Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.
November 7, 2024
Consolidated Financial Results | |
for the Six Months Ended September 30, 2024 | |
(Under Japanese GAAP) | |
Company name: | Kurabo Industries Ltd. |
Listing: | Tokyo Stock Exchange |
Securities code: | 3106 |
URL: | https://www.kurabo.co.jp/ |
Representative: | Shinji Nishigaki, President |
Inquiries: | Kiyoshi Hamaguchi, Manager of Finance & Accounting Department |
Telephone: | +81-6-6266-5188 |
Scheduled date to file semi-annual securities report: | November 14, 2024 |
Scheduled date to commence dividend payments: | December 5, 2024 |
Preparation of supplementary material on financial results: | Yes |
Holding of financial results briefing: | Yes (for institutional investors and analysts) |
(Yen amounts are rounded down to millions, unless otherwise noted.)
1. Consolidated financial results for the six months ended September 30, 2024 (from April 1, 2024 to September 30, 2024)
(1) Consolidated operating results (cumulative) | (Percentages indicate year-on-year changes.) | ||||||||
Net sales | Operating profit | Ordinary profit | Profit attributable to | ||||||
owners of parent | |||||||||
Six months ended | Millions of yen | % | Millions of yen | % | Millions of yen | % | Millions of yen | % | |
September 30, 2024 | 71,845 | (1.1) | 4,241 | 9.4 | 5,100 | 12.7 | 3,425 | 35.8 | |
September 30, 2023 | 72,653 | 0.8 | 3,877 | 13.8 | 4,525 | (2.6) | 2,522 | (22.7) | |
Note: Comprehensive income | For the six months ended September 30, 2024: | ¥4,930 million | [(51.8)%] | |||
For the six months ended September 30, 2023: | ¥10,235 million | [156.9%] | ||||
Basic earnings | Diluted earnings | |||||
per share | per share | |||||
Six months ended | Yen | Yen | ||||
September 30, 2024 | 193.12 | - | ||||
September 30, 2023 | 134.06 | - | ||||
(2) Consolidated financial position
Total assets | Net assets | ||
As of | Millions of yen | Millions of yen | |
September 30, 2024 | 191,032 | 120,235 | |
March 31, 2024 | 192,789 | 118,074 | |
Reference: Equity | |||
As of September 30, 2024: | ¥118,922 million | ||
As of March 31, 2024: | ¥116,849 million |
Equity-to-asset ratio
%
62.3
60.6
2. Cash dividends
Annual dividends per share | ||||||||
First quarter-end | Second quarter-end | Third quarter-end | Fiscal year-end | Total | ||||
Yen | Yen | Yen | Yen | Yen | ||||
Fiscal year ended | - | 40.00 | - | 60.00 | 100.00 | |||
March 31, 2024 | ||||||||
Fiscal year ending | - | 60.00 | ||||||
March 31, 2025 | ||||||||
Fiscal year ending | ||||||||
March 31, 2025 | - | 90.00 | 150.00 | |||||
(Forecast) | ||||||||
Note 1: Revisions to the forecast of cash dividends most recently announced: Yes
Note 2: Regarding the revisions to the forecast of cash dividends, please refer to the news release "Notification on Revisions to the
Forecast of Cash Dividends (Increase of Dividend)" (in Japanese only) disclosed on this date (November 7, 2024).
