Consolidated Financial Results

First Three Quarters of the Fiscal Year Ending March 2023

(April 1-December 31, 2022)

February 8, 2023

Listed Company Name: Rinnai Corporation

Listings: Prime Market of Tokyo Stock Exchange, and Premier Market of Nagoya Stock Exchange

(Securities Code: 5947)

Website: https://www.rinnai.co.jp

Representative: Hiroyasu Naito, President

Contact: Takuya Ogawa, Senior Executive Officer, General Manager of Corporate Planning Headquarters

TEL: +81 (52) 361-8211

Scheduled date for release of quarterly securities report: February 8, 2023

Anticipated date to begin distributing dividends: ―

Supplemental information sheets of quarterly results: Yes

Information meeting of quarterly results: None

I. Performance in the First Three Quarters of the Fiscal Year Ending March 31, 2023

(April 1-December 31, 2022; amounts less than one million yen are omitted)

(1) Consolidated Operating Results

(¥ millions; %)

Net income

Net Sales

Operating Income

Ordinary Income

attributable to

owners of the

(% change)

(% change)

(% change)

parent company

(% change)

Three Quarters to Dec. 2022

¥314,093 [+14.7%]

¥33,688

[+20.1%]

¥36,487

[+20.0%]

¥21,423

[+16.7%]

Three Quarters to Dec. 2021

273,763 [+11.5%]

28,042

[+0.9%]

30,409

[+5.3%]

18,365

[-5.0%]

(Reference)

Comprehensive Income: First three quarters of the year ending March 31, 2023; ¥47,343 million (+77.1%) First three quarters of the year ended March 31, 2022; ¥26,731 million (+46.8%)

(¥)

Net Income

Fully Diluted Net

per Share

Income per Share

Three Quarters to Dec. 2022

¥434.72

-

Three Quarters to Dec. 2021

362.29

-

Note: Percentage figures in net sales, operating income, ordinary income and net income columns indicate increase or decrease from the previous term.

(2) Consolidated Financial Position

(¥ millions; %)

Total Assets

Net Assets

Equity Ratio (%)

December 31, 2022

¥556,069

¥407,722

65.3%

March 31, 2022

512,867

378,856

66.9

(Reference) Equity capital: Three quarters of the year ending March 31, 2023; ¥363,017 million Year ended March 31, 2022; ¥343,120 million

II. Dividends

Dividend per Share

(Basis date)

1st Quarter

Interim

3rd Quarter

Fiscal Year-End

Full Year

(¥)

(¥)

(¥)

(¥)

(¥)

March 2022

-

¥70.00

-

¥70.00

¥140.00

March 2023

-

75.00

-

March 2023

75.00

150.00

(anticipated)

Note: Revision of dividend forecast in period under review: None

1

III. Forecast for the Fiscal Year Ending March 31, 2023 (Consolidated)

(April 1, 2022, to March 31, 2023)

(¥ millions/%)

Net income

Operating

Ordinary

attributable to

Net Income

Net Sales

owners of the

per Share

Income

Income

parent

(¥)

company

Full year

¥425,000 [+16.1%]

¥44,000 [+22.7%]

¥48,500 [+24.2%]

¥29,500 [+24.2%]

¥599.97

Note: Percentage figures in parentheses indicate increase or decrease from the previous fiscal year.

Note: Changes in performance forecasts since most recent announcement: None

* Notes

  1. Changes in scope of consolidation of major subsidiaries during the period: None

Newly included - (Company name: -): Excluded - (Company name: -)

  1. Application of special accounting method for quarterly consolidated financial reporting: None
  2. Changes in accounting policies; changes in accounting estimates; retrospective restatement
  1. Changes due to revision of accounting standard: Yes
  2. Other changes than (a): None
  3. Changes in the rules for the accounting estimates: None
  4. Retrospective restatement: None

Note: For more information, please refer to "2. Consolidated Financial Statements and Main Notes,

  1. Notes to Quarterly Consolidated Financial Statements (Changes in accounting policies) on page 9 of this report.
  2. Number of Outstanding Shares (Common Stock)
  1. Number of outstanding shares at term-end (including treasury stock) December 31, 2022: 50,021,057 shares

