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    2768   JP3663900003

SOJITZ CORPORATION

(2768)
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Sojitz : Summary of Consolidated Financial Results for the First Quarter Ended June 30, 2021

08/03/2021 | 06:15am EDT

Summary of Consolidated Financial Results for the First Quarter Ended June 30, 2021 (IFRS)

August 3, 2021

Sojitz Corporation

( URL https://www.sojitz.com )

Listed stock exchange:

The first section of Tokyo

Security code:

2768

Company representative:

Masayoshi Fujimoto, President & CEO

Contact information:

Yoichi Yanagisawa, GM, Public Relations Dept. TEL +81-3-6871-3404

Scheduled filing date of quarterly financial report: August 12, 2021

Scheduled date of delivery of dividends: -

Supplementary materials for the quarterly financial results: Yes

Investor conference for the quarterly financial results: Yes

(Rounded down to millions of Japanese Yen)

1. Consolidated Financial Results for the First Quarter Ended June 30, 2021

(April 1, 2021 - June 30, 2021)

(1) Consolidated Operating Results

Description of % is indicated as the change rate compared with the same period last year.

Profit for the period

Total comprehensive

Revenue

Profit before tax

Profit for the period

attributable to owners

income for the period

of the Company

For the first quarter ended

Millions of Yen

%

Millions of Yen

%

Millions of Yen

%

Millions of Yen

%

Millions of Yen

%

June 30, 2021

492,842

41.1

23,213

801.5

18,008

559.6

16,924

610.1

37,681

766.6

June 30, 2020

349,280

(20.2)

2,574

(85.8)

2,730

(82.2)

2,383

(83.3)

4,348

-

Basic earnings

Diluted earnings

per share

per share

For the first quarter ended

Yen

Yen

June 30, 2021

14.18

14.18

June 30, 2020

1.98

1.98

Note : Basic earnings per share and Diluted earnings per share are calculated based on Profit for the period attributable to owners of the Company.

(2) Consolidated Financial Position

Total assets

Total equity

Total equity attributable

Total equity attributable to

to owners of the

owners of the Company

Company

ratio

As of

Millions of Yen

Millions of Yen

Millions of Yen

%

June 30, 2021

2,449,380

679,792

645,161

26.3

March 31, 2021

2,300,115

654,639

619,111

26.9

2.Cash Dividends

Cash dividend per share

First

Second

Third

Year

Annual

quarter

quarter

quarter

end

For the year ended

Yen

Yen

Yen

Yen

Yen

March 31, 2021

-

5.00

-

5.00

10.00

March 31, 2022

-

March 31, 2022 (forecast)

7.00

-

7.00

14.00

Note :

  1. Changes in cash dividend forecast : No
  2. The Company intends a one-for-five reverse stock split affecting shares of common stock to be conducted with an effective date of October 1,

2021. Accounting for the impacts of this share consolidation, the Company plans to issue a year-end dividend of 35.00 per share.

3. Consolidated Earnings Forecast for the Year Ending March 31, 2022 (April 1, 2021 - March 31, 2022)

Description of % is indicated as the change rate compared with the same period last year.

Profit attributable to owners of the Company

Basic earnings

per share

For the Year Ending

Millions of Yen

%

Yen

March 31, 2022

Full-year

53,000

96.3

44.20

Note:

1 : Changes in full-year earnings forecast : No

2 : Basic earnings per share is calculated based on Profit attributable to owners of the Company.

3 : Basic earnings per share is without taking into consideration the impacts of reverse stock split with an effective date of October 1, 2021.

1

4. Others

  1. Changes in major subsidiaries during the period

(Changes in specified subsidiaries accompanying changes in scope of consolidation) : No

  1. Accounting policy changes and accounting estimate changes
    1. Changes in accounting policies required by IFRS : No
    2. Changes due to other reasons : No
    3. Accounting estimate change : No
  2. Number of outstanding shares at the end of the periods (Common Stock):
    1. Number of outstanding shares at the end of the periods (Including treasury shares):

As of June 30, 2021: 1,251,499,501

As of March 31, 2021: 1,251,499,501

2. Number of treasury shares at the end of the periods:

As of June 30, 2021 : 68,855,773

As of March 31, 2021 : 52,404,470

3. Average number of outstanding shares during the periods:

For the first quarter ended June 30, 2021 (accumulative): 1,193,580,908

For the first quarter ended June 30, 2020 (accumulative): 1,201,772,967

Note: The Company established the Executive Compensation Board Incentive Plan Trust. The trust account associated with this trust holds shares of the Company's stock, which are treated as treasury shares; 1,538,215 stocks in the first quarter ended June 30, 2021 and 1,547,972 stocks in the financial year ended March 2021.

