August 15, 2022 | |
To whom it may concern | |
Company Name: | OUTSOURCING Inc. |
Representative: | Haruhiko Doi |
Chairman and CEO | |
(Prime Market of TSE: Securities Code 2427) | |
Contact: | Masashi Umehara |
Director and Executive | |
General Manager in charge | |
of Corporate Management | |
Division | |
Phone: | +81-3-3286-4888 (main) |
Notice Regarding Partial Amendments to the Consolidated Financial Results for the Six Months Ended June 30,
2022 [IFRS] (Consolidated)
OUTSOURCING Inc. (hereinafter the "Company") hereby announces that it has made partial amendments to the Consolidated Financial Results for the Six Months Ended June 30, 2022 [IFRS] (Consolidated), which was announced on August 5, 2022.
Since the numerical data has been amended, the amended numerical data will also be sent.
Particulars
-
Reason for the Amendments
In the account settlement procedure after the announcement of the consolidated financial results for the six months ended June 30, 2022, some of the statements have been amended, so the Company will amend the submitted consolidated financial results for the six months ended June 30, 2022.
The detailed background is as follows: the legal counsel of the SL Group, a consolidated subsidiary in Chile, has confirmed that transactions with the owner, a leasing company, are conducted at a level higher than the market price in June 2022, so it is currently investigating the matter and taking legal action. At present, the Company does not consider it necessary to revise its financial statements with this matter. However, if the Company confirms any events that should be disclosed after the completion of a thorough examination, it will promptly disclose such events. Aside from this, there was an increase in advance payments in the assets of the SL Group. In preparing the financial statements for the second quarter of the fiscal year ending December 31, 2022, some of the increased advance payments had been scrutinized and transferred to other items, including but not limited to software in progress and fixed assets, but some factors behind the increase were unknown due to lack of sufficient evidence, so the Company was confirming the details. In order to evaluate the reliability of the financial statements of the SL Group, the Company analyzed the increases and decreases in the financial statements of the SL Group as a whole, though not for all accounts, and because it was able to confirm the main reasons for the increases and decreases, it disclosed its financial results on August 5, 2022. Thereafter, in the process of the accounting auditor's quarterly review procedures, the Company carefully examined, with a broader scope, the details of each account title based on the above, and as a result, it has been decided that in addition to advance payments, some assets that could not be confirmed as assets, such as accounts receivable that are over 90 days, will be recorded as expenses conservatively. As a result, the figures in the financial statements in the second quarter report will be changed, so the consolidated financial results for the six months ended June 30, 2022 will also be amended. - Amendments
Due to the large number of amendments, the entire text after the amendments will be attached, and the parts that were amended will be underlined.
Disclaimer: This document is a translation of the Japanese original and does not constitute any guarantee. The Company will not compensate for any loss or damage resulting from actions taken based on this document. If there is any discrepancy between the Japanese original and this document, the Japanese original prevails.
Consolidated Financial Results
for the Six Months Ended June 30, 2022
(Under IFRS) | August 5, 2022 | |
Company name: | OUTSOURCING Inc. | Listing: Tokyo Stock Exchange |
Securities code: | 2427 | URL: https://www.outsourcing.co.jp/en/ |
Representative: | Haruhiko Doi, Chairman and CEO | |
Contact: | Masashi Umehara, Director and Executive General Manager in charge of | |
Corporate Management Division | ||
TEL: +81-3-3286-4888 | ||
Scheduled date to file quarterly securities report: | August 15, 2022 | |
Scheduled date to commence dividend payments: | - | |
Preparation of supplementary material on quarterly financial results: | Yes | |
Holding of quarterly financial results briefing: | Yes (for institutional investors) |
(Yen amounts are rounded off to millions, unless otherwise noted.)
1. Consolidated financial results for the six months ended June 30, 2022 (From January 1, 2022 to June 30, 2022) a. Consolidated operating results (Cumulative)
(Percentages indicate | year-on-year changes.) | |||||||||||||||||
Profit attributable to | Total | |||||||||||||||||
Revenue | Operating profit | Profit before tax | Profit | comprehensive | ||||||||||||||
owners of parent | ||||||||||||||||||
income | ||||||||||||||||||
Six months ended | Million yen | % | Million yen | % | Million yen | % | Million yen | % | Million yen | % | Million yen | % | ||||||
June 30, 2022 | 325,132 | 22.9 | 10,910 | (5.4) | 7,644 | (29.5) | 3,891 | (39.4) | 3,898 | (30.6) | 13,920 | 23.5 | ||||||
June 30, 2021 | 264,639 | 53.4 | 11,538 | 159.6 | 10,836 | 244.9 | 6,425 | 343.8 | 5,614 | 327.2 | 11,275 | - | ||||||
Basic earnings | Diluted earnings | |||||||||||||||||
per share | per share | |||||||||||||||||
Six months ended | Yen | Yen | ||||||||||||||||
June 30, 2022 | 30.96 | 30.96 | ||||||||||||||||
June 30, 2022 | 44.58 | 44.58 | ||||||||||||||||
(Note) | Since the | provisional accounting | treatments related to | business combinations were finalized in the third quarter and fourth quarter of the fiscal year |
ended December 31, 2021, as well as in the first quarter ended March 31, 2022, the condensed quarterly consolidated financial statements for the six months ended June 30, 2021, were retrospectively adjusted.
