Stanley Electric Co., Ltd. TSE:6923

Stanley Electric : Consolidated Financial Results for ths Six Months Ended September 30, 2024

Published November 25, 2024 at 6:46 a.m. UTC

Source: MarketScreener

Consolidated Financial Results

for the Six Months Ended September 30, 2024

＜Under Japanese GAAP＞

October 28, 2024

Company name: Stanley Electric Co., Ltd.

Securities code: 6923

(URL: https://www.stanley.co.jp/)

Stock exchange listing: Tokyo Stock Exchange

Representative: Yasuaki Kaizumi, President and Representative Director

Contact: Ikuo Kuwata, Executive Officer, Executive General Manager, Corporate Administration Division

Phone: +81 3 6866 2222

Scheduled date of filing of the semi-annual financial report (Hanki Houkokusho): November 11, 2024

Scheduled date of commencement of dividend payments: November 29, 2024

Preparation of supplementary material on financial results: Yes

Holding of financial results briefing: Yes (for securities analysts and institutional investors)

(Figures are rounded down to the nearest million yen.)

1. Consolidated Financial Results for the Six Months Ended September 30, 2024 (from April 1, 2024 to September 30, 2024)

(1) Consolidated Results of Operations (cumulative)

						(% figures	denote year-on-year	change.)
	Net Sales	Operating Income		Ordinary Income		Net Income Attributable to
			Owners of Parent

Six months ended	Millions of Yen	%	Millions of Yen		%	Millions of Yen		%	Millions of Yen	%
September 30, 2024	243,987	7.9	19,197		36.4	21,937		8.7	11,378	42.0
September 30, 2023	226,163	5.7	14,077		(9.1)	20,186		0.7	8,015	(22.2)

Note: Comprehensive income: Six months ended September 30, 2024: ¥(3,277) million [-%]

	Six months ended September 30, 2023: ¥50,564 million [21.7%]

	Net Income per Share	Net Income per Share
	(Basic)	(Diluted)
Six months ended	Yen	Yen
September 30, 2024	71.21	71.21
September 30, 2023	48.78	48.78

(2) Consolidated Financial Position

	Total Assets	Net Assets	Shareholders' Equity Ratio

	Millions of Yen	Millions of Yen	%
Six months ended	727,846	604,641	67.8
September 30, 2024

Fiscal year ended	708,264	589,362	74.0
March 31, 2024

(Reference) Equity: As of September 30, 2024: ¥493,380 million; As of March 31, 2024: ¥524,409 million

2. Dividends

			Cash Dividends per Share

	End of First Quarter	End of Second Quarter	End of Third Quarter		Year-end
					Yen
Fiscal year ended	Yen	Yen	Yen
-	27.00	-		28.00
March 31, 2024

Fiscal year ending	-	32.00
March 31, 2025

Fiscal year ending
March 31, 2025			-		32.00
(Forecast)

Note: Revision to the dividend forecast from recently released figures: Yes

Annual

Yen 55.00

64.00

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3. Consolidated Business Forecasts for the Fiscal Year Ending March 31, 2025 (from April 1, 2024 to March 31, 2025)

(% figures denote year-on-year change.)

	Net Sales		Operating Income	Ordinary Income	Net Income Attributable	Net Income
		to Owners of Parent	per Share

	Millions of Yen		%	Millions of Yen	%	Millions of Yen	%	Millions of Yen	%	Yen
Full year	500,000		5.8	50,000	39.5	56,200	16.9	31,100	17.4	195.89

Note: Revision to the consolidated business forecasts from recently released figures: No

4. Others

Significant changes in the scope of consolidation during the period: Yes
Newly included: one company (Company name: Thai Stanley Electric Public Co., Ltd.)
Adoption of special accounting treatment for preparing semi-annual consolidated financial statements: No
Changes in accounting policies, changes in accounting estimates, and corrections of errors
1. Changes in line with revision to accounting standards: No
2. Other changes in accounting policies: No
3. Changes in accounting estimates: No
4. Corrections of errors: No
Number of shares issued and outstanding (common stock)
1. Number of shares issued and outstanding at the end of the period (including treasury stock)

	Six months ended September 30, 2024:	167,500,000 shares
	Fiscal year ended March 31, 2024:	171,200,000 shares
2)	Number of shares of treasury stock at the end of the period
	Six months ended September 30, 2024:	9,926,004 shares
	Fiscal year ended March 31, 2024:	10,820,114 shares
3)	Average number of shares during the period
	Six months ended September 30, 2024:	159,783,328 shares
	Six months ended September 30, 2023:	164,329,411 shares

These semi-annual financial statements are outside the scope of review by certified public accountants or an audit firm.
Explanation for the appropriate use of performance forecasts and other special notes:

At this point in time, there are no changes to the consolidated business forecasts.

