Furukawa Battery : Financial Results for the Nine-month Period December 31, 2022

(Percentage figures represent year-on-yearchanges)

Translation

Member of Financial Accounting Standards Foundation (FASF)

February 7, 2023

Consolidated Financial Results

for the Nine-month Period Ended December 31, 2022 [Japan GAAP]

Name of Company:	The Furukawa Battery Co., Ltd.
Stock Code:	6937
Stock Exchange Listing:	Tokyo Stock Exchange
URL:	https://www.furukawadenchi.co.jp
Representative
Title:	President & CEO
Name:	Shinichi Ono
Contact Person
Title:	Corporate Officer, General Manager of Finance &
	Accounting Department
Name:	Susumu Meida
Tel:	[phone]
Scheduled date for filing of quarterly securities report:	February 8, 2023
Scheduled date for commencement of dividend payment:	-
Supplementary documents for quarterly financial results:	None
Quarterly financial results briefing:	None
	(Yen in millions, rounded down)

1. Consolidated financial results for the nine months ended December 31, 2022 (April 1, 2022 - December 31, 2022)

(1) Consolidated operating results

	Net sales		Operating profit	Ordinary profit	Profit attributable to
		owners of parent
Million yen	%	Million yen	%	Million yen	% Million yen	%
Nine months ended December 31, 2022	48,224	11.7	132	(90.9)	318	(79.8)		(567)	-
Nine months ended December 31, 2021	43,155	3.2	1,455	(45.6)	1,580	(41.5)		1,299	(38.3)
Note: Comprehensive income
Nine months ended December 31, 2022:	970 million yen	[yoy (17.1)%]
Nine months ended December 31, 2021:	1,171 million yen	[yoy (35.2)%]
Earnings per share	Earnings per share
	(basic)		(diluted)
		Yen		Yen
Nine months ended December 31, 2022	(17.31)		-
Nine months ended December 31, 2021	39.65		-
(2) Consolidated financial position
	Total assets	Net assets	Equity ratio
	Million yen	Million yen		%
As of December 31, 2022	65,555	34,071		49.8
As of March 31, 2022	60,681	33,826		53.6
Reference: Equity
As of December 31, 2022:	32,661 million yen
As of March 31, 2022:	32,546 million yen
2. Dividends
			Annual dividends per share
	End of Q1	End of Q2	End of Q3	End of Q4	Total
		Yen	Yen	Yen		Yen		Yen
Fiscal year ended March 31, 2022		-	-		-	22.00		22.00
Fiscal year ending March 31, 2023		-	-		-
Fiscal year ending March 31, 2023 (forecast)					19.00		19.00

Note: Revisions to the dividends forecasts most recently announced: Yes

3. Forecast of consolidated financial results for the fiscal year ending March 31, 2023 (April 1, 2022 - March 31, 2023)

(Percentage figures represent year-on-year changes)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Earnings
		owners of parent	per share
	Million	%	Million	%	Million	%	Million	%	Yen
	yen	yen	yen	yen
Fiscal year ending	69,000	9.9	1,850	(42.4)	2,100	(38.1)	1,000	(73.9)	30.51
March 31, 2023

Note: Revisions to the earnings forecasts most recently announced: Yes

Notes:

(1) Changes in significant subsidiaries during the nine-month period ended December 31, 2022 (Changes in specific subsidiaries accompanied by changes in the scope of consolidation): Newly included: None Excluded: None

1. Use of accounting methods that are specific to the preparation of the quarterly consolidated financial statements: Yes Note: For details, please refer to "2. Consolidated Financial Statements and Related Notes, (3) Notes on Consolidated Financial Statements (Application of Special Accounting for Preparing Quarterly Consolidated Financial Statements)" on page 8 of the Attachment.
2. Changes in accounting policies, changes in accounting estimates, and retrospective restatements:
3. 1. Changes in accounting policies accompanying revisions in accounting standards: None
   2. Changes other than in (a): None
   3. Changes in accounting estimates: None
   4. Retrospective restatements: None
4. Number of shares outstanding (common stock)
5. 1. Shares outstanding (including treasury shares)

As of December 31, 2022: 32,800,000 shares	As of March 31, 2022: 32,800,000 shares
(b) Treasury shares
As of December 31, 2022: 22,208 shares	As of March 31, 2022: 22,134 shares
(c) Average number of shares outstanding during the period (cumulative)
Nine months ended December 31, 2022:	Nine months ended December 31, 2021:
32,777,858 shares	32,777,899 shares

• Quarterly financial results reports are exempt from quarterly reviews conducted by certified public accountants or an audit corporation.
• Appropriate use of performance forecasts and other special items: (Disclaimer on forward-looking statements, etc.)
  Forward-looking statements in these materials are based on information available to management at the time this report was prepared, and on assumptions that management believes are reasonable. Actual results may differ significantly from these statements for a number of reasons. Please refer to "1. Qualitative Information on Consolidated Financial Results for the Nine- month Period, (3) Explanation of Forecast for the Fiscal Year Ending March 31, 2023" on page 3 of the Attachment for details on the assumptions used and other related matters concerning the forecast of consolidated financial results.

