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MarketScreener Homepage  >  Equities  >  Tokyo Stock Exchange  >  NS Solutions Corporation    2327   JP3379900008

NS SOLUTIONS CORPORATION

(2327)
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NS : Consolidated Financial Results for the First Quarter of Fiscal 2020

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08/06/2020 | 03:04am EDT

The financial results have been translated from the Japanese Consolidated Financial Statements for reference purposes only. In the event of any discrepancy between the Japanese version and the English translation, the Japanese version will prevail.

Consolidated Financial Results

for the First Quarter of Fiscal 2020

(April 1, 2020 June 30, 2020)

[under Japanese GAAP]

July 30, 2020

Company name:

NS Solutions Corporation

Stock exchange listing:

Tokyo Stock Exchange

Code number:

2327

URL:

https://www.nssol.nipponsteel.com

Representative:

Hiroyuki Morita, Representative Director & President

Contact:

Hideki Komatsu, Director, Accounting & Finance Department

Phone:

+81-3-6899-6000

Scheduled date of filing quarterly securities report:

August 7, 2020

Scheduled date of commencing dividend payments:

-

Availability of supplementary briefing material on quarterly financial results:

Available

Schedule of quarterly financial results briefing session:

Scheduled (for analysts)

(Amounts of less than one million yen are rounded down.)

1. Consolidated Financial Results for the First Quarter of Fiscal 2020 (April 1, 2020 to June 30, 2020)

(1) Consolidated Operating Results

(% indicates changes from the previous corresponding period.)

Net sales

Operating profit

Ordinary profit

Profit attributable to

owners of parent

Million yen

%

Million yen

%

Million yen

%

Million yen

%

FY2020 1Q

56,644

(17.4)

5,102

(26.1)

5,389

(24.7)

3,116

(24.0)

FY2019 1Q

68,573

23.8

6,905

37.6

7,153

38.6

4,101

42.8

(Note) Comprehensive income: FY2020 1Q: 9,329 million yen [20.5%]

FY2019 1Q: 7,744 million yen [20.5%]

Net income per share

Diluted net income per share

Yen

Yen

FY2020 1Q

34.06

-

FY2019 1Q

44.83

-

(2) Consolidated Financial Position

Total assets

Net assets

Equity ratio

Million yen

Million yen

%

FY2020 1Q

247,346

161,484

63.0

FY2019

240,448

155,392

62.2

(Reference) Equity: FY2020 1Q: 155,718 million yen

FY2019:

149,448 million yen

1

Copyright (C) 2020 NS Solutions Corporation All rights reserved.

2. Dividends

Annual dividends

1st quarter-end

2nd quarter-end

3rd quarter-end

Year-end

Total

Yen

Yen

Yen

Yen

Yen

FY2019

-

32.50

-

32.50

65.00

FY2020

-

FY2020(Forecast)

25.00

-

(Notes1) Revision to the forecast for dividends announced most recently: Yes

(Notes2) The Company has not determined a year-end dividend distribution plan for fiscal 2020. The dividend distribution plan will be disclosed when it becomes available.

3. Consolidated Financial Results Forecast for Fiscal 2020 (April 1, 2020 to March 31, 2021)

(% indicates changes from the previous corresponding period.)

Profit attributable

Net income

Net sales

Operating profit

Ordinary profit

to owners of

per share

parent

Million yen

%

Million yen

%

Million yen

%

Million yen

%

Yen

First half

120,000

(12.3)

10,900

(23.2)

11,000

(22.5)

6,900

(20.9)

75.41

Full year

255,000

(7.2)

23,900

(15.8)

24,000

(15.1)

15,500

(16.5)

169.40

(Note) Revision to the financial results forecast announced most recently: Yes

* Notes:

  1. Changes in significant subsidiaries during the period under review (changes in specified subsidiaries resulting in changes in scope of consolidation): None
  2. Accounting policies adopted specially for the preparation of quarterly consolidated financial statements: Yes
  3. Changes in accounting policies, changes in accounting estimates and retrospective restatement
    1. Changes in accounting policies due to the revision of accounting standards: None
    2. Changes in accounting policies other than 1) above: None
    3. Changes in accounting estimates: None
    4. Retrospective restatement: None
  4. Total number of issued shares (common stock)
    1. Total number of issued shares at the end of the period (including treasury shares):

