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    6028   JP3545240008

TECHNOPRO HOLDINGS, INC.

(6028)
  Report
Delayed Japan Exchange  -  11:55 2022-08-15 pm EDT
3355.00 JPY   +0.15%
08/08TRANSCRIPT : TechnoPro Holdings, Inc., 2022 Earnings Call, Aug 08, 2022
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TechnoPro : Summary of the Consolidated Second Quarter Statements (IFRS) for the Nine-Month Period Ended March 31, 2021

04/28/2021 | 02:07am EDT
(1) Consolidated Operating Results (Cumulative)

Translation

Notice: This is a translation of the original Japanese document and is provided for informational purposes only. If there are

any discrepancies between this and the original, the original Japanese document prevails.

Summary of the Consolidated Second Quarter Statements (IFRS)

for the Nine-Month Period Ended March 31, 2021

April 28, 2021

Listed Company Name

TechnoPro Holdings, Inc.

Listed Stock Exchange:

Tokyo

TSE Code

6028

URL https://www.technoproholdings.com/en/

Representative

(Title)

President, Representative Director & CEO

(Name) Yasuji Nishio

In charge of inquiries

(Title)

Director & CFO

(Name) Toshihiro Hagiwara TEL 03-6385-7998

Quarterly report scheduled submission date

May 13, 2021

Scheduled commencement date for dividend payment

Supplementary materials for financial results:

Yes

Briefing session for financial results:

Yes (for institutional investors and analysts)

(Amounts less than one million yen are omitted)

1. Consolidated Financial Results for the Nine Months Ended March 31, 2021 (July 1, 2020 - March 31, 2021)

(% represents the change from the same period of the previous fiscal year)

Net profit

Comprehensive

Revenue

Operating profit

Profit before

Net profit

attributable to

income for the

income taxes

owners of the

period

parent company

Million

%

Million

%

Million

%

Millio

%

Million

%

Million

%

yen

yen

yen

n yen

yen

yen

For the nine months ended

120,181

0.6

14,879

13.8

14,902

13.9

10,357

13.9

10,249

14.1

11,398

38.7

March 31, 2021

For the nine months ended

119,491

12.2

13,070

17.4

13,088

18.1

9,096

21.6

8,979

22.3

8,219

13.4

March 31, 2020

Basic earnings per

Diluted earnings

share

per share

Yen

Yen

For the nine months ended

285.44

March 31, 2021

For the nine months ended

248.42

March 31, 2020

(2) Consolidated Financial Position

Equity attributable to

Percentage of equity

Total assets

Total equity

the owners of the

attributable to the

owners of the parent

parent company

company

Million yen

Million yen

Million yen

%

For the nine months ended

112,561

55,574

54,108

48.1

March 31, 2021

FY ended June 30, 2020

107,967

49,509

48,229

44.7

2. Dividends

Annual dividends per share

End of first quarter

End of second quarter

End of third quarter

End of fiscal year

Total

Yen

Yen

Yen

Yen

Yen

FY ended June 30, 2020

50.00

100.00

150.00

FY ending June 30, 2021

50.00

FY ending June 30, 2021

122.00

172.00

(forecast)

(Notes) Revisions to dividend forecasts published most recently: Yes

For information concerning revisions to dividend forecasts, please see the "Notice Regarding Revisions of Earnings Guidance and Dividend Forecast" released today (April 28, 2021).

3. Consolidated Financial Results Forecast for the Fiscal Year Ending June 30, 2021 (July 1, 2020 - June 30, 2021)

(% represents the change from the same period of the previous year)

Profit before

Net profit attributable to

Basic earnings per

Revenue

Operating profit

owners of the parent

income taxes

share

company

Million yen

%

Million yen

%

Million yen

%

Million yen

%

Yen

Full year

159,000

0.4

18,000

14.1

18,000

13.6

12,300

13.6

342.54

(Notes) Revisions to dividend forecasts published most recently: Yes

For information concerning revisions to forecasts, please see the "Notice Regarding Revisions of Earnings Guidance and Dividend Forecast" released today (April 28, 2021).

