Arakawa Chemical Industries,ltd.TSE: 4968

Consolidated Financial Results for the Three Months Ended June 30, 2024

Aug 2, 2024 at 6:19 AM UTC · Issued by Arakawa Chemical Industries,ltd.

Consolidated Financial Results

for the Three Months Ended June 30, 2024

[Japanese GAAP]

August 2, 2024

Company name: ARAKAWA CHEMICAL INDUSTRIES, LTD.

Stock exchange listing: Tokyo Stock Exchange

Code number: 4968

URL: https://www.arakawachem.co.jp/en/

Representative: Nobuyuki Takagi, Representative Director and President

Contact: Toru Nobuhiro, Managing Director

Phone: +81-6-6209-8500

Scheduled date of commencing dividend payments: -

Availability of supplementary explanatory materials on financial results: Available

Schedule of financial results briefing session: Not scheduled

(Amounts of less than one million yen are rounded down.)

1. Consolidated Financial Results for the Three Months Ended June 30, 2024 (April 1, 2024 - June 30, 2024)

(1) Consolidated Operating Results		(% indicates changes from the previous corresponding period.)

	Net sales		Operating profit		Ordinary profit		Profit attributable to
				owners of parent

Three months ended	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
June 30, 2024	19,261	11.3	622	-	806	-	1,799	-
June 30, 2023	17,298	(18.3)	(834)	-	(670)	-	(314)	-

(Note) Comprehensive income: Three months ended June 30, 2024: ¥ 2,411 million [-%]

	Three months ended June 30, 2023: ¥ 212 million [(71.5)%]
	Basic earnings	Diluted earnings
	per share	per share

Three months ended	Yen	Yen
June 30, 2024	90.71	-
June 30, 2023	(15.84)	-

(2) Consolidated Financial Position
	Total assets	Net assets	Equity ratio

	Millions of yen	Millions of yen	%
As of June 30, 2024	123,926	58,854	47.1
As of March 31, 2024	125,418	56,918	44.8

(Reference) Equity: As of June 30, 2024: ¥ 58,428 million As of March 31, 2024: ¥ 56,134 million

2. Dividends

			Annual dividends

	1st quarter-end	2nd quarter-end		3rd quarter-end	Year-end	Total

	Yen	Yen		Yen	Yen	Yen
Fiscal year ended	-	24.00		-	24.00	48.00
March 31, 2024

Fiscal year ending	-

March 31, 2025

Fiscal year ending
March 31, 2025		24.00		-	24.00	48.00
(Forecast)

(Note) Revision to the forecast for dividends announced most recently: None

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2025 (April 1, 2024 - March 31, 2025)

(% indicates changes from the previous corresponding period.)

							Profit attributable	Basic earnings
	Net sales		Operating profit	Ordinary profit		to owners of
				per share
							parent

	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
First half	40,000	15.4	900	-	1,000	-	1,900	-	95.77
(cumulative)

Full year	82,600	14.4	2,200	-	1,900	-	2,100	-	105.85

(Note) Revision to the financial results forecast announced most recently: Yes

* Notes:

Significant changes in the scope of consolidation during the period under review: None
Newly included: - companies (Company name)
Excluded: - companies (Company name)
Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements:
None
Changes in accounting policies, changes in accounting estimates and retrospective restatement
1. Changes in accounting policies due to the revision of accounting standards: None
2. Changes in accounting policies other than 1) above: None
3. Changes in accounting estimates: None
4. Retrospective restatement: None
Total number of issued shares (common shares)
1. Total number of issued shares at the end of the period (including treasury shares):

June 30, 2024:	20,652,400 shares
March 31, 2024:	20,652,400 shares
2) Total number of treasury shares at the end of the period:
June 30, 2024:	813,611 shares
March 31, 2024:	813,611 shares
3) Average number of shares during the period:
Three months ended June 30, 2024:	19,838,789 shares
Three months ended June 30, 2023:	19,838,909 shares

Review of the Japanese-languageoriginals of the attached quarterly consolidated financial statements by certified public accountants or an audit firm:None
Explanation on the proper use of financial results forecast and other special notes

Forward-looking statements, including financial results forecasts, contained in this document are based on information currently available to the Company and certain assumptions deemed reasonable. Therefore, these statements do not constitute a guarantee that they will be realized. Actual results may differ materially from these statements due to various factors.

