Taisei : 2Q FY2023 Consolidated Financial Results

Disclaimer: This financial information, a digest of Taisei Corporation's "Consolidated Financial Results for the Six Months Ended September 30, 2023" ("Kessan Tanshin") disclosed at the Tokyo Stock Exchange on November 13, 2023 was translated into English and presented solely for the convenience of non-Japanese speaking users. If there is any discrepancy between Japanese "Kessan Tanshin" and this document, Japanese "Kessan Tanshin" shall prevail.

November 13, 2023

Consolidated Financial Results for the Six Months Ended September 30, 2023

[Japanese GAAP]

Listed company name:	Taisei Corporation
Stock exchange listings:	Tokyo Stock Exchange, Prime Market
	Nagoya Stock Exchange, Premier Market
Stock code:	1801
Location of headquarters:	Tokyo, Japan
Website:	https://www.taisei.co.jp/
Representative:	Yoshiro Aikawa, President and Chief Executive Officer
Contact:	Yuichi Nakano, General Manager of Accounting Department
TEL:	81-3-3348-1111 (from overseas)
Scheduled date for submission
of quarterly report:	November 14, 2023
Scheduled date for dividend payment:	December 4, 2023
Supplementary materials for
quarterly financial summaries:	Yes
Quarterly financial results briefing:	Yes (for analysts and institutional investors)

1. Consolidated financial results for the six months ended September 30, 2023

	(From April 1, 2023 to September 30, 2023)
(1) Operating results (cumulative total)															(Millions of yen, rounded down)
							(Percentages indicate changes from the same period in the previous fiscal year.)
				Net sales				Operating income	Ordinary income		Net income attributable
								to owners of parent
							%						%						%				%
	FY2023(Second quarter-end)			738,133			2.7					13,069		(41.7)			18,306			(34.0)			14,873		(19.7)
	As of September 30, 2023
	FY2022(Second quarter-end)	718,541		14.4				22,413	(9.4)		27,728	(2.1)	18,518	(5.5)
	As of September 30, 2022
(Note) Comprehensive income:	FY2023(Second quarter-end)	48,956 million yen	129.3%
				FY2022(Second quarter-end)	21,350 million yen	3.2%
				Net income per share	Diluted net income per share
								yen						yen
	FY2023(Second quarter-end)						79.21								―
	As of September 30, 2023
	FY2022(Second quarter-end)				93.20							―
	As of September 30, 2022
(2) Financial position																		(Millions of yen, rounded down)
				Total assets			Net assets								Equity ratio
																											%
	As of September 30, 2023					1,998,518							861,953								42.9
	As of March 31, 2023				2,016,717						833,944							41.1
(Reference) Shareholders' equity:	As of September 30, 2023	856,683 million yen
				As of March 31, 2023	829,187 million yen

1

2. Dividends

			Dividends per share (yen)
		First quarter-end	Interim-end	Third quarter-end	Year-end	Total (Full year)
FY2022		―	65.00	―	65.00	130.00
FY2023		―	65.00
FY2023(forecast)				―	65.00	130.00

(Note) Revisions of projected dividends most recently announced: None

3. Consolidated results forecast for the fiscal year ending March 31, 2024 (FY2023)

(From April 1, 2023 to March 31, 2024)

(Millions of yen, rounded down) (Percentages indicate the rate of change from the same period of the previous fiscal year)

	Net sales		Operating income	Ordinary income	Net income attributable	Net income
		to owners of parent	per share
		%		%		%		%	Yen
Full fiscal year	1,690,000	2.9	64,000	16.9	67,000	6.1	47,000	(0.3)	251.81
(Note) Revisions of consolidated forecasts most recently announced: Yes

*Notes

1. Changes in principal subsidiaries during the quarter under review
   (Changes in specified subsidiaries accompanying changes in scope of consolidation): None
2. Adoption of specific accounting methods for the preparation of quarterly consolidated financial statements: Yes
3. Changes in accounting principles, changes in accounting estimates and restatements

(i)	Changes in accounting principles due to revisions to accounting standards, etc.:	None
(ii)	Changes due to accounting principles other than (i):	None
(iii)	Changes in accounting estimates:	None
(iv)	Restatements:	None

1. Number of shares outstanding (common stock)
2. 1. Number of shares outstanding at the end of period (including treasury stock)

As of September 30, 2023	188,771,572 shares
As of March 31, 2023	188,771,572 shares
ii. Number of treasury stock at the end of period
As of September 30, 2023	2,189,202 shares
As of March 31, 2023	405,934 shares

iii. Average number of shares during the period (quarterly cumulative total)

FY2023 (Second quarter end)	187,777,191 shares
FY2022 (Second quarter end)	198,693,123 shares

(Note) The number of treasury stock at the end of the period and number of treasury stock excluded for calculating average number of shares during the period include the Company's shares held by the Board Benefit Trust (BBT).

