TOKAI : Financial Results for the First Nine Months of the Fiscal Year Ending March 31, 2023 – Net sales for the first nine months grew for the second consecutive fiscal year to reach a new record high – (236KB)

February 2, 2023

For Immediate Release

Company Name:	TOKAI Holdings Corporation
Representative Name:	Representative Director, President and CEO
	Katsuo Oguri
	(Code No. 3167, TSE Prime Market)

Financial Results for the First Nine Months of the Fiscal Year Ending March 31, 2023

• Net sales for the first nine months grew for the second consecutive fiscal year to reach a new
  record high -

TOKAI Holdings Corporation (hereinafter, "the Company") today announced its financial results for the first nine months of the fiscal year ending March 31, 2023.

1. The Company continued to expand its earnings base to achieve a net annual increase of 100,000 in customer count.

The Company worked to increase market share in existing areas, to expand into new sales areas in Japan and to launch overseas operations. Taking the approach of selection and concentration with a focus on profitability, we boosted the number of customers.

The Company will pursue an aggressive strategy to expand its earnings base, aiming to achieve 3.30 million customers (a net annual increase of 100,000 in customer count) at the end of the fiscal year under review.

In operating activities in the first nine months of the fiscal year under review, the Company aggressively conducted sales activities to gain customers while thoroughly taking measures to prevent COVID-19 infections and recorded 3,258,000 continuing customers as of December 31, 2022. This continuing customer exceeded the count at the beginning of the fiscal year (3,194,000) by 63,996 (versus an increase of 43,292 in the same period of the previous fiscal year).

With net increase of 25,943 (LP and city) gas customers (29,533 in the same period of the previous fiscal year), 23,267 CATV customers (26,055), 15,697 Hikari Collaboration customers (5,110) and 9,301 LIMBO (MVNO service) customers (1,782), we further expanded our earnings base.

2. Net sales for the first nine months grew for the second consecutive fiscal year to reach a new record high

For the third quarter under review, net sales stood at 164.2 billion yen, up 14.8 billion yen or 9.9% year on year, rising for the second consecutive year to a new record high. This resulted chiefly from sales growth following an increase in energy, CATV and other customers, rises in selling prices linked with energy purchase prices, and expansion of the stock business for corporate clients in the Information and Communication business.

On the profit front, operating profit stood at 8.5 billion yen, down 0.8 billion yen or 8.5% year on year. This is explained by LP gas purchase prices that were far higher than the level in the same period a year earlier and an increase in expenses for gaining customers in the Information and Communication business for consumers, which endeavored to shift towards a net increase in customers. These factors more than offset earnings growth after an increase in the number of monthly fee-paying customers accompanying an increase in the number of customer accounts, as well as a rise in profit in the Information and Communications business for corporate clients.

Profit attributable to owners of parent stood at 2.8 billion yen, down 1.8 billion yen or 39.2% year on year. This is due mainly to impairment losses of goodwill of an equity-method affiliate based in Vietnam and the posting of special investigation expenses as extraordinary losses.

					(Millions of yen)
	Q3 FY03/23 results	Q3 FY03/22 results	YoY
	(April 1, 2022 to December 31, 2022)	(April 1, 2021 to December 31, 2021)	Change		% change
Net sales	164,249	149,420	+14,829		+9.9%
Operating profit	8,466	9,248	-782		-8.5%
Ordinary profit	6,705	9,324	-2,619		-28.1%
Profit attributable to owners	2,816	4,634	-1,818		-39.2%
of parent
EPS (yen)	21.52	35.38	-13.86		-39.2%

3. Revisions to full-year financial results forecast

Regarding the consolidated full-year financial results forecast for the fiscal year ending March 31, 2023, the figures that were announced on May 10, 2022 have been revised as follows, effective February 2, 2023, in light of recent trends in business performance and other factors.

Looking at the most recent trends in business performance, there has been steady progress in initiatives for increasing the number of continuing customers with the goal of expanding the earnings base, and the net sales and operating profit forecasts that were announced on May 10, 2022 are expected to be achieved.

However, the ordinary profit and profit attributable to owners of parent forecasts were revised, reflecting the goodwill impairment losses of an equity-method affiliate based in Vietnam and the special investigation expenses.

								(Millions of yen)
		FY03/23 forecast		FY03/22	YoY
		(April 1, 2022 to March 31, 2023)
			results
	Latest		Previous		Change	Change		% change
			(April 1, 2021 to
	forecast		forecast
				March 31, 2022)
Net sales	223,000		223,000		－	210,691	+12,309		+5.8%
Operating profit	14,500		14,500		－	15,794	-1,294		-8.2%
Ordinary profit	12,600		14,300		-1,700	15,907	-3,307		-20.8%
Profit attributable to	6,300		8,300		-2,000	8,969	-2,669		-29.8%
owners of parent
EPS (yen)	48.12		63.43		-15.31	68.49	-20.37		-29.7%
Customer count at end	3,295,000		3,295,000		－	3,194,000	+101,000		+3.2%
of fiscal year

To date, the dividend forecasts for the fiscal year ending March 31, 2023 remain unchanged from those announced on May 10, 2022.