3. Forecast of consolidated financial results for the fiscal year ending March 31, 2025 (from April 1, 2024
to March 31, 2025) | (Percentages indicate year-on-year changes.) | ||||||||||
Net sales | Operating profit | Ordinary profit | Profit attributable to | Basic earnings | |||||||
owners of parent | per share | ||||||||||
Millions | % | Millions | % | Millions | % | Millions | % | Yen | |||
of yen | of yen | of yen | of yen | ||||||||
Full year | 154,000 | 1.8 | 9,600 | 4.5 | 10,800 | 6.0 | 7,500 | 11.3 | 424.87 | ||
Note: Revisions to the forecast of financial results most recently announced: None |
* Notes
- Significant changes in the scope of consolidation during the period: None
-
Adoption of accounting treatment specific to the preparation of semi-annual consolidated financial statements: Yes
Note: For the details, please refer to "2. Semi-annual consolidated financial statements and significant notes thereto (4) Notes to semi-annual consolidated financial statements (Notes to accounting treatment specific to the preparation of semi-annual consolidated financial statements)" on page 11 of the attached materials. - Changes in accounting policies, changes in accounting estimates, and restatement
- Changes in accounting policies due to revisions to accounting standards and other regulations: Yes
- Changes in accounting policies due to other reasons: None
- Changes in accounting estimates: None
- Restatement: None
Note: For the details, please refer to "2. Semi-annual consolidated financial statements and significant notes thereto (4) Notes to semi-annual consolidated financial statements (Notes on changes in accounting policies)" on page 11 of the attached materials.
- Number of issued shares (common shares)
- Total number of issued shares at the end of the period (including treasury shares)
As of September 30, 2024
As of March 31, 2024
19,000,000 shares
19,000,000 shares
(ii) Number of treasury shares at the end of the period
As of September 30, 2024
As of March 31, 2024
1,445,716 shares
1,059,028 shares
- Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year)
Six months ended September 30, 2024
Six months ended September 30, 2023
17,736,360 shares
18,814,755 shares
Note: The Company has introduced the Board Benefit Trust, a share-based compensation plan for directors, etc. using a trust, and the Company's shares held by the trust account are included in the number of treasury shares.
- Semi-annualfinancial results reports are exempt from review conducted by certified public accountants or an audit corporation.
- Proper use of earnings forecasts, and other special matters (Caution regarding forward-looking statements and others)
The forward-looking statements, including earnings forecasts, contained in these materials are based on information currently available to the Company and on certain assumptions deemed to be reasonable. Consequently, the statements herein do not constitute assurances regarding the Company's actual results. Actual financial and other results may differ substantially from the statements herein due to various factors. For matters regarding the above earnings forecasts, please refer to "1. Overview of operating results and others (3) Explanation of consolidated financial forecasts and other forward-looking statements" on page 4 of the attached materials.
(Regarding the financial results briefing)
The Company plans to hold a financial results briefing for institutional investors and analysts on Tuesday, November 19, 2024. The explanatory materials on financial results to be distributed at the briefing will be posted on the Company's website following the briefing.
Attached Material | ||
1. Overview of operating results and others | 2 | |
(1) | Overview of operating results for the period under review | 2 |
(2) | Overview of financial position for the period under review | 3 |
(3) | Explanation of consolidated financial forecasts and other forward-looking statements | 4 |
2. Semi-annual consolidated financial statements and significant notes thereto | 5 | |
(1) | Semi-annual consolidated balance sheet | 5 |
(2) | Semi-annual consolidated statement of income and semi-annual consolidated statement of | |
comprehensive income | 7 | |
Semi-annual consolidated statement of income | 7 | |
Semi-annual consolidated statement of comprehensive income | 8 | |
(3) | Semi-annual consolidated statement of cash flows | 9 |
(4) | Notes to semi-annual consolidated financial statements | 11 |
(Notes on changes in accounting policies) | 11 | |
(Notes to accounting treatment specific to the preparation of semi-annual consolidated financial | ||
statements) | 11 | |
(Notes on segment information, etc.) | 12 | |
(Notes on revenue recognition) | 13 | |
(Notes on significant changes in the amount of shareholders' equity) | 15 | |
(Notes on premise of going concern) | 15 | |
(Notes on semi-annual consolidated balance sheet) | 15 | |
(Notes on semi-annual consolidated statement of income) | 16 | |
(Notes on semi-annual consolidated statement of cash flows) | 16 | |
(Notes on significant subsequent events) | 17 | |
3. Others | 18 |
- 1 -
1. Overview of operating results and others
-
Overview of operating results for the period under review
During the first six months of the fiscal year ending March 31, 2025 (from April 1, 2024 to September 30, 2024), the Japanese economy remained on a moderate recovery trend due to factors including improvement in consumer spending owing to wage increases and capital investment increases.
