NEC Capital : Consolidated Financial Results for the six months ended September 30, 2023 396KB (2023/11/07)

Consolidated Financial Results for the six months ended September 30, 2023

Corporate name:

Stock exchange listings:

Stock code:

Website (URL):

Representative's name and title:

Contact:

October 30, 2023

NEC Capital Solutions Limited

Tokyo Stock Exchange, Prime Market

8793

https://www.necap.co.jp/english/

Masaaki Suganuma, President

Seiichiro Kodama, Department Manager of IR & PR Department

TEL [phone]

(Amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the six months ended September 30, 2023 (From April 1, 2023 to September 30, 2023)

(Percentage shows increase/decrease from the same quarter of the previous fiscal year)

(1) Consolidated Business Results

		Revenues	Operating Income	Ordinary Income	Profit attributable to
		owners of parent
		Million Yen	%		Million Yen	%	Million Yen	%	Million Yen	%
Six months ended		124,010	(8.6)		3,741	(49.9)	3,240	(62.4)	1,944	(55.9)
September 30, 2023
Six months ended		135,673	6.8		7,462	7.3	8,608	17.8	4,411	26.7
September 30, 2022
(Note) Comprehensive income:
FY2024/3 2nd quarter : 4,132 Million Yen	(48.8)%
FY2023/3 2nd quarter : 8,071 Million Yen	18.7%
		Net Income per		Net Income per
		Share: Basic		Share: Diluted
			Yen			Yen
Six months ended			90.31			－
September 30, 2023
Six months ended		204.94			－
September 30, 2022
(2) Consolidated Financial Position
		Total Assets		Net Assets	Equity Ratio
		Million Yen		Million Yen		%
As of September 30, 2023	1,053,028		133,628		10.7
As of March 31, 2023	1,055,875		128,815		10.4

(Reference) Shareholders' Equity:

September 30, 2023 : 112,251 Million Yen

March 31, 2023 : 109,490 Million Yen

NEC Capital Solutions Limited (8793) Consolidated Financial Results for the six months ended September 30, 2023

2. Dividends Status

			Annual Dividends
	1st quarter-end	2nd quarter-end	3rd quarter-end	Fiscal year-end	Total
Fiscal year ended	Yen	Yen	Yen	Yen	Yen
－	37.00	－	73.00	110.00
March 31, 2023
Fiscal year ending	－	65.00
March 31, 2024
Fiscal year ending			－	65.00	130.00
March 31, 2024
(Forecasts)
(Note) Revisions to dividend forecasts for the current quarter: No

3. Forecasts for the fiscal year ending March 31, 2024 (April 1, 2023 to March 31, 2024)

(Percentage shows increase/decrease from previous term）

							Profit		Net Income
							attributable to
	Revenues		Operating Income	Ordinary Income	per Share:
		owners of
							Basic
							parent
	Million Yen	%	Million	%	Million Yen	%	Million Yen	%	Yen
			Yen
Fiscal year ending	260,000	0.7	12,000	2.4	12,500	0.5	7,500	16.8	348.37
March 31, 2024
(Note) Revisions to forecasts for the current quarter: No

4. Other

(1) Changes in significant consolidated subsidiaries: Yes

New

: 1company

(TK R Residence one)

1. Application of specific accounting procedures in the preparation of quarterly financial statements: No
2. Changes in accounting policies, accounting estimates or restatements
3. 1. Changes in accounting policies accompanying revision of accounting standards: No
   2. Any other changes, except those mentioned in 1) above: Yes
   3. Changes in accounting estimates: No
   4. Restatements: No
4. Number of shares issued (common stock)
5. 1. Outstanding shares at the end of the period (including treasury shares)

September 30, 2023 : 21,539,071 shares

March 31, 2023

: 21,533,400 shares

1. Number of treasury shares at the end of the period September 30, 2023 : 4,466 shares

March 31, 2023 : 4,324 shares

3) Average numbers of shares during the period

Six months ended September 30, 2023: 21,531,816 shares

Six months ended September 30, 2022: 21,528,449 shares

• This quarterly earnings report is exempt from the quarterly review by certified public accountants or audit corporations.
• Forecasts are based on the information available to management at the time they were made. Actual results may differ materially from forecasts for a number of reasons.

