Nippon Coke & Engineering : Consolidated Financial Report for Fiscal Year Ended March 31, 2023 (J-GAAP)

Nippon Coke & Engineering Co., Ltd. (3315) Consolidated Financial Report for Fiscal Year Ended March 31, 2023

Consolidated Financial Report for Fiscal Year Ended March 31, 2023 (J-GAAP)

		May 12, 2023
Company name:	Nippon Coke & Engineering Co., Ltd.	Listed stock exchange: Tokyo Stock Exchange
Securities code:	3315	URL: n-coke.com/en/index.html
Representative:	MATSUOKA Hiroaki, President and Representative Director
Inquiries:	OKUZONO Takayuki, General Manager, Personnel and General Affairs Department
	TEL: [phone]
Scheduled date of the Company's Annual Meeting of Shareholders: June 29, 2023
Scheduled filing date of the Company's annual securities report:	June 29, 2023
Scheduled date of dividend payment commencement:	-
Preparation of financial report supplemental explanatory materials:	Yes (In Japanese only)
Holding of financial results briefing:	No

(Figures are rounded down to the nearest million yen)

1. Consolidated Performance for Fiscal Year Ended March 31, 2023 (April 1, 2022 to March 31, 2023)

(1) Consolidated Business Results (year-to-date)

(In millions of yen unless otherwise stated; percentage figures show the year-on-year change.)

			Net Sales	Operating Income			Ordinary Income	Net Income Attributable
																							to Owners of the Parent
Fiscal year ended		174,062		39.6%			-397					-			-752			-	-1,075	-
March 31, 2023
Fiscal year ended		124,711		41.9%			12,253		75.1%		11,454		77.5%		7,380	86.0%
March 31, 2022
Note: Comprehensive income (loss):	Fiscal year ended March 31, 2023	-1,029 million yen (-%)
				Fiscal year ended March 31, 2022	7,401 million yen (75.9%)
		Net Income per	Diluted Net Income			Net Income to	Ordinary Income to		Operating Income to
			Share (Yen)		per Share (Yen)		Equity Ratio (%)	Total Assets Ratio (%)		Net Sales Ratio (%)
Fiscal year ended	-3.70						-							-1.9					-0.6			-0.2
March 31, 2023
Fiscal year ended	25.36						-							13.6					9.9			9.8
March 31, 2022
(Reference) Equity method investment gains (losses):	Fiscal year ended March 31, 2023		- million yen
										Fiscal year ended March 31, 2022		- million yen
(2) Consolidated Financial Position
																					(In millions of yen unless otherwise stated)
			Total Assets			Net Assets				Equity Ratio (%)	Net Assets per Share (Yen)
March 31, 2023	140,202				54,277							38.7					186.50
March 31, 2022	128,767				57,343							44.5					197.04
(Reference) Shareholders' equity:	March 31, 2023	54,277 million yen
				March 31, 2022 57,343 million yen
(3) Consolidated Cash Flows
																					(In millions of yen unless otherwise stated)
			Cash Flows from		Cash Flows from			Cash Flows from	Cash and Cash Equivalents as
			Operating Activities		Investing Activities		Financing Activities		of the End of the Period
Fiscal year ended					-12,402					-8,094						21,091					5,616
March 31, 2023
Fiscal year ended					4,608					-4,162							-1,074					5,019
March 31, 2022

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Nippon Coke & Engineering Co., Ltd. (3315) Consolidated Financial Report for Fiscal Year Ended March 31, 2023

2. Dividend Information

		Dividends per Share (Yen)		Total Dividend	Dividend	Dividend to
	End of the	End of the	End of the	Fiscal	Total		(Annual)	Payout		Net Assets
	First	Interim	Third	Year-End			(Millions of	Ratio (%)		Ratio (%)
	Quarter	Period	Quarter				yen)
Fiscal year ended	-	0.00	-	7.00	7.00	2,037		27.6	3.8
March 31, 2022
Fiscal year ended	-	0.00	-	0.00	0.00		-	-		-
March 31, 2023
Fiscal year ending	-	0.00	-	3.00	3.00				34.9
March 31, 2024 (forecast)

3. Consolidated Performance Forecast for Fiscal Year Ending March 31, 2024

(April 1, 2023 to March 31, 2024)

(In millions of yen unless otherwise stated; percentage figures show the year-on-year change)

	Net		Operating		Ordinary		Net Income		Net Income
				Attributable to		per Share
	Sales	Income		Income
			Owners of the Parent	(Yen)
Interim period	82,000		-12.9%	3,200		-%	2,800		-%	1,500		-%	5.15
Full fiscal year	159,000		-8.7%	6,300		-%	5,500		-%	2,500		-%	8.59

Cautionary Notes

1. Changes in important subsidiaries during the period (Changes in special subsidiaries due to changes in the scope of

consolidation and application of the equity method): No

Newly included: -

Excluded: -

1. Changes in Accounting Policies, Changes in Accounting Estimates, and Retrospective Restatements
2. 1. Changes in accounting policies in accordance with revisions to accounting standards and other regulations: No
   2. Changes in accounting policies other than (a) above: No
   3. Changes in accounting estimates: Yes
   4. Retrospective restatements: No

