UACJ : FY2023 Q2 Financial Results

(% indicates year-on-yearchange)

Financial Results for the Second Quarter Ended September 30, 2023

[According to IFRS] (Consolidated)

					November 9, 2023
Name of Listed Company	UACJ Corporation
Stock Exchange Listings	Tokyo
Code Number	5741	URL https://www.uacj.co.jp/english/
Representative	(Title)	Representative Director
	(Name)	Miyuki Ishihara
Contact Person	(Title)	General Manager, Accounting Department, Finance and Accounting Division
	(Name)	Atsushi Hashimoto	Phone	[phone]
Scheduled date for submitting financial statements November 13, 2023	Scheduled Date of Dividend	December 1, 2023
Distribution

Supplementary materials available on quarterly financial results: Yes

Quarterly results briefing: Yes	(For institutional investors and securities analysts)
	Note: Figures have been rounded to the nearest million yen.

1. Consolidated Business Performance for the Second Quarter Ended September 30, 2023 (from April 1, 2023 to September 30, 2023)

(1) Consolidated business performance (cumulative)

															Profit attributable to	Total
	Revenue	Operating income		Profit before tax	Profit		comprehensive
			owners of parent
															income
Six months ended	¥million	%	¥million		%		¥million		%	¥million		%	¥million		%	¥million		%
September 30, 2023	434,943	(13.2)	12,902		(20.0)		10,123		(36.0)	5,894		(43.8)	4,549		(51.7)	27,157		(31.1)
September 30, 2022	501,127	－	16,136		－		15,827		－	10,479		－	9,410			－	39,399		－
	Basic earnings per share		Diluted earnings per share
Six months ended			¥						¥
September 30, 2023			94.33							－
September 30, 2022			195.13							－
(2) Consolidated financial position
	Total assets		Total equity	Equity attributable to owners	Ratio of equity attributable to
		of parent			owners of parent to total
																assets
As of:			¥million							¥million				¥million						%
September 30, 2023			938,304						289,273				265,594						28.3
March 31, 2023			895,731						267,987				246,495						27.5
2. Dividends
											Annual dividends
	1st quarter			2nd quarter				3rd quarter			Year-end				Total
Year ended/ending:			¥					¥				¥				¥				¥
March 31, 2023			－					0.00				－			85.00				85.00
March 31, 2024			－		45.00
March 31, 2024												－			45.00				90.00
(Forecasts)

(Note) Changes in dividend forecast during the quarter under review: Yes

For details, please refer to "Notice Regarding Dividends from Surplus (Interim Dividend)" announced on November 9, 2023.

3. Forecast for Consolidated Business Performance in the Term Ending March 31, 2024 (from April 1, 2023 to March 31, 2024)

(% indicates year-on-year change)

	Revenue		Operating income	Profit attributable to owners	Basic earnings per share
		of parent
	¥million		%	¥million	%	¥million		%	¥
Full year	880,000		(7.8)	27,000	152.4	11,000		－	228.12

(Note) Changes in consolidated business performance forecasts during the quarter under review: Yes

For details, please refer to "1. Qualitative Information on Results for the Second Quarter Ended September 30, 2023 (3) Forecast for Consolidated Business Performance."

Notes

1. Changes in significant subsidiaries during the period (Changes in the scope of consolidation of specific subsidiaries): None
2. Changes in accounting policies, changes in estimates

1. Changes in accounting policies required by IFRS: None
2. Changes in accounting policies other than a. above: None
3. Changes in accounting estimates: None

1. Number of shares outstanding (common stock)

1. Number of shares issued at the end of the period (including treasury stock)
2. Number of shares of treasury stock at the end of the period
3. Average number of shares outstanding during the period (calculated cumulatively from the beginning of the fiscal year)

As of September 30,	48,328,193 shares	As of March 31, 2023	48,328,193 shares
2023
As of September 30,	107,899 shares	As of March 31, 2023	106,933 shares
2023
For the six months		For the six months
ended September	48,220,787 shares	ended September	48,222,433 shares
30, 2023		30, 2022

*These financial results are outside the scope of auditing by certified public accountants or accounting auditors.

*Explanations pertaining to appropriate use of information concerning future forecasts

The operating results forecasts and certain other statements contained in this document are forward-looking statements that are rationally determined based on information available to the UACJ Group at the time the results were announced. Actual performance may differ substantially from these projections due to fluctuations in the economy or a variety of other known and unknown factors.

