Kubota : Quarterly Report for the second quarter of the 133rd business term (From April 1, 2022 to June 30, 2022) (0.7MB)

[Translation]

Quarterly Report

(The Second Quarter of the 133rd Business Term)

From April 1, 2022 to June 30, 2022

2-47, Shikitsuhigashi 1-chome,Naniwa-ku, Osaka, JAPAN

Kubota Corporation

TABLE OF CONTENTS

1. Overview of the Company ……………………………...……………………………..……......................................................	1
1. Key Financial Data ………………………………………………………………………………………………………………………	1

1. Description of Business ….................................................................................................................. 1

2. Business Overview ………………………………………………………………...……………..…………………………………………………. 2

1. Risk Factors ………………………………………………………………………………………...……................................... 2
2. Analysis of Consolidated Financial Position, Results of Operations,

	2
and Cash Flows by Management.......................................................................................................
3. Material Contracts ……………………………………………………………………..……...……………………………………… 4

3. Information on Kubota Corporation ……………………………………………………..…………………………………………………. 5

1. Information on the Shares of Kubota Corporation ………………………………………………..……….……………. 5

2. Changes in Directors and Senior Management …………………...……………….…………………………………….	8
4. Financial Information ………………………………………………….................………………….……...………..........................	9

1. Condensed Consolidated Financial Statements…………………………………………..................................... 9
2. Other ………………………………………………………………………………………………..……………………………………….. 27

Confirmation Letter

COVER
[Document Filed]	Quarterly Report ("Shihanki Hokokusho")
[Applicable Law]	Article 24-4-7, Paragraph 1 of the Financial Instruments and Exchange Act of Japan
[Filed to]	Director, Kanto Local Finance Bureau
[Filing Date]	August 9, 2022
[Fiscal Year]	The Second Quarter of the 133rd Business Term
	(from April 1, 2022 to June 30, 2022)
[Company Name]	Kabushiki Kaisha Kubota
[Company Name in English]	Kubota Corporation
[Title and Name of Representative]	Yuichi Kitao, President and Representative Director
[Address of Head Office]	2-47, Shikitsuhigashi 1-chome,Naniwa-ku, Osaka, JAPAN
[Phone Number]	[phone]
[Contact Person]	Kaori Sato, General Manager of Accounting Dept.
[Contact Address]	Kubota Corporation, Tokyo Head Office
	1-3, Kyobashi 2-chome,Chuo-ku, Tokyo, JAPAN
[Phone Number]	[phone]
[Contact Person]	Jun Sano, General Manager of Tokyo Administration Dept.
[Place Where Available for Public	Kubota Corporation, Tokyo Head Office
Inspection]	(1-3, Kyobashi 2-chome,Chuo-ku, Tokyo, JAPAN)
	Tokyo Stock Exchange, Inc.
	(2-1, Nihombashi Kabuto-cho,Chuo-ku, Tokyo, JAPAN)

This is an English translation of the Quarterly Report filed with the Director of the Kanto Local Finance Bureau via Electronic Disclosure for Investors' NETwork pursuant to the Financial Instruments and Exchange Act of Japan.

The translation of the Confirmation Letter for the original Quarterly Report is included at the end of this document.

For the purposes of this Quarterly Report, the "Company" refers to Kubota Corporation and its subsidiaries, unless context indicates otherwise.

References in this document to the "Financial Instruments and Exchange Act of Japan" are to the Financial Instruments and Exchange Act of Japan and other laws and regulations amending and/or supplementing the Financial Instruments and Exchange Act of Japan.

1. Overview of the Company

1. Key Financial Data

(Unit: millions of yen, except earnings per share)

	Six months ended	Six months ended		Year ended
	June 30, 2022		June 30, 2021	December 31, 2021
Revenue	¥ 1,260,480	¥	1,101,405	¥	2,196,766
	[667,257]		[563,719]
Profit before income taxes	131,587		149,409		252,559
Profit attributable to owners of the parent	91,246		102,950		175,637
	[41,650]		[50,909]
Comprehensive income attributable to owners	273,264		157,131		270,034
of the parent
Equity attributable to owners of the parent	1,909,584		1,610,291		1,677,957
Total assets	4,554,017		3,430,791		3,773,510
Earnings per share attributable to owners of the parent:
Basic	76.13		85.22		145.52
	[34.79]		[42.14]
Diluted	―		―		―
Ratio of equity attributable to owners of the parent to total	41.9		46.9		44.5
assets (%)
Net cash (used in) provided by operating activities	(22,023)		50,797		92,511
Net cash used in investing activities	(226,630)		(45,277)		(127,370)
Net cash provided by financing activities	189,754		2,263		60,586
Cash and cash equivalents, at the end of the period	215,333		237,539		258,639

(Notes)

1. The condensed consolidated financial statements and the consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS).
2. As the Company prepares the condensed consolidated financial statements, its nonconsolidated financial data is not presented.
3. Amounts less than presentation units are rounded to the nearest unit.
4. Earnings per share attributable to owners of the parent-Dilutedis not stated since Kubota Corporation did not have potentially dilutive common shares that were outstanding during the period.