* This summary of consolidated financial results is not subject to quarterly reviews.

*Important Note Concerning the Appropriate Use of Business Forecasts and other

This document contains forward-looking statements based on information available to the company at the time of disclosure and certain assumptions that management believes to be reasonable. Sojitz makes no assurances as to the actual results and/or other outcomes, which may differ substantially from those expressed or implied by forward- looking statements due to various factors including changes in economic conditions in key markets, both in and outside of Japan, and exchange rate movements. The Company will provide timely disclosure of any material changes, events, or other relevant issues.

2

1. Analysis of Business Results

  1. Overview of the Three-Month Period Ended June 30, 2021

Economic Environment

In the three-month period ended June 30, 2021, economic recovery was seen in certain regions as a result of efforts for responding to the COVID-19 pandemic, including vaccine rollouts, substantial financial easing measures, and the expansion of public finance and other government measures seen centered developed countries. At the same time, there is a need for ongoing caution with regard to growing credit costs and the deterioration of performance at companies in tourism, service, and other industries.

Economic activity in the United States showed a smooth recovery due to the benefits of COVID- 19 vaccine rollouts and large-scale economic stimulus measures. However, rises in cases of infection by the COVID-19 Delta variant present the risk that future trends in the pandemic may slow the pace of economic recovery. Meanwhile, there are signs that inflation may accelerate as a result of the sharp increases in demand for general consumer goods, resources, and energy. Accordingly, the cancelation of the Federal Reserve Board's monetary easing measures will likely be dependent upon the recovery of the labor market.

In Europe, economic recovery trends are being witnessed as activity restrictions are alleviated. However, differences in job markets and wage conditions are being seen between European Union countries. Also, it is likely that the European Central Bank will maintain its stance toward monetary easing even after the conclusion of its pandemic emergency purchase programme. Meanwhile, companies have been accumulating debt amid the COVID-19 pandemic, creating a risk of companies exhibiting reluctance to conduct capital investments or otherwise showing diminished productivity.

China succeeded in quickly getting the COVID-19 pandemic under control, and the country has thus become a driving force behind the recovery of the Asian economy. At the same time, there has been a substantial increase in investment as part of China's Belt and Road Initiative for investing in countries along overland distribution routes in comparison to the depressed state seen in 2020. Conversely, anti-China pressure from Western countries is growing. Examples of this pressure include export and investment restrictions placed on several Chinese companies by the United States. This pressure indicates a need to monitor risks pertaining to businesses serving China.

In Asia, COVID-19 cases are rising in countries such as Vietnam, which had previously been enjoying an economic recovery trend driven by exports. Accordingly, the International Monetary Fund has greatly downgraded its 2021 growth forecast for ASEAN and other emerging Asian countries. At the same time, trade with China continues to increase, even amid the COVID-19 pandemic, and the Regional Comprehensive Economic Partnership agreement expected to be concluded within 2021 is anticipated to stimulate trade within Asia.

Any improvements seen in the Japanese economy were quickly undone by the impacts of the COVID-19 pandemic, causing a clear divide between the strong-performing manufacturing industry and the weak consumer service industry. It is projected that the Japanese economy will continue to be supported by exports to recovering overseas markets for the foreseeable future. However, there is some hope that consumer spending will pick up when the Japanese

3

population becomes widely vaccinated.

Financial Performance

Sojitz Corporation's consolidated business results for the first quarter ended June 30, 2021 are

presented below.

Revenue

Revenue was up 41.1% year on year, to ¥492,842 million, due to higher

revenue in the Metals, Mineral Resources & Recycling Division, a result of

higher prices for coal and precious metals as well as growth in precious

metal transactions; in the Chemicals Division, a result of higher methanol

prices and growth in plastic resin transactions; and in the Automotive

Division, a result of increased sales volumes in overseas automotive

businesses.

Gross profit

Gross profit was up ¥17,491 million year on year, to ¥56,446 million, due

to higher revenue in the Automotive Division, a result of increased sales

volumes in overseas automotive businesses; in the Chemicals Division, a

result of higher methanol prices and growth in plastic resin transactions;

and in the Metals, Mineral Resources & Recycling Division, a result of

higher prices for coal.

Profit before tax

Profit before tax was up ¥20,639 million year on year, to ¥23,213 million,

as a result of increases in gross profit and share of profit of investments

accounted for using the equity method.

Profit for the period

After deducting income tax expenses of ¥5,204 million from profit before

tax of ¥23,213 million, profit for the period amounted to ¥18,008 million, up

¥15,278 million year on year. Profit for the period (attributable to owners of

the Company) increased ¥14,541 million year on year, to ¥16,924 million.

