Zero Co., Ltd.TSE: 9028

FY2021 Financial Results

Aug 12, 2022 at 4:58 AM UTC · MarketScreener

Summary of Consolidated Financial Results for the Fiscal Year Ended June 30, 2022 [Based on IFRS]

				August 10, 2022
Company name:	ZERO CO., LTD.			Stock Exchange Listing: Tokyo
Stock code:	9028	URL http://www.zero-group.co.jp/
Representative:	President & CEO		Takeo Kitamura
Inquiries:	Director and Manager of Group Strategies Headquarters	Toshihiro Takahashi	TEL 044-520-0106
Scheduled Date of Ordinary General meeting of Shareholders:	September 28, 2022 Scheduled date to commence dividend payments: September 29, 2022
Scheduled Date for the Submission of Annual Securities Report:	September 29, 2022
Preparation of supplementary material on financial results:	Yes
Holding of financial results meeting:		No

(Amounts less than one million yen are rounded down)

1. Consolidated financial results for the fiscal year ended June 30, 2022 (From July 1, 2021 to June 30, 2022)

(1) Consolidated operating results (cumulative)												(Percentages indicate year-on-year changes)

																		Profit attributable to	Total comprehensive
			Sales revenue			Operating income		Profit before tax		Net Income			equity shareholders		income of the fiscal
																		of the company	year

			Millions of yen	%		Millions of yen	%		Millions of yen	%		Millions of yen	% Millions of yen		% Millions of yen	%
	FY2021/2022	107,045		16.1	3,912			3,947			2,521			2,535			2,718
			△26.6		△26.6		△30.2		△30.1		△31.2
	FY2020/2021		92,171		3.0		5,332		45.1		5,373		46.0		3,614		51.4	3,626	52.7	3,949	66.2

Basic earnings of this

Diluted earnings of this year

Profit ratio attributable to

Total capital profit ratio

Sales revenue operating

year per share

per share

equity shareholders of the

before tax

profit ratio

company

Yen

FY2021/2022

150.91

150.72

8.7

7.5

3.7

FY2020/2021

216.55

215.85

13.6

11.3

5.8

(Reference) Investment gain / loss through equity method;

FY2021/2022: 3 million yen,

FY2020/2021: 42 million yen

(2) Consolidated financial position

Equity attributable to equity

Equity ratio attributable

Equity per share

attributable to equity

Total assets

Total capital

shareholders of the

to equity shareholders of

shareholders of the

company

the company

company

Millions of yen

Yen

FY2021/2022

54,895

30,614

30,067

54.8

1,789.25

FY2020/2021

50,935

28,298

28,280

55.5

1,688.83

(3) Consolidated cash flow position

Cash flow from operating

Cash flow from investing

Cash flow from financing

Cash and cash equivalents at end

activities

of year

Million yen

FY2021/2022

3,954

△3,266

△1,608

5,180

FY2020/2021

8,594

△3,104

△4,364

5,904

2. Cash dividends

Annual dividends per share

Total dividends

Dividend

Equity dividend

1st quarter-

2nd quarter-

3rd quarter-

Fiscal year-

Total

(Total)

payout ratio

ratio attributable

(consolidated)

to equity

end

shareholders of the company (consolidated)

	Yen	Yen	Yen	Yen	Yen	Million yen	%	%
FY2020/2021	---	15.00	---	39.10	54.10	911	25.0	3.4
FY2021/2022	---	15.00	---	22.70	37.70	635	25.0	2.1
FY2022/2023	---	15.00	---	25.20	40.20		25.0
(forecast)

3. Forecast of consolidated financial results for the year ending June 30, 2023 (From July 1, 2022 to June 30, 2023)

(Percentages indicate year-on-year changes)

								Profit attributable to equity
	Sales revenue	Operating income		Profit before tax		shareholders of the	Basic earnings per share
								company

	Millions of yen	%	Millions of yen		%	Millions of yen	%	Millions of yen	%	Yen
Full year	109,000	1.8	4,200		7.3	4,200	6.4	2,700	6.5	160.67

(Note)

Changes in significant subsidiary companies during the current fiscal year (Changes in the specific subsidiary companies following changes in the scope of consolidation): No

New  Co. (Company name),		Exclusions  Co. (Company name)
(2) Changes in accounting policies, changes in accounting estimates
 Changes in the accounting policies required by IFRS	:	No
 Changes in the accounting policies due to reasons other than ① :	No
 Changes in the accounting estimates	:	No

(3) Number of issued shares (common shares)

 Total number of issued shares at the end of the

FY2021/2022

17,560,242 shares

FY2020/2021

17,560,242 shares

period (including treasury shares)

 Number of treasury shares at the end of the period

FY2021/2022

994,982 shares

FY2020/2021

1,018,911 shares

 Average number of shares during the period

FY2021/2022

16,804,791 shares

FY2020/2021

16,745,846 shares

(total up to this year)