The Company made these projections in forecasts based on currently available economic and business information; as such, these projections include certain risks and other uncertainties, and the Company does not intend to guarantee the achievement of these projections. Actual business performance may differ significantly from current projections resulting from various critical factors.

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5. Semi-annual Consolidated Financial Statements and Major Notes

(1) Semi-annual Consolidated Balance Sheets

			(Millions of Yen)
		As of March 31, 2024	As of September 30, 2024
Assets
Current assets
Cash and deposits	194,642	212,457
Notes and accounts receivable-trade	75,060	74,495
Securities	3,998	-
Inventories	55,521	53,825
Other	29,406	40,317
Allowance for doubtful accounts	(17)	(21)
Total current assets	358,610	381,073
Noncurrent assets
Property, plant and equipment
Buildings and structures, net	74,909	77,455
Machinery, equipment and vehicles, net	65,901	76,677
Tools, furniture and fixtures, net	14,883	16,232
Land	14,963	25,870
Lease assets, net	3,110	3,248
Construction in progress	17,072	25,469
Total property, plant and equipment	190,840	224,954
Intangible assets
Goodwill	673	6
Other	8,152	4,359
Total intangible assets	8,825	4,366
Investments and other assets
Investment securities	130,901	84,697
Net defined benefit asset	5,383	6,267
Deferred tax assets	4,489	4,949
Other	9,212	21,537
Total investments and other assets	149,987	117,452
Total noncurrent assets	349,653	346,772
Total assets		708,264	727,846

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				(Millions of Yen)
		As of March 31, 2024		As of September 30, 2024
Liabilities
Current liabilities
Notes and accounts payable-trade	40,575		38,194
Current portion of bonds payable	10,000	-
Lease obligations	1,489		1,416
Income taxes payable	4,949	3,799
Provision for product warranties	9,474		8,206
Provision for bonuses	5,115	6,004
Provision for directors' bonuses	276		146
Other		25,826	26,172
Total current liabilities		97,708		83,939
Noncurrent liabilities
Bonds payable	-		20,000
Lease obligations	2,788	3,012
Deferred tax liabilities	16,534		12,422
Provision for directors' retirement benefits	58	42
Other provisions	28		28
Net defined benefit liability	1,134	3,108
Asset retirement obligations	478		481
Other		170	167
Total noncurrent liabilities		21,193		39,264
Total liabilities		118,901	123,204
Net assets
Shareholders' equity
Capital stock	30,514		30,514
Capital surplus	29,669	19,145
Retained earnings	386,872		383,896
Treasury stock		(28,862)	(26,762)
Total shareholders' equity		418,194		406,793
Accumulated other comprehensive income
Valuation difference on available-for-sale	44,860		36,574
securities

Foreign currency translation adjustment	58,233	47,117
Remeasurements of defined benefit plans		3,122		2,894
Total accumulated other comprehensive income		106,215	86,586
Subscription rights to shares	388		424
Non-controlling interests		64,564	110,836
Total net assets		589,362		604,641
Total liabilities and net assets		708,264	727,846

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Semi-annualConsolidated Statements of Income and Comprehensive Income Semi-annual Consolidated Statements of Income

				(Millions of Yen)
		Six months ended		Six months ended
		September 30, 2023		September 30, 2024
Net sales	226,163		243,987
Cost of sales	188,456	197,771
Gross profit		37,707		46,215
Selling, general and administrative expenses		23,629		27,018
Operating income		14,077		19,197
Non-operating income
Interest income	2,159		2,512
Dividends income	1,113	1,682
Equity in earnings of affiliates	1,232		181
Foreign exchange gains	1,546	-
Miscellaneous income		373		344
Total non-operating income		6,424		4,720
Non-operating expenses
Interest expenses	75	137
Foreign exchange losses	-		1,477
Commission expenses	90	-
Miscellaneous loss		151		365
Total non-operating expenses		316		1,980
Ordinary income		20,186		21,937
Extraordinary income
Gain on sales of noncurrent assets	70		56
Gain on sales of investment securities	0	-
Gain on bargain purchase	-		10,060
Gain on liquidation of subsidiaries	-	170
Total extraordinary income		70		10,288
Extraordinary losses
Loss on step acquisitions	-		1,130
Impairment losses	1,867	6,180
Loss on retirement of noncurrent assets	2,193		2,299
Extra retirement payments	-	1,258
Loss on abandonment of inventories	-		371
Provision for environmental measures	69	-
Special research expenses		-		72
Total extraordinary losses		4,130		11,312
Income before income taxes		16,126		20,912
Income taxes		5,198		5,902
Net income		10,927		15,009
Net income attributable to non-controlling interests		2,912		3,631
Net income attributable to owners of parent		8,015		11,378

