MODEC : 2022 Full-Year Financial Results

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 Results

for the Year Ended December 31, 2022

(IFRS)

February 14, 2023

Company name:	MODEC, INC.
Listing:	Tokyo Stock Exchange
Securities code:	6269
URL:	http://www.modec.com
Representative:	Takeshi Kanamori, Representative Director, President
Inquiries:	Yasuhiro Takano, Director, Executive Managing Officer
Telephone:	[phone]

Scheduled date of annual general meeting of shareholders:	March 28, 2023
Scheduled date to commence dividend payments:	－
Scheduled date to file annual securities report:	March 28, 2023
Preparation of supplementary material on financial results:	Yes
Holding of financial results briefing:	Yes (for institutional investors and analysts)
	(Yen amounts are rounded down to millions.)

1. Consolidated financial results for the year ended December 31, 2022 (from January 1, 2022 to December 31, 2022)

(1) Consolidated operating results						(Percentages indicate year-on-year changes.)
		Revenue				Operating profit		Profit before tax		Profit
	Year ended	million yen		%		million yen		%		million yen	%		million yen		%
	December 31, 2022	363,593		(18.9)	9,997		-	7,277	-		5,460		-
	December 31, 2021	448,510		42.5	(36,512)		-	(39,597)	-		(41,394)		-
		Profit attributable to		Total comprehensive		Basic earnings		Diluted earnings
		owners of parent		income			per share		per share
	Year ended	million yen		%		million yen		%			yen					yen
	December 31, 2022	4,960		-	37,606		-			88.00					87.96
	December 31, 2021	(41,860)		-	(33,780)		-			(742.75)			(742.75)
		Return on equity		Ratio of profit before		Ratio of operating
		attributable to owners
			tax to total assets		profit to revenue
		of parent
	Year ended			%				%			%
	December 31, 2022			5.9				1.8			2.7
	December 31, 2021			(52.7)				(10.4)			(8.1)
	Reference: Share of	profit (loss) of investments	accounted for using equity method
	Year ended December 31, 2022: 16,833 million yen; Year ended December 31, 2021: 3,370 million yen
(2) Consolidated financial position
									Equity attributable	Ratio of equity	Equity attributable
									attributable to
		Total assets				Total equity	to owners of parent
					to owners of parent	owners of parent to
												total assets			per share
	As of	million yen			million yen			million yen			%				yen
	December 31, 2022	416,206		111,625		107,712			25.9			1,910.82
	December 31, 2021	393,971		63,802		61,247			15.5			1,086.67

(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 year
Year ended	million yen	million yen	million yen	million yen
December 31, 2022	(27,722)	(7,544)	(6,504)	65,376
December 31, 2021	17,509	(25,364)	30,588	93,173

Note: The original consolidated financial statements of MODEC, INC. and its subsidiaries (hereinafter "the Company") for the years ended December 31, 2022 and 2021 are presented in functional currency of the Company, US dollars. The amounts presented for consolidated operating results, consolidated financial position and consolidated cash flows are converted to Japanese yen, respectively, as follows:

December 31, 2022 US$1.00 = 132.71 Japanese yen at the TTM rate of Sumitomo Mitsui Banking Corporation as of December 30, 2022. December 31, 2021 US$1.00 = 115.01 Japanese yen at the TTM rate of Sumitomo Mitsui Banking Corporation as of December 30, 2021.

The percentage indicating year-on-year changes is calculated on Japanese yen basis presented above.

Consolidated operating results, consolidated financial position and consolidated cash flow information in US dollars are presented in page 5 of this material.

2. Cash dividends

		Annual dividends per share				Ratio of
						Total cash		dividends to
	First	Second	Third			Payout ratio	equity
	Year-end	Total	dividends	attributable to
	quarter-	quarter-	quarter-	(Consolidated)
	end	end	end			(Total)		owners of
					parent
								(Consolidated)
	yen	yen	yen	yen	yen	million yen	%	%
Year ended	-	15.00	-	0.00	15.00	846	-	1.1
December 31, 2021
Year ended	-	0.00	-	0.00	0.00	-	-	-
December 31, 2022
Year ending	-	-	-	-	-		-
December 31, 2023
(Forecast)

3. Consolidated earnings forecast for 2023 (from January 1, 2023 to December 31, 2023)

(Percentages indicate year-on-year changes.)

	Revenue		Operating profit	Profit before tax	Profit attributable to	Basic earnings
		owners of parent	per share
	million yen	%	million yen	%	million yen	%	million yen	%	yen
Full Year	398,130	9.5	7,962	(20.4)	9,289	27.7	5,971	20.4	105.94

Note: The original consolidated earnings forecast of the Company is presented in functional currency of the Company, US dollars. The amounts in Japanese yen presented for the consolidated earnings forecast for 2023 is converted using US$1.00 = 132.71 Japanese yen at the TTM rate of Sumitomo Mitsui Banking Corporation as of December 30, 2022.

The consolidated earnings forecast in US dollars are presented in page 5 of this material.