２

NEC Capital Solutions Limited (8793) Consolidated Financial Results for the six months ended September 30, 2023

Consolidated Financial Report

(1) Consolidated Balance Sheets

			(Unit: Million Yen)
	Term	As of March 31, 2023	As of September 30, 2023
Items
（Assets）
I. Current assets
1.	Cash on hand and in banks	35,482	28,110
2. Accounts receivable, installment sales	38,828	38,405
3.	Leases receivables and investment in leases	517,945	481,006
4. Accounts receivable, leases	22,034	22,789
5. Accounts receivable, loans	231,611	231,844
6.	Purchased receivables	12,419	13,072
7. Operational investment securities	22,875	25,717
8. Real estate for sale	23,827	29,049
9.Real estate for sale in process	-	567
10.	Other	13,107	10,045
11. Allowance for doubtful accounts	(9,839)	(9,578)
Total current assets	908,292	871,029
II. Fixed assets
(1) Property and equipment, net
1.	Leased assets	55,819	80,669
2.	Other operating assets	7,199	7,174
3. Assets held for own use	363	332
Total property and equipment, net	63,381	88,175
(2) Intangible assets
1.	Computer programs leased to customers	1,437	1,290
2. Goodwill	1,559	1,608
3. Software and other	6,176	7,167
Total intangible assets	9,173	10,066
(3) Investments and other assets
1.	Investment securities	61,737	70,741
2. Other	15,301	16,932
3. Allowance for doubtful accounts	(2,011)	(3,918)
Total investments and other assets	75,027	83,756
Total fixed assets	147,583	181,998
Total assets	1,055,875	1,053,028

３

NEC Capital Solutions Limited (8793) Consolidated Financial Results for the six months ended September 30, 2023

			(Unit: Million Yen)
	Term	As of March 31, 2023	As of September 30, 2023
Items
（Liabilities）
I. Current liabilities
1.	Notes payable, trade	140	189
2. Accounts payable, trade	15,654	10,193
3.	Short-term borrowings	27,090	23,925
4.	Current portion of long-term debt	149,486	134,678
5.	Current portion of bonds	20,000	20,000
6.	Commercial paper	243,000	234,000
7.	Payable under securitized lease receivables	1,286	879
	due within a year
8. Accrued income taxes	238	555
9. Allowance for bonuses	847	1,199
10. Allowance for bonuses for directors	33	20
11.Other	38,615	35,091
Total current liabilities	496,394	460,733
II. Long-term liabilities
1.	Bonds	80,150	80,150
2.	Long-term debt	335,636	362,090
3. Payable under securitized lease receivables	2,699	2,430
4.	Net defined benefit liability	2,034	1,985
5.	Other	10,145	12,009
Total long-term liabilities	430,665	458,665
Total liabilities	927,060	919,399
(Net assets)
I. Shareholders' equity
1.	Common stock	3,776	3,776
2.	Capital surplus	4,646	4,652
3.	Retained earnings	97,131	97,504
4.	Treasury stock, at cost	(9)	(9)
Total shareholders' equity	105,545	105,924
II. Accumulated other comprehensive income
1. Net unrealized gains on marketable securities	1,627	1,921
2.	Deferred losses on hedging derivatives	91	217
3.	Foreign currency translation adjustments	2,262	4,207
4.	Remeasurements of defined benefit plans	(36)	(19)
Total accumulated other comprehensive
3,944	6,327
income
III. Non-controlling interests	19,325	21,376
Total net assets	128,815	133,628
Total liabilities and net assets	1,055,875	1,053,028

４

NEC Capital Solutions Limited (8793) Consolidated Financial Results for the six months ended September 30, 2023

（2）Consolidated Statements of Income and Consolidated Statements of Comprehensive Income

(i) Consolidated Statements of Income

						(Unit: Million Yen)
			Term	Six months ended	Six months ended
Items				September 30, 2022	September 30, 2023
I. Revenues				135,673	124,010
II. Costs				117,570	109,497
	Gross profit				18,102	14,512
III. Selling, general, and administrative
expenses				10,640	10,771
	Operating income				7,462	3,741
IV. Non-operating income
1.	Interest income				22	32
2.	Dividend income				42	51
3.Equity in earnings of affiliates		-	11
4.	Gain on investment in partnerships		843	215
5.	Foreign exchange gains				259	-
6.	Other				188	75
Subtotal				1,356	386
V. Non-operating expenses
1. Interest expense				12	246
2.	Equity in losses of affiliates			77	-
3.	Loss on investment in partnerships		13	53
4.	Foreign exchange losses				-	517
5. Compensation for damage			85	-
6.	Other				21	69
Subtotal				210	886
Ordinary income				8,608	3,240
VI. Extraordinary income
1.Gain on liquidation of subsidiaries		-	114
2.Gain on sale of shares	of	subsidiaries	and	-	9
associates
	Subtotal				-	124
Profit before income taxes				8,608	3,364
Income taxes, current				740	1,119
Income taxes, deferred				2,261	494
	Total				3,001	1,614
Profit				5,606	1,750
Profit (loss) attributable	to	non-controlling	1,194	(194)
interests
Profit attributable to owners of parent		4,411	1,944

