GS Yuasa : Consolidated Earnings Report for the Six Months ended September 30, 2022(319KB)

GS Yuasa Corporation

Consolidated Earnings Report for the Six Months ended September 30, 2022 (Japanese GAAP)

November 8, 2022

Stock listing:	Tokyo Stock Exchange	Securities code: 6674
URL:	https://www.gs-yuasa.com/en/
Representative:	Osamu Murao, President and CEO
Information contact: Hiroaki Matsushima	Tel: [phone]
	Director and CFO

Scheduled dates

Filing of statutory quarterly financial report (Shihanki hokokusho): November 8, 2022

Dividend payout:	December 1, 2022
Supplementary materials to quarterly earnings report available:	Yes
Quarterly earnings presentation held:	Yes (targeted at institutional
	investors and analysts)

(Amounts rounded down to the nearest million yen)

1. Consolidated Financial Results for the Six Months ended September 30, 2022 (April 1, 2022 to September 30, 2022)

(1) Consolidated Operating Results			(Percentages indicate year-on-year changes)
	Net sales		Operating profit	Ordinary profit	Profit attributable to
		owners of parent
	million yen	%	million yen	%	million yen	%	million yen	%
Six Months ended	235,224	20.6	8,224	57.3	6,015	(8.4)	1,713	(22.4)
September 30, 2022
Six Months ended	195,124	13.2	5,226	(1.3)	6,569	1.1	2,207	-
September 30, 2021
Note: Comprehensive income: Six Months ended September 30, 2022:¥15,324 million,135.6%
	Six Months ended September 30, 2021:¥6,504 million,	96.4%
	Basic earnings per share	Diluted earnings per share
	yen			yen
Six Months ended		21.30		-
September 30, 2022
Six Months ended		27.42		-
September 30, 2021
Reference: Operating profit before amortization of goodwill:
	Six Months ended September 30, 2022:¥8,762 million,	37.8%
	Six Months ended September 30, 2021:¥6,356 million,	(1.1)%

The Company uses "operating profit before amortization of goodwill" as an important indicator for management.

(2) Consolidated Financial Position

	Total assets	Net assets	Equity ratio
	million yen	million yen	%
As of September 30,	523,636	262,303	43.1
2022
As of March 31, 2022	480,763	249,938	44.8
Reference: Total equity:	As of September 30, 2022:	¥225,616 million
	As of March 31, 2022:	¥215,233 million

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2. Dividends

				Dividend per share
		End-Q1	End-Q2			End-Q3	Year-end	Total
		yen	yen			yen	yen	yen
Year ended		-	15.00			-	35.00		50.00
March 31, 2022
Year ending		-	15.00
March 31, 2023
Year ending						-	35.00		50.00
March 31, 2023
(forecast)

Note: No revision has been made to the latest dividends forecast.

3. Earnings Forecast for the Year ending March 31, 2023 (April 1, 2022 to March 31, 2023)

(Percentages indicate year-on-year changes)

							Profit attributable to	Basic
	Net sales	Operating profit	Ordinary profit	earnings
	owners of parent
							per share
	million yen	%	million yen	%	million yen	%	million yen	%	yen
Year ending	520,000	20.3	28,000	23.5	28,000	13.4	12,000	41.7	149.17
March 31, 2023

Note: No revision has been made to the latest earnings forecast.

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*Notes

1. Changes affecting the status of material subsidiaries (scope of consolidation): None
2. Use of accounting procedures specific to preparation of quarterly consolidated financial statements: Yes
3. Changes in accounting policy, changes in accounting estimates, and retrospective restatement
4. 1. Changes in accordance with revisions to accounting and other standards: Yes
   2. Changes other than 1) above: None
   3. Changes in accounting estimates: None
   4. Retrospective restatement: None

1. Number of shares issued (common stock)
2. 1. Number of shares issued (including treasury shares)

As of September 30,	As of March 31,
2022	2022
80,599,442	80,599,442

2)	Number of treasury shares	145,986	159,410
		Six Months ended	Six Months ended
		September 30, 2022	September 30, 2021
3)	Average number of shares outstanding during	80,442,910	80,510,181
	the period (cumulative from the beginning of
	the fiscal year)

*Quarterly financial reports are not subject to audit procedures to be conducted by certified public accountants or an audit firm.

*Appropriate Use of Earnings Forecast and Other Important Information

The above forecasts are based on the assumptions of management in light of information available as of the release date of this report. GS Yuasa Corporation makes no assurances as to the actual results, which may differ from forecasts due to various factors such as changes in the business environment.

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4. Qualitative Information on Quarterly Financial Results

(1) Results of Operations

1) Overview

In the first six months of the fiscal year ending March 31, 2023, the global economy showed signs of a gradual recovery as the stagnation in economic activities caused by the novel coronavirus pandemic (COVID-19) began to ease. However, the economic outlook remains uncertain due to shortages of components and China's ongoing zero-COVID policy, as well as rising raw material prices and rising energy costs caused by the situation in Ukraine and other factors. In addition, since the U.S. accelerated the pace of monetary tightening in order to curb inflation, the yen weakened due to the widening interest rate differential between the U.S. and Japan.

