Mercuria : Consolidated Financial Results for 2021

Consolidated Financial Results for 2021

		[Japanese GAAP]
		February 10, 2022
Company name: Mercuria Holdings Co., Ltd.	Listing: Tokyo Stock Exchange, First Section
Stock code:	7347	URL: https://mercuria-hd.jp/en/
Representative:	Toshihiro Toyoshima, CEO
Contact:	Yusuke Takigawa, Executive Officer, Head of Finance & Control Department
	Tel: [phone]
Scheduled date of Annual General Meeting of Shareholders:	March 29, 2022
Scheduled date of payment of dividend:	March 30, 2022
Scheduled date of filing of Annual Securities Report:	March 29, 2022
Preparation of supplementary materials for financial results:	None
Holding of financial results meeting:	Yes (for institutional investors and analysts)

(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for 2021 (January 1 to December 31, 2021)

(1) Consolidated results of operations					(Percentages represent year-on-year changes)
	Operating revenue		Operating profit		Ordinary profit		Profit attributable to
				owners of parent
	Million yen		%	Million yen		%	Million yen		%	Million yen		%
2021	4,170		-	1,763		-	1,817		-	1,304		-
2020	-		-	-		-	-		-	-		-

Note: Comprehensive income (millions of yen)		2021: 1,574 (-%)	2020: - (-%)
	Net income per share	Diluted net income	Return on equity	Ordinary profit on	Operating profit to
		per share		total assets	operating revenue
	Yen		Yen	%	%	%
2021	77.12		76.74	9.7	11.0	42.3
2020	-		-	-	-	-
Reference: Equity in earnings of affiliates (millions of yen)	2021: (398)	2020: -

Note: The results of operations and year-on-year changes for 2020 are not shown above as Mercuria Holdings was established on July 1, 2021 through a transfer of stock.

(2) Consolidated financial position

	Total assets	Net assets	Equity ratio	Net assets per share
	Million yen	Million yen	%	Yen
As of Dec. 31, 2021	18,010	15,821	83.9	733.92
As of Dec. 31, 2020	-	-	-	-

Reference: Shareholders' equity (millions of yen) As of Dec. 31, 2021: 15,108 As of Dec. 31, 2020: -

Note: The financial position as of December 31, 2020 is not presented as Mercuria Holdings was established on July 1, 2021 through a transfer of stock.

(3) Consolidated cash flows

	Cash flows from	Cash flows from	Cash flows from	Cash and cash equivalents
	operating activities	investing activities	financing activities	at end of period
	Million yen	Million yen	Million yen	Million yen
2021	179	228	1,346	4,605
2020	-	-	-	-

2. Dividends

		Dividends per share			Total	Payout ratio	Dividend on equity
	1Q-end	2Q-end	3Q-end	Year-end	Total	dividends	(consolidated)	(consolidated)
	Yen	Yen	Yen		Yen	Yen	Million yen	%	%
2020	-	-	-		-	-	-	-	-
2021	-	-	-		20.00	20.00	412	25.9	2.8
2022 (forecast)	-	0.00	-		20.00	20.00		31.7

Note: Dividends for 2020 and for the ends of 1Q and 2Q of 2021 are not presented as Mercuria Holdings was established on July 1, 2021 through a transfer of stock.

3. Consolidated Forecast for 2022 (January 1 to December 31, 2022)

(Percentages represent year-on-year changes)

	Operating revenue	Operating profit	Ordinary profit		Profit attributable to	Net income per share
		owners of parent
	Million yen	%	Million yen	%	Million yen		%	Million yen	%	Yen
Full year	4,000	(4.1)	1,900	7.7	1,900		4.6	1,300	(0.3)	76.85

* Notes

(1) Changes in significant subsidiaries during the period (change in scope of consolidation): None

Newly added: -

Excluded: -

1. Changes in accounting policies and accounting-based estimates, and restatements
2. 1. Changes in accounting policies due to revisions in accounting standards, others: None
   2. Changes in accounting policies other than 1) above: None
   3. Changes in accounting-based estimates: None
   4. Restatements: None
3. Number of shares issued (common stock)
4. 1. Number of shares issued at the end of the period (including treasury shares)