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Semi-annual Consolidated Statements of Comprehensive Income

				(Millions of Yen)
		Six months ended		Six months ended
		September 30, 2023		September 30, 2024
Net income	10,927		15,009
Other comprehensive income
Valuation difference on available-for-sale	16,763		(8,362)
securities

Foreign currency translation adjustment	21,407	(9,460)
Remeasurements of defined benefit plans	(54)		(229)
Share of other comprehensive income of	1,521	(235)
affiliates accounted for using equity method

Total other comprehensive income		39,636		(18,287)
Comprehensive income		50,564	(3,277)
Comprehensive income attributable to	43,824		(8,250)
owners of parent

Comprehensive income attributable to non-	6,739	4,972
controlling interests

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(3) Semi-annual 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
Income before income taxes	16,126	20,912
Depreciation and amortization	18,283			22,275
Impairment losses	1,867	6,180
Gain on bargain purchase	-			(10,060)
Increase (decrease) in allowance for doubtful	5	(3)
accounts

Increase (decrease) in provision for bonuses	35			917
Increase (decrease) in provision for product	547	(1,286)
warranties

Increase (decrease) in net defined benefit	(640)			833
liability

Interest and dividends income	(3,272)	(4,194)
Interest expenses	75			137
Equity in losses (earnings) of affiliates	(1,232)	(181)
Loss (gain) on step acquisitions	-			1,130
Net loss (gain) on sales and retirement of	2,122	2,242
noncurrent assets

Extra retirement payments	-			1,258
Decrease (increase) in notes and accounts	(3,800)	9,410
receivable-trade

Decrease (increase) in inventories	(7,606)			3,086
Increase (decrease) in notes and accounts	1,795	(6,378)
payable-trade

Other, net		5,076			(11,745)
Subtotal		29,381	34,534
Interest and dividends income received	5,658			5,654
Interest expenses paid	(86)	(150)
Income taxes (paid) refund	(4,370)			(7,955)
Extra retirement payments		-	(1,258)
Net cash provided by (used in) operating	30,583			30,823
activities

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						(Millions of Yen)
			Six months ended			Six months ended
			September 30, 2023			September 30, 2024
Cash flows from investing activities
Payments into time deposits	(36,991)	(66,382)
Proceeds from withdrawal of time deposits	34,818			59,932
Payments into long-term time deposits	-	(9,816)
Purchase of property, plant and equipment	(9,102)			(20,551)
Proceeds from sales of property, plant and	48	51
equipment

Purchase of intangible assets	(1,233)			(670)
Proceeds from sale and redemption of short-	69	-
term and long-term investment securities

Proceeds from purchase of shares of
subsidiaries resulting in change in scope of	-			8,214
consolidation
Purchase of long-term prepaid expenses	(30)	(3,939)
Other, net		296			(712)
Net cash provided by (used in) investing		(12,125)	(33,874)
activities

Cash flows from financing activities
Proceeds from issuance of bonds	-	19,904
Redemption of bonds	-			(10,000)
Purchase of treasury stock	(4,737)	(7,838)
Decrease (increase) in money held in trust for	4,738			(2,169)
purchase of treasury stock

Cash dividends paid	(4,140)	(4,489)
Dividends paid to non-controlling interests	(6,004)			(2,693)
Purchase of shares of subsidiaries not	-	(3,162)
resulting in change in scope of consolidation

Other, net		(891)			(810)
Net cash provided by (used in) financing		(11,035)	(11,259)
activities

Effect of exchange rate change on cash and cash	6,811			(1,527)
equivalents

Net increase (decrease) in cash and cash	14,234	(15,837)
equivalents

Cash and cash equivalents at beginning of period		130,881			147,130
Cash and cash equivalents at end of period			145,116		131,292