	FY03/23	FY03/23	FY03/22
	(forecast)
Interim (end of Q2)		16.00 yen	15.00 yen
Year-end	16.00 yen		17.00 yen
Annual dividend per share	32.00 yen		32.00 yen

For the Company's earnings announcement for the first nine months of the fiscal year ending March 31, 2023 and its notice of posting of extraordinary losses and revisions to the full-year financial results forecast, please see the following URL:

https://www.tokaiholdings.co.jp/english/ir/library/earnings.html

Contact: Yoshihiro Taniguchi

Public Relations and Investor Relations Office

TEL: [phone]

Financial Results for the First Nine Months of the Fiscal Year Ending March 31, 2023

TOKAI Holdings Corporation

(Code No. 3167)

February 2, 2023

Expansion of earnings base proceeds

• The number of continuing customers as of December 31, 2022 stood at 3,258 thousand, an increase of 64 thousand from 3,194 thousand at the beginning of the fiscal year.
• The earnings base continued to expand in the gas business, the CATV business, the Hikari Collaboration business and the LIMBO business.

	Gas (LP and city)			CATV			Hikari Collaboration		LIBMO
(Thousand) +30	+34								+9
+26						+16
+26	+23
					+11
+24							+4
811				1,255	+5	362		65
			+2

n

774

1,224

342

55

737

1,188

335

52

FY2020_3Q

FY2021_3Q

FY2022_3Q

FY2020_3Q

FY2021_3Q

FY2022_3Q

FY2020_3Q

FY2021_3Q FY2022_3Q

FY2020_3Q

FY2021_3Q

FY2022_3Q

(Two years

(Previous fiscal

(Current fiscal

(Two years

(Previous fiscal (Current fiscal

(Two years

(Previous

(Current fiscal

(Two years

(Previous fiscal

(Current fiscal

earlier)

year)

year)

earlier)

year)

year)

earlier)

fiscal year)

year)

earlier)

year)

year)

Number at end of period

Net increase

Number at end of period

Net increase

Number at end of period

Net increase

Number at end of period

Net increase

1

* Rounded to the nearest thousand

(Millions of yen)

Q2 net sales grow for the second

consecutive year to set new record high

• Net sales rose for the second fiscal year to reach a new record high. The result chiefly reflects an increase in customers, rises in selling prices linked with energy purchase prices, and expansion of the Information and Communication business for corporate clients.
• Operating profit fell 0.8 billion yen year on year, primarily because of soaring LP gas purchase prices and an increase in expenses for gaining customers, despite earnings growth after an increase in the number of monthly fee-paying customers accompanying an increase in the number of customer accounts, as well as a rise in profit in the Information and Communications business for corporate clients.
• Profit attributable to owners of parent dropped 1.8 billion yen year on year, due mainly to posting of impairment
  losses of goodwill of an equity-method affiliate and special investigation expenses. (Net sales and profit: million yen; EPS: yen)

	Q2 FY03/23 results	Q2 FY03/22 results	YoY
	(April 1, 2022 -	(April 1, 2022 -	Change		% change
	December 31, 2022)	December 31, 2022)
Net sales	164,249	149,420	+14,829		+9.9%
Operating profit	8,466	9,248	-782		-8.5%
Ordinary profit	6,705	9,324	-2,619		-28.1%
Profit attributable to	2,816	4,634	-1,818		-39.2%
owners of parent
EPS (yen)	21.52	35.38	-13.86		-39.2%

Consolidated full-year

financial results forecast (revised)

◎ Forecast values for net sales and operating profit, which were announced on May 10, 2022, are expected to be achieved.

◎ The forecast amount of ordinary profit was revised to 12.6 billion yen and that of profit attributable to owners of parent was revised to 6.3 billion yen, reflecting the posting of impairment losses of goodwill of an equity-method affiliate and special investigation expenses.

◎ The number of customers of the overall Group has remained unchanged from the initial forecast because activities to gain customers are making steady progress.

	Revised forecast			YoY		Compared with initial forecast
	for the current	Results for the
	fiscal year	previous fiscal	Initial forecast
	Forecast for the	year	(FY2022)			% change		% change
	current fiscal year	(FY2021)		Change		Change
			(%)	(%)
	(FY2022)
Net sales	223,000	210,691	223,000	+12,309		+5.8	－	－
Operating profit	14,500	15,794	14,500	-1,294		-8.2	－	－
Ordinary profit	12,600	15,907	14,300	-3,307		-20.8	-1,700	-11.9
Profit attributable to	6,300	8,969	8,300	-2,669		-29.8	-2,000	-24.1
owners of parent
EPS (yen)	48.12	68.49	63.43	-20.37		-29.7	-15.31	-24.1
Customer count at	3,295,000	3,194,000	3,295,000	+101,000		+3.2	－	－
end of fiscal year

3

Dividend forecast

• Annual dividend per share is projected to stay unchanged at 32 yen per share from the previous fiscal year.
• The dividend forecast (announced on May 10, 2022) remains unchanged.

66.5%

50
		52.9%					54.7%
45			46.7%				47.2%
							44.5%	44.6%		46.7%
	40.2%			43.4%
40		35.1%
												32		32
35											30 yen/share	yen/share
				28		28	28	28
					yen/share
30				yen/share	yen/share	yen/share	yen/share
25					6								17		16
							14	14	14		16
20				14
	12	12	12
15	yen/share 11
yen/share	yen/share	yen/share

10

5

6	6	6	8	14	14	14	14	15	16
			11
6	6	6	6

0

FY2012

FY2013

FY2014

FY2015

FY2016

FY2017

FY2018

FY2019

FY2020

FY2021

FY2022

(forecast)

Interim dividend

Year-end dividend

Commemorative dividend

Payout ratio

4

5