Ahresty : Consolidated Financial Results (Japanese Accounting Standards) for the First Quarter of the Fiscal Year Ending March 31, 2022

Consolidated Financial Results (Japanese Accounting Standards) for the First Quarter of the

Fiscal Year Ending March 31, 2022

			August 6, 2021
Company Name:	Ahresty Corporation	Stock Exchange Listing: Tokyo
Code Number:	5852	URL: https://www.ahresty.co.jp
Representative:	(Title)	President & CEO	(Name) Arata Takahashi

Contact for inquiries: (Title)	Executive Officer, Chief of General	(Name) Tsuruo Tsuji		TEL [phone]
Administrative Command
Planned date for filing of quarterly securities report: August 6, 2021	Planned date for start of dividend payment: -
Supplementary documents for quarterly results: Yes
Quarterly results briefing:			No
								(Amounts of less than 1 million yen are rounded off)
1. Consolidated results for the first quarter of the year ending March 2022 (from April 1, 2021 to June 30, 2021)
(1) Consolidated operating results (for the three months ended June 30, 2021)	(% shows year-on-year change from previous year)
	Net sales			Operating income	Recurring income			Net income attributable
					to owners of parent
	million yen		%		million yen		%	million yen		%		million yen		%
First quarter of year ending	27,117		74.7		(653)		-	(398)		-		(495)		-
March 2022
First quarter of year ended	15,524		(51.4)		(3,020)		-	(2,589)		-		(3,190)		-
March 2021

(Notes) 1. Comprehensive income: First quarter of year ending March 2022: 1,379 million yen (-%) First quarter of year ended March 2021: (3,479) million yen (-%)

2. Since the beginning of the first quarter of the consolidated fiscal year under review, the Company has adopted the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020), etc. The figures for the first quarter of the fiscal year ending March 2022 are the figures after the said accounting standards have been applied.

(Reference) EBITDA: First quarter of year ending March 2022: 2,320 million yen (-%)		First quarter of year ended March 2021: 157 million yen (-96.3%)
* EBITDA = operating income + depreciation and amortization
			Net income per share		Fully diluted net income per share
				yen			yen
First quarter of year ending March 2022			(19.32)			-
First quarter of year ended March 2021			(125.23)			-
(2) Consolidated financial position
	Total assets	Net assets	Equity ratio
		million yen	million yen	%
First quarter of year ending		126,617		57,277	45.1
March 2022
Year ended March 2021		132,223		55,631	41.9

(Reference) Shareholders' equity: First quarter of year ending March 2022: 57,137 million yen Year ended March 2021: 55,467 million yen

(Note) Since the beginning of the first quarter of the consolidated fiscal year under review, the Company has adopted the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020), etc. The figures for the first quarter of the fiscal year ending March 2022 are the figures after the said accounting standards have been applied.

2. Dividend payments

			Dividend per share
	End of first quarter	End of second quarter	End of third quarter	End of year	For the year
	yen	yen	yen	yen	yen
Year ended March 2021	-	0.00	-	5.00	5.00
Year ending March 2022	-
Year ending March 2022		5.00	-	5.00	10.00
(Forecast)
(Note) Revisions to dividend forecast published most recently: No

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3. Forecast of consolidated results for year ending March 2022 (from April 1, 2021 to March 31, 2022)

(% shows the year-on-year change from previous year)

								Net income		Net income per
	Net sales		Operating income	Recurring income	attributable to owners
		share
								of parent
	million yen		%	million yen	%	million yen	%	million yen		%	yen
First half	52,300		-	(750)	-	(850)	-	(1,000)		-	(39.06)
Full year	110,000		-	1,800	-	1,600	-	600		-	23.44

(Note) 1. Revisions to consolidated results forecast published most recently: No

• 2. Starting from the beginning of the year ending March 2022, the Company has adopted the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29), etc. Since the consolidated results forecast above presents the figures after the said accounting standards are applied, year-on-year figures are not provided.

• Notes:
• 1. Significant changes to subsidiaries during the current term (changes for a specified subsidiary accompanying a change in the scope of consolidation): None
  2. Application of specific accounting treatment to the preparation of quarterly consolidated financial statements: None
  3. Changes in accounting principles and changes or restatement of accounting estimates

(i) Changes in accounting principles associated with revision of accounting standards, etc.:	Yes
(ii) Changes in accounting principles other than (i):	None
(iii) Changes in accounting estimates:	None
(iv) Restatement:	None

(Note) For details, please see "2. Consolidated Quarterly Financial Statements and Key Notes (6) Changes in the Accounting Policy" on page 11 of the accompanying materials.

