July 12, 2022

Consolidated Financial Results

for the First Quarter of the Fiscal Year Ending February 28, 2023

(Three Months Ended May 31, 2022)

[Japanese GAAP]

Company name:

AIT CORPORATION

Listing: Tokyo Stock Exchange

Securities code:

9381

URL: https://www.ait-jp.com/

Representative:

Hidekazu Yagura, President and CEO

Contact:

Toshiaki Uchida, Executive Officer, General Manager, Accounting & Finance Dept.

Tel: +81-6-6260-3450

Scheduled date of filing of Quarterly Report:

July 15, 2022

Scheduled date of payment of dividend:

-

Preparation of supplementary materials for quarterly financial results: None

Holding of quarterly financial results meeting:

None

(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the First Quarter (March 1, 2022 - May 31, 2022) of the Fiscal Year Ending February 28, 2023

(1) Consolidated results of operations

(Percentages represent year-on-year changes)

Operating revenue

Operating profit

Ordinary profit

Profit attributable to

owners of parent

Million yen

%

Million yen

%

Million yen

%

Million yen

%

Three months ended May 31, 2022

17,305

28.0

1,306

76.1

1,202

46.4

810

56.7

Three months ended May 31, 2021

13,515

22.1

741

71.8

821

61.1

517

49.4

Note: Comprehensive income

Three months ended May 31, 2022:1,179 million yen

(up 53.2%)

Three months ended May 31, 2021: 769 million yen

(up 203.1%)

Net income per share

Diluted net income per share

Yen

Yen

Three months ended May 31, 2022

34.49

-

Three months ended May 31, 2021

22.01

-

(2) Consolidated financial position

Total assets

Net assets

Equity ratio

Million yen

Million yen

%

As of May 31, 2022

24,529

14,467

58.0

As of Feb. 28, 2022

23,516

14,134

59.2

Reference: Equity capital

As of May 31, 2022:

14,220 million yen

As of Feb. 28, 2022:

13,931 million yen

2. Dividends

Dividend per share

1Q-end

2Q-end

3Q-end

Year-end

Total

Yen

Yen

Yen

Yen

Yen

Fiscal year ended Feb. 28, 2022

-

22.00

-

36.00

58.00

Fiscal year ending Feb. 28, 2023

-

Fiscal year ending Feb. 28, 2023 (forecast)

30.00

-

31.00

61.00

Notes: 1. Revision to the most recently announced dividend forecast: None

2. Breakdown of the year-end dividend forecast for the fiscal year ended February 28, 2022 Ordinary dividend: ¥29.00; Commemorative dividend to celebrate 15th listing anniversary: ¥7.00

3. Consolidated Forecast for the Fiscal Year Ending February 28, 2023 (March 1, 2022 - February 28, 2023)

(Percentages represent year-on-year changes)

Operating revenue

Operating profit

Ordinary profit

Profit attributable

Net income per

to owners of parent

share

Million yen

%

Million yen

%

Million yen

%

Million yen

%

Yen

First half

33,500

24.2

2,350

53.3

2,310

38.1

1,610

65.2

68.53

Full year

69,300

15.6

4,930

37.7

4,980

30.3

3,430

44.9

146.00

Note: Revision to the most recently announced forecast of consolidated results: Yes

* Notes

  1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes in scope of consolidation): None
    Newly added: -
    Excluded: -
  2. Application of special accounting methods for presenting quarterly consolidated financial statements: None
  3. Changes in accounting policies and accounting-based estimates, and restatements

1)

Changes in accounting policies due to revisions in accounting standards, others:

Yes

2)

Changes in accounting policies other than 1) above:

None

3)

Changes in accounting-based estimates:

None

4)

Restatements:

None

(4) Number of outstanding shares (common stock)

1) Number of shares outstanding at the end of the period (including treasury shares)

As of May 31, 2022:

23,913,600 shares

As of Feb. 28, 2022:

23,913,600 shares

2) Number of treasury shares at the end of the period

As of May 31, 2022:

420,008 shares

As of Feb. 28, 2022:

419,975 shares

3) Average number of shares during the period

Three months ended May 31, 2022:

23,493,615 shares

Three months ended May 31, 2021:

23,493,688 shares

The current quarterly financial report is not subject to quarterly review by certified public accountants or auditing firms.

