Summary of Consolidated Financial Results

For the Fiscal Year Ended March 2023 [Japan GAAP]

Name of Company:

SPK CORPORATION

Stock Code:

7466

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

Stock Exchange Listing:

Tokyo Stock Exchange, Prime Market

Representative

Title: President and Representative Director

Contact Person

Title: Senior Managing Director and General Manager of

Administration Division

Phone:

+81-(0)6-6454-2002

Date of regular general meeting of shareholders:

June 22, 2023 (tentative)

Date of commencement of dividend payment:

May 31, 2023 (tentative)

Date of filing of securities report:

June 22, 2023 (tentative)

Supplementary explanatory documents:

Yes

Earnings presentation:

Yes

May 2, 2023

Name: Kyoichiro Oki

Name: Shuji Fujii

(Yen in millions, rounded down)

1. Financial results for the current fiscal year (April 1, 2022 - March 31, 2023)

  1. Result of Operations (Consolidated)

(Percentage figures represent year on year changes)

Profit attributable

Net sales

Operating profit

Ordinary profit

to owners of

parent

Million yen

%

Million yen

%

Million yen

%

Million yen

%

Fiscal year ended March 2023

54,695

14.7

2,720

33.7

2,910

27.3

2,059

26.7

Fiscal year ended March 2022

47,686

13.8

2,034

(0.4)

2,287

12.0

1,625

17.5

Note: Comprehensive income:

FY3/23:2,373 million yen [37.0%]

FY3/22: 1,732 million yen

[27.3%]

Earnings per

Earnings per share

Return on

Ratio of ordinary

Ratio of operating

profit to total

share

fully diluted

equity

profit to net sales

assets

Yen

Yen

%

%

%

Fiscal year ended March 2023

205.13

-

9.7

9.0

5.0

Fiscal year ended March 2022

161.84

-

8.3

7.9

4.3

Reference: Equity in earnings of affiliates

FY3/23: -million yen

FY3/22: -million yen

(2) Financial Position (Consolidated)

Total assets

Net assets

Equity ratio

Net assets per share

Million yen

Million yen

%

Yen

As of March 31, 2023

34,351

22,175

64.6

2,208.26

As of March 31, 2022

30,014

20,223

67.4

2,013.91

Reference: Shareholders' equity:

As of Mar. 31, 2023: 22,175 million yen

As of Mar. 31, 2022: 20,223 million yen

(3) Cash flow position (Consolidated)

Net cash provided

Net cash provided

Net cash provided

Cash and cash

by (used in)

by (used in)

by (used in)

equivalents at end

operating activities

investing activities

financing activities

of period

Million yen

Million yen

Million yen

Million yen

Fiscal year ended March 2023

838

(879)

426

6,513

Fiscal year ended March 2022

536

(592)

(1,194)

6,047

2. Dividends

Dividend per share

Annual

Payout ratio

Dividends/

aggregate

net assets

End of

End of

End of

End of

Total

(Consolidated)

1Q

2Q

3Q

FY

amount

(Consolidated)

Yen

Yen

Yen

Yen

Yen

Million yen

%

%

FY3/22

-

18.00

-

22.00

40.00

401

24.7

2.1

FY3/23

-

20.00

-

24.00

44.00

441

21.5

2.1

FY3/24 (forecast)

-

23.00

-

27.00

50.00

23.4

3. Forecast for the fiscal year ending March 2024 (Consolidated, April 1, 2023 - March 31, 2024)

(Percentage figures represent year on year changes)

Net sales

Operating profit

Ordinary profit

Profit attributable to

Earnings per

owners of parent

share

Million yen

%

Million yen

%

Million yen

%

Million yen

%

Yen

First half

28,800

11.8

1,320

25.7

1,410

19.0

1,010

23.6

100.58

Full year

60,000

9.7

2,750

1.1

2,950

1.3

2,150

4.4

214.10

  • Notes
    1. Changes in significant subsidiaries (Changes in specific subsidiaries accompanied by changes in the scope of consolidation): None
    2. Changes in accounting principles and estimates, and retrospective restatement
      1. Changes due to revision of accounting standards: Yes
      2. Changes other than in (a): None
      3. Changes in accounting estimates: None
      4. Retrospective restatement: None

Note: For more information, please see "3. Consolidated Financial Statements and Important Notes, (5) Notes to consolidated financial statements, Change in accounting policy", on page 12 of Supplementary Information.

