NIKKON : 2024.11.08Summary of Consolidated Financial Results for the Six Months Ended September 30，2024

Published November 8, 2024 at 5:07 a.m. UTC

Source: MarketScreener

Translation

Notice: This document is 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.

Summary of Consolidated Financial Results for the Six Months Ended September 30, 2024 (Based on Japanese GAAP)

				November 8, 2024
Company name:	NIKKON Holdings Co., Ltd.
Stock exchange listing:	Tokyo
Stock code:	9072	URL https://www.nikkon-hd.co.jp
Representative:	President & Representative Director	Masakatsu Kuroiwa
Inquiries:	Director and Managing Executive Officer	Yasunori Matsuda	TEL 03-3541-5330
Scheduled date to file Semi-annual Securities Report:	November 13, 2024
Scheduled date to commence dividend payments:	December 12, 2024
Preparation of supplementary material on financial results:	No
Holding of financial results meeting:		Yes

(Amounts less than one million yen are rounded down)

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 September 30,	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
120,361	11.1		11,393	10.4		10,797	(8.3)	6,536	(18.1)
2024

Six months ended September 30,	108,327	4.4		10,319	16.0		11,770	14.2	7,981	13.8
2023

Note: Comprehensive income Six months ended September 30, 2024	¥4,464 million	[(70.5)%]
Six months ended September 30, 2023	¥15,117 million	[77.5%]

	Earnings per share	Diluted earnings per share
Six months ended September 30,		Yen			Yen
	52.07			51.98
2024

Six months ended September 30,		62.21			62.10
2023

Note: The Company has conducted a two-for-one share split of its shares, effective as of October 1, 2024. Earnings per share and diluted earnings per share are calculated based on the assumption that the share split was conducted at the beginning of the previous fiscal year.

(2) Consolidated financial position

		Total assets			Net assets	Equity ratio
		Millions of yen			Millions of yen	%
As of September 30, 2024		402,417		244,637	60.6
As of March 31, 2024			388,446		246,445	63.3
Reference: Equity	As of September 30, 2024	¥243,675	million
	As of March 31, 2024	¥245,939	million

2. Cash dividends

			Annual dividends per share

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

	Yen	Yen	Yen
Year ended March 31, 2024	−	50.00	−
Year ending March 31, 2025	−	54.00
Year ending March 31, 2025			−
(Forecast)

Fiscal year-end

Yen

55.00

27.00

Total

Yen

105.00

−

Notes: 1. Revisions to the forecasts most recently announced: No

2. The Company has conducted a two-for-one share split of its shares, effective as of October 1, 2024. Therefore, the forecasted year-end dividend per share for the fiscal year ending March 31, 2025 reflects the effect of this share split, and the total annual dividend per share is shown as "-." Without considering the share split, the year-end dividend per share for the fiscal year ending March 31, 2025 is forecasted to be 54 yen per share, and the annual dividends per share will be 108 yen per share.

3. Forecast of consolidated financial results for the 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	Earnings per share
			owners of parent

	Millions of yen	%	Millions of yen	%	Millions of yen		%	Millions of yen	%	Yen
Full year	250,000	12.4	24,000	13.0	25,300		6.0	17,000	2.4	135.98

Notes: 1. Revisions to the forecasts most recently announced: No

2. The Company has conducted a two-for-one share split of its shares, effective as of October 1, 2024. Earnings per share in the forecast of consolidated financial results for the fiscal year ending March 31, 2025 take into account the effect of this share split.

