Oki Electric Industry : Financial Results

(Translation)

Summary of Consolidated Financial Results

for the First Quarter of the Fiscal Year Ending March 31, 2024 (J-GAAP)

Listed Company Name: Oki Electric Industry Co., Ltd.	August 10, 2023
Securities Code: 6703
Stock Exchange Listing: Tokyo Stock Exchange	URL: https://www.oki.com/
Representative: Takahiro Mori, Representative Director, Chief Executive Officer
Contact: Hideaki Sato, General Manager, Investor Relations	TEL: [phone]
Filing of Quarterly Securities Report (Scheduled): August 14, 2023
Commencement of Dividend Payment (Scheduled): -
Supplementary Document on Quarterly Financial Results: Yes
Quarterly Financial Results Briefing: Yes (for institutional investors)

(Amounts less than one million yen have been truncated)

1. Consolidated Financial Results for the Three Months Ended June 30, 2023 (from April 1, 2023 to June 30, 2023)

1. Consolidated operating results (cumulative)

(Percentage figures indicate year-on-year change)

	Net sales	Operating income		Ordinary income		Profit attributable to
			owners of parent
Three months ended	Millions of yen	%	Millions of yen	%		Millions of yen	%	Millions of yen	%
June 30, 2023	81,525	4.3	(10)	-		(293)	-	(156)	-
June 30, 2022	78,127	(2.2)	(3,001)	-		(3,082)	-	(3,186)	-
(Note) Comprehensive income	Three months ended June 30, 2023: ¥(2,972) million (-%)
	Three months ended June 30, 2022: ¥(3,342) million (-%)
	Basic earnings per	Diluted earnings per
	share		share
Three months ended		Yen		Yen
June 30, 2023		(1.81)		-
June 30, 2022		(36.78)		-

1. Consolidated financial position

		Total assets		Net assets			Shareholders' equity ratio
				Millions of yen		Millions of yen		%
As of June 30, 2023			386,455			100,519		26.0
As of March 31, 2023			390,425			99,279		25.4
(Reference) Shareholders' equity	As of June 30, 2023: ¥100,356 million
		As of March 31, 2023: ¥99,088 million
2. Dividends
						Dividend per share
		First	Second	Third		Year-end	Total
	quarter-end	quarter-end	quarter-end
Fiscal year ended	Yen	Yen	Yen			Yen	Yen
March 31, 2023	-		0.00	-	20.00	20.00
Fiscal year ending	-
March 31, 2024
Fiscal year ending
March 31, 2024			0.00	-	30.00	30.00
(Projection)

(Note) Revisions to dividend projection most recently announced: None

3. Consolidated Results Projection for the Fiscal Year Ending March 31, 2024 (from April 1, 2023 to March 31, 2024)

(Percentage figures indicate year-on-year change)

	Net sales		Operating income	Ordinary income	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	440,000	19.2	15,000	524.2	12,500	-	8,000	-	92.31
(Note) Revisions to operating results projection most recently announced: Yes

Notes:

1. Changes in significant subsidiaries during the period
   (changes in specified subsidiaries resulting in changes in the scope of consolidation): None
2. Application of accounting procedures specific to quarterly consolidated financial statements: None
3. Changes in accounting policies, changes in accounting estimates and restatements

1. Changes in accounting policies in accordance with revision of accounting standards, etc.: None
2. Any changes in accounting policies other than 1) above: None
3. Changes in accounting estimates: None
4. Restatements: None

1. Number of shares issued (common stock)

1. Number of shares issued at the end of the period (including treasury shares)

As of June 30, 2023: 87,217,602 shares

As of March 31, 2023: 87,217,602 shares

1. Number of treasury shares at the end of the period As of June 30, 2023: 555,525 shares
   As of March 31, 2023: 598,803 shares
2. Average number of shares during the period

Three months ended June 30, 2023: 86,662,187 shares

Three months ended June 30, 2022: 86,619,897 shares

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

Explanation regarding appropriate use of results projection and other special notes(Warning on forward-looking statements)

The forward-looking statements including the projection for the financial results contained in this document are based on information currently available to the Company and certain assumptions that the Company deems to be reasonable, and actual results may differ from such statements due to a variety of factors. For the conditions assumed for the results projection and notes on the use of such projections, please refer to "(3) Forward-Looking Statements Including Projection for Consolidated Operating Results and Other" of "1. Qualitative Information on Financial Results for the Period" on page 5 of the Attachment.

(How to obtain supplementary document on financial results)

The Company is scheduled to hold a financial results briefing for institutional investors on August 10, 2023 (Thursday). The document on financial results is disclosed on TDNet at the same time as this Summary of Consolidated Financial Results and is also made available on the Company's website on the same day.

Contents of the Attachment
1. Qualitative Information on Financial Results for the Period	2
(1)	Operating Results	2
(2)	Financial Position	4
(3)	Forward-Looking Statements Including Projection for Consolidated Operating Results and Other	5
2. Consolidated Financial Statements and Significant Notes Thereto	6
(1)	Consolidated Balance Sheets	6
(2)	Consolidated Statements of Income and Comprehensive Income	7
	Consolidated Statements of Income
	(For the Three Months Ended June 30, 2022 and 2023)	7
	Consolidated Statements of Comprehensive Income
	(For the Three Months Ended June 30, 2022 and 2023)	8
(3)	Consolidated Statements of Cash Flows	9
(4)	Notes to Consolidated Financial Statements	10
	(Going Concern Assumption)	10
	(Significant Changes in Shareholders' Equity)	10
	(Additional Information)	10
	(Segment Information)	11

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1. Qualitative Information on Financial Results for the Period

1. Operating Results

1. Overview of the first quarter of the fiscal year ending March 31, 2024 (April 1, 2023 to June 30, 2023)

Due to the relaxation of measures against the COVID-19 pandemic, there has been a normalization of economic activity. However, the future remains uncertain due to factors such as rising resource prices leading to inflation, the progression of inflation and financial tightening primarily in Western countries, and the geopolitical risks associated with the situation in Ukraine.