(Reference) Summary of non-consolidated financial results

Non-consolidated financial results for the fiscal year ended June 30, 2022 (From July 1, 2021 to June 30, 2022)

(1) Non-consolidated operating results

(Percentages indicate year-on-year changes)

Sales revenue

Operating income

Profit before tax

Net Income

Millions of yen

FY2021/2022

53,143

2,169

2,190

1,385

△5.5

△15.1

△42.1

△47.2

FY2020/2021

56,226

1.3

2,557

67.9

3,780

149.8

2,626

197.8

Basic earnings per share

Diluted earnings per share

Yen

FY2021/2022

83.71

FY2020/2021

158.81

(2) Non-consolidated financial position

Total assets

Net assets

Equity ratio

Net assets per share

Million yen

yen

FY2021/2022

37,967

23,628

62.2

1,426.41

FY2020/2021

35,807

23,121

64.6

1,397.80

(Reference) Company's Equity

FY2021/2022: 23,628 million yen

FY2020/2021: 23,121 million yen

Earnings summary is not within the scope of audit by a certified public accountant or auditor

Explanation of the proper use of financial results forecast and other notes

The earnings forecast, and other forward-looking statements herein are based on the information currently available to the Company and certain assumptions that the Company considers reasonable. The actual results may differ significantly from these forecasts due to a wide range of factors such as economic status of the major domestic and international markets or exchange rates fluctuation.
At our company, business management is conducted on a consolidated basis; therefore, individual business results forecasts are not created.

Attached Documents - Table of Contents

1. Summary of operating results………………………………………………………………………………………………	2
(1) Summary of operating results of the current fiscal period ………………………………………………………………	2
(2) Summary of financial position of the current fiscal period ……………………………………………………………	4
(3) Summary of cash flows of the current fiscal period ……………………………………………………………………	4
(4) Future outlook ……………………………………………………………………………………………………………	5
2. Basic view on selection of accounting standards ……………………………………………………………………………	5
3. Consolidated financial statements and major notes …………………………………………………………………………	6
(1) Consolidated statement of financial position ……………………………………………………………………………	6
(2) Consolidated statement of profit or loss …………………………………………………………………………………	8
(3) Consolidated statement of profit or loss and other comprehensive income ……………………………………………	9
(4) Consolidated statement of changes in equity ……………………………………………………………………………	10
(5) Consolidated statement of cash flow ……………………………………………………………………………………	11
(6) Notes on consolidated financial statements ……………………………………………………………………………	12
(Notes on going concern assumption) ………………………………………………………………………………	12
(Segment information) ………………………………………………………………………………………………	12
(Information per share) ………………………………………………………………………………………………	15
(Business Combination) ……………………………………………………………………………………………	15
(Significant subsequent events) ……………………………………………………………………………………	18

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1. Summary of operating results

(1) Summary of operating results of the current fiscal period

Japan's economy during the consolidated fiscal year has shown signs of recovery in many areas, the recovery in the automobile sector and other sectors has slowed down due to the impact of the new waves of the COVID-19 pandemic and partial production cutbacks in semiconductors and other products due to supply constraints.

In the domestic automotive market, the total number of new vehicles sales decreased significantly to 83.8% (statistical data of the Japan Automobile Manufacturers Association) as compared to the consolidated cumulative period of the same quarter from the previous year (hereinafter referred to as the same quarter from the previous year). The shortage of semiconductors and the new pandemic wave of COVID-19 in Southeast Asia and China have had a significant impact on the reduction of production due to shortages in the supply of automobile parts. The number of used vehicle registrations also decreased to 92.2% compared to the same period of the previous year, due to the decrease in trade-in cars caused by the slump in new vehicle sales, and a decline in the number of used vehicles purchased as a result of the rise in the market for used vehicles.

Revenue increased in the overseas related business due to the consolidation of Zero Scm Logistics (Beijing) Co., Ltd. as a consolidated subsidiary on July 1, 2021, as well as the strong performance of the used vehicle export business to Malaysia, but operating income decreased due to a decline in the number of units for transportation contracts as a result of the slump in automobile distribution, the soaring of unit price of fuel, and a decrease in employment adjustment subsidies compared to the previous consolidated fiscal year.

As a result, the business results of our group are as follows: sales revenue of 107,045 million yen (116.1% compared to the same quarter from the previous year) and operating profit of 3,912 million yen (73.4% compared to the same quarter from the previous year). In addition, the profit before taxes was 3,947 million yen (73.4% compared to the same quarter from the previous year), and the profit of the quarter attributable to the equity shareholders of the company was 2,535 million yen (69.9% compared to the same quarter from the previous year).

