DISCLAIMER: This translation may be used for reference purposes only. This English version is not an official translation of the original Japanese document. In cases where any differences occur between the English version and the original Japanese version, the Japanese version shall prevail. This translation is subject to change without notice.
Consolidated Financial Results for the First Three Months of
the Fiscal Year Ending March 31, 2025
July 31, 2024 | |
Company name: | ORGANO CORPORATION |
Listing: | Tokyo Stock Exchange |
Securities code: | 6368 |
URL: | https://www.organo.co.jp/english/ |
Representative: | Masayuki Yamada, Representative Director and President |
Inquiries: | Shigeru Sonobe, General Manager of Accounting Dept., Corporate Management and |
Planning | |
TEL: | +81-3-5635-5111 |
Scheduled date to commence dividend payments: | – |
Preparation of supplementary material on financial results: | Yes |
Holding of financial results briefing: | None |
(Millions of yen with fractional amounts discarded, unless otherwise noted)
1. Consolidated financial results for the first three months of the fiscal year ending March 31, 2025 (from April 1, 2024 to June 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 | ||||||||||||||||
Three months ended | Millions of yen | % | Millions of yen | % | Millions of yen | % | Millions of yen | % | ||||||||
June 30, 2024 | 31,619 | 6.8 | 4,001 | 39.8 | 4,368 | 40.8 | 2,676 | 67.5 | ||||||||
June 30, 2023 | 29,612 | 6.4 | 2,861 | 28.9 | 3,103 | 17.9 | 1,597 | 6.8 | ||||||||
Note: | Comprehensive income: Three months ended June 30, 2024 | ¥3,313 million [64.1%] | ||||||||||||||
Three months ended June 30, 2023 | ¥2,019 million [10.3%] | |||||||||||||||
Basic earnings | Diluted earnings | |||||||||||||||
per share | per share | |||||||||||||||
Three months ended | Yen | Yen | ||||||||||||||
June 30, 2024 | 58.25 | – | ||||||||||||||
June 30, 2023 | 34.81 | – | ||||||||||||||
(2) Consolidated financial position | ||||||||||||||||
Total assets | Net assets | Equity-to-asset ratio | ||||||||||||||
As of | Millions of yen | Millions of yen | % | |||||||||||||
June 30, 2024 | 177,283 | 102,652 | 57.8 | |||||||||||||
March 31, 2024 | 182,703 | 102,147 | 55.8 | |||||||||||||
(Reference) Equity: As of June 30, 2024 | ¥102,416 million | As of March 31, 2024 | ¥101,928 million |
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 | – | 41.00 | – | 61.00 | 102.00 | |
March 31, 2024 | ||||||
Fiscal year ending | – | |||||
March 31, 2025 | ||||||
Fiscal year ending | ||||||
March 31, 2025 | 53.00 | – | 53.00 | 106.00 | ||
(Forecast) | ||||||
Note: | Revisions to the forecast of cash dividends most recently announced: None |
3. Consolidated earnings forecasts for the fiscal year ending March 31, 2025 (from April 1, 2024 to March 31, 2025)
(Percentages indicate year-on-year changes.)
Profit attributable to | Basic | ||||||||||
Net sales | Operating profit | Ordinary profit | earnings | ||||||||
owners of parent | |||||||||||
per share | |||||||||||
Millions | % | Millions | % | Millions | % | Millions | % | Yen | |||
of yen | of yen | of yen | of yen | ||||||||
Six months ending | 73,000 | 11.5 | 9,500 | 20.9 | 9,800 | 14.8 | 6,500 | 17.4 | 141.48 | ||
September 30, 2024 | |||||||||||
Fiscal year ending | 160,000 | 6.4 | 24,500 | 8.7 | 24,800 | 5.9 | 17,600 | 1.7 | 383.07 | ||
March 31, 2025 | |||||||||||
Note: | Revisions to the earnings forecasts most recently announced: Yes |
* Notes
- Significant changes in the scope of consolidation during the period: Yes Newly included: –
Excluded: 1 company (ORGANO ECO TECH CORPORATION)
Note: | For more details, please refer to “Significant changes in the scope of consolidation during the period” on page |
9 of the attached material. |
(2) Application of specific accounting for preparing the quarterly consolidated financial statements: Yes
Note: | For more details, please refer to “Application of specific accounting for preparing the quarterly consolidated |
financial statements” on page 9 of the attached material. |
- 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
- Number of issued shares (common shares)
- Total number of issued shares at the end of the period (including treasury shares)
As of June 30, 2024
As of March 31, 2024
46,359,700 shares
46,359,700 shares
b. Number of treasury shares at the end of the period
As of June 30, 2024
As of March 31, 2024
415,704 shares
415,524 shares
- Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year)
For the three months ended June 30, 2024
For the three months ended June 30, 2023
45,944,116 shares
45,888,815 shares
- The Company has introduced an Officer Share Delivery Trust, and shares of the Company held by the Trust have been included in treasury shares excluded from the calculation of the number of treasury shares at the end of the period and the average number of shares outstanding during the period (cumulative from the beginning of the fiscal year).
