METAWATER : CONSOLIDATED RESULTS FOR THE THREE MONTHS ENDED JUNE 30,2022

TRANSLATION - FOR REFERENCE ONLY

METAWATER Co., Ltd.

For Immediate ReleaseJuly 27, 2022

CONSOLIDATED RESULTS FOR THE THREE MONTHS ENDED

JUNE 30, 2022 (Unaudited)	[JP GAAP]
Company name	METAWATER Co., Ltd.
Stock exchanges on which the shares are listed	Prime Market of Tokyo Stock Exchange
Securities code	9551
URL	https://www.metawater.co.jp
Representative	Kenji Yamaguchi
	President and Representative Director
Contact person	Masayuki Nakagawa
	Executive Officer
	Executive General Manager of Financial Planning
	Office
	(TEL.:[phone])
Filing date of quarterly securities report	August 9, 2022
Payment date of cash dividends	―
Supplementary information materials on	Available
quarterly results
Quarterly results briefing	Will not be held

(Amounts are rounded down to the nearest million yen)

1. Highlight of consolidated results for the three months ended June 30, 2022

(1) Consolidated operating results (year-to-date)

(Percentages are year-to-year changes)

	Net sales		Operating			Ordinary		Profit attributable
				income			income		to owners of
										parent
	Million yen	%		Million yen	%	Million yen	%	Million yen		%
Three months ended	19,918	25.0		(1,932)	―		(1,142)	―	(951)	―
June 30, 2022
Three months ended	15,934	12.3		(2,828)	―		(2,697)	―	(2,078)	―
June 30, 2021
Note: Comprehensive income:	Three months ended June 30, 2022		(270) million yen	― %
		Three months ended June 30, 2021		(1,083) million yen	― %
	Net income per share	Net income per share
	- Basic -	- Diluted -
	Yen			Yen
Three months ended		(21.85)				―
June 30, 2022
Three months ended		(47.73)				―
June 30, 2021

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(2) Consolidated financial position

Total assets

Net assets

Shareholders' equity

to total assets

Million yen

Million yen

%

As of June 30, 2022

129,182

59,197

44.9

As of March 31, 2022

133,065

59,548

44.5

Note: Shareholders' equity:

As of June 30, 2022

57,987 million yen

As of March 31, 2022

59,246 million yen

2. Dividends

Dividends per share

Period

1Q

2Q

3Q

4Q

Annual

Yen

Yen

Yen

Yen

Yen

Fiscal year

―

20.00

―

20.00

40.00

ended March

31, 2022

Fiscal year

―

ending March

31, 2023

Fiscal year

ending March

20.00

―

20.00

40.00

31, 2023

(Forecast)

Note: Revision of forecast for dividends from the latest announcement: No

3. Forecast for consolidated operating results for the fiscal year ending March 31, 2023

(Percentages are year-to-year changes)

Profit attributable

Net income

Net sales

Operating income

Ordinary income

per share

to owners of parent

- Basic -

Million

%

Million

%

Million

%

Million

%

Yen

yen

yen

yen

yen

Fiscal

year

149,000

9.9

9,300

14.2

9,300

6.3

6,300

0.9

144.62

ending

March 31,

2023

Note: Revision of forecast for operating results from the latest announcement: No

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Notes:

1. Changes in significant subsidiaries during the three months ended June 30, 2022 (Changes in specified subsidiaries that caused a change in the scope of consolidation): No
2. Application of accounting method specific to preparation of quarterly consolidated financial statements: Yes
3. Changes in accounting policies, changes in accounting estimates and retrospective restatement
4. 1. Changes by a newly issued or amended accounting pronouncement: Yes
   2. Changes other than (3)-(a) above: No
   3. Changes in accounting estimates: No
   4. Retrospective restatement: No
5. Number of shares issued and outstanding (common stock)
6. 1. Number of shares issued and outstanding at the end of the period (including treasury stock): 47,758,500 shares as of March 31, 2022 and 47,758,500 shares as of June 30, 2022.
   2. Number of treasury stock at the end of the period: 4,196,064 shares as of March 31, 2022 and 4,196,064 shares as of June 30, 2022.
   3. Average number of shares issued and outstanding for the period: 43,535,068 shares for the three months ended June 30, 2021 and 43,562,436 shares for the three months ended June 30, 2022.