(3) Number of shares outstanding (common stock)

(a) Shares outstanding (including treasury shares)

End of FY3/23:

10,453,800

End of FY3/22:

10,453,800

(b) Treasury shares

End of FY3/23:

411,712

End of FY3/22:

411,712

(c) Average number of shares outstanding during the year

FY3/23:

10,042,088

FY3/22:

10,042,088

(Reference) Non-consolidated Financial Results

Financial results for the fiscal year ended March 2023 (April 1, 2022 - March 31, 2023)

(1) Result of operations (Non-consolidated)

(Percentage figures represent year on year changes)

Net sales

Operating profit

Ordinary profit

Profit

Million yen

%

Million yen

%

Million yen

%

Million yen

%

Fiscal year ended March 2023

43,170

9.0

1,425

6.6

1,720

6.4

1,253

9.6

Fiscal year ended March 2022

39,603

10.9

1,336

(10.4)

1,616

(23.2)

1,143

(29.9)

Earnings per share

Earnings per share fully diluted

Yen

Yen

Fiscal year ended March 2023

124.80

-

Fiscal year ended March 2022

113.86

-

(2) Financial Position (Non-consolidated)

Total assets

Net assets

Equity ratio

Net assets per share

Million yen

Million yen

%

Yen

As of March 31, 2023

26,450

17,948

67.9

1,787.31

As of March 31, 2022

23,960

17,114

71.4

1,704.27

Reference: Shareholders' equity

As of March 31, 2023:

17,948 million yen

As of March 31, 2022:

17,114 million yen

  • This report is exempt from the audit procedure by certified public accountants or accounting firms.
  • Cautionary statement regarding forecasts of operating results and special notes
    Forward-looking statements in these materials are based on information available to management at the time this report was prepared and assumptions that management believes are reasonable. Actual results may differ significantly from these statements for a number of reasons. For information about the forecasts, please see "1. Results of Operations (4) Outlook" on page 4 of Supplementary Information.

Index for Supplementary Information

1.

Results of Operations

2

(1)

Overview on consolidated business performance

2

(2)

Financial condition

3

(3)

Cash flows

3

(4)

Outlook

4

(5)

Basic policy concerning distribution of profit and dividends for the current and the next fiscal years

4

2.

Basic Position Concerning Selection of Accounting Standards

4

3.

Consolidated Financial Statements and Important Notes

5

(1)

Consolidated balance sheet

5

(2)

Consolidated statements of income and comprehensive income

7

(Consolidated statement of income)

7

(Consolidated statement of comprehensive income)

8

(3)

Consolidated statement of changes in equity

9

(4)

Consolidated statement of cash flows

11

(5)

Notes to consolidated financial statements

12

(Notes on going concern assumptions)

12

(Change in accounting policy)

12

(Business combination)

12

(Segment information, etc.)

13

(Per share information)

16

(Significant subsequent events)

16

1

1. Results of Operations

  1. Overview on consolidated business performance

(i) Result of operations (Consolidated)

(Million yen)

Fiscal year ended

Fiscal year ended

Year-on-year (%)

March 31, 2023

March 31, 2022

Net sales

54,695

47,686

114.7

Operating profit

2,720

2,034

133.7

Ordinary profit

2,910

2,287

127.3

Profit attributable to owners of parent

2,059

1,625

126.7

(ii) Net sales (Consolidated)

(Million yen)

Fiscal year ended

Fiscal year ended

Year-on-year (%)

March 31, 2023

March 31, 2022

Domestic Sales Division

27,287

24,835

109.9

Overseas Business Division

18,195

14,768

123.2

Machinery Equipment Division

6,001

5,410

110.9

CUSPA Division

3,210

2,672

120.1

Total

54,695

47,686

114.7

During the current fiscal year, Japanese economy slowly began to show signs of recovery amid the high level of the inflation and monetary tightening all over the world. However, under the circumstances living with the COVID- 19, we will need to closely monitor the downside risks to the world economy caused by geopolitical risks, increasing prices and supply-side restrictions, fluctuations in the financial markets. On the other hand, although we partly had to face a hard battle because of higher input costs due to rapid depreciation of the yen and soaring raw materials, as well as higher transportation costs, our business performance has been steady in general since the second half of the current fiscal year, thanks to strong exports and the steadily realized positive impacts of sales price revisions.

Fiscal year sales of the SPK Group (SPK and its consolidated subsidiaries) were 54,695 million yen, up 14.7% from one year earlier. Ordinary profit increased 27.3% to 2,910 million yen and profit attributable to owners of parent increased 26.7% to 2,059 million yen.

Business segment performance was as follows.

(Domestic Sales Division)

Although we faced lingering impacts from higher input costs due to globally soaring raw material prices and supply shortages as well as higher transportation costs, our performance has been firm thanks to the revisions of sales prices all over the supply chain. Furthermore, demand for repair parts increased because of the longer ages of service of automobiles as a result of lingering shortages of new cars. The result was a 9.9% increase in net sales to 27,287 million yen. Although it is still difficult to forecast the global economic and political dynamics, we will continue work with our suppliers to prioritize the stable supply of spare parts. In addition, we will work on building the value chain by increasing synergies through strengthening our alignment with our suppliers and group companies, as well as aggressively working on the development of our branded products and sales of new products.

