Tokyo Ohka Kogyo : Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending December 31, 2022 （326.91 KB）

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending December 31, 2022 [J-GAAP]

Company name:	Tokyo Ohka Kogyo Co., Ltd.	November 10, 2022
Listing:	Tokyo Stock Exchange (Prime Market)
Securities Code:	4186	URL: https://www.tok.co.jp/eng

Representative: Noriaki Taneichi, President and Chief Executive Officer

Inquiries: Daisuke Matsuyama, General Manager, Accounting Division TEL: [phone]

Scheduled date to file quarterly securities report:	November 11, 2022
Scheduled date to commence dividend payments:	-
Preparation of supplementary material on financial results: Yes
Holding of financial results briefing:	No

(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending December 2022 (January 1, 2022 to September 30, 2022)

(1) Consolidated Operating Results												(% indicates the rate of increase/decrease year-on-year.)
				Net sales				Operating income			Ordinary income	Profit attributable to
									owners of parent
First nine months ended		Millions of yen	%		Millions of yen		%	Millions of yen		%	Millions of yen	%
September 30, 2022			130,463	29.8		22,665		50.2	23,572	50.2	15,215	47.0
September 30, 2021			100,526	16.8		15,087		37.7	15,696	40.0	10,352	40.6
(Note) Comprehensive income:	First nine months ended September 30, 2022	¥20,930 million	[32.7%]
				First nine months ended September 30, 2021	¥15,772 million	[86.4%]
				Basic earnings per share		Diluted earnings per share
First nine months ended										Yen						Yen
September 30, 2022								378.37						377.77
September 30, 2021								249.47						248.98
(2) Consolidated Financial Position
				Total assets				Net assets			Equity ratio		Net assets per share
As of					Millions of yen						Millions of yen					%				Yen
September 30, 2022						234,519							177,722					71.3				4,153.15
December 31, 2021						217,264							165,190					71.7				3,880.18
(Reference) Equity:	As of September 30, 2022: ¥167,195 million		As of December 31, 2021: ¥155,829 million
2. Cash Dividends
														Annual dividends per share
					First quarter-end			Second quarter-end	Third quarter-end	Fiscal year-end		Total
							Yen			Yen			Yen			Yen		Yen
Fiscal year ended December 31, 2021		-							62.00			-					94.00		156.00
Fiscal year ending December 31, 2022		-							78.00			-
Fiscal year ending December 31, 2022																		80.00		158.00
(Forecast)
(Note) Revisions to the most recently disclosed dividend forecasts: None

3. Consolidated Financial Results Forecast for Fiscal Year Ending December 31, 2022 (January 1, 2022 to December 31, 2022)

(% indicates the rate of increase/decrease against the same period of the previous year)

	Net sales		Operating income	Ordinary income	Profit attributable to	Basic earnings
		owners of parent	per share
	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of	%	Yen
	yen
Full year	171,800	22.7	30,000	44.9	31,000	43.1	20,400	14.9	506.59

(Note) Revisions to the most recently disclosed earnings forecasts: None

• Notes

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of consolidation): None
2. Application of special accounting treatment in preparing the quarterly consolidated financial statements: None
3. Changes in accounting policies, changes in accounting estimates, and restatement
4. 1. Changes in accounting policies due to revisions to accounting standards and other regulations: Yes
   2. Changes in accounting policies due to other reasons: None
   3. Changes in accounting estimates: None
   4. Restatement: None

(Note): Please refer to "2. Quarterly Consolidated Financial Statements and Major Notes, (3) Notes to Quarterly Consolidated Financial Statements (Changes in Accounting Policies)" on page 8.

