Ichikoh Industries,ltd. TSE:7244

Ichikoh Industries : Consolidated Financial Results for the Second Quarter of the Fiscal Year Ending December 31, 2024

Published August 8, 2024 at 8:10 a.m. UTC

Source: MarketScreener

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Consolidated Financial Resultsfor the Second Quarter of the Fiscal Year Ending December 31, 2024

August 8, 2024

ICHIKOH INDUSTRIES, LTD.

Tokyo Stock Exchange 7 2 4 4

http://www.ichikoh.com/

Christophe Vilatte, President, CEO, Representative director

Masaki Takamori, GM of Corporate Planning Department

TEL: (0463) 96-1442

Filing of Quarterly Financial Report: August 9, 2024

Date for starting dividends payment: September 10, 2024

Quarterly earnings supplementary explanatory documents: Yes

Quarterly earnings presentation: Yes (Institutional Investor, Analyst)

*Amounts under one million yen have been rounded down.

1．Performance at the end of the Second Quarter as of June 30, 2024 (January 1, 2024 to June 30, 2024)

(1) Consolidated Financial Results		(Millions of yen; percentage figures indicate year-on-year change)
			Net Sales		Operating Income			Ordinary Income		quarterly net income (loss)
							attributable to the shareholder
																parent company

					%			%						%		%
2nd Quarter (ended on Jun. 30, 2024)		62,182 △ 17.9	1,758 △ 53.4				2,329	△ 38.4			1,382	△ 45.2
2nd Quarter (ended on Jun. 30, 2023)		75,770	20.4	3,777	236.9				3,783	134.4			2,521	99.1

(Note)	Comprehensive income:
	Jun. 30, 2024	3,821 million yen	(	1.0%)	Jun. 30, 2023	3,782 million yen	( 4.6%)

			Net income per	Net income per share-
			share (Yen)	diluted (Yen)

2nd Quarter (ended on Jun. 30, 2024)		14.37			-
2nd Quarter (ended on Jun. 30, 2023)		26.23			-

(2) Consolidated Financial Position		(Millions of yen; except for per share figures)
			Total Assets	Net Assets			Equity Ratio (%)

															%
2nd Quarter (as of Jun. 30, 2024)		127,223			68,037						52.9
FY2023 (as of Dec. 31, 2023)		129,417			64,730						49.5

[Reference] Equity: Second Quarter as of Jun. 30, 2024 67,239 million yen
	Fiscal Year as of Dec. 31, 2023	64,038 million yen
2. Cash Dividends
							Cash Dividends per share (Yen)

	(Cut-off Date)	1st Quarter	2nd Quarter		3rd Quarter		Year-End		Full Year

FY2023 (ended on Dec. 31, 2023)			-		5.50		-				5.50			11.00

FY2024 (ended on Dec. 31, 2024)			-		6.50
FY2024 (ended on Dec. 31, 2024) [plan]						-				6.50			13.00
Note: Revision to previous dividend forecast : No

3. Consolidated Performance Forecasts for the Fiscal Year 2024 (January 1, 2024 to December 31, 2024)

(Millions of yen; percentages indicate changes over the same period in the previous fiscal year)

	Net Sales		Operating Income	Ordinary Income	quarterly net income (loss)	Net Income
		attributable to the shareholder
		per Share (Yen)
						parent company

		%		%	%		%	yen
Full Year	122,000	△ 16.4	4,700	△ 36.7	5,700 △ 29.9	4,300	△ 45.1	44.71

Note: Revision to previous consolidated performance forecast : Yes

4. Other
(1) Principal affiliates' transfer in this fiscal term (in accordance with the change of consolidation scope)	No
Added	-	(Corporate name)
Excluded	-	(Corporate name)

Application of simple accounting as well as specific accounting for preparing the quarterly consolidated financial statements: Applied
Changes in accounting policies, changes in accounting estimates, and restatement
- Changes in accounting policies due to revisions to accounting standard: No
  ② Changes in accounting policies due to other reasons: No
  ③ Changes in accounting estimates: No
  ④ Restatement: No
Number of issued shares (common stock)
- Number of shares outstanding at the end of the period (including treasury stock)

