Notice: This document is a translated excerpt of the original Japanese document and is only for reference purposes. The original Japanese document prevails should there be a discrepancy between it and this translated document.
Summary of Consolidated Financial Results for the Nine Months Ended December 31,
2024 (Based on Japanese GAAP)
February 6, 2025 | ||||
Company name | ZACROS Corporation | |||
Stock exchange listing | Tokyo | |||
Stock Code | 7917 | URL https://www.zacros.co.jp/ | ||
Representative | President and CEO | Taku Shimoda | ||
Inquiries | Director and Senior Executive Officer in Charge of | Michihiko Sato | Tel. 81-3-5804-4221 | |
Administration | ||||
Scheduled date to commence dividend payments | - | |||
Preparation of supplementary material on quarterly earnings | yes | |||
Holding of quarterly earnings performance review | no |
Amounts of less than one million yen are rounded down.
1. Consolidated financial results for the nine months ended December 31, 2024 (from April 1, 2024, to December 31, 2024)
(1) Consolidated operating results | (Percentages indicate year-on-year changes) | |||||||
Net sales | Operating income | Ordinary income | Net income attributable | |||||
to owners of parent | ||||||||
Millions of yen | % | Millions of yen | % | Millions of yen | % | Millions of yen | % | |
Nine months ended December 31, 2024 | 113,387 | 11.4 | 8,369 | 31.2 | 8,586 | 23.3 | 5,299 | 68.2 |
Nine months ended December 31, 2023 | 101,763 | 2.6 | 6,379 | 20.9 | 6,964 | 14.0 | 3,150 | (29.0) |
Note: Comprehensive income Nine months ended December 31, 2024 | ¥6,584 million 22.4% | |||
Nine months ended December 31, 2023 | ¥5,379 million (27.3%) | |||
Net income per share | Diluted net income | |||
per share | ||||
Yen | Yen | |||
Nine months ended December 31, 2024 | 284.92 | 282.28 | ||
Nine months ended December 31, 2023 | 167.44 | 165.88 | ||
- Consolidated financial position
Total assets | Net assets | Equity ratio | Net assets per share | ||||||||||
Millions of yen | Millions of yen | % | Yen | ||||||||||
Nine months ended December 31, 2024 | 149,781 | 97,988 | 59.7 | 4,803.89 | |||||||||
Year ended March 31, 2024 | 141,680 | 93,642 | 60.4 | 4,604.79 | |||||||||
Note: Equity | As of June 30, 2024 | ¥ 89,388 million | |||||||||||
As of March 31, 2023 | ¥ 85,607 million | ||||||||||||
2. Cash dividends | |||||||||||||
Annual dividends | |||||||||||||
1st quarter | 2nd quarter | 3rd quarter | Fiscal year-end | Total | |||||||||
Yen | Yen | Yen | Yen | Yen | |||||||||
Year ended March 31, 2024 | - | 42.00 | - | 42.00 | 84.00 | ||||||||
Year ended March 31, 2025 | - | 63.00 | - | ||||||||||
Year ending March 31, 2025 (forecast) | 63.00 | 126.00 | |||||||||||
Note: There are no revisions to the forecasts of the cash dividends most recently announced.
The second-quarter dividend for the fiscal year ending March 2025: Ordinary dividend: ¥53.00; Commemorative dividend: ¥10.00.
The year-end dividend (forecast) for the fiscal year ending March 2025: Ordinary dividend: ¥53.00; Commemorative dividend: ¥10.00.
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 income | Ordinary income | Net income attributable | Net income per | |||||
to owners of parent | share | ||||||||
Millions of yen | % | Millions of yen | % | Millions of yen | % | Millions of yen | % | Yen | |
Full year | 150,000 | 10.2 | 10,500 | 25.8 | 11,000 | 23.5 | 6,700 | 47.8 | 360.20 |
Note: There are no revisions to the forecasts of the financial results most recently announced.