(4) Number of issued shares (common shares)

1. Total number of issued shares at the end of the period (including treasury shares)

	As of September 30, 2022		42,600,000 shares
	As of December 31, 2021		42,600,000 shares
(ii) Number of treasury shares at the end of the period
	As of September 30, 2022		2,342,615 shares
	As of December 31, 2021		2,439,651 shares
(iii) Average number of shares outstanding during the period
	First nine months ended September 30, 2022		40,213,660 shares
	First nine months ended September 30, 2021		41,496,402 shares

• The Financial Results report is outside the scope of a quarterly review by certified public accountants or an audit firm.
• Explanation of the proper use of earnings forecasts and other special notes

The earnings forecasts stated in this report are based on the information available as of the date of the release of this report, and actual results may differ from these forecasts due to a variety of factors.

○Table of contents of the attached document

1. Qualitative Information on Consolidated Financial Results for the First Nine Months of the Fiscal Year Ending December 2022 ··················································································································· 2

1. Explanation about Operating Results···················································································· 2
2. Explanation about Financial Position···················································································· 3

(3) Explanation about Future Forecast Information Including Consolidated Earnings Forecasts ·················· 3

2. Quarterly Consolidated Financial Statements and Major Notes ························································· 4

1. Quarterly Consolidated Balance Sheet ·················································································· 4
2. Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive Income····· 6

Quarterly Consolidated Statements of Income

Quarterly Consolidated Statement of Income for the First Nine Months ········································ 6 Quarterly Consolidated Statement of Comprehensive Income

Quarterly Consolidated Statement of Comprehensive Income for the First Nine Months ·················· 7

1. Notes to Quarterly Consolidated Financial Statements ······························································· 8 (Notes Concerning Going Concern Assumption) ······································································ 8

(Significant Changes in Shareholders' Equity) ······································································· 8 (Changes in Accounting Policies)························································································ 8 (Additional Information) ·································································································· 9 (Segment Information) ··································································································· 10

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1. Qualitative Information on Consolidated Financial Results for the First Nine Months of the Fiscal Year Ending December 2022

1. Explanation about Operating Results

During the nine months ended September 30, 2022, the global economy continued to show signs of gradual recovery overall despite the impact of COVID-19. On the other hand, the economic environment remained uncertain due to fluctuations in the financial capital market, inflation, and supply constraints amid global monetary tightening.

Against such a backdrop, the Group launched "tok Medium-Term Plan 2024," a three-yearmedium-term plan ending in FY2024, under the management vision to become "The e-Material Global Company®" contributing to a sustainable future through chemistry. With the slogan of "Boost up TOK!!," the Plan aims to attain the long-term vision TOK Vision 2030 by developing and promoting the following five company-wide strategies: (1) Increase global market share of cutting-edge photoresists, (2) Acquire and create core technologies in electronic materials and new fields, (3) Secure stable supply of high-quality products and establish an optimal production system for the Group, (4) Improve employee engagement and promote people-oriented management, and (5) Build sound and efficient management foundation.

With regard to the Equipment Business, the Board of Directors meeting held on September 26, 2022 resolved to transfer the Equipment Business (excluding certain parts) to a succession preparatory company to be established as the Company's wholly-owned subsidiary through an absorption-type company split and then transfer all of the shares of the new company to AIMECHATEC, Ltd. (hereinafter "AIMECHATEC"), and we entered into the "Share Transfer Agreement" and the "Master Collaboration Agreement" concerning the collaboration with AIMECHATEC. We have also acquired some shares of AIMECHATEC so that we establish a solid partnership with the company to further develop our Materials & Equipment (M&E) strategy.

In the Material Business, net sales increased year on year due to a continued growth in the semiconductor market driven by the spread of 5G and IoT and the growing data server market, etc. as well as the effect of the weakening yen despite the weak smartphone market.

In the Equipment Business, net sales increased year on year due to the progress in acceptance inspections of the ordered equipment.

As a result, for the nine months ended September 30, 2022, the Group recorded net sales of ¥130,463 million (up 29.8% year-on-year), operating income of ¥22,665 million (up 50.2% year-on-year), ordinary income of ¥23,572 million (up 50.2% year-on-year), and profit attributable to owners of parent of ¥15,215 million (up 47.0% year-on-year).

