Taihei Dengyo Kaisha : Consolidated Financial Statements for the Fiscal Year Ended March 31,2022

Consolidated Financial Statements for the Fiscal Year Ended March 31, 2022 [Japanese GAAP]

May 10, 2022

Company name: TAIHEI DENGYO KAISHA, LTD.

Stock exchange listing: Tokyo Stock Exchange

Code number: 1968

URL: https://www.taihei-dengyo.co.jp/

Representative: Jo Nojiri, Representative Director, President and Chief Executive Officer

Contact: Shinya Kusaka, Director and Senior Executive Officer/General Manager, General Affairs Administrative Division

Phone: [phone]

Scheduled date of annual general meeting of shareholders: June 29, 2022

Scheduled date of commencing dividend payments: June 30, 2022

Scheduled date of filing securities report: June 29, 2022

Preparation of supplementary explanatory materials: Yes

Financial results briefing: Yes

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

1. Consolidated Results for the Fiscal Year Ended March 31, 2022 (April 1, 2021 - March 31, 2022)

(1) Consolidated Operating Results		(% indicates changes from the previous corresponding period.)
		Net sales		Operating profit	Ordinary profit	Profit attributable to
			owners of parent
	Year ended	Million yen	%	Million yen	%	Million yen	%	Million yen	%
	March 31, 2022	126,908	(0.7)	10,457	41.3	13,125	57.6	8,406	49.7
	March 31, 2021	127,779	7.0	7,400	(21.7)	8,329	(13.1)	5,613	(9.3)

(Note) Comprehensive income: Year ended March 31, 2022: 8,909 million yen [21.9%]

Year ended March 31, 2021: 7,308 million yen [33.1%]

Basic earnings

Diluted earnings

Return on

Ratio of

Ratio of

ordinary profit

operating profit

per share

per share

equity

to total assets

to net sales

Year ended

Yen

Yen

%

%

%

March 31, 2022

442.50

-

11.1

10.1

8.2

March 31, 2021

295.54

-

8.1

6.5

5.8

(Reference) Equity in earnings of affiliated companies:

Year ended March 31, 2022: 108 million yen

Year ended March 31, 2021: 112 million yen

(2) Consolidated Financial Position

Total assets

Net assets

Equity-to-asset

Net assets per share

ratio

Million yen

Million yen

%

Yen

As of March 31, 2022

131,738

80,423

60.1

4,167.04

As of March 31, 2021

128,757

73,113

55.9

3,786.40

(Reference) Equity: As of March 31, 2022: 79,167 million yen

As of March 31, 2021: 71,936 million yen

(3) Consolidated Cash Flows

Cash flows from

Cash flows from

Cash flows from

Cash and cash

equivalents

operating activities

investing activities

financing activities

at end of period

Year ended

Million yen

Million yen

Million yen

Million yen

March 31, 2022

613

(8,679)

(3,848)

19,397

March 31, 2021

19,576

(2,011)

(3,927)

30,941

2. Cash Dividends

		Annual dividends			Total			Ratio of
							Payout ratio		dividends to
	1st	2nd	3rd	Year-			dividends
	quarter-	quarter	quarter	Total		(consolidated)		net assets
	end		(annual)
	end	-end	-end					(consolidated)
Year ended	Yen	Yen	Yen	Yen	Yen		Million yen	%	%
March 31, 2021	-	-	-	80.00	80.00	1,527	27.1	2.1
March 31, 2022	-	-	-	100.00	100.00	1,909	22.6	2.4
Year ending
March 31, 2023	-	-	-	100.00	100.00			35.2
(Forecast)

3. Forecast of Consolidated Results for the Fiscal Year Ending March 31, 2023 (April 1, 2022 - March 31, 2023)

(% indicates changes from the previous corresponding period.)