(As of September 30, 2023 99,400 shares, As of March 31, 2023 104,300 shares, As of September 30, 2022 104,300 shares)

• This financial statement is exempt from auditing procedures.
• Disclaimer regarding appropriate use of forecasts and related points of note

Earnings forecasts in this document are based on information available at present and logical assessments and do not represent any promise by the Company. Actual results may be materially different from expectations due to a variety of factors.

2

Overview of Consolidated Earnings Forecasts for the Fiscal Year Ending March 31, 2024

(Unit: 100 million yen; amounts less than 100 million yen are rounded to the nearest 100 million yen (partially adjusted for fractions))

					First half							Full fiscal year
			Previous fiscal year	Current fiscal year				Previous fiscal year		Current fiscal year
			(From April 1, 2022	(From April 1, 2023 to				(From April 1, 2022
			to September 30,				(From April 1, 2023 to March 31, 2024)
			September 30, 2023)				to March 31, 2023)
			2022)
												Initial
			Result	Result		Over previous				Result	Revised		Over previous	Over initial
							forecast	forecast
							fiscal year						fiscal year	forecast
Amount of orders received	9,453		6,904		(2,549)			18,104	17,800	15,900		(2,204)	(1,900)
	Civil engineering		3,034		2,577	(457)		5,315	4,800	4,600	(715)	(200)
	Building construction		5,744		3,582	(2,162)		11,525	11,700	10,000	(1,525)	(1,700)
	Real estate development		632		695	63		1,149	1,200	1,200	51	-
	Other		43		50	7		115	100	100	(15)	-
Net sales		7,185		7,381		196				16,427	17,600	16,900		473	(700)
	Civil engineering		1,741		1,969	228		4,232	4,800	4,800	568	-
	Building construction		4,772		4,692	(80)		10,927	11,500	10,800	(127)	(700)
	Real estate development		629		670	41		1,153	1,200	1,200	47	-
	Other		43		50	7		115	100	100	(15)	-
Gross Profit	%	9.1		7.9		(1.2)				9.0	9.4	9.8		0.8	0.4
	656		584		(72)				1,478	1,660	1,660		182	-
	Civil engineering	%	12.1		16.2		4.1				17.2	16.7	16.7		(0.5)	-
		210		319	109	727	800	800	73	-
	Building construction	%	6.4		1.8	(4.6)		4.4	4.9	5.0	0.6	0.1
		307		84	(223)	486	565	540	54	(25)
	Real estate development	%	19.8		24.9	5.1		20.5	22.5	25.0	4.5	2.5
			167	300
			125		42	236	270	64	30
	Other	%	33.3		27.7	(5.6)		24.9	25.0	20.0	(4.9)	(5.0)
		14		14	(0)	29	25	20	(9)	(5)
SG&A expenses	%	(6.0)		(6.1)	(0.1)		(5.7)	(5.8)	(6.0)	(0.3)	(0.2)
	(432)		(453)	(21)	(931)	(1,020)	(1,020)	(89)	-
Operating income	%	3.1		1.8		(1.3)				3.3	3.6	3.8		0.5	0.2
	224		131		(93)				547	640	640		93	-
Non-operating income		59		62	3		97	70	80	(17)	10
Non-operating expenses		(6)		(10)	(4)	(13)	(40)	(50)	(37)	(10)
(Net financial revenue)		27		30	3		50	36	50	(0)	14
Ordinary income	%	3.9		2.5		(1.4)				3.8	3.8	4.0		0.2	0.2
	277		183		(94)				631	670	670		39	-
Extraordinary income		5		27	22	66	-	25	(41)	25
Extraordinary loss		(6)		(1)	5		(16)	(10)	(5)	11	5
Income before income	%	3.8		2.8		(1.0)				4.1	3.8	4.1		-	0.3
taxes and minority
	276		209		(67)				681	660	690		9	30
interests
Income taxes and others		(90)		(59)	31	(207)	(210)	(220)	(13)	(10)
Net income	%	2.6		2.0		(0.6)				2.9	2.6	2.8		(0.1)	0.2
	186		150		(36)				474	450	470		(4)	20
Net income (loss) attributable	(1)		(1)	(0)	(3)	-	-	3	-
to non-controlling interests
Net income attributable to	%	2.6		2.0		(0.6)		2.9	2.6	2.8		(0.1)	0.2
owners of parent		185		149		(36)		471	450	470		(1)	20

* "Initial forecasts" refer to the earnings forecasts outlined on August 7, 2023.