(Application of International Accounting Standards (IFRS))

The UACJ Group has applied International Accounting Standards ("IFRS") from the three months ended June 30, 2023. In addition, financial data for the six months ended September 30, 2022, and for the fiscal year ended March 31, 2023, are presented in accordance with IFRS.

Please refer to "2. Condensed Quarterly Consolidated Financial Statements and Main Notes (4) Notes to the Condensed Quarterly Consolidated Financial Statements (First-Time Adoption)" on page 12 of the attached materials for information concerning the differences in financial data between IFRS and Japanese Accounting Standards.

List of attachments

1. Qualitative Information on Results for the Second Quarter Ended September 30, 2023……………………	2
(1)	Explanation of operating results……………………………………………………………………………………	2
(2)	Consolidated Financial Position……………………………………………………………………………………	2
(3)	Forecast for Consolidated Business Performance ………………………………………………………………	3
2. Condensed Quarterly Consolidated Financial Statements and Main Notes………………………………………	4
(1)	Condensed Quarterly Consolidated Statements of Financial Position…………………………………………	4
(2)	Condensed Quarterly Consolidated Statements of Income and Condensed Comprehensive Income……	6
(3)	Condensed Quarterly Consolidated Statement of Changes in Equity…………………………………………	8
(4)	Notes to the Condensed Quarterly Consolidated Financial Statements………………………………………	10
	(Notes on the Assumption of a Going Concern) …………………………………………………………………	10
	(Segment Information) ………………………………………………………………………………………………	10
	(First-Time Adoption) …………………………………………………………………………………………………	12

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1. Qualitative Information on Results for the Second Quarter Ended September 30, 2023

The UACJ Group has applied International Accounting Standards ("IFRS") from the three months ended June 30, 2023. In addition, financial data for the six months ended September 30, 2022, and the fiscal year ended March 31, 2023, have also been reclassified to IFRS for comparative analysis.

Please refer to "2. Condensed Quarterly Consolidated Financial Statements and Main Notes (4) Notes to the Condensed Quarterly Consolidated Financial Statements (First-Time Adoption)" on page 12 of the attached materials for information concerning the differences in financial data between IFRS and Japanese Accounting Standards.

(1) Explanation of operating results

During the six months ended September 30, 2023, although restrictions on economic activities put in place to counter COVID-19 were progressively lifted, the global economy was also affected by the prolongation of Russia's invasion of Ukraine, and the raising of interest rates in the United States and elsewhere to control inflation. As for the Japanese economy, progress was made in balancing measures to prevent infection with economic activity, such as the reclassification of COVID-19 as a Class 5 disease, and business conditions showed signs of a pickup centered on personal consumption and inbound tourist demand. However, with increased geopolitical risks, soaring resource prices, and higher prices caused by the weaker yen, the outlook for the environment in which the Company operates remains uncertain.

In this environment, declines in sales volume, falling aluminum ingot prices and other factors resulted in consolidated revenue of ¥434,943 million (down 13.2% year on year). Regarding income, the decline in sales volume and the negative impact of inventories led to consolidated operating income of ¥12,902 million (down 20.0% year on year), consolidated ordinary income before tax of ¥10,123 million (down 36.0% year on year), and net income attributable to owners of the parent of ¥4,549 million (down 51.7% year on year).

Information by segment is as follows.

Flat Rolled Products Business

In the aluminum flat-rolled products industry, demand for sheet materials in Japan fell year on year. In addition to falling demand for can stock, which was caused by reduced demand for drinking at home as a result of increased events and opportunities for eating out, downturns in areas such as semiconductor production equipment, electrical machinery, and construction led to a year-on-year decrease in domestic demand. Overall demand for extruded products declined year on year, despite a year-on-year increase in the area of automotive materials.

The UACJ Group's domestic sales volume of sheet materials for can stock declined slightly year on year, and although sheet materials used in automotive materials were strong compared with the previous year, the UACJ Group's overall domestic sales volume declined year on year due to downturns in semiconductor production equipment, electrical machinery, and construction. Similarly, extruded products also declined year on year against a background of falling demand.