Notes to Financial Statements: | ||
(1) | Significant changes in the scope of consolidation during the nine months ended December 31, 2024 | yes |
Fujimori PlaChemical Co., Ltd. was excluded. | ||
(2) | Application of special accounting for preparing quarterly consolidated financial statements | none |
- Changes in accounting policies, changes in accounting estimates, and restatement of prior-period financial statements after error corrections
a. Changes in accounting policies due to revisions to accounting standards and other regulations | yes |
b. Changes in accounting policies due to other reasons | none |
c. Changes in accounting estimates | none |
d. Restatement of prior-period financial statements after error corrections | none |
- Number of issued shares (common shares)
a. Total number of issued shares at the end of the period (including treasury shares)
As of December 31, 2024 | 19,267,760 | As of March 31, 2024 | 19,267,760 |
- Number of treasury shares at the end of the period
As of December 31, 2024 | 660,312 | As of March 31, 2024 | 676,693 |
- Average number of shares during the period (cumulative from the beginning of the fiscal year)
As of December 31, 2024 | 18,598,583 | As of December 31, 2024 | 18,817,593 |
Quarterly financial results reports are exempt from quarterly reviews conducted by certified public accountants or an audit corporation none
Proper use of earnings forecasts and other special matters
The above forecasts of consolidated financial results are based on information available to the company and on certain assumptions deemed to be reasonable. The company, however, makes no guarantee that these forecasts will be achieved. Actual business and other results may differ substantially because of various factors. For more information on assumptions for the financial results forecasts and on the use of the forecasts, please refer to "(3) Forward-looking information, including consolidated financial forecasts" in "1. Review of Operating Results and Financial Statements" on page 3 of the attached document.
Contents of Attached Documents
1．Review of Operating Results and Financial Statements……………………………………………………. | 2 |
（1）Overview of business performance ………………………………………………………………………. | 2 |
（2）Overview of financial position……………………………………………………………………………. | 3 |
（3）Forward-looking information, including consolidated financial forecasts……………………………….. | 3 |
2．Quarterly Consolidated Financial Statements and Significant Notes Thereto……………………………. | 4 |
（1）Quarterly consolidated balance sheets …………………………………………………………………… | 4 |
（2）Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive | 6 |
income…………………………………………………………………………………………………... | |
Quarterly consolidated statements of income (Nine-month consolidated period) …………………….. | 6 |
Quarterly consolidated statements of comprehensive income (Nine-month consolidated period) ……. | 7 |
（3）Notes to the quarterly consolidated financial statements ………………………………………………… | 8 |
Notes on assumptions of going concern………………………………………………………… | 8 |
Notes on significant changes in the amount of shareholders' equity …………………………………... | 8 |
Changes in significant subsidiaries during the nine months ended December 31, 2024……………….. | 8 |
Notes on changes in accounting policies……………………………………………………………….. | 8 |
Notes on quarterly consolidated cash flow statements………………………………………………. | 9 |
Segment information……………………………………………………………………………… | 9 |
Notes on significant subsequent events…………………………………………………………………. | 10 |
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1. Review of Operating Results and Financial Statements
(1) Overview of business performance
In the first nine months of fiscal year 2024, the ZACROS Group experienced varied performance across its business segments. The Environmental Solutions business saw a decrease in revenue, whereas the Wellness business realized an increase. And the Electronic Materials and Industrial Infrastructure businesses significantly expanded their sales, leading to an overall year-on-year increase in consolidated revenue for the group.
The group's profitability, however, faced several challenges. These included rising human resources costs; soaring prices for raw materials, energy, and transportation; increased R&D expenses; and a production stoppage at a manufacturing site caused by ransomware. Challenges notwithstanding, the ZACROS Group achieved a year-on-year increase in profit. This was primarily due to increased revenue from its Electronic Materials and Industrial Infrastructure businesses but was also owed to the group's implementation of revenue-enhancing measures, such as improving production efficiency and strategically passing on costs through price adjustments.
For the first nine months of the fiscal year under review, therefore, ZACROS Corporation's consolidated net sales rose 11.4% from the same period a year earlier, to ¥113,387 million. Operating income likewise increased, 31.2%, to ¥8,369 million; ordinary income was up 23.3%, to ¥8,586 million; and net income attributable to owners of parent rose 68.2%, to ¥5,299 million.
The performance of the ZACROS Group's businesses follows.
Wellness
Wellness net sales showed positive growth in the first nine months of fiscal year 2024. Sales of pharmaceutical and medical packaging materials saw a slight increase. Sales of single-use bags for biopharmaceutical manufacturing and related products also increased, but to a greater degree, thereby contributing the most to this business segment's overall sales growth. The segment's profitability, however, decreased because of its ongoing investments in developing medical devices, in vitro diagnostic products, and regenerative medicine advances. These investments are crucial for growth, but they adversely impact profitability. As a result, Wellness operating income dropped 30.8%, to ¥592 million, despite a 1.9% increase in net sales, to ¥20,206 million.
