Summary of Consolidated Financial Results

for the Third Quarter of the Fiscal Year Ending December 31, 2022

[Japanese GAAP]

November 7, 2022

Company name:

Tokai Carbon Co., Ltd.

Listing:

Tokyo Stock Exchange Prime Market

Securities code:

5301

URL:

https://www.tokaicarbon.co.jp/en/

Representative:

Hajime Nagasaka, President & Chief Executive Officer

Inquiries:

Akihiko Sato, Executive Officer and General Manager, Accounting & Finance Department

Telephone:

81-3-3746-5100

Scheduled date to file quarterly report:

November 11, 2022

Scheduled date to commence dividend payments:

-

Preparation of supplementary material on quarterly financial results:

Yes

Holding of quarterly financial results briefing:

Yes (Conference call for analysts and institutional investors)

(Yen amounts are rounded down to millions, unless otherwise noted)

1. Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending December 31, 2022 (January 1 to September 30, 2022)

(1) Consolidated Operating Results

(Percentages indicate year-on-year changes)

Quarterly Net Income

Net Sales

Operating Income

Ordinary Income

Attributable to Owners

of the Parent Company

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Nine months ended September

246,332

33.1

28,015

58.6

32,132

83.1

16,121

68.6

30, 2022

Nine months ended September

185,095

28.0

17,669

137.9

17,547

183.9

9,559

818.6

30, 2021

Note: Comprehensive income: Nine months ended September 30, 2022: 54,296 million yen (115.2%)

Nine months ended September 30, 2021: 25,225 million yen (−%)

Quarterly Net Income

Quarterly Net Income

per Share

per Share Fully Diluted

Yen

Yen

Nine months ended September

75.62

-

30, 2022

Nine months ended September

44.84

-

30, 2021

  1. Consolidated Financial Position

Total Assets

Net Assets

Equity Ratio

Millions of yen

Millions of yen

%

As of September 30, 2022

562,933

298,475

47.7

As of December 31, 2021

512,503

256,570

44.7

For reference: Shareholders' capital:

As of September 30, 2022:

268,640 million yen

As of December 31, 2021:

229,210 million yen

2. Dividends

Annual Dividends

End of 1st

End of 2nd

End of 3rd

Year-end

Total

quarter

quarter

quarter

Yen

Yen

Yen

Yen

Yen

Fiscal year ended December 31, 2021

-

15.00

-

15.00

30.00

Fiscal year ending December 31, 2022

-

15.00

-

Fiscal year ending December 31, 2022

-

15.00

30.00

(Forecast)

Note: Amendment to most recently disclosed dividend forecast: None

3. Consolidated Earnings Forecast for the Fiscal Year Ending December 31, 2022 (January 1 to December 31, 2022)

(Percentages represent year-on-year changes)

Net Income

Net Sales

Operating Income

Ordinary Income

Attributable to

Net Income per

Owners of the Parent

Share

Company

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Yen

Full year

305,000

17.8

35,000

42.0

34,000

37.3

20,000

24.2

93.82

Note: Amendment to most recently disclosed consolidated earinings forecast: None

* Notes:

  1. Changes in significant subsidiaries during the period (changes in specific subsidiaries accompanying changes in the scope of consolidation): Yes
    Newly included: -
    Excluded: 1 company (Tokai Carbon (Tianjin) Co., Ltd.)
  2. Application of accounting treatment specific to the preparation of quarterly consolidated financial statements: None
  3. Changes in accounting policy and changes and restatements of accounting estimates
    1. Changes in accounting policy accompanying the revision of accounting standards: Yes
    2. Changes in accounting policy other than those listed in (a): None
    3. Changes in accounting estimates: None
    4. Restatements: None
  4. Number of shares issued (common stock)
    1. Number of shares issued at the end of the period (including treasury stock)

As of September 30, 2022

224,943,104 shares

As of December 31, 2021

224,943,104 shares

(b) Number of treasury stock at the end of the period

As of September 30, 2022

11,747,938 shares

As of December 31, 2021

11,762,569 shares

(c) Average number of shares during the period

Nine months ended September

213,189,325 shares

Nine months ended September

213,177,407 shares

30, 2022

30, 2021

  • The financial results are not subject to audit by certified public accountants or audit firms.
  • Appropriate use of earnings forecasts and other pertinent information (Cautionary statement on forward-looking statements)
    These materials contain various forward-looking statements and other forecasts regarding performance and other matters. Such statements are based on information available at the time of preparation as well as certain reasonable assumptions. Actual results may differ materially from those expressed or implied by forward-looking statements due to a range of factors.
    (How to obtain the supplemental material on quarterly financial results)
    Tokai Carbon has scheduled a briefing on financial results in the form of a telephone meeting for analysts and institutional investors on Tuesday, November 8, 2022. The materials for this briefing will be posted on the corporate website on that day.