Cautionary statement with respect to forecasts of future performance and other special items

Forward-looking statements in these materials are based on certain assumptions judged to be valid and information currently available to AIT. These statements are not promises by AIT regarding future performance. Actual performance may differ significantly from these forecasts for a number of reasons. Please refer to "1. Qualitative Information on Quarterly Consolidated Financial Performance, (3) Explanation of Forecast of Consolidated Results and Other Forward-looking Statements" on page 3 of the attachments regarding preconditions or other related matters for forecasts shown above.

AIT CORPORATION (9381) Financial Results for the First Quarter of FY2/23

Contents of Attachments

1. Qualitative Information on Quarterly Consolidated Financial Performance

2

(1)

Explanation of Results of Operations

2

(2)

Explanation of Financial Position

3

(3)

Explanation of Forecast of Consolidated Results and Other Forward-looking Statements

3

2. Quarterly Consolidated Financial Statements and Notes

4

(1)

Quarterly Consolidated Balance Sheet

4

(2)

Quarterly Consolidated Statements of Income and Comprehensive Income

6

(3)

Notes to Quarterly Consolidated Financial Statements

8

Going Concern Assumption

8

Significant Changes in Shareholders' Equity

8

Changes in Accounting Policies

8

Additional Information

9

Segment and Other Information

9

1

AIT CORPORATION (9381) Financial Results for the First Quarter of FY2/23

1. Qualitative Information on Quarterly Consolidated Financial Performance

(1) Explanation of Results of Operations

During the first quarter of the fiscal year ending February 28, 2023, the Japanese economy recovered gradually despite challenges posed by the COVID 19 pandemic. But the outlook remains unclear because of several uncertainties. There is no sign of an end to the COVID-19 pandemic, the Ukraine situation has become increasingly tense, raw material prices are soaring and the yen has weakened sharply.

The business climate for the AIT Group remained challenging because of lockdowns in Shanghai due to resurgence of the COVID-19 infections. Many of our shippers have production plants in Shanghai which had to be closed due to the lockdowns. In addition, supply chains were disrupted, and international cargo transportation as well as domestic truck transportation was affected causing logistics disruptions.

Under these circumstances, the AIT Group worked closely with its subsidiaries in China, proactively provided information to customers, and used Shanghai and ports in its vicinity for cargoes that could be shipped, to ensure stable international cargo transportation. At the same time, logistics costs have gone up further for many shippers as ocean freight rates have spiked and the yen has weakened sharply. Since the Group focuses on sales activities using proposals involving international freight, it views these challenges as an opportunity to add new customers and strengthen relationships with current customers to increase revenue. There were also many sales activities with the goal of receiving even more orders for integrated services. As the yen weakened, we concentrated on winning more cargo out of Japan.

Lockdowns in Shanghai had particularly strong impact in the first quarter of the current fiscal year as the container handling volume and customs clearance orders decreased compared with the same period a year earlier. On the other hand, shortages of cargo space and other factors caused freight rates to remain at high levels and the ongoing depreciation of the yen provided a tailwind for earnings growth, offsetting the declines in cargo volume and other factors. The Group also focused on DX initiatives to improve operational efficiency and continued to hold down selling, general and administrative expenses to the greatest degree possible in order to increase earnings.

Operating revenue increased 28.0% year-on-year to 17,305 million yen. Earnings at all levels were much higher than one year earlier mainly because of the significant increase in operating revenue. Operating profit increased 76.1% to 1,306 million yen, ordinary profit was up 46.4% to 1,202 million yen and profit attributable to owners of parent increased 56.7% to 810 million yen.

Results by business segment are as follows.