On the other hand, amid growing concerns regarding geopolitical risks, such as the prolongation of the Russia-Ukraine War and the escalation of conflict in the Middle East, some uncertainty continues to remain mainly due to concerns over the future of the Chinese economy and instability in financial markets.
In this type of environment, the Group has strived to expand business operations of growth and priority businesses such as semiconductor production-related business and functional films, and to enhance the earning capability of core businesses such as textiles and flexible polyurethane foam based on the basic policy of "expand high-profit businesses and strengthen core businesses to achieve sustainable growth" in the medium-term corporate business plan "Progress '24" that is in its final fiscal year.
As a result, net sales were ¥71.8 billion (down 1.1% YoY), operating profit was ¥4.24 billion (up 9.4% YoY), ordinary profit was ¥5.1 billion (up 12.7% YoY), and profit attributable to owners of parent was ¥3.42 billion (up 35.8% YoY).
Results by segment are as follows. (Textiles)
Yarns experienced increased revenue as sales at the Brazilian and Thai subsidiaries were solid, although sales of yarns for items including underwear in Japan were at around the same level year on year.
Fabrics experienced decreased revenue as orders of casual clothing materials decreased in Japan and at the Chinese subsidiary.
Textile products (sewn products, etc.) experienced decreased revenue given decreased orders of products for casual clothing, although sales increased for the "Smartfit" management system that helps to mitigate risks in hot environments.
As a result, net sales were ¥23.6 billion (down 4.2% YoY) with operating profit of ¥0.03 billion (operating loss of ¥0.37 billion in the same period of the previous fiscal year).
(Chemical Products)
Flexible polyurethane foam experienced increased revenue due to steady orders for automotive interior in Japan, along with a recovery in automobile production and other factors, despite the weak orders at Chinese subsidiaries, as well as due to carrying out the price pass-through of raw material and labor costs.
Functional resin products experienced increased revenue due to a recovery in orders for high-performance plastic products for semiconductor production in line and strong orders for functional films for solar cells.
Housing construction products experienced increased revenue due to an increase in orders for precast concrete products for apartment complexes, despite weak sales of heat-insulating materials.
Nonwoven fabrics experienced revenue at around the same level year on year.
As a result, net sales were ¥32.5 billion (up 11.4% YoY) with operating profit of ¥2.31 billion (up 41.8% YoY).
(Advanced Technology)
Electronics businesses experienced decreased revenue due to a decrease in unit sales of silicon wafer cleaning equipment at a subsidiary, despite strong sales for chemical concentration meters and other products for the semiconductor industry.
Engineering businesses experienced increased revenue due to steady performance in areas such as exhaust gas treatment facilities and at a subsidiary, where large-scale industrial facility projects were carried out, despite weak sales for chemical supply systems for the semiconductor industry.
Biomedical businesses experienced revenue at around the same level year on year due to solid sales of mixer/deaerator models and other products. - 2 -
As a result, net sales were ¥8.8 billion (down 27.9% YoY) mainly due to the impact of the transfer in the previous fiscal year of all the shares of a subsidiary that was engaged in manufacturing and sales of machine tools, etc., while operating profit was ¥1.05 billion (down 34.9% YoY).
(Food and Services)
Freeze-dried foods experienced increased revenue as sales were steady for instant noodle ingredients and other products while sales were weak for molding soup.
Hotels and their related services experienced increased revenue due to steady performance related to accommodations and restaurants resulting from the impact of strong domestic travel and demand from inbound tourism.