(Number of units related to domestic distribution of automobiles)				Units: vehicles

	Domestic			July of 2020 to June of 2021		July 2021 to June 2022	Compared to the
					previous year


	Number of new vehicles
	sold
	Domestic manufacturer	*1	4,577,218	3,830,263	83.7%
	(out of this, Nissan	*1	(483,552)	(428,312)	(88.6%)
	Motor)

	Foreign manufacturer	*2	278,207	239,669	86.1%
	Total of new vehicle sales		4,855,425	4,069,932	83.8%

	Number of registered used
	vehicles
	Registered vehicles	*3	3,909,258	3,591,917	91.9%
	Light vehicles	*4	3,094,802	2,863,195	92.5%
	Total number of used		7,004,060	6,455,112	92.2%
	vehicles registered


	Number of vehicles	*3	207,818	180,972	87.1%
	permanently deleted



	Export			July of 2020 to June of 2021		July 2021 to June 2022	Compared to the
					previous year


	New vehicles of domestic	*1	4,140,514	3,529,909	85.3%
	manufacturers

	Used vehicles(registered	*5		1,177,126		1,276,107	108.4%

	vehicles)

*1 Calculated from Japan Automobile Industry Association Statistics*2 Calculated from Japan Automobile Importers' Association statistics*3 Calculated from Japan Automobile Dealers Association statistics

*4 Calculated from Japan Mini Vehicles Association statistics*5 Trial calculated from the number of export deleted registered vehicles in the Japan Automobile Dealers Association statistics

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[Fuel retail price]						Unit: Yen / L

	National average			July of 2020 to June of 2021	July 2021 to June 2022	Compared to the
				previous year


	Light oil	*6	121.0	146.7	121.2%
	Regular petrol	*6		140.6	166.9		118.7%

*6 Calculated from statistics of Agency for Natural Resources and Energy (fuel used by our company for transport is mainly light oil)

The segment business results are as follows.

From the first quarter of the consolidated accounting period, the Company acquired an additional equity interest in Zero Scm Logistics (Beijing) Co., Ltd., which had been a jointly controlled company accounted for by the equity method, and made it a consolidated subsidiary, and as a result, the "Overseas Related Business" reporting segment was added. In addition, the automobile related businesses has been changed to the domestic automotive related businesses.

For the following comparisons with the previous consolidated fiscal year, figures for the previous consolidated fiscal year have been reclassified to reflect the new segment classifications.

"Domestic automotive related businesses"

For vehicle transportation, which is the core business, the number of units for transportation contracts decreased due to the decline in new vehicles sales and used vehicle registrations caused by the shortage of semiconductors, which led to a decrease in revenue. Revenue in the maintenance business also decreased due to a decrease in the number of pre-delivery maintenance and inspection contracts accompanying the decline in new vehicle sales, and there was an overall decrease in revenue in the domestic automobile related businesses.

Segment profit decreased due to lower revenue in the vehicle transportation and maintenance businesses, as well as higher unit fuel costs and fuel surcharges for marine transportation as a result of soaring crude oil prices and the depreciation of the yen.

As a result, the overall sales revenue in the domestic automotive business was 51,482 million yen (93.6% compared to the same period from the previous year), and the segment profit was 4,202 million yen (72.5% compared to the same quarter from the previous year).

In the vehicle transportation business, we will continue to respond to the "Digitalization", "Greening", and "New Normal. In the area of Digitalization, we have set up the Transportation Digitalization Promotion Office and are promoting the construction of a system to realize systematic allocation of vehicles.

In the area of Greening, we have completed the development of transportation equipment with an increased maximum loading capacity to cope with the increased weight of automobiles as they become more electrically powered, and we will sequentially introduce the equipment. Also, with the rapid acceleration of the adoption of EVs, we will take the initiative in developing the infrastructure for logistics bases and building EV-related peripheral businesses.

In response to the New Normal, we are striving to reduce overtime work in order to respond to the so-called "2024 Supply Chain Crisis", in which the application of the Work Style Reform Law to automobile driving duties is expected to take effect in 2024, we are also implementing various measures to maintain our transportation capacity, such as hiring new crew members, efficient operation of transportation equipment, and promotion of the division of labor in cargo handling.

Regarding the pick-up service business, revenues continued to increase due to the recovery from the impact of COVID-19 pandemic, and revenues from the human resources business as well as airport related personnel business increased as the businesses recovered from the previous year, when they were affected by the termination of employment contracts due to the COVID-19 pandemic. Segment income decreased due to a lower employment adjustment subsidy compared to the previous consolidated fiscal year.

As a result, the sales revenue of the overall human resource business was 19,330 million yen (107.7% compared to the same quarter from the previous year), and the segment profit was 666 million yen (80.0% compared to the same quarter from the previous year).

In the port cargo handling business, the full-scale launch of fuel cargo handling for biomass power plants has led to an increase in revenue in the transport / warehousing business due to the acquisition of new customers, increasing the revenue in the overall general cargo business as well.

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