Acom : 2Ｑ(1405KB)

Quarterly Securities Report

(The second quarter of the 47th fiscal year)

ACOM CO., LTD.

Quarterly Securities Report

This document has been outputted and printed by adding a table of contents and page numbers to the data contained in the quarterly securities report which has been submitted through the usage of Electronic Disclosure for Investors' NETwork (EDINET) that is stipulated in Article 27-30-2 of the Financial Instruments and Exchange Act of Japan.

This document is a translation of the Second Quarter Securities Report (original text: Japanese) submitted to the Prime Minister pursuant to Article 24-4-7 of the Financial Instruments and Exchange Act. It does not bear any responsibility pertaining to the aforementioned Financial Instruments and Exchange Act regarding the content of the English text. We recommend that the determination of the authenticity of the content be based on the Japanese text of the Second Quarter Securities Report.

	Contents
[Cover]	1
Part I Information on the Company	2
I. Overview of the Company	2
1.	Key Financial Data and Trends	2
2.	Description of Business	2
II. Business Overview	3
1.	Risks Related to Business	3
2. Analyses of Consolidated Business Results and Financial Position by the Corporate Managers
	..........................................................................................................................................................	3
3.	Material Business Agreements, etc	21
III. Information on the Filing Company	22
1.	Information on the Company's Shares	22
2.	Directors and Audit and Supervisory Committee Members	24
IV. Financial Information	25
1.	Interim Consolidated Financial Statements	26
2.	Others	39
Part II Information on Guarantors for the Filing Company	40

[Cover]
[Document Submitted]	Quarterly Securities Report ("Shihanki-Hokokusho")
[Article of the Applicable Law RequiringArticle 24-4-7, Paragraph 1 of the Financial Instruments and
Submission of This Document]	Exchange Act of Japan
[Submitted to]	Director, Kanto Local Finance Bureau
[Date of Submission]	November 14, 2023
[Quarterly Accounting Period]	Second Quarter of the 47th Fiscal Year (from July 1, 2023 to
	September 30, 2023)
[Company Name]	ACOM Kabushiki-Kaisha
[Company Name in English]	ACOM CO., LTD. (the "Company" or the "Filing Company")
[Position and Name of Representative]	Masataka Kinoshita, President & CEO
[Location of Head Office]	9-1,Higashi-Shimbashi1-chome,Minato-ku, Tokyo
[Phone No.]	03-6865-0001 (main)
[Contact for Communications]	Akifumi Kinoshita, Executive Officer, Chief General Manager of
	Treasury Department
[Nearest Contact]	9-1,Higashi-Shimbashi1-chome,Minato-ku, Tokyo
[Phone No.]	03-6865-0001 (main)
[Contact for Communications]	Akifumi Kinoshita, Executive Officer, Chief General Manager of
	Treasury Department
[Place Where Available for Public	Tokyo Stock Exchange, Inc.
Inspection]	(2-1, Nihombashi Kabutocho, Chuo-ku, Tokyo)

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Part I Information on the Company

I. Overview of the Company

1. Key Financial Data and Trends

(Millions of yen, unless otherwise stated)

Fiscal period	For the six months ended	For the six months ended	46th fiscal year
September 30, 2022	September 30, 2023
Period of account	From April 1, 2022	From April 1, 2023	From April 1, 2022
to September 30, 2022	to September 30, 2023	to March 31, 2023
Operating revenue	135,068	144,299	273,793
Ordinary profit	48,846	44,382	87,485
Profit attributable to owners of	33,016	27,287	54,926
parent
Comprehensive income	49,440	39,661	71,409
Net assets	605,702	650,192	619,837
Total assets	1,309,403	1,359,973	1,297,316
Basic earnings per share (yen)	21.08	17.42	35.06
Diluted earnings per share (yen)	―	―	―
Shareholders' equity ratio (%)	43.42	44.66	44.79
Net cash provided by (used in)	1,946	(20,668)	(1,318)
operating activities
Net cash provided by (used in)	(255)	(2,209)	(2,692)
investing activities
Net cash provided by (used in)	11,967	31,804	(12,933)
financing activities
Cash and cash equivalents at end	88,472	66,815	57,666
of period
Fiscal period	For the second quarter	For the second quarter
of the 46th fiscal year	of the 47th fiscal year
Period of account	From July 1, 2022	From July 1, 2023
to September 30, 2022	to September 30, 2023
Basic earnings per share (yen)	10.48	8.62

(Notes) 1. Key financial data and trends of the Filing Company are not stated since the Filing Company has prepared its interim consolidated financial statements.

2. "Diluted earnings per share" is not shown since there was no dilutive security.

2. Description of Business

During the six months ended September 30, 2023, there was no material change in the businesses conducted by the Company Group (the Company and its subsidiaries and associates).

