Kansai Paint : Consolidated Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2024（679KB）

Consolidated Financial Results [Japanese GAAP]

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

(April 1, 2023 － June 30, 2023)

	August 8, 2023
Company name:	Kansai Paint Co., Ltd.
Stock listing:	Tokyo Stock Exchange
Code number:	4613
URL:	https://www.kansai.co.jp/
Representative:	MORI Kunishi, Representative Director of the Board, President
Contact:	MARUYAMA Kazuhide, Director, Financial Planning & Analysis Dept.
	Corporate Finance Div.
Telephone:	[phone]
Scheduled date of the filing of Securities Report: August 9, 2023
Scheduled date of dividend payment:	－
Supplemental information:	No
Financial results briefing:	No
	(Amounts are rounded down to the nearest million yen)

1. Consolidated financial results for the First Quarter Fiscal Year Ending March 31, 2024 (April 1, 2023 － June 30, 2023)

(1) Consolidated operating results

	(The percentages represent the rates of increase (decrease) compared to the corresponding prior period.)
	Net sales		Operating income	Ordinary income		Net income attributable to
			owners of the parent
	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
Three months ended June 30, 2023	136,436	13.3	12,105	42.6	16,965	28.6	37,609	483.1
Three months ended June 30, 2022	120,448	23.2	8,487	(2.8)	13,197	13.7	6,450	20.6
(Note) Comprehensive income:
Three months ended June 30, 2023:	25,947	million yen	52.9%
Three months ended June 30, 2022:	16,965	million yen	11.2%
	Net income per	Diluted net income
	share		per share
	Yen		Yen

Three months ended June 30, 2023 Three months ended June 30, 2022

(2) Consolidated financial positions

164.67－

25.1823.84

Total assets	Net assets	Shareholders' equity
ratio
Millions of yen	Millions of yen	%

As of June 30, 2023	647,294	365,559	46.5
As of March 31, 2023	671,954	353,020	43.6
(Reference) Shareholders' equity:	As of June 30, 2023:	300,701	million yen
	As of March 31, 2023:	292,910	million yen

2. Dividends

	1st Quarter
	Yen
Fiscal Year ended March 31, 2023	－
Fiscal Year ending March 31, 2024	－
Fiscal Year ending March 31, 2024
(Forecast)

(Note) Revisions to the latest dividend forecast announced : No

	Dividends per share
2nd Quarter	3rd Quarter	Year-end	Total
Yen	Yen	Yen	Yen
15.00	－	15.00	30.00
18.00	－	18.00	36.00

3. Consolidated financial forecast for the Fiscal Year Ending March 31, 2024 (April 1, 2023 － March 31, 2024)

(The percentages represent the rates of increase (decrease) compared to the corresponding prior period.)

	Net sales		Operating income	Ordinary income	Net income attributable
		to owners of the parent
	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
Full Year	550,000	8.0	42,000	30.9	45,000	11.9	55,000	118.3

(Note) Revisions to the latest consolidated financial forecast announced: No

Net income

per share

Yen

242.47

*Notes
(1)	Changes in significant subsidiaries during the period
(changes in specified subsidiaries due to changes in scope of consolidation):	None
(2)	Application of accounting treatment specific to preparation of quarterly consolidated financial statements:	Yes
(3)	Changes in accounting policies, changes in accounting estimates, and retrospective restatement
1.	Changes in accounting policies in accordance with revision of accounting standards:	None
2.	Changes in accounting policies other than 1. above:	None
3.	Changes in accounting estimates:	None
4.	Retrospective restatement:	None

1. Number of shares of common stock issued

1. Number of shares of common stock issued at period-end (including treasury stock):

	As of June 30, 2023:	238,623,270	shares
	As of March 31, 2023:	272,623,270	shares
2.	Number of shares of treasury stock at period-end:
	As of June 30, 2023:	12,483,110	shares
	As of March 31, 2023:	42,115,208	shares
3.	Average number of shares during the period:
	Three months ended June 30, 2023:	228,390,999	shares
	Three months ended June 30, 2022:	256,132,119	shares

*Status of the implementation of audit procedures

These financial statements are not subject to quarterly review procedure of certified public accountant or audit firm.

*Explanation for appropriate use of forecasts and other notes

The forward-looking statements such as operational forecasts contained in this document are based on information currently available to the Company and certain assumptions which are regarded as legitimate. However, it does not mean that we guarantee its achievement. Actual results may differ from such forward-looking statements for a variety of reasons.

Overview of financial results

In the fiscal year under review, the global economy experienced a temporary easing of supply constraints and the effects of inflation. However, geopolitical risks remained high and underlying price pressures persisted. As a result, monetary tightening has progressed in many countries, and the pace of recovery has slowed. Under such circumstances, the Chinese economy is heading toward recovery due to the termination of the Zero Corona policy. In the United States and Europe, the moderate pickup continued despite the downward pressure on the economy from monetary tightening due to the interest rate hike. In other regions, the economy showed signs of recovery or picking up. The Japanese economy has been picking up moderately, mainly in domestic demand, reflecting the normalization of economic activity, while being affected by the past rise in resources and the slowdown in the pace of recovery in overseas economies.

