Ferrotec : Notice of the Difference Between the Consolidated Business Forecasts and Actual Results for the Cumulative Second Quarter of the Fiscal Year Ending March 31, 2023, the Revision to the Full-year Consolidated Business Forecasts, and the Revision to Dividend Forecasts picture_as

News Release: Ferrotec Holdings Corporation (6890 TSE Standard)

November 14, 2022

Notice of the Difference Between the Consolidated Business Forecasts and Actual Results for the Cumulative Second Quarter of the Fiscal Year Ending March 31, 2023, the Revision to the Full-year Consolidated Business Forecasts, and the Revision to Dividend Forecasts

Ferrotec Holdings Corporation (Representative Director: He Xian Han; hereinafter "the Company") announces the difference that arose between the consolidated business forecasts for the cumulative second quarter of the fiscal year ending March 31, 2023, disclosed on August 12, 2022, and the actual results disclosed today, as outlined below. Furthermore, at the meeting of Board of Directors held today, the Company resolved to revise the full-year consolidated business forecasts and the dividend forecasts (dividend increase) based on the recent business performance trends.

1. Difference between the consolidated business forecasts and actual results for the cumulative second quarter of the fiscal year ending March 31, 2023

(1) Difference between the consolidated business forecasts and actual results for the cumulative second quarter of the fiscal

year ending March 31, 2023 (April 1, 2022 to September 30, 2022)

											Net income
		Net sales			Operating			Ordinary			attributable to			Net income per
				income			income			owners of			share
											parent
		Million yen		Million yen		Million yen		Million yen		Yen
Previous forecasts (A)	90,000		16,000		19,000		12,000		266.37
Actual results (B)	97,505		17,061		23,554		15,979		352.88
Change (B-A)	7,505		1,061		4,554		3,979
Percentage change (%)	8.3%		6.6%		24.0%		33.2%
(Reference)
Previous results	59,826		10,708		12,468		17,257		460.26
(H1 FY3/22)

(2) Reason for the difference

For the amount of non-operating foreign exchange gains to be recorded during the second quarter, we made a slightly conservative assumption in our previous forecast. However, due to the yen that depreciated more than expected, ordinary income and net income attributable to owners of parent were significantly higher than expected. The Company is making this disclosure because the difference between net income attributable to owners of parent and the previously disclosed forecast exceeded 30%.

2. Revision to the consolidated business forecasts

(1) Revision to the full-year consolidated business forecasts (April 1, 2022 to March 31, 2023)

Net income

Net sales

Operating

Ordinary

attributable to

Net income per

income

income

owners of

share

parent

Million yen

Million yen

Million yen

Million yen

Yen

Previous forecasts (A)

195,000

32,500

34,000

20,000

440.15

Revised forecasts (B)

200,000

34,000

39,000

24,000

521.01

News Release: Ferrotec Holdings Corporation (6890 TSE Standard)

Change (B-A)	5,000	1,500	5,000	4,000
Percentage change (%)	2.6%	4.6%	14.7%	20.0%
(Reference)
Previous results	133,821	22,600	25,994	26,659	668.06
(FY3/22)

(2) Reason for the revision

The main reason for the revision is an adjustment made in foreign exchange assumptions. We have compared actual results with the consolidated business forecasts disclosed on August 12, 2022, and revised the forecast, taking into account of the following factors: (1) actual non-operating foreign exchange gains in the first half were higher than expected, and (2) in the second half, the exchange market shifted in the direction of the yen depreciation more than expected and is expected to continue, even though we expected to record a non-operating foreign exchange loss due to the weakening trend of the yen depreciation at the time of the previous forecast. (The assumed exchange rate has been revised from 125 yen to 133 yen per US dollar.)

3. Revision to the interim and full-year dividend forecasts

(1) Dividend forecasts for FY3/23

			Dividend per share
		End of the 2Q	Year-end	Annual
	Previous forecasts	Yen	Yen	Yen
	(Announced on May 16,	35.00	35.00	70.00
	2022)
	Revised forecasts	50.00	50.00	100.00
	Previous results	23.00	27.00	50.00
	The brackets represent the	[Common dividend: 14.00]	[Common dividend: 18.00]	[Common dividend: 32.00]
	breakdown.	[Special dividend: 9.00]	[Special dividend: 9.00]	[Special dividend: 18.00]

(2) Reason for the revision

As described in the "Update of the Mid-Term Management Plan" announced on May 30, 2022, the Company has reviewed the dividend policy. Our basic policy of increasing shareholder returns through sustained revenue enhancement remains unchanged. However, in determining dividends, we follow our policy to make decisions based on a balance between financial and investment opportunities, with a dividend payout ratio of 20% in mind.

The previous dividend forecast for the current fiscal year was based on the projected net income attributable to owners of parent as of May 16, 2022, in the beginning of the fiscal year. As mentioned above, the financial results for the current fiscal year are expected to exceed the business forecasts disclosed on August 12, 2022, and the forecasted net income attributable to owners of parent has increased significantly compared to the forecast made in the beginning of the fiscal year. Therefore, in addition to revising the dividend forecasts as described above, the Company has decided to pay an interim dividend of 50 yen per share.