As a result, net sales were ¥4.8 billion (up 7.8% YoY) while operating profit was ¥0.21 billion (down 20.1% YoY) mainly due to the impact of rising purchasing costs.
(Real Estate)
Real estate leasing recorded net sales of ¥1.8 billion (down 1.3% YoY) mainly due to an increase in taxes and dues and operating profit of ¥1.18 billion (down 4.4% YoY).
-
Overview of financial position for the period under review
(i) Assets, liabilities and net assets
Total assets at the end of the period under review decreased by ¥1.7 billion from the end of the previous fiscal year to ¥191.0 billion mainly due to a decrease in notes and accounts receivable - trade, and contract assets, although there were increases in investment securities and inventories.
Liabilities decreased by ¥3.9 billion from the end of the previous fiscal year to ¥70.7 billion mainly due to decreases in short-term borrowings and notes and accounts payable - trade.
Net assets increased by ¥2.1 billion from the end of the previous fiscal year to ¥120.2 billion mainly due to increases in retained earnings and valuation difference on available-for-sale securities, despite a decrease due to purchase of treasury shares.
As a result of the above, the equity-to-asset ratio was 62.3%, up 1.7 percentage points.
(ii) Cash flows
Cash and cash equivalents (hereinafter "cash") at the end of the period under review decreased by ¥1.9 billion from the end of the previous fiscal year to ¥14.21 billion (¥10.46 billion at the end of the same period of the previous fiscal year). The respective cash flow positions and the factors thereof are as follows.
Cash flows from operating activities
Net cash provided by operating activities in the period under review was ¥4.6 billion (compared to ¥5.83 billion in net cash provided by operating activities in the same period of the previous fiscal year). This was mainly due to profit before income taxes of ¥5.1 billion and an increase in cash of ¥3.94 billion from a decrease in trade receivables and contract assets, despite income taxes paid of ¥2.46 billion.
Cash flows from investing activities
Net cash used in investing activities in the period under review was ¥1.7 billion (compared to ¥1.97 billion in net cash used in investing activities in the same period of the previous fiscal year). This was mainly due to purchase of property, plant and equipment and intangible assets of ¥1.72 billion.
Cash flows from financing activities
Net cash used in financing activities in the period under review was ¥4.9 billion (compared to ¥3.98 billion in net cash used in financing activities in the same period of the previous fiscal year). This was mainly due to a net decrease in short-term borrowings of ¥2.29 billion and purchase of treasury shares of ¥1.68 billion.
- 3 -
-
Explanation of consolidated financial forecasts and other forward-looking statements
At this point in time, there are no changes in consolidated earnings forecasts announced on August 7, 2024 for the full year (April 1, 2024 to March 31, 2025).
- 4 -
2. Semi-annual consolidated financial statements and significant notes thereto
(1) Semi-annual consolidated balance sheet
(Millions of yen) | |||
As of March 31, 2024 | As of September 30, 2024 | ||
Assets | |||
Current assets | |||
Cash and deposits | 16,156 | 14,245 | |
Notes and accounts receivable - trade, and contract | 32,432 | 29,777 | |
assets | |||
Electronically recorded monetary claims - operating | 7,664 | 6,723 | |
Merchandise and finished goods | 15,474 | 14,638 | |
Work in process | 6,505 | 8,232 | |
Raw materials and supplies | 7,732 | 8,704 | |
Other | 3,400 | 3,754 | |
Allowance for doubtful accounts | (47) | (41) | |
