Kanematsu Electronics : Highlights of Consolidated Financial Results for the Six Months Ended September 30, 2022

[Supplementary Materials]

October 28, 2022

Kanematsu Electronics, Ltd.

Highlights of Consolidated Financial Results for the Six Months Ended September 30, 2022 [Japanese GAAP]

■Net sales, operating profit, and ordinary profit all increased. ■Record high half-yearly results.

		(% indicates change from the previous corresponding period)
♢Net sales	39,791 million yen	16.8 %
♢Operating profit	6,702 million yen	10.3 %
♢Ordinary profit	6,735 million yen	9.9 %
♢Profit attributable to owners of parent	4,552 million yen	8.7 %

	Status of assets, liabilities and net assets
		As of	As of March	Change from		■ Assets
		September 30,	end of FY	Percentage	Current assets increased ¥6,357 million (8.5%) from the end of the previous fiscal
	(Million yen)	2022	31, 2022	Mar 2022	year, mainly due to increases of ¥4,510 million in notes and accounts receivable-
		change (%)	trade and ¥1,909 million in inventories.
Total Assets		89,458	82,446	7,011	8.5	Non-current assets increased ¥653 million (8.8%) from the end of the previous
	fiscal year, mainly due to an increase of ¥519 million in investment securities.

Current assets	81,389	75,031	6,357	8.5	■ Liabilities
						Current liabilities increased ¥4,598 million (25.6%) from the end of the previous
Non-current assets	8,068	7,415	653	8.8
fiscal year, mainly due to an increase of ¥5,394 million in notes and accounts
						payable-trade.
Liabilities		25,152	20,518	4,634	22.6	Non-current liabilities increased ¥36 million (1.4%) from the end of the previous
						fiscal year, mainly due to an increase of ¥17 million in asset retirement
Current liabilities		22,564	17,966	4,598	25.6	obligations.
						■ Net assets
Non-current liabilities		2,587	2,551	36	1.4
	Net assets increased ¥2,376 million (3.8%) from the end of the previous fiscal
						year, mainly due to an increase from recording ¥4,552 million in profit
Net assets	64,305	61,928	2,376	3.8	attributable to owners of parent and a decrease from the payment of ¥2,289
						million in dividends.

(Million yen)

Status of Income					■ Net sales
							Net sales increased by ¥5,727 million year on year
FY Mar	FY Mar			FY Mar
Year-on-		2023 full-			to ¥39,791 million (up 16.8% year on year) in an
2023	2022
year change	Percentage	year	Progress
2Q	2Q	effort that the Group worked on workstyle reform
	change (%)	forecast	(%)

	Equity (Note 1)		64,262	61,885	2,376	3.8	As a result, the equity ratio stood at 71.8%, down 3.3pt from the end of the
	previous fiscal year.
	Equity ratio (Note 2)	71.8%	75.1%	Down 3.3pt	-

(Note 1) Equity = "Total shareholders' equity" + "Total accumulated other comprehensive income" of net assets

(Note 2) Equity ratio = Equity capital / Total assets

Net sales

Gross profit

Selling, general and administrative expenses

Operating profit

Non-operating income

Non-operating expenses

Ordinary profit

Extraordinary income

39,791	34,064	5,727	16.8	77,000	51.7	and COVID-19 countermeasures through the
■ 売上⾼
						construction of robust environments for virtual
11,522	10,626	895	8.4	-	-	売上⾼は、IT投資の潜在的な需要はあるもの
desktop infrastructure (VDI) and security
						の、新型コロナウイルス感染症の影響を受け、営
(4,820)	(4,552)	(268)	5.9	-	-	業solutions活動のin制line限にwithよるthe商談eraスofピーzeroドのtrust低下や案件
						の⼀部⻑期化などの要因があったことにより減収
6,702	6,074	627	10.3	13,400	50.0	networks. At the same time, the Group further
となりました。
						expanded sales of its service-oriented businesses
36	55	(19)	(34.4)	-	-	centered on the 3Ks*.
						■ 四半期利益
(3)	(1)	(1)	96.9	-	-	親■ 会Profit社株主に帰属する四半期純利益は、売上
⾼が減少したものの、活動⾃粛やコストの⾒直し
						Operating profit increased by ¥627 million year on
6,735	6,128	606	9.9	13,500	49.9	などにより、売上原価、販売費及び⼀般管理費
year to ¥6,702 million (up 10.3% year on year).
						が削減されたことで、概ね前期並みの利益を確
1	5	(4)	(77.1)	-	-	Ordinary profit increased by ¥606 million year on
保することができました。
						year to ¥6,735 million (up 9.9% year on year).