FY2020 1Q :

94,704,740

shares

FY2019:

94,704,740

shares

2) Total number of treasury shares at the end of the period:

FY2020 1Q :

3,204,329

shares

FY2019:

3,204,329

shares

3) Average number of shares during the period:

FY2020 1Q :

91,500,411

shares

FY2019 1Q :

91,500,577

shares

  • This quarterly consolidated financial results report is exempt from the audit conducted by certified public accountants or an audit corporation.
  • Explanation of the proper use of financial results forecast and other notes

The forecasts stated above are based on information available as of the date of publication of this document. Actual results may differ from these forecasts due to a wide range of factors hereafter.

2

Copyright (C) 2020 NS Solutions Corporation All rights reserved.

Consolidated Financial Statements

Consolidated Balance Sheets

(Milions of yen)

March 31, 2020

June 30, 2020

Assets

Current assets

Cash and deposits

4,459

3,805

Deposits paid

53,794

63,125

Notes and accounts receivable - trade

62,513

45,097

Work in process

26,834

33,362

Raw materials and supplies

15

12

Short-term loans receivable from subsidiaries and associates

12,000

12,000

Other

3,290

3,628

Allowance for doubtful accounts

(25)

(19)

Total current assets

162,882

161,013

Non-current assets

Property, plant and equipment

21,442

21,465

Intangible assets

Goodwill

3,389

3,272

Other

2,983

2,782

Total intangible assets

6,372

6,055

Investments and other assets

Investment securities

39,168

48,146

Other

10,631

10,714

Allowance for doubtful accounts

(48)

(48)

Total investments and other assets

49,750

58,811

Total non-current assets

77,565

86,333

Total assets

240,448

247,346

Liabilities

Current liabilities

Notes and accounts payable - trade

17,693

14,084

Income taxes payable

5,225

5,933

Advances received

18,741

24,809

Provision for bonuses

9,527

4,722

Other provisions

1,334

1,219

Other

15,577

15,914

Total current liabilities

68,100

66,683

Non-current liabilities

Provision for directors' retirement benefits

129

130

Retirement benefit liability

9,860

10,036

Other provisions

225

215

Other

6,741

8,796

Total non-current liabilities

16,955

19,178

Total liabilities

85,055

85,862

Net assets

Shareholders' equity

Share capital

12,952

12,952

Capital surplus

9,950

9,950

Retained earnings

116,904

117,047

Treasury shares

(10,026)

(10,026)

Total shareholders' equity

129,780

129,924

Accumulated other comprehensive income

Valuation difference on available-for-sale securities

19,571

25,845

Foreign currency translation adjustment

95

(50)

Total accumulated other comprehensive income

19,667

25,794

Non-controlling interests

5,944

5,765

Total net assets

155,392

161,484

Total liabilities and net assets

240,448

247,346

3

Copyright (C) 2020 NS Solutions Corporation,All rights reserved.

Consolidated Statements of Income

(Milions of yen)

FY2019 1Q

FY2020 1Q

Net sales

68,573

56,644

Cost of sales

54,284

44,404

Gross profit

14,288

12,239

Selling, general and administrative expenses

7,382

7,136

Operating profit

6,905

5,102

Non-operating income

Interest income

44

46

Dividend income

209

204

Foreign exchange gains

13

Other

26

110

Total non-operating income

279

375

Non-operating expenses

Interest expenses

2

2

Share of loss of entities accounted for using equity method

3

4

Loss on retirement of non-current assets

1

5

Foreign exchange losses

18

Special investigation expenses

71

Other

7

4

Total non-operating expenses

31

88

Ordinary profit

7,153

5,389

Extraordinary income

Gain on sales of investment securities

822

Total extraordinary income

822

Extraordinary losses

Office transfer cost

32

910

Total extraordinary losses

32

910

Profit before income taxes

7,121

5,301

Income taxes

2,909

2,095

Profit

4,211

3,205

Profit attributable to non-controlling interests

110

88

Profit attributable to owners of parent

4,101

3,116

4

Copyright (C) 2020 NS Solutions Corporation,All rights reserved.