March 31, 2022: 50,021,057 shares

  1. Number of treasury stock shares at term-end

December 31, 2022: 1,225,483 shares

March 31, 2022: 219,577 shares

(c) Average number of shares during the term

First three quarters of the fiscal year ending March 2023: 49,281,699 shares

First three quarters of the fiscal year ended March 2022: 50,692,851 shares

  • Implementation status of quarterly review process This report is exempt from a quarterly review process.
  • Note on appropriate use of performance forecasts

Performance forecasts contained in this document are based on information currently available and certain judgments deemed by the Corporation to be reasonable. Actual results may differ significantly from such forecasts due to various factors. For more information, please refer to "1. Consolidated Performance, (3) Explanation about Consolidated Performance Forecasts" on page 4 of this report.

  • Supplemental information sheets of financial results are posted on the Corporation's website on
    Wednesday, February 8, 2023.

2

1. Consolidated Performance

(1) Operating Results

In the first three quarters under review, the global economy continued to face challenging conditions, including rising global prices, supply chain disruptions, the protracted situation in Ukraine, and concerns about an economic downturn, as the spread of COVID-19 became increasingly normalized. In the domestic economy, consumer spending and corporate earnings showed signs of recovery, but sharp exchange rate fluctuations, rising prices of energy and other commodities, and the re- emergence of infectious diseases made the situation unpredictable.

In the domestic housing-related industry, new housing starts weakened, but the household appliance sector remained firm, particularly in the renovation category.

Under these circumstances, the Rinnai Group pursued three key strategies under its medium-term business plan, New ERA 2025: "Advancement in addressing social challenges," "Expansion of business scale," and "Revolution of corporate structure." During the period under review, for example, we launched the 405LP GP Series of built-in dishwashers/dryers with improved convenience, as well as the ECO ONE X5 hybrid water heater with heating system, which helps protect the global environment. The latter received the 2022 Energy Conservation Grand Prize from the Commissioner of the Agency for Natural Resources and Energy. In these and other ways, we made steady progress in fulfilling our promise to our customers ("Creating a healthier way of living") and achieving sustainable and solid long-term growth.

For the period, domestic sales of water heaters were solid as we worked to resolve supply delays, while higher sales of mainstay products, particularly in the United States and China, led to a year-on- year increase in overseas sales. On the earnings side, we posted an increase in operating income due to sales increase and growth in sales of high-value-added products. This was despite soaring raw material prices and distribution costs and higher expenses associated with the commissioning of a new plant in the United States.

As a result, consolidated net sales for the period amounted to ¥314,093 million, up 14.7% from the previous corresponding period. Operating income rose 20.1%, to ¥33,688 million, while ordinary income climbed 20.0%, to ¥36,487 million. Net income attributable to owners of the parent company increased 16.7%, to ¥21,423 million.

Our results by geographical segment were as follows:

Japan

In Japan, sales of mainstay water heaters grew substantially as we worked to strengthen our production system to eliminate supply delays. Despite soaring raw material prices and distribution costs, we posted increased sales of mainstay products with new functions and benefited from the weaker yen. As a result, sales in Japan rose 14.6%, to ¥148,049 million, and operating income jumped 53.1%, to ¥20,652 million.

United States

In the United States, sales rose 27.1%, to ¥42,280 million, thanks to an increase in the supply of tankless water heaters from Japan and higher local sales of water heaters following the commissioning of a new plant. However, these factors did not fully compensate for higher expenses and logistics costs associated with that plant. Consequently, we reported an operating loss of ¥252 million.

Australia

Sales in Australia increased 4.8%, to ¥20,958 million, due to a gradual recovery in the supply of tankless water heaters and heaters from Japan. This was despite tight parts procurement conditions and the impact of exchange rates. However, a decrease in sales of mainstay products resulting from supply delays, as well as soaring raw material prices and logistics costs, led to a 50.1% fall in operating income, to ¥881 million.