- 8 -

Segment Information, etc. Segment information
I. Six months ended September 30, 2023 (from April 1, 2023 to September 30, 2023)
1. Sales and income or loss by reportable segment

						(Millions of Yen)

						Total amount
	Automotive	Electronic	Applied			recognized in
			semi-annual
	Electronic	Others	Adjustment
	Equipment	Components	consolidated
	Products	(Note 1)	(Note 2)
	Business	Business	statements of
	Business
					income

						(Note 3)
Sales
Sales to outside customers	184,168	11,205	30,730	58	-	226,163
Intersegment sales or transfer	626	8,015	25,077	1,081	(34,801)	-

Total	184,795	19,221	55,808	1,140	(34,801)	226,163

Segment income (loss)	10,690	2,009	5,693	(44)	(4,270)	14,077

Notes: 1. "Others" mainly includes the following project and services not included in the reportable segments: the project for promotion of employment of the physically disabled; and financial and management services provided within the Stanley Group.

(4,270) million yen adjustment to segment income (loss) mainly includes company-wide expenses not included in the reportable segments of (3,865) million yen. The company-wide expenses are mainly general research and development expenses and administrative expenses, which are not attributable to the reportable segments.
Segment income (loss) is adjusted to be consistent with operating income shown on the semi-annual consolidated statements of income.

2. Information concerning impairment loss on noncurrent assets or goodwill by reportable segment (Significant impairment loss on noncurrent assets)

Losses on impairment of noncurrent assets were recorded in the "Automotive Equipment Business," the "Electronic Components Business," the "Applied Electronic Products Business," and for corporate assets which are not attributable to the reportable segments. The breakdown of the impairment losses for the six months ended September 30, 2023 was 978 million yen in the "Automotive Equipment Business," 870 million yen in the "Electronic Components Business," 0 million yen in the "Applied Electronic Products Business," and 17 million yen for corporate assets which are not attributable to the reportable segments.

(Significant gain on bargain purchase resulted from recognition of negative goodwill) Not applicable.

Six months ended September 30, 2024 (from April 1, 2024 to September 30, 2024)

1. Sales and income or loss by reportable segment

						(Millions of Yen)

						Total amount
	Automotive	Electronic	Applied			recognized in
			semi-annual
	Electronic	Others	Adjustment
	Equipment	Components	consolidated
	Products	(Note 1)	(Note 2)
	Business	Business	statements of
	Business
					income

						(Note 3)
Sales
Sales to outside customers	209,187	9,593	25,206	0	-	243,987
Intersegment sales or transfer	806	8,463	32,576	1,408	(43,255)	-

Total	209,993	18,057	57,783	1,408	(43,255)	243,987

Segment income (loss)	18,376	1,238	4,080	(21)	(4,476)	19,197

- 9 -

(4,476) million yen adjustment to segment income (loss) mainly includes company-wide expenses not included in the reportable segments of (4,157) million yen. The company-wide expenses are mainly general research and development expenses and administrative expenses, which are not attributable to the reportable segments.
Segment income (loss) is adjusted to be consistent with operating income shown on the semi-annual consolidated statements of income.

2. Information concerning impairment loss on noncurrent assets or goodwill by reportable segment (Significant impairment loss on noncurrent assets)

Losses on impairment of property, plant and equipment and intangible assets were recorded in the "Automotive Equipment Business," the "Electronic Components Business," the "Applied Electronic Products Business," and for corporate assets which are not attributable to the reportable segments. The breakdown of the impairment losses for the six months ended September 30, 2024 was 939 million yen in the "Automotive Equipment Business," 3,969 million yen in the "Electronic Components Business," 850 million yen in the "Applied Electronic Products Business," and 419 million yen for corporate assets which are not attributable to the reportable segments.

(Significant gain on bargain purchase resulted from recognition of negative goodwill)

In the "Automotive Equipment Business," gain on bargain purchase was recorded upon the Company additionally acquiring shares in Thai Stanley Electric Public Co., Ltd., formerly an affiliate, which resulted in negative goodwill as a result of becoming a consolidating subsidiary. The recorded amount of gain on bargain purchase from this acquisition was 10,060 million yen. Gain on bargain purchase is recorded as extraordinary income rather than the segment income (loss).

- 10 -