  • Notes
    1. Changes to important subsidiaries during the period (changes to "Specified Subsidiaries" that involve changes made to scope of consolidation): None
    2. Changes to accounting policies and accounting estimates
      1. Changes to accounting policies as required by IFRS: None
      2. Changes to accounting policies other than i.: None
      3. Changes to accounting estimates: None
    3. Number of outstanding shares (ordinary shares)

i. Number of outstanding shares at the end of the period (including treasury shares)

  1. Number of treasury shares at the end of the period
  2. Average number of shares during the period (cumulative)

As of March 31,

36,140,388

shares

FY ended June

36,140,388

shares

2020

30, 2020

As of March 31,

231,703 shares

FY ended June

231,681 shares

2020

30, 2020

For the nine months

35,908,697

shares

For the nine months

36,147,600

shares

ended March 31,

ended March 31,

2021

2020

  • This Summary of Financial Statements is not subject to quarterly review by certified public accountant or audit corporation.
  • Explanation regarding proper use of financial results forecasts, and other notes

(Cautionary note on forward-looking statements)

Forward-looking statements in this document about future performance are based on information currently available and certain assumptions that are considered reasonable. Due to unforeseen circumstances, actual results may differ from such estimates.

Please refer to page 5 "1. Qualitative Information on Financial Results for the Period Under Review; (3) Results forecasts and other forward- looking information", for criteria for assumptions used in the earnings forecast.

(Obtaining supplementary materials for financial results)

The Company plans to hold a briefing on business results for institutional investors and analysts on April 28, 2021. The Company plans to post supplementary and other materials for the briefing on the Company's website today (April 28, 2021) at the same time that the information is disclosed to the Tokyo Stock Exchange.

Contents

1. Qualitative Information on Financial Results for the Period Under Review

2

(1)

Summary of business performance

2

(2)

Summary of financial position

4

(3)

Results forecasts and other forward-looking information

5

2. Interim Consolidated Financial Statements (Summary) and notes

6

(1)

Consolidated Statement of Financial Position (Summary)

6

(2)

Consolidated Statement of Income (Summary) and Consolidated Statement of Comprehensive Income

8

(Summary)

(3)

Consolidated Statement of Changes in Equity (Summary)

12

(4)

Consolidated Statement of Cash Flows (Summary)

13

(5)

Notes to the consolidated financial results (Summary)

15

(Note on assumption about going concern)

15

(Note on segment information)

15

1

1. Qualitative Information on Financial Results for the Period Under Review

(1) Summary of business performance

During the consolidated third quarter period under review (July 1, 2020 to March 31, 2021), there was continuing uncertainty towards the future of the global economy, as it continued to be impacted by U.S.-China trade friction and the global COVID-19 pandemic. In Japan too, with COVID-19 still on the rise, a sense of caution about the future of the country's economy continued despite hopes raised by the spread of vaccines.

In this economic environment, the Group's core business area of Engineer Dispatching and Contract Assignment was impacted; despite a decline in the utilization of some engineers due to fall in demand in machinery and other sectors, demand for engineers in the IT field remained strong due to active investment in IT infrastructure such as cloud computing and security to support the development of remote-working environments.

Due to concerns over the impact of COVID-19, since the second half of the previous fiscal year the Group has rapidly executed defensive business operations with its continuity as its top priority, and, from the second quarter period, launched initiatives to shift the business toward growth. The main initiatives implemented by the Group during the consolidated period under review were as follows:

Secure engineer assignments

Due to significant concerns over the ending of customer contracts, either because of expiration or cancellation caused by the decline in demand in technological fields including the machinery, electronics, and electricals, and in the transportation machinery industry, the Group prioritized securing engineer assignments in its business activities, continuing contract negotiations with existing customers and shifting engineers to other customers. As a result, while the average utilization rate during the consolidated third quarter period under review was lower than that of the same period of the previous fiscal year, it exceeded expectations made at the beginning of the period and recovered to above 96% at the end of March 2021. The Group will continue to prioritize the preservation of employment and work to secure engineer assignments.

Secure engineers

The Group has been significantly controlling new hires from the consolidated fourth quarter of the previous fiscal year when COVID-19 infections were increasing in Japan. However, with an improved average utilization rate and a continued shortage of engineers in certain fields, the Group restarted the mid-career hiring mainly of high added-value engineers. The number of engineers on payroll has been on a downward trend from the consolidated fourth quarter of the previous fiscal year, with the number falling below 20,000 at the end of the consolidated third quarter period of the current fiscal year. However, the number of engineers on payroll is expected to exceed 20,000 from April 2021, as we restarted lateral hiring and 292 new graduates joined the Group in April 2021. The Group will endeavor to secure engineers, the driver of its growth, by continuing hiring activities to meet demand for IT engineers, and by continuing measures to curtail resignations.

Shift to the IT sector

Irrespective of the impact of COVID-19, the IT sector is seeing stronger demand in comparison to other sectors, and this is expected to increase in future. Currently, IT engineers account for over half of all the Group's engineers on payroll, and this proportion is increasing. The Group is investing resources into the IT Sector; it is increasing the number of engineers specialized in digital technologies (data science, cloud, IoT, security, 5G, etc.), by converting engineer skills from hardware-related areas to digital, as well as by recruitment of such engineers.

