Nitto Boseki : Financial Results (Fiscal Year Ending 2024/Mar 2Q） （254KB）

Disclaimer: This document has been translated from the Consolidated Financial Results report originally written in Japanese and is provided for your reference and convenience only, without any warranty as to its accuracy or as to the completeness of the information. The Japanese original of the document is the sole official version.

Consolidated Financial Results

for the First Six Months of the Fiscal Year Ending March 31, 2024

November 2, 2023

Company Name:	Nittobo
Securities Code:	3110
Stock Exchange Listing:	Tokyo Stock Exchange
URL:	https://www.nittobo.co.jp/eng/index
Representative:	Yuichi Tsuji, Director, Representative and Chief Executive Officer
Contact:	Hiroki Kajikawa, Executive Officer
Tel:	[phone]

Scheduled date of filing quarterly securities report:	November 9, 2023
Scheduled date of commencement of dividend payment:	December 11, 2023
Preparation of supplementary explanatory material for quarterly financial results: Yes
Organization of quarterly financial results briefing:	Yes (online conference for institutional investors and
	analysts)

(Millions of yen, rounded down)

1. Consolidated financial results for the first six months of the fiscal year ending March 31, 2024 (April 1, 2023 to September 30, 2023)

(1) Consolidated results of operations (cumulative)

(Percentage figures represent year-on-year changes.)

			Net sales	Operating profit	Ordinary profit	Profit attributable to
			owners of parent
	Six months ended		Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
	September 30, 2023		42,734	(9.1)	3,118	(32.2)	4,187	(32.5)	3,516	(53.0)
	September 30, 2022		47,037	14.5	4,597	16.9	6,205	59.0	7,474	219.1
	(Note) Comprehensive income: Six months ended September 30, 2023	¥8,347 million [(25.1)%]
		Six months ended September 30, 2022	¥11,145 million [171.2%]
			Basic earnings	Diluted earnings
			per share		per share
	Six months ended			Yen			Yen
	September 30, 2023			96.59			-
	September 30, 2022			195.32			-
(2) Consolidated financial position
			Total assets		Net assets	Equity-to-asset ratio
	As of		Millions of yen		Millions of yen		%
	September 30, 2023			199,208			116,071		55.5
	March 31, 2023			185,585			108,948		55.9
(Reference) Equity: As of September 30, 2023 ¥110,542 million;		As of March 31, 2023 ¥103,793 million

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2. Dividends

					Dividends per share
		First quarter-		Second quarter-		Third quarter-		Fiscal year-end		Annual total
		end		end		end
		Yen		Yen		Yen		Yen		Yen
Fiscal year ended March 31, 2023		-	22.50		-		32.50	55.00
Fiscal year ending March 31, 2024		-	22.50
Fiscal year ending March 31, 2024						-		22.50	45.00
(Forecast)

(Note) Revision of the forecasted dividends from most recently announced figures: None

Notes on dividends: Fiscal year-end dividends for the fiscal year ended March 31, 2023 include the commemorative dividend of ¥10.00.

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

(Percentage figures represent year-on-year changes.)

Net sales

Operating profit

Ordinary profit

Profit attributable to

Basic earnings

owners of parent

per share

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Yen

Full year

92,000

5.1

7,000

43.4

7,500

23.6

5,500

98.4

151.06

(Note) Revision of the forecasted earnings from most recently announced figures: Yes

* Notes

(1) Changes in significant subsidiaries during the period: None

(Changes in specific subsidiaries accompanied by changes in the scope of consolidation)

Newly included:

None;

Excluded:

None

1. Application of accounting treatment special to the preparation of quarterly consolidated financial statements: None
2. Changes in accounting policies, accounting estimates and retrospective restatements
3. 1. Changes in accounting policies due to revision of accounting standards: None
   2. Changes in accounting policies other than (a): None
   3. Changes in accounting estimates: None
   4. Retrospective restatements: None
4. Number of issued shares (common shares)
5. 1. Number of issued shares at the end of the period (including treasury shares)

As of September 30, 2023

37,723,012 shares As of March 31, 2023

37,723,012 shares

(b) Number of treasury shares at the end of the period

As of September 30, 2023

1,313,772 shares As of March 31, 2023

1,313,357 shares

(c) Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year)

Six months ended September 30, 2023

36,409,491 shares Six months ended September 30, 2022

38,268,570 shares

*Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation.

