ShinMaywa Industries : Announcement of "Consolidated Financial Results for the Six Months Ended September 30, 2023"

Note: This document is a translation of a part of the original Japanese version and provided for reference purposes only. In the event of any discrepancy between the Japanese original and this English translation, the Japanese original shall prevail.

Consolidated Financial Results

for the Six Months Ended September 30, 2023

[Japanese GAAP]

October 31, 2023

Company name: ShinMaywa Industries, Ltd.

Stock exchange listing: Tokyo

Code number: 7224

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

Representative: Tatsuyuki Isogawa ,President and Chief Executive Officer

Contact: Toshiki Kume ,Director, Member of the Board, Managing Executive Officer

Phone: [phone]

Scheduled date of filing quarterly securities report: November 10, 2023

Scheduled date of commencing dividend payments: December 01, 2023

Availability of supplementary briefing material on quarterly financial results: Yes

Schedule of quarterly financial results briefing session: Yes

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

1. Consolidated Financial Results for the Six Months Ended September 30, 2023 (April 01, 2023 to September 30, 2023)

(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, 2023		116,464		12.0	4,431		38.2	4,858	16.6	2,974	3.6
September 30, 2022		104,001		3.7	3,206		(27.8)	4,168	(11.3)	2,871	(14.6)

(Note) Comprehensive income:	Six months ended September 30, 2023:
	Six months ended September 30, 2022:

¥	5,253 million	[	4.1%]
¥	5,044 million	[	41.5%]

	Basic earnings	Diluted earnings per
	per share		share
Six months ended	Yen			Yen
September 30, 2023	45.11			-
September 30, 2022	43.60			-
(2) Consolidated Financial Position
	Total assets		Net assets	Capital adequacy ratio
As of	Million yen			Million yen	%
September 30, 2023	248,647			103,756	41.1
March 31, 2023	226,907			100,439	43.5
(Reference) Equity: As of	September 30, 2023:	¥	102,191 million
As of	March 31, 2023:	¥	98,747 million

2. Dividends

					Annual dividends
		1st	2nd		3rd		Year-end	Total
	quarter-end	quarter-end		quarter-end
		Yen		Yen		Yen		Yen	Yen
Fiscal year ended March 31, 2023		-		21.00		-		24.00	45.00
Fiscal year ending March 31, 2024		-		22.50
Fiscal year ending March 31, 2024						-		22.50	45.00
(Forecast)
(Note) Revision to the forecast for dividends	announced most	recently:	No
(Note) Breakdown of the 2nd quarter dividend for the fiscal year ending March 31, 2024 :
Commemorative dividend	-	yen
Special dividend	-	yen

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2024 (April 01, 2023 to March 31, 2024)

(% indicates changes from the previous corresponding period.)

			Net sales		Operating profit	Ordinary profit	Profit attributable to	Basic earnings
				owners of parent	per share
			Million yen		%	Million yen	%	Million yen		%	Million yen	%	Yen
Full year			265,000		17.7	12,000	29.1	11,700		18.2	7,300	(0.2)	110.65
(Note) Revision to the financial results forecast announced most recently:	Yes
* Notes:
(1) Changes in significant subsidiaries during the six months ended September 30, 2023
(changes in specified subsidiaries resulting in changes in scope of consolidation):	No
New	-	(Company name:									)
Exclusion:	-	(Company name:									)
(2) Accounting policies adopted specially for the preparation of quarterly consolidated financial statements:	No

1. Changes in accounting policies, changes in accounting estimates and retrospective restatement
2. 1. Changes in accounting policies due to the revision of accounting standards: No
   2. Changes in accounting policies other than 1) above: No
   3. Changes in accounting estimates: No
   4. Retrospective restatement: No
3. Total number of issued shares (common shares)
4. 1. Total number of issued shares at the end of the period (including treasury shares):

September 30, 2023:	70,000,000	shares
March 31, 2023:	70,000,000	shares
2) Number of treasury shares at the end of the period:
September 30, 2023:	4,027,907	shares
March 31, 2023:	4,087,841	shares

3) Average number of shares outstanding during the period:
Six months ended September 30, 2023:	65,937,859	shares
Six months ended September 30, 2022:	65,868,378	shares

* This quarterly financial summary is not subject to quarterly review by certified public accountants or audit corporations.