Measures to prevent the spread of COVID-19

The Group has prioritized the health and safety of its employees throughout the COVID-19 pandemic. Specifically, it has promoted working from home and staggered commuting, set up systems to enable business discussions and meetings to be conducted via online video conferencing, distributed masks and disinfectant to all offices in Japan, changed hanko seal-based approvals to other methods, and continued with furlough procedures. In addition, the Group was named a Certified Health and Productivity Management Outstanding Organization (Large Enterprise Category) by the Ministry of Economy, Trade and Industry for the second consecutive year and is implementing measures to support the health of employees, even under changed working circumstances

2

such as working from home. The Group continues to work to strengthen systems that will enable it to conduct business even if the COVID-19 pandemic continues to expand in future.

As a result of the initiatives described above, the number of domestic engineers at the end of the consolidated third quarter period under review was 19,949 (down 285 compared to the end of the third quarter of the previous fiscal year). The average utilization rate for the period under review was 94.5% (down 1.1 pts), higher than expectations at the beginning of the period. In spite of the past efforts to improve sales per engineer, the hiring of a large number of new graduates, lower levels of overtime due to government-led workplace reforms, and spread of remote-working due to COVID-19 pandemic resulted in average monthly sales per engineer (average for engineers at TechnoPro, Inc. and TechnoPro Construction, Inc.) of 632 thousand yen per month (down 1 thousand yen). However, excluding new employees who had joined the Group in the last twelve months, average monthly sales per engineer for existing employees rose by 15 thousand yen compared to the third quarter of the previous fiscal year.

In employment, due to significant controls placed on new hires, the number of newly employed domestic engineers for the period under review was 464 (down 2,134 compared to the third quarter of the previous fiscal year). The total number of domestic engineers fell by 1,315 compared to the end of the previous fiscal year.

In terms of expenses, the gross profit margin was 24.0% (down 1.9 pts compared to the third quarter of the previous fiscal year) due to a decrease in the number of operating hours and days and an increase in stand-by engineers as a result of business closure requests and other factors. The SG&A ratio to revenue was 13.1% (down 2.1 pts) as a result of the continued implementation of cost controls.

In addition, owing to the Group's efforts to protect employment it recorded 1,691 million yen of employment adjustment subsidy, in relation to COVID-19 pandemic, as other income.

As a result, the Group's revenue for the consolidated third quarter was 120,181 million yen (up 0.6% compared to the third quarter of the previous fiscal year), operating profit was 14,879 million yen (up 13.8%), profit before taxes was 14,902 million yen (up 13.9%), and net profit attributable to the owners of the parent company was 10,249 million yen (up 14.1%).

Earnings for the segments of the business during the consolidated third quarter period under review were as follows:

(R&D Outsourcing)

In order to expand its IT business, which has been performing well within R&D Outsourcing, the Group implemented IT training for hardware-related engineers and realized engineer assignments through skill conversions, in addition to restarting the mid-career hiring mainly of high added-value engineers. The Group also made efforts to secure assignments through business collaborations with the partners possessing high added- value technologies and by actively implementing internal/external training. These efforts restrained a decrease in engineers on payroll and assigned engineers, which were 17,368 and 16,703, respectively (down 152 and 18, respectively, compared to the end of the third quarter of the previous fiscal year). As a result of these initiatives, revenue in this segment was 95,464 million yen (up 0.7%).

(Construction Management Outsourcing)

In addition to construction management, the main service provided under Construction Management Outsourcing, the Group has also expanded its services to offer services based on technological skills developed in the design and construction management fields, for example: 3D measurement, aerial photography, and inspections using drones, and the establishment of first-class qualified architect offices. While in this segment the impact of COVID-19 has been minimal and so a high utilization rate has been maintained, engineers on payroll and assigned engineers are 2,581 and 2,497, respectively (down 133 and 51, respectively, compared to the end of the third quarter of the previous fiscal year). As a result, revenue in this segment was 14,849 million yen (down 0.5%).

3

(Other Businesses in Japan)

Other Businesses in Japan comprises a professional recruitment service and an education and training service in engineering. These businesses collectively saw a decline in performance due to the impact of COVID-19. In particular, the professional recruitment service saw significant decline due to controls on hiring at customer companies. However, Win School operated by PC Assist Co., Ltd. has been increasing online courses since the previous fiscal year, and this, together with courses held physically at their schools, served to cover this decline to some extent. As a result of these initiatives, revenue in this segment was 2,693 million yen (down 13.5%).

