Ahresty : Consolidated Financial Results (Japanese Accounting Standards) for the First Quarter of the Fiscal Year Ending March 31, 2024

Consolidated Financial Results (Japanese Accounting Standards)

for the First Quarter of the Fiscal Year Ending March 31, 2024

Company Name: Ahresty Corporation
Code Number:	5852	URL: https://www.ahresty.co.jp
Representative:	(Title)	President & CEO
Contact for		Director and Managing Executive
(Title)	Officer, Chief of General Administrative
inquiries:
	Command
Planned date for filing of quarterly securities	August 10, 2023
report:
Supplementary documents for quarterly results: Yes
Quarterly results briefing:		No

August 10, 2023

Stock Exchange Listing: Tokyo

(Name) Shinichi Takahashi

(Name) Hideki Nariya TEL [phone]

Planned date for start of dividend

payment:－

(Amounts of less than 1 million yen are rounded off)

1. Consolidated results for the first quarter of the year ending March 2024 (from April 1, 2023 to June 30, 2023)

1. Consolidated operating results (for the three months ended June 30, 2023) (% shows year-on-yearchange from previous year)

	Net sales		Operating income	Recurring income	Net income attributable
		to owners of parent
	million yen		%	million yen	%	million yen	%	million yen	%
First quarter of year	37,996		14.7	227	－	357	－	452	－
ending March 2024
First quarter of year	33,113		22.1	(553)	－	(424)	－	(649)	－
ended March 2023

(Notes) 1. Comprehensive income: First quarter of year ending March 2024: 1,662 million yen (-25.1%)

(Reference) EBITDA:First quarter of year ending March 2024: 3,309 million yen (30.9%) * EBITDA = operating income + depreciation and amortization

First quarter of year ended March 2023: 2,218 million yen (60.8%)

First quarter of year ended March 2023: 2,529 million yen (9.0%)

Net income per share

Fully diluted net income

yen

yen

First quarter of year ending March 2024

17.44

17.33

First quarter of year ended March 2023

(25.15)

－

(2) Consolidated financial position

Total assets

Net assets

Equity ratio

million yen

million yen

%

First quarter of year ending March 2024

137,579

58,099

42.1

Year ended March 2023

137,069

56,649

41.2

(Reference) Shareholders' equity: First quarter of year ending March 2024: 57,981 million yen

Year ended March 2023: 56,527 million yen

2. Dividend payments

Dividend per share

End of first quarter

End of second

End of third quarter

End of year

For the year

quarter

yen

yen

yen

yen

yen

Year ended March 2023

－

5.00

－

5.00

10.00

Year ending March 2024

－

Year ending March 2024 (Forecast)

5.00

－

10.00

15.00

(Note) Revisions to dividend forecast published most recently: No

3. Forecast of consolidated results for year ending March 2024 (from April 1, 2023 to March 31, 2024)

(% shows year-on-year change from previous year)

							Net income		Net income per
	Net sales	Operating income	Recurring income	attributable to
	share
							owners of parent
	million yen	%	million yen	%	million yen	%	million yen		%	yen
First half	74,700	12.3	400	－	100	－	100		－	3.86
Full year	150,000	6.4	2,200	－	1,600	－	1,100		－	42.43

(Notes) 1. Revisions to consolidated results forecast published most recently: No

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• Notes:
• 1. Significant changes to subsidiaries during the current term (changes for a specified subsidiary accompanying a change in the scope of consolidation): No
  2. Application of specific accounting treatment to the preparation of quarterly consolidated financial statements: No
  3. Changes in accounting policies and changes in or restatement of accounting estimates

	(i)	Changes in accounting policies associated with revision of accounting standards, etc.:	No
	(ii)	Changes in accounting policies other than (i):			No
	(iii)	Changes in accounting estimates:			No
	(iv)	Restatement:				No
	(4) Number of shares outstanding (Common stock)
	(i)	Number of shares
		outstanding at end of period	1Q of year ending March 2024	26,076,717 shares	Year ended March 2023	26,076,717 shares
		(including treasury shares)
	(ii)	Number of treasury shares at	1Q of year ending March 2024	273,342 shares	Year ended March 2023	149,822 shares
		end of period
	(iii)	Average number of shares	1Q of year ending March 2024	25,911,898 shares	1Q of year ended March	25,826,273 shares
		(for first quarter)	2023
*	Quarterly consolidated financial statements are placed outside the scope of quarterly reviews performed by a certified
	public accountant or an audit corporation.
*	Explanation for appropriate use of financial forecasts and other special remarks

(Note on forward-looking statements)

The forecasts presented herein are based on information currently available and certain assumptions deemed reasonable by the Company, and actual results may differ significantly from these forecasts due to various factors. For notes on the use of the results forecasts and assumptions as the basis for the results forecasts, please see "1. Qualitative Information on Consolidated Operating Results, etc. for First Quarter (3) Explanation of Consolidated Earnings Forecasts and Other Information for Future Outlook" on page 3 of the accompanying materials.

