Wellnet : Financial Results for the Fiscal Year Ended June 30, 2022(Non-consolidated)

Financial Results

for the Fiscal Year Ended June 30, 2022 [Japanese GAAP] (Non-consolidated)

August 12, 2022

Company name: WELLNET CORPORATION

Stock exchange listing: Tokyo Stock Exchange

Code number: 2428

URL: https://www.wellnet.co.jp

Representative: Kazuhiro Miyazawa, President and Representative Director

Contact: Tatsuya Igarashi, Executive Officer, General Manager of Administrative Division

Phone: [phone]

Scheduled date of annual general meeting of shareholders: September 21, 2022

Scheduled date of commencing dividend payments: September 22, 2022

Scheduled date of filing securities report: September 22, 2022

Availability of supplementary briefing material on financial results: Available

Schedule of financial results briefing session: Yes

										(Amounts of less than one million yen are rounded down.)
1. Financial Results for the Fiscal Year Ended June 30, 2022 (July 1, 2021 to June 30, 2022)
(1) Operating Results								(% indicates changes from the previous corresponding period.)
				Net sales					Operating profit		Ordinary profit					Profit
Fiscal year ended		Million yen	%		Million yen	%		Million yen	%			Million yen	%
June 30, 2022			8,950	1.2				735	29.7			754	13.2				532	35.1
June 30, 2021			8,842	(5.7)				567	(30.6)			666	(19.4)				393	(20.3)
			Basic earnings per		Diluted earnings	Return on equity		Ordinary profit to		Operating profit to
				share			per share			total assets				net sales
Fiscal year ended			Yen				Yen			%					%			%
June 30, 2022			28.25					28.15			7.4					3.4			8.2
June 30, 2021			20.94					20.87			5.6					3.2			6.4
(Reference)	Equity in earnings/loss of affiliates: Fiscal year ended June 30, 2022: ¥- million
										Fiscal year ended June 30, 2021: ¥- million
(2) Financial Position
				Total assets			Net assets		Equity ratio			Net assets per share
				Million yen				Million yen				%					Yen
As of June 30, 2022			23,644				7,410				31.1					390.16
As of June 30, 2021			21,257				7,175				33.4					377.37
(Reference)	Equity:		As of June 30, 2022:		¥7,355 million
				As of June 30, 2021:		¥7,102 million
(3) Status of Cash Flows
				Cash flows from			Cash flows from	Cash flows from				Cash and cash
							equivalents at the end
				operating activities			investing activities	financing activities
									of year
				Million yen				Million yen				Million yen				Million yen
As of June 30, 2022			3,285				(269)				(390)						13,049
As of June 30, 2021			2,599				(1,799)				1,013						10,423

2. Dividends

		Annual dividends			Total	Payout		Dividend
								to
	1st	2nd	3rd
	Year-end	Total		dividends	ratio
	quarter-end	quarter-end	quarter-end			net assets
	Yen	Yen	Yen	Yen	Yen		Million	%	%
		yen
Fiscal year ended	-	0.00	-	15.47	15.47	291	73.9	4.1
June 30, 2021
Fiscal year ended	-	0.00	-	14.13	14.13	266	50.0	3.6
June 30, 2022
Fiscal year ending	-	-	-	-	-			-
June 30, 2023 (Forecast)

3. Financial Results Forecast for the Fiscal Year Ending June 30, 2023 (July 1, 2022 to June 30, 2023)

Regarding the performance forecast, we plan to announce our three-yearmedium-term plan in the near future. Meanwhile, out of consideration for our shareholders, we plan for the dividend payout ratio to continue to be 50% or more. As a result, year-end dividends and annual dividends for the fiscal year ending June 30, 2023 are presented with "-."

* Notes:

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):

As of June 30, 2022: 19,400,000 shares

As of June 30, 2021: 19,400,000 shares

1. Total number of treasury shares at the end of the period: As of June 30, 2022: 547,985 shares
   As of June 30, 2021: 577,865 shares
2. Average number of shares during the period:

Fiscal year ended June 30, 2022: 18,841,127 shares

Fiscal year ended June 30, 2021: 18,814,679 shares

• These financial results are outside the scope of audit procedures by a certified public accountant or an audit corporation.
• Explanation of the proper use of financial results forecast and other notes

As the Company is currently examining the financial results forecast, it plans to disclose them in the near future.

Table of Contents
1. Overview of Business Results, etc..........................................................................................................................	2
(1)	Overview of Business Results ............................................................................................................................	2
(2)	Overview of Financial Position ..........................................................................................................................	2
(3)	Basic Policy for Profit Sharing and Dividends for the Current and Next Fiscal Years ......................................	3
2. Management Policy ................................................................................................................................................	4
3. Basic Principle on the Selection of Accounting Standards .....................................................................................	6
4. Financial Statements and Significant Notes ...........................................................................................................	7
(1)	Balance Sheet .....................................................................................................................................................	7
(2)	Statement of Income...........................................................................................................................................	9
(3)	Statement of Changes in Equity ........................................................................................................................	11
(4)	Statement of Cash Flows ..................................................................................................................................	13
(5)	Notes to Financial Statements ..........................................................................................................................	14
	(Notes on going concern assumption).........................................................................................................	14
	(Additional information) .............................................................................................................................	14
	(Changes in accounting policies) ................................................................................................................	15
	(Notes to balance sheet) ..............................................................................................................................	15
	(Notes to statement of income) ...................................................................................................................	15
	(Notes to statement of changes in equity) ...................................................................................................	16
	(Notes to statement of cash flows) ..............................................................................................................	21
	(Segment information, etc.) ........................................................................................................................	21
	(Per share information) ...............................................................................................................................	23
	(Significant subsequent events) ..................................................................................................................	24
5. Others....................................................................................................................................................................	24
(1)	Changes to Directors ........................................................................................................................................	24
(2)	Others ...............................................................................................................................................................	24

