Hanwa Co., Ltd. · TSE:8078
Hanwa — Q1 FY2024 Earnings Presentation
22 slides from Hanwa's earnings presentation, Aug 8, 2024
Slide 1: Outline of Financial Results for the First Quarter ended June 30, 2024
Outline of Financial Results for the First Quarter ended June 30, 2024 August 2024 HANWA CO., LTD. Copyright© 2024 Hanwa Co., Ltd. All Rights Reserved
Slide 2: Agenda
1. Summary of FY2024 Q1 Financial Results and Progress 2. Details by Business Segment 3. Progress on Medium-Term Business Plan 2025 * From FY2024 Q1, due to our organizational changes effective April 1, 2024, the Company has reviewed its reporting segment classification and transferred a part of “St
Slide 3: 1. Summary of FY2024 Q1 Financial Results and Progress
1. Summary of FY2024 Q1 Financial Results and Progress Copyright© 2024 Hanwa Co., Ltd. All Rights Reserved 2
Slide 4: Summary of Consolidated Financial Results
Summary of Consolidated Financial Results Ordinary income for FY2024 Q1 was 12.3 bil. yen, making 21% progress toward the full-year forecast of 60 bil. yen. The full-year forecast remained unchanged. FY2023 FY2024 Y on Y FY2024 (billions of yen) Progress Q1 Results Q1 Results change (Rate) Forecas
Slide 5: Segment Information (Consolidated)
Segment Information (Consolidated) （billions of yen） FY2023 FY2024 Y on Y Change Ordinary Income by Segment Business Segments (Y on Y Rate) Main Factors Q1 Q1 16.0 Lower transaction volumes due to a decline in housing starts -0.5 Steel 8.2 7.7 and other factors, as well as higher labor costs, weighe
Slide 6: Segment Ordinary Income compared to Forecast
Segment Ordinary Income compared to Forecast （billions of yen） FY2024 Forecast Rate against Rate against Business FY2024 Q1 1st Half Full year Progress Segments 1st Half 2nd Half Full year Results Forecast Forecast The price of steel remained relatively stable, and the domestic construction sector c
Slide 7: Impacts of Profits/Losses from Market Value Accounting and Temporary Factors
Impacts of Profits/Losses from Market Value Accounting and Temporary Factors Actual ordinary income was 15.6 bil. yen (up 1.9 bil. yen year on year), while accounting ordinary income was 12.3 bil. yen. In FY2023, actual ordinary income was 13.7 bil. yen, while accounting ordinary income was 16.0
Slide 8: Financial Position (Consolidated)
Financial Position (Consolidated) （billions of yen） Change Mar. 2024 June. 2024 Main Factors （Rate） +10.4 Increased due to increase in inventories and Total Assets 1,166.9 1,177.4 investment securities, etc. (+1%) +3.2 Shareholder's Equity 304.2 307.5 (+1%) Increased due to accumulation of retained
Slide 9: Investments Updates FY2024 Q1
Investments Updates FY2024 Q1 Cum. amount during Amount FY2024 Q1 Segments Major Investment Projects “Mid-Term plan 2025” (bil. Yen) (Total budget 80 bil.yen) Steel 102 2.6億円 Construction of new factories at the overseas coil center subsidiary 13 Metal Recycling 5 0.1 億円 Capital investment to expand
Slide 10: Reducing Strategic Shareholdings
Reducing Strategic Shareholdings Sold shares in 7 companies, maintaining the value of strategic shareholdings at less than 20% of consolidated net assets as of the end of June 2024. Continue divestments to achieve a further reduction in terms of capital efficiency and asset replacement. Mar. 202
Slide 11: 2. Details by Business Segment
2. Details by Business Segment Copyright© 2024 Hanwa Co., Ltd. All Rights Reserved 10
Slide 12: Steel Business Segment
Steel Business Segment The Sales declined due to lower volume of steel sheet and wire rod handled, while domestic construction remained strong. Income decreased due to lower transaction volume and higher labor costs, although steel prices remained at the same level as 2023 Q1. （thousand tons） FY2023
Slide 13: Primary Metal Business Segment
Primary Metal Business Segment Sales and earnings decreased due to lower transaction volumes, lower market prices for various products and higher transportation costs, despite higher equity earnings from Samancor Chrome Holdings Proprietary Limited. （thousand tons） FY2023 FY2024 Y on Y Change Transa
Slide 14: Metal Recycling Business Segment
Metal Recycling Business Segment Sales increased due to higher transaction volume of gold bullion and copper scrap, but income decreased due to lower market price of nickel compared to FY2023 Q1. （thousand tons） FY2023 FY2024 Y on Y Change Transaction Volumes (unconsolidated) (billions of yen) Q1 Q1
Slide 15: Foods Business Segment
Foods Business Segment Sales increased due to higher food prices, especially for crab, compared to FY2023 Q1. Income decreased due to higher procurement costs resulting from the depreciation of the yen and other factors. （thousand tons） FY2023 FY2024 Y on Y Change Transaction Volumes (unconsolidated
Slide 16: Energy & Living Materials Business Segment
Energy & Living Materials Business Segment Sales and income increased due to significant increase in bunker oil and urea transaction volumes. （thousand tons） FY2023 FY2024 Y on Y Change Transaction Volumes (unconsolidated) Bunker oil Heavy oil (billions of yen) Q1 Q1 （Y on Y Rate） Light oil / Kerose
Slide 17: Overseas Sales Subsidiaries Segment
Overseas Sales Subsidiaries Segment Sales increased due to an increase in new business in China and a new consolidated company, but income decreased due to sluggish steel market conditions, mainly in Asia. （thousand tons） FY2023 FY2024 Y on Y Change Steel Transaction Volumes (billions of yen) Q1 Q1
Slide 18: Other Segment
Other Segment Housing Materials :Although sales decreased due to a slight decrease in transaction volume, income increased due to an increase in high-margin products for wooden houses. Machinery :Sales and income decreased due to a decrease in large projects compared to FY2023 Q1. （billions of yen）
Slide 19: Actual Ordinary Income by Segment
Actual Ordinary Income by Segment （billions of yen） Rate against Accounting Valuation and Temporary Items Actual FY2024 Forecast Segments Net Sales Ordinary Foreign Ordinary Income Inventory Derivative Other One-time Income Exchange 1st Half Full year Valuation Valuation Factors Valuation Steel 293.
Slide 20: 3. Progress on Medium-Term Business Plan 2025
3. Progress on Medium-Term Business Plan 2025 Copyright© 2024 Hanwa Co., Ltd. All Rights Reserved 19
Slide 21: Progress on Targets of the Medium-Term Business Plan
Progress on Targets of the Medium-Term Business Plan （billions of yen） FY2023 FY2024 FY2025 Ordinary Income by Segment Results Targets Targets 70 Net Sales 2,431.9 2,800.0 3,200.0 2.5 Steel 24.5 27.0 31.0 60 12.0 2.0 Primary Metal 8.4 13.0 13.0 8.0 Metal Recycling 2.1 3.0 4.0 48.2 13.0 Ordinary Food
Slide 22: HANWA CO., LTD.
Run Up to HANWA 2030 HANWA CO., LTD. This presentation contains forward-looking statements concerning future results, performance and achievements that are subject to risk and uncertainties and reflect management’s views and assumptions formed by available information. Consequently, due to a range o