3

Overview of Non-consolidated Earnings Forecasts for the Fiscal Year Ending March 31, 2024

(Unit: 100 million yen; amounts less than 100 million yen are rounded to the nearest 100 million yen (partially adjusted for fractions))

					First half			Full fiscal year
				Previous fiscal year	Current fiscal year	Previous fiscal year		Current fiscal year
				(From April 1, 2022	(From April 1, 2023 to	(From April 1, 2022
				to September 30,	(From April 1, 2023 to March 31, 2024)
				2022)	September 30, 2023)	to March 31, 2023)
				Result	Result	Over previous	Result	Initial	Revised	Over previous	Over initial
						fiscal year		forecast	forecast	fiscal year	forecast
Amount of orders received	7,685	5,293	(2,392)	14,725	14,200	12,600	(2,125)	(1,600)
	Civil engineering		2,337	1,882	(455)	3,956	3,300	3,300	(656)	-
		Domestic		1,713	1,803	90	3,528	3,100	3,100	(428)	-
		Overseas		624	79	(545)	428	200	200	(228)	-
	Building construction		5,277	3,193	(2,084)	10,514	10,600	9,000	(1,514)	(1,600)
		Domestic		5,120	2,835	(2,285)	10,847	10,000	8,600	(2,247)	(1,400)
		Overseas		157	358	201	(333)	600	400	733	(200)
	Total		7,614	5,075	(2,539)	14,470	13,900	12,300	(2,170)	(1,600)
	Real estate development		43	191	148	168	230	230	62	-
	Other		28	27	(1)	87	70	70	(17)	-
Net sales		5,729	5,931	202	13,256	14,200	13,600	344	(600)
	Civil engineering		1,201	1,411	210	2,939	3,400	3,500	561	100
		Domestic		1,144	1,322	178	2,824	3,200	3,300	476	100
		Overseas		57	89	32	115	200	200	85	-
	Building construction		4,446	4,312	(134)	10,050	10,500	9,800	(250)	(700)
		Domestic		4,113	4,148	35	9,500	10,200	9,500	0	(700)
		Overseas		333	164	(169)	550	300	300	(250)	-
	Total		5,647	5,723	76	12,989	13,900	13,300	311	(600)
	Real estate development		54	181	127	180	230	230	50	-
	Other		28	27	(1)	87	70	70	(17)	-
Gross Profit	%	8.1	6.7	(1.4)	8.1	8.2	8.8	0.7	0.6
	465	396	(69)	1,077	1,170	1,200	123	30
	Civil engineering	%	14.5	19.1	4.6	20.4	18.5	19.1	(1.3)	0.6
		174	270	96	601	630	670	69	40
	Building construction	%	5.9	1.1	(4.8)	3.6	3.9	4.1	0.5	0.2
		263	47	(216)	358	410	400	42	(10)
	Total	%	7.7	5.5	(2.2)	7.4	7.5	8.0	0.6	0.5
		437	317	(120)	959	1,040	1,070	111	30
	Real estate development	%	36.1	39.3	3.2	53.9	47.8	52.2	(1.7)	4.4
				19	71	52	97	110	120	23	10
	Other	%	31.3	30.8	(0.5)	23.7	28.6	14.3	(9.4)	(14.3)
		9	8	(1)	21	20	10	(11)	(10)
SG&A expenses	%	(5.2)	(5.5)	(0.3)	(5.0)	(5.1)	(5.3)	(0.3)	(0.2)
	(301)	(326)	(25)	(660)	(730)	(730)	(70)	-
Operating income	%	2.9	1.2	(1.7)	3.1	3.1	3.5	0.4	0.4
	164	70	(94)	417	440	470	53	30
Non-operating income		66	60	(6)	91	50	65	(26)	15
Non-operating expenses		(5)	(7)	(2)	(11)	(20)	(35)	(24)	(15)
(Net financial revenue)		43	37	(6)	71	37	54	(17)	17
Ordinary income	%	3.9	2.1	(1.8)	3.7	3.3	3.7	-	0.4
	225	123	(102)	497	470	500	3	30
Extraordinary income		4	22	18	27	-	25	(2)	25
Extraordinary loss		(7)	(2)	5	(17)	(10)	(5)	12	5
Income before income	%	3.9	2.4	(1.5)	3.8	3.2	3.8	-	0.6
taxes		222	143	(79)	507	460	520	13	60
Income taxes and others		(67)	(44)	23	(137)	(140)	(160)	(23)	(20)
Net income	%	2.7	1.7	(1.0)	2.8	2.3	2.6	(0.2)	0.3
	155	99	(56)	370	320	360	(10)	40