As of Dec. 31, 2021:	21,443,100 shares	As of Dec. 31, 2020:	- shares
2) Number of treasury shares at the end of the period
As of Dec. 31, 2021:	857,121 shares	As of Dec. 31, 2020:	- shares
3) Average number of shares during the period
2021:	16,915,161 shares	2020:	- shares

(Reference) Summary of Non-consolidated Financial Results Non-consolidated Financial Results for 2021 (January 1 to December 31, 2021)

(1) Non-consolidated results of operations			(Percentages represent year-on-year changes)
	Operating revenue	Operating profit	Ordinary profit		Profit
	Million yen	%	Million yen	%	Million yen		%	Million yen		%
2021	834	-	511	-	485		-	655		-
2020	-	-	-	-	-		-	-		-
	Net income per share	Diluted net income per
	share
		Yen		Yen
2021		38.44		38.26
2020		-		-

Note: The results of operations and year-on-year changes for 2020 are not shown above as Mercuria Holdings was established on July 1, 2021 through a transfer of stock. Non-consolidated results of operations are shown for the period from July 1, 2021, when Mercuria Holdings was established, to December 31, 2021.

(2) Non-consolidated financial position

	Total assets	Net assets		Equity ratio	Net assets per share
	Million yen	Million yen		%	Yen
As of Dec. 31, 2021	16,014	14,832		92.6	709.27
As of Dec. 31, 2020	-	-		-	-
Reference: Shareholders' equity (millions of yen)	As of Dec. 31, 2021: 14,832		As of Dec. 31, 2020: -

Note: The financial position as of December 31, 2020 is not presented as Mercuria Holdings was established on July 1, 2021 through a transfer of stock.

• The current financial report is not subject to audit by certified public accountants or auditing firms.
• Cautionary statement with respect to forward-looking statements, and other special items
  Mercuria Holdings plans to hold a financial results meeting for institutional investors and analysts on Friday, February 25, 2022. Materials to be distributed at this meeting will be available on the Mercuria Holdings' website immediately thereafter.

	Mercuria Holdings Co., Ltd. (7347) Financial Results for 2021
Contents of Attachments
1. Overview of Results of Operations	2
(1)	Analysis of Results of Operations	2
(2)	Analysis of Financial Position	3
(3)	Basic Policy for Profit Distribution, and Dividends in the Current and Next Fiscal Years	3
2. Corporate Group	4
3. Basic Approach for the Selection of Accounting Standards	4
4. Consolidated Financial Statements and Notes	5
(1)	Consolidated Balance Sheet	5
(2)	Consolidated Statements of Income and Comprehensive Income	7
	Consolidated Statement of Income	7
	Consolidated Statement of Comprehensive Income	8
(3)	Consolidated Statement of Changes in Equity	9
(4)	Consolidated Statement of Cash Flows	10
(5)	Notes to Consolidated Financial Statements	11
	Going Concern Assumption	11
	Segment and Other Information	11
	Per-share Information	11
	Subsequent Events	11

1

Mercuria Holdings Co., Ltd. (7347) Financial Results for 2021

1. Overview of Results of Operations

1. Analysis of Results of Operations Results of Operations

On July 1, 2021, Mercuria Holdings Co., Ltd. was established as the parent company and sole shareholder of Mercuria Investment Co., Ltd. by transferring all shares of Mercuria Investment to the new holding company. As there is no effective change in the scope of consolidation, comparisons with 2020 are comparisons of 2020 of Mercuria Investment and comparisons with the end of 2020 are comparisons with the end of 2020 for Mercuria Investment.

The consolidated financial statements for 2021 succeed those of Mercuria Investment, which became a wholly owned subsidiary through a transfer of stock.

In 2021, the pandemic continued to restrict economic activity in Japan. Although there are signs of an upturn in some sectors, the outlook for the Japanese economy remains uncertain.