Environmental Solutions
Net sales in Environmental Solutions declined during the nine-month period under review. Although sales of liquid containers increased domestically and at overseas subsidiaries, the Environmental Solutions business recorded decreased revenue. This was due mainly to reduced food packaging sales resulting from the divestment of certain related operations and to lower sales of refill packaging compared with the same period a year earlier. Despite increased sales of liquid containers, the segment's earnings decreased, mainly because of the lower refill packaging sales. As a result, Environmental Solutions net sales decreased 1.7%, to ¥24,856 million, and operating income dropped 6.3%, to ¥1,107 million.
Electronic Materials
Electronic Materials saw substantial growth in sales of protective film, its core product among display-related materials. This was primarily due to industry restructuring that enhanced this business's competitiveness. Sales also increased in the electronic component-related and other products categories due to the recovery of the semiconductor market. The positive sales improved profitability across all areas of this business. As a result, Electronic Materials net sales rose significantly, 23.3%, to ¥40,257 million, and operating income surged an exceptional 78.1%, to ¥3,323 million.
Industrial Infrastructure
Industrial Infrastructure continued its robust performance. Sales of building and civil engineering materials increased for air-conditioning pipes, void slabs (floor structural materials) for housing complexes, industrial chimneys, and tunnel materials. Chemical product sales grew owing to strong demand for adhesive products, particularly for semiconductor and automotive film applications. The Industrial Infrastructure business thus achieved sales and profit growth. Industrial Infrastructure net sales rose significantly, 16.9%, to ¥28,067 million, and operating income increased an impressive 35.2%, to ¥3,345 million.
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Nine months ended | Nine months ended | Year-on-year changes | |||||
December 31, 2023 | December 31, 2024 | ||||||
Millions of yen | Percent of | Millions of yen | Percent of | Millions of yen | Percent of | ||
net sales | net sales | net sales | |||||
Net sales | 101,763 | 100.0 | 113,387 | 100.0 | 11,624 | 11.4 | |
Wellness | 19,832 | 19.5 | 20,206 | 17.8 | 374 | 1.9 | |
Environmental | 25,284 | 24.8 | 24,856 | 21.9 | (427) | (1.7) | |
Solutions | |||||||
Electronic | 32,636 | 32.1 | 40,257 | 35.5 | 7,620 | 23.3 | |
Materials | |||||||
Industrial | 24,010 | 23.6 | 28,067 | 24.8 | 4,057 | 16.9 | |
Infrastructure | |||||||
Operating income | 6,379 | 6.3 | 8,369 | 7.4 | 1,990 | 31.2 | |
Wellness | 856 | 4.3 | 592 | 2.9 | (263) | (30.8) | |
Environmental | 1,181 | 4.7 | 1,107 | 4.5 | (73) | (6.3) | |
Solutions | |||||||
Electronic | 1,866 | 5.7 | 3,323 | 8.3 | 1,457 | 78.1 | |
Materials | |||||||
Industrial | 2,474 | 10.3 | 3,345 | 11.9 | 871 | 35.2 | |
Infrastructure | |||||||
(2) Overview of financial position
Total assets at the end of the first nine months of fiscal year 2024 were ¥149,781 million, an increase of ¥8,101 million from the end of the previous fiscal year. This was due to increases in tangible fixed assets, accounts receivable, and cash and deposits and despite a decrease in short-term securities.
Total liabilities were ¥51,793 million, an increase of ¥3,754 million from the previous fiscal year-end. This was mainly due to an increase in long-term borrowings despite decreases in income taxes payable and accounts payable.
Total net assets were ¥97,988 million, an increase of ¥4,346 million from the previous fiscal year-end. This owed itself chiefly to an increase in retained earnings, resulting in an equity ratio of 59.7%.
(3) Forward-looking information, including consolidated financial forecasts
There are no changes to the full-year earnings forecast that we announced on August 7, 2024.
