Member of Financial Accounting Standards Foundation (FASF)

Consolidated Financial Results (Japanese Accounting Standards)

for the First Six Months of the Fiscal Year Ending December 31, 2023

July 28, 2023

Company name:

Okabe Co., Ltd.

Stock exchange listing: Prime Market of the Tokyo Stock Exchange

Stock code:

5959

URL: https://www.okabe.co.jp/

Representative:

Hirohide Kawase, Representative Director, President and Chief Executive Officer

Contact:

Yasushi Hosomichi, Director and Senior Managing Executive Officer in charge of Administrative Division and

International Division

Tel. +81-3-3624-5119

Scheduled date for filing of quarterly report:

August 10, 2023

Scheduled date of commencement of dividend payment:

September 4, 2023

Supplementary documents for quarterly results:

None

Quarterly results briefing:

Yes

(Figures are rounded down to the nearest one million yen.)

1. Consolidated Financial Results for the First Six Months Ended June 30, 2023 (January 1, 2023 - June 30, 2023)

(1) Consolidated Results of Operations (Accumulated Total)

(Percentages represent year-on-year changes.)

Net sales

Operating profit

Ordinary profit

Profit attributable to

owners of parent

Six months ended

Million yen

%

Million yen

%

Million yen

%

Million yen

%

June 30, 2023

38,021

4.8

2,042

(16.5)

2,074

(18.8)

(116)

-

June 30, 2022

36,267

17.5

2,446

19.8

2,555

18.8

2,137

94.1

(Note) Comprehensive income:

-1,132 million yen (-%) for the six months ended June 30, 2023

3,358 million yen (110.6%) for the six months ended June 30, 2022

Profit per share (basic)

Profit per share(diluted)

Six months ended

Yen

Yen

June 30, 2023

(2.50)

-

June 30, 2022

45.07

-

(2) Consolidated Financial Position

Total assets

Net assets

Equity ratio

As of

Million yen

Million yen

%

June 30, 2023

99,260

64,902

65.4

December 31, 2022

103,894

67,111

64.6

(Reference) Shareholders' equity:

As of June 30, 2023:

64,885 million yen

As of December 31, 2022:

67,092 million yen

2. Dividends

Dividend per share

End of

End of

End of

Year-end

Annual

first quarter

second quarter

third quarter

Yen

Yen

Yen

Yen

Yen

Year ended December 31, 2022

-

12.00

-

12.00

24.00

Year ending December 31, 2023

-

12.50

Year ending December 31, 2023

-

12.50

25.00

(forecasts)

(Note) Revisions to dividend forecasts published most recently: None

3. Consolidated Forecasts for the Fiscal Year Ending December 31, 2023 (January 1, 2023 - December 31, 2023)

(Percentages represent year-on-year changes.)

Net sales

Operating profit

Ordinary profit

Profit attributable to

Profit per

owners of parent

share

Million yen

%

Million yen

%

Million yen

%

Million yen

%

Yen

Full year

79,300

3.2

4,100

(22.2)

4,200

(23.2)

950

(75.3)

20.52

(Note) Revisions to financial forecasts published most recently: Yes

* Notes

  1. Changes in important subsidiaries during the period
    (changes of specific subsidiaries in accordance with changes in the scope of consolidation): None
  2. Application of particular accounts procedures to the preparation of quarterly consolidated financial statements: Yes

(Note) Please refer to "Application of particular accounts procedures to the preparation of quarterly consolidated financial statements" on page 8 for details.