b. Consolidated financial position
Equity attributable to | Ratio of equity | Equity attributable to | |||||
Total assets | Total equity | attributable to owners of | owners of parent per | ||||
owners of parent | |||||||
parent to total assets | share | ||||||
As of | Million yen | Million yen | Million yen | % | Yen | ||
June 30, 2022 | 401,020 | 81,052 | 76,326 | 19.0 | 606.10 | ||
December 31, 2021 | 351,939 | 72,458 | 65,824 | 18.7 | 522.71 | ||
(Note) | Since the | provisional accounting treatments related to business combinations were finalized in the first quarter and the second quarter of the fiscal |
year ending December 31, 2022, the consolidated financial statements for the fiscal year ended December 31, 2021, were retrospectively adjusted.
2. Cash dividends
Annual dividends per share | |||||||
First quarter-end | Second quarter-end | Third quarter-end | Fiscal year-end | Total | |||
Fiscal year ended | Yen | Yen | Yen | Yen | Yen | ||
- | 0.00 | - | 31.00 | 31.00 | |||
December 31, 2021 | |||||||
Fiscal year ending | - | 0.00 | |||||
December 31, 2022 | |||||||
Fiscal year ending | |||||||
December 31, 2022 | - | 45.00 | 45.00 | ||||
(Forecast) | |||||||
(Note) | Revisions | to the forecast of cash dividends most recently announced: None |
3. Forecast of consolidated financial results for the fiscal year ending December 31, 2022 (From January 1, 2022 to December 31, 2022)
(Percentages indicate | year-on-year changes.) | ||||||||||||||
Revenue | Operating profit | Profit before tax | Profit | Profit attributable to | Basic earnings | ||||||||||
owners of parent | per share | ||||||||||||||
Million yen | % | Million yen | % | Million yen | % | Million yen | % | Million yen | % | Yen | |||||
Full year | 695,000 | 22.1 | 32,000 | 33.8 | 29,600 | 152.1 | 19,300 | 856.6 | 18,500 | - | 146.93 | ||||
(Note) | Revisions to the financial results forecast most recently announced: None |
(Notes)
- Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of consolidation): None
- Changes in accounting policies and accounting estimates
(a) Changes in accounting policies as required by IFRS: | None |
(b) Changes in accounting policies due to other reasons: | None |
(c) Changes in accounting estimates: | None |
- Number of issued shares (ordinary shares)
- Number of issued shares at the end of the period (including treasury shares)
- Number of treasury shares at the end of the period
- Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year)
As of June 30, 2022 | 125,951,200 | As of December 31, 2021 | 125,926,800 |
As of June 30, 2022 | 23,490 | As of December 31, 2021 | 490 |
Six months ended June 30, | 125,912,457 | Six months ended June 30, | 125,913,451 |
2022 | 2021 |
(Notes)
- This summary of quarterly financial statements is not subject to quarterly review by certified public accountants or an auditing firm.
- Statement regarding the proper use of financial forecasts and other special remarks:
(Cautions concerning forward-looking statements)
The forward-looking statements including financial forecasts in this summary are based on information currently available to OUTSOURCING Inc. (hereinafter, "the Company") and on assumptions believed to be reasonable by the Company. These statements do not guarantee future performance of the Company, and various factors may cause the actual results to differ significantly from the forecasts. For details on the specific assumptions on which the forecasts are based and cautionary statements regarding the use of financial forecasts, please see "1. QUALITATIVE INFORMATION ON QUARTELY FINANCIAL RESULTS, (3) Explanation of Forecasts Including the Consolidated Financial Results Forecasts" on page 5 of the attached documents.