• "Initial forecasts" refer to the earnings forecasts outlined on August 7, 2023.
  4

Quarterly consolidated financial statements

(1) Quarterly consolidated balance sheet

				(Millions of yen)
			As of March 31, 2023	As of September 30, 2023
	Assets
	Current assets
	Cash and deposits		415,950	339,777
	Notes receivable, accounts receivable from completed	688,768	625,264
	construction contracts and other
	Costs on construction contracts in progress		67,658	104,435
	Real estate for sale and development projects in progress	131,439	153,360
	Other inventories		4,003	5,157
	Other	45,847	56,559
	Allowance for doubtful accounts		(182)	(73)
	Total current assets		1,353,485	1,284,483
	Non-current assets
	Property, plant and equipment	213,349	211,527
	Intangible assets		17,581	16,701
	Investments and other assets
	Investment securities		386,906	442,862
	Retirement benefit asset	10,875	10,631
	Other		36,489	34,459
	Allowance for doubtful accounts	(1,969)	(2,146)
	Total investments and other assets		432,300	485,806
	Total non-current assets		663,232	714,034
	Total assets		2,016,717	1,998,518

5

(Millions of yen)

As of March 31, 2023

As of September 30, 2023

Liabilities

Current liabilities

Notes payable, accounts payable for construction contracts and other

Short-term borrowings

Short-termnon-recourse borrowings

Advances received on construction contracts in progress Provision for warranties for completed construction Provision for loss on construction contracts

Other

Total current liabilities

Non-current liabilities

Bonds payable

Long-term borrowings

Long-termnon-recourse borrowings

Provision for retirement benefits for directors (and other officers)

Provision for share awards for directors (and other officers) Retirement benefit liability

Other

Total non-current liabilities

Total liabilities

Net assets

Shareholders' equity

Share capital

Capital surplus

Retained earnings

Treasury shares

Total shareholders' equity

Accumulated other comprehensive income

Valuation difference on available-for-sale securities Deferred gains or losses on hedges

Revaluation reserve for land

Foreign currency translation adjustment

Remeasurements of defined benefit plans

	476,115		443,913
	81,965	94,302
	11	15
	181,226	194,182
	3,325	3,391
	47,897	47,491
	232,110	196,598
	1,022,652	979,894
	40,000	40,000
	79,606	64,674
	117	4,665
	508	566
	48	22
	15,037	15,574
	24,802	31,167
	160,120		156,670
	1,182,773	1,136,565
	122,742	122,742
	30,382	30,382
	562,774	565,397
	(906)	(9,732)
	714,992		708,789
	97,090	128,373
	(6)	2
	1,235	1,235
	237	3,836
	15,638	14,445

	Total accumulated other comprehensive income	114,194	147,893
	Non-controlling interests	4,756	5,269
	Total net assets	833,944	861,953
	Total liabilities and net assets	2,016,717	1,998,518

6

1. Quarterly consolidated statement of income and quarterly consolidated statement of comprehensive income Quarterly consolidated statement of income
   First half of FY2023 (April 1, 2023 to September 30, 2023)

				(Millions of yen)
			From April 1, 2022	From April 1, 2023
			to September 30, 2022	to September 30, 2023
	Net sales
	Net sales of completed construction contracts	643,592	658,227
	Net sales in development business and other		74,948	79,906
	Total net sales	718,541	738,133
	Cost of sales
	Cost of sales of completed construction contracts	591,657	617,973
	Cost of sales in development business and other		61,276	61,714
	Total cost of sales		652,933	679,687
	Gross profit
	Gross profit on completed construction contracts	51,935	40,253
	Gross profit on development business and other		13,671	18,191
	Total gross profit	65,607	58,445
	Selling, general and administrative expenses		43,194	45,376
	Operating income	22,413	13,069
	Non-operating income
	Interest income	214	475
	Dividends income		2,903	3,037
	Foreign exchange gains	1,679	1,822
	Other		1,067	822
	Total non-operating income	5,865	6,157
	Non-operating expenses
	Interest expenses	455	465
	Taxes and dues		39	245
	Other	54	209
	Total non-operating expenses		550	920
	Ordinary income	27,728	18,306
	Extraordinary income
	Gain on sale of non-current assets	127	378
	Gain on sales of investment securities		310	2,212
	Other	78	157
	Total extraordinary income		517	2,747
	Extraordinary losses
	Loss on sale of non-current assets		106	25
	Loss on retirement of non-current assets	130	61
	Loss on valuation of investment securities		139	25
	Settlement payments	203	-
	Other		59	12
	Total extraordinary losses		639	125
	Profit before income taxes		27,607	20,928
	Income taxes		9,043	5,920
	Net income		18,563	15,008
	Net income attributable to non-controlling interests	45	134
	Net income attributable to owners of parent		18,518	14,873