(Overseas Business Division)

Orders of this division were lower than the last year, mainly because orders have slowed in some parts of Asia, Middle and Near East and Africa, and Latin America. On the other hand, we were able to maintain the sales as the same level as the last year, because shipment to Middle and Near East has increased where the exports had been suspended temporarily due to the foreign currency shortages. However, order backlog is still on the rise because the lengthened delivery time by the suppliers has not been improved. Furthermore, suppliers continue to raise prices, which is a source of concern for the future orders. We will timely take necessary measures with resuming overseas business trips in addition to ongoing online meetings in order to cooperate with overseas key customers more closely. Our sales at overseas subsidiaries were steady and sales hit the record high. The result was a 23.2% increase in sales to 18,195 million yen.

(Machinery Equipment Division)

In this division, while productions at construction equipment, agricultural machinery and industrial vehicle companies, our main customers, were unstable because of the difficulty in components procurements and higher material and component costs, productions at our customers were recovering against a backdrop of order backlogs lingering from the last year. The result was a 10.9% increase in sales to 6,001 million yen. We will continue to contribute to decarbonation and autonomous driving society by working on product developments for electrification and advanced operation support system while keeping the stable procurement with close

2

cooperation with our clients, in order to meet the increasing demand from the market and customers for the higher environmental and safety performance.

(CUSPA Division)

Although impacts on our main products remain from component shortages mainly for the semiconductors, globally soaring raw material prices and soaring product prices due to the weaker yen, our continuous focus on our brand, as well as brands and merchandise which boast competitive strength through our total imports rights and sole agency rights contributed to the sales. In addition, we promoted "Manufacturing and Kotozukuri (making things happen) starting from Motor Sports" including cooperation with Daihatsu Motor around motor sports and maintaining the partnership agreement with TOYOTA Gazoo Racing of Toyota Motor. The result was a 20.1% increase in sales to 3,210 million yen.

  1. Financial condition
    (Assets)
    Current assets were 27,676 million yen at the end of the current fiscal year, 3,576 million yen more from the end of the previous fiscal year. This was mainly due to increases of 466 million yen in cash and deposits, 964 million yen in notes and accounts receivable-trade and 1,908 million yen in inventories. Non-current assets increased 760 million yen to 6,675 million yen. This was mainly due to increases of 373 million yen in construction in progress.
    As a result, total assets were 34,351 million yen at the end of the fiscal year, 4,337 million yen more than at the end of the previous fiscal year.
    (Liabilities)
    Current liabilities increased 1,830 million yen to 9,750 million yen. This was mainly due to an increase of 353 million yen in notes and accounts payable-trade, 249 million yen in short-term borrowings and 333 million yen in current portion of long-term borrowings. Non-current liabilities increased 554 million yen to 2,425 million yen. This was mainly due to increase of 502 million yen in long-term borrowings.
    As a result, total liabilities increased 2,385 million yen to 12,176 million yen.
    (Net assets)
    Net assets increased 1,951 million yen to 22,175 million yen. The increase was primarily the net result of profit attributable to owners of parent of 2,059 million yen and dividends of surplus of 421 million yen.
    As a result, the equity ratio was 64.6% compared with 67.4% one year earlier.
  2. Cash flows
    Cash and cash equivalents increased 466 million yen from the beginning of the current fiscal year to 6,513 million yen at the end of the fiscal year compared with a 1,207 million yen decrease in the previous fiscal year. The factors affecting each category of cash flows are explained below.
    (Operating activities)
    Net cash provided by operating activities was 838 million yen compared with 536 million yen provided in the previous fiscal year. Major components were profit before income taxes of 2,968 million yen, increase in inventories of 1,639 million yen, increase in notes and accounts payable - trade of 307 million yen and income taxes paid of 763 million yen.
    (Investing activities)
    Net cash used in investing activities was 879 million yen compared with 592 million yen used in the previous fiscal year. The main components were 509 million yen for purchase of property, plant and equipment, 168 million yen for purchase of intangible assets and 274 million yen for loan advances.
    (Financing activities)
    Net cash provided in financing activities was 426 million yen compared with 1,194 million yen used in the previous fiscal year. This was mainly attributable to proceeds from long-term borrowings of 1.3 billion yen, repayments of long-term borrowings of 464 million yen and dividends paid of 421 million yen.
    Cash flow indicators

FY 3/22

FY 3/23

Equity ratio (%)

67.4

64.6

Market capital equity ratio (%)

44.7

50.6

Debt to cash flow ratio (%)

493.4

458.2

Interest coverage ratio (times)

39.6

42.4

Notes: Equity ratio = Shareholders' equity/Total assets

Market capital equity ratio = Market capitalization/Total assets

Debt to cash flow ratio = Interest-bearing debt/Cash flows

Interest coverage ratio = Cash flows/Interest expenses

  1. All figures are calculated based on consolidated financial data.
  2. Market capitalization uses the number of shares outstanding less treasury shares.
  3. Cash flows are operating cash flows.

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SPK Corporation published this content on 02 May 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 May 2023 07:29:09 UTC.