* Notes

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of consolidation): None
2. Changes in accounting policies and changes in accounting estimates
3. 1. Changes in accounting policies required by IFRS: None
   2. Changes in accounting policies due to other reasons: None
   3. Changes in accounting estimates: None
4. Number of issued shares (ordinary shares)
5. 1. Total number of issued shares at the end of the year (including treasury shares)

As of December 31, 2022

As of December 31, 2021

56,408,000 shares

56,408,000 shares

1. Number of treasury shares at the end of the year

As of December 31, 2022

As of December 31, 2021

38,217 shares

45,100 shares

(iii) Average number of shares outstanding during the year

Year ended December 31, 2022

Year ended December 31, 2021

56,367,747 shares

56,359,561 shares

[Reference] Overview of non-consolidated financial results

1. Non-consolidated financial results for the year ended December 31, 2022 (from January 1, 2022 to December 31, 2022)

(1) Non-consolidated operating results				(Percentages indicate year-on-year changes.)
		Net sales			Operating profit		Ordinary profit		Profit
	Year ended	million yen	%			million yen	%		million yen		%	million yen	%
	December 31, 2022	269,663	(24.7)			(2,747)	-		29,192		-	5,112	-
	December 31, 2021	358,045	54.6			(5,535)	-		(4,052)		-	(67,621)	-
		Basic earnings		Diluted earnings
		per share		per share
	Year ended		yen			yen
	December 31, 2022		90.69				-
	December 31, 2021		(1,199.82)			-
(2) Non-consolidated financial position
		Total assets	Net assets	Equity-to-asset ratio	Net assets per share
	As of		million yen		million yen			%		yen
	December 31, 2022		241,328				21,532				8.9		381.98
	December 31, 2021		263,987				16,389				6.2		290.78

Reference: Equity as of December 31, 2022: 21,532 million yen; as of December 31, 2021: 16,389 million yen

Note: Non-consolidated financial results are based on Japan GAAP.

• Consolidated financial results are exempt from audit conducted by certified public accountants or an audit corporation.
• Notes for the proper use of earnings forecasts and other special matters
• • Accompanying consolidated financial statements and selected notes are presented in functional currency of the

Company, US dollars.

・Earnings forecast and other forward-looking statements included in this material are based on information currently available to the Company and are based on assumptions deemed reasonable. They are not meant to be a guarantee of future performance or outcomes. Actual results may differ materially subject to various factors. Please refer to

Qualitative information on financial results on the second page of attached material for assumptions and conditions precedent of earnings forecast and notes for utilization.

・The Company will hold an on-line financial result presentation for institutional investors and analysts on February 15th, 2023. The material used for the financial result presentation will be posted on the Company's web site immediately following the session.

[Reference] Consolidated financial results for the year ended December 31, 2022 and consolidated earnings forecast for the year ending December 31, 2023 presented in functional currency of the Company, US dollars

(US dollar amounts are rounded down to thousands.)

1. Consolidated financial results for the year ended December 31, 2022 (from January 1, 2022 to December 31, 2022)

(1) Consolidated operating results

												(Percentages indicate year-on-year changes.)
			Revenue				Operating profit		Profit before tax				Profit
	Year ended		US$ thousand		%		US$ thousand		%		US$ thousand		%		US$ thousand		%
	December 31, 2022	2,739,762		(29.7)		75,330		－		54,835		－			41,143		－
	December 31, 2021	3,899,748		42.5		(317,552)		-		(344,300)		-			(359,920)		-
			Profit attributable to		Total comprehensive		Basic earnings			Diluted earnings
			owners of parent		income		per share					per share
	Year ended		US$ thousand		%		US$ thousand		%						US$						US$
	December 31, 2022	37,377			－		283,372		－						0.66						0.66
	December 31, 2021	(363,975)		-		(293,720)		-				(6.46)						(6.46)
			Return on equity		Ratio of profit before		Ratio of operating
			attributable to owners
				tax to total assets		profit to revenue
			of parent
	Year ended				%			%						%
	December 31, 2022				5.6			1.7						2.7
	December 31, 2021				(52.7)			(10.4)						(8.1)
	Reference: Share of	profit (loss) of investments		accounted for using equity method
	Year ended December 31, 2022: US$126,845 thousand; Year ended December 31, 2021: US$29,309 thousand
(2) Consolidated financial position
										Equity attributable		Ratio of equity			Equity attributable
											attributable to
			Total assets		Total equity					to owners of parent
					to owners of parent		owners of parent
														to total assets			per share
	As of		US$ thousand		US$ thousand			US$ thousand						%				US$
	December 31, 2022	3,136,213			841,121				811,640				25.9				14.40
	December 31, 2021	3,425,542			554,759				532,541				15.5				9.45
(3) Consolidated cash flows
			Cash flows from	Cash flows from	Cash flows from			Cash and cash
				equivalents at end of
			operating activities	investing activities	financing activities
					year
	Year ended		US$ thousand		US$ thousand				US$ thousand					US$ thousand
	December 31, 2022		(208,895)		(56,846)					(49,013)					492,625
	December 31, 2021				152,239		(220,544)					265,965					810,131

2. Consolidated earnings forecast for 2023 (from January 1, 2023 to December 31, 2023)

(Percentages indicate year-on-year changes.)

	Revenue		Operating profit	Profit before tax	Profit attributable	Basic
		to owners of	earnings per
								parent		share
	US$ thousand		%	US$ thousand	%	US$ thousand	%	US$ thousand	%	US$
Full Year	3,000,000		9.5	60,000	(20.4)	70,000	27.7	45,000	20.4	0.80