FY2023 1st Half Financial Results
(Results for the Six Months Ended September 30, 2023)
(Forward-Looking Statements)
This material contains forward-looking statements based on expectations and are not guarantees or assurances of future performance. Accordingly, please be fully aware that results may differ materially from those expectations.
Copyright © Iwatani Corporation. All rights reserved.
November 17, 2023 Iwatani Corporation
[Securities code 8088]
Contents
-
FY2023 1st Half Overview -Highlights
-Consolidated Operating Results (Analysis of Net Sales)
-Consolidated Operating Results (Analysis of Operating Profit) -Consolidated Operating Results (Segment Analysis) -Operating Profit Analysis of Each Segment
-Balance Sheet (Consolidated) -Statement of Cash Flows - FY2023 Forecasts
-Forecasts for the year ending March 31, 2024 -Forecasts of Each Segment
-Returns to Shareholders
3. Progress of Medium-Term Management Plan "PLAN27"
-Overview
-Progress of Priority Measures
Copyright © Iwatani Corporation. All rights reserved. | 1 |
1
FY2023 1st Half Overview
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2
Highlights
Decrease in net sales. Despite the negative impact of LPG import price fluctuation, strong sales of products for industrial use contributed to increase in operating profit which marked record high.
Summary of Financial Results for the 1st Half of FY2023
- Decrease in net sales due to lower LPG import prices, decrease in sales volumes of LPG and decline in sales of rechargeable battery materials.
- Increase in operating profit due to strong sales of products for industrial use, despite the negative impact of LPG import price fluctuation compared to the previous year.
- Full-yearfinancial forecasts: no change
Net sales
Operating profit
Ordinary profit
Profit attributable to
owners of parent
394.2
14.5
18.1
12.0
■ Operating profit quarterly trends (100 million yen) | ||||||||||||
billion yen | YoY (19.0) billion yen | (4.6%) | 165 | |||||||||
billion yen | YoY +0.2 | billion yen | +1.9% | 88 | 91 | 85 | ||||||
54 | 60 | |||||||||||
billion yen | YoY (0.1) | billion yen | (0.7%) | |||||||||
billion yen | YoY (0.5) | billion yen | (4.3%) | 1Q | 2Q | 3Q | 4Q | 1Q | 2Q | 3Q | 4Q | |
FY2022 | FY2023 | |||||||||||
*The figures for the 1Q, 2Q, 3Q of FY2022 reflect the finalization of the | 3 | |||||||||||
Copyright © Iwatani Corporation. All rights reserved. | provisional accounting treatment for a business combination. |
Although net sales declined YoY in this FY2023 H1 financial results, operating income increased and reached a new record high due to strong sales of products for the industrial sector, despite the negative impact of factors in the LPG market.
3
Consolidated Operating Results (Analysis of Net Sales)
(100 million yen)
FY23 1H | FY22 1H | YoY | FY23 | |
Results | Results | (A)-(B) | Progress | |
Forecasts | ||||
(A) | (B) * | (A)/(B) |
Net sales | 3,942 | 4,132 | (190) | 9,070 | 43.5% | |
(4.6%) | ||||||
+27 | - | - | ||||
Gross profit | 1,009 | 981 | ||||
+2.8% | ||||||
Operating profit | 145 | 143 | +2 | 450 | 32.4% | |
+1.9% | ||||||
Operating profit | +59 | |||||
excluding impact | 197 | 137 | 450 | 43.8% | ||
of LPG import | +43.1% | |||||
price fluctuation | ||||||
Non-operating | 35 | 39 | (3) | - | - | |
income/expenses | (9.8%) | |||||
Ordinary profit | 181 | 183 | (1) | 503 | 36.2% | |
(0.7%) | ||||||
Profit attributable | (5) | |||||
120 | 126 | 335 | 36.0% | |||
to owners of parent | (4.3%) | |||||
Decrease factors
■ lower LPG import prices and decrease in sales volume due to higher temperature
■ decrease in sales of rechargeable battery materials caused by inventory adjustments at sales destinations
■ strong sales of products for industrial use
■ Net sales
Integrated | ||||
4,132 Energy | 189 | Materials | Others | 3,942 |
(253) | Industrial | (124) | (1) | |
Gases & |
Machinery
* The figures for the 1st half of FY2022 reflect the finalization of the provisional accounting treatment for a | FY22 1H | FY23 1H |
business combination. | ||
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Net sales decreased JPY19 billion, or 4.6%, YoY to JPY394.2 billion as a result of lower LPG import prices and lower LPG sales volume due to higher temperatures, as well as weak sales of EV-related battery materials due to industry-wide inventory adjustments.
Despite the negative JPY5.6 billion impact of LPG import price fluctuation compared to the previous year, gross profit increased 2.8% to JPY100.9 billion, up JPY2.7 billion, as a result of strong sales of products for the industrial sector and our response to increased manufacturing and procurement costs.
