Financial Results for the Second Quarter of the Fiscal Year Ending March 31, 2025(With transcripts)（1MB）

Profit attributable to

owners of parent

*Unless otherwise stated, figures in this document are rounded down to the nearest unit, and percentages and percentage changes are rounded off.

If the YoY change % exceeds 1,000%, or if one or both of the comparison targets are negative, this is indicated with "-".

Copyright(C)Inaba Denki Sangyo Co., Ltd. All rights reserved.

Nov 28, 2024 at 4:32 AM UTC · Issued by Inaba Denkisangyo Co., Ltd.

Financial Results for the FY2024 2Q

This document is a translation of the original Japanese document and is only for reference purposes. In the event of any discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Inaba Denki Sangyo Co., Ltd.

Tokyo Stock Exchange Prime: 9934

This document is a translation of the original Japanese document and is only for reference purposes. In the event of any discrepancy between this translated document and the original Japanese document, the latter shall prevail.

I'm Kita, the President and Representative Director.

Thank you for attending this presentation.

I would like to explain Inaba Denki Sangyo Co., Ltd.'s "Financial Results for the Second Quarter of the Fiscal Year Ending March 31, 2025".

- 1 -

Contents

Financial Results for the FY2024 2Q
Initiatives for Priority Measures
Earnings Forecast for the FY2024

*Forward-looking statements such as forecasts, plans and targets are based on information currently available to the Group and on certain assumptions that the Group deems reasonable. Actual results may differ significantly from these forecasts due to various factors.

First, I would like to give you an overview of our financial results for the second quarter of the fiscal year ending March 31, 2025.

After that, I will explain the initiatives for priority measures and earnings forecasts.

- 2 -

Consolidated Statements of Income

Net sales Gross profit SG&A Operating profit

Non-operating income and expenses

Ordinary profit

Extraordinary income and losses

Profit before income taxes

				(Millions of yen)
FY23	% of	FY24	% of	YoY change	YoY change
2Q	Net sales	2Q	Net sales	amount	%
158,787	100%	179,729	100%	20,942	13.2%
27,190	17.1%	31,335	17.4%	4,144	15.2%
17,391		19,509		2,117	12.2%
9,799	6.2%	11,826	6.6%	2,026	20.7%
879		591		(288)	(32.8%)
10,679	6.7%	12,417	6.9%	1,738	16.3%
290		(174)		(464)	-
10,969	6.9%	12,243	6.8%	1,273	11.6%

The slide shows the consolidated statements of income.

Net sales increased 13.2% year on year to ¥ 179.729 billion.

Gross profit increased 15.2% to ¥ 31.335 billion, and the gross profit rate rose 0.3 percentage points to 17.4%.

Despite increases in personnel expenses and freight charges, operating profit increased 20.7% to ¥11.826 billion.

Ordinary profit increased 16.3% to ¥12.417 billion.

Profit attributable to owners of parent increased 12.7% to ¥8.438 billion. The second quarter financial results set a record.

- 3 -

Business Results by Segment
■ Proprietary Products
■ Industrial Automation
■ Electrical Equipment & Materials
Net sales			(100 millions of yen)	Segment profit		(100 millions of yen)
				430
			356	180
292	333	363	193					82
184					70
132	161					76

						68
								8
				1,187	58
			1,038			10
833	832	892
			6	8		56
					3	41

						26
					24
					19

FY20	FY21	FY22	FY23	FY24	FY20	FY21	FY22	FY23	FY24
2Q	2Q	2Q	2Q	2Q	2Q	2Q	2Q	2Q	2Q
* Accounting Standards for Revenue Recognition have been applied from FY21. These standards have not been applied retroactively to FY20 or earlier.
Copyright(C)Inaba Denki Sangyo Co., Ltd. All rights reserved.					4

This slide shows the performance trends of each segment.

There are three main segments: Electrical Equipment & Materials and Industrial Automation in the Trading Companies division, and Proprietary Products in the Manufacturing division.

As you can see, our trading company division account for a large portion of our sales while our manufacturing division "Proprietary Products" segment is the main pillar of our earnings structure.

Next, I will explain the performance of each segment.