7

Quarterly consolidated statement of comprehensive income

First half of FY2023 (April 1, 2023 to September 30, 2023)

						(Millions of yen)
				From April 1, 2022	From April 1, 2023
				to September 30, 2022	to September 30, 2023
	Net income			18,563		15,008
	Other comprehensive income
	Valuation difference on available-for-sale securities			1,090		31,280
	Deferred gains or losses on hedges	(4)	9
	Foreign currency translation adjustment			3,098		3,418
	Remeasurements of defined benefit plans, net of tax	(2,132)	(1,206)
	Share of other comprehensive income of entities accounted for			735		446
	using equity method
	Total other comprehensive income		2,787	33,948
	Comprehensive income			21,350		48,956
	Comprehensive income attributable to owners of parent		20,889	48,572
	Comprehensive income attributable to non-controlling interests		461		384

8

(3) Quarterly consolidated statement of cash flows

						(Millions of yen)
				From April 1, 2022	From April 1, 2023
				to September 30, 2022	to September 30, 2023
	Cash flow from operating activities
	Profit before income taxes	27,607	20,928
	Depreciation			5,502		5,989
	Increase (decrease) in allowance for doubtful accounts	297	66
	Increase (decrease) in provision for loss on construction contracts			1,939		(410)
	Increase (decrease) in retirement benefit liability	(204)	526
	Decrease (increase) in retirement benefit asset			357		244
	Interest and dividend income	(3,118)	(3,513)
	Interest expenses			455		465
	Foreign exchange losses (gains)	(1,679)	(1,822)
	Loss (gain) on valuation of investment securities			139		25
	Loss (gain) on sales of investment securities	(251)	(2,212)
	Loss (gain) on sale of non-current assets			(20)		(352)
	Loss on retirement of non-current assets	130	61
	Decrease (increase) in trade receivables			(33,584)		63,924
	Decrease (increase) in costs on construction contracts in progress	(33,091)	(36,691)
	Decrease (increase) in real estate for sale and development projects			1,986		(16,166)
	in progress
	Decrease (increase) in other inventories	(1,589)	(1,153)
	Decrease (increase) in accounts receivable - other			21,511		(6,212)
	Increase (decrease) in trade payables	(52,616)	(32,735)
	Increase (decrease) in advances received on construction contracts			5,704		12,646
	in progress
	Increase (decrease) in deposits received	(24,976)	(15,899)
	Increase (decrease) in accounts payable - other			(1,103)		(12,303)
	Other	(8,101)	(9,635)
	Subtotal			(94,705)		(34,230)
	Interest and dividends received		3,986	4,064
	Interest paid			(463)		(462)
	Income taxes paid	(14,568)	(11,867)
	Net cash provided by (used in) operating activities			(105,750)		(42,496)

9

				(Millions of yen)
			From April 1, 2022	From April 1, 2023
			to September 30, 2022	to September 30, 2023
	Cash flow from investing activities
	Decrease (increase) in time deposits	2,674	(748)
	Purchase of property, plant and equipment and intangible assets		(6,623)	(11,516)
	Proceeds from sales of property, plant and equipment and	209	1,031
	intangible assets
	Purchase of investment securities		(3,585)	(14,823)
	Proceeds from sale and redemption of investment securities	1,197	6,586
	Other		71	(102)
	Net cash provided by (used in) investing activities		(6,055)	(19,572)
	Cash flows from financing activities
	Net increase (decrease) in short-term borrowings	(3,229)	2,463
	Proceeds from long-term borrowings		-	1,000
	Repayments of long-term borrowings	(7,173)	(6,058)
	Proceeds from long-termnon-recourse borrowings		-	4,555
	Repayment of long-termnon-recourse borrowings	(7)	(3)
	Proceeds from issuance of bonds		(20,000)	-
	Purchase of treasury shares	(21,706)	(8,843)
	Dividends paid		(13,032)	(12,250)
	Other	(177)	(247)
	Net cash provided by (used in) financing activities		(65,325)	(19,385)
	Effect of exchange rate change on cash and cash equivalents		3,151	4,525
	Net increase (decrease) in cash and cash equivalents		(173,981)	(76,928)
	Cash and cash equivalents at beginning of period	496,760	415,863
	Cash and cash equivalents at end of period		322,778	338,935

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