- Review of the Japanese-language originals of the attached quarterly consolidated financial statements by certified public accountants or an audit firm: None
- 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, any statements herein do not constitute assurances regarding actual results by the Company. Actual business and other results may differ substantially due to various factors. Please refer to “(3) Explanation regarding consolidated earnings forecasts and other forward-looking statements” in “1. Qualitative information regarding financial results for the first three months” on pages 3 and 4 of the attached material for the suppositions that form the assumptions for earnings forecasts and cautions concerning the use thereof.
Attached Material | ||
Index | ||
1. Qualitative information regarding financial results for the first three months | 2 | |
(1) | Explanation regarding operating results | 2 |
(2) | Explanation regarding financial position | 3 |
(3) | Explanation regarding consolidated earnings forecasts and other forward-looking statements 3 | |
2. Quarterly consolidated financial statements and significant notes thereto | 5 | |
(1) | Consolidated balance sheet | 5 |
(2) | Consolidated statement of income and consolidated statement of comprehensive income | 7 |
Consolidated statement of income (cumulative) | 7 | |
Consolidated statement of comprehensive income (cumulative) | 8 | |
(3) | Notes to quarterly consolidated financial statements | 9 |
Notes on premise of going concern | 9 | |
Notes on substantial changes in the amount of shareholders’ equity | 9 | |
Significant changes in the scope of consolidation during the period | 9 | |
Application of specific accounting for preparing the quarterly consolidated financial | ||
statements | 9 | |
Changes in accounting policies | 9 | |
Notes to quarterly consolidated statement of cash flows | 9 | |
Segment information, etc | 10 | |
3. Supplementary information | 11 |
- 1 -
1. Qualitative information regarding financial results for the first three months
- Explanation regarding operating results
During the three months ended June 30, 2024 (April 1, 2024 to June 30, 2024), the global economy remained firm despite risk factors, such as the situation in the Middle East and other geopolitical issues and the slowdown of the Chinese economy. The moderate recovery of the Japanese economy continued amid concerns about the impact of depreciation of the yen and inflation in Japan.
In the electronics industry, the Organo Group’s main market, expansion of markets related to generative AI, etc. has spurred demand for cutting-edge semiconductors, and in view of moves to build new data centers or add capacity to existing ones and a recovery in the semiconductor memory market, semiconductor-related capital investment and factory utilization rates are high both in Japan and overseas. Moreover, in the general industry, such as pharmaceuticals and food, and in the social infrastructure field, such as electric power/water supply and sewage, capital investment and demand for maintenance, etc. are strong.
Under these conditions, while promoting order-taking and delivery activities for large-scale projects in Japan and overseas, the Organo Group executed investment related to digital transformation (DX) with the aim of enhancing the efficiency of plant engineering processes and took steps to expand production and delivery capacities, such as promotion of measures for development and deployment of human resources worldwide. We have also promoted various measures to enhance R&D aimed at the creation of next-generation technology and new businesses and to enhance sustainability and governance.