*The forward-looking statements, including earnings forecasts, contained in this document are based on the information currently

available to the Company and certain assumptions that it deems to be reasonable. As such, they do not constitute guarantees by the

Company of future performance. Actual results may differ materially from these projections due to various factors.

(How to obtain supplementary briefing material on quarterly financial results and details of financial results briefing session) Supplementary briefing material on quarterly financial results is disclosed on TDnet on the same day.

In addition, the video of the financial results briefing is scheduled to be released on our website on Tuesday, November 14, 2023.

Contents

Qualitative Information of the Quarterly Consolidated Results・・・・・・・・・・・・・・・・・・・・・	2
(1)	Operating Results・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・	2
(2)	Financial Position・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・	3
(3)	Consolidated Financial Results Forecasts・・・・・・・・・・・・・・・・・・・・・・・・・・	3
Quarterly Consolidated Financial Statements and Notes・・・・・・・・・・・・・・・・・・・・・・・	4
(1)	Quarterly Consolidated Balance Sheets・・・・・・・・・・・・・・・・・・・・・・・・・・・	4
(2)	Quarterly Consolidated Statements of Income and Comprehensive Income・・・・・・・・・・・・・	6
(3)	Quarterly Consolidated Statements of Cash Flows・・・・・・・・・・・・・・・・・・・・・・・	8
(4)	Explanatory Notes to Quarterly Consolidated Financial Statements・・・・・・・・・・・・・・・・	9
	(Notes on the Assumption of a Going Concern)・・・・・・・・・・・・・・・・・・・・・・・・	9
	(Notes in the Event of Significant Changes in Shareholders' Equity)・・・・・・・・・・・・・・・・	9
	(Segment Information)・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・	10

1

Qualitative Information of the Quarterly Consolidated Results

(1)Operating Results

During the six months ended September 30, 2023, the outlook of Japanese economy still remained uncertain due to yen appreciation, higher prices for energy and raw materials, etc. while the economic activities normalized as the COVID-19 was reclassified to Class 5 infectious diseases.

Against this backdrop, the Group has implemented various measures to enhance corporate value as it has entered into the final year of [SG-2023], its Medium-term management plan, which is Phase 1 of [SG-Vision 2030], its Long-term management plan aiming for 2030.

The financial results for the six months ended September 30, 2023 were as follows: orders received of 128,631 million yen, down 3.9% year-on-year, and net sales of 116,464 million yen, up 12.0% year-on-year. The outstanding orders as of September 30, 2023 was 269,205 million yen, up 10.4% year-on-year.

As for profits and losses, with an increase in revenue, operating profit was 4,431 million yen, up 38.2% year-on-year, ordinary profit was 4,858 million yen, up 16.6% year-on-year, profit attributable to owners of parent was 2,974 million yen, up 3.6% year-on-year.

The overview of the Group's operating results by segment is as follows.

(Special Purpose Truck)

For manufacture and sales of vehicle frames, etc., the orders received decreased and net sales increased. For maintenance and repair business, both the orders received and net sales increased.

In addition to this, for forestry machinery, etc., the orders received increased and net sales decreased.

As a result, for this segment, the orders received were 53,865 million yen, down 5.6% year-on-year, net sales were 48,205 million yen, up 10.3% year-on-year, and operating profit was 1,117 million yen, up 49.7% year-on-year. The outstanding orders for second quarter-end were 111,383 million yen, up 15.7% year-on-year.

(Parking Systems)

For mechanical car parking systems, both the orders received and net sales increased.

For aircraft passenger boarding bridges, the orders received increased, and net sales decreased.

As a result, for this segment, the orders received were 23,614 million yen, up 14.5% year-on-year, net sales were 18,423 million yen, up 0.5% year-on-year, and operating profit was 1,423 million yen, up 23.0% year-on-year. The outstanding orders for second quarter-end were 51,063 million yen, up 10.3% year-on-year.

