Toda : Results Briefing for the Third Quarter Ended December 31, 2022

Note:This document is a translation of a part of the original Japanese version and provided for reference purposes only. In the event of any discrepancy between the Japanese original and this English translation, the Japanese original shall prevail.

Consolidated Financial Results

for the Nine Months Ended December 31, 2022

[Japanese GAAP]

February 13, 2023

Company name: TODA CORPORATION

Stock exchange listing: Tokyo
Code number: 1860
URL: https://www.toda.co.jp/
Representative: Seisuke Otani	President and Representative Director
Contact: Kaname Miwa	Corporate Officer General Manager,Financial&IR Div.
Phone: [phone]

Scheduled date of filing quarterly securities report: February 13, 2023

Scheduled date of commencing dividend payments: -

Availability of supplementary briefing material on quarterly financial results: No

Schedule of quarterly financial results briefing session: No

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

1. Consolidated Financial Results for the Nine Months Ended December 31, 2022 (April 01, 2022 to December 31, 2022)

(1) Consolidated Operating Results					(% indicates changes from the previous corresponding period.)
		Net sales			Operating profit	Ordinary profit	Profit attributable to
				owners of parent
Nine months ended		Million yen		%		Million yen	%	Million yen		%	Million yen		%
December 31, 2022		381,072		6.8		4,558	(72.6)	9,024		(54.7)	8,370		(37.9)
December 31, 2021		356,652		1.0		16,620	15.2	19,926		18.4	13,484		19.9
(Note) Comprehensive income:	Nine months ended December 31, 2022:	5,288	million	[ (54.3) %]
		Nine months ended December 31, 2021:	11,565	million	[ (64.0) %]
		Basic earnings	Diluted earnings per
		per share					share
Nine months ended				Yen				Yen
December 31, 2022				27.16				-
December 31, 2021				43.95				-
(2) Consolidated Financial Position
		Total assets			Net assets	Capital adequacy ratio
As of			Million yen				Million yen				%
December 31, 2022		795,964				319,503				39.3
March 31, 2022		761,199				319,042				41.6
(Reference) Equity: As of	December 31, 2022:		312,588	million
As of	March 31, 2022:	316,574	million

2. Dividends

				Annual dividends
	1st	2nd	3rd		Year-end	Total
	quarter-end	quarter-end	quarter-end
	Yen		Yen	Yen		Yen	Yen
Fiscal year ended March 31, 2022	-		10.00	-		16.00	26.00
Fiscal year ending March 31, 2023	-		13.50	-
Fiscal year ending March 31, 2023						13.50	27.00
(Forecast)
(Note) Revision to the forecast for dividends announced most recently:	No

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2023(April 01, 2022 to March 31, 2023)

(% indicates changes from the previous corresponding period.)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Basic earnings
		owners of parent	per share
	Million yen		%	Million yen	%	Million yen	%	Million yen	%	Yen
Full year	540,000		7.7	12,600	(48.3)	16,700	(40.6)	14,700	(20.8)	47.69
(Note) Revision to the financial results forecast announced most recently:	No

* Notes:

(1) Changes in significant subsidiaries during the nine months ended December 31, 2022 (changes in specified subsidiaries resulting in changes in scope of consolidation): Yes New １(Company name: PT Tatamulia Nusantara Indah)

(2) Accounting policies adopted specially for the preparation of quarterly consolidated financial statements:

Yes

1. Changes in accounting policies, changes in accounting estimates and retrospective restatement
2. 1. Changes in accounting policies due to the revision of accounting standards: Yes
   2. Changes in accounting policies other than 1) above: No
   3. Changes in accounting estimates: No
   4. Retrospective restatement: No
3. Total number of issued shares (common shares)
4. 1. Total number of issued shares at the end of the period (including treasury shares):

December	31, 2022:	322,656,796	shares
March 31,	2022:	322,656,796	shares

2) Total number of treasury shares at the end of the period:

December	31, 2022:	14,426,611	shares
March 31,	2022:	14,440,349	shares

3) Average number of shares during the period:

Nine months ended December 31, 2022: 308,222,129 shares

Nine months ended December 31, 2021: 306,815,769 shares

*Notes:

These statements include Toda Corporation's forecasts based on information currently available as of the announcement date,

which are subject to a number of risks and uncertainties. Therefore, the actual results of developments may differ from those presented in these forward-looking statements due to the changes in various factors.

Consolidated Financial Results

for the Third Quarter

Ended December 31, 2022

―1―

1. Qualitative Information on Consolidated Financial Results for the Three Months Ended December 31, 2022

(1) Explanation of Operating Results

During the nine months ended December 31, 2022, the Japanese economy saw an easing of restrictions due to COVID-19 pandemic, and the normalization of social and economic activities were underway, centered around personal consumption. However, the outlook remains uncertain due to the factors such as Japanese yen's depreciation as a result of global monetary tightening policies and the prolonged situation in Ukraine leading to inflation.

In the construction industry, orders received increased compared with the same period of the previous year, mainly in the private sector, but the business environment remains challenging due to soaring prices of various commodities and other factors.