- 4 -

Electrical

Net sales

892

Equipment & Materials
(100 millions of yen)	Net sales +14.3％ YoY

	Sales increased as selling prices continued to increase due to
1,187	soaring distribution costs and raw materials prices.
1,038	By product category, the sharp rise in copper prices contributed
significantly to sales of electric wire cables. In addition, disaster
	prevention equipment and power distribution equipment were
	delivered to large-scale projects such as redevelopment projects
	in the western Japan area and replacement of manufacturing
	facilities.

			Reference index	YoY

				FY23 2Q	FY24 2Q
			Floor area of non-residential	(18.5%)	(9.6%)
			private buildings

			Number of	(6.2%)	(0.8%)
FY22	FY23	FY24	new housing starts

2Q	2Q	2Q	Source: Ministry of Land, Infrastructure, Transport and Tourism

Copyright(C)Inaba Denki Sangyo Co., Ltd. All rights reserved.			5

First, I would like to explain the performance of Electrical Equipment & Materials.

Electrical Equipment & Materials sells equipment such as electric wire cables, lighting, and power distribution equipment to office buildings, commercial facilities, logistics center, factories, and residences.

Net sales increased 14.3% year on year to ¥ 118.7 billion.

Sales increased as selling prices continued to increase due to soaring distribution costs and raw materials prices.

By product category, the sharp rise in copper prices contributed significantly to sales of electric wire cables. In addition, disaster prevention equipment and power distribution equipment were delivered to large-scale projects such as redevelopment projects in the western Japan area and replacement of manufacturing facilities.

- 5 -

Electrical Equipment & Materials - Electric Wire
❚ Copper prices			❚ Copper wire shipment volume
			(construction and wire sales)
	（10,000 yen / ton）		（1,000 tons）
	+20.6％		（2.8％）
	YoY
			YoY

			144	145	141
	Previous year	Current year
	first half	first half
	average	average
	124.1	149.7
FY22	FY23	FY24
FY22	FY23	FY24	FY22	FY23	FY24	（September
2Q	2Q	2Q
	Source: JX Advanced Metals Corporation	estimate）

			Source: The Japanese Electric Wire & Cable Makers' Association
Copyright(C)Inaba Denki Sangyo Co., Ltd. All rights reserved.					6

This slide shows the copper market situation for wire.

The line graph on the left shows the domestic price of copper.

The bar graph on the right shows the trend of copper wire shipment volume in the construction and wire sales industry.

Copper prices maintained a high level, with an average year-on-year increase of 20.6% in the first six months.

Shipments of wire for the construction and wire sales industry are expected to decrease year on year. However, our sales volume exceeded the industry average due to the optimization of selling prices, inventory measures, and sales efforts, and sales of electric wire cables increased by approximately 17% year on year.

- 6 -

Industrial Automation

Net sales		(100 millions of yen)
184	193	180

FY22	FY23	FY24
2Q	2Q	2Q
Copyright(C)Inaba Denki Sangyo Co., Ltd. All rights reserved.

Net sales	(6.7％) YoY
In the manufacturing industry, capital investment remained firm
backed by demand for labor-saving and automation due to
labor shortages.
However, sales of control equipment and electronic
components declined due to the continued impact of inventory
adjustments in semiconductors caused by a rebound from the
stay-at-home demand of the COVID-19 pandemic.
Reference index	YoY

		FY23 2Q	FY24 2Q
Electrical control equipment	+3.8%	(22.4%)
domestic shipment value
		FY23	FY24
		August	August
Electronic components and	cumulative total	cumulative total
(7.7%)	+11.8%
devices production results

Source: Nippon Electric Control Equipment Industries Association
Japan Electronics and Information Technology Industries Association
			7

Next, I would like to explain the performance of Industrial Automation.

Industrial Automation, which handles control equipment and electronic components, is affected by trends in capital investments in Japan.

Net sales decreased 6.7% year on year to ¥18.0 billion.

In the manufacturing industry, capital investment remained firm backed by demand for labor- saving and automation due to labor shortages.

However, sales of control equipment and electronic components declined due to the continued impact of inventory adjustments in semiconductors caused by a rebound from the stay-at- home demand of the COVID-19 pandemic.

