VALQUA : posted summary of its FY ended March 2020 2nd Quarter results.

October 30, 2019

Summary of Consolidated Financial Results

for the Second Quarter of the Fiscal Year Ending March 31, 2020

VALQUA, LTD. (7995)

English translation from the original Japanese-language document

(All financial information has been prepared in accordance with accounting principles generally accepted in Japan)

Consolidated Balance Sheets

				(Millions of yen)
		As of March 31, 2019	As of September 30, 2019
Assets
Current assets
Cash and deposits	7,109		7,161
Notes and accounts receivable - trade	12,113		11,899
Electronically recorded monetary claims -	2,012		2,137
operating
Merchandise and finished goods	2,690		2,881
Work in process	617		732
Raw materials and supplies	1,326		1,249
Other	2,314		2,302
Allowance for doubtful accounts		18		16
Total current assets		28,166		28,347
▲	▲
Non-current assets
Property, plant and equipment
Buildings and structures, net	4,935		5,084
Land	4,004		4,003
Other, net		5,316		5,604
Total property, plant and equipment		14,256		14,692
Intangible assets
Other		533		724
Total intangible assets		533		724
Investments and other assets
Investment securities	3,893		3,966
Other	2,680		2,668
Allowance for doubtful accounts		0		0
Total investments and other assets		6,573		6,635
▲	▲
Total non-current assets		21,363		22,051
Deferred assets		5		1
Total assets		49,535		50,400

－ 1 －

				(Millions of yen)
		As of March 31, 2019	As of September 30, 2019
Liabilities
Current liabilities
Notes and accounts payable - trade	5,798		5,711
Short-term borrowings	1,758		1,941
Current portion of long-term borrowings	154		101
Current portion of bonds	1,700		1,700
Income taxes payable	629		406
Provision for bonuses	488		511
Provision for bonuses for directors (and	83		45
other officers)
Other		2,648		2,455
Total current liabilities		13,261		12,871
Non-current liabilities
Long-term borrowings	131		209
Retirement benefit liability	732		708
Other		1,032		1,386
Total non-current liabilities		1,895		2,304
Total liabilities		15,157		15,175
Net assets
Shareholders' equity
Share capital	13,957		13,957
Capital surplus	3,938		3,963
Retained earnings	15,400		16,337
Treasury shares		1,685		1,634
Total shareholders' equity		31,610		32,624
▲	▲
Accumulated other comprehensive income
Valuation difference on available-for-sale	1,490		1,584
securities
Foreign currency translation adjustment	19		288
Remeasurements of defined benefit plans	304		▲259
		▲	▲
Total accumulated other comprehensive	1,205		1,036
income
Non-controlling interests		1,562		1,564
Total net assets		34,378		35,225
Total liabilities and net assets		49,535		50,400

－ 2 －

Consolidated Statements of Income

					(Millions of yen)
			Six months ended	Six months ended
			September 30, 2018	September 30, 2019
Net sales	26,084		24,915
Cost of sales	16,199		15,468
Gross profit	9,884		9,447
Selling, general and administrative expenses	6,677		6,902
Operating profit	3,207		2,545
Non-operating income
Interest income	1		2
Dividend income	43		29
Rental income from facilities	70		115
Share of profit of entities accounted for using		25		0
equity method
Foreign exchange gains	37		－
Gain on investments in silent partnerships	51		－
Other	33		46
Total non-operating income	264		194
Non-operating expenses
Interest expenses	29		33
Rental expenses on facilities	67		97
Foreign exchange losses		－	49
Other	27		29
Total non-operating expenses	124		210
Ordinary profit	3,347		2,529
Extraordinary income
Gain on sales of non-current assets	1		4
Gain on sales of investment securities		－	70
Total extraordinary income	1		75
Extraordinary losses
Loss on sales of non-current assets	0		0
Loss on abandonment of non-current assets	35		11
Compensation expenses for health damage		10		－
caused by asbestos
Other	8		－
Total extraordinary losses	54		11
Profit before income taxes	3,294		2,593
Income taxes - current	779		661
Income taxes - deferred	107		63
Total income taxes	886		725
Profit	2,408		1,867
Profit attributable to non-controlling interests	54		51
Profit attributable to owners of parent		2,354		1,816

－ 3 －

Consolidated Statements of Comprehensive Income

				(Millions of yen)
		Six months ended	Six months ended
		September 30, 2018	September 30, 2019
Profit	2,408		1,867
Other comprehensive income
Valuation difference on available-for-sale	309		92
securities	▲
Foreign currency translation adjustment	473		322
Remeasurements of defined benefit plans, net	▲		▲
29	45
of tax
Share of other comprehensive income of	5		4
entities accounted for using equity method
Total other comprehensive income	759		188
▲	▲
		▲	▲
Comprehensive income		1,648		1,679
Comprehensive income attributable to
Comprehensive income attributable to owners	1,617		1,647
of parent
Comprehensive income attributable to non-	31		32
controlling interests

－ 4 －

Consolidated Statements of Cash Flows

					(Millions of yen)
		Six months ended			Six months ended
		September 30, 2018			September 30, 2019
Cash flows from operating activities
Profit before income taxes	3,294		2,593
Depreciation	837		1,040
Interest and dividend income		45			32
Interest expenses	▲29	▲33
Decrease (increase) in retirement benefit asset	201			20
Increase (decrease) in retirement benefit	▲			▲
▲	23			6
liability			▲
Loss on abandonment of non-current assets		35			11
Loss (gain) on sales of non-current assets		1			4
		▲	▲
Decrease (increase) in trade receivables	1,127			27
Loss (gain) on sales of investment securities	▲	－
▲	70
Decrease (increase) in inventories	229		291
Increase (decrease) in trade payables	▲476	▲	69
Other, net			28		▲111
Subtotal		3,074		3,321
Interest and dividends received		66			54
Interest paid		26			41
Income taxes refund	▲	1		▲10
Income taxes paid	905		940
The amount of payment of the asbestos illness	▲			▲
	10			55
compensation money
▲			▲
Net cash provided by (used in) operating	2,200		2,349
activities
Cash flows from investing activities
Purchase of property, plant and equipment	1,179		1,264
Proceeds from sales of property, plant and	▲			▲
	5			8
equipment
Purchase of intangible assets		66		256
Proceeds from sales of investment securities	▲	－	▲137
Payments for investments in capital	184
		▲				－
Proceeds from divestments	21			－
Payments of guarantee deposits		31			34
Proceeds from refund of guarantee deposits	▲	8		▲21
Other, net	129		▲	16
		▲
Net cash provided by (used in) investing	1,555		1,405
activities		▲			▲

－ 5 －