Consolidated Financial Results
for the Nine Months Ended March 31, 2021
[Japanese GAAP]
May 14, 2021 | |||||||||||||||||||||||
Company name: ENVIPRO HOLDINGS Inc. | |||||||||||||||||||||||
Stock exchange listing: Tokyo Stock Exchange | |||||||||||||||||||||||
Code number: 5698 | |||||||||||||||||||||||
URL: https://www.envipro.jp/ | |||||||||||||||||||||||
Representative: Tomikazu Sano | Representative Director, President/CEO | ||||||||||||||||||||||
Contact: Naoki Takekawa | Director and General Manager, Corporate Planning Department | ||||||||||||||||||||||
Phone: +81-544-21-3160 | |||||||||||||||||||||||
Scheduled date of filing quarterly securities report: May 14, 2021 | |||||||||||||||||||||||
Scheduled date of commencing dividend payments: - | |||||||||||||||||||||||
Availability of supplementary briefing material on quarterly financial results: Available | |||||||||||||||||||||||
Schedule of quarterly financial results briefing session: Not scheduled | |||||||||||||||||||||||
(Amounts of less than one million yen are rounded down) | |||||||||||||||||||||||
1. Consolidated Financial Results for the Nine Months Ended March 31, 2021 (July 01, 2020 to March 31, 2021) | |||||||||||||||||||||||
(1) Consolidated Operating Results | (% indicates changes from the previous corresponding period.) | ||||||||||||||||||||||
Net sales | Operating profit | Ordinary profit | Profit attributable to | ||||||||||||||||||||
owners of parent | |||||||||||||||||||||||
Nine months ended | Million yen | % | Million yen | % | Million yen | % | Million yen | % | |||||||||||||||
March 31, 2021 | 26,874 | (1.5) | 1,250 | 39.9 | 1,467 | 42.9 | 686 | (8.6) | |||||||||||||||
March 31, 2020 | 27,294 | 1.4 | 894 | 61.3 | 1,026 | 36.3 | 750 | 52.7 | |||||||||||||||
(Note) Comprehensive income: | Nine months ended March 31, 2021: | ¥ | 875 million | [ 14.4%] | |||||||||||||||||||
Nine months ended March 31, 2020: | ¥ | 765 million | [ 54.1%] | ||||||||||||||||||||
Basic earnings | Diluted earnings per | ||||||||||||||||||||||
per share | share | ||||||||||||||||||||||
Nine months ended | Yen | Yen | |||||||||||||||||||||
March 31, 2021 | 46.54 | 44.59 | |||||||||||||||||||||
March 31, 2020 | 51.21 | 48.98 | |||||||||||||||||||||
(2) Consolidated Financial Position | |||||||||||||||||||||||
Total assets | Net assets | Capital adequacy ratio | |||||||||||||||||||||
As of | Million yen | Million yen | % | ||||||||||||||||||||
March 31, 2021 | 27,526 | 12,764 | 45.0 | ||||||||||||||||||||
June 30, 2020 | 25,913 | 12,012 | 45.0 | ||||||||||||||||||||
(Reference) Equity: As of | March 31, 2021: | ¥ | 12,392 million | ||||||||||||||||||||
As of | June 30, 2020: | ¥ | 11,654 million | ||||||||||||||||||||
2. Dividends | |||||||||||||||||||||||
Annual dividends | |||||||||||||||||||||||
1st | 2nd | 3rd | Year-end | Total | |||||||||||||||||||
quarter-end | quarter-end | quarter-end | |||||||||||||||||||||
Yen | Yen | Yen | Yen | Yen | |||||||||||||||||||
Fiscal year ended June 30, 2020 | - | 0.00 | - | 10.00 | 10.00 | ||||||||||||||||||
Fiscal year ending June 30, 2021 | - | 0.00 | - | ||||||||||||||||||||
Fiscal year ending June 30, 2021 | 25.00 | 25.00 | |||||||||||||||||||||
(Forecast) | |||||||||||||||||||||||
(Note) Revision to the forecast for dividends announced most recently: | Yes |
3. Consolidated Financial Results Forecast for the Fiscal Year Ending June 30, 2021(July 01, 2020 to June 30, 2021)
(% indicates changes from the previous corresponding period.)