Given this state of affairs, the OKI Group has formulated a new Medium-term Business Plan 2025 and updated its materiality. To further clarify the relationship between our materiality and business, we have established three contribution areas: "safe and convenient social infrastructure," "job satisfaction and productivity enhancement," and "conservation of global environment." As a company dedicated to maintaining social infrastructure without interruptions, OKI is committed to providing value that addresses social issues in these three contribution areas.

Net sales for the first quarter of the fiscal year ending March 31, 2024 reached ¥81.5 billion (a year- on-year increase of ¥3.4 billion, or 4.3%). This was mainly due to the alleviation of the impact of production declines caused by difficulties in procuring components, leading to increased net sales.

On the profit front, while there were positive effects from increased sales, OKI experienced cost hikes due to the components procured in the previous fiscal year and rising labor costs. However, by recording a reversal of allowance for doubtful accounts of ¥4.3 billion for ATM claims in China, the operating loss was ¥0 billion (a year-on-year improvement of ¥3.0 billion).

Ordinary loss came in at ¥0.3 billion (an improvement of ¥2.8 billion year-on-year), due to factors such as increased interest payments.

Loss attributable to owners of parent was ¥0.2 billion (a year-on-year improvement of ¥3.0 billion).

(Billions of yen)	Three months ended	Three months ended	Year-on-year change rate
June 30, 2023	June 30, 2022
Net sales	81.5	78.1	4.3 %
Operating income (loss)	0.0	(3.0)	-
Ordinary income (loss)	(0.3)	(3.1)	-
Profit (loss) attributable to owners	(0.2)	(3.2)	-
of parent

Net sales to external customers and operating income by business segment were as follows.

Please note that from the first quarter of the fiscal year ending March 31, 2024, the categorization of the reportable segments has been changed. Figures for the first quarter of the previous fiscal year were reorganized under the new segment classification for year-on-year comparisons.

1. Results by business segment
   Segment net sales came to ¥19.3 billion (equivalent to the previous year, a year-on-year decrease of 0.2%), and the segment operating loss amounted to ¥0.1 billion (a year-on-year improvement of ¥0.2 billion). While defense-related projects saw an increase, there was a decline in communication carrier projects. As a result, segment net sales and operating income remained roughly at the previous year's levels.

(Billions of yen)	Three months ended	Three months ended	Year-on-year change rate
June 30, 2023	June 30, 2022
Net sales	19.3	19.3	(0.2) %
Operating income(loss)	(0.1)	(0.3)	-

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Segment net sales reached ¥27.4 billion (a year-on-year increase of ¥4.1 billion, or 17.5%). Sales increased year-on-year due to a recovery from production declines caused by shortages of components.

Segment operating income was ¥1.9 billion (a year-on-year improvement of ¥3.5 billion). Despite the impact of increased material costs in hardware products, the higher profit from construction and maintenance services offset some of this impact. Additionally, the recording of a reversal of allowance for doubtful accounts amounting to ¥4.3 billion contributed to a year-on-year increase in operating income.

(Billions of yen)	Three months ended	Three months ended	Year-on-year change rate
June 30, 2023	June 30, 2022
Net sales	27.4	23.3	17.5 %
Operating income(loss)	1.9	(1.6)	-

Segment net sales were ¥17.0 billion (a year-on-year decrease of ¥2.2 billion, or 11.1%), and the segment operating loss amounted to ¥0.8 billion (a year-on-year deterioration of ¥0.7 billion). Although the profit in IoT improved due to the decrease in the impact of soaring material prices, there was a reactionary decline in the printer business from a last-minute surge in demand ahead of the previous year's price hikes. As a result, the segment posted a year-on-year decrease in both net sales and operating income.

(Billions of yen)	Three months ended	Three months ended	Year-on-year change rate
June 30, 2023	June 30, 2022
Net sales	17.0	19.2	(11.1) %
Operating income(loss)	(0.8)	(0.1)	-

Segment net sales stood at ¥17.7 billion (a year-on-year increase of ¥1.5 billion, or 9.3%). Segment operating income was ¥0.6 billion (a year-on-year increase of ¥0.5 billion, or 627.3%). Our customers are primarily in the domestic market, and demand was generally steady. Coupled with improvements in supply chain impacts, the segment realized a year-on-year growth in both net sales and operating income.

(Billions of yen)	Three months ended	Three months ended	Year-on-year change rate
June 30, 2023	June 30, 2022
Net sales	17.7	16.2	9.3 %
Operating income(loss)	0.6	0.1	627.3 %

Segment net sales came to ¥0.1 billion (equivalent to the previous year, a year-on-year decrease of 11.5%). The operating loss amounted to ¥0.1 billion (a deterioration of ¥0.2 billion year-on-year).

(Billions of yen)	Three months ended	Three months ended	Year-on-year change rate
June 30, 2023	June 30, 2022
Net sales	0.1	0.1	(11.5) %
Operating income(loss)	(0.1)	0.1	-

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