With the goal of achieving medium to long -term growth, there were sales of stock of existing funds to recover investments, which resulted in the receipt of performance fees. Sales of stock include parts of the holdings of En Fund Limited Partnership, where Mercuria Holdings is the investment adviser, Asuka DBJ Investment Limited Partnership (Growth Fund I), a fund administered and managed by Mercuria Holdings, and other funds.

In addition, the Mercuria Group logged gains on the sale of shares held by Mercuria Japan Industrial Growth Fund (Buyout Fund I). This fund was established by Mercuria Investment together with Development Bank of Japan Inc. and Sumitomo Mitsui Trust Bank, Limited. Due to the above strategic exit made by Buyout Fund I, a gain on a fund investment through a "same -boat" investment was recognized. In addition, Buyout Fund I successfully made new investments in domestic operating companies.

There was also progress with business plans involving new funds based on Mercuria Group's investment strategy that reflects current market conditions. One was the establishment of the Infrastructure Warehousing Fund , which attracted investor commitments that exceeded initial expectations. This fund was establish ed with Itochu Enex Co., Ltd., Sumitomo Mitsui Trust and Banking Co., Ltd. and other partners and has the basic strategy of selling solar power facilities to Enex Infrastructure Investment Corporation. In the aircraft leasing business, we established Mercuria Airborne Capital Co., Ltd. with Airborne Capital Limited, a company specializing in the establishment and administration of aircraft leases. This company was formed in anticipation of the growth of investments in aircraft after the pandemic ends.

In 2021, operating revenue was 4,169 million yen. Compared with the previous year, there was revenue from performance fees in the fund management business in 2021 and there was revenue in the principal investing business that included a gain on fund investment resulting both from the sale of stock held by Buyout Fund I and from the transfer of solar power facilities to Enex Infrastructure Investment Corporation . However, operating revenue decreased 32.6% because of the substantial revenue generated in 2020 by t he sale of Spring REIT units held by the Mercuria Group.

Performance fees in the fund management business and operating revenue in the principal investing business generated earnings. In addition, earnings in 2020 were held down by a loss on the sale of th e Spring REIT units. As a result, ordinary profit increased 139.8% to 1,816 million yen.

Profit attributable to owners of parent increased 148.4% to 1,304 million yen.

Outlook

The business climate is expected to remain uncertain in 2022 because of the abs ence of signs of an end of the pandemic and concerns about the outlook for the global economy.

In this circumstance, we expect consolidated operating revenue of 4,000 million yen (down 4.1% year-on-year), operating profit of 1,900 million yen (up 7.7%), ordinary profit of 1,900 million yen (up 4.6%), and profit

2

Mercuria Holdings Co., Ltd. (7347) Financial Results for 2021

attributable to owners of parent of 1,300 million yen (down 0.3%) for 2022.

The above forecasts are based on assumptions judged to be valid and information currently available to Mercuria Holdings's management. Actual results may differ from the forecasts for a number of reasons.

(2) Analysis of Financial Position

Assets, Liabilities and Net Assets

Total assets amounted to 18,010 million yen at the end of 2021, an increase of 2,957 million yen over the end of 2020. The main reasons were increases of 1,794 million yen in cash and deposits primarily resulting from fund procurement by the issue of new shares, and 983 million yen in operational investment securities mainly due to payments of capital commitments for Buyout Fund I and changes in the market values of securities.

Total liabilities amounted to 2,188 million yen, a decrease of 394 million yen over the end of 2020. The main reason was a decrease of 293 million yen in short-term borrowings through repayment.

Net assets totaled 15,821 million yen, an increase of 3,352 million yen. The main reasons were increases of 1,031 million yen in share capital, 1,207 million yen in capital surplus mainly due to fund procurement by the issue of new shares and 959 million yen in retained earnings.

(3) Basic Policy for Profit Distribution, and Dividends in the Current and Next Fiscal Years

Distributing earnings to shareholders is one of our highest priorities. The basic policy is to consistently distribute earnings to shareholders in a manner that reflects results of operations while taking into consideration the current financial position, business performance and status of business operations and retaining earnings as needed.

We plan to pay a dividend of 20 yen per share for 2021 and 20 yen per share for 2022 in accordance with this basic policy.

3