FOR IMMEDIATE RELEASE

August 3, 2021

Contact: IR Group

Corporate Planning and Control Dept.

2-47, Shikitsuhigashi 1-chome,

Naniwa-ku, Osaka 556-8601, Japan

Phone: +81-6-6648-2645

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2021 [IFRS]

Kubota Corporation hereby reports its consolidated results for the six months ended June 30, 2021.

Consolidated Financial Highlights

1. Consolidated results of operations for the six months ended June 30, 2021

(1) Results of operations

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

Six months ended

Change

Six months ended

Change

June 30, 2021

[%]

June 30, 2020

[%]

Revenue

¥ 1,101,405

24.6

¥ 884,170

(8.9)

Operating profit

¥ 147,548

80.7

¥ 81,670

(26.4)

Profit before income taxes

¥ 149,409

77.0

¥ 84,421

(26.4)

Profit for the period

¥ 113,140

73.6

¥ 65,161

(24.9)

Profit attributable to owners of the parent

¥ 102,950

72.8

¥ 59,570

(26.6)

Comprehensive income for the period

¥ 167,788

443.9

¥ 30,848

(60.1)

Earnings per share attributable to owners of the parent:

Basic

¥ 85.22

¥ 48.87

Diluted

-

-

(2) Financial condition

(Unit: millions of yen)

June 30, 2021

Dec. 31, 2020

Total assets

¥ 3,430,791

¥ 3,189,317

Total equity

¥ 1,712,384

¥ 1,574,185

Equity attributable to owners of the parent

¥ 1,610,291

¥ 1,476,039

Ratio of equity attributable to owners of the parent

to total assets

46.9%

46.3%

Note:

Change [%] represents the percentage change from the same period in the prior year.

2. Cash dividends

(Unit: yen)

Cash dividends per common share

Interim

Year-end

Total

Year ending Dec. 31, 2021

¥ 21.00

Undecided

Undecided

Year ended Dec. 31, 2020

¥ 17.00

¥ 19.00

¥ 36.00

Note:

Although Kubota Corporation's basic policy for the return of profit to shareholders is to maintain stable dividends and raise dividends, the specific amount of cash dividends for each fiscal year is decided in consideration of the development of business performance, financial condition, and shareholder return ratio calculated from dividends and share buybacks. The specific amount of year-end cash dividends for the year ending December 31, 2021 has not been decided at this time, and Kubota Corporation will publicize the amount as soon as a decision is made.

-1-

Kubota Corporation

and Its Subsidiaries

3. Forecasts of operations for the year ending December 31, 2021

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

Year ending

Change

Dec. 31, 2021

[%]

Revenue

¥ 2,150,000

16.0

Operating profit

¥ 260,000

48.3

Profit before income taxes

¥ 263,000

41.5

Profit attributable to owners of the parent

¥ 183,000

42.4

Earnings per share attributable to owners of the parent - Basic

¥ 151.49

Notes:

  1. Change [%] represents the percentage change from the same period in the prior year.
  2. Please refer to the accompanying materials, "1. Review of operations and financial condition (3) Forecasts for the year ending December 31, 2021" on page 6 for further information related to the forecasts of operations.

4. Other information

  1. Changes in significant subsidiaries during the six months ended June 30, 2021 (changes in specified subsidiaries resulting in the changes in scope of consolidation): None
  2. Changes in accounting policies and changes in accounting estimates
    1. Changes in accounting policies required by IFRS: None
    2. Changes in accounting policies due to reasons other than a) above: None
    3. Changes in accounting estimates: None
  3. Number of common shares issued

a) Number of common shares issued including treasury shares as of June 30, 2021

:

1,208,576,846

Number of common shares issued including treasury shares as of December 31, 2020

:

1,208,576,846

b) Number of treasury shares as of June 30, 2021

:

533,513

Number of treasury shares as of December 31, 2020

:

643,937

c) Weighted-average number of common shares outstanding during the six months ended June 30, 2021

:

1,207,946,806

Weighted-average number of common shares outstanding during the six months ended June 30, 2020

:

1,218,840,330

(Information on the status of the quarterly review by the independent auditor) This release is not subject to the quarterly review by the independent auditor.