*Explanation on the appropriate use of earnings forecasts and other special notes

Cautions on forward-looking statements, etc.

The projections contained in this document are based on information currently available to NITTO BOSEKI CO., LTD. (hereinafter, the "Company") and certain assumptions that are deemed to be reasonable, and the Company does not intend to guarantee their achievement. Moreover, actual business and other results may differ from the forecast due to various factors going forward. For matters related to the forecasts, please see "(2) Explanation on Consolidated Earnings Forecasts for the Fiscal Year" of "1. Qualitative Information on Quarterly Financial Results" on page 4.

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NITTO BOSEKI CO., LTD. (3110)

1. Qualitative Information on Quarterly Financial Results

(1) Explanation on Operating Results

During the first six months ended September 30, 2023, the pace of recovery of the global economy slowed due to factors such as prolonged inflation in Europe and the United States and the slowdown in China's economy caused by the slump in the real estate market. In the Japanese economy, although there has been a gradual recovery mainly due to social and economic activities moving toward full-scale normalization, the outlook remained uncertain, reflecting the risk of downward pressure on the economy, such as from the global monetary tightening in response to rising prices.

In such an environment, the Nittobo Group (hereinafter, the "Group") aims to become a corporate group that continues to create a global niche No.1 business that contributes to "Environment/Energy," "Digital Society," and "Health/Safety/Security" in order to help achieve a sustainable society, based on its Mid-Term Business Plan with the fiscal year ending March 31, 2024 as its final year.

In the first six months ended September 30, 2023, despite the continuing recovery trend in sales of Special Glass, which are high-value- added products in the glass fiber business, there was sluggishness in sales of other commodity products, and sales were lower than the level in the same period of the previous fiscal year.

As a result, consolidated net sales were ¥42,734 million (down 9.1% year on year), operating profit was ¥3,118 million (down 32.2% year on year), ordinary profit was ¥4,187 million (down 32.5% year on year) and profit attributable to owners of parent was ¥3,516 million (down 53.0% year on year).

The status of operations and initiatives being carried out in each business are as follows.

In the Glass Fiber Yarn Business, sales of composite materials used in reinforced plastic applications and yarn for electronic materials were lower than the level in the same period of the previous fiscal year. As a result, net sales in the Glass Fiber Yarn Business were ¥11,825 million (down 8.6% year on year) and operating loss was ¥356 million (compared with an operating profit of ¥368 million in the same period of the previous fiscal year).

In the Glass Fiber Cloth Business, sales of Special Glass with low-dielectric properties grew mainly due to strong demand related to AI servers. Meanwhile, sales of Special Glass for semiconductor package substrates and other demand showed signs of recovery but did not attain the level of the same period of the previous fiscal year. As a result, net sales in the Glass Fiber Cloth Business were ¥11,968 million (down 11.2% year on year) and operating profit was ¥2,087 million (down 21.8% year on year).

In the Glass Fiber for Industrial Materials Business, strong sales of insulation and glass cloth for facility and construction materials continuously contributed to revenue. As a result, net sales in the Glass Fiber for Industrial Materials Business were ¥10,322 million (up 5.1% year on year) and operating profit was ¥361 million (up 299.4% year on year).

In the Life Science Business, sales in the medical business were steady. On the other hand, revenue decreased as Nitto Beverage Co., Ltd., which is engaged in the beverage business, was excluded from the scope of consolidation of the Company in January 2023. As a result, net sales in the Life Science Business were ¥6,855 million (down 24.7% year on year) and operating profit was ¥1,185 million (down 21.1% year on year).

In the Textile Business, although sales of interlining products were strong, there was an impact from higher costs. As a result, net sales in the Textile Business were ¥1,220 million (up 5.2% year on year) and operating profit was ¥49 million (down 25.1% year on year).

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NITTO BOSEKI CO., LTD. (3110)

(2) Explanation on Consolidated Earnings Forecasts for the Fiscal Year

For the consolidated earnings forecasts for the full fiscal year, considering the results in the first half of the fiscal year as well as recent business trends, the earnings forecasts have been revised as indicated below.

