Taihei Dengyo Kaisha : Consolidated Financial Statements for the Six Months Ended September 30, 2021

Consolidated Financial Statements for the Six Months Ended September 30, 2021 [Japanese GAAP]

November 11, 2021

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 filing quarterly report: November 12, 2021

Scheduled date of commencing dividend payments: -

Preparation of supplementary explanatory materials: Yes

Quarterly financial results briefing: Yes

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

1. Consolidated Results for the Six Months Ended September 30, 2021 (April 1, 2021 - September 30, 2021)

(1) Consolidated Operating Results (Cumulative)	(% 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	59,988	(0.7)		6,599	48.3	8,011	70.4	5,469	79.0
	September 30, 2020		60,394	14.6		4,450	81.3		4,700	88.7		3,054	79.5

(Note) Comprehensive income: Six months ended September 30, 2021: 6,087 million yen [67.3%]

Six months ended September 30, 2020: 3,638 million yen [156.3%]

Basic earnings per share

Diluted earnings per share

Six months ended

Yen

Yen

September 30, 2021

287.90

-

September 30, 2020

160.85

-

(2) Consolidated Financial Position

Total assets

Net assets

Equity-to-asset ratio

Million yen

Million yen

%

As of September 30, 2021

124,561

77,618

61.3

As of March 31, 2021

128,757

73,113

55.9

(Reference) Equity: As of September 30, 2021: 76,409 million yen

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

2. Cash Dividends

Annual dividends

1st quarter-end

2nd quarter- end

3rd quarter-end

Year-end

Total

Yen

Yen

Yen

Yen

Yen

Year ended

March 31, 2021

-

-

-

80.00

80.00

Year ending

March 31, 2022

-

-

Year ending

March 31, 2022

-

100.00

100.00

(Forecast)

(Note) Changes from the most recent dividends forecast: None

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

(% 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	127,000	(0.6)	8,800	18.9	10,700	28.5	7,100	26.5	373.71

(Note) Changes from the most recent results forecast: Yes

* Notes:

1. Changes in significant subsidiaries during the period under review (changes in specified subsidiaries resulting in changes in scope of consolidation): None
2. Application of special accounting methods for preparing quarterly consolidated financial statements: None
3. Changes in accounting policies, changes in accounting estimates and retrospective restatement
4. 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
5. Total number of shares issued and outstanding (common shares)
6. 1. Number of shares issued and outstanding at the end of the period (including treasury shares):

September 30, 2021: 20,341,980 shares

March 31, 2021: 20,341,980 shares

1. Number of treasury shares at the end of the period: September 30, 2021: 1,343,371 shares March 31, 2021: 1,343,371 shares
2. Average number of shares during the period (cumulative from the beginning of the fiscal year): September 30, 2021: 18,998,609 shares
   September 30, 2020: 18,992,258 shares

* These financial results are outside the scope of quarterly review 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.

TAIHEI DENGYO KAISHA, LTD. (1968)

Financial Results for the Six Months Ended September 30, 2021 [Japanese GAAP]

Table of Contents
1. Qualitative Information on Quarterly Financial Results .......................................................................	2
(1)	Explanation of Operating Results .....................................................................................................	2
(2)	Explanation of Financial Position .....................................................................................................	3
(3)	Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information . 3
2. Quarterly Consolidated Financial Statements and Primary Notes ........................................................	4
(1)	Quarterly Consolidated Balance Sheet..............................................................................................	4
(2)	Quarterly Consolidated Statement of Income and Comprehensive Income......................................	6
(3)	Quarterly Consolidated Statement of Cash Flows ............................................................................	7
(4)	Notes to Quarterly Consolidated Financial Statements.....................................................................	9
	(Notes on going concern assumption) ..........................................................................................	9
	(Notes in case of significant changes in shareholders' equity).....................................................	9
	(Changes in accounting policies) ................................................................................................	9
	(Segment information, etc.)........................................................................................................	10

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TAIHEI DENGYO KAISHA, LTD. (1968)

Financial Results for the Six Months Ended September 30, 2021 [Japanese GAAP]

1. Qualitative Information on Quarterly Financial Results

(1) Explanation of Operating Results

Regarding the Japanese economy in the six months ended September 30, 2021, the economic outlook remained severe. Although consumer spending and some exports were on the recovery trend after the lifting of the state of emergency, there have been potential downward risks due to the trend of the COVID-19 infection in and outside Japan as well as supply chain disruptions, and the level of economic activity needs to be raised according to the COVID-19 situation.

The electric power industry, the main business of the TAIHEI DENGYO KAISHA Group (the TDK Group), has been expanding the use of renewable energy, promoting stable supply and economic efficiency on the premise of safety, and pursuing innovation in thermal power generation and other areas from the perspective of "S+3E" (safety, energy security, economic efficiency, and environment). As such, the industry has been promoting effective measures to reduce CO2 emissions while building a PDCA cycle.