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2. Quarterly Consolidated Financial Statements and Significant Notes Thereto
- Quarterly consolidated balance sheets
(Millions of yen) | ||||
March 31, 2024 | December 31, 2024 | |||
Assets | ||||
Current assets | ||||
Cash and deposits | 15,516 | 16,899 | ||
Notes and accounts receivable-trade and contract assets | 40,972 | 43,667 | ||
Securities | 16,596 | 10,492 | ||
Merchandise and finished goods | 7,920 | 7,253 | ||
Work in process | 2,136 | 2,237 | ||
Raw materials and supplies | 5,264 | 6,023 | ||
Other | 4,584 | 5,368 | ||
Allowance for doubtful accounts | (106) | (120) | ||
Total current assets | 92,885 | 91,821 | ||
Noncurrent assets | ||||
Property, plant and equipment | ||||
Buildings and structures | 47,790 | 56,348 | ||
Accumulated depreciation | (29,828) | (29,085) | ||
Buildings and structures, net | 17,961 | 27,263 | ||
Machinery, equipment and vehicles | 68,459 | 68,601 | ||
Accumulated depreciation | (58,077) | (58,380) | ||
Machinery, equipment and vehicles, net | 10,381 | 10,221 | ||
Tools, furniture and fixtures | 8,370 | 8,680 | ||
Accumulated depreciation | (7,376) | (7,596) | ||
Tools, furniture and fixtures, net | 993 | 1,084 | ||
Land | 8,718 | 9,020 | ||
Construction in progress | 3,738 | 3,753 | ||
Other | 2,499 | 2,579 | ||
Accumulated depreciation | (1,136) | (1,091) | ||
Other, net | 1,363 | 1,487 | ||
Total property, plant and equipment | 43,158 | 52,830 | ||
Intangible assets | ||||
Goodwill | 162 | 116 | ||
Other | 637 | 691 | ||
Total intangible assets | 800 | 808 | ||
Investments and other assets | ||||
Investment securities | 2,502 | 2,585 | ||
Deferred tax assets | 1,494 | 904 | ||
Other | 852 | 844 | ||
Allowance for doubtful accounts | (13) | (13) | ||
Total investments and other assets | 4,836 | 4,321 | ||
Total noncurrent assets | 48,795 | 57,960 | ||
Total assets | 141,680 | 149,781 | ||
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(Millions of yen) | ||||
March 31, 2024 | December 31, 2024 | |||
Liabilities | ||||
Current liabilities | ||||
Notes and accounts payable-trade | 26,311 | 25,372 | ||
Short-term loans payable | 1,579 | 728 | ||
Accounts payable-other | 4,618 | 7,581 | ||
Income taxes payable | 1,813 | 782 | ||
Contract liabilities | 381 | 181 | ||
Provision for bonuses | 1,683 | 897 | ||
Provision for directors' bonuses | 119 | 107 | ||
Allowance for contingent losses | 2,198 | 2,198 | ||
Other | 2,075 | 2,908 | ||
Total current liabilities | 40,781 | 40,757 | ||
Noncurrent liabilities | ||||
Long-term loans payable | 75 | 3,839 | ||
Deferred tax liabilities | 55 | 138 | ||
Net defined benefit liability | 4,956 | 4,666 | ||
Provision for directors' retirement benefits | 592 | 606 | ||
Other | 1,577 | 1,784 | ||
Total noncurrent liabilities | 7,257 | 11,036 | ||
Total liabilities | 48,038 | 51,793 | ||
Net assets | ||||
Shareholders' equity | ||||
Capital stock | 6,600 | 6,600 | ||
Capital surplus | 6,515 | 6,569 | ||
Retained earnings | 70,265 | 73,506 | ||
Treasury shares | (2,220) | (2,166) | ||
Total shareholders' equity | 81,161 | 84,509 | ||
Accumulated other comprehensive income | ||||
Valuation difference on available-for-sale securities | 827 | 902 | ||
Foreign currency translation adjustment | 3,557 | 3,851 | ||
Remeasurements of defined benefit plans | 62 | 124 | ||
Total accumulated other comprehensive income | 4,446 | 4,878 | ||
Subscription rights to shares | 351 | 351 | ||
Noncontrolling interests | 7,682 | 8,249 | ||
Total net assets | 93,642 | 97,988 | ||
Total liabilities and net assets | 141,680 | 149,781 | ||
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-
Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive income
Quarterly consolidated statements of income (Nine-month consolidated period)
(Millions of yen) | ||||
Nine-month period ended | Nine-month period ended | |||
December 31, 2023 | December 31, 2024 | |||
Net sales | 101,763 | 113,387 | ||
Cost of sales | 79,460 | 86,953 | ||
Gross profit | 22,302 | 26,434 | ||
Selling, general and administrative expenses | 15,923 | 18,095 | ||
Operating income | 6,379 | 8,369 | ||
Nonoperating income | ||||
Interest income | 113 | 215 | ||
Dividend income | 67 | 62 | ||
Insurance and dividend income | 110 | 93 | ||
Foreign exchange gains | 181 | 154 | ||
Subsidy income | 5 | 3 | ||
Income from recycling | 51 | 86 | ||
Other | 103 | 118 | ||
Total nonoperating income | 633 | 735 | ||
Nonoperating expenses | ||||
Interest expenses | 26 | 48 | ||