Overseas sales volume of the Group fell year on year, owing to decreases in can stock at Tri-Arrows Aluminum Inc. and UACJ (Thailand) Co., Ltd., which resulted in a year-on-year decline in the UACJ Group's total volume of flat-rolled products.

As a result of the above, revenue in the Flat Rolled Products Business was ¥374,265 million (down 15.8% year on year), due to factors such as a decrease in sales volume and falling prices of aluminum ingots. Operating income came to ¥16,565 million (down 6.9% year on year), due to declining sales volume and the negative impact of inventories.

Precision-Machined Components and Related Businesses

Due to a recovery in automobile-related demand after the easing of the semiconductor shortage and the launch of new components in North America, revenue came to ¥103,920 million (up 1.5% year on year), and operating income was ¥2,116 million (up 73.3% year on year).

(2) Consolidated Financial Position

Due to the increase in inventories, the impact of foreign exchange conversion, and other factors, total assets as of September 30, 2023, amounted to ¥938,304 million (up 4.8% from March 31, 2023), and total liabilities were up 3.4% to ¥649,031 million.

Due to the recording of net income attributable to owners of the parent and increases in foreign currency translation adjustments, total shareholders' equity was ¥289,273 million (up 7.9%).

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(3) Forecast for Consolidated Business Performance

Owing to the decline in revenue and the negative impact of inventories caused by falling aluminum ingot prices, the Company has revised forecasts of consolidated business performance announced on May 11, 2023.

The Company expects revenue of ¥880,000 million, operating income of ¥27,000 million, and net income attributable to owners of the parent of ¥11,000 million.

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2. Condensed Quarterly Consolidated Financial Statements and Main Notes

1. Condensed Quarterly Consolidated Statements of Financial Position

						(Millions of yen)
		Date of transition		Previous fiscal year		Current fiscal year
			(as of March 31,		(as of September 30,
		(April 1, 2022)
		2023)	2023)
Assets
Current assets
Cash and cash equivalents	22,962	23,357	32,560
Trade and other receivables	161,344	158,994	166,079
Inventories	242,392	228,662	239,329
Other financial assets	10,918	11,848	9,821
Other current assets	9,820	14,789	13,474
Total current assets	447,436	437,650	461,262
Non-current assets
Property, plant and equipment	357,693	365,655	378,786
Right-of-use assets	4,370	6,900	8,714
Goodwill and intangible assets	41,441	42,856	44,372
Investment property	5,731	5,573	5,690
Investments accounted for using equity	14,756	17,220	18,362
method
Other financial assets	9,657	9,927	11,554
Retirement benefit assets	150	150	175
Deferred tax assets	9,004	7,202	6,063
Other non-current assets	2,497	2,599	3,326
Total non-current assets	445,299	458,081	477,042
Total assets	892,735	895,731	938,304

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						(Millions of yen)
		Date of transition		Previous fiscal year		Current fiscal year
			(as of March 31,		(as of September 30,
		(April 1, 2022)
		2023)	2023)
Liabilities and equity
Liabilities
Current liabilities
Trade and other payables	143,227	139,375	137,244
Loans payable	150,024	163,921	177,364
Lease obligations	1,270	1,310	1,303
Income taxes payable	3,344	439	1,538
Other financial liabilities	59,970	53,947	55,956
Provisions	152	138	1,166
Other current liabilities	13,962	12,487	13,383
Total current liabilities	371,949	371,617	387,954
Non-current liabilities
Loans payable	196,272	176,462	183,016
Lease obligations	4,304	6,810	9,103
Other financial liabilities	28,254	31,463	27,222
Retirement benefit obligations	18,554	18,256	18,630
Provisions	1,153	1,112	1,079
Deferred tax liabilities	12,758	17,429	17,241
Other non-current liabilities	4,336	4,595	4,786
Total non-current liabilities	265,632	256,127	261,077
Total liabilities	637,581	627,744	649,031
Equity
Capital stock	52,277	52,277	52,277
Capital surplus	79,383	79,458	79,476
Retained earnings	101,881	97,782	98,319
Treasury stock	(338)	(341)	(344)
Other components of equity	2,025	17,319	35,867
Total equity attributable to owners of	235,228	246,495	265,594
parent
Non-controlling interests	19,927	21,493	23,679
Total equity	255,155	267,987	289,273
Total liabilities and equity	892,735	895,731	938,304