Net sales | Operating profit | Ordinary profit | Profit attributable to | Basic earnings | |||||||
owners of parent | per share | ||||||||||
Million yen | % | Million yen | % | Million yen | % | Million yen | % | Yen | |||
Full year | 40,400 | 19.2 | 1,918 | 142.7 | 2,229 | 138.4 | 1,291 | 114.4 | 87.54 | ||
(Note) Revision to the financial results forecast announced most recently: | Yes | ||||||||||
* Notes: | |||||||||||
(1) Changes in significant subsidiaries during the nine months ended March 31, 2021 | |||||||||||
(changes in specified subsidiaries resulting in changes in scope of consolidation): | No | ||||||||||
(2) Accounting policies adopted specially for the preparation of quarterly consolidated financial statements: | Yes |
- Changes in accounting policies, changes in accounting estimates and retrospective restatement
- Changes in accounting policies due to the revision of accounting standards: No
- Changes in accounting policies other than 1) above: Yes
- Changes in accounting estimates: No
- Retrospective restatement: No
- Total number of issued shares (common shares)
- Total number of issued shares at the end of the period (including treasury shares):
March 31, 2021: | 15,051,227 | shares |
June 30, 2020: | 15,051,227 | shares |
2) Total number of treasury shares at the end of the period: | ||
March 31, 2021: | 290,690 | shares |
June 30, 2020: | 329,326 | shares |
3) Average number of shares during the period: | ||
Nine months ended March 31, 2021: | 14,742,964 | shares |
Nine months ended March 31, 2020: | 14,658,340 | shares |
- These consolidated financial results are outside the scope of audit by certified public accountants or audit firms
-
Explanation of the proper use of financial results forecast and other notes
The financial results forecast and other forward-looking statements in this material are based on information currently available to the Company and certain assumptions deemed to be reasonable, and actual results may differ significantly due to various factors. Please see the item (3) "Explanation of Consolidated Financial Results Forecast and Other Forward- looking Information" on page 4 of the attached document of this material for the conditions for financial and other results, as well as important matters to be aware of when using the financial results forecast.
Table of Contents of Appendix | ||
1.Qualitative Information on Quarterly Financial Results .............................................................................. | 2 | |
(1) | Explanation of Business Results.................................................................................................................. | 2 |
(2) | Explanation of Financial Position .............................................................................................................. | 4 |
(3) | Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information .......... | 4 |
2.Quarterly Consolidated Financial Statements and Primary Notes ................................................................ | 5 | |
(1) | Quarterly Consolidated Balance Sheets ..................................................................................................... | 5 |
(2) | Quarterly Consolidated Statements of Income and Comprehensive Income ............................................ | 7 |
(3) | Notes to the Quarterly Consolidated Financial Statements ....................................................................... | 9 |
(Notes on Going Concern Assumption) .......................................................................................................... | 9 | |
(Notes in the Case of Significant Changes in Shareholders' Equity) .............................................................. | 9 | |
(Changes in Accounting Policies) ..................................................................................................................... | 9 | |
(Adoption of Special Accounting Methods for Preparing Quarterly Consolidated Financial Statements) ....... | 9 | |
(Additional Information) ................................................................................................................................. | 9 | |
(Segment Information) .................................................................................................................................... | 10 | |
(Significant Subsequent Events) ..................................................................................................................... | 12 |
1
1. Qualitative Information on Quarterly Financial Results
- Explanation of Business Results
In the Group's business areas during the nine months ended March 31, 2021, the uncertain situation continued, with ocean freight rates soaring due to tight supply and demand of cargo ships against the backdrop of the worldwide shortage of shipping containers in addition to the prolonged COVID-19 pandemic. Demand for steel products has remained robust as domestic and overseas production in the manufacturing industries bounced back. Furthermore, using ferrous scrap is more appreciated amid the global trend of decarbonization.
As a result, the ferrous scrap price (Tokyo Steel (Tahara) Tokkyu Grade Seaborne Price) increased from ¥24,500 at the end of the previous fiscal year to ¥41,000 as of March 31, 2021, and the average price during the nine months was ¥32,231, trending upward from ¥23,607 of the same period of the previous fiscal year. With regard to the prices of nonferrous metals, the average prices during the nine months of copper, aluminum, and nickel rose above those seen in the same period of the previous fiscal year.
Amid this environment, in the nine months ended March 31, 2021, we have set forth "CASH IS KING," "Restructuring of work," and "Reaffirming the raison d'etre" as our basic policy to address the COVID-19 crisis based on our mission statement "Contribute to create a sustainable society," and have proceeded with the reinforcement of our foundation.
The business related to recycling lithium-ion rechargeable batteries is positioned as an important growth driver for the Group in the medium to long term. We chose not to avoid facing the potential risks in accelerating our growth in the future, and reviewed our revenue plan to make it more appropriate. As a result of careful discussions at Board of Directors meetings, an impairment loss of ¥437 million was recognized.