Under these circumstances, the TDK Group has continued to work on achieving the targets set forth in the Mid-Term Business Plan (FY2020 - FY2022), which started in April 2020 and focuses on "Enhancing the corporate foundation for sustainable growth" and "Securing a revenue base that responds to changes in the business environment." Furthermore, the Group is implementing initiatives that take the new fields of design and material procurement into consideration, along with its conventional businesses. In this context, we established in August 2021 Taihei Engineering Service Co., Ltd., a subsidiary dedicated to engineering work, and are striving to build an order-receiving system aimed at further business expansion. As part of ESG efforts, we are carrying out a joint project with a partner company for the purpose of reducing CO2 emissions at construction sites. In terms of our own power plants, we are endeavoring to build a business model for a recycle- oriented society where we segregate, collect, and store CO2 emissions and use them to grow agricultural products.

As a result, in the six months ended September 30, 2021, orders received amounted to 52,542 million yen (a decrease of 8.1% YoY) and net sales amounted to 59,988 million yen (a decrease of 0.7% YoY) including 2,684 million yen (a decrease of 16.5% YoY) for overseas works.

Regarding profits, operating profit amounted to 6,599 million yen (an increase of 48.3% YoY), ordinary profit amounted to 8,011 million yen (an increase of 70.4% YoY) and profit attributable to owners of parent amounted to 5,469 million yen (an increase of 79.0% 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 first quarter of the current consolidated fiscal year. Details are stated in "2. Quarterly Consolidated Financial Statements and Primary Notes, (4) Notes to Quarterly Consolidated Financial Statements, (Changes in accounting policies)."

Performance results by business segment are as follows.

(Construction Segment)

Orders received amounted to 18,816 million yen (a decrease of 20.9% YoY, composition ratio: 35.8%). Orders received in works for thermal power plants for business use and works for iron and steel-related plants decreased, resulting in a decrease for the overall segment.

Net sales amounted to 24,273 million yen (a decrease of 14.6% YoY, composition ratio: 40.5%). Despite an increase in that for works for thermal power plants for private use and works for iron and steel-related plants, net sales of works for thermal power plants for business use decreased, resulting in a decrease for the overall segment. Segment profit amounted to 2,467 million yen (an increase of 33.4% YoY) due to improved profit rates for works for thermal power plants for business use and works for iron and steel-related plants.

(Maintenance and Renovation Segment)

Orders received amounted to 33,726 million yen (an increase of 1.1% YoY, composition ratio: 64.2%). Despite a decrease in orders received in works for nuclear power plants, orders for thermal power plants for business use increased, resulting in an increase for the overall segment.

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TAIHEI DENGYO KAISHA, LTD. (1968)

Financial Results for the Six Months Ended September 30, 2021 [Japanese GAAP]

Net sales amounted to 35,715 million yen (an increase of 11.7% YoY, composition ratio: 59.5%). Despite a decrease in that for works for iron and steel-related plants, net sales of works for thermal power plants for business use and works for thermal power plants for private use increased, resulting in an increase for the overall segment. Segment profit amounted to 5,739 million yen (an increase of 37.7% YoY).

1. Explanation of Financial Position
2. 1. Assets

Current assets amounted to 88,324 million yen, down 6,183 million yen from the end of the previous consolidated fiscal year. This was due mainly to a decrease of 8,474 million yen in cash and deposits despite increases of 3,000 million yen in securities and 2,246 million yen in costs on construction contracts in progress.

Non-current assets amounted to 36,236 million yen, up 1,988 million yen from the end of the previous consolidated fiscal year. This was due mainly to an increase of 1,149 million yen in investment securities.

1. Liabilities
   Current liabilities amounted to 32,621 million yen, down 7,866 million yen from the end of the previous

consolidated fiscal year. This was due mainly to a decrease of 3,795 million yen in other current liabilities. Non-current liabilities amounted to 14,321 million yen, down 835 million yen from the end of the previous

consolidated fiscal year. This was due mainly to a decrease of 842 million yen in long-term borrowings.

1. Net assets
   Net assets amounted to 77,618 million yen, up 4,505 million yen from the end of the previous consolidated

fiscal year. This was due mainly to an increase of 3,894 million yen in retained earnings.

(3) Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information

The Company revised the consolidated financial results forecast for the full year ending March 31, 2022 (April 1, 2021 to March 31, 2022) from the forecast announced on May 14, 2021. For more details on the revised forecast, please see "Notice concerning the Revision of the Financial Results Forecast for the Full Year Ending March 31, 2022" published today on November 11, 2021 (available in Japanese).

Forward-looking statements, such as performance forecasts, made in this document are based on information currently available to the Company and certain assumptions deemed reasonable, and actual results, etc. may differ significantly due to various factors.

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