As of June 30, 2024	96,363,161
As of December 31, 2023	96,334,226

Number of shares of treasury stock at the end of period

As of June 30, 2024	181,340
As of December 31, 2023	180,942

Average number of shares during the period (cumulative)

FY2024 2nd quarter:	96,161,426
FY2023 2nd quarter:	96,130,698

*Quarterly review procedures:

This quarterly financial flash report is out of scope of the review procedures by certified public accountants or auditing firms

*Appropriate use of business forecast; other special items:

Performance Forecasts are based on judgments and estimated that have been made on the basis of currently available information. Change in the company's business environment and in market trends may cause actual result to differ materially from these forecast figures.

1. Qualitative Information on Quarterly Results

(1) Analysis of operating results

The Japanese economy of the consolidated cumulative period of the second quarter of this fiscal year was stagnant due to higher cost burden from the depreciation of the yen, negative impact of the increasing labor costs on corporate profits and sluggish personal consumption attributable to rising prices.

Although personal consumption in the US remained firm due to the wealth effect arising from higher stock prices, business activities of the manufacturing industry declined and the capital investment fell down, and the pace of economic expansion slowed down.

As for ASEAN, the economy in Malaysia remained strong, driven by consumption and IT exports such as semiconductors, but in Indonesia, consumption of durable goods was weak due to high interest, new car sales was sluggish, and momentum of domestic demand slowed down.

In Thailand, the economic recovery continued through the strong overseas demand, but new car sales was sluggish due to the high debt ratio of households.

Under these circumstances, car production volume in this cumulative period of the second quarter decreased year-on-year in mainstay Japan due to the impact of the vehicle certification issue. And car production volume also decreased year-on-year in ASEAN as a whole, due to the decrease in car production volume in Thailand and Indonesia despite the recovery of production in Malaysia.

As a result, for this cumulative period of the second quarter, the ratio of decrease of our sales both in Japan and ASEAN excluding the impact of mirror business transfer was smaller than that of the market, but the impact of certification issues prolonged, and sales decreased to 62,182 million yen (down 17.9% year-on- year). Due to decrease in profits impacted by sales decrease in spite of the efforts to pass-through the increased cost of raw materials caused by inflation and the yen depreciation, operating income was 1,758 million yen (down 53.4% year-on-year), ordinary income was 2,329 million yen (down 38.4% year-on-year) and the net income attributable to shareholders of the parent company was 1,382 million yen (down45.2% year-on-year).

Results by each segment are as follows:

1. Auto-Components business

The ratio of decrease of our sales both in Japan and ASEAN excluding the impact of mirror business transfer was smaller than that of the market, but the impact of certification issues prolonged, and sales was 57,983 million yen (down 19.3% year-on-year). Operating income was 1,580 million yen (down 56.4% year-on-year) due to decrease in profits impacted by sales decrease.

2. After-Market business

Sales was 5,002 million yen (up 5.1% year-on-year) due to price increases in response to inflation and sales growth of dealer option products. Operating income was 206 million yen (up 23.5% year-on-year) due to improvement of profit margins resulting from sales increase and the effect of cost reductions.

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(3) Description of future outlooks such as consolidated earnings forecast

Regarding our earnings forecast, the market trends of the automotive production market remains unpredictable in Japan due to factors such as the prolonged suspension of operations by automotive manufacturers due to certification issues, the progressing inflation caused by the yen depreciation and soaring raw material prices, the impact of the Bank of Japan's shift in monetary easing policy on the economy. As for the second half of the fiscal year, although there will be an impact from a decrease in sales and profits and the recognition of a gain on sale which accompanied the transfer of our subsidiary PIAA, we forecast a recovery in profits compared to the first half by promoting pass-through and rationalization.

Considering the above, the earnings forecast for this fiscal year has been revised as below.