Effective January 1, 2022, the Group applied the "Accounting Standard for Revenue Recognition" (Accounting Standards Board of Japan ("ASBJ") Statement No. 29, March 31, 2020), etc., and its impact was insignificant. Please see "2. Quarterly Consolidated Financial Statements and Major Notes (3) Notes to Quarterly Consolidated Financial Statements (Changes in Accounting Policies)" for details.

Operating results by segment are as follows:

1) Material Business

Net sales in the Material Business segment, excluding internal transactions were ¥127,080 million (up 28.4% year-on-year), and operating income was ¥26,245 million (up 38.1% year-on-year), mainly due to strong sales of electronic functional materials and high-purity chemicals.

				(Millions of yen)
	Nine months ended	Nine months ended	Change	%
	September 30, 2021	September 30, 2022
Net sales	98,997	127,080	28,083	28.4%
Operating income	19,005	26,245	7,239	38.1%

Overview by division is as follows.

In the Electronic Functional Materials Division, net sales significantly increased to ¥68,853 million (up 20.0% year-on-year).This was mainly due to continued strong sales of semiconductor photoresists, etc., supported by spread of 5G and IoT, etc. and strong semiconductor demand for data servers in addition to the effect of the weakening yen although sales of photoresists for display decreased as a result of changes in demand for small- and medium-sizedLCDs.

Net sales in the High-Purity Chemicals Division significantly increased to ¥57,628 million (up 39.4% year-on-year) mainly due to sales price adjustments for chemicals attached to semiconductor photoresists used in the semiconductor production process and the weakening yen.

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2) Equipment Business

Net sales in the Equipment Business segment, excluding internal transactions increased to ¥3,383 million (up 121.2% year-on-year), and operating income increased by ¥582 million from a year earlier to ¥339 million. This was mainly due to the progress in acceptance inspections of ordered products, such as a wafer handling system Zero Newton® used for the through-silicon-via (TSV) process for realizing high function, high-performance semiconductors.

				(Millions of yen)
	Nine months ended	Nine months ended	Change	%
	September 30, 2021	September 30, 2022
Net sales	1,529	3,383	1,853	121.2%
Operating income	(243)	339	582	－
(loss)

1. Explanation about Financial Position
   (Assets)
   Total assets as of September 30, 2022 increased by ¥17,255 million from December 31, 2021 to ¥234,519 million.

Total current assets increased by ¥9,844 million mainly due to increases in inventories of ¥6,263 million, notes and accounts receivable - trade of ¥3,067 million.

Total non-current assets increased by ¥7,411 million mainly because property, plant and equipment increased by ¥8,322 million due to capital investments although investments and other assets decreased by ¥1,174 million due to mark-to-market valuation of investment securities.

(Liabilities)

Total liabilities as of September 30, 2022 increased by ¥4,723 million from December 31, 2021 to ¥56,797 million mainly because notes and accounts payable - trade increased by ¥3,137 million and provision for bonuses increased by ¥1,539 million.

(Net assets)

Total net assets as of September 30, 2022 increased by ¥12,531 million from December 31, 2021 to 177,722

million mainly because retained earnings increased by ¥8,267 million due to recording of profit and foreign currency translation adjustment increased by ¥4,844 million due to the weakening yen despite a decrease in valuation difference on available-for-sale securities of ¥2,159 million due to mark-to-market valuation.

As a result, the equity ratio as of September 30, 2022 stood at 71.3%.

(3) Explanation about Future Forecast Information Including Consolidated Earnings Forecasts

There has been no change in the earnings forecasts announced in "Announcement of Revision to Earnings Forecasts" (in Japanese) dated July 29, 2022.

The foreign exchange rate is assumed to be $1=¥125.

In the event that we need to revise them due to impact of COVID-19, etc., we will disclose promptly.

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