Kanematsu Electronics : Highlights of Consolidated Financial Results for the Three Months Ended June 30, 2022

[Supplementary Materials]

July 29, 2022

Kanematsu Electronics, Ltd.

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

• Net sales, operating profit, and ordinary profit all increased.

Status of assets, liabilities and net assets

										As of June 30, As of March	Year-on-year		■Assets
											Current assets decreased ¥6,006 million (8.0%) from the end of the
					(% indicates change from the previous corresponding period)				2022	31, 2022	change	Percentage
							(Million yen)	previous fiscal year, mainly due to a decrease of ¥8,166 million in notes and
															change (%)
♢Net sales															accounts receivable-trade.
			12,792 million yen		14.1 %	Total Assets		75,887		82,446		(6,559)	(8.0)
							Non-current assets decreased ¥552 million (7.5%) from the end of the
♢Operating profit				1,275 million yen		38.4 %	Current assets							(8.0)	previous fiscal year, mainly due to a decrease of ¥464 million in investment
					69,025		75,031		(6,006)	securities.
♢Ordinary profit				1,301 million yen		36.8 %	Non-current assets		6,862		7,415		(552)	(7.5)	■Liabilities
♢Profit attributable to owners of parent	866 million yen		30.8 %	Liabilities		15,726		20,518		(4,791)	(23.4)	Current liabilities decreased ¥4,833 million (26.9%) from the end of the
				previous fiscal year, mainly due to a decrease of ¥2,523 million in income
																	taxes payable.
								Current liabilities		13,133		17,966		(4,833)	(26.9)	Non-current liabilities increased ¥41 million (1.6%) from the end of the
																	previous fiscal year, mainly due to an increase of ¥26 million in other non-
								Non-current liabilities	2,592		2,551		41	1.6	current liabilities.
								Net assets		60,161		61,928		(1,767)	(2.9)	■Net assets
																	Net assets decreased ¥1,767 million (2.9%) from the end of the previous
	Status of Income				■Net sales	Equity	(Note 1)		60,114		61,885		(1,770)	(2.9)	fiscal year, mainly due to an increase from recording ¥866 million in profit
							attributable to owners of parent and a decrease from the payment of ¥
							Net sales increased by ¥1,585 million year on year										2,289 million in dividends.
	FY Mar	FY Mar			FY Mar 2023 full-		to ¥12,792 million (up 14.1% year on year) in an	Equity ratio (Note 2)		79.2%		75.1%		Up 4.1pt	-	As a result, the equity ratio stood at 79.2%, up 4.1pt from the end of the
	Year-on-year		year												previous fiscal year.
	2023	2022			effort that the Group worked on workstyle reform
	change	Percentage	forecast	Percentage change	(Note 1) Equity = "Total shareholders' equity" + "Total accumulated other comprehensive income" of net assets
	1Q	1Q	from
			and COVID-19 countermeasures through the
				change (%)		FY Mar 2023 1Q	(Note 2) Equity ratio = Equity capital / Total assets
(Million yen)						(Forecast) (%)	construction of robust environments for virtual
Net sales	12,792	11,207	1,585	14.1	72,000	17.8
desktop infrastructure (VDI) and security	Million yen	Trends in ordinary profit and ordinary profit to total assets			Million yen		Trends in Profit and ROE
Gross profit	3,477	2,995	481	16.1	-	- solutions in line with the era of zero trust networks.	14,000							30.0%
								10,000					30.0%
Selling, general and administrative							At the same time, the Group further expanded
(2,202)	(2,074)	(128)	6.2	-	-				12,784	12,800
expenses							sales of its service-oriented businesses centered on	12,000						9,000
Operating profit													25.0%
1,275	921	353	38.4	12,750	10.0
the 3Ks*1.						(Forecast)			8,785	8,600	25.0%
Non-operating income									10,999	11,041						8,000
29	31	(1)	(4.9)	-	-		10,000									(Forecast)
							■Profit			17.9%
Non-operating expenses	(3)	(1)	(1)	155.1	-	-					17.8%	20.0%		7,387
					7,000	7,382
Operating profit increased by ¥353 million year on
															20.0%
Ordinary profit	1,301	951	350	36.8	12,800	10.2				16.8%
year to ¥1,275 million (up 38.4% year on year).	8,000	15.3%						6,000		14.9%
							Ordinary profit increased by ¥350 million year on
Extraordinary income	-	0	(0)	(100.0)	-	-
							15.0%		14.5%
							year to ¥1,301 million (up 36.8% year on year).										13.5%		13.4%
Extraordinary loss	(0)	(1)	1	(98.7)	-	-	6,000								5,000			15.0%
Profit attributable to owners of parent increased
Profit before income taxes	1,301	950	351	36.9	-	- by ¥204 million year on year to ¥866 million (up								10.0%	4,000
Income taxes	(434)	(290)	(144)	49.6	-	-	30.8% year on year).	4,000													10.0%
									3,000
Profit	867	660	206	31.3	-	-	*1 3Ks: The service business cluster comprising	2,000							5.0%	2,000
Profit attributable to
866	661	204	30.8	8,600	10.1 KEL Briefing Center (KBC); KEL Custom Cloud												5.0%
owners of parent
						(KCC); and KEL Managed Service (KMS).						1,301
								742	914	951				1,000				866
								0				0.0%
Basic earnings per share (yen)	30.27	23.14	7.13	30.8												661
				FY Mar 2020	FY Mar 2021	FY Mar 2022		FY Mar 2023		481
										0	615			0.0%
									Ordinary profit (1Q)
														FY Mar 2020	FY Mar 2021 FY Mar 2022	FY Mar 2023
									Ordinary profit (Full year)						Profit (1Q)	Profit (Full year)	ROE (Full year)
	Segment Information						Ratio of ordinary profit to total assets (Full year)

		Net sales
	FY Mar	FY Mar	Year-on-year	FY Mar
	2023	2022	2023
	change
(Million yen)	1Q	1Q	1Q
IT Systems Business	8,043	6,544	1,499	314
Services and Support Business	4,827	4,752	75	920
Total	12,871	11,296	1,574	1,235
Other (including adjustments)	(78)	(89)	11	39
Total	12,792	11,207	1,585	1,275

Segment profit		■IT Systems Business
		Net sales increased ¥1,499 million year on
FY Mar 2022	Year-on-year	year, mainly due to strong performance in
1Q	change	the server-related business for the service
		industry and government offices.
53	261	■Services and Support Business
832	87	Net sales increased ¥75 million year on year,
		mainly due to an increase in sales related to
886	349	cloud services for the manufacturing
industry.
35	4
921	353

Dividends

		FY March 2023		FY March 2022	FY March 2021	FY March 2020
Interim dividend (Yen)		75.00	(forecast)		75.00	65.00	65.00
Year-end dividend (Yen)		80.00	(forecast)		80.00	70.00	70.00
Annual dividend (Yen)		155.00	(forecast)		155.00	135.00	135.00
Equity (Million yen)			-		61,885	56,361	52,863
Payout ratio (%)	51.60	(forecast)	50.50	52.30	52.30

*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.