Total current assets | 89,320 | 86,035 | |
Non-current assets | |||
Property, plant and equipment | |||
Buildings and structures, net | 21,438 | 20,958 | |
Other, net | 23,208 | 23,333 | |
Total property, plant and equipment | 44,646 | 44,292 | |
Intangible assets | 1,717 | 1,671 | |
Investments and other assets | |||
Investment securities | 53,409 | 55,359 | |
Other | 3,932 | 3,909 | |
Allowance for doubtful accounts | (238) | (235) | |
Total investments and other assets | 57,104 | 59,033 | |
Total non-current assets | 103,469 | 104,997 | |
Total assets | 192,789 | 191,032 | |
Liabilities | |||
Current liabilities | |||
Notes and accounts payable - trade | 18,598 | 17,308 | |
Electronically recorded obligations - operating | 3,939 | 3,634 | |
Short-term borrowings | 9,331 | 7,338 | |
Income taxes payable | 2,548 | 1,729 | |
Provision for bonuses | 1,444 | 1,472 | |
Other | 8,194 | 8,030 | |
Total current liabilities | 44,055 | 39,514 | |
Non-current liabilities | |||
Long-term borrowings | 2,313 | 2,553 | |
Provision for retirement benefits for directors (and | 213 | 159 | |
other officers) | |||
Provision for share-based payments | 178 | 192 | |
Retirement benefit liability | 12,188 | 12,083 | |
Other | 15,764 | 16,294 | |
Total non-current liabilities | 30,659 | 31,283 | |
Total liabilities | 74,714 | 70,797 |
- 5 -
(Millions of yen) | |||
As of March 31, 2024 | As of September 30, 2024 | ||
Net assets | |||
Shareholders' equity | |||
Share capital | 22,040 | 22,040 | |
Capital surplus | 15,237 | 15,237 | |
Retained earnings | 64,164 | 66,503 | |
Treasury shares | (2,654) | (4,321) | |
Total shareholders' equity | 98,788 | 99,460 | |
Accumulated other comprehensive income | |||
Valuation difference on available-for-sale securities | 25,054 | 26,366 | |
Deferred gains or losses on hedges | 49 | (90) | |
Foreign currency translation adjustment | (6,982) | (6,749) | |
Remeasurements of defined benefit plans | (60) | (65) | |
Total accumulated other comprehensive income | 18,061 | 19,461 | |
Non-controlling interests | 1,225 | 1,313 | |
Total net assets | 118,074 | 120,235 | |
Total liabilities and net assets | 192,789 | 191,032 |
- 6 -
-
Semi-annualconsolidated statement of income and semi-annual consolidated statement of comprehensive income
Semi-annual consolidated statement of income
(Millions of yen) | ||||||
Six months ended | Six months ended | |||||
September 30, 2023 | September 30, 2024 | |||||
Net sales | 72,653 | 71,845 | ||||
Cost of sales | 58,353 | 57,189 | ||||
Gross profit | 14,300 | 14,656 | ||||
Selling, general and administrative expenses | * | 10,422 | * | 10,415 | ||
Operating profit | 3,877 | 4,241 | ||||
Non-operating income | ||||||
Interest income | 48 | 61 | ||||
Dividend income | 683 | 803 | ||||
Share of profit of entities accounted for using equity | 18 | 30 | ||||
method | ||||||
Other | 300 | 278 | ||||
Total non-operating income | 1,049 | 1,173 | ||||
Non-operating expenses | ||||||
Interest expenses | 171 | 169 | ||||
Other | 230 | 143 | ||||
Total non-operating expenses | 401 | 313 | ||||
Ordinary profit | 4,525 | 5,100 | ||||
Extraordinary income | ||||||
Gain on sale of investment securities | 126 | - | ||||
Total extraordinary income | 126 | - | ||||
Extraordinary losses | ||||||
Loss on disposal of non-current assets | 121 | - | ||||
Loss on sale of investment securities | 9 | - | ||||
Total extraordinary losses | 131 | - | ||||
Profit before income taxes | 4,520 | 5,100 | ||||
Income taxes | 2,016 | 1,638 | ||||
Profit | 2,504 | 3,461 | ||||
Profit (loss) attributable to non-controlling interests | (18) | 36 | ||||
Profit attributable to owners of parent | 2,522 | 3,425 |
- 7 -