(Overseas Businesses)

At the Group's Overseas Businesses, the impact of COVID-19 was more pronounced than it was in Japan. In addition, the degree of impact varied among countries. China was able to exit from its economic downturn at an early stage and saw a return to economic activity. As a result, the Group proceeded with business activities with Chinese customers in addition to existing Japanese customers in China. In the UK and Singapore, new daily infections are on downward trend having been suppressed as a result of infection countermeasures and the spread of vaccines, and as such, the impact on business activities has been limited. However, in India, there is still no end to the COVID-19 pandemic in sight, and business activities are restricted. As a result, revenue in this segment was 8,119 million yen (up 3.4%).

  1. Summary of financial position
  1. Analysis of financial position

Assets totaled 112,561 million yen as of the end of the consolidated third quarter period under review (up 4,594 million yen from the end of the previous fiscal year). The primary components were goodwill of 36,300 million yen, cash and cash equivalents of 26,686 million yen, and accounts receivables and other receivables of 21,423 million yen.

The status for each item was as follows.

(Current assets)

Current assets totaled 56,797 million yen as of the end of the consolidated third quarter period under review (up 5,490 million yen from the end of the previous fiscal year). The primary components were cash and cash equivalents of 26,686 million yen (up 3,888 million yen), and accounts receivables and other receivables of 21,423 million yen (up1,209 million yen).

(Non-current assets)

Non-current assets totaled 55,764 million yen as of the end of the consolidated third quarter period under review (down 896 million yen from the end of the previous fiscal year). The primary components were goodwill of 36,300 million yen (up 185 million yen), right-of-use assets of 5,224 million yen (down 1,424 million yen), and other long-term financial assets 5,166 million yen (up 300 million yen).

(Current liabilities)

Current liabilities totaled 40,325 million yen as of the end of the consolidated third quarter period under review (down 2,840 million yen from the end of the previous fiscal year). The primary components were accounts payable and other liabilities of 15,023 million yen (up 1,653 million yen), employee benefit liabilities of 7,355 million yen (up 957 million yen), income taxes payable of 5,369 million yen (up 2,417 million yen), and lease liabilities of 4,395 million yen (down 1,492 million yen).

(Non-current liabilities)

Non-current liabilities totaled 16,661 million yen as of the end of the consolidated third quarter period under review (up 1,369 million yen from the end of the previous fiscal year). The primary components were loans payable of 6,965 million yen (up 3,759 million yen), other long-term financial liabilities of 4,871 million yen (down 342 million yen), and lease liabilities of 3,996 million yen (down 1,869 million yen).

(Equity attributable to the owners of the parent company)

4

Equity attributable to the owners of the parent company totaled 54,108 million yen as of the end of the consolidated third quarter period under review (up 5,878 million yen from the end of the previous fiscal year). The primary components were retained earnings of 41,003 million yen (up 4,863 million yen) and a capital surplus of 7,436 million yen (up 86 million yen).

ii. Cash flow

Cash and cash equivalents (hereinafter "Cash") totaled 26,686 million yen as of end of the consolidated third quarter period under review, representing an increase of 3,888 million yen compared to the end of the previous fiscal year.

Cash flow during the consolidated third quarter period under review as well as the main factors affecting changes are as follows.

(Cash flows from operating activities)

Cash inflows from operating activities were 13,827 million yen (same period of previous fiscal year: inflows of 11,000 million yen). This was mainly due to profit before taxes (14,902 million yen), a decrease in prepaid expenses (2,364 million yen), depreciation and amortization (1,993 million yen), an increase in accounts payable and other liabilities (1,648 million yen) offset by payments of corporate income taxes (4,663 million yen), a decrease in deposits received (2,524 million yen), and a decrease in consumption tax payable (1,498 million yen).

(Cash flows from investing activities)

Cash outflows from investing activities were 1,096 million yen (same period of previous fiscal year: outflows of 935 million yen). This was mainly due to outflows for payments into time deposits (1,001 million yen) and the acquisition of tangible fixed assets (245 million yen).

(Cash flows from financing activities)

Cash outflows from financing activities were 8,982 million yen (same period of previous fiscal year: outflows of 12,255 million yen). This was mainly due to inflows from long-term borrowings (10,000 million yen) offset by repayment of long-term borrowings (7,658 million yen), dividend payments (5,420 million yen), and repayment of lease liabilities (4,903 million yen).

