Kyudenko : Consolidated Financial Report for the Nine Months Ended December 31, 2021

Note : This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

Consolidated Financial Report [Japanese GAAP] for the Nine Months Ended December 31, 2021

			January 28, 2022
Company name:	Kyudenko Corporation	Listing:	Tokyo Stock Exchange / Fukuoka Stock Exchange
Securities code:	1959	URL:	https://www.kyudenko.co.jp/
Representative:	Naofumi Sato, Representative Director and President
Inquiries:	Akira Shirouzu, Executive Officer,
General Manager of Finance & Accounting Department
TEL:	[phone]
Scheduled date to file quarterly securities report:	February 10, 2022
Scheduled date to commence dividend payments:	－

Preparation of supplementary material on quarterly financial results : Yes

Holding of quarterly financial results briefing: None

(Yen amounts are rounded down to millions.)

1. Consolidated financial results for the nine months ended December 31, 2021 (From April 1, 2021 to December 31, 2021)

(1) Consolidated operating results (cumulative)						(Percentages indicate year-on-year changes.)
		Net sales				Operating income		Ordinary income	Profit attributable to
						owners of parent
		Millions of yen		%		Millions of yen		%		Millions of yen	%	Millions of yen		%
Nine months ended		241,283		(9.5)		16,741		(11.4)		19,402	(7.3)	13,787		(0.4)
December 31, 2021
Nine months ended		266,597		(4.7)		18,898		0.7		20,940	(0.6)	13,845		(3.3)
December 31, 2020
(Note) Comprehensive income	Nine months ended December 31, 2021:		¥12,035 million (-28.8%)
		Nine months ended December 31, 2020:		¥16,901 million (19.3%)
							Profit per share			Diluted profit per share
												Yen					Yen
Nine months ended December 31, 2021									194.62					－
Nine months ended December 31, 2020									195.43					－
(2) Consolidated financial position
							Total assets				Net assets	Equity ratio
							Millions of yen			Millions of yen			%
As of December 31, 2021						348,168					226,593			64.5
As of March 31, 2021						366,532					221,741			60.0
(Reference) Equity	As of December 31, 2021:				¥224,618 million
		As of March 31, 2021:				¥219,807 million

2. Dividends

		Annual dividends per share
	1st quarter-end	2nd quarter-end	3rd quarter-end		Year-end	Total
	Yen	Yen	Yen		Yen	Yen
Year ended March 31 2021	－	50.00	－		50.00	100.00
Year ending March 31 2022	－	50.00	－
Year ending March 31 2022					50.00	100.00
(Forecast)
(Note) Revisions to the forecast of cash dividends most recently announced: None

3. Forecast of consolidated financial results of operations for the fiscal year ending March 31, 2022 (From April 1, 2021 to March 31, 2022)

(Percentages indicate change from corresponding period of the previous fiscal year.)

	Net sales		Operating income	Ordinary income	Profit attributable to	Profit per share
		owners of parent
	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Full year	410,000		4.6	35,000	6.1	37,700	5.0	25,500	1.8	359.94

(Note) Revisions to the most recently announced consolidated earnings forecast: None

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*Notes

1. Changes in significant subsidiaries during the period: None
   (Changes in specified subsidiaries resulting in the change in scope of consolidation)
2. Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements: Yes

Note: For details, see "Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements" on p.7 of the attached materials.

(3) Changes in accounting policies, changes in accounting estimates, and restatement

(i) Changes in accounting policies due to revisions to accounting standards and other regulations: Yes

(ii) Changes in accounting policies due to other reasons: None

(iii) Changes in accounting estimates: None

(iv) Restatement: None

(4) Number of issued shares (common stock)
(i)	Total number of issued shares at	Nine months ended		Year ended
	the end of the period (including	70,864,961shares	70,864,961shares
	December 31, 2021	March 31, 2021
	treasury stock)
(ii)	Number of treasury stock at the	Nine months ended	19,272shares	Year ended	19,025shares
	end of the period	December 31, 2021	March 31, 2021
(iii) Average number of shares
	outstanding during the period	Nine months ended	70,845,834shares	Nine months ended	70,846,049shares
	(cumulative from the beginning	December 31, 2021	December 31, 2020
	of the fiscal year)

• Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation.
• Proper use of consolidated earnings forecasts and other special matters
  Forward-looking statements such as the earnings outlook included in these materials are based on information available to the company at the time of their compilation and on certain assumptions that have been determined to be reasonable. They do not constitute any commitment on the part of the company to achieve specific results. In addition, actual performance and other results may diverge significantly from forecasts for a variety of reasons. For precautionary information about the conditions that comprise the assumptions underlying earnings forecasts and about the use of earnings forecasts, see "Explanation of consolidated earnings forecasts and other forward-looking information " on p.2 of the attached materials.

