Prima Meat Packers : (Delayed) Consolidated Financial Results for the Six Months Ended September 30, 2021

Consolidated Financial Results

for the Six Months Ended September 30, 2021

[Japanese GAAP]

November 1, 2021

Company name: Prima Meat Packers, Ltd.

Stock exchange listing: Tokyo Stock Exchange

Securities Code number: 2281

URL: https://www.primaham.co.jp/

Representative: Naoto Chiba, President and Representative Director

Contact: Takahiro Uchiyama, Senior Managing Executive Officer

Phone: [phone]

Scheduled date of filing quarterly securities report: November 8, 2021

Scheduled date of commencing dividend payments: December 1, 2021

Availability of supplementary briefing material on quarterly financial results: Yes

Schedule of quarterly financial results briefing session: Yes (for institutional investors and analysts)

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

1. Consolidated Financial Results for the Six Months Ended September 30, 2021 (April 1, 2021 to September

30, 2021)
(1) Consolidated Operating Results		(% indicates changes from the previous corresponding period.)
		Net sales		Operating profit	Ordinary profit	Profit attributable to
			owners of parent
	Six months ended	Million yen	%	Million yen	%	Million yen	%	Million yen	%
	September 30, 2021	209,728	-	7,995	(28.3)	8,850	(22.7)	5,288	(24.0)
	September 30, 2020	212,226	2.8	11,148	48.0	11,451	44.1	6,957	21.1

(Note) Comprehensive income: Six months ended September 30, 2021: ¥5,504 million [(33.8)%] Six months ended September 30, 2020: ¥8,318 million [24.5%]

	Earnings	Diluted earnings
	per share	per share
Six months ended	Yen	Yen
September 30, 2021	105.24	-
September 30, 2020	138.46	-

The Company and its subsidiaries (The "Group") has applied the "Accounting Standard for Revenue Recognition" (Accounting Standards Board of Japan (ASBJ) Statement No. 29, March 31, 2020), etc. from the beginning of the first quarter ended June 30, 2021. As a result, changes in net sales from the previous corresponding period before the said accounting standard was applied are not presented.

(2) Consolidated Financial Position

	Total assets	Net assets	Equity ratio
	Million yen	Million yen	%
As of September 30, 2021	217,345	116,990	48.4
As of March 31, 2021	214,542	114,761	48.3

(Reference) Equity: As of September 30, 2021: ¥105,142 million As of March 31, 2021: ¥103,632 million

Excluded: -

2. Dividends

			Annual dividends
	1st	2nd	3rd		Year-end		Total
	quarter-end	quarter-end	quarter-end
Fiscal year ended	Yen	Yen	Yen		Yen		Yen
-	20.00	-		65.00	85.00
March 31, 2021
Fiscal year ending	-	20.00
March 31, 2022
Fiscal year ending
March 31, 2022			-		45.00	65.00
(Forecast)

(Note) Revision to the dividend forecast announced most recently: None

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2022 (April 1, 2021 to March 31, 2022)

(% indicates changes from the previous corresponding period.)

							Profit attributable	Earnings
	Net sales		Operating profit	Ordinary profit	to owners of
		per share
							parent
	Million yen	%	Million yen	%	Million yen	%	Million yen	%	Yen
Full year	437,700	-	16,600	(22.7)	16,800	(25.0)	10,500	(25.9)	208.96

(Note) Revision to the financial results forecast announced most recently: None

The Group has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020), etc. from the beginning of the first quarter ended June 30, 2021. As a result, changes in net sales from the previous corresponding period are not presented.

Notes:

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes in scope of consolidation): None

New: -

1. Accounting applied especially for the preparation of quarterly consolidated financial statements: Yes
2. Changes in accounting policies, changes in accounting estimates and retrospective restatement
3. 1. Changes in accounting policies due to the revision of accounting standards: Yes
   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 shares)

1. Total number of issued shares at the end of the period (including treasury shares): September 30, 2021: 50,524,399 shares
   March 31, 2021: 50,524,399 shares
2. Total number of treasury shares at the end of the period:

September 30, 2021: 274,306 shares

March 31, 2021: 275,939 shares

3) Average number of shares during the period:

Six months ended September 30, 2021: 50,249,116 shares

Six months ended September 30, 2020: 50,249,177 shares

(Note) The number of treasury shares that has been excluded when calculating total number of treasury shares at the end of the period and average number of shares during the period includes the Company's shares owned by the Board Benefit Trust (BBT).

• These quarterly financial results are outside the scope of quarterly review by a certified public accountant or an audit firm.
• Explanation of the proper use of the financial results forecast and other notes

• The earnings forecasts and other forward-looking statements herein are based on information available to the Company at the time of preparation and certain assumptions deemed to be reasonable, and actual results may vary significantly due to various factors. For the assumptions and notes for earnings forecasts, please refer to "1. Qualitative Information on Quarterly Financial Results for the Period, (1) Explanation on Operating Results" on page 2 of the attachment.
• The Company plans to hold a financial results briefing session for institutional investors and analysts on Tuesday, November 16, 2021. Soon after the event, we plan to post financial results briefing materials to be distributed at the briefing on our website.