As for the future statements of performance forecast, etc. contained in this material, the statements are based on the information currently available to the company and certain information that the company deems reasonable. Please note that actual results may differ due to various factors

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2. Consolidated Financial Statement

(1) Consolidated Balance Sheets		(Millions of yen)
	Previous Fiscal Year End	Second Quarter End
	(As of December 31, 2023)	(As of June 30, 2024)

Assets
Current assets

Cash and deposits	8,937	9,845
Notes and accounts receivable-trade	24,401	20,613

Electronically recorded monetary claims-operating	379	197
Merchandise and finished goods	4,172	4,013

Work in process	782	1,255
Raw materials and supplies	4,427	4,265

Short-term loans receivable	21,648	19,846
Other	2,671	3,377

Allowance for doubtful accounts	(82)	(54)
Total current assets	67,337	63,360

Noncurrent assets
Property, plant and equipment

Buildings and structures, net	10,803	10,558
Machinery, equipment and vehicles, net	17,337	17,164

Tools, furniture and fixtures, net	2,271	2,616
Land	2,302	2,522

Lease assets, net	3,383	3,291
Construction in progress	3,602	2,754

Total property, plant and equipment	39,701	38,909
Intangible assets

Other	123	104
Total intangible assets	123	104

Investments and other assets
Investment securities	2,958	3,824

Long-term loans receivable	737	811
Deferred tax assets	4,804	4,727

Other	13,757	15,488
Allowance for doubtful accounts	(2)	(2)

Total investments and other assets	22,255	24,849
Total noncurrent assets	62,079	63,863

Total assets	129,417	127,223

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		(Millions of yen)
	Previous Fiscal Year End	Second Quarter End
	(As of December 31, 2023)	(As of June 30, 2024)

Liabilities
Current liabilities

Notes and accounts payable-trade	15,724	14,610
Electronically recorded obligations - operating	16,956	14,920

Short-term loans payable	1,150	800
Current portion of long-term loans payable	920	-

Lease obligations	640	663
Income taxes payable	1,376	349

Accrued expenses	5,480	5,958
Provision for bonuses	910	2,421

Provision for directors' bonuses	25	58
Provision for product warranties	1,764	1,908

Other	8,961	6,346
Total current liabilities	53,910	48,038

Noncurrent liabilities
Lease obligations	3,257	3,089

Retirement benefits	7,296	7,535
Asset retirement obligations	26	26

Other	195	496
Total noncurrent liabilities	10,775	11,148

Total liabilities	64,686	59,186
Net assets

Shareholders' equity
Capital stock	8,996	9,003

Capital surplus	2,515	2,523
Retained earnings	51,536	52,390

Treasury stock	(55)	(56)
Total shareholders' equity	62,993	63,861

Accumulated other comprehensive income
Valuation difference on other securities.	89	137

Foreign currency translation adjustment	2,014	4,195
Adjustment retirement benefits	(1,058)	(954)

Total accumulated other comprehensive income	1,044	3,378
Minority interests	692	797

Total net assets	64,730	68,037
Total liabilities and net assets	129,417	127,223

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(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income

Consolidated Statements of Income		(Millions of yen)
	Previous 2nd Quarter	Current 2nd Quarter
	(January 1, 2023 ~	(January 1, 2024 ~
	June 30, 2023)	June 30, 2024)

Net sales	75,770	62,182
Cost of sales	61,192	51,292

Gross profit	14,578	10,889
Selling, general and administrative expenses	10,800	9,130

Operating income	3,777	1,758
Non-operating income

Interest income	101	80
Dividends income	5	6

Equity in earnings of affiliates	235	927
Other	16	5

Non-operating income	359	1,019
Non-operating expenses

Interest expenses	56	68
Commission paid	3	3

Foreign exchange losses	249	351
Other	44	26

Non-operating expenses	353	448
Ordinary income	3,783	2,329

Extraordinary income
Gain on disposal of noncurrent assets	5	-

Total Extraordinary income	5	-
Extraordinary loss

Loss on disposal of noncurrent assets	280	42
Business restructuring expenses	198	205