In this economic environment, the GS Yuasa Group's consolidated net sales for the first six months of the fiscal year ending March 31, 2023 totaled ¥235,224 million, up ¥40,099 million or 20.6%, from the same period of the previous fiscal year. This increase in Group sales mainly reflects an increase in sales volume of lithium-ion batteries for hybrid vehicles and the effect of the consolidation of İnci GS Yuasa Akü Sanayi ve Ticaret Anonim Şirketi of the Republic of Turkey, as well as the effect of yen depreciation on foreign exchange rate. In line with this, operating profit came to ¥8,224 million (operating profit before goodwill amortization came to ¥8,762 million), up ¥2,997 million or 57.3% from the same period of the previous fiscal year. Ordinary profit came to ¥6,015 million, down ¥553 million or 8.4% from the same period of the previous fiscal year, due to deterioration in share of profit of entities accounted for using equity method and recording foreign exchange losses. Profit attributable to owners of parent came to ¥1,713 million, down ¥493 million or 22.4% from the same period of the previous fiscal year.

2) Business Segment Results

(Automotive Batteries)

Net sales in Japan for the first six months of the fiscal year ending March 31, 2023 totaled ¥37,669 million, a year-on-year increase of ¥2,441 million or 6.9%, due to revising sales prices, despite the decrease in sales volume of batteries for new vehicles in line with the decline in new vehicle sales compared to the same period of the previous fiscal year. Domestic segment profit (before amortization of goodwill) came to ¥1,757 million, down ¥22 million or 1.2% from the same period of the previous fiscal year, due to the decrease in sales volume.

Overseas net sales totaled ¥121,839 million, a year-on-year increase of ¥34,267 million or 39.1%, due to the consolidation of İnci GS Yuasa Akü Sanayi ve Ticaret Anonim Şirketi and the effect of yen depreciation on foreign exchange rate. Overseas segment profit came to ¥6,087 million, up ¥1,757 million or 40.6% from the same period of the previous fiscal year, thanks to increased net sales, despite the impact of higher costs including distribution costs.

As a result of the above factors, the automotive batteries segment's combined net sales in Japan and overseas in the first six months of the fiscal year ending March 31, 2023 totaled ¥159,509 million, a year-on-year increase of ¥36,709 million or 29.9%. Overall automotive batteries segment profit (before goodwill amortization) came to ¥7,844 million, up ¥1,735 million or 28.4% from the same period of the previous fiscal year.

(Industrial Batteries and Power Supplies)

Net sales in the industrial batteries and power supplies segment totaled ¥40,387 million, a year-on- year decrease of ¥5,616 million or 12.2%, due to the completion of the delivery of lithium-ion batteries for large-scale wind power generation facilities in the previous fiscal year. The segment

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posted an operating profit of ¥772 million, a year-on-year improvement of ¥932 million, owing to changes in our sales mix.

(Automotive Lithium-ion Batteries)

Net sales in the automotive lithium-ion batteries segment totaled ¥27,336 million, a year-on-year increase of ¥8,934 million or 48.5%, due to the increase in sales volume of lithium-ion batteries for hybrid vehicles. The segment posted an operating profit of ¥181 million, up ¥6 million or 3.8% from the same period of the previous fiscal year.

(Other)

Net sales in the other segment totaled ¥7,991 million, a year-on-year increase of ¥72 million or 0.9%. The segment posted an operating loss after adjustments for corporate expenses, etc. of ¥36 million, a year-on-year deterioration of ¥268 million.

(2) Financial Condition

Total assets as of September 30, 2022, amounted to ¥523,636 million, ¥42,873 million more than at the end of the previous fiscal year, due to an increase in inventories and the new consolidation of İnci GS Yuasa Akü Sanayi ve Ticaret Anonim Şirketi, despite a decrease from the collection of trade receivables.

Liabilities increased to ¥261,333 million, up ¥30,509 million from the end of the previous fiscal year, due to an increase in borrowings and the new consolidation of İnci GS Yuasa Akü Sanayi ve Ticaret Anonim Şirketi.

Net assets totaled ¥262,303 million, an increase of ¥12,364 million from the end of the previous fiscal year. This mainly reflects an increase due to the recording of profit attributable to owners of parent and an increase in the foreign currency translation adjustment due to forex rate fluctuations, which outweighed outflows from dividends paid.

[Cash Flows]

Cash and cash equivalents as of September 30, 2022, amounted to ¥25,727 million, a decrease of ¥117 million, or 0.5%, from the end of the previous fiscal year.

Net cash provided by operating activities in the first half of the fiscal year, amounted to ¥1,939 million, compared with net cash provided of ¥6,112 million in the same period of the previous fiscal year. There were main contributions from profit before income taxes, depreciation and the collection of trade receivables, partially offset by an increase in inventories, a decrease in trade payables and the payment of income taxes.

Net cash used in investing activities totaled ¥15,656 million, compared with net cash used of ¥16,850 million a year earlier. The main cash outflow from investments was the purchase of property, plant, and equipment.

Net cash provided by financing activities amounted to ¥11,860 million, compared with net cash used of ¥1,809 million in the first half of the previous fiscal year. The main cash outflow was dividends paid. An increase in borrowings was the main source of inflows.

(3) Note on Consolidated Earnings Forecast and Other Forward-looking Statements

No revisions have been made to the consolidated earnings forecast announced on May 12, 2022.

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