(3) Results forecasts and other forward-looking information

The Consolidated Full Year Earnings Guidance from the "Notice Regarding Revisions of Earnings Guidance and Dividend Forecast, and Dividend from Surplus" released on February 2, 2021 has been revised. For details, please see the "Notice Regarding Revisions of Earnings Guidance and Dividend Forecast" and the "TechnoPro Group Financial Results for the 3rd Quarter of FYE June 2021" released today (April 28, 2021).

5

2. Interim Consolidated Financial Statements (Summary) and notes

  1. Consolidated Statement of Financial Position (Summary)

(Millions of yen)

As of June 30, 2020

As of March 31, 2021

Assets

Current assets

Cash and cash equivalents

22,797

26,686

Accounts receivables and other receivables

20,214

21,423

Income taxes receivable

1,159

Other short-term financial assets

2,275

2,750

Other current assets

4,860

5,936

Total current assets

51,307

56,797

Non-current assets

Property, plant and equipment

1,726

1,656

Right-of-use assets

6,649

5,224

Goodwill

36,115

36,300

Intangible assets

2,149

1,956

Other long-term financial assets

4,865

5,166

Deferred tax assets

4,282

4,948

Other non-current assets

871

511

Total non-current assets

56,660

55,764

Total assets

107,967

112,561

Liabilities and equity

Current liabilities

Accounts payable and other liabilities

13,369

15,023

Loans payable

4,453

1,990

Lease liability

5,888

4,395

Income taxes payable

2,952

5,369

Other financial liabilities

2,055

2,362

Employee benefits liabilities

6,398

7,355

Provisions

11

28

Other current liabilities

8,037

3,799

Total current liabilities

43,165

40,325

6

(Millions of yen)

As of June 30, 2020

As of March 31, 2021

Non-current liabilities

Loans payable

3,205

6,965

Lease liabilities

5,865

3,996

Other long-term financial liabilities

5,214

4,871

Deferred tax liabilities

400

231

Retirement benefit liabilities

9

13

Provisions

459

438

Other non-current liabilities

138

145

Total non-current liabilities

15,292

16,661

Total liabilities

58,457

56,987

Equity

Share capital

6,929

6,929

Capital surplus

7,349

7,436

Retained earnings

36,139

41,003

Treasury shares

(1,000)

(1,000)

Other components of equity

(1,188)

(260)

Equity attributable to owners of the parent company

48,229

54,108

Non-controlling interests

1,279

1,466

Total equity

49,509

55,574

Total liabilities and equity

107,967

112,561

7

  1. Consolidated Statement of Income (Summary) and Consolidated Statement of Comprehensive Income (Summary) Consolidated Statement of Income (Summary)
    The consolidated nine-month period

(Millions of yen)

Nine months ended

Nine months ended

March 31, 2020

March 31, 2021

(July 1, 2019 to

(July 1, 2020 to

March 31, 2020)

March 31, 2021)

Revenue

119,491

120,181

Cost of sales

88,538

91,294

Gross profit

30,952

28,887

Selling, general and administrative expenses

18,104

15,700

Other income

393

1,984

Other expenses

171

291

Operating profit

13,070

14,879

Financial income

124

125

Financial expenses

103

103

Investment profit (loss) under the equity method

(2)

Profit before income taxes

13,088

14,902

Income taxes

3,992

4,545

Net profit

9,096

10,357

Net profit attributable to:

Owners of the parent company

8,979

10,249

Non-controlling interests

116

107

Net profit

9,096

10,357

(Yen)

Earnings per share attributable to owners of the

parent company

Basic earnings per share

248.42

285.44

Diluted earnings per share

8

Consolidated Statement of Income (Summary)

The consolidated three-month period

(Millions of yen)

Three months ended

Three months ended

March 31, 2020

March 31, 2021

(January 1, 2020 to

(January 1, 2021 to

March 31, 2020)

March 31, 2021)

Revenue

40,453

40,729

Cost of sales

29,607

30,366

Gross profit

10,846

10,363

Selling, general and administrative expenses

6,109

5,468

Other income

254

469

Other expenses

142

165

Operating profit

4,848

5,198

Financial income

73

72

Financial expenses

33

14

Investment profit (loss) under the equity method

8

Profit before income taxes

4,897

5,257

Income taxes

1,526

1,603

Net profit

3,370

3,653

Net profit attributable to:

Owners of the parent company

3,325

3,626

Non-controlling interests

45

27

Net profit

3,370

3,653

(Yen)

Earnings per share attributable to owners of the

parent company

Basic earnings per share

92.09

100.99

Diluted earnings per share

9

Consolidated Statement of Comprehensive Income (Summary)

The consolidated nine-month period

(Millions of yen)