Loss on investments in investment partnerships | 13 | 14 | ||
Costs for responding to system failures | － | 203 | ||
Losses associated with production stoppages | － | 239 | ||
Other | 8 | 12 | ||
Total nonoperating expenses | 48 | 518 | ||
Ordinary income | 6,964 | 8,586 | ||
Extraordinary income | ||||
Gain on sales of noncurrent assets | 19 | 7 | ||
Gain on sales of investment securities | 911 | － | ||
Total extraordinary income | 931 | 7 | ||
Extraordinary losses | ||||
Loss on retirement of noncurrent assets | 42 | 43 | ||
Loss on business transfers | － | 57 | ||
Loss on valuation of investment securities | － | 364 | ||
Provision for contingent loss | 2,198 | － | ||
Other | － | 0 | ||
Total extraordinary losses | 2,240 | 466 | ||
Income before income taxes | 5,655 | 8,127 | ||
Income taxes-current | 1,850 | 1,622 | ||
Income taxes-deferred | 234 | 465 | ||
Total income taxes | 2,084 | 2,088 | ||
Net income | 3,571 | 6,039 | ||
Net income attributable to noncontrolling interests | 420 | 740 | ||
Net income attributable to owners of parent | 3,150 | 5,299 | ||
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Quarterly consolidated statements of comprehensive income (Nine-month consolidated period)
(Millions of yen) | |||
Nine-month period ended | Nine-month period ended | ||
December 31, 2023 | December 31, 2024 | ||
Net income | 3,571 | 6,039 | |
Other comprehensive income | |||
Valuation difference on available-for-sale securities | (462) | 72 | |
Foreign currency translation adjustment | 2,257 | 362 | |
Remeasurements of defined benefit plans, net of tax | 12 | 110 | |
Total other comprehensive income | 1,808 | 545 | |
Comprehensive income | 5,379 | 6,584 | |
Comprehensive income attributable to | |||
Owners of parent | 4,490 | 5,730 | |
Noncontrolling interests | 889 | 853 |
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(3) Notes to the quarterly consolidated financial statements
Notes on assumptions of going concern
Not applicable.
Notes on significant changes in the amount of shareholders' equity
Not applicable.
Changes in significant subsidiaries during the nine months ended December 31, 2024
Fujimori PlaChemical Co., Ltd., which was a consolidated subsidiary, has been excluded from the scope of consolidation because of its dissolution through an absorption-type merger.
Notes on changes in accounting policies
Application of Accounting Standard for Corporate, Inhabitant and Enterprise Taxes
The Accounting Standard for Corporate, Inhabitant and Enterprise Taxes (ASBJ Statement No. 27, October 28, 2022; hereafter referred to as the 2022 Revised Accounting Standard) and other standards have been applied from the beginning of the first quarter of the consolidated accounting period under review.
Regarding the revision to the classification of corporate tax (taxation on other comprehensive income), we have followed the transitional treatments stipulated in the proviso of paragraph 20-3 of the 2022 Revised Accounting Standard and the proviso of paragraph 65-2 (2) of the Guidance on Accounting Standard for Tax Effect Accounting (ASBJ Guidance No. 28, October 28, 2022; hereafter referred to as the 2022 Revised Guidance). This change in accounting policy had no effect on the quarterly consolidated financial statements.
In addition, revisions related to the treatment in the consolidated financial statements of the deferral for tax purposes of gains or losses on sales of shares of subsidiaries and other securities arising from sales between consolidated companies have been applied based on the 2022 Revised Guidance from the beginning of the first quarter of the consolidated accounting period under review.
This change in accounting policy has been applied retroactively to the consolidated financial statements for the previous fiscal year. The change, however, had no effect on the second quarter and the previous year's consolidated financial statements.
Notes on quarterly consolidated cash flow statements
The quarterly consolidated cash flow statement for the nine-month consolidated period has not been prepared. However, the depreciation and amortization expenses (including the amortization of intangible assets, excluding goodwill) and the amortization of goodwill for the nine-month consolidated period were as follows:
(Millions of yen) | ||
Nine-month period ended | Nine-month period ended | |
December 31, 2023 | December 31, 2024 | |
Depreciation and amortization expenses | 4,362 | 4,359 |
Amortization of goodwill | 48 | 50 |
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