The Toda Group announced in May 2022 the Medium-term Management Plan 2024 - Rolling Plan. While evolving the value that we provide to customers in each of our core operations, namely, the architectural construction, civil engineering and strategic businesses, we position the New Toda Building project, overseas business and renewable energy projects, such as the floating offshore wind power generation business, as priority management initiatives. By making investments for future growth in these businesses, the Group has been strengthening its business portfolio. During the period under review, the Group continued to invest in growth with the active involvement of top management in order to achieve medium to long-term growth. To ensure our ROE (return on equity) target of 8% over the medium to long term while promoting growth investments, the Group is also working to strengthen its investment process by using indicators such as IRR (internal rate of return) and cost of capital to manage post- investment profitability.

Under these circumstances, the Toda Group's consolidated results for the period under review were as follows. Consolidated net sales increased 6.8% year on year to ¥381.0 billion, mainly due to higher sales in the architectural

construction business, domestic group companies business, and overseas investment and development business, despite lower sales in the civil engineering business.

Operating income increased in the overseas investment and development business compared with the same period of the previous fiscal year, while the architectural construction business posted a provision for losses on construction contracts for several projects due to the rise in prices of steel frames and other materials caused by changes in the market environment. Gross profit was ¥34.7 billion, down 20.2% year on year. Selling, general and administrative expenses were ¥30.2 billion, up 12.0% year on year. As a result, overall operating income was ¥4.5 billion, down 72.6% year on year.

Ordinary income decreased 54.7% year on year to ¥9.0 billion, despite an increase in non-operating income year on year due to dividend income from investment securities held and foreign exchange gains.

Profit for the quarter attributable to owners of the parent was ¥8.3 billion, down 37.9% year on year.

The results for each segment are as follows. Segment results are presented including intersegment sales and transfers.

From the first quarter ended June 30, 2022, the Group has changed the way it presents its reportable segments, with year-on-year comparisons and analysis now made using these changed segment classifications. For details, please refer to "2. Consolidated Financial Statements (3) Notes to Quarterly Consolidated Financial Statements (Segment Information, etc.) II Three months ended December 31, 2022, 3. Matters pertaining to changes in reportable segments, etc."

Architectural Construction Business

The segment recorded net sales of ¥236.3 billion (up 7.2% year on year), and the segment loss (operating loss) was ¥3.5 billion (segment income was ¥6.9 billion in the same quarter of the previous year).

On a non-consolidated basis, orders received from domestic private sector construction increased 2.7% year on year, while orders received from domestic public sector construction decreased 44.1% year on year, resulting in an overall decrease of 9.4% year on year, to ¥169.2 billion.

Civil Engineering Business

The segment recorded net sales of ¥100.2 billion (down 6.2% year on year), and the segment income (operating income) was ¥6.8 billion (down 1.4% year on year).

―2―

On a non-consolidated basis, overall orders received decreased 12.6% year on year to ¥82.6 billion, due to a 12.8% decrease year on year in domestic public sector construction orders and a 9.5% decrease year on year in domestic private sector orders.

Domestic Investment and Development Business

The segment recorded net sales of ¥14.0 billion (down 18.9% year on year), and the segment income (operating income) of ¥800 million (down 74.7% year on year).

Domestic Group Companies Business

The segment recorded net sales of ¥33.4 billion (up 35.4% year on year), and the segment income (operating income) of ¥600 million (up 187.0% year on year).

Overseas Investment and Development Business

The segment recorded net sales of ¥15.4 billion (up 814.6% year on year), and the segment income (operating income) of ¥1.1 billion (up 118.2% year on year).

Environment and Energy Business

The segment recorded net sales of ¥1 billion (up 151.9% year on year), and the segment loss (operating loss) of ¥100 million (segment loss was ¥600 million in the same quarter of the previous year).

1. Explanation of Financial Position Assets, Liabilities and Net Assets Assets
   Total assets as of December 31, 2022 were ¥795.9 billion (up 4.6% year on year), a ¥34.7 billion increase from the end of the previous fiscal year, despite decreases of ¥37.2 billion in cash and deposits and ¥12.4 billion in investment securities, but increased ¥54.5 billion in notes receivable, accounts receivable from completed construction contracts and other, ¥14.1 billion in construction in progress, and ¥10.5 billion in costs on uncompleted construction contracts.
   Liabilities
   Total liabilities as of December 31, 2022 were ¥476.4 billion (up 7.8% year on year), a ¥34.3 billion increase from the end of the previous fiscal year. The main contributors to this increase were decreases of ¥5.9 billion in income taxes payable and ¥5.0 billion in bonds payable, and increases of ¥33.6 billion in long term loans payable, ¥7.4 billion in advances received on uncompleted construction contracts, and ¥5.9 billion in short term loans payable.
   Net Assets
   Total net assets as of December 31, 2022, were ¥319.5 billion (up 0.1% year on year), a ¥400 million increase from the end of the previous fiscal year, and the shareholders' equity ratio was 39.3%. Although net unrealized gains on available-for-sale securities decreased by ¥5.3 billion due to the sale of shares held and the decline in market values, this was mainly attributable to an increase in non-controlling interests of ¥4.4 billion resulting from PT Tatamulia Nusantara Indah becoming a consolidated subsidiary, and an increase in foreign currency translation adjustments of ¥2.5 billion due to the depreciation of the Japanese yen.
2. Explanation of Consolidated Results Forecasts and Other Forward-looking Information
   There are no changes to the consolidated results forecasts for the fiscal year ending March 31, 2023, which were

announced on October 31, 2022.

―3―