(Method of obtaining supplementary materials on the financial results)

Kubota Corporation plans to hold a result briefing for institutional investors and securities analysts on August 5, 2021. The supplementary material will be published on the Company's website on the same day.

< Cautionary statements with respect to forward-looking statements >

This document may contain forward-looking statements that are based on management's expectations, estimates, projections, and assumptions. These statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Therefore, actual future results may differ materially from what is forecast in forward-looking statements due to a variety of factors, including, without limitation: general economic conditions in the Company's markets, particularly government agricultural policies, levels of capital expenditures both in public and private sectors, foreign currency exchange rates, the occurrence of natural disasters, continued competitive pricing pressures in the marketplace, as well as the Company's ability to continue to gain acceptance of its products.

-2-

Kubota Corporation

and Its Subsidiaries

Index to accompanying materials

1. Review of operations and financial condition …………………………………………………………………………………………

4

(1)

Summary of the results of operations for the six-month period ………………………………………………………

4

(2)

Financial condition ……………………………………………………………………………………………………………………......

5

(3)

Forecasts for the year ending December 31, 2021 …………………………………………………………………………

6

2. Other information ……………………………………………………………………………………………………………………............... 6

(1)

Changes in significant subsidiaries ……………………………………………………………………………………………………

6

(2)

Changes in accounting policies …………………………………………………………………………………………………………

6

3. Condensed consolidated financial statements …………………………………………………………………………………………

7

(1)

Condensed consolidated statement of financial position …………………………………………………………………

7

(2)

Condensed consolidated statement of profit or loss ………………………………………………………………………

9

(3)

Condensed consolidated statement of comprehensive income ………………………………………………………

10

(4)

Condensed consolidated statement of changes in equity ………………………………………………………………

11

(5)

Condensed consolidated statement of cash flows ……………………………………………………………………………

12

(6)

Notes to the going concern assumption …………………………………………………………………………………………

12

(7)

Consolidated segment information …………………………………………………………………………………………………

13

(8)

Consolidated revenue by product group …………………………………………………………………………………………

14

(9)

Anticipated consolidated revenue by reportable segment ………………………………………………………………

15

4. Results of operations for the three months ended June 30, 2021 ……………………………………………………………

16

(1)

Condensed consolidated statement of profit or loss ………………………………………………………………………

16

(2)

Consolidated segment information …………………………………………………………………………………………………

17

(3)

Consolidated revenue by product group …………………………………………………………………………………………

18

-3-

Kubota Corporation

and Its Subsidiaries

1. Review of operations and financial condition

(1) Summary of the results of operations for the six-month period

For the six months ended June 30, 2021, revenue of Kubota Corporation and its subsidiaries (hereinafter, the "Company") increased by ¥217.2 billion [24.6%] from the same period in the prior year to ¥1,101.4 billion.

Domestic revenue increased by ¥12.4 billion [4.3%] from the same period in the prior year to ¥302.5 billion because of increased revenue in Farm & Industrial Machinery mainly due to increased sales of farm equipment, despite a decrease in revenue in Water & Environment and Other.

Overseas revenue increased by ¥204.9 billion [34.5%] from the same period in the prior year to ¥798.9 billion because of significantly increased sales of farm equipment and construction machinery, while revenue in Water & Environment decreased from the same period in the prior year.

Operating profit increased by ¥65.9 billion [80.7%] from the same period in the prior year to ¥147.5 billion mainly due to significantly increased revenue in the domestic and overseas markets and improved foreign exchange rates, while there were some negative effects from increased fixed costs and a rise in material prices. Profit before income taxes increased by ¥65.0 billion [77.0%] from the same period in the prior year to ¥149.4 billion due to increased operating profit. Income tax expenses were ¥37.8 billion. Share of profits of investments accounted for using the equity method was ¥1.5 billion. Profit for the period increased by ¥48.0 billion [73.6%] from the same period in the prior year to ¥113.1 billion. Profit attributable to owners of the parent increased by ¥43.4 billion [72.8%] from the same period in the prior year to ¥103.0 billion.

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

1) Farm & Industrial Machinery

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

Revenue in this segment increased by 30.9% from the same period in the prior year to ¥941.3 billion and accounted for 85.5% of consolidated revenue.