Cash flows

	FY Mar 2023	FY Mar 2022	■CF from operating activities
	Cash inflow of ¥2,965 million,
	2Q	2Q	mainly due to an increase in
(Million yen)		operating revenue and the
	collection of trade receivables.

CF from operating activities	2,965	3,386	■CF from investing activities
CF from investing activities	(759)	(785)	Cash outflow of ¥759 million,
mainly due to the purchase of
Free cash flows	2,205	2,601	property, plant and equipment,
intangible assets, and investment
			securities.
CF from financing activities	(2,289)	(2,003)	■CF from financing activities
Net increase (decrease) in cash and cash equivalents	(68)	601	Cash outflow of ¥2,289 million,
mainly due to payment of
	49,599	47,479	dividends.
Cash and cash equivalents at end of period

Dividends

	FY March 2023	FY March
	2022
Interim dividend		80.00	75.00
(Yen)
Year-end dividend	80.00	(Forecast)	80.00
(Yen)
Annual dividend	160.00	(Forecast)	155.00
(Yen)
Equity (Million yen)		-	61,885
Payout ratio (%)	50.3	(Forecast)	50.5

Extraordinary loss

Profit before income taxes

Income taxes

Profit

Profit attributable to owners of parent

(0)	(4)	3	(80.1)	-	-	Profit attributable to owners of parent increased
6,735	6,129	606	9.9	-	-	by ¥365 million year on year to ¥4,552 million (up
						8.7% year on year).
(2,184)	(1,946)	(237)	12.2	-	-
						* 3Ks: The service business cluster comprising
4,551	4,183	368	8.8	-	-
KEL Briefing Center (KBC); KEL Custom Cloud
4,552	4,187	365	8.7	9,100	50.0	(KCC); and KEL Managed Service (KMS).

Million

14,000

12,000

10,000

Trends in ordinary profit and ordinary profit to total assets

30.0%

		13,500
		12,784
		25.0%
10,999	11,041	(Forecast)
		20.0%
		17.9%

Trends in Profit and ROE

Million yen

10,000
9,000		9,100
		8,785
8,000		(Forecast)
7,000	7,387	7,382

30.0%

25.0%

Basic earnings per share (yen)

159.10

146.36

12.74

8.7

8,000

16.8%

17.5%

20.0%

(Million yen)

IT Systems Business

Services and Support Business

Total

Other (including adjustments)

Segment Information

	Net sales		Segment profit
FY Mar	FY Mar	Year-on-	FY Mar	FY Mar	Year-on-
2023	2022	2023	2022
year change	year change
2Q	2Q	2Q	2Q
29,708	24,231	5,477	4,640	3,922	717
10,293	10,070	222	1,983	2,089	(105)
40,002	34,302	5,700	6,623	6,011	611
(210)	(238)	27	78	62	15

• IT Systems Business

Net sales increased ¥5,477 million year on year (up 22.6% year on year), mainly due to strong performance in the server-related business for the manufacturing industry.

• Services and Support Business

Net sales increased ¥222 million year on year (up 2.2% year on year), mainly due to an increase in sales related to cloud services for the manufacturing industry.

6,000

4,000

2,000

0

15.3%
		15.0%
		6,735
		6,128
5,147	5,136	10.0%
		5.0%
			0.0%
FY Mar 2020	FY Mar 2021	FY Mar 2022 FY Mar 2023

Ordinary profit (2Q)

Ordinary profit (Full year)

Ratio of ordinary profit to total assets (Full year)

6,000
	14.5%	14.9%	14.2%
5,000	13.5%
4,000				4,187	4,552
3,000	3,460	3,478
2,000
1,000
0
FY Mar 2020 FY Mar 2021 FY Mar 2022 FY Mar 2023
			Profit (2Q)			Profit (Full year)	ROE (Full year)

15.0%

10.0%

5.0%

0.0%

Total

39,791	34,064	5,727	6,702	6,074	627

*The financial results outlook and other forward-looking statements herein are based on information currently available to the Company and on certain assumptions deemed reasonable, and do not represent a promise by the Company to achieve them. Actual results may differ significantly from these forecasts due to a wide range of factors.