4
Consolidated Operating Results (Analysis of Operating Profit)
(100 million yen)
FY23 1H | FY22 1H | YoY | FY23 | |
Results | Results | (A)-(B) | Progress | |
Forecasts | ||||
(A) | (B) * | (A)/(B) |
Net sales | 3,942 | 4,132 | (190) | 9,070 | 43.5% |
(4.6%) | |||||
Gross profit | 1,009 | 981 | +27 | - | - |
+2.8% | |||||
Operating profit | 145 | 143 | +2 | 450 | 32.4% |
+1.9% | |||||
Operating profit | +59 | ||||
excluding impact |
Increase factors
■ strong sales of products for industrial use contributed to increase in operating profit despite the negative impact of LPG import price fluctuation
■ decrease in non-operating income/expenses due to decline in share of profit of entities accounted for using equity method and increase in interest expense, which led to decrease in ordinary profit and profit attributable to owners of parent
■ Operating profit
143 | Integrated | 4 | 5 | 145 | |
Energy | 44 | ||||
of LPG import | 197 | 137 | +43.1% | 450 | 43.8% |
price fluctuation | |||||
Non-operating | 35 | 39 | (3) | - | - |
income/expenses | (9.8%) | ||||
Ordinary profit | 181 | 183 | (1) | 503 | 36.2% |
(0.7%) | |||||
Profit attributable | (5) | ||||
120 | 126 | 335 | 36.0% | ||
to owners of parent | (4.3%) | ||||
Materials
-
Industrial
Gases &
Machinery
Others
- The figures for the 1st half of FY2022 reflect the finalization of the provisional accounting treatment for a business combination.
FY22 1H | FY23 1H |
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SG&A expenses increased by JPY2.4 billion due to increases in personnel expenses and depreciation and amortization, but operating income increased by JPY0.2 billion, or 1.9%, to JPY14.5 billion.
As a result, the company recorded its highest profit ever in Q2.
Non-operating income decreased due to a decrease in equity in earnings of affiliates and an increase in interest expenses, and ordinary income decreased by JPY0.1 billion, or 0.7%, to JPY18.1 billion.
As a result, net income for the quarter declined JPY0.5 billion, or 4.3%, to JPY12 billion.
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Consolidated Operating Results (Segment Analysis)
(100 million yen)
FY23 1H | FY22 1H * | YoY | YoY | FY23 | Progress | |
Results (A) | Results (B) | (A)-(B) | (A)/(B) | Forecasts | ||
Net sales | 3,942 | 4,132 | (190) | (4.6%) | 9,070 | 43.5% |
■ Integrated Energy | 1,433 | 1,686 | (253) | (15.0%) | 3,980 | 36.0% |
■ Industrial Gases & Machinery | 1,268 | 1,079 | +189 | +17.6% | 2,592 | 48.9% |
■ Materials | 1,085 | 1,210 | (124) | (10.3%) | 2,202 | 49.3% |
■ Others | 155 | 156 | (1) | (1.1%) | 296 | 52.4% |
Operating profit | 145 | 143 | +2 | +1.9% | 450 | 32.4% |
■ Integrated Energy | (11) | 39 | (51) | - | 180 | - |
■ Industrial Gases & Machinery | 108 | 64 | +44 | +69.5% | 175 | 62.0% |
■ Materials | 62 | 57 | +4 | +8.1% | 123 | 50.9% |
■ Others, Adjustments | (13) | (17) | +4 | - | (28) | - |
Operating profit excluding impact of LPG | 197 | 137 | +59 | +43.1% | 450 | 43.8% |
import price fluctuation | ||||||
Ordinary profit | 181 | 183 | (1) | (0.7%) | 503 | 36.2% |
Profit attributable to owners of parent | 120 | 126 | (5) | (4.3%) | 335 | 36.0% |
* The figures for the 1st half of FY2022 reflect the finalization of the provisional accounting treatment for a business combination.
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6
Impact of LPG Import Price Fluctuations
Assumption Wholesale price is linked to LPG import price. | Assumption | Term from import to sale is | ||||||||
① | ② | approx. three months. | ||||||||
Approx. three months | ||||||||||
LPG import price | linked to | Wholesale price | ||||||||
-LPG from Middle East(CP) | ||||||||||
-LPG from the US(MB) | ||||||||||
Iwatani's LPG | ||||||||||
Gas-producingcountry import & storage terminal | LPG users | |||||||||
Legally required reserves:40 days | ||||||||||
LPG import | Produces short-term impact on performance(due to market fluctuations) | |||||||||
price | (If LPG import prices return to original levels, impact will be zero.) | |||||||||
fluctuation |
Rising phase
Cheap inventory sold at high price | Falling phase | Expensive inventory sold at low price | ||
Cost basis | ||||
Earnings | Basis for selling price | |||
Earnings | ||||
booster effect | depressor effect |
Basis for selling price | Cost basis |
Copyright © Iwatani Corporation. All rights reserved. | 7 |
We will briefly explain the impact of LPG import price fluctuations on our business performance.
We import LPG from the Middle East and the US. in order to equalize the fluctuation of import prices. We have a pricing structure with many of our wholesale partners whereby selling prices are linked to import prices.