Index	of the Attachment
1. Qualitative Information on Consolidated Financial Results for the Nine-month Period	2
(1)	Explanation of Operating Results	2
(2)	Explanation of Financial Position	2
(3)	Explanation of Forecast for the Fiscal Year Ending March 31, 2023	3
2. Consolidated Financial Statements and Related Notes	4
(1)	Consolidated Balance Sheets	4
(2)	Consolidated Statements of Income and Comprehensive Income	6
	(Consolidated Statements of Income (Cumulative))	6
	(Consolidated Statements of Comprehensive Income (Cumulative))	7
(3)	Notes on Consolidated Financial Statements	8
	(Going Concern Assumptions)	8
	(Material Changes in the Amount of Shareholders' Equity)	8
	(Application of Special Accounting for Preparing Quarterly Consolidated Financial Statements)	8
3. Other	9
(Trend in Quarterly Consolidated Results)	9

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1. Qualitative Information on Consolidated Financial Results for the Nine-month Period

1. Explanation of Operating Results

(Business Environment)

During the nine-month period ended December 31, 2022, the global economy saw the economic impact of COVID- 19 starting to relax, but the outlook is uncertain due to economic slowdown caused by turmoil from the situation in Ukraine, rising energy costs, the acceleration of global inflation and an increase in interest rates.

In the Japanese economy as well, the outlook continues to be uncertain due to the slowdown in the overseas economy becoming a downside risk for the domestic economy amid continuing global monetary tightening in addition to rising commodity prices, supply-side restrictions and rising raw material prices.

(Operating Results)

The Group recorded net sales of 48,224 million yen for the nine-month period ended December 31, 2022, an increase of 5,069 million yen year on year. Overseas sales were 17,992 million yen and accounted for 37.3% of total sales.

In terms of profit and loss, operating profit came to 132 million yen, decreasing by 1,322 million yen year on year due to the impact of the rise in the price of lead, a major raw material, and energy costs. Ordinary profit came to 318 million yen due to an increase in foreign exchange gains and other income, despite a year-on-year decrease of 1,261 million yen.

Loss attributable to owners of parent came to 567 million yen (profit attributable to owners of parent of 1,299 million yen in the same period of the previous fiscal year) as a result of recording deferred taxes of 719 million yen as tax effects pertaining to retained surplus of overseas subsidiaries.

(2) Explanation of Financial Position

Total assets were 65,555 million yen as of December 31, 2022, which is 4,874 million yen more than at the end of the previous fiscal year. Current assets increased by 4,332 million yen from the end of the previous fiscal year to 36,881 million yen, while non-current assets increased by 541 million yen from the end of the previous fiscal year to 28,674 million yen.

The main factors leading to the increase in current assets were increases in merchandise and finished goods and work in process.

There was a 1,082 million yen increase from the end of the previous fiscal year to 24,164 million yen in property, plant and equipment in non-current assets. The main factor leading to this increase was capital investment.

Investments and other assets decreased by 778 million yen from the end of the previous fiscal year to 3,490 million yen.

Total liabilities as of December 31, 2022, increased by 4,629 million yen from the end of the previous fiscal year to 31,484 million yen. Current liabilities increased by 5,111 million yen from the end of the previous fiscal year to 21,562 million yen, and non-current liabilities decreased by 482 million yen from the end of the previous fiscal year to 9,921 million yen.

Interest-bearing debt, which is the sum of short-term borrowings and long-term borrowings, increased by 4,290 million yen from the end of the previous fiscal year to 9,366 million yen.

Equity as of December 31, 2022, increased by 114 million yen from the end of the previous fiscal year to 32,661 million yen, resulting in a decrease in the equity ratio from 53.6% at the end of the previous fiscal year to 49.8%.

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(3) Explanation of Forecast for the Fiscal Year Ending March 31, 2023

There have been changes to the consolidated forecast for the fiscal year ending March 31, 2023 from the consolidated forecast that was announced on May 12, 2022 based on results, etc. in the nine-month period ended December 31, 2022.

For details, please refer to the "Notice Regarding Revisions to Consolidated Forecast for the Fiscal Year Ending March 31, 2023 and Revisions to Dividend Forecast" announced on February 7, 2023 (Japanese only).

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