Nine months ended

Nine months ended

March 31, 2020

March 31, 2021

(July 1, 2019 to

(July 1, 2020 to

March 31, 2020)

March 31, 2021)

Net profit

9,096

10,357

Other comprehensive income

Items that will not be reclassified to profit or loss

Changes in fair value of financial assets at fair value

(696)

486

through other comprehensive income

Total items that will not be reclassified to profit or loss

(696)

486

Items that may be reclassified to profit or loss

Foreign currency translation adjustments

(181)

555

Total items that may be reclassified to profit or loss

(181)

555

Total other comprehensive income

(877)

1,041

Comprehensive income for the period

8,219

11,398

Comprehensive income for the period attributable to:

Owners of the parent company

8,154

11,178

Non-controlling interests

65

220

Comprehensive income for the period

8,219

11,398

10

The consolidated three-month period

Three months ended

Three months ended

March 31, 2020

March 31, 2021

(January 1, 2020 to

(January 1, 2021 to

March 31, 2020)

March 31, 2021)

Net profit

3,370

3,653

Other comprehensive income

Items that will not be reclassified to profit or loss

Changes in fair value of financial assets at fair value

(541)

371

through other comprehensive income

Total items that will not be reclassified to profit or loss

(541)

371

Items that may be reclassified to profit or loss

Foreign currency translation adjustments

(346)

417

Total items that may be reclassified to profit or loss

(346)

417

Total other comprehensive income

(888)

788

Comprehensive income for the period

2,482

4,442

Comprehensive income for the period attributable to:

Owners of the parent company

2,519

4,326

Non-controlling interests

(36)

115

Comprehensive income for the period

2,482

4,442

11

(3) Consolidated Statement of Changes in Equity (Summary)

Nine-months ended March 31, 2020 (July 1, 2019 to March 31, 2020)

(Millions of yen)

Other

Total equity

Non-

Share

Capital

Retained

Treasury

attributable to

Total

components

owners of

controlling

capital

surplus

earnings

shares

equity

of equity

the parent

interests

company

As of July 1, 2019

6,903

7,304

31,129

(2)

(532)

44,803

1,262

46,065

Net profit

8,979

8,979

116

9,096

Other comprehensive

2

(828)

(825)

(51)

(877)

income

Total comprehensive

8,982

(828)

8,154

65

8,219

income

Issuance of new shares

25

(25)

Dividends of surplus

(4,856)

(4,856)

(55)

(4,911)

Share-based payment

9

9

9

transaction

Purchase of treasury

(2,061)

(2,061)

(2,061)

shares

Disposal of treasury

12

90

102

102

shares

Cancellation of treasury

(12)

(961)

973

shares

Changes in ownership

25

25

(25)

interests in subsidiaries

Other increases

(2)

(2)

(2)

(decreases)

Total transactions with the

25

7

(5,817)

(997)

(6,782)

(80)

(6,863)

owners

As of March 31, 2020

6,929

7,312

34,294

(1,000)

(1,360)

46,175

1,246

47,422

Nine-months ended March 31, 2021 (July 1, 2020 to March 31, 2021)

(Millions of yen)

Other

Total equity

Non-

Share

Capital

Retained

Treasury

attributable to

Total

components

owners of

controlling

capital

surplus

earnings

shares

equity

of equity

the parent

interests

company

As of July 1, 2020

6,929

7,349

36,139

(1,000)

(1,188)

48,229

1,279

49,509

Net profit

10,249

10,249

107

10,357

Other comprehensive

928

928

113

1,041

income

Total comprehensive

10,249

928

11,178

220

11,398

income

Dividends of surplus

(5,386)

(5,386)

(34)

(5,420)

Share-based payment

86

86

86

transaction

Purchase of treasury

(0)

(0)

(0)

shares

Total transactions with the

86

(5,386)

(0)

(5,299)

(34)

(5,333)

owners

As of March 31, 2021

6,929

7,436

41,003

(1,000)

(260)

54,108

1,466

55,574

12

(4) Consolidated Statement of Cash Flows (Summary)

(Millions of yen)

Nine months ended

Nine months ended

March 31, 2020

March 31, 2021

(July 1, 2019 to

(July 1, 2020 to

March 31, 2020)

March 31, 2021)

Cash flows from operating activities

Profit before income taxes

13,088

14,902

Depreciation and amortization

1,926

1,993

Interest and dividend income

(2)

(6)

Interest expense

92

85

Investment loss (profit) under the equity method

2

Decrease (increase) in accounts receivables and other receivables

(1,438)

(1,200)

