak recovery in demand, in addition to the continued impact of high raw material and fuel prices.

In the packaging film business, product prices were revised in response to soaring raw material and fuel prices, while freight movements were sluggish due to prolonged adjustments of distributors' inventories.

In the industrial film business, sales of polarizer protective films for LCDs "COSMOSHINE SRF" increased significantly. However, sales of mold releasing film for MLCC struggled due to continued inventory adjustments throughout the supply chain. Product prices were revised in response to soaring raw material and fuel prices, but which has not led to improved profitability.

As a result, sales in this segment decreased ¥0.2 billion (0.4%) from the same period of the previous fiscal year to ¥39.0 billion, and operating profit decreased ¥1.2 billion (49.7%) to ¥1.2 billion.

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Life Science

In this segment, sales and operating profit decreased due to a significant drop in sales of reagents for COVID-19 PCR testing.

In the biotechnology business, sales of enzymes for diagnostic reagents remained steady. However, sales of reagents for PCR testing declined significantly due to the reclassification of COVID-19 to a Class 5 Infectious Diseases.

In the contract manufacturing business of pharmaceuticals, expenses in response to suggestions from the FDA continued to be incurred, but the Warning Letter was lifted by the FDA in July 2023.

In the medical materials business, sales of artificial kidney hollow fiber trended strong.

As a result, sales in this segment decreased ¥0.5 billion (6.3%) from the same period of the previous fiscal year to ¥8.1 billion, and operating profit decreased ¥0.8 billion (36.6%) to ¥1.4 billion.

Environmental and Functional Materials

In this segment, sales decreased and an operating loss was recorded, compared with an operating profit in the previous fiscal year, due to the impact of lower demand for electronic materials and civil engineering and building materials.

In the resins and chemicals business, engineering plastics saw product price revisions in Japan in response to soaring raw material and fuel prices. Sales of industrial adhesives "Vylon" declined in China and other Asian markets. Sales of photo functional materials for water-wash photosensitive printing plates were weak in North America and China.

In the environment and fiber business, environmental solutions sales declined due to a lag in shipments affecting sales of VOC recovery equipment used in the manufacturing process for lithium-ion battery separators. In the high performance fibers business, sales of "Tsunooga" used in cut resistant gloves and "ZYLON" for applications in building structural reinforcement decreased. Nonwoven materials were sluggish in response to declining demand in civil engineering and building materials.

As a result, sales in this segment decreased ¥2.9 billion (10.5%) from the same period of the previous fiscal year to ¥25.0 billion, with an operating loss of ¥0.7 billion (compared with operating profit of ¥0.9 billion for the same period of the previous fiscal year).

Functional Textiles and Trading

In this segment, sales decreased and operating loss increased because the airbag fabric business failed to improve profitability.

In the textile business, earnings improved as a result of the withdrawal of unprofitable products and progress in price pass-through.

In the airbag fabric business, sales volume increased with the recovery of automobile production volume, but product sales price revisions have not kept pace with rising raw material prices, and the business struggled.

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As a result, sales in this segment decreased ¥0.0 billion (0.1%) from the same period of the previous fiscal year to ¥22.2 billion, and operating loss of ¥0.7 billion (compared with operating loss of ¥0.4 billion for the same period of the previous fiscal year).

Real Estate and Other Businesses

This segment includes infrastructure-related businesses such as real estate, engineering, information processing services, and logistics services. Results in these businesses were generally in line with plans.

As a result, sales in this segment decreased ¥0.3 billion (9.7%) from the same period of the previous fiscal year to ¥2.8 billion, and operating profit increased ¥0.1 billion (15.4%) to ¥0.4 billion.

(2) Analysis of Financial Position

Total assets decreased ¥19.4 billion (3.3%) from the end of the previous fiscal year, to ¥569.5 billion. This was mainly due to a decrease in cash and deposits, notes and accounts receivable - trade.

Total liabilities decreased ¥17.9 billion (4.9%) from the end of the previous fiscal year, to ¥349.5 billion. This was mainly due to a decrease in notes and accounts payable - trade and borrowings.

Net assets decreased ¥1.5 billion (0.7%) from the end of the previous fiscal year, to ¥219.9 billion mainly due to a decrease in retained earnings and other items.

(3) Forecast for Fiscal 2023 (Ending March 31, 2024)

The performance of the Group in the three months ended June 30, 2023 was generally as forecast. Regarding the consolidated earnings forecast for fiscal year ending March 31, 2024, no changes have been made in the outlook announced on May 11, 2023.

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