2. Description of Business

In the six months ended June 30, 2022, there were no material changes in the Company's business.

Escorts Limited (currently, Escorts Kubota Limited) became a subsidiary of the Company in the Farm & Industrial Machinery segment during the three months ended June 30, 2022.

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2. Business Overview

1. Risk Factors

For the six months ended June 30, 2022, there were no major risks for which managements recognize that they may have a significant impact on the consolidated financial position, results of operations, and cash flows (hereafter, "results of operations") presented in "2. Business Overview" or "4. Financial Information."

There were no material changes in the information described in the Risk Factors section of the Annual Securities Report for the year ended December 31, 2021.

At the end of the reporting period, the Company estimates that the impact of COVID-19 on the Company's results of operations is not significant. However, the timing of the convergence of COVID-19 and its future impact remain uncertain and difficult to envision at this time. If the situation of COVID-19 deteriorates further in the future, the Company's results of operations may be adversely affected.

2. Analysis of Consolidated Financial Position, Results of Operations, and Cash Flows by

Management

(1) Analysis of Results of Operations

For the six months ended June 30, 2022, revenue of Kubota Corporation and its subsidiaries (hereinafter, the "Company") increased by ¥159.1 billion [14.4%] from the same period in the prior year to ¥1,260.5 billion.

Domestic revenue decreased by ¥3.5 billion [1.1%] from the same period in the prior year to ¥299.1 billion because of decreased revenue in Farm & Industrial Machinery, despite increased revenue in Water & Environment.

Overseas revenue increased by ¥162.5 billion [20.3%] from the same period in the prior year to ¥961.4 billion because of increased revenue in Farm & Industrial Machinery and Water & Environment.

Operating profit decreased by ¥26.5 billion [18.0%] from the same period in the prior year to ¥121.0 billion mainly due to some negative effects from a rise in material prices and logistics expenses, despite some positive effects from sales price increase and favorable impact of foreign exchange rates. Profit before income taxes decreased by ¥17.8 billion [11.9%] from the same period in the prior year to ¥131.6 billion due to decreased operating profit. Income tax expenses were ¥30.9 billion. Share of profits of investments accounted for using the equity method was ¥1.2 billion. Profit for the period decreased by ¥11.2 billion [9.9%] from the same period in the prior year to ¥102.0 billion. Profit attributable to owners of the parent decreased by ¥11.7 billion [11.4%] from the same period in the prior year to ¥91.2 billion.

Revenue from external customers and operating profit by each reportable segment were as follows:

1) Farm & Industrial Machinery

Farm & Industrial Machinery is composed of farm equipment, agricultural-related products, engines, and construction machinery.

Revenue in this segment increased by 16.5% from the same period in the prior year to ¥1,096.2 billion and accounted for 87.0% of consolidated revenue.

Domestic revenue decreased by 3.0% from the same period in the prior year to ¥155.6 billion. Sales of agricultural-related products decreased due to a decline in rice price and termination of subsidies for business continuation of farmers.

Overseas revenue increased by 20.5% from the same period in the prior year to ¥940.6 billion. In North America, shipment of tractors made progress to resolve back orders and replenish dealer inventories, and sales of construction machinery were solid due to demand for infrastructure construction. In Europe, sales mainly of construction machinery and engines increased due to the stable market. In Asia outside Japan, sales of farm equipment, mainly tractors, in Thailand increased due to progress in developing dryland farming, while sales of farm equipment for rice farming were slow due to stagnated rice price. In China, sales of construction machinery and rice transplanters decreased by missing sales opportunities due to lockdown. Sales in India increased due to consolidation of Escorts Limited (currently, Escorts Kubota Limited; hereinafter, "EKL").

Operating profit in this segment decreased by 18.5% from the same period in the prior year to ¥117.3 billion due to some negative effects from a rise in material prices and logistics expenses, while there were some positive effects from sales price increase and favorable impact of foreign exchange rates.

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