Iwatani : Overview of Business Results for 1Q FY24

About this update from Iwatani Corporation

Note: This document is a translation of a part of the original Japanese version and provided for reference purposes only. In the event of any discrepancy between the Japanese original and this English translation, the Japanese original shall prevail. Consolidated Financial Results for the Three Months Ended June 30, 2024 [Japanese GAAP] August 9, 2024 Company name: IWATANI CORPORATION Stock exchange listing: Tokyo Code number: 8088 URL: https://www.iwatani.co.jp/ Representative: Hiroshi Majima President Contact: Tetsuo Matsuo General Manager Accounting Dept. Phone: 06-7637-3325 Scheduled date of commencing dividend payments: - Availability of supplementary briefing material on financial results: Yes Schedule of financial results briefing session: Yes (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 to 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 Million yen % Million yen % Million yen % Million yen % June 30, 2024 197,519 (2.2) 8,419 (1.1) 15,038 41.7 11,601 61.7 June 30, 2023 201,909 (0.9) 8,512 (3.6) 10,614 (6.3) 7,172 (12.3) (Note) Comprehensive income: Three months ended June 30, 2024: ¥ 17,533 million[ 13.5%] Three months ended June 30, 2023: ¥ 15,445 million[ 28.4%] Basic earnings Diluted earnings per per share share Three months ended Yen Yen June 30, 2024 201.67 - June 30, 2023 124.69 - (2) Consolidated Financial Position Total assets Net assets Capital adequacy ratio As of Million yen Million yen % June 30, 2024 833,780 382,880 44.6 March 31, 2024 834,391 372,930 43.4 (Reference) Equity: As of June 30, 2024: ¥ 372,149 million As of March 31, 2024: ¥ 362,328 million 2. Dividends Annual dividends 1st 2nd 3rd Year-end Total quarter-end quarter-end quarter-end Yen Yen Yen Yen Yen Fiscal year ended March 31, 2024 - - - 130.00 130.00 Fiscal year ending March 31, 2025 - Fiscal year ending March 31, 2025 - - 32.50 32.50 (Forecast) (Note) 1. Revision to the forecast for dividends announced most recently: No The Company plans to carry out a 4-for-1 stock split of its common share, with an effective date of October 1, 2024. The year-end dividend per share forecast for the fiscal year ending March 31, 2025 takes into account the impact of this stock split. The year-end dividend forecast for the fiscal year ending March 31, 2025 that does not take into account the stock split is 130.00 yen. One of the company's divedend policies is to distribute 20% of profit of Cosmo Energy HD, excluding the impact of inventory valuation factors and multiplied by the shareholding ratio. Dividends under this policy are not included in annual dividends for the fiscal year ending March 31, 2025(Forecast). 3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2025(April 1, 2024 to March 31, 2025) (% indicates changes from the previous corresponding period.) Net sales Operating profit Ordinary profit Profit attributable to Basic earnings owners of parent per share Million yen % Million yen % Million yen % Million yen % Yen Full year 902,000 6.4 52,700 4.1 72,800 10.0 54,000 14.0 234.67 (Note) 1. Revision to the financial results forecast announced most recently: No 2. The Company plans to carry out a 4-for-1 stock split of its common share, with an effective date of October 1, 2024. The basic earnings per share in the consolidated financial results forecast for the fiscal year ending March 31, 2025 take into account the impact of this stock split. The basic earnings per share for the fiscal year ending March 31, 2025 that do not take into account the stock split is 938.67 yen. Notes: (1) Significant changes in the scope of consolidation during the period: Yes New 2 Companies Exclusion: 3 Companies Accounting policies adopted specially for the preparation of quarterly consolidated financial statements: No Changes in accounting policies, changes in accounting estimates and retrospective restatement Changes in accounting policies due to the revision of accounting standards: Yes Changes in accounting policies other than 1) above: No Changes in accounting estimates: No Retrospective restatement: No (Note) For details, please refer to "2. Quarterly Consolidated Financial Statements and Notes (3) Explanatory Notes to Quarterly Consolidated Financial Statement (Notes to Changes in Accounting Policies)" on page 8 of the attached document. (4) 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: 58,561,649 shares March 31, 2024: 58,561,649 shares 2) Number of treasury shares at the end of the period: June 30, 2024: 1,034,065 shares March 31, 2024: 1,033,325 shares 3) Average number of shares outstanding during the period: Three months ended June 30, 2024: 57,527,811 shares Three months ended June 30, 2023: 57,524,159 shares *1. Review