(3) Changes in accounting policies, accounting estimates and restatement

(i) Changes in accounting policies caused by revision of accounting standards:

Yes

(ii) Changes in accounting policies other than (i):

None

(iii)Changes in accounting estimates:

None

(iv) Restatement:

None

  1. Number of shares outstanding (common shares):
    1. Number of shares outstanding at end of period (including treasury shares)

As of June 30, 2023:

49,290,632 shares

As of December 31, 2022:

49,290,632 shares

(ii) Number of treasury shares at end of period

As of June 30, 2023:

3,131,913 shares

As of December 31, 2022:

2,453,507 shares

(iii)Average number of shares outstanding during the period

Six months ended June 30, 2023:

46,401,540 shares

Six months ended June 30, 2022:

47,427,104 shares

(Note) The number of treasury shares at the end of each period includes the shares of the Company held by the stock-granting ESOP trust (176,163 shares as of June 30, 2023, and 179,594 shares as of December 31, 2022). The shares of the Company held by the stock-granting ESOP trust are included in the treasury shares deducted in the calculation of the average number of shares outstanding during each period (six months) (177,747 shares for the six months ended June 30, 2023, and 184,438 shares for the six months ended June 30, 2022).

  • This financial summary is not subject to the statutory quarterly review by a certified public accountant or an audit corporation. This financial summary is not subject to the statutory quarterly review by a certified public accountant or an audit corporation, and the review of the quarterly consolidated financial statements under the Financial Instruments and Exchange Act has not been completed at the time of the disclosure of this financial summary. Therefore, the figures of the financial statements may change.

○ Index for Supplementary Information

1. Qualitative Information Regarding Results of Operations for the First Six Months Ended June 30, 2023

2

(1)

Explanation Regarding Results of Operations

2

(2)

Explanation Regarding Forecast for Fiscal Year Ending December 31, 2023

3

2. Quarterly Consolidated Financial Statements and Key Notes

4

(1)

Quarterly Consolidated Balance Sheet

4

(2)

Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive Income

6

Quarterly Consolidated Statement of Income

First six-month period

6

Quarterly Consolidated Statement of Comprehensive Income

First six-month period

7

(3)

Notes to Quarterly Consolidated Financial Statements

8

Note to going concern assumptions

8

Note to significant changes in shareholders' equity

8

Application of particular accounts procedures to the preparation of quarterly consolidated financial statements

8

Changes in accounting policies

8

Additional information

9

Segment information

10

Significant events after the reporting period

11

-1-

1. Qualitative Information Regarding Results of Operations for the First Six Months Ended June 30, 2023

  1. Explanation Regarding Results of Operations
    During the first six months of the fiscal year under review (January 1, 2023 to June 30, 2023), the Japanese economy remained unpredictable due to concerns about an economic downturn caused by global monetary tightening and rising prices, despite the easing of restrictions associated with COVID-19 and moves toward the normalization of economic activities.
    In the Japanese construction industry, where the Okabe Group's core customers operate, private investment continued to pick up, but the environment remained challenging due to soaring labor costs caused by a chronic shortage of construction workers, continued high steel material prices, and prolonged high electricity and fuel costs.
    In this business environment, the Okabe Group strove to achieve the sustainable growth of the Company and enhance corporate value, focusing on SDG-based management, including decarbonization, use of digital transformation, and acceleration of globalization, which are initiatives set out in the medium-term management plan, NEXT100-PHASE2.1, of which the final year is the year ending December 31, 2024.
    Results of operations by business segment are as follows:
    1. Construction-relatedproducts
      Sales of temporary building and formwork products, civil engineering products and building structural products marketed under the house brand were buoyant, chiefly as a result of the proper incorporation of rising costs into prices, the appropriate response to demand for products used for the prevention of landslide disasters and a focus on capturing demand from redevelopment projects in the Tokyo Metropolitan area.
      Sales of building products and materials (overseas) increased due to the effect of the weaker yen on foreign exchange rates, although sales growth of construction materials was sluggish due to the slowdown in the U.S. housing market as a result of interest rate hikes. However, operating profit dropped due to increases in personnel expenses, packing and transportation costs and other factors.
      As a result, sales in the construction-related products segment increased 5.0% year on year, to 30,979 million yen, and operating profit decreased 16.8% year on year, to 1,983 million yen.
    2. Automotive products
      Net sales increased 6.9% year on year, to 5,089 million yen, reflecting the effect of the weaker yen on foreign exchange rates, although sales growth of automotive battery terminal products was sluggish on the back of deteriorating business confidence in the United States. However, operating loss of 51 million yen was posted (compared with an operating loss of 107 million yen for the same period of the previous year) chiefly due to a fall in the gross profit margin associated with a lower factory utilization rate.
    3. Other businesses
      Net sales decreased 2.8% year on year, to 1,952 million yen, mainly due to a decline in large projects in the marine business, although sales of industrial machinery products remained firm. Operating profit decreased 34.4% year on year, to 111 million yen.

