Kintetsu : Financial Results for 2Q of FY2023

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 September 30, 2023
		(Based on Japanese GAAP)
					November 13, 2023
Company name:	Kintetsu Group Holdings Co.,Ltd.
Stock exchange listing:	Tokyo
Stock code:	9041	URL https://www.kintetsu-g-hd.co.jp/
Representative:	President		Takashi Tsuji
Inquiries:	General Manager of Accounting and Finance	Naoyuki Isokawa	TEL [phone]
	Division
Scheduled date to file Quarterly Securities Report:	November 13, 2023
Scheduled date to commence dividend payments:	-
Preparation of supplementary material on quarterly financial results:	Yes
Holding of quarterly financial results meeting:	Yes	(for analysts and institutional investors)

(Amounts less than one million yen are rounded down)

1. Consolidated financial results for the six months ended September 30, 2023 (from April 1, 2023 to September 30, 2023)

(1) Consolidated operating results (cumulative)				Percentages indicate year-on-year changes
	Operating revenue	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 September 30, 2023	803,623	29.0	43,060	229.3	40,509	84.8	23,858	(61.1)
Six months ended September 30, 2022	623,066	113.6	13,076	-	21,920	-	61,321	410.9

	Earnings per share	Diluted earnings per share
		Yen				Yen
Six months ended September 30, 2023		125.45				-
Six months ended September 30, 2022		322.43				-
(2) Consolidated financial position
	Total assets			Net assets		Equity ratio
	Millions of yen		Millions of yen		%
As of September 30, 2023	2,405,229		537,051		19.8
As of March 31, 2023	2,424,755		500,262		18.2
2. Cash dividends
				Annual dividends per share
	1st quarter-end	2nd quarter-end		3rd quarter-end	Fiscal year-end
	Yen			Yen			Yen	Yen
Year ended March 31, 2023	-			0.00			-	50.00
Year ending March 31, 2024	-			0.00
Year ending March 31, 2024 (Forecast)							-	50.00

Total

Yen 50.00

50.00

3. Forecast of consolidated financial results for the year ending March 31, 2024 (from April 1, 2023 to March 31, 2024)

Percentages indicate year-on-year changes

	Operating revenue	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	1,643,000	5.3	80,000	19.1	74,000		(0.8)	44,000	(50.4)	231.36

1

4. Notes

1. Changes in significant subsidiaries during the six months ended September 30, 2023 (changes in specified subsidiaries resulting in the change in scope of consolidation):
2. Application of special accounting methods for preparing quarterly consolidated financial statements:

No

Yes

(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:	No
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 September 30, 2023	190,662,061	shares	As of March 31, 2023	190,662,061	shares
Number of treasury shares at the end of the period
	As of September 30, 2023	480,895	shares	As of March 31, 2023	482,673	shares
Average number of shares during the period (cumulative from the beginning of the fiscal year)
	Six months ended September 30, 2023	190,180,372	shares	Six months ended September 30, 2022	190,183,097	shares

2

Quarterly consolidated financial statements

Consolidated balance sheets

		(Millions of yen)
	As of March 31, 2023	As of September 30, 2023
Assets
Current assets
Cash and deposits	217,087	235,363
Notes and accounts receivable - trade, and contract assets	224,337	183,840
Securities	5,008	5,589
Merchandise and finished goods	9,638	9,791
Work in process	4,750	4,626
Raw materials and supplies	5,176	5,176
Land and buildings for sale	155,664	163,761
Other	82,640	73,980
Allowance for doubtful accounts	(2,254)	(2,191)
Total current assets	702,048	679,937
Non-current assets
Property, plant and equipment
Buildings and structures, net	557,549	549,750
Land	679,139	679,217
Construction in progress	5,379	6,734
Other, net	122,335	127,936
Total property, plant and equipment	1,364,404	1,363,638
Intangible assets
Goodwill	62,517	60,889
Other	107,399	110,250
Total intangible assets	169,917	171,140
Investments and other assets
Investment securities	58,827	62,951
Other	129,109	126,925
Allowance for doubtful accounts	(1,750)	(1,494)
Total investments and other assets	186,186	188,382
Total non-current assets	1,720,508	1,723,161
Deferred assets	2,199	2,129
Total assets	2,424,755	2,405,229

3

		(Millions of yen)
	As of March 31, 2023	As of September 30, 2023
Liabilities
Current liabilities
Notes and accounts payable - trade	133,461	128,525
Short-term borrowings	273,229	221,731
Commercial papers	45,000	10,000
Current portion of bonds payable	43,137	46,137
Income taxes payable	10,220	14,618
Provision for bonuses	17,281	16,464
Provision for loss on exchanging gift certificates	5,755	5,919
Provision for loss on contract	3,470	559
Other	248,206	243,393
Total current liabilities	779,761	687,349
Non-current liabilities
Bonds payable	342,054	327,485
Long-term borrowings	575,903	623,939
Retirement benefit liability	12,056	13,580
Other	214,718	215,822
Total non-current liabilities	1,144,732	1,180,828
Total liabilities	1,924,493	1,868,178
Net assets
Shareholders' equity
Share capital	126,476	126,476
Capital surplus	54,898	54,341
Retained earnings	161,795	176,085
Treasury shares	(1,164)	(1,162)
Total shareholders' equity	342,006	355,741
Accumulated other comprehensive income
Valuation difference on available-for-sale securities	4,920	8,204
Deferred gains or losses on hedges	(0)	(0)
Revaluation reserve for land	89,899	89,930
Foreign currency translation adjustment	(8,346)	11,631
Remeasurements of defined benefit plans	13,371	11,494
Total accumulated other comprehensive income	99,845	121,261
Non-controlling interests	58,410	60,047
Total net assets	500,262	537,051
Total liabilities and net assets	2,424,755	2,405,229