of the Japanese-language originals of the attached consolidated quarterly financial statements by certified public accountants or an audit firm ： Yes (voluntary) *2. Cautionary Statement with Respect to Forward-Looking Statements, and Other Information (Caution regarding forward-looking statements) The forward-looking statements, such as results forecasts, included in this document are based on information currently available to the Company and assumptions considered reasonable, and do not purport to be a promise by the Company to achieve such results. Actual results may differ materially, depending on a range of factors. For the assumptions prerequisite to the results forecasts and the points to be noted in the use of the results forecasts, please see "1. Overview of Operating Results, Etc. (3) Consolidated Financial Results Forecasts" on page 3. Contents Overview of Operating Results, Etc. …………………………………………………………………………… 2 Overview of Operating Results for the Three Months Ended June 30, 2024 ……………………………. 2 Segment Information …………………………….……………….……………….……………….……. 2 (3) Overview of Financial Position for the Three Months Ended June 30, 2024 …………………………… 3 (4) Consolidated Financial Results Forecasts ………………………………………………………………... 3 Quarterly Consolidated Financial Statements and Notes .……………………………………………………… 4 Quarterly Consolidated Balance Sheets ………………………………………………………………….. 4 Quarterly Consolidated Statements of Income and Comprehensive Income …………………………….. 6 Explanatory Notes to Quarterly Consolidated Financial Statements …………………………………….. 8 (Notes to Changes in Accounting Policies) ………………………………………………………………. 8 (Notes to Segment Information, Etc.) …………………………………………………………………… 8 (Notes in the Event of Significant Changes in Shareholders' Equity) …………………………………… 9 (Notes on the Assumption of a Going Concern) ………………………………………………………… 9 (Notes to Quarterly Consolidated Statements of Cash Flows) …………………………………………… 9 (Notes to Significant Subsequent Events) ……………………………………………………………….. 10 (Notes to Additional Information) ……………………………………………………………………….. 10 Additional Information …………………………………………………………………………………………. 11 Results for 1Q FY2024 ………………………………………………………………………………………... 11 Consolidated Statements of Income ……………………………………………………………………… 11 Operating Profit Except for Impact of LPG Import Price Fluctuation …………………………………… 11 LPG Import Price (CP) …………………………………………………………………………………… 11 Segment Information ……………………………………………………………………………………... 11 LPG and Industrial Gases Net Sales -Sales Volume ……………………………………………………... 12 Financial Position ………………………………………………………………………………………… 12 Capital Expenditure ………………………………………………………………………………………. 12 Amount of share of profit or loss of Cosmo accounted for using equity method ………………………... 12 Non-consolidated …………………………………………………………………………….…………… 12 - 1 - Overview of Operating Results, Etc. (1) Overview of Operating Results for the Three Months Ended June 30, 2024 During the cumulative first quarter of the current fiscal year, the Japanese economy continued to recover gradually, with signs of a pick-up in personal consumption due to an improvement in the income environment, and capital investment also remaining strong against the backdrop of improving corporate earnings, despite the uncertainty surrounding the future due to exchange rate fluctuations and rising prices. Under these circumstances, Iwatani (hereinafter referred to as the "Company") expanded its business to achieve its basic policies of "solutions to social issues" and "sustained growth" in accordance with its medium-term management plan, "PLAN27," which ends in the fiscal year ending March 31, 2028. In order to realize a hydrogen energy-based society, the Company opened the Iwatani Cosmo Hydrogen Refueling Station Heiwajima, the first hydrogen-refueling station located within a truck terminal in Japan. We have also taken steps to expand demand for hydrogen, for instance, starting construction of a new hydrogen station for commercial vehicles in Tokyo. In the Integrated Energy Business, the Company has begun the operation of a cylinder filling station constructed within the Negishi Liquefied Gas Terminal, an LPG import terminal. We will carry out import, filling, and distribution on the same premises to improve logistics efficiency and strengthen our supply system and profitability in the Kanto and Tokyo metropolitan areas. In the Industrial Gases & Machinery Business, we opened a new gas center in Singapore with expanded manufacturing capacity for helium, semiconductor material gases, air separation gases, etc. and will promote business expansion in Southeast Asia. In the Materials Business, we strengthened sales of biomass fuels to domestic power plants. As a result, for the first quarter of the current fiscal year, net sales were 197.519 