Aoyama Zaisan : Summary of Consolidated Financial Results for the Six Months Ended June 30, 2023 (Based on Japanese GAAP)

Translation

Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Summary of Consolidated Financial Results

for the Six Months Ended June 30, 2023

(Based on Japanese GAAP)

August 9, 2023

Company name:	Aoyama Zaisan Networks Co., Ltd.
Stock exchange listing:	Tokyo
Stock code:	8929	URL https://www.azn.co.jp/
Representative:	President	Masazumi Hasumi

Director, Managing Executive Officer, and
Inquiries:	Shintaro Hashiba	TEL [phone]
Corporate Finance Division
Scheduled date to file Quarterly Securities Report:	August 9, 2023
Scheduled date to commence dividend payments:	August 21, 2023
Preparation of supplementary material on quarterly financial results:	Yes
Holding of quarterly financial results meeting:	Yes	(for analysts)

(Amounts less than one million yen are rounded down)

1. Consolidated financial results for the six months ended June 30, 2023 (from January 1, 2023 to June 30, 2023)
(1) Consolidated operating results (cumulative)						Percentages indicate year-on-year changes
	Net sales		Operating profit	Ordinary profit	Profit attributable to
		owners of parent
	Millions of yen	%	Millions of yen		%	Millions of yen		%	Millions of yen	%
Six months ended June 30, 2023	14,039	(30.6)	1,102		0.5	1,246		19.3	832	16.7
Six months ended June 30, 2022	20,232	69.7	1,097		(7.8)	1,044		(10.2)	713	(33.7)
	Earnings per share		Diluted earnings per share
		Yen			Yen
Six months ended June 30, 2023		34.26				34.25
Six months ended June 30, 2022		29.46				29.41
(2) Consolidated financial position
	Total assets		Net assets		Equity ratio		Net assets per share
	Millions of yen		Millions of yen				%		Yen
As of June 30, 2023		24,982				8,667				34.4		353.50
As of December 31, 2022		21,757				8,320				38.0		340.13

2. Cash dividends

		Annual dividends per share
	1st quarter-end	2nd quarter-end	3rd quarter-end	Fiscal year-end	Total
	Yen	Yen	Yen	Yen	Yen
Year ended December 31, 2022	-	13.00	-	22.00	35.00
Year ending December 31, 2023	-	15.00
Year ending December 31, 2023 (Forecast)			-	26.00	41.00

3. Forecast of consolidated financial results for the year ending December 31, 2023 (from January 1, 2023 to December 31, 2023)

Percentages indicate year-on-year changes

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Earnings per share
		owners of parent
	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Full year	39,500	9.9	3,300	25.5	3,050	22.0	1,980	16.8	81.38

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4. Notes

(1) Changes in significant subsidiaries during the six months ended June 30, 2023

	(changes in specified subsidiaries resulting in the change in scope of consolidation):	Yes
(2)	Application of special accounting methods for preparing quarterly consolidated financial statements:	No
(3)	Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements
	Changes in accounting policies due to revisions to accounting standards and other regulations:	Yes
	Changes in accounting policies due to other reasons:	No
	Changes in accounting estimates:	No
	Restatement of prior period financial statements:	No
(4)	Number of issued shares (common shares)
	Total number of issued shares at the end of the period (including treasury shares)

	As of June 30, 2023	24,520,859	shares	As of December 31, 2022	24,520,859	shares
Number of treasury shares at the end of the period
	As of June 30, 2023	189,246	shares	As of December 31, 2022	220,328	shares
Average number of shares during the period (cumulative from the beginning of the fiscal year)
	Six months ended June 30, 2023	24,309,461	shares	Six months ended June 30, 2022	24,238,203	shares

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Quarterly consolidated financial statements

Consolidated balance sheets

			(Millions of yen)
		As of December 31, 2022	As of June 30, 2023
Assets
Current assets
Cash and deposits	12,804	11,651
Accounts receivable - trade	684	560
Real estate for sale	1,751	6,237
Other inventories	15	12
Other	160	343
Allowance for doubtful accounts	(0)	(7)
Total current assets	15,416	18,798
Non-current assets
Property, plant and equipment
Buildings and structures, net	2,324	2,264
Land	195	195
Other, net	110	97
Total property, plant and equipment	2,630	2,557
Intangible assets
Goodwill	19	14
Software	365	310
Other	25	24
Total intangible assets	410	350
Investments and other assets
Investment securities	2,727	2,824
Shares of subsidiaries and associates	37	38
Deferred tax assets	160	30
Other	375	383
Total investments and other assets	3,300	3,276
Total non-current assets	6,341	6,183
Total assets	21,757	24,982

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			(Millions of yen)
		As of December 31, 2022	As of June 30, 2023
Liabilities
Current liabilities
Accounts payable - trade	291	195
Short-term borrowings	-	4,200
Current portion of long-term borrowings	1,950	1,967
Current portion of bonds payable	150	90
Income taxes payable	687	340
Accounts payable - other	1,128	697
Provision for bonuses	-	304
Other	935	731
Total current liabilities	5,142	8,527
Non-current liabilities
Bonds payable	30	-
Long-term borrowings	6,003	5,370
Long-term leasehold and guarantee deposits received	2,180	2,339
Long-term accounts payable - other	54	52
Other	26	24
Total non-current liabilities	8,295	7,786
Total liabilities	13,437	16,314
Net assets
Shareholders' equity
Share capital	1,210	1,210
Capital surplus	1,374	1,381
Retained earnings	5,593	5,891
Treasury shares	(168)	(144)
Total shareholders' equity	8,010	8,340
Accumulated other comprehensive income
Valuation difference on available-for-sale securities	206	299
Foreign currency translation adjustment	47	(38)
Total accumulated other comprehensive income	254	261
Share acquisition rights	30	39
Non-controlling interests	24	27
Total net assets	8,320	8,667
Total liabilities and net assets	21,757	24,982

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Consolidated statements of income (cumulative) and consolidated statements of comprehensive income (cumulative)

Consolidated statements of income (cumulative)

			(Millions of yen)
		Six months ended	Six months ended
		June 30, 2022	June 30, 2023
Net sales	20,232	14,039
Cost of sales	17,562	11,471
Gross profit	2,669	2,567
Selling, general and administrative expenses	1,572	1,464
Operating profit	1,097	1,102
Non-operating income
Foreign exchange gains	62	169
Other	11	24
Total non-operating income	73	193
Non-operating expenses
Interest expenses	39	38
Commission expenses	78	10
Other	8	0
Total non-operating expenses	126	49
Ordinary profit	1,044	1,246
Extraordinary income
Gain on reversal of share acquisition rights	0	-
Total extraordinary income	0	-
Profit before income taxes	1,045	1,246
Income taxes - current	327	321
Income taxes - deferred	5	89
Total income taxes	333	411
Profit	711	835
Profit (loss) attributable to non-controlling interests	(2)	2
Profit attributable to owners of parent	713	832

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