Revisions to the consolidated earnings forecasts for the fiscal year ending March 31, 2024 (April 1, 2023 to March 31, 2024)

	Net sales	Operating profit	Ordinary profit	Profit attributable		Basic earnings
	to owners of parent		per share
	Millions of yen	Millions of yen	Millions of yen	Millions of yen		Yen
Previous forecasts (A)	92,000	6,500	7,000	4,500	123.59
Revised forecasts (B)	92,000	7,000	7,500	5,500	151.06
Amount changed (B) - (A)	0	500	500	1,000
Change (%)	0.0	7.7	7.1	22.2
Results for the fiscal year	87,529	4,880	6,067	2,772	73.94
ended March 31, 2023

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				NITTO BOSEKI CO., LTD. (3110)
2. Quarterly Consolidated Financial Statements and Significant Notes Thereto
(1) Quarterly Consolidated Balance Sheet
						(Millions of yen)
			As of March 31, 2023			As of September 30, 2023
	Assets
	Current assets
	Cash and deposits		21,594			19,337
	Notes and accounts receivable - trade		21,954			27,927
	Merchandise and finished goods		16,631			18,091
	Work in process		5,611			6,943
	Raw materials and supplies		24,186			25,002
	Other		4,239			3,887
	Allowance for doubtful accounts		(2)			(2)
	Total current assets		94,215	101,187
	Non-current assets
	Property, plant and equipment
	Buildings and structures, net		19,620			20,200
	Machinery, equipment and vehicles, net		25,756			26,475
	Land		15,490			15,832
	Leased assets, net		568			513
	Construction in progress		5,553			7,226
	Other, net		1,620			1,573
	Total property, plant and equipment		68,609			71,823
	Intangible assets		3,133	3,247
	Investments and other assets
	Investment securities		14,094			17,481
	Retirement benefit asset		1,251			1,700
	Deferred tax assets		2,904			2,442
	Other		1,397			1,346
	Allowance for doubtful accounts		(20)			(20)
	Total investments and other assets		19,627			22,949
	Total non-current assets		91,369	98,020
	Total assets		185,585			199,208

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				NITTO BOSEKI CO., LTD. (3110)
						(Millions of yen)
			As of March 31, 2023			As of September 30, 2023
	Liabilities
	Current liabilities
	Notes and accounts payable - trade		7,493			9,358
	Short-term borrowings		12,770			12,988
	Current portion of bonds		-			5,000
	Current portion of long-term borrowings		5,751			9,342
	Lease liabilities		317			291
	Income taxes payable		622			920
	Provision for bonuses		995			992
	Other	8,089			7,618
	Total current liabilities		36,039			46,513
	Non-current liabilities
	Bonds payable		10,000			5,000
	Long-term borrowings	15,995			16,939
	Lease liabilities		1,227			1,095
	Provision for repairs	5,419			5,548
	Provision for share awards for directors (and other officers)		21			33
	Retirement benefit liability	5,724			5,579
	Other		2,208			2,427
	Total non-current liabilities		40,596	36,623
	Total liabilities		76,636			83,136
	Net assets
	Shareholders' equity
	Share capital	19,699			19,699
	Capital surplus		19,373			19,373
	Retained earnings	62,676			64,968
	Treasury shares		(3,013)			(3,014)
	Total shareholders' equity		98,736	101,027
	Accumulated other comprehensive income
	Valuation difference on available-for-sale securities	1,750			4,117
	Foreign currency translation adjustment		3,714			5,778
	Remeasurements of defined benefit plans	(407)			(380)
	Total accumulated other comprehensive income		5,057			9,515
	Non-controlling interests		5,155	5,529
	Total net assets		108,948			116,071
	Total liabilities and net assets		185,585	199,208

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NITTO BOSEKI CO., LTD. (3110)

1. Quarterly Consolidated Statement of Income and Comprehensive Income
   (Quarterly Consolidated Statement of Income) [For the six months]