4. Notes

(1)	Significant changes in the scope of consolidation during the six months ended September 30, 2024:	Yes
	Newly included: 4 companies	Supreme Auto Transport, LLC and 3 other companies
(2)	Application of special accounting methods for preparing semi-annual consolidated financial statements: Yes
	Note: For details, please refer to "Application of special accounting for preparing semi-annual consolidated financial statements" of "2.
		Semi-annual consolidated financial statements and significant notes thereto, (4) Notes on semi-annual consolidated financial
		statements" on page 12 of the attached documents.
(3)	Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements
	Changes in accounting policies due to revisions to accounting standards and other regulations:	Yes
	Changes in accounting policies due to other reasons:		No
	Changes in accounting estimates:			No
	Restatement of prior period financial statements:		No
(4)	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	126,479,784 shares	As of March 31, 2024		126,479,784 shares
	Number of treasury shares at the end of the period
		As of September 30, 2024	1,978,488 shares	As of March 31, 2024		352,446 shares
	Average number of shares during the period (cumulative from the beginning of the fiscal year)
		Six months ended September 30, 2024	125,539,943 shares	Six months ended September 30, 2023	128,300,566 shares

Note: The Company conducted a two-for-one share split of its shares on October 1, 2024. The total number of issued shares at the end of the period, number of treasury shares at the end of the period, and average number of shares during the period are calculated based on the assumption that the share split was conducted at the beginning of the previous fiscal year. The number of treasury shares at the end of the period and the number of treasury shares excluded from the calculation of the average number of shares outstanding during the period include treasury shares of the Company held by a trust whose beneficiaries are Directors (98,400 shares as of September 30, 2024, 53,800 shares as of September 30, 2023).

Semi-annualfinancial results reports are exempt from review conducted by certified public accountants or an audit corporation.
Proper use of forecasts of financial results, and other special matters
Forward-looking statements, including financial results forecasts stated in these materials, are based on information currently available to the Company and certain assumptions deemed reasonable. Actual financial and other results may differ substantially from the statements herein due to various factors.

Index of attached documents
1. Qualitative information regarding results for the six months	4
(1)	Explanation of operating results	4
(2)	Explanation of financial position	4
(3)	Explanation of forward-looking statements, including forecasts of consolidated financial results	5
2. Semi-annual consolidated financial statements and significant notes thereto	6
(1)	Consolidated balance sheets	6
(2)	Consolidated statements of income (cumulative) and consolidated statements of comprehensive
	income (cumulative)	8
(3)	Consolidated statements of cash flows	10
(4)	Notes on semi-annual consolidated financial statements	12
	(Notes on going concern assumption)	12
	(Application of special accounting for preparing semi-annual consolidated financial statements)	12
	(Notes on significant changes in the amount of shareholders' equity)	12
	(Changes in accounting policies)	12
	(Change in method of presentation)	12
	(Notes on segment information, etc.)	13
	(Subsequent events)	15

1. Qualitative information regarding results for the six months

Explanation of operating results
In the first six months of the fiscal year ending March 31, 2025, the Japanese economy showed favorable trends, including a rise in capital investment, against the backdrop of strong corporate earnings, and signs that personal consumption is bottoming out. On the other hand, the outlook remained uncertain mainly due to the economic slowdown in China, which suppressed exports to China, and the continuing instability in resource prices caused by the situation in Ukraine, for which there is still no end in sight, and the increasingly tense situation in the Middle East.
In the logistics industry, the severe business situation has continued due to labor shortage arising from shortage of drivers and warehouse workers, as well as increasing costs such as personnel and fuel expenses.
Under these circumstances, the Group's consolidated sales for the six months ended September 30, 2024 were 120,361 million yen, up 11.1% from the same period of the previous fiscal year.
Operating profit was 11,393 million yen, up 10.4% from the same period of the previous fiscal year, mainly due to a recovery in business volume and an increase in the volume of cargo handled.
Ordinary profit was 10,797 million yen, down 8.3% from the same period of the previous fiscal year, mainly due to foreign exchange losses.
Profit attributable to owners of parent was 6,536 million yen, down 18.1% from the same period of the previous fiscal year.

Business results by segment are as follows.

Transportation business

Sales were 56,392 million yen, up 16.2% from the same period of the previous fiscal year, mainly due to an increase in business volume and the consolidation of U.S. company Supreme Auto Transport, LLC. Operating profit was 2,756 million yen, up 6.8% from the same period of the previous fiscal year, due to the effects of higher sales.