China

In China, we benefited from a rebound in production and sales activities following the lifting of lockdowns in Shanghai related to COVID-19, as well as growth in sales of high-value-added products, such as gas water heaters with built-inquick-heating units. Accordingly, sales in China, increased 13.4% to ¥45,195 million, and operating income jumped 73.6% to ¥8,355 million.

3

South Korea

In South Korea, weakening market sentiment due to rising prices and interest rates, as well as a decrease in government subsidies, led to a decline in sales of mainstay boilers. Consequently, sales in South Korea edged down 0.7%, to ¥22,667 million, and operating income slipped 0.4%, to ¥895 million.

Indonesia

Despite weak sales of mainstay tabletop stoves, sales of built-in hobs (stovetops) and range hoods increased on the back of sales promotion activities and an expanded product lineup. As a result, sales in Indonesia increased 22.4% to ¥12.6 billion. Due to soaring raw material prices, however, operating income declined 22.2%, to ¥1,682 million.

(For references 1) Sales Composition by Business Segment

(¥ millions; %)

Three Quarters to

Three Quarters to

Change

Year to

Dec. 31, 2021

Dec. 31, 2022

March 31, 2022

Amount

% of

Amount

% of

Amount

%

Amount

% of

total

total

total

Water heaters

¥157,145

57.4%

¥185,856

59.2%

¥28,711

18.3%

¥211,026

57.6%

Kitchen appliances

64,547

23.6

70,104

22.3

5,557

8.6

85,531

23.4

Air conditioning

16,790

6.1

17,854

5.7

1,064

6.3

21,109

5.8

appliances

Commercial-use

6,572

2.4

7,884

2.5

1,312

20.0

9,007

2.5

equipment

Others

28,708

10.5

32,391

10.3

3,683

12.8

39,509

10.8

Total

¥273,763

100.0%

¥314,093

100.0%

¥40,329

14.7%

¥366,185

100.0%

(For references 2) Overseas Sales

(¥ millions; %)

Three Quarters to

Three Quarters to

Dec. 31, 2021

Dec. 31, 2022

Asia

Others

Total

Asia

Others

Total

I. Overseas sales

¥86,686

¥65,783

¥152,469

¥96,922

¥76,584

¥173,506

II. Consolidated net sales

-

-

273,763

-

-

314,093

III. Composition ratio of

overseas sales to

31.7%

24.0%

55.7%

30.9%

24.4%

55.2%

consolidated net sales

Note: Above indicates sales of the Corporation and consolidated subsidiaries in overseas countries or regions.

(2) Financial Position

As of December 31, 2022, Rinnai had total assets of ¥556,069 million, up ¥43,202 million from March 31, 2022. Total liabilities increased ¥14,337 million, to ¥148,347 million. Net assets were up ¥28,865million, to ¥407,722 million. The equity ratio at the end of the period was 65.3%.

(3) Explanation about Consolidated Performance Forecasts

Rinnai has not changed its forecasts for the full-year period ending March 31, 2023. (Those forecasts were released on November 4, 2022.)

4

2. Consolidated Financial Statements

(1) Consolidated Balance Sheets

(¥ millions)

At March 31, 2022

At December 31, 2022

(Three Quarters of

(Fiscal 2022)

Fiscal 2023)

ASSETS:

Current assets

Cash and deposits

¥173,235

¥161,806

Notes and accounts receivable, and

contract assets

75,596

87,322

Electronically recorded monetary claims

7,641

11,979

Marketable securities

12,250

7,626

Products

36,078

50,101

Raw materials and stores

28,548

39,537

Other

4,698

6,688

Less allowance for doubtful accounts

(4,093)

(6,067)

Total current assets

333,956

358,995

Fixed assets

Property, plant and equipment

100,598

112,574

Intangible fixed assets

3,792

3,897

Investments and advances

Investments in securities

44,620

48,269

Other

30,053

32,490

Less allowance for doubtful accounts

(153)

(158)

Total investments and advances

74,520

80,601

Total fixed assets

178,910

197,074

Total assets

¥512,867

¥556,069

5

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Rinnai Corporation published this content on 08 February 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 February 2023 10:59:04 UTC.