As a result, for the first three months ended June 30, 2024, orders received increased by 56.9% year on year to ¥52,710 million, net sales increased by 6.8% to ¥31,619 million, operating profit increased by 39.8% to ¥4,001 million, ordinary profit increased by 40.8% to ¥4,368 million, profit attributable to owners of parent increased by 67.5% to ¥2,676 million, and the carry-over balance for order backlog as of June 30, 2024 was up 13.5% to ¥139,269 million.
Results by segment are as follows.
Effective from the first quarter ended June 30, 2024, the method of classification of the reportable segments has been changed and comparison and analysis for the three months ended June 30, 2024 are based on the classification after the change.
[Water Treatment Engineering Business Unit]
■Orders received
Orders received increased 69.0% year on year to ¥46,546 million. In the electronics industry, orders received increased significantly, reflecting several large-scale projects ordered for cutting-edge semiconductors in Taiwan and strong sales of projects for solutions, such as facility-owned services. In the general industry, orders received were strong, including winning a bid for a new ultrapure water facility for Hyper-Kamiokande, which is under construction. In the social infrastructure field, such as electric power/water supply and sewage, orders on a par with the previous fiscal year were secured, centering on projects for solutions in Japan.
■Net sales
Net sales increased 6.8% year on year to ¥25,464 million. In the electronics industry, net sales increased, reflecting generally steady progress in the construction of projects with the carry-over balance for order backlog from the previous year and strong sales of solutions projects, such as facility-owned services and various maintenance services. Moreover, in the general industry, sales were strong for both plant and service solutions mainly for pharmaceuticals, food, and electronics peripherals. On the other hand, in the social infrastructure field, net sales decreased slightly because of a decrease in sales from large-scale projects for electric power compared with the same period of the previous fiscal year, despite robust sales from water supply and sewage projects. - 2 -
■Operating profit
Operating profit increased 42.6% year on year to ¥3,221 million. This was attributable to an increase in sales from large-scale plant projects in the electronics and general industries and the expansion of sales from service solutions projects, whose profitability is relatively high. In addition, improved profitability of orders received against the backdrop of active capital investment as well as various initiatives for cost reduction and profit improvement resulted in a higher gross profit margin.
[Performance Products Business Unit]
■Orders received/Net sales
Orders received increased 1.8% year on year to ¥6,163 million and net sales increased 6.6% year on year to ¥6,155 million. Sales of products for the electronics industry increased, including water treatment chemicals, such as RO membrane protection chemicals and wastewater treatment chemicals, and of functional materials, such as ion exchange resin used for separation and refinement of electronic materials. In addition, sales of small-scale pure water production equipment for medical and research institutions and sales of various food processing agents for processed foods, among others, were robust.
■Operating profit
Operating profit increased 29.5% year on year to ¥779 million. In addition to strong sales in each field, an increase in sales of relatively high-margin products, such as water treatment chemicals and functional materials for the electronics industry, and the positive impact of the revised pricing strategy, including price increases in line with increases in raw material prices, resulted in higher operating profit.
- Explanation regarding financial position Assets, liabilities and net assets
Assets
Assets as of June 30, 2024 amounted to ¥177,283 million, a decrease of ¥5,420 million from the previous fiscal year end. This was mainly due to a decrease of ¥8,612 million in notes and accounts receivable - trade, and contract assets and a decrease of ¥5,693 million in work in process, despite an increase of ¥7,632 million in investments in leases.
Liabilities
Liabilities as of June 30, 2024 amounted to ¥74,630 million, a decrease of ¥5,925 million from the previous fiscal year end. This was mainly due to a decrease of ¥2,852 million in notes and accounts payable - trade.
Net Assets
Net assets as of June 30, 2024 amounted to ¥102,652 million, an increase of ¥504 million from the previous fiscal year end. This was mainly due to an increase of ¥532 million in foreign currency translation adjustment. - Explanation regarding consolidated earnings forecasts and other forward-looking statements
With respect to the earnings forecasts for the six months ending September 30, 2024 and the full-year earnings forecasts for the fiscal year ending March 31, 2025, the forecasts announced on May 13, 2024 have been revised as stated below, because large-scale capital investment mainly in the electronics industry is expected to exceed the initial forecast, and in addition, in view of the vigorous trends of production, indicated by factory utilization rates, etc., service solutions, including various maintenance services, and performance products, including expendable items, are expected to perform strongly.