５

NEC Capital Solutions Limited (8793) Consolidated Financial Results for the six months ended September 30, 2023

(ii) Consolidated Statements of Comprehensive Income

		(Unit: Million Yen)
Term	Six months ended	Six months ended
Items	September 30, 2022	September 30, 2023
I. Profit	5,606	1,750
II. Other comprehensive income
1. Net unrealized gains (losses) on marketable	18	147
securities
2. Deferred gains (losses) on hedging derivatives	79	(13)
3. Foreign currency translation adjustments	2,144	1,226
4. Remeasurements of defined benefit plans	6	18
5. Share of other comprehensive income of	215	1,004
associates accounted for using equity method
Subtotal	2,465	2,382
Comprehensive income	8,071	4,132
Comprehensive income attributable to:
Owners of the parent	6,875	4,326
Non-controlling interests	1,195	(194)

６

NEC Capital Solutions Limited (8793) Consolidated Financial Results for the six months ended September 30, 2023

（3）Consolidated Statements of Cash Flows

		(Unit: Million Yen)
Term	Six months ended	Six months ended
Items	September 30, 2022	September 30, 2023
I. Cash Flows From Operating Activities
Income before income taxes and minority interests	8,608	3,364
Depreciation and amortization	8,093	9,246
Amortization of goodwill	100	97
Increase (Decrease) in allowance for doubtful accounts	577	1,645
Increase (Decrease) in allowance for bonuses	309	351
Increase (Decrease) in allowance for bonuses for directors	-	(12)
Increase (Decrease) in net defined benefit asset and	(51)	(57)
liability
Interest and dividend income	(64)	(83)
Interest expense	2,224	3,866
Equity in losses (earnings) of affiliated companies	77	(11)
Foreign exchange losses (gains)	9,530	6,950
Loss (gain) on sale of shares of subsidiaries and	-	(9)
associates
Gain on liquidation of subsidiaries	-	(114)
Decrease(Increase) in installment sales receivables	(1,806)	422
Decrease(Increase) in lease receivables and investment in	30,514	38,383
leases
Decrease(Increase) in loans receivable	(12,018)	828
Decrease(Increase) in trading receivables	80	(754)
Decrease(Increase) in purchased receivables	(2,490)	(652)
Decrease(Increase) in operational investment securities	(1,433)	(3,055)
Decrease(Increase) in real estate for sale	4,900	(5,414)
Decrease(Increase) in real estate for sale in process	-	(567)
Purchases of leased assets	(11,173)	(32,960)
Proceeds from sales of leased assets	5,292	1,377
Increase in other operating assets	(1,121)	(252)
Increase (Decrease) in trading accounts payables	7,631	(5,143)
Increase (Decrease) in advances received - leases	(432)	(2,811)
Other, net	(3,962)	(2,443)
Subtotal	43,385	12,188
Interest and dividend income received	90	109
Interest paid	(2,078)	(3,488)
Income taxes paid	(750)	(198)
Net cash provided by operating activities	40,648	8,610

７

NEC Capital Solutions Limited (8793) Consolidated Financial Results for the six months ended September 30, 2023

		(Unit: Million Yen)
Term	Six months ended	Six months ended
Items	September 30, 2022	September 30, 2023
II. Cash Flows From Investing Activities
Purchases of assets held for own use	(1,912)	(1,249)
Purchases of investment securities	(4,966)	(10,068)
Proceeds from redemption of securities	6,757	3,725
Proceeds from liquidation of subsidiaries and associates	-	354
Other, net	46	129
Net cash used in investing activities	(75)	(7,108)
III. Cash Flows From Financing Activities
Increase (Decrease) in short-term borrowings, net	(4,732)	(7,807)
Increase (Decrease) in commercial paper	(37,000)	(9,000)
Increase in long-term debt	38,455	66,979
Repayment of long-term debt	(47,239)	(57,548)
Repayment of securitized lease receivables	(1,411)	(675)
Proceeds from issuance of bonds	10,000	10,000
Redemption of bonds	(10,000)	(10,000)
Cash dividends paid	(1,064)	(1,660)
Cash dividends paid to Non-controlling	(2,472)	(587)
Proceeds from stock issuance to Non-controlling	1,833	2,309
Other, net	(8)	(7)
Net cash used in financing activities	(53,640)	(7,996)
Foreign currency translation adjustments on cash and cash	(384)	(907)
equivalents
IV. Net (decrease) increase in cash and cash equivalents	(13,452)	(7,401)
V. Cash and cash equivalents at beginning of period	37,467	35,557
Decrease in cash and cash equivalents resulting from
(137)	-
exclusion of subsidiaries from consolidation
VI. Cash and cash equivalents at end of period	23,877	28,155

８