Unitika : Nov. 9, 2021 Financial Results for the 2nd Quarter of the Fiscal Year Ending March 31, 2022 (0.3MB)PDF

Member of Financial Accounting Standards Foundation

Financial Results for the 2nd Quarter of the Fiscal Year Ending March 31, 2022

		November 9, 2021
		Listed stock exchanges: Tokyo Stock Exchange
Company name: Unitika Ltd.
Code number: 3103	URL: https://www.unitika.co.jp/e/home.htm
Representative: Shuji Ueno, President and Chief Executive Officer
Contact: Masumi Fujimoto, General Manager of Accounting Department	TEL: [phone]
Expected submission of quarterly report: November 12, 2021
Expected commencement date for paying dividend: -

Preparation of supplementary explanation documents for quarterly financial results: Yes

Holding of an analyst meeting for quarterly financial results: Yes (for securities analysts and institutional investors)

(Figures rounded down to nearest million yen.)

1. Consolidated performance for 2nd quarter of fiscal year ending March 31, 2022 (April 1, 2021 to September 30, 2021)

(1) Consolidated performance (accumulation)		(Percentages represent changes from same period in previous year.)
							Quarterly profit
	Net sales		Operating profit	Ordinary profit	attributable to owners of
							parent
	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
Q2 of FY ending March 31, 2022	55,514	-	3,392	21.2	2,922	81.4	2,214	(40.7)
Q2 of FY ended March 31, 2021	54,828	(9.4)	2,798	(2.4)	1,610	(25.0)	3,731	-

(Note) Comprehensive income	Q2 of FY ending March 31, 2022: 3,260 million yen [(20.8%)]
	Q2 of FY ending March 31, 2021: 4,114 million yen [-%]
	Quarterly profit per share	Diluted quarterly profit per share
	Yen	Yen
Q2 of FY ending March 31, 2022	35.61	18.16
Q2 of FY ended March 31, 2021	61.93	29.48

(Note) The Accounting Standard for Revenue Recognition (Accounting Standards Board of Japan (ASBJ) Statement No. 29, March 31, 2020), etc. have been applied from the beginning of the first quarter of the consolidated fiscal year ending March 31, 2022. Accordingly, net sales for the second quarter of the consolidated fiscal year ending March 31, 2022 show the amount after the above-mentioned accounting standard, etc. have been applied, and the year-on-year percentage change in net sales for the second quarter of the consolidated fiscal year ending March 31, 2022 has been omitted from the table above.

(2) Consolidated financial situation

	Total assets	Net assets	Capital adequacy ratio
	Millions of yen	Millions of yen	%
Q2 of FY ending March 31, 2022	192,017	44,131	22.0
FY ended March 31, 2021	190,403	41,192	20.7

(Reference) Shareholders' equity	2nd quarter of fiscal year ending March 31, 2022: 42,314 million yen
	Fiscal year ended March 31, 2021: 39,476 million yen
2. Dividend payment
		Annual dividend per share
	End of Q1	End of Q2	End of Q3	Year end	Total
	Yen	Yen	Yen	Yen	Yen
FY ended March 31, 2021		0.00		0.00	0.00
FY ending March 31, 2022		0.00
FY ending March 31, 2022 (forecast)					0.00	0.00

(Note) Revision of the latest dividend forecast: None

(Note) The above-mentionedDividend payment refers to dividends paid to the holders of common stock. For details of dividend payment to the holders of class shares (unlisted), the rights of which are different from those of common stock, please refer to Dividend payment to the holders of class shares mentioned below.

Member of Financial Accounting Standards Foundation

3. Forecast of consolidated performance for fiscal year ending March 31, 2022 (April 1, 2021 to March 31, 2022)

(Percentages represent changes from same period in previous year.)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Profit per
		owners of parent		share
	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
FY ending March 31, 2022	116,500		6,600	9.7	5,400	0.3	4,000	3.5	63.80

(Note) Revision of the latest forecasts of operational results: Yes

(Note) The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020), etc. have been applied from the beginning of the first quarter of the consolidated fiscal year ending March 31, 2022. Accordingly, the above-mentioned forecast of consolidated performance for the fiscal year ending March 31, 2022 shows the amounts after the above-mentioned accounting standard, etc. have been applied, and the year-on-year percentage change in net sales for the full year of the consolidated fiscal year ending March 31, 2022 has been omitted from the table above.