Domestic revenue increased by 10.9% from the same period in the prior year to ¥160.4 billion. Sales of farm equipment and agricultural-related products increased due to a recovery from adverse reaction from rushed demand before the consumption tax hike and increased demand resulting from subsidies for business continuation of farmers.

Overseas revenue increased by 35.9% from the same period in the prior year to ¥780.9 billion. In North America, sales of tractors and construction machinery increased significantly mainly due to strong demand along with trend in move to suburbs despite delay in production and shipment caused by port congestion and labor shortages. In addition, sales of engines recovered. In Europe, sales of construction machinery, tractors, and engines increased due to a recovery from sluggish sales along with the infection spread of COVID-19 in the prior year. In Asia outside Japan, sales of farm equipment in Thailand significantly increased mainly due to favorable weather conditions and stable crop prices at a high level. In addition, sales of farm equipment in China, India, and Philippines were strong as well. In Other areas, sales of tractors and construction machinery in Australia increased significantly due to more rainfall than usual and government stimulus policies.

Operating profit in this segment increased by 65.1% from the same period in the prior year to ¥143.9 billion mainly due to significantly increased revenue in the domestic and overseas markets and deteriorated profitability of products, which had been shipped in the same period in the prior year, in its manufacturing bases, while some negative effects from increased fixed costs and a rise in material prices.

-4-

Kubota Corporation

and Its Subsidiaries

2) Water & Environment

Water & Environment is comprised of pipe- and infrastructure-related products (ductile iron pipes, plastic pipes, valves for public sector, industrial castings, spiral-welded steel pipes, air-conditioning equipment, and other products) and environment-related products (environmental control plants, pumps, valves for private sector, and other products).

Revenue in this segment decreased by 2.5% from the same period in the prior year to ¥146.6 billion and accounted for 13.3% of consolidated revenue.

Domestic revenue decreased by 1.8% from the same period in the prior year to ¥128.6 billion. In pipe- and infrastructure-related products, sales of ductile iron pipes and construction business decreased mainly due to a negative effect from postponed construction period along with a state of emergency. In environment-related products, sales of pumps increased significantly due to increased sales of drainage pump vehicles.

Overseas revenue decreased by 7.4% from the same period in the prior year to ¥18.0 billion. Mainly sales of industrial castings decreased.

Operating profit in this segment increased by 33.2% from the same period in the prior year to ¥13.2 billion mainly due to an improvement in plant construction costs.

3) Other

Other is mainly comprised of a variety of services.

Revenue in this segment decreased by 7.6% from the same period in the prior year to ¥13.6 billion and accounted for 1.2% of consolidated revenue.

Operating profit in this segment increased by 9.6% from the same period in the prior year to ¥1.6 billion.

(2) Financial condition

  1. Assets, liabilities, and equity

Total assets as of June 30, 2021 were ¥3,430.8 billion, an increase of ¥241.5 billion from the prior fiscal year-end. With respect to assets, the yen value of finance receivables increased significantly due to the yen depreciation compared with the prior fiscal year-end in addition to an expansion in sales financing operations in North America, where retail sales were strong. In addition, inventories increased mainly due to increased inventories in transit along with port congestion.

With respect to liabilities, the yen value of bonds and borrowings denominated in foreign currencies increased mainly due to the yen depreciation compared with the prior fiscal year-end and an increase in finance receivables. Equity increased due to the accumulation of retained earnings and an improvement in other components of equity along with fluctuations mainly in foreign exchange rates. The ratio of equity attributable to owners of the parent to total assets stood at 46.9%, 0.6 percentage points higher than the prior fiscal year-end.

  1. Cash flows

Net cash provided by operating activities during the six months ended June 30, 2021 was ¥50.8 billion, an increase of ¥1.3 billion in net cash inflow compared with the same period in the prior year. This increase was mainly due to an increase in profit for the period, despite an increase in cash outflow related to an increase in finance receivables.

Net cash used in investing activities was ¥45.3 billion, an increase of ¥14.9 billion in net cash outflow compared with the same period in the prior year. This increase was mainly due to a decrease in cash inflow related to sales of securities and an increase in cash outflow related to acquisition of property, plant, and equipment and intangible assets, despite a decrease in cash outflow related to net increase in time deposits.

-5-

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Kubota Corporation published this content on 03 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 August 2021 06:40:11 UTC.