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Accompanying Materials - Contents

1. Qualitative Information on Consolidated Operating Results, etc. for First Quarter	4
(1)	Explanation of Operating Results	4
(2)	Explanation of Financial Position	5
(3)	Explanation of Consolidated Earnings Forecasts and Other Information for Future Outlook	5
2. Consolidated Quarterly Financial Statements and Key Notes	6
(1)	Quarterly Consolidated Balance Sheet	6
(2)	Quarterly Consolidated Income Statement and Quarterly Consolidated Statement of Comprehensive Income	8
	Quarterly Consolidated Income Statement
	First Quarter	8
	Quarterly Consolidated Statement of Comprehensive Income
	First Quarter	9
(3)	Notes	10
	(Notes on Going Concern Assumption)	10
	(Notes on Significant Change in Amount of Shareholders' Equity)	10
	(Segment Information, etc.)	11

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1. Qualitative Information on Consolidated Operating Results, etc. for First Quarter

1. Explanation of Operating Results
   During the first quarter of the consolidated fiscal year under review, although restrictions on economic and social activities due to COVID-19 were lifted and the shortage of semiconductors eased, the world economy continued to stagnate under high interest rates and high inflation. In the U.S., while the rapid raising of the policy interest rate affected the overall economy, inflation continued due to the tightening supply of labor, and the U.S. economy is expected to slow down in the latter half of this year. In China, the rapid demand recovery along with the resumption of economic activities has come to an end, and the economy has been seeing slowdown due to weak private investment and prolonging real estate market adjustments. In Japan, despite the ongoing consumption recovery mainly in the service industry, the slowdown in the U.S. economy and the high commodity prices, which diminished the effect of wage hikes, are putting downward pressure on the Japanese economy. Therefore, the gradual economic recovery is expected to continue. In addition to these economic conditions in major countries, the heightening geopolitical risks against the backdrop of the prolonged Russian invasion of Ukraine and the U.S.-China trade conflict are causing the outlook of the business environment to remain uncertain.
   Under these economic circumstances, the Ahresty Group continued efforts to improve production efficiency by automating production lines, etc. and reduce capital investment by promoting the utilization of idle internal facilities, etc., while also working to start or expand businesses with companies with an advantage in parts for electric vehicles. In Asia, we faced difficulty due to the impact of the spread of infection following the lifting of the zero-COVID policy in China and the intensification of competition between Japanese automobile companies and local manufacturers in the Chinese market. However, we were able to record surpluses for operating income, recurring income, and net income thanks to the recovery in the volume of orders received in line with the global easing of the shortage of semiconductors in car production as a whole.
   Starting from the consolidated fiscal year under review, the Ahresty Group has promoted its 10-year Business Plan, a long-term management plan toward fiscal 2030, and the 2224 Medium-Term Management Plan, the milestone plan for the first three years of the 10-year Business Plan. Under the 2224 Medium-Term Management Plan, in response to changes in the external environment, such as the acceleration of electrification of automobiles and moves toward carbon neutrality, we set "establishing low-cost, highly productive MONOZUKURI," "reducing CO2 emissions in production," and "shifting the business portfolio to predominantly parts for electric vehicles" as the pillars of our strategy. Based on these pillars, we are making efforts to secure net sales, improve productivity, and enhance our earnings strength. Furthermore, we formulated financial strategies for the 10-year Business Plan in June this year, aiming to achieve, in addition to the income targets that have already been released, an equity ratio of 40%, a dividend payout ratio of 35%, capital investment of 140 billion yen, and an ROE of 9% as the four pillar financial targets for the period of the 10-year Business Plan.
   Consequently, for the first quarter of the consolidated fiscal year under review, the Group recorded net sales of ¥37,996 million (up 14.7% year on year), operating income of ¥227 million (operating loss of ¥553 million for the first quarter of the previous year), recurring income of ¥357 million (recurring loss of ¥424 million for the first quarter of the previous year), and net income attributable to owners of parent of ¥452 million (net loss attributable to owners of parent of ¥649 million in the first quarter of the previous year).