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1. Overview of Business Results, etc.

(1) Overview of Business Results

During the fiscal year under review, the Japanese economy has not fully recovered from the economic downturn caused by the COVID-19 pandemic, and its effects are becoming prolonged, while factors such as increasing geopolitical risks surrounding the situation in Ukraine and monetary tightening in the US have caused resource prices to rise and financial markets to become unstable, and the situation remains unpredictable.

In the Company's main business domain markets, the impact related to transportation-related businesses such as airlines, buses, and railroads has not returned to pre-pandemic levels. At the same time, DX (Digital Transformation) is being actively promoted in a variety of industries and business categories, and the non-face-to-face and non-contact services are increasing, and IT is playing an increasingly important role in society. In the midst of this paradigm shift, the Company has been promoting activities such as "Response to the age of electronic money" and "IT Promotion Solution Project for transportation industry and the MaaS Business" as priority measures, with "paperless" and "cashless" as the keywords, and conducting activities considering a lifestyle-basedfin-tech platform in this context. In addition, we have focused on expanding our "Payment Plus Alpha Platform," including the start of full-scale sales expansion of ekaiin.com (e-member.com), a service that promotes digital transformation of membership management. Also, the consolidation of back-office operations into our Sapporo head office has begun to produce efficiency gains.

As a result of these business activities, for the fiscal year ended June 30, 2022, the Company reported net sales of ¥8,950 million (up 1.2% year on year), operating profit of ¥735 million (up 29.7% year on year), ordinary profit of ¥754 million (up 13.2% year on year), and profit of ¥532 million (up 35.1% year on year).

1. Overview of Financial Position
2. 1. Status of assets, liabilities, and net assets (Assets)

   Current assets as of June 30, 2022 stood at ¥16,864 million. This mainly comprises cash and deposits of ¥13,129 million, deposits paid of ¥2,637 million and accounts receivable - trade of ¥537 million. Cash and deposits include ¥10,170 million of receiving agency deposits in money collection business, which is the money kept temporarily and separately by the Company up to the predetermined date of transfer to operators in the following month. Meanwhile, non-current assets amounted to ¥6,778 million. This mainly comprises buildings of ¥2,274 million, land of ¥1,739 million, guarantee deposits of ¥1,449 million, and software of ¥564 million. As a result, total assets amounted to ¥23,642 million.

(Liabilities)

Current liabilities as of June 30, 2022 stood at ¥14,205 million. This mainly comprises receiving agency deposits of ¥10,170 million and deposits received of ¥2,857 million. Meanwhile, non-current liabilities amounted to ¥2,026 million. This mainly comprises long-term borrowings of ¥1,800 million. As a result, total liabilities amounted to ¥16,231 million.

(Net assets)

Net assets as of June 30, 2022 stood at ¥7,410 million. This mainly comprises shareholders' equity of ¥7,353 million.

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(Reference) Cash and deposits, net (net balance of cash and deposits after offsetting receiving agency deposits related to money collection business)

		(Million yen)
	As of June 30, 2021	As of June 30, 2022
(A) Cash and deposits	10,503	13,129
(B) Receiving agency deposits	8,349	10,170
(A)-(B) Cash and deposits, net	2,154	2,958

2) Status of cash flows

Cash and cash equivalents (the "funds") as of June 30, 2022 stood at ¥13,049 million. The status of cash flows as of June 30, 2022 and their contributing factors are as follows.

(Cash flows from operating activities)

Funds provided in operating activities for the fiscal year ended June 30, 2022 amounted to ¥3,285 million. The main factors for the increase are profit before income taxes of ¥770 million, recording of depreciation of ¥450 million and an increase in receiving agency deposits of ¥1,820 million, while the main factor for the decrease is an increase in deposits paid of ¥513 million.

(Cash flows from investing activities)

Funds used in investing activities for the fiscal year ended June 30, 2022 amounted to ¥269 million. The main factor for the decrease is the purchase of property, plant and equipment of ¥151 million.

(Cash flows from financing activities)

Funds used in financing activities for the fiscal year ended June 30, 2022 amounted to ¥390 million. The main factor for the decrease is dividends paid of ¥290 million.

(3) Basic Policy for Profit Sharing and Dividends for the Current and Next Fiscal Years

We plan for the dividend payout ratio to be 50% or more. Accordingly, the Company plans to issue ¥14.13 per share for the current fiscal year. The dividend forecast for the next fiscal year will be disclosed in the near future.

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