Total Extraordinary loss	478	248
Income (loss) before income taxes	3,310	2,081

Income taxes	756	665
Income (loss) before minority interests	2,553	1,415

Minority interests in income	32	33
Quarterly net income (loss) attributable to the shareholder parent	2,521	1,382
company

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Consolidated Statements of Comprehensive Income		(Millions of yen)
	Previous 2nd Quarter	Current 2nd Quarter
	(January 1, 2023 ~	(January 1, 2024 ~
	June 30, 2023)	June 30, 2024)

Income (loss) before minority interests	2,553	1,415
Other comprehensive income

Valuation difference on other securities	3	47
Foreign currency translation adjustment	553	709

Adjustment retirement benefits	71	104
Share of other comprehensive income of associates accounted	598	1,544
for using equity method


Total other comprehensive income	1,228	2,405
Comprehensive income	3,782	3,821

Comprehensive income attributable to
Owners of the parent	3,723	3,716

Minority interests	58	105

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Note on assumptions for going concern There is no item to be reported.
Segment Information
Ⅰ . Previous Second Quarter （January 1, 2023 to June 30, 2023） 1. Sales and profits or losses for each reportable segment

(Millions of yen)

	Segments
			Total
	Automotive	Automotive
	Parts	Aftermarket

Net sales
Domestic	52,064	3,538	55,602
Oversea	19,767	400	20,168

Revenue from contracts with customers	71,831	3,938	75,770

Other income	-	-	-

Sales to Outside Customers	71,831	3,938	75,770
Intersegment Sales or Transfers	1	819	820

TOTAL	71,832	4,758	76,590

Segment income	3,623	167	3,790

2. Total amount for profit and loss in reportable segment and

Details of adjustment in the quarterly consolidated statement (Adjustment amounts and items）

		(Millions of yen)

	Profit		Amount

	Total amount for Segment		3,790
	Elimination for intersegment		△ 12

	Operating income in quarterly consolidated statement	3,777

Ⅱ. Current Second Quarter （January 1, 2024 to June 30, 2024）
1. Sales and profits or losses for each reportable segment
			(Millions of yen)

		Segments
				Total
		Automotive	Automotive
		Parts	Aftermarket

	Net sales
	Domestic	40,335	3,892	44,228
	Oversea	17,648	305	17,953

	Revenue from contracts with customers	57,983	4,198	62,182

	Other income	-	-	-

	Sales to Outside Customers	57,983	4,198	62,182
	Intersegment Sales or Transfers	0	803	803

	TOTAL	57,983	5,002	62,985

	Segment income	1,580	206	1,787

2. Total amount for profit and loss in reportable segment and

Details of adjustment in the quarterly consolidated statement (Adjustment amounts and items）

	(Millions of yen)

Profit		Amount

Total amount for Segment		1,787
Elimination for intersegment		△ 28

Operating income in quarterly consolidated statement		1,758

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( Reference) Summary of Non-consolidated financial results as of June 30,2024 (January 1, 2024 ～ June 30, 2024)

(1) Operating results					(Percentages(%) shows fluctuation to the previous)
	Net Sales	Operating income		Ordinary income		Net income

	million yen	%	million yen	%		million yen	%		million yen	%
30-Jun.24	42,286	△20.9	638	△69.6		547	△73.5		255	△77.2
30-Jun.23	53,448	20.2	2,101	-		2,062	245.0		1,120	139.5

(2) Financial conditions

	Total assets	Net assets		Ratio of		Net assets per share
		shareholders' equity


	million yen	million yen			%			yen
30-Jun.24		86,783		45,367			52.3			471.68
31-Dec.23		92,284		45,626			49.4			474.52

(Reference) Shareholders' equity:
	Jun. 30, 2024	45,367 million yen	Dec. 31, 2023	45,626	million yen

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