• Notes

(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries accompanying change of scope of consolidation): None

New companies: ― (company name)

Excluded companies: ― (company name)

1. Adoption of special accounting methods for preparing quarterly consolidated financial statements: None
2. Changes in accounting policies, changes in accounting estimates and retrospective restatement

• Changes in accounting policies due to revisions of accounting standards: Yes
• Changes of accounting policies other than the above: None
• Changes in accounting estimates: None

• Retrospective restatement: None

(Note) For details, please refer to 2. Quarterly Consolidated Financial Statements and Main Notes (4) Notes on quarterly consolidated financial statements (Changes in accounting policies) on page 10 of the attachment.

1. Number of shares outstanding (Common stock)
2. • Number of shares outstanding at end of term (including treasury share): 2nd quarter of the fiscal year ending March 31, 2022: 57,752,343 shares Fiscal year ended March 31, 2021: 57,752,343 shares
   • Number of treasury shares at end of term
     2nd quarter of the fiscal year ending March 31, 2022: 95,485 shares

Fiscal year ended March 31, 2021: 95,236 shares

• • Average number of shares outstanding during the term (quarterly consolidated accumulated period) 2nd quarter of the fiscal year ending March 31, 2022: 57,657,021 shares
    2nd quarter of the fiscal year ended March 31, 2021: 57,657,898 shares
• This brief report of quarterly financial statements is not subject to audit procedures by a certified public accountant or an independent auditor.
• Explanation on appropriate use of forecasts of performance and other special items
  The forward-looking statements in this document concerning forecasting of performance etc. are based on currently available information and assumptions considered by the Company to be reasonable. Such statements are neither promises nor guarantees of future performance. The actual performance may be significantly different from forecasts due to various factors. Concerning assumptions used as a basis for forecasting business performance and precautionary statements when using the forecast of performance, please refer to 1. Qualitative Information on Quarterly Results
• 1. Explanation of future forecast information including forecast of consolidated performance on page 4 of the attachment.

(Method to obtain the supplementary documents for quarterly financial results)

The Company plans to hold a conference call for institutional investors and securities analysts for quarterly financial results on Wednesday, November 24, 2021. It plans to post the supplementary documents for quarterly financial results to be used in this investor conference call on its website.

Member of Financial Accounting Standards Foundation

Dividend payment to the holders of class shares

The breakdown of dividends per share related to class shares, the rights of which are different from those of common stock, is as follows:

				Annual dividends
		End of Q1	End of Q2		End of Q3	Year end	Total
Class A share		Yen	Yen		Yen	Yen	Yen
FY ended March 31, 2021		-	0.00		-	12,000.00	12,000.00
FY ending March 31, 2022		-	0.00
FY ending March 31, 2022 (forecast)					-	12,000.00	12,000.00
Class B share		Yen	Yen		Yen	Yen	Yen
FY ended March 31, 2021		-	0.00		-	23,740.00	23,740.00
FY ending March 31, 2022		-	0.00
FY ending March 31, 2022 (forecast)					-	23,740.00	23,740.00

Unitika Ltd. (3103) Financial Results for 2nd Quarter of Fiscal Year Ending March 31, 2022

• Table of contents for the attachment

1. Qualitative Information on Quarterly Results...................................................................................................	2
(1)	Explanation of operational results................................................................................................................	2
(2)	Explanation of financial position .................................................................................................................	3
(3)	Explanation of future forecast information including forecast of consolidated performance ......................	4
2. Quarterly Consolidated Financial Statements and Main Notes ........................................................................	5
(1)	Quarterly consolidated balance sheets .........................................................................................................	5
(2)	Quarterly consolidated statements of income and quarterly consolidated statements of
	comprehensive income ................................................................................................................................	7
	Quarterly consolidated statements of income
	Six-month period ended September 30, 2021 .........................................................................................	7
	Quarterly consolidated statements of comprehensive income
	Six-month period ended September 30, 2021 .........................................................................................	8
(3)	Quarterly consolidated statements of cash flows .........................................................................................	9
(4)	Notes on quarterly consolidated financial statements ................................................................................	10
	(Notes on assumption of going concern)...................................................................................................	10
	(Notes on significant changes in shareholders' equity) .............................................................................	10
	(Changes in accounting policies)...............................................................................................................	10
	(Additional information) ...........................................................................................................................	10
	(Segment information, etc.).......................................................................................................................	11
3. Supplementary Materials ................................................................................................................................	12

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Unitika Ltd. (3103) Financial Results for 2nd Quarter of Fiscal Year Ending March 31, 2022

1. Qualitative Information on Quarterly Results

1. Explanation of operational results

The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020), etc. have been applied from the beginning of the first quarter of the consolidated fiscal year ending March 31, 2022 (April 1, 2021 to June 30, 2021). Accordingly, the Company's accounting method for revenue recognition for the first six-month period of the consolidated fiscal year ending March 31, 2022 differed from those for the first six-month period of the previous consolidated fiscal year. Thereby, in the explanation on operational results for the first six-month period of the consolidated fiscal year ending March 31, 2022, the Company explained net sales without describing the year-on-year amount and percentage changes.