(4) Number of shares outstanding (Common stock)

(i) Number of shares outstanding at end of period (including treasury shares)

As of June 30, 2021:	26,076,717 shares	As of March 31, 2021:	26,076,717 shares
(ii) Number of treasury shares at end of period
As of June 30, 2021:	369,607 shares	As of March 31, 2021:	410,044 shares
(iii) Average number of shares (for the first quarter)
1Q of year ending March 2022: 25,672,466 shares	1Q of year ended March 2021: 25,474,428 shares

• Quarterly consolidated financial statements are placed outside the scope of quarterly reviews performed by a certified public accountant or an audit corporation.
• Explanation for appropriate use of financial forecasts and other special remarks
  The forecasts presented herein are based on information currently available and certain assumptions deemed reasonable by the Company, and actual results may differ significantly from these forecasts due to various factors. For notes on the use of the results forecasts and assumptions as the basis for the results forecasts, please see "1. Qualitative Information on Consolidated Operating Results, etc. for the First Quarter (3) Qualitative Information Concerning Consolidated Earnings Forecasts" on page 5 of the accompanying materials.

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Accompanying Materials - Contents

1. Qualitative Information on Consolidated Operating Results, etc. for the First Quarter	4
(1)	Qualitative Information Concerning Consolidated Operating Results	4
(2)	Qualitative Information Concerning Consolidated Financial Position	5
(3)	Qualitative Information Concerning Consolidated Earnings Forecasts	5
2. Consolidated Quarterly Financial Statements and Key Notes	6
(1)	Quarterly Consolidated Balance Sheet	6
(2)	Quarterly Consolidated Income Statements and Quarterly Consolidated Statements of Comprehensive Income	8
	Quarterly Consolidated Income Statements
	First Quarter	8
	Quarterly Consolidated Statements of Comprehensive Income
	First Quarter	9
(3)	Notes on Going Concern Assumption	10
(4)	Notes for Significant Change in the Amount of Shareholders' Equity	10
(5) Additional Information	10
(6)	Changes in the Accounting Policy	11
(7)	Segment Information, etc.	12

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1. Qualitative Information on Consolidated Operating Results, etc. for the First Quarter

1. Qualitative Information Concerning Consolidated Operating Results
   During the first quarter of the consolidated fiscal year under review, the world economy was still in a severe situation due to the impact of the novel coronavirus "COVID-19" pandemic. Although signs of recovery were seen in the United States along with a decrease in the number of infected people, the economy in Europe, India and Southeast Asia remained stagnant, affected mainly by the re-expansion of infections and lockdowns. In Japan, the economy was severely affected by the novel coronavirus pandemic and remained stagnant, suffering a decrease in domestic demand and a slowdown in exports resulting from sluggish economic activities. The future outlook still remains uncertain with factors such as the re-expansion of COVID-19 infections and the shortage of semiconductors, which may continue to affect car production.
   In response to these circumstances, the Ahresty Group, while implementing measures to prevent the spread of COVID-19 in accordance with the local regulations of each country or region, took various actions, such as production adjustment by controlling operations and revising work shifts according to sales volume, utilization of idle internal facilities to reduce capital investment, and the prohibition in principle of business trips and the promotion of web conferencing to reduce costs. In response to the resumption of economic activities in many countries, car sales have been on a recovery trend though the pace of recovery varies among countries and customers. However, due to the impact of a shortage of semiconductors on car production, the Group received fewer orders than in the fourth quarter of the previous consolidated fiscal year. In terms of profit, an operating loss was recorded due to an increase in procurement costs caused by the rise in raw material prices.
   Although concerns remain about the shortage of semiconductors and the rising prices of raw materials, the Ahresty Group will accelerate measures based on its 1921 Medium-term Management Plan, which we have promoted since fiscal 2019, to improve profitability and enhance our corporate structure by cutting costs and raising productivity.
   Consequently, for the first quarter of the consolidated fiscal year under review, the Group recorded consolidated net sales of ¥27,117 million (up 74.7% year on year), operating loss of ¥653 million (operating loss of ¥3,020 million for the first quarter of the previous year), recurring loss of ¥398 million (recurring loss of ¥2,589 million for the first quarter of the previous year) and net loss attributable to owners of parent of ¥495 million (net loss attributable to owners of parent of ¥3,190 million in the first quarter of the previous year).
   Operating results by segment are as follows:

(i) Die Casting Business: Japan

In the Japanese automobile market, during the previous fiscal year, production adjustments due to the impact of the spread of COVID-19 resulted in a significant decrease in net sales. This year, however, along with the resumption of economic activities in many countries, car manufacturers, our main customers, have been putting their global car sales back on a recovery track. In line with this trend, we achieved a significant year-on-year increase in orders received, boosting our net sales to ¥12,315 million (up 70.3% year on year). On the profitability side, despite an increase in orders received, the segment recorded a loss of ¥326 million (a segment loss of ¥2,069 million was recorded a year earlier) due mainly to the rise in aluminum prices, which resulted in an increase in procurement costs.