(Industrial Machinery & Environmental Systems)

For mechatronics products, the orders received decreased in vacuum products, while net sales increased. As a result, for the entire business area, the orders received decreased and net sales increased.

For environment-related business, both the orders received and net sales increased.

As a result, for this segment, the orders received were 16,489 million yen, down 31.8% year-on-year, net sales were 19,692 million yen, up 27.8% year-on-year, and operating profit was 1,781 million yen, up 41.9% year-on-year. The outstanding orders for second quarter-end were 40,865 million yen, up 10.7% year-on-year.

(Fluid)

As a result of increases in orders received and net sales due to steady demand, for this segment, the orders received were 14,314 million yen, up 3.2% year-on-year, net sales were 9,254 million yen, up 6.1% year-on-year, and operating profit was 341 million yen, up 10.0% year-on-year.

The outstanding orders for second quarter-end were 12,166 million yen, up 5.7% year-on-year.

2

(Aircraft)

For the Ministry of Defense, both the orders received and net sales increased.

Also, both the orders received and net sales increased for civilian demand-related production.

As a result, for this segment, the orders received were 11,927 million yen, up 20.5% year-on-year, net sales were 14,720 million yen, up 27.8% year-on-year, and operating profit was 1,052 million yen, up 40.0% year-on-year. The outstanding orders for second quarter-end were 40,396 million yen, down 0.3% year-on-year.

(Others)

The orders received for construction business increased, but net sales for software business decreased. As a result, for this segment, the orders received were 8,419 million yen, up 1.9% year-on-year, net sales were 6,167 million yen, down 2.2% year-on-year, and operating profit was 284 million yen, down 18.0% year-on-year.

The outstanding orders for second quarter-end were 13,329 million yen, up 8.6% year-on-year.

(2) Financial Position

Total assets for second quarter-end amounted to 248,647 million yen, an increase of 21,740 million yen from the previous fiscal year-end, mainly due to increases in trade receivables and inventories. Liabilities totaled 144,891 million yen, an increase of 18,423 million yen from the previous fiscal year-end, mainly due to increases in trade payables and short-term borrowings. Net assets increased 3,316 million yen from the previous fiscal year-end to 103,756 million yen, mainly due to the recording of profit attributable to owners of parent, despite the dividend payments. As a result, capital adequacy ratio decreased to 41.1% from 43.5% at the previous fiscal year-end.

(3) Consolidated Financial Results Forecasts

In consideration of the financial results for the six months ended September 30, 2023 and the future outlook, the full-year financial results forecasts, released on May 09, 2023, are revised as follows.

Revision to the Consolidated Financial Results Forecast (April 01, 2023-March 31, 2024)

				Profit	Basic
		Operating	Ordinary	attributable to
	Net sales	earnings per
	profit	profit	owners of
		share
				parent
	Million yen	Million yen	Million yen	Million yen	yen
Previous forecast (A)	270,000	12,000	11,700	7,300	110.75
Current forecast (B)	265,000	12,000	11,700	7,300	110.65
Amount of change (B-A)	(5,000)	－	－	－	－
Percentage change (%)	(1.9)	－	－	－	－
(Reference) Results for the
previous fiscal year	225,175	9,293	9,902	7,313	111.00
(FY2022)

* The assumed exchange rate is 135 yen to the US dollar for October onwards.