	Net sales		Operating profit	Ordinary profit	Profit attributable	Basic earnings
		to owners of parent	per share
	Million yen	%	Million yen	%	Million yen	%	Million yen	%	Yen
Full year	130,000	2.4	7,600	(27.3)	8,200	(37.5)	5,400	(35.8)	284.23

* Notes:

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

Newly included: - (Company name)

Excluded: - (Company name)

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: Yes
   2. Changes in accounting policies other than 1) above: None
   3. Changes in accounting estimates: None
   4. Retrospective restatement: None
3. Total number of shares issued and outstanding (common shares)
4. 1. Number of shares issued and outstanding at the end of the period (including treasury shares): March 31, 2022: 20,341,980 shares
      March 31, 2021: 20,341,980 shares
   2. Number of treasury shares at the end of the period:

March 31, 2022: 1,343,554 shares

March 31, 2021: 1,343,371 shares

1. Average number of shares during the period:
   Year ended March 31, 2022: 18,998,545 shares
   Year ended March 31, 2021: 18,995,471 shares

(Reference) Summary of Non-consolidated Results

1. Non-consolidated Results for the Fiscal Year Ended March 31, 2022 (April 1, 2021 - March 31, 2022)

(1) Non-consolidated Operating Results				(% indicates changes from the previous corresponding period.)
				Net sales				Operating profit		Ordinary profit		Profit
	Year ended		Million yen	%	Million yen	%		Million yen	%		Million yen	%
	March 31, 2022		119,884	(1.8)		9,963	46.1		12,500	65.0	8,065	49.5
	March 31, 2021		122,106	7.8		6,818	(22.7)		7,573	(14.5)	5,394	(8.5)
			Basic earnings		Diluted earnings
			per share		per share
	Year ended			Yen				Yen
	March 31, 2022		424.47				-
	March 31, 2021		283.94				-
(2) Non-consolidated Financial Position
				Total assets	Net assets	Equity-to-asset		Net assets per share
				ratio
				Million yen		Million yen		%			Yen
	As of March 31, 2022			127,056		77,282		60.8			4,067.18
	As of March 31, 2021			124,022		70,733		57.0			3,722.45

(Reference) Equity: As of March 31, 2022: 77,282 million yen As of March 31, 2021: 70,733 million yen

2. Forecast of Non-Consolidated Results for the Fiscal Year Ending March 31, 2023 (April 1, 2022 - March 31, 2023)

(% indicates changes from the previous corresponding period.)

	Net sales		Ordinary profit	Profit		Basic earnings per
			share
	Million yen	%	Million yen	%	Million yen	%	Yen
Full year	123,000	2.6	7,600	(39.2)	5,100	(36.8)	268.40

• These financial results are outside the scope of audit procedures by certified public accountants or audit corporations.
• Explanation of the proper use of performance forecast and other notes

The earnings forecast and other forward-looking statements herein are based on the information currently available and certain assumptions deemed reasonable by the Company, and thus actual results may differ significantly from these forecasts due to a wide range of factors.

For details, please see "1. Overview of Operating Results, etc., (4) Future Outlook" on page 4 of the attached materials.

Table of Contents
1. Overview of Operating Results, etc.......................................................................................................	2
(1)	Overview of Operating Results for the Fiscal Year under Review....................................................	2
(2)	Overview of Financial Position for the Fiscal Year under Review ...................................................	3
(3)	Overview of Cash Flows for the Fiscal Year under Review..............................................................	3
(4)	Future Outlook ..................................................................................................................................	4
2. Basic Policy Regarding Selection of Accounting Standards .................................................................	5
3. Consolidated Financial Statements and Primary Notes.........................................................................	6
(1)	Consolidated Balance Sheet ..............................................................................................................	6
(2)	Consolidated Statement of Income and Comprehensive Income ......................................................	8
(3)	Consolidated Statement of Changes in Equity ................................................................................	10
(4)	Consolidated Statement of Cash Flows...........................................................................................	12
(5)	Notes to Consolidated Financial Statements ...................................................................................	14
	(Notes on going concern assumption) ........................................................................................	14
	(Changes in accounting policies) ...............................................................................................	14
	(Changes in presentation).............................................................................................................	14
	(Segment information, etc.)........................................................................................................	15
	(Per share information)...............................................................................................................	17
	(Significant subsequent events)..................................................................................................	17
4. Others ..................................................................................................................................................	18
(1)	Orders Received, Net Sales and Order Backlog by Segment..........................................................	18
(2) Changes in Officers .........................................................................................................................	19