Operating results by segment are as follows:

1. Die Casting Business: Japan
   In the Japanese automobile market, as car production recovered due to the stabilization of supply of semiconductors, resulting in an increase in the volume of orders received, our net sales increased to ¥15,459 million (up 18.8% year on year). On the profitability side, despite the rise in energy prices, etc., the segment recorded a profit of ¥42 million (a segment loss of ¥554 million was recorded a year earlier) due to the impact of the recovery in production associated with an increase in orders received
2. Die Casting Business: North America
   In the automobile market in North America, as car production recovered due to the stabilization of supply of semiconductors, resulting in an increase in the volume of orders received, our net sales increased to ¥11,307 million (up 35.3% year on year). On the profitability side, the segment recorded a profit of ¥405 million (a segment loss of ¥441 million was recorded a year earlier) due to the impact of the recovery in production associated with an increase in orders received.
3. Die Casting Business: Asia
   In the automobile market in Asia, despite an increase in sales in line with the start of mass production by a major customer in India, net sales decreased 9.0% year on year to ¥7,707 million due to the impact of the spread of infection following the lifting of the zero-COVID policy in China and the intensification of competition between Japanese automobile companies and local manufacturers in the Chinese market. On the profitability side, the segment recorded a loss of ¥617 million (a segment loss of ¥340 million was recorded a year earlier) due to the decrease in production associated with a decrease in orders received and the impact of higher costs pertaining to the ongoing instability in production of some products.
4. Aluminum Business
   In the Aluminum Business, the sales weight decreased by 5.0% year on year due to the decrease in automobile-related delivery, and net sales decreased 12.3% year on year to ¥1,842 million due to the decline in the aluminum market from high prices resulting from the conflict in Ukraine in the first quarter of the previous year. On the profitability side, the segment recorded a profit of ¥55 million (down 32.6% year on year) due to the impact of the decrease in sales.

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1. Proprietary Products Business
   In the Proprietary Products Business, net sales increased 44.1% year on year to ¥1,679 million, mainly reflecting an increase in orders for projects of the main customers, such as a clean room at a semiconductor-related company. On the profitability front, the segment achieved a stable profit of ¥174 million (up 93.3% year on year), though the profitability differs among individual projects.

1. Explanation of Financial Position (Assets)
   Total assets at the end of the consolidated first quarter under review increased by ¥510 million from the end of the previous consolidated fiscal year, to ¥137,579 million. Current assets stood at ¥59,636 million, a decrease of ¥1,663 million from the end of the previous consolidated fiscal year. This was mainly due to decreases of ¥3,443 million in cash and time deposits and ¥471 in inventories despite increases of ¥1,712 million in trade notes and accounts receivable and ¥261 million in prepaid expenses included in Others. Fixed assets were ¥77,943 million, up ¥2,174 million from the end of the preceding consolidated fiscal year. This was due chiefly to increases of ¥1,608 million in tangible fixed assets, ¥72 million in investment securities, and ¥399 million in deferred tax assets included in Others.
   (Liabilities)
   Liabilities at the end of the consolidated first quarter under review fell ¥939 million from the end of the previous consolidated fiscal year, to ¥79,480 million. Current liabilities stood at ¥57,291 million, a decrease of ¥1,985 million from the end of the previous consolidated fiscal year. This was mainly due to a decrease of ¥3,947 million in short-term loans payable, in contrast to increases of ¥1,367 million in notes and accounts payable and ¥641 million in bonus allowances. Long-term liabilities stood at ¥22,188 million, up ¥1,046 million from the end of the previous consolidated fiscal year. This was mainly due to an increase of ¥1,038 million in long-term loans payable.
   (Net assets)
   Net assets at the end of the consolidated first quarter under review increased by ¥1,449 million from the end of the previous consolidated fiscal year, to ¥58,099 million. This was attributable primarily to increases of ¥323 million in retained earnings and ¥1,130 million in foreign currency translation adjustments.
   As a result, the equity ratio was up from 41.24% at the end of the previous consolidated fiscal year to 42.14% at the end of the consolidated first quarter under review.
2. Explanation of Consolidated Earnings Forecasts and Other Information for Future Outlook
   No changes have been made to the consolidated financial forecasts for the first half and the full year announced on May 18, 2023.

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