Warehousing business

Sales were 20,305 million yen, up 4.9% from the same period of the previous fiscal year, mainly due to an increase in the volume of cargo stored, which is the result of our ongoing efforts to establish or expand warehouses. Operating profit was 4,186 million yen, down 5.1% from the same period of the previous fiscal year, mainly due to increases in various expenses and depreciation.

Packaging business

Sales were 28,393 million yen, up 7.8% from the same period of the previous fiscal year, due to an increase in business volume. Operating profit was 2,247 million yen, up 50.8% from the same period of the previous fiscal year, due to the effects of higher sales.

Testing business

Sales were 11,649 million yen, up 8.0% from the same period of the previous fiscal year, due to an increase in business volume. Operating profit was 1,789 million yen, up 21.5% from the same period of the previous fiscal year, due to the effect of higher sales.

(2) Explanation of financial position

Assets

Current assets as of September 30, 2024 totaled 81,748 million yen, a decrease of 6,232 million yen from the end of the previous fiscal year. The decrease mainly came from a decrease of 11,778 million yen in cash and deposits, partially offset by an increase of 4,998 million yen in securities. Non-current assets totaled 320,668 million yen, an increase of 20,204 million yen from the end of the previous fiscal year. The increase mainly came from an increase of 10,007 million yen in property, plant and equipment due to the progress of warehouse construction in Utsunomiya City, Tochigi Prefecture, Kanegasaki Town, Iwate Prefecture, Tokai City, Aichi Prefecture, and Suzuka City, Mie Prefecture and an increase in the number of consolidated companies, as well as an increase of 15,260 million yen in intangible assets mainly due to an increase in goodwill from M&As, partially offset by a decrease of 5,211 million yen in investment securities due to the market valuation.

As a result, total assets were 402,417 million yen, an increase of 13,971 million yen from the end of the previous fiscal year.

Liabilities

Current liabilities as of September 30, 2024 totaled 66,706 million yen, an increase of 7,339 million yen from the end of the previous fiscal year. The increase mainly came from increases of 15,681 million yen in short-term borrowings and 2,797 million yen in electronically recorded obligations - non-operating, partially offset by a decrease of 10,000 million yen in the current portion of bonds payable due to redemption. Non-current liabilities totaled 91,073 million yen, an increase of 8,438 million yen from the end of the previous fiscal year. The increase mainly came from an increase of 10,000 million yen in bonds payable due to issuance, partially offset by a decrease of 1,715 million yen in deferred tax liabilities.

As a result, total liabilities were 157,779 million yen, an increase of 15,778 million yen from the end of the previous fiscal year.

Net assets

Net assets as of September 30, 2024 totaled 244,637 million yen, a decrease of 1,807 million yen from the end of the previous fiscal year. The decrease mainly came from a decrease of 3,910 million yen in valuation difference on available-for-sale securities and an increase of 2,990 million yen in treasury shares, partially offset by increases of 3,063 million yen in retained earnings and 1,676 million yen in foreign currency translation adjustment.

As a result, the equity ratio at the end of the period under review was 60.6% (63.3% at the end of the previous fiscal year).

Cash flows

Cash and cash equivalents (hereinafter referred to as "cash") as of September 30, 2024 were 36,190 million yen, a decrease of 6,606 million yen from the end of the previous fiscal year.

Net cash provided by operating activities was 14,264 million yen, a decrease of 1,194 million yen from the same period of the previous fiscal year. Major factors having a negative impact on cash flow from operating activities included decreases of 913 million yen in profit before income taxes and 4,353 million yen in cash flows from increase (decrease) in other liabilities. Major factors having a positive impact on cash flow from operating activities were a decrease of 832 million yen in decrease (increase) in trade receivables, an increase of 829 million yen in depreciation, and a decrease of 769 million yen in income taxes paid.

Net cash used in investing activities was 27,257 million yen, an increase of 16,373 million yen from the same period of the previous fiscal year. The main reason for this increase was an increase of 16,925 million yen in purchase of shares of subsidiaries resulting in a change in the scope of consolidation, while the decrease was due to a decrease of 1,017 million yen in payments into time deposits.

