Note:This document is a translation of a part of the original Japanese version and provided for reference purposes only. In the event of any discrepancy between the Japanese original and this English translation, the Japanese original shall prevail.
Consolidated Financial Results
for the Six Months Ended December 31, 2021
[Japanese GAAP]
February 07, 2022 | ||||||||||||||
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 in charge of Management Department | |||||||||||||
Phone: +81-544-21-3160 | ||||||||||||||
Scheduled date of filing quarterly securities report: February 10, 2022 | ||||||||||||||
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 | (The briefing will be video streamed instead of holding a | ||||||||||||
normal briefing session.) | ||||||||||||||
(Amounts of less than one million yen are rounded down) | ||||||||||||||
1. Consolidated Financial Results for the Six Months Ended December 31, 2021 (July 01, 2021 to December 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 | ||||||||||||||
Six months ended | Million yen | % | Million yen | % | Million yen | % | Million yen | % | ||||||
December 31, 2021 | 27,242 | 64.0 | 1,494 | 180.9 | 1,759 | 146.7 | 1,270 | 159.6 | ||||||
December 31, 2020 | 16,615 | (11.1) | 532 | (19.5) | 713 | (4.7) | 489 | (11.0) |
(Note) Comprehensive income: | Six months ended December 31, 2021: |
Six months ended December 31, 2020: |
¥ | 1,294 | million | [ | 158.0%] |
¥ | 501 | million | [ | (6.3) %] |
Basic earnings | Diluted earnings per | ||
per share | share | ||
Six months ended | Yen | Yen | |
December 31, 2021 | 85.97 | 82.21 | |
December 31, 2020 | 33.21 | 31.83 |
(2) Consolidated Financial Position
Total assets | Net assets | Equity ratio | ||||
As of | Million yen | Million yen | % | |||
December 31, 2021 | 26,644 | 14,288 | 52.1 | |||
June 30, 2021 | 26,548 | 13,333 | 48.8 | |||
(Reference) Equity: As of | December 31, 2021: | ¥ | 13,890 | million | ||
As of | June 30, 2021: | ¥ | 12,959 | 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, 2021 | - | 0.00 | - | 25.00 | 25.00 | ||
Fiscal year ending June 30, 2022 | - | 0.00 | |||||
Fiscal year ending June 30, 2022 | - | 33.00 | 33.00 | ||||
(Forecast) | |||||||
(Note) Revision to the forecast for dividends announced most recently: | No |
3. Consolidated Financial Results Forecast for the Fiscal Year Ending June 30, 2022(July 01, 2021 to June 30, 2022)
(% 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 | 54,000 | 31.9 | 2,390 | 12.2 | 2,850 | 13.6 | 1,950 | 30.7 | 132.07 | ||
(Note) Revision to the financial results forecast announced most recently: | No | ||||||||||
* Notes: | |||||||||||
(1) Changes in significant subsidiaries during the six months ended December 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: Yes
- Changes in accounting policies other than 1) above: No
- 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):
December 31, 2021: | 15,051,227 | shares |
June 30, 2021: | 15,051,227 | shares |
2) Total number of treasury shares at the end of the period: | ||
December 31, 2021: | 260,444 | shares |
June 30, 2021: | 286,091 | shares |
3) Average number of shares during the period: | ||
Six months ended December 31, 2021: | 14,775,059 | shares |
Six months ended December 31, 2020: | 14,734,554 | 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 "(3) Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information" from page 5 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 ............................................... | 5 |
2. Quarterly Consolidated Financial Statements and Primary Notes .................................................................................................... | 6 | |
(1) | Quarterly Consolidated Balance Sheets ......................................................................................................................................... | 6 |
(2) | Quarterly Consolidated Statements of Income and Comprehensive Income .................................................................................. | 8 |
(3) | Quarterly Consolidated Statements of Cash Flows ...................................................................................................................... | 10 |
(4) | Notes to the Quarterly Consolidated Financial Statements .......................................................................................................... | 12 |
(Notes on Going Concern Assumption) ............................................................................................................................................. | 12 | |
(Notes in the Case of Significant Changes in Shareholders' Equity) ................................................................................................. | 12 | |
(Adoption of Special Accounting Methods for Preparing Quarterly Consolidated Financial Statements) ........................................... | 12 | |
(Changes in Accounting Policies) ........................................................................................................................................................ | 12 | |
(Additional Information) .................................................................................................................................................................... | 12 | |
(Segment Information)......................................................................................................................................................................... | 14 | |
(Business Combinations) ................................................................................................................................................................... | 17 | |
(Significant Subsequent Events) .......................................................................................................................................................... | 18 |
1
1. Qualitative Information on Quarterly Financial Results
- Explanation of Business Results
In the Group's business areas during the six months ended December 31, 2021, overseas demand for ferrous scrap was in a declining trend as a result of factors including concerns over an economic slowdown in China and the suppression of crude steel production due to stronger environmental restrictions aimed at decarbonization, in addition to the impact of the resurgence of the spread of COVID-19 in Southeast Asia. Meanwhile in Japan, demand for ferrous scrap was strong, with crude steel production increasing year on year due to forecasts of an increase in production in the manufacturing industries as demand recovers after the COVID-19 pandemic and the shortage in semiconductors is resolved. As a result, the ferrous scrap price remained high in Japan, and low overseas. The situation remains unclear at present, however, with concerns over the spread of new COVID-19 variants adding to soaring ocean freight rates and continuing reduction in production in the manufacturing industries primarily caused by the semiconductor shortage.