- 7 -

Proprietary Products
Net sales +20.6％ YoY		Air Conditioning Sector
	Net sales	+25.6％ YoY
■ Housing Sector
■ Industrial Sector			The primary source of revenue that accounted for more
■ Air Conditioning Sector	(100 millions of yen)
than 70% in Proprietary Products

		430	Reference index	YoY
363	356	44			FY23 2Q	FY24 2Q
49	Room air conditioning systems
45	45	(8.9%)	+9.0%
	domestic shipments
54	44				Source: The Japan Refrigeration and
					Air Conditioning Industry Association
		335	Industrial Sector
263	267	Net sales	+12.4％ YoY

			Sales increased due to strong sales of in-vehicle equipment
FY22	FY23	FY24	Housing Sector
Net sales	(0.9％) YoY
2Q	2Q	2Q
Sluggish sales due to a decrease in new housing starts

Copyright(C)Inaba Denki Sangyo Co., Ltd. All rights reserved.				8

Next, I would like to explain the performance of Proprietary Products. Proprietary Products consists of 3 brands.

"INABA DENKO" in the air conditioning sector, "Abaniact" in the housing sector,

and "PATLITE" in the industrial sector.

Net sales increased 20.6% year on year to ¥ 43.0 billion.

By sector, sales in the air conditioning sector increased 25.6% year on year to ¥ 33.5 billion. Against the backdrop of rising production and distribution-related costs, including raw materials prices, we implemented price revisions for air conditioning parts and materials. In addition, sales of mainstay products such as insulated copper tubes and decorative covers for air conditioning piping "SLIMDUCT Series" were strong due to an increase in room air conditioning systems shipments.

Net sales in the industrial sector increased 12.4% year on year to ¥4.9 billion.

Net sales increased due to a recovery trend in the global market and the launch of new products in the automotive segment.

In the housing sector, sales were sluggish amid a decrease in new housing starts, and net sales declined 0.9% year on year to ¥4.4 billion.

We are working to further strengthen our development functions and develop new products that will become a new pillar of earnings to change our sales currently focused on the air conditioning sector.

Non-operating Income and Expenses
				(Millions of yen)
FY23		FY24	YoY change	YoY change
2Q		2Q	amount	%
Dividend income	431	514	83	19.3%
Foreign exchange gains	336	-	(336)	(100%)
Other	174	252	77	44.1%
Non-operating	942	766	(176)	(18.7%)
income（Ａ）

Interest expenses	8	10	1	18.6%
Foreign exchange losses	-	110	110	-
Other	54	53	(0)	(0.4%)
Non-operating	62	174	111	177.4%
expenses（Ｂ）

Net non-operating income	879	591	(288)	(32.8%)
and expenses（Ａ－Ｂ）

Copyright(C)Inaba Denki Sangyo Co., Ltd. All rights reserved.				9

Next, I would like to explain our non-operating income and expenses.

Non-operating income decreased by ¥176 million and non-operating expenses increased by ¥111 million compared to the same period of the previous year.

This is because foreign exchange gains recorded in the same period of the previous year turned to a loss.

As a result, we recorded Net non-operating income of ¥591 million, a decrease of ¥288 million from the same period of the previous fiscal year.

Extraordinary Income and Losses
	FY23
	2Q
Gain on sale of investiment	288
securities

Gain on sale of non-current	6
assets

Extraordinary income（Ａ）	294
Loss on retirement of	4
non-current assets

Loss on sale of non-current	0
assets

Other	-
Extraordinary losses（Ｂ）	4
Net extraordinary income	290
and losses（Ａ－Ｂ）

Copyright(C)Inaba Denki Sangyo Co., Ltd. All rights reserved.

		(Millions of yen)
FY24	YoY change	YoY change
2Q	amount	%
-	(288)	(100%)
1	(4)	(77.3%)
1	(293)	(99.5%)
1	(2)	(56.8%)
-	(0)	(100%)
173	173	-
175	171	-
(174)	(464)	-

Our extraordinary income and losses were as shown here.

Extraordinary income decreased by ¥293 million due to a reactionary decline following the recording of gain on sale of investment securities in the same period of the previous fiscal year.

An impairment loss was recorded on assets to be sold in Proprietary Products, resulting in an increase of ¥171 million in extraordinary losses.

As a result, we recorded Net extraordinary losses of ¥174 million, a decrease in profit of ¥464 million year on year.

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