The Company will revise its forecasts appropriately according to the situation, based on each business segment and the trends in each country and region. - 3 -
Revisions to the consolidated earnings forecasts for the six months ending September 30, 2024 (April 1, 2024 to September 30, 2024)
Profit | Basic | |||||
Operating | Ordinary | attributable | ||||
Net sales | earnings per | |||||
profit | profit | to owners of | ||||
share | ||||||
parent | ||||||
Millions of yen | Millions of yen | Millions of yen | Millions of yen | Yen | ||
Previous forecast (A) | 70,000 | 8,500 | 8,500 | 5,500 | 119.71 | |
Revised forecast (B) | 73,000 | 9,500 | 9,800 | 6,500 | 141.48 | |
Change (B-A) | 3,000 | 1,000 | 1,300 | 1,000 | ||
Change (%) | 4.3 | 11.8 | 15.3 | 18.2 | ||
Reference: | ||||||
Six months results ended | 65,469 | 7,855 | 8,539 | 5,538 | 120.64 | |
September 30, 2023 |
Revisions to the consolidated earnings forecasts for the fiscal year ending March 31, 2025 (April 1, 2024 to March 31, 2025)
Profit | Basic | |||||
Operating | Ordinary | attributable | ||||
Net sales | earnings per | |||||
profit | profit | to owners of | ||||
share | ||||||
parent | ||||||
Millions of yen | Millions of yen | Millions of yen | Millions of yen | Yen | ||
Previous forecast (A) | 155,000 | 23,000 | 23,000 | 16,100 | 350.43 | |
Revised forecast (B) | 160,000 | 24,500 | 24,800 | 17,600 | 383.07 | |
Change (B-A) | 5,000 | 1,500 | 1,800 | 1,500 | ||
Change (%) | 3.2 | 6.5 | 7.8 | 9.3 | ||
Reference: Full-year results | 150,356 | 22,544 | 23,425 | 17,310 | 376.92 | |
ended March 31, 2024 | ||||||
- 4 -
2. Quarterly consolidated financial statements and significant notes thereto
(1) Consolidated balance sheet
(Millions of yen) | |||||||
As of March 31, 2024 | As of June 30, 2024 | ||||||
Assets | |||||||
Current assets | |||||||
Cash and deposits | 17,642 | 17,157 | |||||
Notes and accounts receivable - trade, and | 77,773 | 69,161 | |||||
contract assets | |||||||
Electronically recorded monetary claims - | 4,452 | 4,541 | |||||
operating | |||||||
Investments in leases | 27,814 | 35,447 | |||||
Merchandise and finished goods | 7,707 | 8,237 | |||||
Work in process | 9,221 | 3,528 | |||||
Raw materials and supplies | 4,902 | 4,837 | |||||
Other | 3,978 | 4,339 | |||||
Allowance for doubtful accounts | (23) | (27) | |||||
Total current assets | 153,469 | 147,222 | |||||
Non-current assets | |||||||
Property, plant and equipment | |||||||
Buildings and structures | 19,526 | 19,610 | |||||
Accumulated depreciation | (13,550) | (13,708) | |||||
Buildings and structures, net | 5,976 | 5,901 | |||||
Machinery, equipment and vehicles | 6,706 | 6,733 | |||||
Accumulated depreciation | (5,828) | (5,902) | |||||
Machinery, equipment and vehicles, net | 877 | 830 | |||||
Land | 12,304 | 12,432 | |||||
Construction in progress | 148 | 436 | |||||
Other | 6,557 | 6,738 | |||||
Accumulated depreciation | (5,229) | (5,375) | |||||
Other, net | 1,327 | 1,362 | |||||
Total property, plant and equipment | 20,634 | 20,963 | |||||
Intangible assets | 986 | 996 | |||||
Investments and other assets | |||||||
Investment securities | 2,835 | 3,295 | |||||
Retirement benefit asset | 1,955 | 2,007 | |||||
Deferred tax assets | 2,404 | 2,386 | |||||
Other | 600 | 593 | |||||
Allowance for doubtful accounts | (183) | (183) | |||||
Total investments and other assets | 7,613 | 8,100 | |||||