Increase (decrease) in accounts payable and other liabilities

1,430

1,648

Increase (decrease) in deposits received

(1,931)

(2,524)

Decrease (increase) in prepaid expenses

2,532

2,364

Decrease (increase) in lease repayments

1,264

1,358

Increase (decrease) in consumption tax payable

598

(1,498)

Increase (decrease) in retirement benefit liabilities

(691)

(653)

Other

(537)

896

Subtotal

16,334

17,365

Interest received

2

2

Interest paid

(65)

(59)

Income taxes paid

(5,309)

(4,663)

Income tax refund

39

1,182

Net cash flows from operating activities

11,000

13,827

Cash flows from investing activities

Payments into time deposits

(33)

(1,001)

Proceeds from withdrawal of time deposits

31

98

Purchase of tangible fixed assets

(560)

(245)

Purchase of intangible assets

(25)

(33)

Purchase of marketable securities

(139)

Payment for acquisition of other financial assets

(255)

(76)

Proceeds from sale of other financial assets

34

81

Other

13

81

Net cash flows from investing activities

(935)

(1,096)

Cash flows from financing activities

Net increase (decrease) in short-term loans payable

1,037

(999)

Repayment of lease liabilities

(4,678)

(4,903)

Proceeds from long-term borrowings

1,000

10,000

Repayments of long-term borrowings

(2,434)

(7,658)

Redemption of bonds

(138)

Purchase of treasury shares

(2,061)

(0)

Cash dividends paid

(4,911)

(5,420)

Payments for purchase of interests in subsidiaries from noncontrolling

(67)

interests

Other

(1)

Net cash flows from financing activities

(12,255)

(8,982)

Effect of change in exchange rates on cash and cash equivalents

(81)

139

Net increase (decrease) in cash and cash equivalents

(2,272)

3,888

13

Cash and cash equivalents at the beginning of the period

21,230

22,797

Cash and cash equivalents at the end of the period

18,958

26,686

14

  1. Notes to the consolidated financial results (Summary) (Note on assumption about going concern)
    Not applicable.

(Note on segment information)

1. Segment information overview

The Group's business segments are Group components for which separate financial information can be obtained. Each segment is subject to periodic examinations to allow the Board of Directors to decide how to allocate management resources and assess performance. In determining reportable segments, the Group does not consolidate business segments; reportable segments and business segments are the same.

Overview of the reportable segments:

  • In R&D Outsourcing Business, the Group provides engineer dispatch and contract assignment services in technological fields including machinery, electronics/electricals, embedded controllers, IT networks, business applications, system maintenance/management, and biochemistry; its customers are major businesses and other organizations in industries including automotive and automotive parts, industrial machinery and equipment, telecommunications equipment, electronic and electrical equipment, IT, semiconductors, energy, pharmaceuticals, and chemicals.
  • In Construction Management Outsourcing Business, the Group provides contract assignment services for construction design and engineer dispatch services for construction management (safety administration, quality control, process administration, and cost management) in the construction industry in the fields of construction, civil engineering, facility machinery, and plant; its customers are mainly general contractors and subcontractors.
  • In Other Businesses in Japan, the Group provides professional recruitment services and education and training services in engineering.
  • In Overseas Business, the Group provides technical outsourcing and professional recruitment services in China, engineer dispatch services and contracted R&D operations in Southeast Asia and India, and engineer dispatch and professional recruitment services in the UK.

15

2. Information on reportable segments

Accounting principles for the reportable segments are the same as those used in the creation of the Consolidated Financial Statements by the Group . Business between reportable segments is based on market prices, and segment profit is shown as operating profit.

Nine-months ended March 31, 2020 (July 1, 2019 to March 31, 2020)

(Millions of yen)

Reportable segment

Eliminations/

Consoli-

R&D

Construction

Other

Management

Overseas

Corporate

dated

Outsourcing

Businesses

Total

Business

Outsourcing

in Japan

Businesses

Business

Revenue

Revenue from external

94,546

14,922

2,509

7,474

119,452

38

119,491

customers

Intersegment sales or

211

603

379

1,194

(1,194)

transfers

Total revenue

94,758

14,922

3,112

7,853

120,646

(1,155)

119,491

Segment profit

10,221

1,884

306

563

12,976

94

13,070

Financial income

124

Financial expenses

103

Investment profit (loss)

(2)

under equity method

Quarterly profit before

13,088

income taxes

Other

Depreciation and

695

156

226

173

1,252

460

1,712

amortization

Amortization of customer-

60

153

213

213

related assets

Profit on early exercise of

60

60

put options

Profit on currency

exchange related to put

116

116

option liabilities

Loss on currency

exchange related to put

option liabilities

Change (loss) from fair

value adjustments related

110

110

to contingent consideration

Impairment loss

(Notes)