There was no change in the status of the Company's major subsidiaries and associates either.

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II. Business Overview

1. Risks Related to Business

There were no significant events or conditions which may cast significant doubt about the going-concern assumption, or other events having material impact on the Company's operations, during the six months ended September 30, 2023.

There were no significant changes to the "Risks Related to Business" described in the Securities Report for the prior fiscal year.

2. Analyses of Consolidated Business Results and Financial Position by the Corporate Managers

(1) Analysis of business results

During the six months ended September 30, 2023, Japanese socio-economic activities are returning to normal against a backdrop of COVID-19 being classified as a Category V Infectious Disease and various government policies, resulting in economic conditions showing signs of gradual recovery. However, there are some risks that could push down Japan's economic momentum, such as a slowdown in global economy coupled with growing tension in the international situation and prolonged monetary tightening in response to high global inflation. The impact of those factors on consumer spending and financial markets needs to be closely monitored.

Overseas, while the situation varied from country to country, economic conditions in the Kingdom of Thailand where we operate the business, continue to grow gradually led by inbound demand and recovery of consumer spending although the economic growth rate has slowed down due to slowdown of global economy. In the Republic of the Philippines, the steady economic growth is expected associated with a recovery of inbound demand in the future.

In the nonbank business sector in Japan, the outlook remains uncertain, as does the Japanese economy. Although requests for interest repayment are decreasing, future trends need to be closely monitored on an ongoing basis, as requests for interest repayment are susceptible to the impacts of changes in the external environment.

In such an environment, the Company Group formulated a medium-term management plan beginning in the fiscal year ended March 31, 2023. Based on this plan, the Company Group has articulated its commitment to each of its stakeholders in the "vision," and has set forth a medium-term policy to promote initiatives to realize this vision in the next three years. ACOM (M) SDN. BHD., our subsidiary established in Malaysia, started its personal loan business in September 2023. Even amid changes in the external environment, the Company Group will continue to promote its operating activities in accordance with its vision and medium-term policy.

Consolidated operating revenue for the six months ended September 30, 2023, increased to 144,299 million yen (up 6.8% year-on-year). This is attributable to: the increases in interest on operating loans due to an increase in accounts receivable - operating loans and the impact of depreciation of the yen. Operating expenses also increased to 100,081 million yen (up 16.0% year-on-year) mainly due to an increase in provision of allowance for doubtful accounts associated with the expansion of business scale and an increase in advertising expenses associated with strengthening attracting new customers. As a result, operating profit decreased to 44,218 million yen (down 9.4% year-on-year). Ordinary profit also decreased to 44,382 million yen (down 9.1% year-on-year). Due to the stripping out of gain on sale of non-current assets recorded in the previous year, profit attributable to owners of parent decreased to 27,287 million yen (down 17.4% year- on-year).

Business results for each segment are as follows:

1) Loan and credit card business

In the domestic loans business, new loans and additional use increased due to the impact of a recovery in personal consumption. Accordingly, accounts receivable - operating loans totaled 845,213 million yen as of September 30, 2023 (up 6.7% year-on-year, up 4.2% from the prior fiscal year-end). In the credit card business, accounts receivable - installment amounted to 112,650 million yen (up 18.9% year-on-year, up 8.8% from the prior fiscal year-end) due primarily to higher transaction volumes.

As a result, the segment's operating revenue stood at 76,332 million yen (up 5.7% year-on-year) for the six months ended September 30, 2023, due in part to increases in interest on operating loans and revenue from credit card business generated by higher accounts receivable - operating loans and accounts receivable

• installment. However, operating profit decreased to 20,005 million yen (down 16.8% year-on-year) after an increase in provision for bad debts caused by business expansion and an increase in advertising expenses

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caused by efforts to attract new customers resulted in an increase in operating expenses.

2) Guarantee business

The guarantee business also benefitted from the recovery in personal consumption in the same way that the loan and credit card business did. The total balance of guaranteed receivables in the guarantee operation of the Company and MU Credit Guarantee Co., LTD. was 1,242,160 million yen as of September 30, 2023 (up 4.4% year-on-year, up 2.4% from the prior fiscal year-end).

As a result, the segment's operating revenue totaled 34,841 million yen (up 6.8% year-on-year) for the six months ended September 30, 2023, primarily owing to an increase in guarantee income attributable to an increase in the balance of guaranteed receivables and guarantee fee rates. However, operating profit totaled 11,512 million yen (down 12.3% year-on-year) following an increase in operating expenses attributable to an increase in provisioning for bad debts caused by business expansion.