Quarterly Consolidated Financial Statements and Principal Notes

(1) Quarterly Consolidated Balance Sheets

(Millions of yen)

As of March 31, 2024

As of June 30, 2024

Assets

Current assets

Cash and deposits

Notes and accounts receivable - trade

Electronically recorded monetary claims - operating

Merchandise and finished goods

Work in process

Raw materials and supplies

Other

Allowance for doubtful accounts

Total current assets

Non-current assets

Property, plant and equipment

Buildings and structures, net Machinery, equipment and vehicles, net

Land

Construction in progress

Other, net

Total property, plant and equipment

Intangible assets

Investments and other assets

11,578		9,821
25,683	26,775

2,504		2,397
12,423	12,365
1,603		1,447
9,267	9,015
1,215		961
(116)	(117)
64,159		62,667


17,723	17,623
14,126		13,652
4,996	4,995
1,969		2,062
1,136	1,086
39,952		39,420
1,529	1,485

Investment securities	11,200	11,811
Retirement benefit asset		6,087	6,172
Deferred tax assets	286	255
Other		354	366
Allowance for doubtful accounts	(79)	(82)
Total investments and other assets		17,850	18,523
Total non-current assets	59,332	59,429
Deferred assets
Business commencement expenses	1,927	1,829
Total deferred assets		1,927	1,829
Total assets		125,418	123,926

(Millions of yen)

As of March 31, 2024

As of June 30, 2024

Liabilities

Current liabilities

Notes and accounts payable - trade Electronically recorded obligations - operating Short-term borrowings

Current portion of bonds payable

Income taxes payable

Accrued consumption taxes

Provision for bonuses

Provision for bonuses for directors (and other officers)

Provision for repairs

Provision for loss on business liquidation

Asset retirement obligations

Notes payable - facilities

Other

Total current liabilities

Non-current liabilities

9,478		7,702
1,403	1,370
18,512		17,935
5,000	5,000
434		662
100	147
1,190		623
-	10

732		441
110	82
-		158
297	199
6,146		6,015
43,406	40,349

Bonds payable	5,000	5,000
Long-term borrowings		13,875	13,195
Deferred tax liabilities	3,847	4,304
Retirement benefit liability		299	304
Asset retirement obligations	1,919	1,770
Other		151	147
Total non-current liabilities	25,093	24,722
Total liabilities		68,500	65,071

Net assets

Shareholders' equity

Share capital

Capital surplus

Retained earnings

Treasury shares

Total shareholders' equity

Accumulated other comprehensive income Valuation difference on available-for-sale securities

3,343	3,343
3,564		3,564
38,927	40,250
(1,211)		(1,211)
44,623	45,946

5,173	5,619

Foreign currency translation adjustment		3,530	4,134
Remeasurements of defined benefit plans	2,807	2,727
Total accumulated other comprehensive income		11,511	12,482
Non-controlling interests	783	425
Total net assets		56,918	58,854
Total liabilities and net assets		125,418	123,926

Quarterly Consolidated Statements of Income and Comprehensive Income Quarterly Consolidated Statements of Income
Three Months Ended June 30

			(Millions of yen)

		For the three months ended	For the three months ended
		June 30, 2023	June 30, 2024

Net sales		17,298	19,261
Cost of sales	14,585	15,002
Gross profit		2,712	4,259
Selling, general and administrative expenses	3,547	3,637
Operating profit (loss)		(834)	622
Non-operating income

Interest income		21	30
Dividend income	77	79
Rental income from real estate		10	13
Foreign exchange gains	85	228
Other		59	45
Total non-operating income	254	397
Non-operating expenses
Interest expenses	66	96
Amortization of business commencement expenses		2	99
Other	20	17
Total non-operating expenses		90	213
Ordinary profit (loss)	(670)	806
Extraordinary income
Gain on sale of non-current assets	4	979
Gain on sale of investment securities		38	314
Total extraordinary income	43	1,293
Extraordinary losses
Loss on sale and retirement of non-current assets	36	18
Total extraordinary losses		36	18
Profit (loss) before income taxes	(663)	2,081
Income taxes - current		135	370
Income taxes - deferred	(25)	326
Total income taxes		109	696
Profit (loss)	(773)	1,384
Loss attributable to non-controlling interests		(459)	(414)
Profit (loss) attributable to owners of parent		(314)	1,799

Quarterly Consolidated Statements of Comprehensive Income

Three Months Ended June 30

			(Millions of yen)

		For the three months ended	For the three months ended
		June 30, 2023	June 30, 2024

Profit (loss)	(773)	1,384
Other comprehensive income

Valuation difference on available-for-sale securities	850	445
Foreign currency translation adjustment	189	660

Remeasurements of defined benefit plans, net of tax		(55)	(79)
Total other comprehensive income		985	1,027

Comprehensive income	212	2,411
Comprehensive income attributable to

Comprehensive income attributable to owners of parent	648	2,770
Comprehensive income attributable to non-controlling	(436)	(358)
interests

(3) Quarterly Consolidated Statements of Cash Flows

			(Millions of yen)

		For the three months ended	For the three months ended
		June 30, 2023	June 30, 2024

Cash flows from operating activities
Profit (loss) before income taxes	(663)	2,081

Depreciation		1,370	1,294
Amortization of business commencement expenses	2	99

Increase (decrease) in allowance for doubtful accounts		2	(0)
Increase (decrease) in provision for bonuses	(456)	(574)

Increase (decrease) in provision for bonuses for		-	10
directors (and other officers)

Increase (decrease) in retirement benefit liability

Decrease (increase) in retirement benefit asset

Increase (decrease) in provision for loss on business liquidation

6	5

(66)		(83)
-	(31)

Loss (gain) on sale and retirement of non-current assets		32	(960)
Loss (gain) on sale of investment securities	(38)	(314)