Total non-current assets | 29,233 | 30,060 | |||||
Total assets | 182,703 | 177,283 |
- 5 -
(Millions of yen) | |||||||
As of March 31, 2024 | As of June 30, 2024 | ||||||
Liabilities | |||||||
Current liabilities | |||||||
Notes and accounts payable - trade | 19,842 | 16,990 | |||||
Electronically recorded obligations - operating | 2,839 | 3,646 | |||||
Short-term borrowings | 34,065 | 33,438 | |||||
Income taxes payable | 3,605 | 2,430 | |||||
Contract liabilities | 3,920 | 4,119 | |||||
Provision for bonuses | 1,890 | 865 | |||||
Provision for product warranties | 1,686 | 1,395 | |||||
Provision for loss on construction contracts | 83 | 76 | |||||
Provision for share awards for directors (and | 107 | 131 | |||||
other officers) | |||||||
Other | 4,561 | 4,210 | |||||
Total current liabilities | 72,602 | 67,303 | |||||
Non-current liabilities | |||||||
Long-term borrowings | 2,400 | 1,800 | |||||
Deferred tax liabilities | 59 | 45 | |||||
Retirement benefit liability | 5,344 | 5,337 | |||||
Other | 149 | 143 | |||||
Total non-current liabilities | 7,953 | 7,327 | |||||
Total liabilities | 80,555 | 74,630 | |||||
Net assets | |||||||
Shareholders’ equity | |||||||
Share capital | 8,225 | 8,225 | |||||
Capital surplus | 7,508 | 7,508 | |||||
Retained earnings | 82,907 | 82,775 | |||||
Treasury shares | (518) | (519) | |||||
Total shareholders’ equity | 98,122 | 97,990 | |||||
Accumulated other comprehensive income | |||||||
Valuation difference on available-for-sale | 774 | 886 | |||||
securities | |||||||
Foreign currency translation adjustment | 1,923 | 2,455 | |||||
Remeasurements of defined benefit plans | 1,108 | 1,083 | |||||
Total accumulated other comprehensive income | 3,805 | 4,426 | |||||
Non-controlling interests | 219 | 236 | |||||
Total net assets | 102,147 | 102,652 | |||||
Total liabilities and net assets | 182,703 | 177,283 |
- 6 -
- Consolidated statement of income and consolidated statement of comprehensive income Consolidated statement of income (cumulative)
(Millions of yen) | |||||
Three months ended | Three months ended | ||||
June 30, 2023 | June 30, 2024 | ||||
(From April 1, 2023 to | (From April 1, 2024 to | ||||
June 30, 2023) | June 30, 2024) | ||||
Net sales | 29,612 | 31,619 | |||
Cost of sales | 21,509 | 21,759 | |||
Gross profit | 8,102 | 9,859 | |||
Selling, general and administrative expenses | 5,241 | 5,858 | |||
Operating profit | 2,861 | 4,001 | |||
Non-operating income | |||||
Interest income | 15 | 26 | |||
Dividend income | 20 | 25 | |||
Foreign exchange gains | 232 | 335 | |||
Share of profit of entities accounted for using | 8 | 7 | |||
equity method | |||||
Other | 26 | 43 | |||
Total non-operating income | 303 | 438 | |||
Non-operating expenses | |||||
Interest expenses | 52 | 65 | |||
Other | 9 | 5 | |||
Total non-operating expenses | 61 | 71 | |||
Ordinary profit | 3,103 | 4,368 | |||
Extraordinary income | |||||
Gain on sale of non-current assets | 3 | 4 | |||
Total extraordinary income | 3 | 4 | |||
Extraordinary losses | |||||
Loss on abandonment of non-current assets | 11 | 0 | |||
Total extraordinary losses | 11 | 0 | |||
Profit before income taxes | 3,094 | 4,372 | |||
Income taxes | 1,494 | 1,689 | |||
Profit | 1,600 | 2,683 | |||
Profit attributable to non-controlling interests | 3 | 7 | |||
Profit attributable to owners of parent | 1,597 | 2,676 |
- 7 -