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Attached materials ― Contents

1.	Qualitative information related to this quarterly financial report ......................................................................................	2
	(1)	Explanation of operating results ...........................................................................................................................	2
	(2)	Explanation of financial position ...........................................................................................................................	2
	(3)	Explanation of consolidated earnings forecasts and other forward-looking information .......................................	2
2.	Quarterly consolidated financial statements and principal notes ....................................................................................	3
	(1)	Quarterly consolidated balance sheet ..................................................................................................................	3
	(2)	Quarterly consolidated statement of income and quarterly consolidated statement of comprehensive income ...	5
	(3)	Notes on the quarterly consolidated financial statements.....................................................................................	7
		(Notes on the premise of a going concern)...........................................................................................................	7
		(Notes on noteworthy changes in shareholders' equity) .......................................................................................	7
		(Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements) ....	7
		(Changes in accounting policies)..........................................................................................................................	7
3.	Reference .......................................................................................................................................................................	8
		Overview of non-consolidated results...................................................................................................................	8
4.	Supplemental information ...............................................................................................................................................	9
	(1)	Breakdown of consolidated results by business segment and customer..............................................................	9
	(2)	Breakdown of non-consolidated results by business segment and customer.....................................................	10

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1. Qualitative information related to this quarterly financial report

(1) Explanation of operating results

Order volume during the nine months ended December 31, 2021, rose 5.4% from the corresponding period of the previous fiscal year to ¥256,411 million thanks to efforts to earn targeted orders. Orders from general private-sector customers exhibited particular strength.

Net sales fell 9.5% from the corresponding period of the previous fiscal year to ¥241,283 million. With regard to general facilities construction, a lack of progress posting sales due to a comparatively large number of the pecentage- of-completion method projects in the initial stages of construction as well as delays in procurement stemming partially from the effects of supply shortages weighed on construction progress. With regard to solar power facility construction, the construction balance fell from the corresponding period of the previous fiscal year due to factors including a delay in the start of construction on a large project.

Operating profit fell 11.4% from the corresponding period of the previous fiscal year to ¥16,741 million. Factors including a decline in sales pushed down profits despite progress in cost improvements over the corresponding period of the previous fiscal year thanks to profit-improving measures.

Ordinary profit fell 7.3% to ¥19,402 million, while quarterly profit attributable to owners of parent fell 0.4% to ¥13,787 million.

With regard to the impact of the COVID-19 pandemic, we're experiencing delays in the start of construction and in progress on some large projects, but we have determined that those issues are not sufficiently pronounced at this point in time to necessitate a review of management policies or plans for the current fiscal year.

In addition, net sales fell ¥1,476 million due to the application of Accounting Standards for Revenue Recognition and other accounting standards.

(2) Explanation of financial position

Total assets fell ¥18,363 million (5.0%) from the end of the previous consolidated fiscal year to ¥348,168 million due to factors including a decrease in completed construction contract accounts receivable.

Total liabilities fell ¥23,215 million (16.0%) from the end of the previous consolidated fiscal year to ¥121,574 million due to factors including a decrease in construction contracts accounts payable.

Total net assets rose ¥4,852 million (2.2%) from the end of the previous consolidated fiscal year to ¥226,593 million as posting of quarterly profit attributable to owners of parent offset cash dividend payments and a decrease in valuation difference on other available-for-sale securities.

(3) Explanation of consolidated earnings forecasts and other forward-looking information

There has been no change to the earnings forecast announced along with year-end financial results on April 28, 2021.

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2. Quarterly consolidated financial statements and principal notes

(1) Quarterly consolidated balance sheet

					(Millions of yen)
				Previous fiscal year	Current 3rd Quarter
				As of March 31, 2021 As of December 31, 2021
Assets
	Current assets
		Cash and deposits	50,905	46,856
		Notes receivable, accounts receivable from completed	130,705	93,993
		construction contracts and other
		Costs of uncompleted construction contracts	5,910	17,657
		Merchandise	1,040	1,447
		Raw materials and supplies	14,579	21,881
		Other	9,451	9,234
		Allowance for doubtful accounts	(18)	(30)
		Total current assets	212,574	191,040
	Fixed assets
		Property and equipment
		Buildings and structures, net	32,337	32,512
		Land	28,887	29,488
		Other, net	19,472	18,297
		Total property and equipment	80,698	80,298
		Intangible assets
		Goodwill	-	1,935
		Other	1,729	1,643
		Total intangible assets	1,729	3,578
		Investments and other assets
		Investment securities	63,194	60,774
		Long-term loans receivable	1,256	411
		Retirement benefit asset	554	3,317
		Deferred tax assets	3,507	4,375
		Other	4,781	5,375
		Allowance for doubtful accounts	(1,764)	(1,004)
		Total investments and other assets	71,530	73,249
		Total fixed assets	153,957	157,127
	Total assets	366,532	348,168

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