billion yen (-4.389 billion yen year-on-year), operating profit was 8.419 billion yen (-0.093 billion yen year-on-year), ordinary profit was 15.038 billion yen (+4.423 billion yen year-on-year), and profit attributable to owners of parent was 11.601 billion yen (+4.428 billion yen year-on-year). Segment Information Integrated Energy In the Integrated Energy Business, the LPG import prices were higher than those in the previous fiscal year, sales prices rose, and sales volume of industrial LPG remained strong, resulting in an increase in revenue. On the other hand, profits increased as the profitability of LPG improved in the wholesale sector while declining in the retail sector, and LPG price fluctuation had a positive impact (+1.658 billion yen year-on-year). As a result, net sales in this segment were 82.567 billion yen (+5.606 billion yen year-on-year), and operating profit was 3.267 billion yen (+1.666 billion yen year-on-year). Industrial Gases & Machinery In the Industrial Gases & Machinery Business, sales of air separation gases remained strong mainly for the electronic components industries. In the hydrogen business, the sales volume of liquid hydrogen for space development increased. On the other hand, the profitability of specialty gases declined due to the weakening of helium markets, mainly in Asia. In machinery and equipment, sales of automobile-related equipment and gas supply facilities decreased. As a result, net sales in this segment were 60.371 billion yen (-1.811 billion yen year-on-year), and operating profit was 3.286 billion yen (-1.613 billion yen year-on-year). - 2 - Materials In the Materials Business, sales of resin products, mainly for air conditioners, increased, and in the mineral sands business overseas, production and sales at our own mining sites remained strong. On the other hand, sales of stainless steel and rechargeable battery materials for next-generation automobiles were sluggish due to factors such as falling market prices and inventory adjustments at sales destinations. As a result, net sales in this segment were 47.316 billion yen (-8.004 billion yen year-on-year), and operating profit was 2.529 billion yen (-0.240 billion yen year-on-year). Others Net sales were 7.263 billion yen (-0.180 billion yen year-on-year), and operating profit was 0.788 billion yen (+0.177 billion yen year-on-year). Overview of Financial Position for the Three Months Ended June 30, 2024 Total Assets Total assets at the end of the first quarter of the current fiscal year decreased by 0.610 billion yen from the end of the previous fiscal year to 833.780 billion yen. This was mainly due to a decrease of 17.022 billion yen in notes and accounts receivable - trade, and contract assets, despite increases of 6.086 billion yen in merchandise and finished goods, 5.516 billion yen in investment securities, and 3.312 billion yen in property, plant and equipment, respectively. Total Liabilities Total liabilities at the end of the fiscal quarter of the current fiscal year decreased by 10.561 billion yen from the end of the previous fiscal year to 450.899 billion yen. This was mainly due to decreases of 9.172 billion yen in notes and accounts payable - trade, 8.839 billion yen in income taxes payable, and 4.576 billion yen in other under current liabilities including equipment and electronically recorded obligations - operating, respectively, despite an increase of 11.487 billion yen in short-term borrowings. Interest-bearing debt, including lease liabilities, etc., at the end of the first quarter increased by 14.510 billion yen to 269.031 billion yen from the end of the previous fiscal year. Total Net Assets Total net assets at the end of the first quarter of the current fiscal year increased by 9.950 billion yen from the end of the previous fiscal year to 382.880 billion yen. This was mainly due to increases of 4.245 billion yen in retained earnings, 2.650 billion yen in valuation difference on available-for-sale securities, and 2.461 billion yen in foreign currency translation adjustment, respectively. (4) Consolidated Financial Results Forecasts Although economic trends, fluctuations in LPG import prices, and other factors may affect our business performance, we have not changed our consolidated earnings forecast announced on May 13, 2024, for the first quarter of the current fiscal year. - 3 - Quarterly Consolidated Financial Statements and Notes (1) Quarterly Consolidated Balance Sheets (Million yen) As of March 31, 2024 As of June 30, 2024 Assets Current assets Cash and deposits 33,937 30,344 Notes and accounts receivable - trade, and contract assets 145,981 128,959 Electronically recorded monetary claims - operating 26,852 27,582 Merchandise and finished goods 58,510 64,596 Work in process 5,204 7,354 Raw