Furukawa Battery : Financial Results for the Three-month Period Ended June 30, 2023

Translation

Member of Financial Accounting Standards Foundation (FASF)

August 3, 2023

Consolidated Financial Results

for the Three-month Period Ended June 30, 2023 [Japan GAAP]

Name of Company:			The Furukawa Battery Co., Ltd.
Stock Code:			6937
Stock Exchange Listing:			Tokyo Stock Exchange
URL:			https://www.furukawadenchi.co.jp
Representative
Title:			President & CEO
Name:			Osamu Kuroda
Contact Person
Title:			General Manager of Finance & Accounting Department
Name:			Tsutomu Mikawa
Tel:			[phone]
Scheduled date for filing of quarterly securities report:	August 7, 2023
Scheduled date for commencement of dividend payment:	-
Supplementary documents for quarterly financial results:	None
Quarterly financial results briefing:			None
						(Yen in millions, rounded down)
1. Consolidated financial results for the three months ended June 30, 2023 (April 1, 2023 - June 30, 2023)
(1) Consolidated operating results					(Percentage figures represent year-on-year changes)
	Net sales		Operating profit	Ordinary profit	Profit attributable to
		owners of parent
	Million yen	%	Million yen	%	Million yen	%	Million yen	%
Three months ended June 30, 2023	14,736	5.1	(309)	-	(211)	-	429	-
Three months ended June 30, 2022	14,027	7.6	(174)	-	(89)	-	(127)	-

Note: Comprehensive income
Three months ended June 30, 2023:	911 million yen	[yoy 28.3%]
Three months ended June 30, 2022:	710 million yen	[yoy (16.6)%]
	Earnings per share	Earnings per share
	(basic)		(diluted)
	Yen			Yen
Three months ended June 30, 2023	13.09			-
Three months ended June 30, 2022	(3.89)			-
(2) Consolidated financial position
	Total assets		Net assets		Equity ratio
	Million yen		Million yen		%
As of June 30, 2023	63,684		35,233		53.4
As of March 31, 2023	63,278		34,947		53.3
Reference: Equity
As of June 30, 2023:	33,973 million yen
As of March 31, 2023:	33,708 million yen
2. Dividends
			Annual dividends per share
	End of Q1	End of Q2		End of Q3	End of Q4	Total
	Yen	Yen	Yen	Yen	Yen
Fiscal year ended March 31, 2023		-		-	-	19.00	19.00
Fiscal year ending March 31, 2024		-
Fiscal year ending March 31, 2024 (forecast)			-	-	21.00	21.00

Note: Revisions to the dividends forecasts most recently announced: None

3. Forecast of consolidated financial results for the fiscal year ending March 31, 2024 (April 1, 2023 - March 31, 2024)

(Percentage figures represent year-on-year changes)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Earnings
		owners of parent	per share
	Million	%	Million	%	Million	%	Million	%	Yen
	yen	yen	yen	yen
Fiscal year ending	73,000	5.0	2,400	26.3	2,500	14.0	2,200	175.8	67.12
March 31, 2024

Note: Revisions to the earnings forecasts most recently announced: None

Notes:

(1) Changes in significant subsidiaries during the three-month period ended June 30, 2023 (Changes in specific subsidiaries accompanied by changes in the scope of consolidation): Newly included: None Excluded: None

1. Use of accounting methods that are specific to the preparation of the quarterly consolidated financial statements: Yes Note: For details, please refer to "2. Consolidated Financial Statements and Related Notes, (3) Notes on Consolidated Financial Statements (Application of Special Accounting for Preparing Quarterly Consolidated Financial Statements)" on page 7 of the Attachment.
2. Changes in accounting policies, changes in accounting estimates, and retrospective restatements:
3. 1. Changes in accounting policies accompanying revisions in accounting standards: None
   2. Changes other than in (a): None
   3. Changes in accounting estimates: None
   4. Retrospective restatements: None
4. Number of shares outstanding (common stock)
5. 1. Shares outstanding (including treasury shares)

As of June 30, 2023: 32,800,000 shares	As of March 31, 2023: 32,800,000 shares
(b) Treasury shares
As of June 30, 2023: 22,208 shares	As of March 31, 2023: 22,208 shares
(c) Average number of shares outstanding during the period (cumulative)
Three months ended June 30, 2023:	Three months ended June 30, 2022:
32,777,792 shares	32,777,866 shares

• Quarterly financial results reports are exempt from quarterly reviews conducted by certified public accountants or an audit corporation.
• Appropriate use of performance forecasts and other special items: (Disclaimer on forward-looking statements, etc.)
  Forward-looking statements in these materials are based on information available to management at the time this report was prepared, and on assumptions that management believes are reasonable. Actual results may differ significantly from these statements for a number of reasons. Please refer to "1. Qualitative Information on Consolidated Financial Results for the Three- month Period, (3) Explanation of Forecast for the Fiscal Year Ending March 31, 2024" on page 2 of the Attachment for details on the assumptions used and other related matters concerning the forecast of consolidated financial results.