3) Overseas financial business

In the overseas financial business, accounts receivable - operating loans generated by EASY BUY Public Company Limited (hereinafter, "EASY BUY") in the Kingdom of Thailand totaled 232,052 million yen (up 8.4% year-on-year, up 7.8% from the prior fiscal year-end) as of September 30, 2023, due to signs of economic recovery on the back of growth in consumer spending, as well as an increase from the impact of the depreciation of Japanese yen.

The segment's operating revenue amounted to 30,047 million yen (up 10.8% year-on-year) for the six months ended September 30, 2023, primarily due to the impact of the depreciation of the yen. Operating profit totaled 13,675 million yen (up 27.6% year-on-year).

4) Loan servicing business

In the loan servicing business, with the servicer market continuing to shrink, the Company Group focused on strengthening relationships with existing business partners and worked to enhance its sales and collection capabilities, including the sophistication of collection methods.

As a result, the segment's operating revenue totaled 2,904 million yen (up 2.6% year-on-year) for the six months ended September 30, 2023, owing to an increase in the proceeds from purchased receivables. On the other hand, following an increase in cost of purchased receivables, operating profit totaled 735 million yen (down 5.0% year-on-year).

(2) Analysis of financial position

Compared with the end of the prior fiscal year, total assets increased by 62,657 million yen and net assets increased by 30,354 million yen as of September 30, 2023. Details of changes in assets, liabilities and net assets are as follows:

(Assets)

Current assets increased by 69,731 million yen and non-current assets decreased by 7,074 million yen. Consequently, total assets increased by 62,657 million yen. The breakdown of major increases in current assets is as follows: accounts receivable - operating loans (up 51,042 million yen) and accounts receivable

• installment (up 9,092 million yen). The factors of an increase in accounts receivable - operating loans include foreign exchange impacts. The increases in accounts receivable - operating loans and accounts receivable - installment led to an increase of 4,517 million yen in allowance for doubtful accounts. The breakdown of major decreases in non-current assets is as follows: deferred tax assets due in part to a reversal of provision for loss on interest repayment (down 6,940 million yen).

(Liabilities)

With regard to the liabilities account, changes in current and non-current liabilities were an increase of 53,055 million yen and a decrease of 20,753 million yen, respectively, resulting in an increase of 32,302 million yen in total liabilities. The breakdown of major changes in liabilities includes the outstanding balance of funds procured mainly in the form of loans and bonds payable (up 46,808 million yen) and provision for loss on interest repayment (down 13,950 million yen).

(Net assets)

In terms of net assets, shareholders' equity increased by 19,454 million yen due to an increase in retained earnings. The breakdown of major changes in retained earnings includes an increase due to the recording of

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profit attributable to owners of parent (27,287 million yen) and a decrease due to the payment of dividends (7,833 million yen). Moreover, accumulated other comprehensive income increased by 6,851 million yen due in part to an increase in foreign currency translation adjustment, and non-controlling interests increased by 4,049 million yen. As a result, total net assets increased by 30,354 million yen, and the shareholders' equity ratio decreased by 0.1 percentage points to 44.7%.

(3) Status of cash flows

Cash and cash equivalents (hereinafter, "funds") as of September 30, 2023, increased by 9,148 million yen during the six months ended September 30, 2023, from the end of the prior fiscal year to 66,815 million yen. The changes in the respective cash flows and the reasons thereof are as follows.

(Net cash provided by (used in) operating activities)

With respect to net cash used in operating activities, funds saw a decrease of 20,668 million yen (down 22,615 million yen year-on-year), mainly reflecting 44,255 million yen in profit before income taxes, a decrease of 13,950 million yen in provision for loss on interest repayment, and funds-decreasing factors such as an increase of 35,371 million yen in accounts receivable - operating loans and an increase of 9,042 million yen in accounts receivable - installment.

(Net cash provided by (used in) investing activities)

With respect to net cash used in investing activities, funds saw a decrease of 2,209 million yen (down 1,953 million yen year-on-year). This was primarily due to funds-decreasing factors such as the purchase of intangible fixed assets (1,419 million yen).

(Net cash provided by (used in) financing activities)

With respect to net cash provided by financing activities, funds saw an increase of 31,804 million yen (up 19,837 million yen year-on-year). This was primarily due to the fact that the total amount of proceeds from loans and issuance of bonds was 41,172 million yen higher than the amount of repayments of borrowings and payments at maturity of bonds, and that dividends paid amounted to 7,831 million yen.

(4) Business and financial issues to address

In the six months ended September 30, 2023, the Company saw no significant change in business and financial issues to address and no new issue presented itself that the Company needed to address.