Net cash provided by financing activities was 6,463 million yen, an increase of 3,954 million yen from the same period of the previous fiscal year. Major factors having a positive impact on cash flow from financing activities included an increase of 15,000 million yen in proceeds from short-term borrowings and a decrease of 11,962 million yen in repayments of long-term borrowings.Major factors having a negative impact on cash flow from financing activities were a decrease of 20,000 million yen in proceeds from long-term borrowings and an increase of 2,033 million yen in purchase of treasury shares.

Explanation of forward-looking statements, including forecasts of consolidated financial results
As for the forecast of consolidated financial results for the full year, there is no change to the forecasts announced on May 10, 2024 based on recent performance trends.

2. Semi-annual consolidated financial statements and significant notes thereto

(1) Consolidated balance sheets

		(Millions of yen)
	As of March 31, 2024	As of September 30, 2024

Assets
Current assets
Cash and deposits	43,847	32,068
Notes and accounts receivable - trade	32,610	33,938
Electronically recorded monetary claims - operating	5,946	5,743
Securities	-	4,998
Raw materials and supplies	614	701
Other	4,991	4,323
Allowance for doubtful accounts	(29)	(25)
Total current assets	87,981	81,748
Non-current assets
Property, plant and equipment
Buildings and structures, net	115,109	114,258
Machinery, equipment and vehicles, net	8,713	12,144
Tools, furniture and fixtures, net	1,847	1,930
Land	120,058	120,493
Leased assets, net	111	287
Construction in progress	8,222	14,957
Total property, plant and equipment	254,064	264,071
Intangible assets
Goodwill	2	15,079
Other	2,496	2,680
Total intangible assets	2,498	17,759
Investments and other assets
Investment securities	32,990	27,778
Long-term loans receivable	241	150
Deferred tax assets	3,669	3,810
Retirement benefit asset	502	540
Other	6,529	6,589
Allowance for doubtful accounts	(31)	(31)
Total investments and other assets	43,901	38,838
Total non-current assets	300,464	320,668
Total assets	388,446	402,417

		(Millions of yen)
	As of March 31, 2024	As of September 30, 2024
Liabilities
Current liabilities
Notes and accounts payable - trade	10,615	10,854
Electronically recorded obligations - operating	7,333	7,449
Short-term borrowings	2,025	17,706
Current portion of bonds payable	10,000	-
Lease liabilities	37	118
Income taxes payable	4,002	4,266
Provision for bonuses	4,557	4,697
Provision for bonuses for directors (and other officers)	218	110
Notes payable - facilities	324	209
Electronically recorded obligations - non-operating	4,405	7,203
Other	15,845	14,089
Total current liabilities	59,366	66,706
Non-current liabilities
Bonds payable	40,000	50,000
Long-term borrowings	27,034	27,113
Lease liabilities	84	196
Deferred tax liabilities	8,571	6,856
Retirement benefit liability	4,940	4,940
Provision for retirement benefits for directors (and other	466	419
officers)

Other provisions	20	10
Other	1,517	1,537
Total non-current liabilities	82,634	91,073
Total liabilities	142,001	157,779
Net assets
Shareholders' equity
Share capital	11,316	11,316
Capital surplus	12,332	12,332
Retained earnings	198,226	201,289
Treasury shares	(552)	(3,543)
Total shareholders' equity	221,322	221,395
Accumulated other comprehensive income
Valuation difference on available-for-sale securities	17,477	13,567
Foreign currency translation adjustment	6,289	7,965
Remeasurements of defined benefit plans	849	746
Total accumulated other comprehensive income	24,616	22,279
Share acquisition rights	161	152
Non-controlling interests	344	809
Total net assets	246,445	244,637
Total liabilities and net assets	388,446	402,417

Consolidated statements of income (cumulative) and consolidated statements of comprehensive income (cumulative)

Consolidated statements of income (cumulative)