Consequently, consolidated net sales for the first six months of the fiscal year under review increased 4.8% year on year, to 38,021 million yen, consolidated operating profit declined 16.5% year on year, to 2,042 million yen, and consolidated ordinary profit decreased 18.8% year on year, to 2,074 million yen. Non-current assets of the business manufacturing and selling battery terminal products in the automotive products business in the United States became subject to impairment due to the severe deterioration of its profitability. Thus, impairment losses of 1,805 million yen were posted as extraordinary losses, resulting in a loss attributable to owners of parent of 116 million yen (profit attributable to owners of parent of 2,137 million yen for the same period in the previous fiscal year).

-2-

(For reference)

Net sales by business segments and product category (consolidated)

(Yen in millions, rounded down)

Previous consolidated

Consolidated first six months

first six months

under review

Change

(Jan. 1, 2022 ‒ Jun. 30, 2022)

(Jan. 1, 2023 ‒ Jun. 30, 2023)

Amount

Proportion

Amount

Proportion

%

%

%

Temporary building

3,311

9.1

3,551

9.3

7.3

and formwork products

Civil engineering

3,442

9.5

3,525

9.3

2.4

products

Construction-

Building structural

9,306

25.7

10,002

26.3

7.5

related

products

Building materials

5,990

16.5

5,957

15.7

(0.5)

products

Subtotal - Japan

22,050

60.8

23,037

60.6

4.5

Building products and

7,447

20.5

7,941

20.9

6.6

materials

Subtotal - overseas

7,447

20.5

7,941

20.9

6.6

Subtotal - segment

29,497

81.3

30,979

81.5

5.0

Automotive products

4,762

13.1

5,089

13.4

6.9

Other businesses (Note 2)

2,007

5.6

1,952

5.1

(2.8)

Total

36,267

100.0

38,021

100.0

4.8

(Notes) 1. For information about the main operations of each business segment, please refer to "Segment information" on page 10.

  1. 2. Other businesses include those for diversification that do not form part of the Company's core businesses, i.e., construction- related products and automotive products. This segment includes, among other things, the manufacture and sale of marine materials, the manufacture and sale of fishing sinkers in the United States, and the manufacture and sale of industrial machinery products.

  2. Explanation Regarding Forecast for Fiscal Year Ending December 31, 2023
    Revision to the consolidated financial results forecast for the fiscal year ending December 31, 2023 (January 1, 2023 to December 31, 2023)

Profit attributable

Net sales

Operating profit

Ordinary profit

to owners of

Profit per share

parent

Million yen

Million yen

Million yen

Million yen

Yen

Previous forecast (A)

79,300

4,100

4,200

2,320

50.12

Revised forecast (B)

79,300

4,100

4,200

950

20.52

Change (B - A)

0

0

0

(1,370)

Change (%)

0.0

0.0

0.0

(59.1)

(Reference) Results of previous

fiscal year (full year ended

76,854

5,271

5,471

3,848

81.30

December 2022)

The forecasts for net sales, operating profit and ordinary profit have not been changed from the consolidated financial results forecast for the fiscal year ending December 31, 2023 announced on June 22, 2023. However, profit attributable to owners of parent is now expected to fall substantially below the initial forecast as a result of the posting of extraordinary losses. For details, please refer to "Notice on Recording of Extraordinary Losses, Difference between Consolidated Financial Results Forecast and Results for the First Six Months of Fiscal Year Ending December 31, 2023 and Revision of Consolidated Financial Results Forecast for the Fiscal Year Ending December 31, 2023" announced on the same date.

-3-

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OKABE Co. Ltd. published this content on 28 July 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 August 2023 06:04:36 UTC.