Organo : Consolidated Financial Results for the First Six Months of the Fiscal Year Ending March 31, 2023 188KB

DISCLAIMER: This translation may be used for reference purposes only. This English version is not an official translation of the original Japanese document. In cases where any differences occur between the English version and the original Japanese version, the Japanese version shall prevail. This translation is subject to change without notice.

Consolidated Financial Results for the First Six Months of

the Fiscal Year Ending March 31, 2023

	October 31, 2022
Company name:	ORGANO CORPORATION
Listing:	Tokyo Stock Exchange
Securities code:	6368
URL:	https://www.organo.co.jp/english/
Representative:	Masayuki Yamada, Representative Director and President
Inquiries:	Shigeru Sonobe, General Manager of Accounting Dept., Corporate Management and
	Planning
TEL:	[phone]

Scheduled date to file quarterly securities report:	November 9, 2022
Scheduled date to commence dividend payments:	December 5, 2022
Preparation of supplementary material on quarterly financial results: Yes
Holding of quarterly financial results presentation meeting:	Yes (for institutional investors and
	analysts)

(Millions of yen with fractional amounts discarded, unless otherwise noted)

1. Consolidated financial results for the first six months of the fiscal year ending March 31, 2023 (from April 1, 2022 to September 30, 2022)

(1) Consolidated operating results (cumulative)		(Percentages indicate year-on-year changes.)
			Net sales	Operating profit	Ordinary profit		Profit attributable to
				owners of parent
	Six months ended	Millions of yen	%	Millions of yen		%	Millions of yen	%		Millions of yen	%
	September 30, 2022	62,117	24.2	6,510		72.6	7,451	77.7		5,027	86.4
	September 30, 2021	50,001	10.3	3,771		18.5	4,193	28.0		2,696	29.6
	Note:	Comprehensive	income: Six months ended September 30, 2022	¥6,231 million [93.5%]
			Six months ended September 30, 2021	¥3,220 million [55.4%]
			Basic earnings	Diluted earnings
			per share	per share
	Six months ended		Yen			Yen
	September 30, 2022		109.67			-
	September 30, 2021		58.70			-

The Company conducted a 4-for-1 common share split effective as of October 1, 2022. Basic earnings per share are calculated on the assumption that said share split was conducted at the beginning of the previous fiscal year.

(2) Consolidated financial position

		Total assets		Net assets	Equity-to-asset ratio
	As of	Millions of yen		Millions of yen	%
	September 30, 2022	143,400		81,346	56.6
	March 31, 2022	130,506		76,004	58.1
	(Reference) Equity: As of September 30, 2022 ¥81,145 million	As of March 31, 2022	¥75,836 million

2. Cash dividends

				Annual dividends per share
			First quarter-end	Second quarter-end	Third quarter-end	Fiscal year-end	Total
			Yen	Yen	Yen	Yen	Yen
	Fiscal year ended	-	72.00	-	88.00	160.00
	March 31, 2022
	Fiscal year ending	-	116.00
	March 31, 2023
	Fiscal year ending			-	29.00	-
	March 31, 2023
	(Forecast)
	Note:	Revisions to the forecast of cash	dividends most recently	announced: None

The Company conducted a 4-for-1 common share split effective as of October 1, 2022. The year-end dividend per share for the fiscal year ending March 31, 2023 (forecast) stated taking into account the effect of such share split, and the total annual dividend is stated as "-." The year-end dividend per share for the fiscal year ending March 31, 2023 (forecast) that does not take the share split into account is ¥116, and the annual total of dividends per share is ¥232.

3. Consolidated earnings forecasts for the fiscal year ending March 31, 2023 (from April 1, 2022 to March 31, 2023)

(Percentages indicate year-on-year changes.)

Net sales

Operating profit

Ordinary profit

Profit attributable to

Basic

earnings

owners of parent

per share

Millions

%

Millions

%

Millions

%

Millions

%

Yen

of yen

of yen

of yen

of yen

Fiscal year ending

140,000

24.9

14,500

33.6

15,200

31.6

11,500

24.9

250.86

March 31, 2023

Note:

Revisions to the earnings forecasts most recently announced: None

Basic earnings per share in the consolidated earnings forecasts for the fiscal year ending March 31, 2023 take into account the effect of the share split. The forecast for basic earnings per share that does not take the share split into account is ¥1,003.44.

* Notes

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of consolidation): None
2. Application of specific accounting for preparing the quarterly consolidated financial statements: Yes

Note:	For more details, please refer to "Application of special accounting for preparing the quarterly consolidated
	financial statements" on page 11 of the attached material.

1. Changes in accounting policies, changes in accounting estimates, and restatement
2. 1. Changes in accounting policies due to revisions to accounting standards and other regulations: None
   2. Changes in accounting policies due to other reasons: None
   3. Changes in accounting estimates: None
   4. Restatement: None
3. Number of issued shares (common shares)
4. 1. Total number of issued shares at the end of the period (including treasury shares)

As of September 30, 2022	46,359,700 shares
As of March 31, 2022	46,359,700 shares

b. Number of treasury shares at the end of the period

As of September 30, 2022	470,720 shares
As of March 31, 2022	541,020 shares

1. Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year)

For the six months ended September 30, 2022	45,842,128 shares
For the six months ended September 30, 2021	45,938,568 shares

Notes:

1. The Company conducted a 4-for-1 common share split effective as of October 1, 2022. Total number of issued shares at the end of the period, number of treasury shares at the end of the period, and average number of shares outstanding during the period are calculated on the assumption that said share split was conducted at the beginning of the previous fiscal year.
2. The Company has introduced an Officer Share Delivery Trust, and shares of the Company held by the Trust have been included in treasury shares excluded from the calculation of the number of treasury shares at the end of the period and the average number of shares outstanding during the period (cumulative from the beginning of the fiscal year).

* Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation.

* Proper use of earnings forecasts, and other special matters (Caution regarding forward-looking statements and others)

The forward-looking statements, including earnings forecasts, contained in these materials are based on information currently available to the Company and on certain assumptions deemed to be reasonable. Consequently, any statements herein do not constitute assurances regarding actual results by the Company. Actual business and other results may differ substantially due to various factors. Please refer to "(3) Explanation regarding consolidated earnings forecasts and other forward-looking statements" in "1. Qualitative information regarding financial results for the first six months" on page 4 of the attached material for the suppositions that form the assumptions for earnings forecasts and cautions concerning the use thereof.

Attached Material
	Index
1. Qualitative information regarding financial results for the first six months......................................	2
(1)	Explanation regarding operating results..........................................................................................	2
(2)	Explanation regarding financial position .........................................................................................	3
(3)	Explanation regarding consolidated earnings forecasts and other forward-looking statements 4
2. Quarterly consolidated financial statements and significant notes thereto ........................................	5
(1)	Consolidated balance sheet ................................................................................................................	5
(2)	Consolidated statement of income and consolidated statement of comprehensive income..........	7
	Consolidated statement of income (cumulative) ..............................................................................	7
	Consolidated statement of comprehensive income (cumulative)....................................................	8
(3)	Consolidated statement of cash flows ...............................................................................................	9
(4)	Notes to quarterly consolidated financial statements....................................................................	11
	Notes on premise of going concern..................................................................................................	11
	Notes on substantial changes in the amount of shareholders' equity...........................................	11
	Application of special accounting for preparing the quarterly consolidated financial statements
	............................................................................................................................................................	11
	Additional information ....................................................................................................................	11
	Segment information, etc. ................................................................................................................	12
	Significant subsequent events ..........................................................................................................	13

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1. Qualitative information regarding financial results for the first six months

1. Explanation regarding operating results
   During the six months ended September 30, 2022 (from April 1, 2022 to September 30, 2022), although the trend in the global economy was one of moderate recovery, the surge in worldwide inflation originating in energy and food prices, and concerns about slowing business conditions in the US, Europe, and China, due to the impact of monetary tightening among other factors, led to an intensifying sense of uncertainty regarding the outlook.
   With regard to the environment in which the Organo Group operates, our main market of electronics saw a deterioration in conditions for semiconductor memory against a backdrop of slowing demand for smartphones, PCs and others, and there are signs that some customers are reducing production and investment. However, investment in cutting-edge fields where semiconductor miniaturization is being driven by competition, and in wafers and legacy semiconductors, remained at high levels. The general industry field trended toward recovery, as seen in the execution of capital investment plans that had been postponed due to the COVID-19 pandemic, and the social infrastructure field, such as electric power/water supply and sewage, remained strong.
   Under these conditions, the Organo Group proceeded to draw in orders and make deliveries for large- scale projects in Japan and overseas, while establishing supply chains and delivery frameworks in each country, and promoting a shift to digitalization such as of engineering operations and service solutions. We also engaged in initiatives to enhance R&D systems in such areas as next-generation ultrapure water systems and new separation and purification technologies, and to strengthen governance such as by developing risk management systems.
   As a result, in the Group's financial results for the six months ended September 30, 2022, orders received increased by 32.8% year on year to ¥78,230 million, net sales increased by 24.2% to ¥62,117 million, operating profit increased by 72.6% to ¥6,510 million, ordinary profit increased by 77.7% to ¥7,451 million, profit attributable to owners of parent increased by 86.4% to ¥5,027 million, and our carry-over balance for order backlog as of September 30, 2022 was up 52.3% to ¥107,461 million, which were all record highs for the first six months.
   Results by segment are as follows.
   [Water Treatment Engineering Business Unit]
   ■Orders received
   Orders received increased 38.7% year on year to ¥67,964 million. In the mainstay electronics field, the Organo Group succeeded in capturing orders for large-scale projects in Japan, such as semiconductors and wafers, while investment in cutting-edge semiconductors and other areas in Taiwan also remained at high levels. There were also investments in major semiconductor projects in China and in successive major projects in Malaysia, including legacy semiconductors. As a result, orders received expanded significantly year on year. In the general industry field, there was a recovery in capital investment in areas related to the pharmaceutical and electronics industries. The field of social infrastructure, which includes electric power/water supply and sewage, recorded a year-on-year decline to the presence in the previous fiscal year of a major order for a water supply/sewage project, but firm levels of orders were seen mainly in the Service Solutions Division in Japan.
   ■Net sales
   Net sales increased 29.0% year on year to ¥52,083 million. In the mainstay electronics field, process delays occurred for some projects as a result of supply shortage of raw materials and other problems, primarily in the Plant Division. Nevertheless, sales grew due not only to the order backlog carried over from the previous year but also due to a large number of construction projects undertaken as a result of strong orders continuing in the period under review, the occurrence of translation differences in relation to overseas net sales as a result of the depreciation of the yen, and strength in maintenance, renovation/reconditioning, contracted processing services, etc. of the Service Solutions Division. On the other hand, the aforementioned process delays resulted in delays in the recognition of revenue for certain projects in the general industry field, which caused a slight year-on-year decline in net sales. However,
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