In the China reportable segment, Nisshin International Trading Co.,Ltd. is currently being liquidated.

1) Japan

While economic activities are gradually returning to normal following the lifting of the state of emergency declaration in late March, the situation for consumer spending remains challenging as prices of daily necessities have soared and other factors. Furthermore, lockdowns in Shanghai have disrupted cargo transportation services between Japan and China.

In this difficult environment, we have stepped up sales activities, to leverage the Group's strength in integrated services from international freight forwarding and customs clearance to delivery. The number of containers handled in the sea freight sector decreased 11.3% from one year earlier to 61,117 TEU for imports and the total for imports and exports decreased 9.6% to 65,347 TEU mainly due to the lockdown in Shanghai. Customs clearance orders were lower than one year earlier, decreasing 5.9% to 34,752 because of lower ocean freight volume. On the other hand, high ocean freight rates and the depreciation of the yen contributed to increasing operating revenue and the gross profit. We are also constantly reexamining selling, general and administrative expenses and using the digital transformation to operate more efficiently in order to cut costs for further earnings growth.

2

AIT CORPORATION (9381) Financial Results for the First Quarter of FY2/23

As a result, operating revenue increased 30.6% from one year earlier to 14,945 million yen. Segment profit increased 80.3% to 1,189 million yen mainly because of a big increase in the gross profit and measures to hold down personnel expenses and expenses for sales activities.

2) China

The volume of apparel shipments is recovering but the recovery is not yet robust. Consequently, the situation of orders for merchandise inspections, needle detection and other services associated with these shipments is difficult. On the other hand, the volume of freight for Japan handled by the AIT Group has increased during January to March 2022as the volume of non-apparel cargo was favorable. This created opportunities for increasing revenue involving cargo shipments within China. In addition, the amount of foreign currency translation gain was also higher due to appreciation of the Chinese yuan.

As a result, operating revenue increased 1.4% from one year earlier to 1,885 million yen and segment profit decreased 31.4% to 52 million yen because of higher expenses caused partly by an increase in personnel expenses one year earlier.

3) Other

The volume of cargo handled and revenue remained steady at subsidiaries in Taiwan and Vietnam. Revenue is also recovering at the Myanmar subsidiary as the effects of the COVID-19 pandemic and civil unrest are easing. As a result, operating revenue increased 119.6% from one year earlier to 474 million yen and segment profit was 64 million yen compared with segment profit of 5 million yen.

Note: TEU (twenty-foot equivalent unit) is a unit of cargo capacity based on a standard intermodal container.

  1. Explanation of Financial Position Assets

Total assets increased 1,013 million yen from the end of the previous fiscal year to 24,529 million yen at the end of the period under review.

Current assets increased 995 million yen to 20,230 million yen. This was mainly due to increases in notes and accounts receivable-trade, and contract assets of 544 million yen, advances paid of 228 million yen and cash and deposits of 160 million yen.

Non-current assets increased 17 million yen to 4,298 million yen. This was mainly due to an increase in investment securities of 74 million yen.

Liabilities

Total liabilities increased 679 million yen to 10,061 million yen.

Current liabilities increased 680 million yen to 8,555 million yen. This was mainly due to an increase in accounts payable-trade of 782 million yen, which was partially offset by a decrease in income taxes payable of 347 million yen.

Non-current liabilities decreased 0 million yen to 1,506 million yen.

Net assets

Net assets increased 333 million yen to 14,467 million yen. This was mainly due to a booking of profit attributable to owners of parent of 810 million yen, dividends distributed from retained earnings of 845 million yen and a 322 million yen increase in foreign currency translation adjustment.

(3) Explanation of Forecast of Consolidated Results and Other Forward-looking Statements

Based on the recent results of operations, AIT has revised its forecast for the fiscal year ending February 28, 2023 that was announced on April 13, 2022. For further details, see the release titled "Notice Regarding Revisions to Forecasts (Upward revisions)" (Japanese version only).

3

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AIT Corporation published this content on 29 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 July 2022 03:13:05 UTC.