(ii) Die Casting Business: North America

In the automobile market in North America, during the previous fiscal year, production adjustments due to the impact of the spread of COVID-19 resulted in a significant decrease in net sales. This year, however, sales of new cars have been on a recovery track despite production adjustments due to the shortage of semiconductors. In line with this trend, orders received by the Company significantly recovered from the first quarter of the previous fiscal year, resulting in an increase in net sales to ¥7,241 million (up 52.7% year on year). On the profitability side, despite the increase in orders received, the segment recorded a loss of ¥115 million (a segment loss of ¥156 million was recorded a year earlier) due mainly to the rise in aluminum prices, which resulted in an increase in procurement costs.

(iii) Die Casting Business: Asia

The plants in China recorded a significant decrease in net sales for the previous fiscal year as a result of production adjustments due to the impact of the spread of COVID-19. This year, however, production of our main customers recovered along with the resumption of economic activities, which resulted in a significant increase in the number of orders received by the Company.

In India, net sales also declined significantly during the previous fiscal year due mainly to plant lockdowns caused by the spread of COVID-19. This year, however, production of our main customers has recovered despite the ongoing impact of the pandemic, resulting in a significant increase in the number of orders received by the Company.

As a result, net sales came to ¥5,478 million (up 142.6% year on year). On the profitability side, despite the recovery in orders received, the segment recorded a loss of ¥353 million (a segment loss of ¥995 million was recorded a year earlier) due mainly to the rise in aluminum prices, which resulted in an increase in procurement costs.

(iv) Aluminum Business

The Aluminum business recovered from the impact of the production decrease due to the spread of COVID-19 although the impact of the production decrease due to the shortage of semiconductors continues. As a result, sales weight increased by 57.9% year on year, boosting net sales 105.4% year on year to ¥1,328 million. On the profitability side, the segment recorded a profit of ¥67 million (a segment loss of ¥40 million was recorded a year earlier) due mainly to the impact of the increase in net sales.

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1. 1. Proprietary Products Business
      In the Proprietary Products business, net sales increased 17.1% year on year to ¥754 million, mainly reflecting an increase in orders for projects of the main customers, namely a clean room at a semiconductor-related company and a data center at a telecommunications company. On the profitability side, segment profit declined 39.6% year on year to ¥65 million due mainly to intensifying price competition.
2. Qualitative Information Concerning Consolidated Financial Position (Assets)

Total assets at the end of the consolidated first quarter under review decreased ¥5,605 million from the end of the previous consolidated fiscal year, to ¥126,617 million. Current assets stood at ¥41,862 million, a decrease of ¥3,521 million from the end of the previous consolidated fiscal year. This was mainly due to a decrease of ¥8,102 million in cash and time deposits despite increases of ¥2,429 million in trade notes and accounts receivable and ¥1,424 million in inventories. Fixed assets were ¥84,755 million, down ¥2,084 million from the end of the preceding fiscal year. This was due chiefly to a decrease of ¥1,807 million in tangible fixed assets.

(Liabilities)

Liabilities at the end of the consolidated first quarter under review fell ¥7,251 million from the end of the previous consolidated fiscal year, to ¥69,340 million. Current liabilities stood at ¥44,209 million, a decrease of ¥6,530 million from the end of the previous consolidated fiscal year. This was mainly due to a decrease of ¥7,317 million in short-term loans payable. Long-term liabilities stood at ¥25,131 million, a decrease of ¥720 million from the end of the previous consolidated fiscal year. This was mainly due to a decrease of ¥862 million in long-term loans payable.

(Net assets)

Net assets at the end of the consolidated first quarter under review increased ¥1,645 million from the end of the previous consolidated fiscal year, to ¥57,277 million. This was attributable primarily to an increase of ¥2,100 million in foreign currency translation adjustments despite a decrease of ¥233 million in retained earnings.

As a result, the equity ratio was up from 41.9% at the end of the previous consolidated fiscal year to 45.1%.

1. Qualitative Information Concerning Consolidated Earnings Forecasts
   No changes have been made to the consolidated financial forecasts for the first half and the full year announced on May 18, 2021.

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