					(Millions of yen)
			For the six months ended		For the six months ended
			September 30, 2022		September 30, 2023
	Net sales		47,037		42,734
	Cost of sales	31,300		28,643
	Gross profit		15,737		14,090
	Selling, general and administrative expenses	11,140	10,971
	Operating profit		4,597		3,118
	Non-operating income
	Interest income		1		12
	Dividend income	271		250
	Rental income		37		142
	Compensation income	191		162
	Foreign exchange gains		1,447		871
	Other	145		149
	Total non-operating income		2,095		1,589
	Non-operating expenses
	Interest expenses		113		203
	Expenses related to inactive real estate for rent	137		133
	Inactive facilities expenses		140		134
	Other	95		47
	Total non-operating expenses		486		519
	Ordinary profit	6,205	4,187
	Extraordinary income
	Gain on sale of non-current assets	3,154		0
	Gain on sale of investment securities		813		-
	Total extraordinary income	3,967		0
	Extraordinary losses
	Loss on disposal of non-current assets	107		99
	Extra retirement payments		47		-
	Loss on disaster	153		10
	Other		1		4
	Total extraordinary losses	310	114
	Profit before income taxes		9,862		4,073
	Income taxes - current	1,653	903
	Income taxes - deferred		621		(328)
	Total income taxes	2,275	574
	Profit		7,587		3,498
	Profit (loss) attributable to non-controlling interests	113	(18)
	Profit attributable to owners of parent		7,474		3,516

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			NITTO BOSEKI CO., LTD. (3110)
	(Quarterly Consolidated Statement of Comprehensive Income)
	[For the six months]				(Millions of yen)
		For the six months ended			For the six months ended
		September 30, 2022			September 30, 2023
	Profit	7,587			3,498
	Other comprehensive income
	Valuation difference on available-for-sale securities	(190)			2,366
	Foreign currency translation adjustment	3,682		2,455
	Remeasurements of defined benefit plans, net of tax	65			27
	Total other comprehensive income	3,557	4,849
	Comprehensive income	11,145			8,347
	Comprehensive income attributable to
	Comprehensive income attributable to owners of parent	10,525			7,974
	Comprehensive income attributable to non-controlling interests	619		373

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			NITTO BOSEKI CO., LTD. (3110)
(3) Quarterly Consolidated Statement of Cash Flows
					(Millions of yen)
		For the six months ended			For the six months ended
		September 30, 2022			September 30, 2023
	Cash flows from operating activities
	Profit before income taxes	9,862			4,073
	Depreciation	4,111			3,523
	Increase (decrease) in retirement benefit liability	(367)			(107)
	Increase (decrease) in provision for repairs	421			129
	Interest and dividend income	(273)			(262)
	Interest expenses	113			203
	Loss (gain) on sale and valuation of investment securities	(813)			-
	Loss (gain) on sale and retirement of non-current assets	(3,046)			99
	Decrease (increase) in trade receivables	(430)			(5,821)
	Decrease (increase) in inventories	(3,197)			(2,962)
	Increase (decrease) in trade payables	500			1,793
	Other, net	(625)			(176)
	Subtotal	6,255	491
	Interest and dividends received	273			262
	Interest paid	(112)			(199)
	Income taxes paid	(135)			(518)
	Net cash provided by (used in) operating activities	6,280	36
	Cash flows from investing activities
	Purchase of non-current assets	(4,452)			(3,303)
	Proceeds from sale of non-current assets	3,121			6
	Payments for dismantling costs	-			(950)
	Proceeds from sale of investment securities	2,516			-
	Settlement of forward exchange contracts	-			(1,061)
	Other, net	(171)			(44)
	Net cash provided by (used in) investing activities	1,012	(5,353)
	Cash flows from financing activities
	Net increase (decrease) in short-term borrowings	571			(496)
	Proceeds from long-term borrowings	4,000			7,800
	Repayments of long-term borrowings	(2,550)			(3,264)
	Purchase of treasury shares	(2,463)			(1)
	Dividends paid	(872)			(1,188)
	Other, net	(158)			(188)
	Net cash provided by (used in) financing activities	(1,473)	2,660
	Effect of exchange rate change on cash and cash equivalents	1,124			387
	Net increase (decrease) in cash and cash equivalents	6,944	(2,269)
	Cash and cash equivalents at beginning of period	18,453			21,460
	Cash and cash equivalents at end of period	25,398	19,191

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NITTO BOSEKI CO., LTD. (3110)

1. Notes to Quarterly Consolidated Financial Statements
   Notes on going concern assumptions
   Not applicable
   Notes on significant changes in the amount of shareholders' equity
   Not applicable

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