Furukawa Battery : Financial Results for the Six-month Period November 8, 2022

(Percentage figures represent year-on-yearchanges)

Translation

Member of Financial Accounting Standards Foundation (FASF)

November 8, 2022

Consolidated Financial Results

for the Six-month Period Ended September 30, 2022 [Japan GAAP]

Name of Company:

Stock Code:

Stock Exchange Listing:

URL:

Representative

Title:

Name:

Contact Person

Title:

Name:

Tel:

Scheduled date for filing of quarterly securities report: Scheduled date for commencement of dividend payment: Supplementary documents for quarterly financial results: Quarterly financial results briefing:

The Furukawa Battery Co., Ltd. 6937

Tokyo Stock Exchange https://www.furukawadenchi.co.jp

President & CEO

Shinichi Ono

Corporate Officer, General Manager of Finance & Accounting Department

Susumu Meida

[phone] November 10, 2022

-

Yes

Yes (Financial results briefing via video streaming on the Company's website)

(Yen in millions, rounded down)

1. Consolidated financial results for the six months ended September 30, 2022 (April 1, 2022 - September 30, 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	%
Six months ended September 30, 2022	29,830	11.3		(381)		-	(231)	-			(228)		-
Six months ended September 30, 2021		26,799	5.3		562		(33.8)		645	(25.5)		563		(16.6)
Note: Comprehensive income
Six months ended September 30, 2022:		1,340 million yen [yoy 63.9 %]
Six months ended September 30, 2021:		817 million yen		[yoy 11.2 %]
	Earnings per share		Earnings per share
		(basic)				(diluted)
					Yen					Yen
Six months ended September 30, 2022				(6.98)						-
Six months ended September 30, 2021					17.18						-
(2) Consolidated financial position
		Total assets			Net assets		Equity ratio
				Million yen			Million yen				%
As of September 30, 2022				63,251				34,469			52.3
As of March 31, 2022					60,681				33,826			53.6
Reference: Equity
As of September 30, 2022:	33,107 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)										-		22.00		22.00

Note: Revisions to the dividends forecasts most recently announced: None

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	70,000		11.5	2,400	(25.3)	2,400	(29.3)	1,950	(49.2)	59.49
March 31, 2023
Note: Revisions to the earnings forecasts most recently announced: None

Notes:

(1) Changes in significant subsidiaries during the six-month period ended September 30, 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 7 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 September 30, 2022: 32,800,000 shares	As of March 31, 2022: 32,800,000 shares
(b) Treasury shares
As of September 30, 2022: 22,134 shares	As of March 31, 2022: 22,134 shares
(c) Average number of shares outstanding during the period (cumulative)
Six months ended September 30, 2022:	Six months ended September 30, 2021:
32,777,866 shares	32,777,914 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 Six- month Period, (3) Explanation of Forecast for the Fiscal Year Ending March 31, 2023" on page 2 of the Attachment for details on the assumptions used and other related matters concerning the forecast of consolidated financial results.
  (Obtaining the supplementary documents for quarterly financial results)
  The Company plans to stream the financial results briefing via video for institutional investors and analysts on Tuesday, November 15, 2022.
  The video and the supplementary documents for quarterly financial results will be posted on the Company's website.

Index	of the Attachment
1. Qualitative Information on Consolidated Financial Results for the Six-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...................................................................	2
2. Consolidated Financial Statements and Related Notes .............................................................................................	3
(1)	Consolidated Balance Sheets ...............................................................................................................................	3
(2)	Consolidated Statements of Income and Comprehensive Income .......................................................................	5
	(Consolidated Statements of Income (Cumulative)) ...........................................................................................	5
	(Consolidated Statements of Comprehensive Income (Cumulative)) .................................................................	6
(3)	Notes on Consolidated Financial Statements .......................................................................................................	7
	(Going Concern Assumptions) ............................................................................................................................	7
	(Material Changes in the Amount of Shareholders' Equity)................................................................................	7
	(Application of Special Accounting for Preparing Quarterly Consolidated Financial Statements).....................	7
3. Other .........................................................................................................................................................................	8
(Trend in Quarterly Consolidated Results) ................................................................................................................	8

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

1. Explanation of Operating Results

(Business Environment)

During the six-month period ended September 30, 2022, the global economy experienced the normalization of economic activities, notably due to a settling down in the spread of COVID-19 infection, but the outlook is uncertain due to downside risks for economic conditions due to global monetary tightening.