4

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
	September 30, 2022	September 30, 2023
Operating revenue	623,066	803,623
Operating expenses
Operating expenses and cost of sales of transportation	534,348	649,675
Selling, general and administrative expenses	75,642	110,888
Total operating expenses	609,990	760,563
Operating profit	13,076	43,060
Non-operating income
Interest income	247	1,620
Dividend income	452	541
Share of profit of entities accounted for using equity method	7,747	982
Subsidies for employment adjustment	948	-
Foreign exchange gains	3,663	30
Other	2,080	2,300
Total non-operating income	15,139	5,476
Non-operating expenses
Interest expenses	4,014	4,874
Other	2,281	3,152
Total non-operating expenses	6,296	8,027
Ordinary profit	21,920	40,509
Extraordinary income
Contribution received for construction	2,566	1,420
Gain on sale of non-current assets	25	16
Gain on step acquisitions	47,536	-
Other	437	296
Total extraordinary income	50,565	1,733
Extraordinary losses
Tax purpose reduction entry of contribution for construction	2,563	1,420
Loss on sale of non-current assets	22	365
Loss on retirement of non-current assets	517	348
Impairment losses	22	82
Special survey costs, etc.	-	551
Other	391	433
Total extraordinary losses	3,517	3,202
Profit before income taxes	68,968	39,039
Income taxes	6,948	13,130
Profit	62,019	25,908
Profit attributable to non-controlling interests	698	2,050
Profit attributable to owners of parent	61,321	23,858

5

Consolidated statements of comprehensive income (cumulative)

		(Millions of yen)
	Six months ended	Six months ended
	September 30, 2022	September 30, 2023
Profit	62,019	25,908
Other comprehensive income
Valuation difference on available-for-sale securities	(335)	3,389
Deferred gains or losses on hedges	0	-
Foreign currency translation adjustment	4,375	21,456
Remeasurements of defined benefit plans, net of tax	(1,714)	(1,922)
Share of other comprehensive income of entities accounted	(3,832)	91
for using equity method
Total other comprehensive income	(1,506)	23,015
Comprehensive income	60,512	48,924
Comprehensive income attributable to
Comprehensive income attributable to owners of parent	59,748	45,244
Comprehensive income attributable to non-controlling	763	3,679
interests

6

Consolidated statements of cash flows

		(Millions of yen)
	Six months ended	Six months ended
	September 30, 2022	September 30, 2023
Cash flows from operating activities
Profit before income taxes	68,968	39,039
Depreciation	27,779	35,619
Amortization of goodwill	816	1,627
Reduction entry of land contribution for construction	2,563	1,420
Impairment losses	22	82
Contribution received for construction	(2,566)	(1,420)
Loss (gain) on sale of non-current assets	(2)	349
Loss (gain) on sale of securities	(344)	(30)
Increase (decrease) in retirement benefit liability	(3,090)	(555)
Interest and dividend income	(700)	(2,162)
Interest expenses	4,014	4,874
Subsidies for employment adjustment	(948)	-
Share of loss (profit) of entities accounted for using equity	(7,747)	(982)
method
Loss (gain) on step acquisitions	(47,536)	-
Decrease (increase) in trade receivables and contract assets	13,042	50,406
Decrease (increase) in inventories	(925)	(8,560)
Increase (decrease) in trade payables	(6,000)	(11,185)
Other, net	38,846	(6,819)
Subtotal	86,190	101,702
Interest and dividends received	3,443	2,081
Interest paid	(4,098)	(4,641)
Proceeds from subsidies for employment adjustment	1,194	-
Income taxes refund (paid)	(9,143)	(1,519)
Net cash provided by (used in) operating activities	77,586	97,622
Cash flows from investing activities
Purchase of short-term and long-term investment securities	(530)	(4,355)
Proceeds from sale and redemption of short-term and long-	421	11,196
term investment securities
Purchase of shares of subsidiaries resulting in change in scope	(19,183)	-
of consolidation
Proceeds from purchase of shares of subsidiaries resulting in	-	49
change in scope of consolidation
Purchase of property, plant and equipment and intangible	(15,626)	(28,367)
assets
Proceeds from sale of property, plant and equipment and	164	146
intangible assets
Proceeds from contribution received for construction	2,566	1,420
Other, net	1,773	(1,402)
Net cash provided by (used in) investing activities	(30,414)	(21,312)

7

		(Millions of yen)
	Six months ended	Six months ended
	September 30, 2022	September 30, 2023
Cash flows from financing activities
Net increase (decrease) in short-term borrowings	124,719	(51,050)
Proceeds from long-term borrowings	61,150	114,300
Repayments of long-term borrowings	(62,174)	(66,956)
Net increase (decrease) in commercial papers	(15,000)	(35,000)
Proceeds from issuance of bonds	-	29,817
Redemption of bonds	(1,184)	(41,568)
Dividends paid	(4,762)	(9,524)
Dividends paid to non-controlling interests	(570)	(966)
Repayments of lease liabilities	(4,551)	(8,898)
Other, net	(1,687)	(1,284)
Net cash provided by (used in) financing activities	95,938	(71,132)
Effect of exchange rate change on cash and cash equivalents	1,470	10,621
Net increase (decrease) in cash and cash equivalents	144,580	15,798
Cash and cash equivalents at beginning of period	75,765	208,188
Increase (decrease) in cash and cash equivalents	(21)	-
Increase (decrease) in cash and cash equivalents resulting from	-	5
change in scope of consolidation
Cash and cash equivalents at end of period	220,324	223,992

8