		(Millions of yen)
	Six months ended	Six months ended
	September 30, 2023	September 30, 2024
Net sales	108,327	120,361
Cost of sales	92,179	101,252
Gross profit	16,147	19,109
Selling, general and administrative expenses	5,828	7,716
Operating profit	10,319	11,393
Non-operating income
Interest income	100	86
Dividend income	349	610
Rental income	36	39
Share of profit of entities accounted for using equity method	310	205
Foreign exchange gains	294	-
Miscellaneous income	519	359
Total non-operating income	1,611	1,301
Non-operating expenses
Interest expenses	123	213
Foreign exchange losses	-	1,548
Miscellaneous expenses	36	135
Total non-operating expenses	159	1,897
Ordinary profit	11,770	10,797
Extraordinary income
Gain on sale of non-current assets	35	64
Gain on sale of investment securities	-	24
Total extraordinary income	35	88
Extraordinary losses
Loss on sale of non-current assets	3	4
Loss on retirement of non-current assets	9	0
Total extraordinary losses	12	4
Profit before income taxes	11,794	10,880
Income taxes	3,803	4,139
Profit	7,991	6,741
Profit attributable to non-controlling interests	9	204
Profit attributable to owners of parent	7,981	6,536

Consolidated statements of comprehensive income (cumulative)

		(Millions of yen)
	Six months ended	Six months ended
	September 30, 2023	September 30, 2024
Profit	7,991	6,741
Other comprehensive income
Valuation difference on available-for-sale securities	4,812	(3,910)
Foreign currency translation adjustment	2,193	1,559
Remeasurements of defined benefit plans, net of tax	20	(102)
Share of other comprehensive income of entities accounted for	100	176
using equity method

Total other comprehensive income	7,126	(2,277)
Comprehensive income	15,117	4,464
Comprehensive income attributable to
Comprehensive income attributable to owners of parent	15,096	4,200
Comprehensive income attributable to non-controlling interests	20	263

(3) Consolidated statements of cash flows

		(Millions of yen)
	Six months ended	Six months ended
	September 30, 2023	September 30, 2024
Cash flows from operating activities
Profit before income taxes	11,794	10,880
Depreciation	5,809	6,639
Increase (decrease) in provision for bonuses	275	29
Increase (decrease) in provision for bonuses for directors (and	(104)	(108)
other officers)

Increase (decrease) in allowance for doubtful accounts	3	(2)
Increase (decrease) in retirement benefit asset and liability	(5)	(217)
Increase (decrease) in provision for retirement benefits for	(22)	(46)
directors (and other officers)

Interest and dividend income	(450)	(696)
Interest expenses	123	213
Share of loss (profit) of entities accounted for using equity	(310)	(205)
method

Loss (gain) on sale of non-current assets	(32)	(59)
Loss on retirement of non-current assets	-	0
Loss (gain) on sale of investment securities	-	(24)
Decrease (increase) in trade receivables	(618)	213
Decrease (increase) in other assets	866	1,368
Increase (decrease) in trade payables	273	(58)
Increase (decrease) in other liabilities	1,826	(2,527)
Other, net	(542)	1,419
Subtotal	18,886	16,816
Interest and dividends received	980	1,148
Interest paid	(119)	(182)
Income taxes paid	(4,288)	(3,519)
Net cash provided by (used in) operating activities	15,458	14,264
Cash flows from investing activities
Payments into time deposits	(1,728)	(711)
Proceeds from withdrawal of time deposits	801	851
Proceeds from sale of securities	144	-
Purchase of property, plant and equipment	(9,954)	(9,790)
Proceeds from sale of property, plant and equipment	32	104
Purchase of intangible assets	(214)	(377)
Purchase of investment securities	(15)	(669)
Proceeds from sale of investment securities	-	260
Loan advances	(7)	(11)
Proceeds from collection of loans receivable	69	111
Purchase of shares of subsidiaries resulting in change in scope	-	(16,925)
of consolidation

Other, net	(10)	(99)
Net cash provided by (used in) investing activities	(10,883)	(27,257)