Interest and dividend income		(99)	(109)
Interest expenses	66	96

Decrease (increase) in trade receivables		537	(690)
Decrease (increase) in inventories	(36)	677

Increase (decrease) in trade payables		(1,459)	(1,907)
Increase (decrease) in accrued consumption taxes	195	214

Other, net		(592)	(121)
Subtotal		(1,198)	(317)

Interest and dividends received		97	111
Interest paid	(63)	(96)

Income taxes refund (paid)		(88)	(162)
Net cash provided by (used in) operating activities		(1,253)	(465)

Cash flows from investing activities
Decrease (increase) in time deposits	(30)	676

Purchase of property, plant and equipment		(1,182)	(689)
Proceeds from sale of property, plant and equipment	0	768

Purchase of investment securities		(11)	(11)
Proceeds from sale of investment securities	39	355

Purchase of intangible assets		(13)	(6)
Payments for deferred assets	(9)	-

Decrease (increase) in investments and other assets		(1)	3
Other, net	(0)	(25)

Net cash provided by (used in) investing activities		(1,210)	1,070
Cash flows from financing activities

Net increase (decrease) in short-term borrowings		1,970	(529)
Repayments of long-term borrowings	(355)	(875)

Dividends paid		(476)	(476)
Other, net	(22)	(5)

Net cash provided by (used in) financing activities		1,117	(1,886)
Effect of exchange rate change on cash and cash		103	136
equivalents

Net increase (decrease) in cash and cash equivalents		(1,242)	(1,144)
Cash and cash equivalents at beginning of period		9,286	9,164

Cash and cash equivalents at end of period		8,043	8,020

(4) Notes to Quarterly Consolidated Financial Statements

(Segment information, etc.) [Segment information]

For the three months ended June 30, 2023 (from April 1, 2023 to June 30, 2023) 1. Information on net sales and income or loss by reportable segment

						(Millions of yen)

		Reportable segments
	Functional	Paper	Adhesive &			Others
	Chemicals &	Fine Chemicals		Total
	Coating	Biomass	Total	(Note)
	Environmental	& Electronics
	Chemicals	Materials
	Business


Net sales
Net sales to	3,536	4,708	6,223	2,812	17,281	17	17,298
external customers

Inter-segment sales	-	-	-	-	-	7	7
or transfers


Total	3,536	4,708	6,223	2,812	17,281	24	17,306

Segment income (loss)	33	89	(944)	(98)	(920)	7	(913)

Note: The "Others" category comprises business segments not included in reportable segments, such as non-life insurance business and real estate management.

2. Reconciliation of total income or loss of reportable segments with the amount reported in the quarterly consolidated statements of income and main components of the difference (matters related to adjustments)

	(Millions of yen)

Income	Amount

Total of reportable segments	(920)
Income in "Others" category	7
Variance from the allocation of corporate expenses (Note 1)	223
Corporate research and development expenses (Note 2)	(96)
Non-operating income and expenses (Note 3)	(47)

Operating loss in the quarterly consolidated statements of income	(834)

Notes: 1. The variance from the allocation of corporate expenses primarily represents the difference in the estimated allocation of general and administrative expenses to reportable segments.

Corporate research and development expenses represent new research and development costs not allocated to reportable segments, which are the source of medium- to long-term growth.
Non-operatingincome and expenses primarily consist of items recorded as non-operating income and expenses in reportable segments.

3. Information on impairment losses on non-current assets or goodwill, etc., by reportable segment Not applicable

For the three months ended June 30, 2024 (from April 1, 2024 to June 30, 2024) 1. Information on net sales and income or loss by reportable segment

						(Millions of yen)

		Reportable segments

	Functional	Paper	Adhesive &			Others
	Chemicals &	Fine Chemicals		Total
	Coating	Biomass	Total	(Note)
	Environmental	& Electronics
	Chemicals	Materials
	Business

Net sales
Net sales to	4,059	5,314	6,560	3,309	19,243	18	19,261
external customers

Inter-segment sales	-	-	-	-	-	7	7
or transfers


Total	4,059	5,314	6,560	3,309	19,243	25	19,269

Segment income (loss)	429	583	(493)	270	790	8	798

Note: The "Others" category comprises business segments not included in reportable segments, such as non-life insurance business and real estate management.

	(Millions of yen)

Income	Amount
Total of reportable segments	790
Income in "Others" category	8
Variance from the allocation of corporate expenses (Note 1)	89
Corporate research and development expenses (Note 2)	(93)
Non-operating income and expenses (Note 3)	(172)

Operating profit in the quarterly consolidated statements of income	622

Notes: 1. The variance from the allocation of corporate expenses primarily represents the difference in the estimated allocation of general and administrative expenses to reportable segments.

Corporate research and development expenses represent new research and development costs not allocated to reportable segments, which are the source of medium- to long-term growth.
Non-operatingincome and expenses primarily consist of items recorded as non-operating income and expenses in reportable segments.

3. Information on impairment losses on non-current assets or goodwill, etc., by reportable segment Not applicable

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