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1. Condensed Quarterly Consolidated Statements of Income and Condensed Comprehensive Income (Condensed Quarterly Consolidated Statements of Income)

			(Millions of yen)
	FY2022 2nd Quarter		FY2023 2nd Quarter
	(From April 1, 2022		(From April 1, 2023
	to September 30, 2022)		to September 30, 2023)
Revenue	501,127	434,943
Cost of sales	(441,792)	(387,529)
Gross profit	59,335	47,414
Selling, general and administrative expenses	(40,784)	(34,856)
Share of profit (loss) of entities accounted for using	912	756
equity method
Other revenue	799	1,059
Other expenses	(4,126)	(1,471)
Operating income	16,136	12,902
Financial revenue	4,021	3,146
Financial expenses	(4,330)	(5,925)
Profit before tax	15,827	10,123
Income tax expenses	(5,348)	(4,229)
Profit	10,479	5,894
Profit attributable to
Owners of parent	9,410	4,549
Non-controlling interests	1,069	1,345
Profit	10,479	5,894
Earnings per share for the period
Basic earnings per share (¥)	195.13	94.33
Diluted earnings per share for the period (¥)	－		－

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(Condensed Quarterly Consolidated Statements of Comprehensive Income)

				(Millions of yen)
		FY2022 2nd Quarter		FY2023 2nd Quarter
		(From April 1, 2022		(From April 1, 2023
		to September 30, 2022)		to September 30, 2023)
Profit	10,479	5,894
Other comprehensive income
Items that will not be reclassified to profit or loss
Net change in fair value of financial assets	(43)	908
measured through other comprehensive income
Remeasurements of defined benefit plans	(10)	0
Share of other comprehensive income of	120	106
investments accounted for using equity method
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign	26,214	18,741
operations
Effective portion of change in fair value of cash	863	737
flow hedges
Share of other comprehensive income of	1,775	770
investments accounted for using equity method
Other comprehensive income, net of tax	28,920	21,263
Comprehensive income	39,399	27,157
Comprehensive income attributable to
Owners of parent	34,560	23,183
Non-controlling interests	4,839	3,974
Total comprehensive income for the period	39,399	27,157

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(3) Condensed Quarterly Consolidated Statement of Changes in Equity

First Six Months of the Fiscal Year Ended March 31, 2023 (April 1, 2022 to September 30, 2022)

(Millions of yen)

Equity attributable to owners of parent

Other components of equity

Capital

Retained

Treasury

Exchange

Effective

Capital stock

differences

portion of

surplus

earnings

stock

on

change in

translation of

fair value of

foreign

cash flow

operations

hedges

Balance as of April 1, 2022

52,277

79,383

101,881

(338)

－

700

Profit

－

－

9,410

－

－

－

Other comprehensive income

－

－

－

－

24,432

675

Comprehensive income

－

－

9,410

－

24,432

675

Purchase of treasury stock

－

－

－

(1)

－

－

Dividends

－

－

(4,099)

－

－

－

Share-based payment

－

38

－

－

－

－

transactions

Transfer from other components

－

－

86

－

－

－

of equity to retained earnings

Total transactions with owners,

－

38

(4,013)

(1)

－

－

etc.

Balance as of September 30,

52,277

79,421

107,278

(339)

24,432

1,375

2022

Balance as of April 1, 2022 Profit

Other comprehensive income Comprehensive income Purchase of treasury stock Dividends

Share-based payment transactions

Transfer from other components of equity to retained earnings Total transactions with owners, etc.

Balance as of September 30, 2022

Equity attributable to owners of parent

Other components of equity

Net change in								Non-
fair value of		Remeasurements						controlling		Total equity
financial assets					Total		interests
	of defined benefit
measured			Total
	retirement benefit
through other
	plans
comprehensive
income
1,325		－	2,025	235,228	19,927	255,155
－		－		－	9,410	1,069	10,479
(43)	86	25,150	25,150	3,770	28,920
(43)	86	25,150	34,560	4,839	39,399
－		－		－	(1)		－	(1)
－		－		－	(4,099)	(943)	(5,042)
－		－		－	38		－	38
－	(86)	(86)		－		－		－
－	(86)	(86)	(4,062)	(943)	(5,005)
1,282		－	27,089	265,725	23,823	289,548

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