Table of Contents for the Attached Documents
1. QUALITATIVE INFORMATION ON QUARTERLY FINANCIAL RESULTS............................................... | ||
Overview of Consolidated Operating Results ......................................................................................... | ||
(2) | Overview of Consolidated Financial Position ......................................................................................... | 5 |
(3) | Explanation of Forecasts Including the Consolidated Financial Results Forecasts ..................... | 5 |
2. CONDENSED QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS AND RELATED NOTES . 6
(1) | Condensed Quarterly Consolidated Statement of Financial Position............................................... | 6 |
(2) | Condensed Quarterly Consolidated Statement of Profit or Loss....................................................... | 8 |
(3) | Condensed Quarterly Consolidated Statement of Comprehensive Income ..................................... | 9 |
(4) | Condensed Quarterly Consolidated Statement of Changes in Equity ............................................ | 10 |
(5) | Notes to Condensed Quarterly Consolidated Financial Statements ............................................... | 12 |
[Going Concern Assumption]............................................................................................................................ | 12 | |
[Changes in Significant Subsidiaries]................................................................................................................ | 12 | |
[Segment Information] ..................................................................................................................................... | 12 | |
3. SUPPLEMENTARY INFORMATION ................................................................................................................. | 15 |
1
1. QUALITATIVE INFORMATION ON QUARTERLY FINANCIAL RESULTS
(1) Overview of Consolidated Operating Results
The business environment during the six months ended June 30, 2022 (the "current period"), gradually saw signs of recovery from the devastating impact of the COVID-19 pandemic. However, pervasive uncertainty still remained as myriad events with significant repercussions on international affairs continued, such as new variants of coronaviruses spreading infections, the Ukraine crisis, the tightening of financial conditions, and persistent inflationary pressures.
Although the economy in Japan saw an upward trend despite a falling yen and soaring resource prices, major manufacturers, representing the Company's main customers, were forced to reduce the level of factory operation due to lockdowns in Shanghai as well as prolonged semiconductor shortage and other supply restrictions. Meanwhile, companies in the information technology (IT), construction, and service industries continued to show a strong need for hiring engineers on the back of serious labor shortage. A consistent gain in demand was also evident in the area of system engineering and digital transformation (DX). As a strong demand for implementing systems continued to grow, restructuring activities, such as disposals of companies or businesses, in manufacturing and IT industries also accelerated during the current period.
In response to such business environment in Japan, the OUTSOURCING Group (the "Group") has pursued to reinforce the growth domain by smoothing out earnings. In the manufacturing field, part of the work performed by fixed-term workers are replaced by dispatching workers under a long-term dispatch contract to mitigate the effect of production adjustment. Also, the Group continues to expand a dispatched employee management system, called "Cloud Staffing Management (CSM)," an HR tech service aiming to improve the productivity of customers through digitalizing dispatch management tasks. The Group has now entered into a new phase through a joint project with industry leaders to develop the "Industry Standard Platform," making the system become the de-facto industry standard platform for dispatched employee management. In the auto industry, although the supply chain disruption including semiconductor shortage has tentatively affected the production line, the demand for automobiles remains high and production is expected to catch up. Thus, when looking at the auto industry over a span of one year, the effect on the Group business is expected to ease. In the administrative work outsourcing business for technical intern trainees, the number of foreign workers under management marked 18,660 as of June 30, 2022, which continues to represent the top share in Japan, despite limitations on entering Japan and precarious conditions of inbound flights under the COVID-19 pandemic, thanks to positive feedback from customers for the Group's efficient and appropriate management service. In the engineering field, the Group is promoting "Dispatch 2.0," a business model to improve efficiency and reduce manpower at the same time by combining engineers and technology. Also, the Group has developed a business scheme utilizing KEN School, one of the Group companies specialized in offering training service. KEN School provides training to people with little experience to enable them to work not only in the engineering field but also in various industries, including IT, construction, and pharma. By keeping recruitment costs at a low level while increasing the number of hiring through this scheme, the Group has successfully grown the business. Further, in April 2022, more than 3,200 new hires have joined the Group, making it one of the leading companies in hiring new graduates. This clearly demonstrates not only our high recruiting capability but also the Group's excellence in marketing to find a new workplace suitable for people with little experience, on-boarding training for our people, and the ability to build a trusted relationship with client companies. Besides the manufacturing field, which is more susceptible to macroeconomic dynamics, the Group is aiming to expand businesses that are less affected by economic fluctuations. In particular, the business with U.S. military facilities continues to see a steady growth in demand for renovation and maintenance services for buildings and facilities, which are less affected by the COVID-19 outbreak. As bidders for U.S. military construction projects are generally required to place an equivalent amount of bonds (i.e., performance guarantee insurance), the Company has successfully stretched the credit line of bonds by leveraging its creditworthiness to win large projects with high profitability.
Looking at the market overseas, despite the promotion of a large-scale inoculation together with COVID-19 countermeasures, uncertainty still remained quite high under the following circumstances: sudden increase of geopolitical risks led by the Ukraine crisis, growing concerns over recession driven by inflationary pressures and further monetary tightening, and the quick spread of new variants of coronavirus.
Under such business environment, the Group has continued to make all-out effort to reinforce the growth domain by smoothing out earnings for its overseas businesses. In detail, in addition to expanding outsourcing businesses in the public sector, including government projects, which are less susceptible to economic fluctuations, the Group offers engineering outsourcing service in a remote working environment. Also, the Group is rolling out a scheme to mobilize human resource at a global level from countries that have plenty of work force to those that
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Outsourcing Inc. published this content on 15 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 August 2022 12:12:19 UTC.