As a result, for the nine months ended March 31, 2021, net sales were ¥26,874 million (down 1.5% year on year), operating profit was ¥1,250 million (up 39.9% year on year), ordinary profit was ¥1,467 million (up 42.9% year on year), and profit attributable to owners of parent was ¥686 million (down 8.6% year on year).
Results by segment are as follows, with net sales shown as inter-segment sales or sales including transfers.
Summary of Business Results by Segment | ||||
<Net sales> | (Million yen) | |||
Nine months ended | Nine months ended | Increase/decrease | ||
March 31, 2020 | March 31, 2021 | ratio | ||
Resource Circulation Business | 8,609 | 9,822 | 14.1% | |
Global Resource Circulation Business | 16,067 | 15,793 | (1.7)% | |
Used-cars-related Business | 4,824 | 4,034 | (16.4)% | |
Others | 222 | 267 | 20.1% | |
Adjustment | (2,429) | (3,043) | - | |
Total | 27,294 | 26,874 | (1.5)% | |
<Segment profit> | (Million yen) | |||
Nine months ended | Nine months ended | Increase/decrease | ||
March 31, 2020 | March 31, 2021 | ratio | ||
Resource Circulation Business | 458 | 1,252 | 173.1% | |
Global Resource Circulation Business | 571 | 357 | (37.5)% | |
Used-cars-related Business | 83 | 71 | (14.7)% | |
Others | 22 | 70 | 213.8% | |
Adjustment | (109) | (283) | - | |
Total | 1,026 | 1,467 | 42.9% |
(Note) Segment profit is adjusted with ordinary profit in the quarterly consolidated statements of income.
2
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Resource Circulation Business
The impending problem of final disposal sites that arose in the previous fiscal year on account of the return
of waste to Japan eased owing to a decline in the volume of waste generated as a result of the COVID-19 pandemic, and at our processing sites as well, operations stabilized with no restrictions on acceptance with regard to waste processing. In addition, the surging of ferrous scrap prices, as well as the revisions to waste disposal fee we have pursued from the previous fiscal year, enabled us to secure profit margins. Combined with the effects of factors including the streamlining of production processes and an increase in share of profit of entities accounted for using equity method, they have all led to an increase in both sales and profit. Although we continue to incur up-front expenses associated with our new business related to recycling lithium-ion rechargeable batteries, we made progress with conclusion of purchase contracts with leading battery manufacturers and acceptance of waste batteries processing by making use of the disposal business license. We will continue to aggressively apply management resources to make these pillars of our growth strategy.
As a result, net sales in the Resource Circulation Business segment were ¥9,822 million (up 14.1% year on year), while segment profit was ¥1,252 million (up 173.1% year on year).
-
Global Resource Circulation Business
In the ferrous scrap business, we strived to secure revenue by fulfilling multiple sales contracts with high
profit margins leveraging fluctuations in ferrous scrap prices in a challenging business environment, which included difficulties in booking freighters due to soaring ocean freight rates. In addition, in the nonferrous metals scrap business, handling volume increased from efforts to capitalize on domestic demand and contributed to revenue, despite struggling sales of products for overseas markets due to the shortage of shipping containers. However, both sales and profit declined due to the impact of the dedicated aircraft of the Japanese government posted as one-time revenue in the same period of the previous fiscal year. In our new biomass fuel business, we will continue to strengthen its structure to respond to market expansion.
As a result, net sales in the Global Resource Circulation Business segment were ¥15,793 million (down 1.7% year on year), while segment profit was ¥357 million (down 37.5% year on year).
-
Used-cars-relatedBusiness
A quick recovery from the sluggish previous fourth quarter lifted handling volume of used cars and used
automobile parts above initial expectations, despite a decline in demand for used cars in our major export destination countries, reflecting the lockdown resumed in certain areas of Chile and lackluster sales of used truck parts for South East Asia, which had been favorable in the same period of the previous fiscal year. In logistics agency services, we secured revenue by adjusting sales prices in light of a decrease in handling volume due to the shortage of shipping containers. In addition, we endeavored to reduce fixed costs by such measures as reviewing yard management cost. However, we were unable to recover to the same level of the same period of the previous fiscal year and both sales and profit declined.
As a result, net sales in the Used-cars-related Business segment were ¥4,034 million (down 16.4% year on year), while segment profit was ¥71 million (down 14.7% year on year).
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Others
The Environment Management Consulting Business remained robust and posted increases in both sales and
3
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Envipro Holdings Inc. published this content on 19 May 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 May 2021 06:01:01 UTC.