Comprehensive

Comprehensive income for the period of ¥37,681 million was recorded,

income for the

up ¥33,333 million year on year, following an increase in financial assets

period

at fair value through other comprehensive income along with more

beneficial foreign currency translation differences for foreign operations.

Comprehensive income for the period (attributable to owners of the

Company) was ¥36,541 million, an increase of ¥33,324 million.

Results for the three-month period ended June 30, 2021, are summarized by segment below.

Effective April 1, 2021, the Machinery & Medical Infrastructure Division, Energy & Social Infrastructure Division, and part of the Industrial Infrastructure & Urban Development Division were reorganized into the Infrastructure & Healthcare Division.

The Foods & Agriculture Business Division, Retail & Lifestyle Business Division, and part of the Industrial Infrastructure & Urban Development Division were reorganized into the Consumer Industry & Agriculture Business Division and the Retail & Consumer Service Division.

The Metals & Mineral Resources Division was renamed the Metals, Mineral Resources & Recycling Division.

In addition, the car and motorcycle parts, ship equipment, industrial machinery, forefront industry business, bearing, and nuclear power-related equipment businesses previously included in the Automotive Division, the Aerospace & Transportation Project Division, the Machinery & Medical Infrastructure Division, and the Energy & Social Infrastructure Division were transferred to the Others segment .

4

Automotive

Revenue was up 145.1% year on year, to ¥56,877 million, due to higher sales volumes in overseas automobile transactions. Profit for the period (attributable to owners of the Company) rose ¥2,877 million, to ¥1,113 million, as a result of an increase in gross profit.

Aerospace & Transportation Project

Revenue was up 62.4% year on year, to ¥6,324 million, due to the acquisition of railcar leasing business in North America. Profit for the period (attributable to owners of the Company) increased ¥448 million, to ¥146 million, as a result of an increase in gross profit.

Infrastructure & Healthcare

Revenue was up 5.5% year on year, to ¥14,976 million, due to higher earnings at IT system subsidiaries. Profit for the period (attributable to owners of the Company) decreased ¥1,400 million, to ¥818 million, despite an increase in gross profit, as other income was down due to the absence of a gain on a partial sale of a natural gas-fired power project company recorded in the previous equivalent period.

Metals, Mineral Resources & Recycling

Revenue was up 57.0% year on year, to ¥124,119 million, due to higher prices for coal and precious metals as well as growth in precious metal transactions. Profit for the period (attributable to owners of the Company) increased ¥7,942 million, to ¥5,972 million, as a result of an increase in gross profit as well as increase in share of profit of investments accounted for using the equity method associated with higher profit of steel operating company.

Chemicals

Revenue was up 45.9% year on year, to ¥133,651 million, due to higher methanol prices and growth in plastic resin transactions. Profit for the period (attributable to owners of the Company) increased ¥3,985 million, to ¥4,009 million, as a result of an increase in gross profit.

Consumer Industry & Agriculture Business

Revenue was up 16.9% year on year, to ¥71,384 million, due to higher sales volumes in overseas fertilizer businesses. Profit for the period (attributable to owners of the Company) increased ¥910 million, to ¥2,984 million, as a result of an increase in gross profit.

Retail & Consumer Service

Revenue was up 13.3% year on year, to ¥51,743 million, due to higher sales volumes in meat transaction. Profit for the period (attributable to owners of the Company) increased ¥483 million, to ¥611 million, as a result of an increase in gross profit.

(2) Financial Position

Consolidated Balance Sheet

Total assets on June 30, 2021, were ¥2,449,380 million, up ¥149,265 million from March 31, 2021, following the increase in trade and other receivables under current assets associated with wheat and iron ore and the increase in inventories associated with aircraft and real estate for sale.

Total liabilities on June 30, 2021, amounted to ¥1,769,587 million, up ¥124,111 million from March 31, 2021, as results of the increase in trade and other payables under current liabilities associated

5

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Sojitz Corporation published this content on 03 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 August 2021 09:55:28 UTC.


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Sales 2022 1 950 B 17 794 M 17 794 M
Net income 2022 62 500 M 570 M 570 M
Net Debt 2022 688 B 6 276 M 6 276 M
P/E ratio 2022 6,73x
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Nbr of Employees 19 463
Free-Float 92,3%
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Number of Analysts 5
Last Close Price 362,00 JPY
Average target price 376,00 JPY
Spread / Average Target 3,87%
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Masayoshi Fujimoto President, CEO & Representative Director
Seiichi Tanaka CFO, Representative Director, Head-IR & Accounting
Takashi Hara Chairman
Masaaki Kushibiki GM-Personnel & Information Technology Operations
Kayoko Naito Independent Outside Director
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