On the other hand, we use the FIFO method for inventory valuation, but because of the time it takes to import and sell LPGs, we sell inventory purchased approximately three months in advance.
In this way, when LPG import prices rise, we sell inventories purchased at low costs at a higher price, while when prices fall, we sell inventories purchased at high cost at a lower price. We refer to these effects as LPG import price fluctuation.
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Operating Profit Analysis of Integrated Energy
Results | (100 million yen) | Main factors | ||||||||||||||||||||
■ Impact of LPG import price fluctuation (5,670) | ||||||||||||||||||||||
FY23 1H | FY22 1H | YoY | YoY | FY23 | Progress | |||||||||||||||||
Results (A) | Results (B) | (A)-(B) | (A)/(B) | Forecasts | (100 million | 1Q | 2Q | 1H | 3Q | 4Q | Full | |||||||||||
Net Sales | 1,433 | 1,686 | (253) | (15.0%) | 3,980 | 36.0% | yen) | year | ||||||||||||||
FY23 | (17.3) | (34.0) | (51.3) | - | - | - | ||||||||||||||||
Operating | (11) | 39 | (51) | - | 180 | - | FY22 | +20.4 | (15.0) | +5.3 | (29.3) | (7.3) | (31.3) | |||||||||
Profit | ||||||||||||||||||||||
Changes | (37.7) | (19.0) | (56.7) | - | - | - | ||||||||||||||||
Operating profit | 39 | 33 | +5 | +16.7% | 180 | 21.9% | ||||||||||||||||
of LPG import | ■ Retail | +630 | ||||||||||||||||||||
excluding impact | ||||||||||||||||||||||
price fluctuation | -improvement in profitability of LPG | |||||||||||||||||||||
Analysis of Changes in Operating Profit | (million yen) | ■ Wholesale | (120) | |||||||||||||||||||
3,910 | ||||||||||||||||||||||
-decrease in sales due to cancellation of barter trading | ||||||||||||||||||||||
■ Industrial | (150) | |||||||||||||||||||||
-decrease in LPG sales for calorific adjustment | ||||||||||||||||||||||
for city gas | ||||||||||||||||||||||
630 | 200 | ■ Others | +200 | |||||||||||||||||||
-strong sales of gas-related safety equipment | ||||||||||||||||||||||
(5,670) | (120) | (150) | (1,199) | |||||||||||||||||||
FY22 1H Impact of LPG | Retail | Wholesale | Industrial | Others | FY23 1H | |||||||||||||||||
import price | Copyright © Iwatani Corporation. All rights reserved. | 8 | ||||||||||||||||||||
fluctuation |
In the Integrated Energy Business, net sales declined JPY25.3 billion to JPY143.3 billion due to low LPG import prices and lower sales volume caused by high temperatures.
Despite improved profitability in the LPG retail sector and solid sales of gas safety equipment and other products, LPG import price fluctuation resulted in a negative JPY5.6 billion versus the previous year, resulting in a JPY1.1 billion operating loss, a JPY5.1 billion decrease.
Excluding these LPG import price fluctuation, operating income was JPY3.9 billion, an increase of JPY0.5 billion.
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Operating Profit Analysis of Industrial Gases & Machinery
Results | (100 million yen) | ||||||||
FY23 1H | FY22 1H | YoY | YoY | FY23 | Progress | ||||
Results (A) | Results (B) | (A)-(B) | (A)/(B) | Forecasts | |||||
Net Sales | 1,268 | 1,079 | +189 | +17.6% | 2,592 | 48.9% | |||
Operating | |||||||||
108 | 64 | +44 | +69.5% | 175 | 62.0% | ||||
Profit | |||||||||
Analysis of Changes in Operating Profit | (million yen) | ||||||||
2,690 330 10,852
900 530
6,402
Main factors
■ Air separation gases +900
-decrease in sales volume mainly for the electronic component industry
-took an action toward growing production cost
■ Hydrogen Business +530
-decrease in sales volume mainly for the semiconductor industry
-took an action toward growing production cost
■ Specialty gases +2,690
-strong sales of carbon dioxide for the beverage and chemical industries
-stable procurement and supply of helium
■ Gas-related equipment +330
-improve in sales of power semiconductors-related equipment
-increase in sales of gas-related equipment
FY22 1H | Air separation | Hydrogen | Specialty | Gas-related | FY23 1H | ||
gases | Business | gases | equipment | 9 | |||
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In the Industrial Gases & Machinery Business, sales volumes of air separaIion gas and hydrogen gas decreased, mainly to the semiconductor and electronic components industries, but profitability improved as a result of efforts to respond to increased production costs associated with higher electricity rates.
With regard to specialty gases, carbon dioxide gas sales to the beverage and chemical industries remained strong, and efforts were made to ensure a stable supply of helium amid a worldwide supply- demand crunch.
In machinery and equipment, sales of equipment for power semiconductors, a growing market, and gas supply facilities increased.
As a result, net sales increased JPY18.9 billion to JPY126.8 billion and operating income rose 69.5% to JPY10.8 billion.
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Iwatani Corporation published this content on 29 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 November 2023 09:15:16 UTC.