1. Research and development activities
   Not applicable

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(6) Consolidated operating results

1) Operating revenue by business segment

				For the six months ended	For the six months ended
				September 30, 2022	September 30, 2023
	Business segment		(From April 1, 2022	(From April 1, 2023
		to September 30, 2022)	to September 30, 2023)
				Amount	Proportion	Amount	Proportion
				(Millions of yen)	(%)	(Millions of yen)	(%)
		Loan business	65,799	48.7	68,764	47.7
		Credit	card	6,409	4.8	7,567	5.2
		business
	Japan	Guarantee		32,619	24.2	34,841	24.2
Financial	business
service		Loan servicing	2,830	2.1	2,904	2.0
businesses		business
		Others		179	0.1	112	0.1
		Loan business	27,190	20.1	30,067	20.8
	Overseas	Installment	loan	39	0.0	40	0.0
		business
	Total			135,068	100.0	144,299	100.0

(Note) Category of business above applies the category of business stated in "Segments of an Enterprise and Related Information" in [Notes] under 1. Interim Consolidated Financial Statements of IV. Financial Information.

1. Transaction volume and outstanding receivables at the end of the period of the financial service business segments

(a) Transaction volume

				For the six months ended	For the six months ended
				September 30, 2022	September 30, 2023
	Business segment	(From April 1, 2022	(From April 1, 2023
	to September 30, 2022)	to September 30, 2023)
				Amount	Proportion	Amount	Proportion
				(Millions of yen)	(%)	(Millions of yen)	(%)
	Loan business		181,153	63.1	220,257	64.5
Japan	Credit card business	29,157	10.2	34,698	10.2
	Loan servicing business	1,146	0.4	1,401	0.4
Overseas	Loan business		75,044	26.1	84,664	24.8
Installment loan business	466	0.2	455	0.1
	Total			286,968	100.0	341,477	100.0
(Notes) 1.	Category of business above applies the category of business stated in "Segments of an Enterprise
	and Related Information" in [Notes] under 1. Interim Consolidated Financial Statements of IV.
	Financial Information.
2. Details and transaction volume of the above financial service business segments are as follows:
	Loan business	Provision of loans directly to customers. The scope of this segment's transaction
			volume is the amount of loans to customers during the period.
	Credit	cardProvision of general financial services through the use of credit cards, based on
	business		comprehensive credit administration. The scope of transaction volume is the total
			amount of credit extended for shopping through the use of credit cards during the
			period.
	Loan servicingThe amount of purchased receivables.
	business
	Installment	loanProvision of financial services without using credit cards. Each transaction of this
	business		service involves customer screening and review. The scope of transaction volume
			is the sum of credit amount and commission fees.

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(b) Receivables outstanding

						Prior second quarter			Current second quarter		Prior fiscal year
Business segment		(As of September 30, 2022)		(As of September 30, 2023)		(As of March 31, 2023)
		Amount	Proportion			Amount	Proportion		Amount	Proportion
				(Millions of yen)	(%)	(Millions of yen)	(%)	(Millions of yen)	(%)
		Loan business		791,899	71.2		845,224	70.3		810,974	71.0
Japan		Credit card business		94,724	8.5		112,650	9.4		103,575	9.1
		Loan	servicing		7,980	0.7		7,785	0.6		7,630	0.7
		business
		Loan business		217,144	19.5		235,545	19.6		218,753	19.1
Overseas
	Installment	loan		731	0.1		736	0.1		719	0.1
		business
		Total			1,112,481	100.0		1,201,944	100.0		1,141,653	100.0
(Note)	Category of business above applies the category of business stated in "Segments of an Enterprise and
	Related Information" in [Notes] under 1. Interim Consolidated Financial Statements of IV. Financial
	Information.
3) Number of outlets
		Category				Prior second quarter			Current second quarter		Prior fiscal year
					(As of September 30, 2022)	(As of September 30, 2023)	(As of March 31, 2023)
		Outlets					889			811			865
4) Number of customer accounts
	Business segment		Prior second quarter			Current second quarter		Prior fiscal year
		(As of September 30, 2022)	(As of September 30, 2023)	(As of March 31, 2023)
	Loan business			1,544,372			1,705,862			1,609,378
Japan	Credit card business			552,816			733,883			629,988
	Loan servicing business			403,869			414,279			410,289
Overseas	Loan business			1,455,665			1,465,359			1,471,495
Installment loan business			14,509			12,679			12,997
(Notes)	1. Category of business above applies the category of business stated in "Segments of an Enterprise

and Related Information" in [Notes] under 1. Interim Consolidated Financial Statements of IV. Financial Information.

2. The number of customer accounts by business segment shown above is as follows:

Loan business	Number of accounts with outstanding accounts receivable - operating
	loans
Credit card business	Number of credit card "MasterCard®" holders
Loan servicing business	Number of accounts with outstanding purchased receivables
Installment loan business	Number of contracts with outstanding accounts receivable -
	installment

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