1. Issued shares (common stock)
2. 1. Number of issued shares as of the end of the period (including treasury stock)
   2. Number of shares of treasury stock as of the end of the period
   3. Average number of shares for the period (fiscal year-to-date)

March 31, 2023	302,349,449 shares	March 31, 2022	302,349,449 shares
March 31, 2023	11,323,046	shares	March 31, 2022	11,321,741 shares
Fiscal year ended	291,027,077	shares	Fiscal year ended	291,028,238 shares
March 31, 2023	March 31, 2022

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Nippon Coke & Engineering Co., Ltd. (3315) Consolidated Financial Report for Fiscal Year Ended March 31, 2023

(Reference) Overview of Non-Consolidated Business Results

Non-Consolidated Performance for Fiscal Year Ended March 31, 2023 (April 1, 2022 to March 31, 2023)

(1) Non-Consolidated Business Results

(In millions of yen unless otherwise stated; percentage figures show the year-on-year change.)

				Net Sales				Operating Income	Ordinary Income		Net Income
	Fiscal year ended	165,580		41.8%		-1,191			-%	-1,478		-%	-1,525	-%
	March 31, 2023
	Fiscal year ended	116,742		47.4%		11,569		78.5%	10,826		78.7%	7,011	84.4%
	March 31, 2022
				Net Income per Share (Yen)	Diluted Net Income per Share (Yen)
	Fiscal year ended						-5.24						-
	March 31, 2023
	Fiscal year ended						24.09						-
	March 31, 2022
(2) Non-Consolidated Financial Position
													(In millions of yen unless otherwise stated)
			Total Assets				Net Assets		Equity Ratio (%)	Net Assets per Share (Yen)
	March 31, 2023			133,239		50,334		37.8				172.96
	March 31, 2022			122,296		53,857		44.0				185.06
(Reference) Shareholders' equity:	March 31, 2023	50,334 million yen	March 31, 2022 53,857 million yen

This consolidated financial report is not subject to audit by a certified public accountant or an auditor.

Cautionary Statement and Other Explanatory Notes

Forward-looking statements including performance forecasts contained in this document are based on certain reasonable presumptions and beliefs in light of information currently available to management and should not be interpreted as a promise or guarantee by the Company that information or quantitative data will be achieved. Moreover, readers are advised that actual results may differ materially from forecasts due to a variety of factors. Please refer to "(4) Future Outlook" under "1. Business Results" on page 6 for details of the presumptions that underpin performance forecasts as well as cautionary statements and other explanatory notes with respect to the use of performance forecasts.

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Nippon Coke & Engineering Co., Ltd. (3315) Consolidated Financial Report for Fiscal Year Ended March 31, 2023

1. Business Results

1. Business Results for the Fiscal Year Ended March 31, 2023

During the fiscal year ended March 31, 2023, the Japanese economy continued to face downward risks from overseas economic situations, including volatile raw material prices due to the prolonged conflict in Ukraine and sharp fluctuations in exchange rates.

Under these circumstances, the Nippon Coke & Engineering Group recorded an increase of 49,350 million yen in consolidated net sales, compared with the previous fiscal year, to 174,062 million yen, due partly to improvement in market conditions for coking coal in the mainstay Coke Business as well as depreciation of the yen.

On the profit front, the Group recorded a consolidated operating loss of 397 million yen, compared with operating income of 12,253 million yen in the previous fiscal year. This loss was due to the impact of overvalued inventories resulting from a sharp decline in the coking coal market after a sharp rise in the market price. The Group recorded a consolidated ordinary loss of 752 million yen, compared with ordinary income of 11,454 million yen in the previous fiscal year.

The Group recorded extraordinary income of 183 million yen arising from such factors as gain on sales of non-current assets, against an extraordinary loss of 867 million yen due to loss on retirement of non-current assets.

As a result, net loss attributable to owners of the parent after income taxes stood at 1,075 million yen, compared to net income attributable to owners of the parent of 7,380 million yen in the previous fiscal year.

Segment Information

1. Coke Business

The Group's sales volume in the Coke Business decreased by 270,000 tonnes compared to the previous fiscal year to 1,483,000 tonnes due to decreased productions resulting from the implementation of the 2A coke kiln renewal project. However, revenues increased mainly due to better market conditions for coking coal and depreciation of the yen.

Profit decreased due to the impact of overvalued inventories resulting from a sharp decline in the coking coal market after a sharp rise in the market price.

As a result, consolidated net sales in the Coke Business amounted to 110,243 million yen, up 25,993 million yen compared with the previous fiscal year. There was a consolidated operating loss of 3,880 million yen, compared to consolidated operating income of 10,308 million yen in the previous fiscal year.

1. Fuel and Resource Recycling Business

The Group's sales volume in the Fuel and Resource Recycling Business amounted to 1,092,000 tonnes, down 151,000 tonnes year on year, owing to factors such as a decline in capacity utilization at major customers. However, revenue increased mainly due to better market conditions for fuel-use coal and depreciation of the yen.