In the Japanese economy as well, despite signs of recovery due to the loosening of restrictions on economic activity caused by the impact of COVID-19, the situation requires close attention to the risk that a downturn in the overseas economic conditions caused by global monetary tightening might suppress economic conditions in Japan.

(Operating Results)

The Group recorded net sales of 29,830 million yen for the six-month period ended September 30, 2022, an increase of 3,030 million yen year on year. Overseas sales were 11,975 million yen and accounted for 40.1% of total sales.

In terms of profit and loss, operating loss came to 381 million yen, deteriorating by 943 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 loss came to 231 million yen, deteriorating by 877 million yen year on year due to the operating loss, despite an increase in foreign exchange gains and other income.

Loss attributable to owners of parent came to 228 million yen, decreasing by 791 million yen year on year.

(2) Explanation of Financial Position

Total assets were 63,251 million yen as of September 30, 2022, which is 2,569 million yen more than at the end of the previous fiscal year. Current assets increased by 1,093 million yen from the end of the previous fiscal year to 33,642 million yen, while non-current assets increased by 1,476 million yen from the end of the previous fiscal year to 29,609 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 1,040 million yen increase from the end of the previous fiscal year to 24,122 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 increased by 156 million yen from the end of the previous fiscal year to 4,425 million yen.

Total liabilities as of September 30, 2022, increased by 1,926 million yen from the end of the previous fiscal year to 28,781 million yen. Current liabilities increased by 2,244 million yen from the end of the previous fiscal year to 18,695 million yen, and non-current liabilities decreased by 317 million yen from the end of the previous fiscal year to 10,086 million yen.

Interest-bearing debt, which is the sum of short-term borrowings and long-term borrowings, increased by 2,762 million yen from the end of the previous fiscal year to 7,838 million yen.

Equity as of September 30, 2022, increased by 560 million yen from the end of the previous fiscal year to 33,107 million yen, resulting in an increase in the equity ratio from 53.6% at the end of the previous fiscal year to 52.3%.

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

There is no change to the consolidated earnings forecast that was announced on May 12, 2022.

Moreover, regarding the spread of COVID-19 and the timing of the settlement of COVID-19, etc., no changes have been made to the assumptions (that this situation will continue in the fiscal year ending March 31, 2023 and certain limits will be set regarding economic activity as there is no uniform opinion regarding the spread of COVID-19, the timing of the settlement of COVID-19, etc.) announced on May 12, 2022.

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2. Consolidated Financial Statements and Related Notes

1. Consolidated Balance Sheets

		(Millions of yen)
	As of March 31, 2022	As of September 30, 2022
Assets
Current assets
Cash and deposits	6,911	5,720
Notes and accounts receivable - trade	12,309	9,169
Electronically recorded monetary claims - operating	1,353	1,290
Securities	3,257	3,849
Merchandise and finished goods	2,883	4,734
Work in process	3,160	5,731
Raw materials and supplies	1,606	1,889
Other	1,072	1,263
Allowance for doubtful accounts	(7)	(7)
Total current assets	32,548	33,642
Non-current assets
Property, plant and equipment
Buildings and structures, net	7,316	7,521
Machinery, equipment and vehicles, net	6,555	7,026
Tools, furniture and fixtures, net	810	707
Land	7,603	7,804
Leased assets, net	441	437
Construction in progress	354	624
Total property, plant and equipment	23,081	24,122
Intangible assets
Leased assets	7	5
Other	775	1,056
Total intangible assets	782	1,061
Investments and other assets
Investment securities	1,787	1,850
Deferred tax assets	2,369	2,463
Other	135	133
Allowance for doubtful accounts	(22)	(22)
Total investments and other assets	4,268	4,425
Total non-current assets	28,133	29,609
Total assets	60,681	63,251

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