materials and supplies 10,749 10,959 Other 28,515 26,980 Allowance for doubtful accounts (177) (180) Total current assets 309,573 296,597 Non-current assets Property, plant and equipment Land 73,937 74,667 Other, net 151,474 154,057 Total property, plant and equipment 225,412 228,725 Intangible assets Goodwill 19,569 20,227 Other 16,932 18,573 Total intangible assets 36,502 38,801 Investments and other assets Investment securities 225,427 230,943 Other 38,017 39,258 Allowance for doubtful accounts (541) (544) Total investments and other assets 262,903 269,657 Total non-current assets 524,817 537,183 Total assets 834,391 833,780 - 4 - (Million yen) As of March 31, 2024 As of June 30, 2024 Liabilities Current liabilities Notes and accounts payable - trade 66,067 56,894 Electronically recorded obligations - operating 34,935 31,439 Short-term borrowings 129,161 140,649 Income taxes payable 12,542 3,702 Contract liabilities 7,201 7,722 Provision for bonuses 6,765 4,209 Provision for loss on liquidation of subsidiaries and associates 68 45 Other 55,771 51,194 Total current liabilities 312,513 295,858 Non-current liabilities Bonds payable 40,000 40,000 Long-term borrowings 70,100 73,170 Provision for retirement benefits for directors (and other officers) 1,385 1,372 Retirement benefit liability 5,884 5,994 Other 31,576 34,503 Total non-current liabilities 148,947 155,041 Total liabilities 461,461 450,899 Net assets Shareholders' equity Share capital 35,096 35,096 Capital surplus 32,043 32,043 Retained earnings 245,694 249,940 Treasury shares (1,546) (1,553) Total shareholders' equity 311,288 315,528 Accumulated other comprehensive income Valuation difference on available-for-sale securities 37,375 40,025 Deferred gains or losses on hedges 4,317 4,798 Foreign currency translation adjustment 8,201 10,663 Remeasurements of defined benefit plans 1,145 1,134 Total accumulated other comprehensive income 51,039 56,621 Non-controlling interests 10,601 10,731 Total net assets 372,930 382,880 Total liabilities and net assets 834,391 833,780 - 5 - Quarterly Consolidated Statements of Income and Comprehensive Income Quarterly Consolidated Statements of Income (For the three months) (Million yen) For the three months ended For the three months ended June 30, 2023 June 30, 2024 Net sales 201,909 197,519 Cost of sales 150,258 143,861 Gross profit 51,651 53,657 Selling, general and administrative expenses Transportation costs 7,131 7,666 Provision of allowance for doubtful accounts 19 (3) Salaries, allowances and bonuses 10,497 11,142 Provision for bonuses 2,900 3,002 Retirement benefit expenses 440 499 Provision for retirement benefits for directors (and other officers) 37 41 Other 22,112 22,889 Total selling, general and administrative expenses 43,138 45,238 Operating profit 8,512 8,419 Non-operating income Interest income 130 111 Dividend income 628 772 Foreign exchange gains 125 - Share of profit of entities accounted for using equity method 469 5,283 Subsidy income 469 471 Other 798 854 Total non-operating income 2,622 7,493 Non-operating expenses Interest expenses 414 607 Foreign exchange losses - 121 Other 105 145 Total non-operating expenses 520 874 Ordinary profit 10,614 15,038 Extraordinary income Gain on sale of non-current assets 950 183 Gain on receipt of donated non-current assets 49 - Gain on sale of investment securities 0 1,580 Subsidy income 0 2 Total extraordinary income 1,000 1,767 Extraordinary losses Loss on sale of non-current assets 312 10 Loss on retirement of non-current assets 94 88 Loss on sale of investment securities 0 1 Loss on valuation of investment securities 1 - Loss on tax purpose reduction entry of non-current assets 43 2 Total extraordinary losses 451 103 Profit before income taxes 11,163 16,702 Income taxes 3,719 4,804 Profit 7,443 11,897 Profit attributable to non-controlling interests 271 296 Profit attributable to owners of parent 7,172 11,601 - 6 - Quarterly Consolidated Statements of Comprehensive Income (For the three months) (Million yen) For the three For the three months ended months ended June 30, 2023 June 30, 2024 Profit 7,443 11,897 Other comprehensive income Valuation difference on available-for-sale securities 6,420 2,636 Deferred gains or losses on hedges 1,369 362 Foreign currency translation adjustment 52 2,090 Remeasurements of defined benefit plans, net of tax (15) 21 Share of other comprehensive income of entities accounted for using equity method 174 525 Total other comprehensive income 8,001 5,635 Comprehensive income 15,445 17,533 Comprehensive income attributable to Comprehensive income attributable to owners of parent 15,089 17,184 Comprehensive income attributable to non-controlling interests 356 349 - 7 -

View stock analysis, news, and events for Iwatani Corporation