1

1. Overview of Operating Results, etc.

(1) Overview of Operating Results for the Fiscal Year under Review

During the consolidated fiscal year under review, the Japanese economy remained in a difficult situation due to intermittent restrictions on economic activities caused by the COVID-19 pandemic, soaring raw material prices and rising fuel costs. Also for the global economy, the outlook remained uncertain as the risks of economic downturn increased with a steep rise in resource prices triggered by economic sanctions against Russia for its invasion of Ukraine and other factors.

In the electric power industry, the main area of business for the TAIHEI DENGYO KAISHA Group (the TDK Group), with the revision of the national Strategic Energy Plan which showed the course of policy for reducing greenhouse gas emissions and reducing energy costs toward FY2030, efforts to achieve carbon neutrality centered around decarbonizing power and propelling electrification were driven forward.

In this business environment, the TDK Group has been carrying forward its Mid-Term Business Plan which started in FY2020 and exploring new business models. In August last year, it established a subsidiary dedicated to engineering work aiming to win EPC contracts to expand its business areas, and in November of the same year, aiming to become carbon negative, it decided to introduce a CO2 recycling system at its own power plants, which partially captures CO2 emitted from power generation with a CO2 capture system and uses it in agricultural greenhouses on the plant premises.

Meanwhile, we launched a new project focusing on strengthening safety and quality, which are of utmost importance for a construction company, as well as on compliance, and has been working to improve employee awareness and skills throughout the TDK Group by strengthening guidance at its locations across the country.

In addition, to contribute to the stable supply of electric power, we have worked to ensure safety, quality and processes, and to reduce costs through continuously developing new technologies and construction methods, thereby increasing its corporate value.

As a result, in the fiscal year ended March 31, 2022, orders received amounted to 120,844 million yen (a decrease of 3.1% YoY) and net sales amounted to 126,908 million yen (a decrease of 0.7% YoY) including 6,153 million yen (a decrease of 3.0% YoY) for overseas works.

Regarding profits, operating profit amounted to 10,457 million yen (an increase of 41.3% YoY), ordinary profit amounted to 13,125 million yen (an increase of 57.6% YoY) and profit attributable to owners of parent amounted to 8,406 million yen (an increase of 49.7% YoY).

The "Accounting Standard for Revenue Recognition" (Accounting Standards Board of Japan (ASBJ) Statement No. 29; March 31, 2020) and others have been applied from the beginning of the consolidated fiscal year under review. Details are stated in "3. Consolidated Financial Statements and Primary Notes, (5) Notes to Consolidated Financial Statements, (Changes in accounting policies)."

At the Board of Directors meeting held on February 10, 2022, the Board decided to pay a year-end ordinary dividend of 100 yen per share for the fiscal year under review, with an increase of 20 yen per share from the year-end ordinary dividend for the previous consolidated fiscal year, in accordance with a distribution policy of surplus with long-term and stable return of profit as a basis.

Performance results by business segment are as follows.

(Construction Segment)

Orders received amounted to 43,881 million yen (a decrease of 27.4% YoY, composition ratio: 36.3%). Orders received in works for thermal power plants for business use decreased, resulting in a decrease for the overall segment.

Net sales amounted to 53,294 million yen (a decrease of 7.3% YoY, composition ratio: 42.0%). Despite an increase in that for works for thermal power plants for private use, net sales of works for thermal power plants for business use decreased, resulting in a decrease for the overall segment. Segment profit amounted to 1,910 million yen (a decrease of 25.3% YoY).

2