As a result, consolidated net sales in the Fuel and Resource Recycling Business increased 22,041 million yen year on year to 51,768 million yen. Consolidated operating income increased 986 million yen to 3,243 million yen.

(iii) Comprehensive Engineering Business

In the Comprehensive Engineering Business, revenue in the Chemical Machinery Business increased as a result of increased capital investments at many of the Group's clients as they recovered from the effects of COVID-19.

As a result, consolidated net sales in the Comprehensive Engineering Business amounted to 8,159 million yen, up 1,187 million yen compared with the previous fiscal year. Consolidated operating income was 1,275 million yen, up 365 million yen year on year.

(iv) Other Businesses

In the Other Business segment, revenues increased due to the higher handling volume in the logistics business.

As a result, consolidated net sales in the Other Business segment were 3,891 million yen, up 128 million yen compared with the previous fiscal year. Consolidated operating income also increased 146 million yen year on year to 598 million yen.

1. Financial Position

Assets, Liabilities and Net Assets

Total assets as of March 31, 2023 stood at 140,202 million, up 11,435 million yen compared with the balance as of March 31, 2022. The main changes were merchandise and finished goods, which were up 8,177 million yen; construction in progress, which were up 3,527 million yen; raw materials and supplies, which were up 3,160 million yen; other current assets, which were up 1,112 million yen; and accounts receivable-trade, which were down 5,184 million yen.

Total liabilities as of March 31, 2023 stood at 85,925 million yen, up 14,501 million yen compared with the balance

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Nippon Coke & Engineering Co., Ltd. (3315) Consolidated Financial Report for Fiscal Year Ended March 31, 2023

as of March 31, 2022. In main movements, short-term loans payable were up 23,496 million yen, notes and accounts payable-trade shrank by 5,662 million yen, and income taxes payable decreased 2,845 million yen.

Net assets as of March 31, 2023 stood at 54,277 million yen, down 3,066 million yen compared with the balance as of March 31, 2022. Based on the aforementioned, the equity ratio was 38.7%.

1. Cash Flows

The balance of cash and cash equivalents (hereafter referred to as "funds") stood at 5,616 million yen as of March 31, 2023, 597 million yen higher than the end of the previous fiscal year.

The status and movements in various cash flows for the fiscal year ended March 31, 2023 were as follows.

(Cash Flows from Operating Activities)

Net cash used in operating activities was 12,402 million yen, an increase of 17,010 million yen compared with the previous fiscal year.

Major cash inflows were depreciation expenses of 5,381 million yen and a decrease in notes and accounts payable- trade and contract assets of 4,849 million yen. Principal cash outflows included an increase in inventories of 11,410 million yen, a decrease in notes and accounts payable-trade of 5,662 million yen, and payment of income taxes of 3,600 million yen.

(Cash Flows from Investing Activities)

Net cash used in investing activities totaled 8,094 million yen, an increase of 3,932 million yen compared with the previous fiscal year.

Major cash outflow in the fiscal year ended March 31, 2023 consisted of purchase of property, plant and equipment totaling 7,633 million yen.

(Cash Flows from Financing Activities)

Net cash provided by financing activities was 21,091 million yen, an increase of 22,165 million yen compared with the previous fiscal year.

In the fiscal year ended March 31, 2023, the proceeds from short-term loans payable amounted to 395,719 million yen, and proceeds from long-term loans payable amounted to 2,815 million yen. Against this, the repayment of short-term loans payable was 368,374 million yen, and the repayment of long-term loans payable was 7,020 million yen.

(Reference) Trends in Cash Flow Indices

	Fiscal Year	Fiscal Year	Fiscal Year	Fiscal Year	Fiscal Year
	Ended March	Ended March	Ended March	Ended March	Ended March
	31, 2019	31, 2020	31, 2021	31, 2022	31, 2023
Equity ratio1 (%)	39.4	44.4	50.0	44.5	38.7
Equity ratio based on market	23.8	16.7	32.5	32.5	18.1
capitalization2 (%)
Ratio of interest-bearing	3.6	4.6	1.5	5.0	-
liabilities to cash flows3 (Years)
Interest coverage ratio4 (Times)	26.1	17.8	55.3	21.0	-

1Equity ratio: (Net assets - Minority interests - New share subscription rights) / Total assets

2Equity ratio based on market capitalization: Market capitalization / Total assets

3Ratio of interest-bearing liabilities to cash flows: Interest-bearing liabilities / Cash flows from operating activities

4Interest coverage ratio: Cash flows from operating activities / Interest payments Notes:

1. All indices have been calculated using figures on a consolidated basis.
2. Market capitalization is calculated by multiplying the period-end closing share price with the number of shares issued and outstanding as of the fiscal period-end (after deducting treasury stock).
3. Cash flows from operating activities are the cash flows from operating activities listed in the statement of consolidated cash flows. Interest-bearing liabilities include all liabilities listed on the consolidated balance sheet on which interest is paid. Moreover, with respect to the payment of interest, the amount listed under interest paid in the statement of consolidated cash flows has been used.
4. The ratio of interest-bearing liabilities to cash flows and the interest coverage ratio for the fiscal year ended March 31, 2023 are omitted due to negative cash flows from operating activities.

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