Sanko Gosei : For the Nine Months Ended February 28, 2023

Translation

Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Summary of Consolidated Financial Results for the Nine Months Ended February 28, 2023 (Based on Japanese GAAP)

				April 7, 2023
Company name:	Sanko Gosei Ltd.
Stock exchange listing:	Tokyo
Stock code:	7888	URL http://www.sankogosei.co.jp
Representative:	Representative Director/President	Kenso Kuroda
Inquiries:	Director/Executive Officer	Akira Serikawa	TEL [phone]
Scheduled date to file Quarterly Securities Report:	April 13, 2023
Scheduled date to commence dividend payments:	-
Preparation of supplementary material on quarterly financial results:	No
Holding of quarterly financial results meeting:	No

(Amounts less than one million yen are rounded down)

1. Consolidated financial results for the nine months ended February 28, 2023 (from June 1, 2022 to February 28, 2023)

(1) Consolidated operating results (cumulative)						Percentages indicate year-on-year changes
	Net sales			Operating profit	Ordinary profit	Profit attributable to
			owners of parent
	Millions of yen	%		Millions of yen	%	Millions of yen		%	Millions of yen	%
Nine months ended February 28, 2023	57,265	25.9		2,173	84.6	2,228		128.6	1,515	112.1
Nine months ended February 28, 2022	45,489	13.3		1,177	(36.3)	974		(38.2)	714	(20.5)
	Earnings per share			Diluted earnings per share
			Yen			Yen
Nine months ended February 28, 2023		49.73			-
Nine months ended February 28, 2022		23.44			-
(2) Consolidated financial position
	Total assets			Net assets	Equity ratio		Net assets per share
	Millions of yen			Millions of yen				%		Yen
As of February 28, 2023		61,648				24,856				39.6		800.96
As of May 31, 2022		58,409				23,251				39.1		748.46

2. Cash dividends
		Annual dividends per share
	1st quarter-end	2nd quarter-end	3rd quarter-end	Fiscal year-end
	Yen	Yen	Yen	Yen
Year ended May 31, 2022	-	7.00	-	7.00
Year ending May 31, 2023	-	7.00	-
Year ending May 31, 2023 (Forecast)				7.00

Total

Yen 14.00

14.00

3. Forecast of consolidated financial results for the year ending May 31, 2023 (from June 1, 2022 to May 31, 2023)

Percentages indicate year-on-year changes

	Net sales		Operating profit	Ordinary profit		Profit attributable to	Earnings per share
			owners of parent
	Millions of yen	%	Millions of yen	%	Millions of yen		%	Millions of yen		%	Yen
Full year	68,000	3.6	2,800	10.1	2,500		3.5	1,900		4.9	62.32

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4. Notes

1. Changes in significant subsidiaries during the nine months ended February 28, 2023 (changes in specified subsidiaries resulting in the change in scope of consolidation):
2. Application of special accounting methods for preparing quarterly consolidated financial statements:

No

Yes

(3) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements
Changes in accounting policies due to revisions to accounting standards and other regulations:	No
Changes in accounting policies due to other reasons:	No
Changes in accounting estimates:	No
Restatement of prior period financial statements:	No

(4) Number of issued shares (common shares)

Total number of issued shares at the end of the period (including treasury shares)

	As of February 28, 2023	30,688,569	shares	As of May 31, 2022	30,688,569	shares
Number of treasury shares at the end of the period
	As of February 28, 2023	204,786	shares	As of May 31, 2022	204,749	shares
Average number of shares during the period (cumulative from the beginning of the fiscal year)
	Nine months ended February 28, 2023	30,483,817	shares	Nine months ended February 28, 2022	30,483,843	shares

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Quarterly consolidated financial statements

Consolidated balance sheets

		(Millions of yen)
	As of May 31, 2022	As of February 28, 2023
Assets
Current assets
Cash and deposits	6,822	7,185
Notes receivable - trade	32	21
Electronically recorded monetary claims - operating	631	1,293
Accounts receivable - trade	14,007	14,993
Merchandise and finished goods	1,896	1,308
Work in process	3,306	3,939
Raw materials and supplies	1,777	1,733
Other	2,248	2,819
Allowance for doubtful accounts	(0)	-
Total current assets	30,721	33,295
Non-current assets
Property, plant and equipment
Buildings and structures, net	9,157	9,878
Machinery, equipment and vehicles, net	9,505	9,693
Tools, furniture and fixtures, net	1,977	1,914
Land	4,977	5,023
Construction in progress	977	776
Total property, plant and equipment	26,595	27,286
Intangible assets
Goodwill	109	87
Other	416	431
Total intangible assets	526	518
Investments and other assets
Investment securities	18	20
Other	547	527
Total investments and other assets	566	548
Total non-current assets	27,687	28,353
Total assets	58,409	61,648

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		(Millions of yen)
	As of May 31, 2022	As of February 28, 2023
Liabilities
Current liabilities
Notes and accounts payable - trade	6,963	6,762
Electronically recorded obligations - operating	2,585	3,396
Short-term borrowings	6,341	6,809
Current portion of long-term borrowings	1,870	1,798
Income taxes payable	464	317
Provision for bonuses	169	144
Provision for bonuses for directors (and other officers)	34	-
Other	4,712	6,327
Total current liabilities	23,141	25,557
Non-current liabilities
Long-term borrowings	7,343	6,549
Provision for retirement benefits for directors (and other	18	16
officers)
Retirement benefit liability	832	751
Other	3,821	3,918
Total non-current liabilities	12,017	11,235
Total liabilities	35,158	36,792
Net assets
Shareholders' equity
Share capital	4,008	4,008
Capital surplus	4,071	4,071
Retained earnings	14,729	15,818
Treasury shares	(43)	(43)
Total shareholders' equity	22,766	23,855
Accumulated other comprehensive income
Valuation difference on available-for-sale securities	(3)	(2)
Remeasurements of defined benefit plans	(226)	(178)
Foreign currency translation adjustment	279	741
Total accumulated other comprehensive income	49	560
Non-controlling interests	435	439
Total net assets	23,251	24,856
Total liabilities and net assets	58,409	61,648

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Consolidated statements of income (cumulative) and consolidated statements of comprehensive income (cumulative)

Consolidated statements of income (cumulative)

		(Millions of yen)
	Nine months ended	Nine months ended
	February 28, 2022	February 28, 2023
Net sales	45,489	57,265
Cost of sales	39,265	49,247
Gross profit	6,224	8,018
Selling, general and administrative expenses	5,047	5,844
Operating profit	1,177	2,173
Non-operating income
Interest and dividend income	25	23
Rental income	49	46
Foreign exchange gains	-	216
Other	112	71
Total non-operating income	187	358
Non-operating expenses
Interest expenses	303	267
Foreign exchange losses	14	-
Loss on Derivative	39	0
Other	32	35
Total non-operating expenses	390	303
Ordinary profit	974	2,228
Extraordinary income
Gain on sale of non-current assets	177	0
Total extraordinary income	177	0
Extraordinary losses
Loss on retirement of non-current assets	51	38
Loss on sale of non-current assets	7	10
Total extraordinary losses	59	49
Profit before income taxes	1,092	2,179
Income taxes	344	667
Profit	748	1,512
Profit (loss) attributable to non-controlling interests	33	(3)
Profit attributable to owners of parent	714	1,515

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