Index	of the Attachment
1. Qualitative Information on Consolidated Financial Results for the Three-month Period	2
(1)	Explanation of Operating Results	2
(2)	Explanation of Financial Position	2
(3)	Explanation of Forecast for the Fiscal Year Ending March 31, 2024	2
2. Consolidated Financial Statements and Related Notes	3
(1)	Consolidated Balance Sheets	3
(2)	Consolidated Statements of Income and Comprehensive Income	5
	(Consolidated Statements of Income (Cumulative))	5
	(Consolidated Statements of Comprehensive Income (Cumulative))	6
(3)	Notes on Consolidated Financial Statements	7
	(Going Concern Assumptions)	7
	(Material Changes in the Amount of Shareholders' Equity)	7
	(Application of Special Accounting for Preparing Quarterly Consolidated Financial Statements)	7
3. Other	8
(Trend in Quarterly Consolidated Results)	8

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1. Qualitative Information on Consolidated Financial Results for the Three-month Period

1. Explanation of Operating Results

(Business Environment)

During the three-month period ended June 30, 2023, the global economy saw the impact of COVID-19 weaken, but the outlook is uncertain due to the economic downturn caused by rising energy costs resulting from Russia's invasion of Ukraine, the acceleration of global inflation, and an increase in interest rates.

In the Japanese economy as well, the outlook continues to be uncertain due to the slowdown in the overseas economy becoming a downside risk for the domestic economy amid continuing global monetary tightening in addition to rising commodity prices, semiconductor supply shortages, and rising raw material prices.

(Operating Results)

The Group recorded net sales of 14,736 million yen for the three-month period ended June 30, 2023, an increase of 708 million yen year on year. Overseas sales were 6,364 million yen and accounted for 43.2% of total sales.

In terms of profit and loss, operating loss came to 309 million yen (operating loss of 174 million yen in the same period of the previous fiscal year) due to the rise in the price of lead, a major raw material, and energy costs. Ordinary loss came to 211 million yen (ordinary loss of 89 million yen in the same period of the previous fiscal year) due to the operating loss, despite an increase in foreign exchange gains and other income.

Profit attributable to owners of parent came to 429 million yen (loss attributable to owners of parent of 127 million yen in the same period of the previous fiscal year) as a result of recording a gain on revision of retirement benefit plan of 857 million yen due to the transition from the previous defined benefit corporate pension plan to the defined contribution pension plan.

(2) Explanation of Financial Position

Total assets were 63,684 million yen as of June 30, 2023, which is 405 million yen more than at the end of the previous fiscal year. Current assets increased by 283 million yen from the end of the previous fiscal year to 34,952 million yen, while non-current assets increased by 122 million yen from the end of the previous fiscal year to 28,732 million yen.

The main factors leading to the increase in current assets were increases in merchandise and finished goods and work in process.

There was a 157 million yen increase from the end of the previous fiscal year to 24,048 million yen in property, plant and equipment in non-current assets. The main factor leading to the increase was foreign currency translation differences of non-current assets owned by overseas subsidiaries.

Investments and other assets decreased by 1 million yen from the end of the previous fiscal year to 3,708 million yen.

Total liabilities as of June 30, 2023, increased by 120 million yen from the end of the previous fiscal year to 28,451 million yen. Current liabilities increased by 2,049 million yen from the end of the previous fiscal year to 19,368 million yen, and non-current liabilities decreased by 1,929 million yen from the end of the previous fiscal year to 9,083 million yen.

Interest-bearing debt, which is the sum of short-term borrowings and long-term borrowings, increased by 748 million yen from the end of the previous fiscal year to 6,737 million yen.

Equity as of June 30, 2023, increased by 265 million yen from the end of the previous fiscal year to 33,973 million yen, resulting in an increase in the equity ratio from 53.3% at the end of the previous fiscal year to 53.4%.

(3) Explanation of Forecast for the Fiscal Year Ending March 31, 2024

There is no change to the consolidated earnings forecast that was announced on May 11, 2023.

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2. Consolidated Financial Statements and Related Notes

1. Consolidated Balance Sheets

		(Millions of yen)
	As of March 31, 2023	As of June 30, 2023
Assets
Current assets
Cash and deposits	3,098	5,878
Securities	5,127	2,149
Notes and accounts receivable - trade	13,164	10,248
Electronically recorded monetary claims - operating	1,668	1,471
Merchandise and finished goods	3,059	5,014
Work in process	5,478	6,146
Raw materials and supplies	1,826	2,019
Other	1,253	2,032
Allowance for doubtful accounts	(8)	(8)
Total current assets	34,669	34,952
Non-current assets
Property, plant and equipment
Buildings and structures, net	7,244	7,356
Machinery, equipment and vehicles, net	6,965	6,981
Tools, furniture and fixtures, net	732	686
Land	7,690	7,759
Leased assets, net	418	411
Construction in progress	839	853
Total property, plant and equipment	23,891	24,048
Intangible assets
Leased assets	3	2
Other	1,003	971
Total intangible assets	1,007	974
Investments and other assets
Investment securities	1,354	1,420
Deferred tax assets	2,250	2,181
Other	127	128
Allowance for doubtful accounts	(22)	(22)
Total investments and other assets	3,710	3,708
Total non-current assets	28,609	28,732
Total assets	63,278	63,684

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