During the first six-month period of the consolidated fiscal year under review (April 1, 2021 to September 30, 2021), the Japanese economy experienced ups and downs amid the intermittent declaration of a State of Emergency. Manufacturing industries showed steady recovery supported by robust demand from overseas, but service businesses, such as restaurants and hotels, were in difficult conditions. On the other hand, the global economy, in general, continued on a recovery path due to the progress of vaccinations against new coronavirus infection (hereinafter "COVID-19"), although the recovery speed varied depending on the country and region. However, the global economic outlook continued to be uncertain due to the spread of COVID-19 variants, a worldwide supply shortage of and rise in prices of components and raw materials, and concerns over geopolitical tensions between the U.S. and China.

Under these circumstances, the Unitika Group has been endeavoring to realize the building of strong business portfolios, promotion of global business development, and a change in business culture and mind-set-the Group's basic policies that place the strengthening of the foundation for a growth phase as the highest priority under "G-STEP30, the 1st," a medium-term management plan.

Consequently, the Group reported net sales of 55,514 million yen (versus net sales of 54,828 million yen in the previous year), operating profit of 3,392 million yen (up 21.2% year on year), ordinary profit of 2,922 million yen (up 81.4% year on year), and profit attributable to owners of parent of 2,214 million yen (down 40.7% year on year) in the first six-month period of the consolidated fiscal year under review. The application of the Accounting Standard for Revenue Recognition, etc. caused net sales to decrease by 1,444 million yen.

Here is an overview of the business results by segment.

[Polymers Segment]

The Polymers Segment suffered negative impacts of soaring raw material and fuel prices, chaos in ocean shipping supply chains, and restraint on people's activity due to the COVID-19 pandemic. However, the segment saw demand, which declined in the previous year due to the pandemic, recover and sales grow steadily throughout the period under review.

In the Films business, the packaging sector saw sales grow steadily in food package applications due to continuous strong demand from staying at home. Furthermore, sales of high-value-added products, such as EMBLEM HG, a barrier nylon film, continued to grow robustly in Japan and overseas. In addition, the adoption of environmentally friendly food package films, which contribute to the reduction of CO2 emissions, also grew. In the industrial sector, sales were robust, mainly in semiconductor-related applications, while sales of high-value-added products, such as UNIPEEL, a silicon-free release PET film, also increased steadily. Accordingly, the Films business saw net sales and profit grow.

In the Plastics business, sales increased supported by a continuing recovery in demand, which decreased due to the impact of the COVID-19 pandemic in the previous year. Sales of nylon resins increased due to a recovery in demand for mainly automotive applications and electrical and electronics applications. Furthermore, sales of U-Polymer, a polyarylate resin, grew robustly for automotive applications and information terminal equipment applications. Sales of XecoT, a high-heat-resistant aromatic polyamide resin, grew steadily due to successful development of a new automotive application. Sales of raw materials for other functional resins were also strong. Accordingly, the Plastics business saw net sales and profit grow.

Consequently, the Polymers segment posted operating profit of 3,818 million yen (up 59.1% year on year) on net sales of 25,151 million yen (versus net sales of 20,193 million yen in the previous year). The application of the Accounting Standard for Revenue Recognition, etc. caused net sales to increase by 1,610 million yen.

[Performance Materials Segment]

The Performance Materials Segment faced negative effects of rising raw material and fuel prices, turmoil in the ocean freight network, the reduction of automobile production due to the shortage of semiconductor supply, and restraint on people's activity due to the COVID-19 pandemic.

In the Activated Carbon Fibers business, sales for mainstay water purifier applications were steady, supported by a recovery in demand for housing-equipment-related applications and VOC removal applications. Sales for environment-related applications grew due to robust demand for electronic-industry-related applications.

In the Glass Fibers business, in the industrial materials sector, sales for electric- and electronic-related material applications recovered. However, sales for building and civil engineering applications, such as tents and sheets, were weak due to a slow recovery from the decline in demand caused by the COVID-19 pandemic. In the electronic materials sector, sales of IC cloth remained robust for semiconductor applications, such as products for information terminal equipment and peripheral equipment. Sales of high-value-added products, including

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