The Group's net sales for the period under review were 136,436 million yen (up 13.3% year on year). Operating income was 12,105 million yen (up 42.6% year on year) as a result of efforts to improve profits, such as passing on cost increases to sales prices, while selling expenses increased. Ordinary income was 16,965 million yen (up 28.6% year-on-year) mainly due to an increase in foreign exchange gains caused by the depreciation of the yen. Profit attributable to owners of parent was 37,609 million yen (up 483.1% year on year), mainly due to gain on sales of investment securities associated with the reduction in strategic shareholdings and gain on sales of fixed assets associated with the sale of land in India.

Segment overviews are as follows.

From this consolidated fiscal year, the main business management indicators used in evaluating the performance of our group have been changed from ordinary income to operating income and equity in earnings of affiliates. Accordingly, segment income has also been changed from ordinary income to operating income and equity in earnings of affiliates. As a result of this change, segment income for the same quarter of the previous fiscal year is also compared after changing to operating income and equity in earnings of affiliates.

In the automotive coatings sector, the number of automobiles manufactured increased from the previous year, and sales increased from the previous year due in part to efforts to improve selling prices. In the industrial coatings, decorative coatings, automotive coatings (for refinishing) and marine sectors, although market conditions were sluggish, total sales increased from the previous year due mainly to efforts to improve selling prices. In the protective coatings sector, market conditions recovered and sales increased year on year. Profits increased from the previous year due to a decline in the prices of some raw materials as well as efforts to improve selling prices.

As a result of those factors, the segment's net sales and segment income were 38,841 million yen (up 9.8% year on year) and 3,869 million yen (up 68.4% year on year), respectively.

In the decorative coatings sector, sales increased slightly due to intensifying competition and other factors, despite the promotion of sales promotion activities. On the other hand, automobile production was stable, and improvements in selling prices also contributed to an increase in overall sales in India over the previous year. Profits increased from the previous year due to a decline in the prices of some raw materials, as well as continued efforts to improve selling prices.

As a result of those factors, the segment's net sales and segment income were 36,569 million yen (up 5.7% year on year) and 4,879 million yen (up 33.7% year on year), respectively.

In Turkey, the number of automobiles manufactured increased from the previous year, and sales increased from the previous year due in part to efforts to improve selling prices. In other European countries, sales increased year on year, supported by firm demand, mainly in the industrial coatings sector, and overall sales in Europe increased year on year. On the other hand, profits declined from the previous fiscal year due to factors such as the persistently high prices of raw materials and an increase in selling, general and administrative expenses due to rising personnel costs caused by inflation.

As a result of those factors, the segment's net sales and segment income were 30,891 million yen (up 31.2% year on year) and 552 million yen (down 54.5% year on year), respectively.

In China, automobile production was sluggish, but sales increased from the previous year due to a recovery in automobile production in Thailand, Malaysia and Indonesia and an improvement in selling prices. Profits increased from the previous year due to a decline in the prices of some raw materials as well as efforts to improve selling prices and other factors.

As a result of those factors, the segment's net sales and segment income were 18,115 million yen (up 12.7% year on year) and 3,248 million yen (up 49.8% year on year), respectively.

The economies of South Africa and neighboring countries were slow to recover due to chronic power shortages and high prices. Demand was sluggish, and sales were on par with the previous year as a result of efforts to improve selling prices and other measures. On the other hand, the East African region performed strongly, and sales grew mainly due to sales expansion in the decorative coatings sector and efforts to improve sales prices and product mix. As a result, overall sales in Africa rose year on year. Earnings increased from the previous year due to price revisions covering the steep rise in raw material prices and cost reduction initiatives.

As a result of those factors, the segment's net sales and segment income were 9,928 million yen (up 7.4% year on year) and 693 million yen (up 41.0% year on year), respectively.

In North America, automobile production increased from the previous year, and sales increased from the previous year. Earnings increased from the previous fiscal year, mainly due to an increase in equity in earnings of affiliates, despite the impact of soaring raw material prices.

As a result of those factors, the segment's net sales and segment income were 2,089 million yen (up 31.7% year on year) and 369 million yen (up 138.1% year on year), respectively.

Consolidated financial statements

(1) Consolidated Balance Sheets		(Millions of yen)
	As of March 31, 2023	As of June 30, 2023
Assets
Current assets
Cash and deposits	86,973	61,071
Trade notes and accounts receivable, and contract assets	106,785	119,826
Securities	8,169	16,602
Finished goods	54,673	55,533
Work-in-process	7,994	8,469
Raw materials and supplies	42,942	42,900
Other	16,819	17,834
Allowance for doubtful receivables	(4,526)	(4,614)
Total current assets	319,832	317,625
Non-current assets
Property, plant and equipment
Buildings and structures, net	65,465	67,872
Other, net	80,844	84,540
Total property, plant and equipment	146,309	152,412
Intangible assets
Goodwill	34,905	34,734
Other	28,842	29,876
Total intangible assets	63,747	64,611
Investments and other assets
Investment securities	89,098	58,247
Other	58,061	59,744
Allowance for doubtful receivables	(5,094)	(5,346)
Total investments and other assets	142,065	112,645
Total non-current assets	352,122	329,668
Total assets	671,954	647,294