• This quarterly report is not subject to the quarterly review performed by certified public accountants or accounting firm.
• Appropriate use of forecasts and other matters

Descriptions and statements in relation to estimates and other forward-looking projections disclosed in this document are based on judgments and assumptions using information currently available to the Company. Actual results may differ significantly from such projections due to risks of uncertainty inherent in such judgments and assumptions as well as changes in business operations and the internal and external environment of the Company. As such, the Company does not guarantee the accuracy of any forward-looking projections disclosed.

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Contents of Appendix
1. Qualitative Information Regarding Consolidated Results for the Three Months Ended
June 30, 2022 ....................................................................................................................................	5
(1)	Explanation of Operating Results .........................................................................................	5
(2)	Explanation of Financial Position .........................................................................................	6
(3) Explanation of Consolidated Business Forecast ...................................................................	6
2. Quarterly Consolidated Financial Statements and Major Notes.............................................	7
(1)	Quarterly Consolidated Balance Sheets ...............................................................................	7
(2)	Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of
	Comprehensive Income .........................................................................................................	9
(3) Notes to Quarterly Consolidated Financial Statements ....................................................	11
	Notes on Going Concern Assumption .....................................................................	11
	Notes on Significant Changes in Shareholders' Equity .........................................	11
	Application of Accounting Method Specific to Preparation of Quarterly
	Consolidated Financial Statements .........................................................................	11
	Changes in Accounting Policies ...............................................................................	11
	Segment Information.................................................................................................	12

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1. Qualitative Information Regarding Consolidated Results for the Three Months Ended June 30, 2022

(1) Explanation of Operating Results

Japanese economy during the three months ended June 30, 2022 showed signs of recovery, as the severe situation due to the effect of COVID-19 eased and the economic and social activities have gradually normalized. The global economy also continued to recover. Meanwhile, there are concerns about downside risks to the economy, including rising raw material prices, disruption of supply chain and the shortage of semiconductors due to rapid depreciation of Japanese Yen, prolonged situation in Ukraine and re-spreadingCOVID-19 in China.

Under such circumstances, the Group continues to make company-wide efforts to achieve the Midterm Business Plan 2023 (through the fiscal year ending March 31, 2024), by focusing on the following priority measures: i) enhancement of foundation field and expansion of growth field, ii) increase in R&D investment and iii) efforts of sustainable ESG.

The operating results of the Group for the three months ended June 30, 2022 are as the table below.

Both net sales and operating income increased year on year, as a result of steady growth in the EPC business and the North American subsidiaries in the overseas business, as well as the consolidation of K.K. Mizumusubi Management Miyagi in the PPP business. Ordinary income includes the ¥664 million of foreign exchange gain due to depreciation of Japanese Yen.

Our business consists mostly of the domestic public work projects for government agencies, which are typically developed and completed intensively in the fourth quarter. As a result, operating results for the first three months tend to be low, and this fiscal year is no exception.

	Three months	Three months	Increase/	Increase/
	ended	ended	(decrease)	(decrease)
	June 30, 2021	June 30, 2022
	(Million yen)	(Million yen)	(Million yen)	(%)
Net sales	15,934	19,918	3,983	25.0
Operating income	(2,828)	(1,932)	895	―
Ordinary income	(2,697)	(1,142)	1,555	―
Profit attributable to	(2,078)	(951)	1,126	―
owners of parent
Order received	37,969	38,180	211	0.6
Order backlog	191,045	204,292	13,246	6.9

The Group's business consists of two segments: Plant Engineering Business Segment including EPC (note 1) as foundation field and overseas business as growth field, and Service Solutions Business Segment including O&M (note 2) as foundation field and PPP (note 3) as growth field.

Operating results by segment are as follows:

Notes:

1. EPC: Engineering, Procurement and Construction
2. O&M: Operation and Maintenance
3. PPP (Public-Private Partnership): the means for the private sector to participate in providing services to the public

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