Supplemental Materials

1. Operating Results ..........................................................................................................................................................

2

(1)

Operating Results for the Third Quarter of the Fiscal Year Ending December 31, 2022 .....................................

2

2. Quarterly Consolidated Financial Statements and Notes ..............................................................................................

4

(1)

Quarterly Consolidated Balance Sheets ................................................................................................................

4

(2)

Quarterly Consolidated Statements of Income and Comprehensive Income ........................................................

6

Quarterly Consolidated Statements of Income for the First Nine-month Period ..................................................

6

Quarterly Consolidated Statements of Comprehensive Income for the First Nine-month Period ........................

7

(3)

Notes to Quarterly Consolidated Financial Statements ........................................................................................

8

(Notes on the Going-concern Assumption) ..........................................................................................................

8

(Notes on Significant Changes in Shareholders' Equity Amount) ........................................................................

8

(Changes in Accounting Policy) ...........................................................................................................................

8

(Additional Information) ......................................................................................................................................

8

(Segment Information)..........................................................................................................................................

9

1

1. Operating Results

  1. Operating Results for the Third Quarter of the Fiscal Year Ending December 31, 2022
    During the first nine months of 2022 (from January 1, 2022 to September 30, 2022) the global economy simultaneously experienced a significant slowdown in the pace of economic recovery and an increase in inflation, contrary to expectations at the beginning of the year. Although lockdowns occurred in major Chinese cities, the balance between anti-infection measures and economic activities progressed in countries around the world. However, generally speaking, the supply chain disruption triggered by Russia's invasion of Ukraine, the advance of global inflation and the resulting monetary tightening have become major downward factors, and uncertainty about the future of the global economy has increased again.
    Under these circumstances, in February this year, Tokai Carbon Group disclosed the rolling medium-term management plan "T-2024", for the three-year period from 2022 to 2024. Based on the three basic policies of "returning core businesses to a path of growth," "optimizing the business portfolio (selection and concentration)," and "strengthening the consolidated governance structure," we aim to achieve quantitative targets of 356 billion yen in net sales, 57 billion yen in operating income, 16% in ROS, and 91 billion yen in EBITDA by 2024. Focusing on our core businesses of graphite electrodes and carbon black, we are working to secure appropriate profits by passing through the rising costs to selling prices. At the same time, we are expanding our production capacity for the growing future demand.
    In February this year, we disclosed our new long-term vision for 2030, "Contributing to the Realization of a Sustainable Society with Advanced Materials and Solutions." We also established the Sustainability Committee to discuss important matters related to sustainability and the Carbon Neutral Committee to serve as a control tower for accelerating carbon neutral issues.
    As a result, net sales for the first nine months of 2022 increased 33.1% year on year to 246,332 million yen. Operating income increased 58.6% year on year to 28,015 million yen. Ordinary income increased 83.1% year on year to 32,132 million yen. Quarterly net income attributable to owners of the parent company increased 68.6% year on year to 16,121 million yen.
    Results by business segment were as follows:

Graphite Electrodes

Demand for graphite electrodes remained firm, despite concerns about the impact of the global economic slowdown and rising raw material and energy costs. Production and sales volumes increased at all sites, and average selling prices also rose.

As a result, net sales for the Graphite Electrodes business increased 53.8% year on year to 43,667 million yen, while operating income increased significantly to 5,303 million yen (compared with 138 million yen in operating loss for the same period of the previous year).

Carbon Black

Automobile production recovery has been delayed due to a shortage of semiconductors and other factors, however, demand in replacement tires remained strong, particularly for truck and bus applications in North America. Despite a decrease in overall sales volume year on year due to the sale of the China-based business, sales and profit increased due to measures such as passing on the increase in raw material oil prices to selling prices.

As a result, net sales for the Carbon Black business increased 43.0% year on year to 103,350 million yen, while operating income increased 34.4% year on year to 8,986 million yen.

Fine Carbon

2

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Tokai Carbon Co. Ltd. published this content on 14 November 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 November 2022 06:11:26 UTC.