3

Quarterly Consolidated Financial Statements

(1) Quarterly Consolidated Balance Sheets

		(Million yen)
	As of March 31, 2023	As of September 30, 2023
Assets
Current assets
Cash and deposits	22,745	21,199
Notes and accounts receivable - trade, and contract	62,812	69,735
assets
Electronically recorded monetary claims -	8,604	16,434
operating
Merchandise and finished goods	4,805	5,905
Work in process	24,122	27,687
Raw materials and supplies	24,874	26,765
Other	4,920	5,766
Allowance for doubtful accounts	(395)	(333)
Total current assets	152,491	173,159
Non-current assets
Property, plant and equipment
Buildings and structures, net	19,030	18,916
Other, net	23,458	23,689
Total property, plant and equipment	42,488	42,606
Intangible assets	2,702	2,592
Investments and other assets
Other	29,241	30,305
Allowance for doubtful accounts	(17)	(15)
Total investments and other assets	29,224	30,290
Total non-current assets	74,415	75,488
Total assets	226,907	248,647

4

		(Million yen)
	As of March 31, 2023	As of September 30, 2023
Liabilities
Current liabilities
Notes and accounts payable - trade	27,310	30,699
Current portion of bonds payable	800	800
Short-term borrowings	6,372	26,094
Current portion of long-term borrowings	2,210	2,205
Income taxes payable	2,337	1,458
Provision for loss on construction contracts	3,168	2,777
Other	26,323	24,036
Total current liabilities	68,522	88,071
Non-current liabilities
Bonds payable	800	400
Long-term borrowings	42,234	41,135
Retirement benefit liability	12,973	13,299
Other	1,937	1,984
Total non-current liabilities	57,945	56,819
Total liabilities	126,467	144,891
Net assets
Shareholders' equity
Share capital	15,981	15,981
Capital surplus	15,657	15,686
Retained earnings	70,236	71,624
Treasury shares	(5,838)	(5,753)
Total shareholders' equity	96,037	97,540
Accumulated other comprehensive income
Valuation difference on available-for-sale	633	1,660
securities
Revaluation reserve for land	(376)	(376)
Foreign currency translation adjustment	2,116	2,962
Remeasurements of defined benefit plans	335	405
Total accumulated other comprehensive income	2,709	4,651
Non-controlling interests	1,692	1,564
Total net assets	100,439	103,756
Total liabilities and net assets	226,907	248,647

5

(2) Quarterly Consolidated Statements of Income and Comprehensive Income

Quarterly Consolidated Statements of Income (For the six months)

		(Million yen)
	For the six months	For the six months
	ended September 30, 2022	ended September 30, 2023
Net sales	104,001	116,464
Cost of sales	88,550	98,962
Gross profit	15,451	17,501
Selling, general and administrative expenses	12,245	13,070
Operating profit	3,206	4,431
Non-operating income
Interest income	32	53
Dividend income	113	147
Share of profit of entities accounted for using equity	44	-
method
Foreign exchange gains	1,040	588
Other	91	106
Total non-operating income	1,323	896
Non-operating expenses
Interest expenses	113	208
Share of loss of entities accounted for using equity	-	41
method
Cost of inactive noncurrent assets	73	84
Borrowing fees	5	5
Loss on securitization of receivables	21	87
Other	147	43
Total non-operating expenses	361	469
Ordinary profit	4,168	4,858
Extraordinary income
Gain on sale of non-current assets	-	64
Gain on sale of investment securities	202	-
Total extraordinary income	202	64
Extraordinary losses
Loss on disposal of non-current assets	38	22
Total extraordinary losses	38	22
Profit before income taxes	4,331	4,900
Income taxes - current	948	1,413
Income taxes - deferred	84	244
Total income taxes	1,032	1,658
Profit	3,298	3,242
Profit attributable to non-controlling interests	426	267
Profit attributable to owners of parent	2,871	2,974

6

Quarterly Consolidated Statements of Comprehensive Income (For the six months)

		(Million yen)
	For the six months	For the six months
	ended September 30, 2022	ended September 30, 2023
Profit	3,298	3,242
Other comprehensive income

Valuation difference on available-for-sale securities

Foreign currency translation adjustment

Remeasurements of defined benefit plans, net of tax Share of other comprehensive income of entities accounted for using equity method

Total other comprehensive income

Comprehensive income

Comprehensive income attributable to Comprehensive income attributable to owners of parent

Comprehensive income attributable to non-controlling interests

(313)	1,026
1,182	773
568	69
307	141
1,745	2,011
5,044	5,253

4,4784,916

565

336

7