Consolidated Statements of Comprehensive Income

(Milions of yen)

FY2019 1Q

FY2020 1Q

Profit

4,211

3,205

Other comprehensive income

Valuation difference on available-for-sale securities

3,492

6,273

Foreign currency translation adjustment

40

149

Total other comprehensive income

3,532

6,123

Comprehensive income

7,744

9,329

Comprehensive income attributable to

Comprehensive income attributable to owners of parent

7,632

9,244

Comprehensive income attributable to non-controlling interests

111

85

5

Copyright (C) 2020 NS Solutions Corporation,All rights reserved.

(Note)

Transactions of which the Company is unable to verify the actual existence

During the tax examination process that was conducted by the national tax authority on NS Solutions Corporation (the "Company") in mid-November of 2019, questions arose with respect to the actual existence of certain of the Company ' s recorded purchase and resale of goods transactions. Due to this situation, the Company established a Special Investigation Committee and investigated this matter. As a result, transactions of which the actual existence cannot be verified have been ascertained. Therefore, the Company has cancelled such transactions, and has recorded the deposits and withdrawals related thereto as temporary receipts of 46,404 million yen and temporary payments of 44,753 million yen, respectively, and has also recorded the net amount of 1,650 million yen as other non-current liabilities. In addition to the above, there were matters in relation to which orders were received and/or issued but not yet processed.

In connection with such matters, a lawsuit was filed against the Company on March 31, 2020. For details, please see Note: " Contingent Liability " in the Quarterly Consolidated Balance Sheets. Depending on the circumstances of these matters going forward, it is possible that these matters will affect the financial condition or business performance of the Company.

Accounting Estimates and COVID-19 Pandemic

The spread of COVID-19 is not expected to end any time soon, and the economic activity level outlook for the current fiscal year is extremely severe. Despite such business environment, the consolidated financial results forecast for the current fiscal year is made with the assumption that the Group will secure orders from customers by focusing on their IT needs, representative of which being their initiatives for " DX, Digital Transformation, " and thereby securing the currently planned sales revenue. Accounting estimates are made using the financial results forecast based on the above assumptions. The assumptions used in making accounting estimates involve a high degree of uncertainty and if COVID-19 persists longer than expected or if its effects on the business environment change, the financial condition and operating performance of the Group may be affected.

Contingent Liability

Mizuho-Toshiba Leasing Company, Limited ("Mizuho-Toshiba Leasing") filed a lawsuit against the Company with the Tokyo District Court on March 31, 2020 (the date on which the complaint was served on the Company is June 24, 2020) regarding a claim for a penalty. According to the complaint served, this litigation involves assertions to the effect that a sales agreement ( " Sales Agreement " ) was entered into between Mizuho-Toshiba Leasing and the Company in August 2019 regarding our purchase of servers and peripherals, etc. from it, and that the Company then terminated the Sales Agreement in November 2019, and accordingly, Mizuho-Toshiba Leasing is entitled to claim against the Company for penalty of the amount equivalent to the sales price, the amount of which is 10,926 million yen plus its delay damages.

In the future, the Company will appropriately handle the matter, including demanding dismissal of the claim. This fact may affect the financial condition or business performance of the group. However, as of now, it is difficult to reasonably estimate the amount of such effect, and thus it is not reflected in the Quarterly Consolidated Financial Statements.

6

Copyright (C) 2020 NS Solutions Corporation,All rights reserved.

Disclaimer

NS Solutions Corporation published this content on 06 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 August 2020 06:03:15 UTC


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Financials
Sales 2021 255 B 2 446 M 2 446 M
Net income 2021 16 270 M 156 M 156 M
Net cash 2021 62 379 M 598 M 598 M
P/E ratio 2021 17,4x
Yield 2021 1,93%
Capitalization 283 B 2 710 M 2 708 M
EV / Sales 2021 0,86x
EV / Sales 2022 0,78x
Nbr of Employees 6 639
Free-Float 33,1%
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Mean consensus OUTPERFORM
Number of Analysts 9
Average target price 3 195,56 JPY
Last Close Price 3 090,00 JPY
Spread / Highest target 24,9%
Spread / Average Target 3,42%
Spread / Lowest Target -6,15%
EPS Revisions
Managers
NameTitle
Hiroyuki Morita President & Representative Director
Kazumasa Kondo Director, Head-Finance, General & Legal Affairs
Katsuhiko Yoshida Director & General Manager-Technology
Munetaka Shashiki Director
Takashi Ohshiro Director & Managing Executive Officer
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