	Prima Meat Packers, Ltd. (2281)
Table of Contents
1. Qualitative Information on Quarterly Financial Results for the Period ...............................................	2
(1)	Explanation on Operating Results ...................................................................................................	2
(2)	Explanation on Financial Position ...................................................................................................	3
(3) Explanation on Consolidated Financial Results Forecast
	and Other Forward-looking Information .........................................................................................	4
2. Quarterly Consolidated Financial Statements and Primary Notes ......................................................	5
(1)	Quarterly Consolidated Balance Sheets ..........................................................................................	5
(2)	Quarterly Consolidated Statements of Income and Comprehensive Income ..................................	7
(3)	Quarterly Consolidated Statements of Cash Flows .........................................................................	9
(4)	Notes to the Quarterly Consolidated Financial Statements ...........................................................	11
	(Notes on going concern assumption) ..........................................................................................	11
	(Notes in the case of significant changes in shareholders' equity) ................................................	11
	(Accounting applied especially for the preparation
	of quarterly consolidated financial statements) ...........................................................................	12
	(Changes in accounting policies) .................................................................................................	12
	(Segment information, etc.) .........................................................................................................	13

1

Prima Meat Packers, Ltd. (2281)

1. Qualitative Information on Quarterly Financial Results for the Period

1. Explanation on Operating Results

Items in this document which relate to the future are judgments made by Prima Meat Packers, Ltd., and its subsidiaries (the "Group") as of the end of the second quarter ended September 30, 2021, consolidated basis.

The Group has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020, hereinafter the "Revenue Recognition Standard"), etc. from the beginning of the first quarter ended June 30, 2021. Accordingly, the explanation on operating results does not mention year-on-year comparison for net sales. For details, please refer to "2. Quarterly Consolidated Financial Statements and Primary Notes, (4) Notes to the Quarterly Consolidated Financial Statements (Changes in accounting policies)."

In addition, comments that make comparisons with net sales from the previous corresponding period also are based on figures calculated excluding the effects of the Revenue Recognition Standard.

During the six months ended September 30, 2021, while restrictions on activities continued for a long period due to the extension of the declaration of a state of emergency, the trend of the food market environment has changed from a year ago, when very intensive stockpiling behavior was observed in terms of demand for consumption at home, and consumption behavior has calmed down. On the other hand, the food service industry, including bars and restaurants, continues to suffer further from long-term restrictions on evening hours and bans on serving alcohol.

In our sector, the market environment is plagued by concerns over both price and supply, as the market price rose for imported meat, manufacturing declined due to the impact of COVID-19 infections with no end in sight to the global spread, and delays in logistics caused supply issues. In addition, the grain market that directly impacts feed prices has surged, and manufacturing costs have risen due to higher crude oil prices. The pork market in Japan saw demand and supply went out of balance particularly at the beginning of the fiscal year, and the market price has dropped below the previous year.

Under these circumstances, based on our mission as a group of contributing "To food culture and society through great taste and excitement," we set and worked to attain the basic policy goal in our medium-term management plan of "Strengthening basic sustainability through ESG measures," "Expanding the scope of existing businesses and further strengthening the earnings base," and "Business creation and global expansion for growth markets."

As a result, net sales amounted to ¥209,728 million (¥212,226 million for the same period of the previous fiscal year), operating profit was ¥7,995 million (down 28.3% year on year), ordinary profit was ¥8,850 million (down 22.7% year on year), and profit attributable to owners of parent was ¥5,288 million (down 24.0% year on year).

Results by segment are as follows:

1) Ham and sausage section

We implemented measures to increase our share in the retail product market, despite the overall market decline year on year due partly to a reactionary drop from last year. Particularly in the Koukun® Sausage series, one of our core brands, not only our classic drawstring-packaged range but also products in large, zippered packs performed well. The series continues to be supported widely by customers of all generations, and sales volume increased again this year, resulting in higher total retail product sales volume year on year. On the other hand, commercial-use products, which were struggling in the severe environment last year, also increased sales year on year mainly due to a partial recovery of the market and new product proposals.

As marketing promotion strategies, we implemented the Tokyo Disney Resort® invitation campaign and the Disney items present campaign, as well as other campaigns utilizing our official corporate Twitter account and LINE as part of new initiatives. At our plants, we continued reforms and improvements to stabilize supply and raise productivity. We proceeded with efforts to raise man-hour productivity and promoted utility cost-cutting and other initiatives, steadily improving our cost competitiveness. As a result, we increased total net sales and volumes year on year in the ham and sausage section.

2