  1. Segment profit under Eliminations/Corporate includes corporate expenses not allocated to individual reportable segments and eliminations of intersegment transactions. Corporate expenses are recorded as general administrative expenses not allocated to reportable segments.
  2. Depreciation and amortization does not include amortization of customer-related assets.
    • 16

Nine-months ended March 31, 2021 (July 1, 2020 to March 31, 2021)

(Millions of yen)

Reportable segment

Eliminations/

Consoli-

R&D

Construction

Other

Management

Overseas

Corporate

dated

Outsourcing

Businesses

Total

Outsourcing

Businesses

Business

in Japan

Business

Revenue

Revenue from external

95,248

14,849

2,400

7,650

120,148

32

120,181

customers

Intersegment sales or

216

293

468

978

(978)

transfers

Total revenue

95,464

14,849

2,693

8,119

121,126

(945)

120,181

Segment profit (loss)

12,146

2,187

112

601

15,047

(167)

14,879

Financial income

125

Financial expenses

103

Quarterly profit before

14,902

income taxes

Other

Depreciation and

750

155

234

141

1,282

496

1,779

amortization

Amortization of

60

154

214

214

customer-related assets

Profit on currency

exchange related to put

option liabilities

Loss on currency

exchange related to put

201

201

option liabilities

Impairment loss

(Notes)

  1. Segment profit under Eliminations/Corporate includes corporate expenses not allocated to individual reportable segments and eliminations of intersegment transactions. Corporate expenses are recorded as general administrative expenses not allocated to reportable segments.
  2. Depreciation and amortization does not include amortization of customer-related assets.

17

Three-months ended March 31, 2020 (January 1, 2020 to March 31, 2020)

(Millions of yen)

Reportable segment

Eliminations/

Consoli-

R&D

Construction

Other

Management

Overseas

Corporate

dated

Outsourcing

Businesses

Total

Outsourcing

Businesses

Business

Business

in Japan

Revenue

Revenue from external

32,007

5,154

873

2,405

40,441

12

40,453

customers

Intersegment sales or

73

195

156

425

(425)

transfers

Total revenue

32,081

5,154

1,068

2,562

40,866

(412)

40,453

Segment profit

3,790

727

44

210

4,772

76

4,848

Financial income

73

Financial expenses

33

Investment profit (loss)

8

under equity method

Quarterly profit before

4,897

income taxes

Other

Depreciation and

235

50

75

54

416

164

580

amortization

Amortization of customer-

20

51

71

71

related assets

Profit on currency

exchange related to put

178

178

option liabilities

Loss on currency

exchange related to put

option liabilities

Change (loss) from fair

value adjustments related

110

110

to contingent consideration

Impairment loss

(Notes)

  1. Segment profit under Eliminations/Corporate includes corporate expenses not allocated to individual reportable segments and eliminations of intersegment transactions. Corporate expenses are recorded as general administrative expenses not allocated to reportable segments.
  2. Depreciation and amortization does not include amortization of customer-related assets.

18

Three-months ended March 31, 2021 (January 1, 2021 to March 31, 2021)

(Millions of yen)

Reportable segment

Eliminations/

Consoli-

R&D

Construction

Other

Management

Overseas

Corporate

dated

Outsourcing

Businesses

Total

Outsourcing

Businesses

Business

in Japan

Business

Revenue

Revenue from external

32,084

4,929

907

2,798

40,720

9

40,729

customers

Intersegment sales or

75

86

133

295

(295)

transfers

Total revenue

32,160

4,929

994

2,931

41,015

(286)

40,729

Segment profit (loss)

4,441

621

85

168

5,317

(118)

5,198

Financial income

72

Financial expenses

14

Quarterly profit before

5,257

income taxes

Other

Depreciation and

246

51

78

41

418

163

581

amortization

Amortization of

20

52

73

73

customer-related assets

Profit on currency

exchange related to put

option liabilities

Loss on currency

exchange related to put

150

150

option liabilities

Impairment loss

(Notes)

  1. Segment profit under Eliminations/Corporate includes corporate expenses not allocated to individual reportable segments and eliminations of intersegment transactions. Corporate expenses are recorded as general administrative expenses not allocated to reportable segments.
  2. Depreciation and amortization does not include amortization of customer-related assets.

19

Disclaimer

TechnoPro Holdings Inc. published this content on 28 April 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 April 2021 06:06:08 UTC.


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