The average ferrous scrap price (Tokyo Steel (Tahara) Tokkyu Grade Seaborne Price) during the six months ended December 31, 2021 was ¥52,266, trending upward from ¥28,008 of the same period of the previous fiscal year. With regard to nonferrous metals, etc., the average prices during the six months of copper, aluminum, nickel, and cobalt rose above those seen in the same period of the previous fiscal year. The use of recycled raw materials such as metal scrap is expected to become more appreciated amid the global trend of decarbonization.
Amid this environment, in the six months ended December 31, 2021, with a strategic concept of challenging ourselves to resolve issues toward realizing a "Decarbonized society", "Circular economy society" and "Distributed society" by viewing it as a business opportunity, based on our mission statement "Contribute to create a sustainable society", we have proceeded with measures to establish "Realization of concrete cases of the circular economy" and "A disciplined group of autonomous individuals with emergent abilities."
As a result, for the six months ended December 31, 2021, net sales were ¥27,242 million (up 64.0% year on year), operating profit was ¥1,494 million (up 180.9% year on year), ordinary profit was ¥1,759 million (up 146.7% year on year), and profit attributable to owners of parent was ¥1,270 million (up 159.6% year on year).
Results by segment are as follows, with net sales shown as inter-segment sales or sales including transfers. The classification of reportable segments has been changed from the end of the previous fiscal year, and the amounts stated for the six months ended December 31, 2020 are those compiled based on the classification of reportable segments following the change.
Summary of Business Results by Segment | ||||
<Net sales> | (Million yen) | |||
Six months ended | Six months ended | Increase/decrease | ||
December 31, 2020 | December 31, 2021 | ratio | ||
Resource Circulation Business | 5,989 | 9,891 | 65.1% | |
Global Trading Business | 12,270 | 20,233 | 64.9% | |
Lithium-ion Battery Recycling Business | 125 | 376 | 199.9% | |
Others | 166 | 243 | 46.2% | |
Adjustment | (1,937) | (3,503) | - | |
Total | 16,615 | 27,242 | 64.0% | |
2
<Segment profit (loss)> | (Million yen) | |||
Six months ended | Six months ended | Increase/decrease | ||
December 31, 2020 | December 31, 2021 | ratio | ||
Resource Circulation Business | 737 | 1,405 | 90.7% | |
Global Trading Business | 164 | 371 | 125.6% | |
Lithium-ion Battery Recycling Business | (80) | 92 | - | |
Others | 37 | 81 | 120.7% | |
Adjustment | (145) | (191) | - | |
Total | 713 | 1,759 | 146.7% | |
(Note) Segment profit (loss) is adjusted with ordinary profit in the quarterly consolidated statements of income.
- Resource Circulation Business
Metal scrap prices rose year on year, and the profitability of resource recycling increased further against the backdrop of physical sorting technologies. In addition, handling volume of ferrous scrap discharged from large- scale demolished properties has been continuing to increase from the previous fiscal year, and combined with 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.
As a result, net sales in the Resource Circulation Business segment were ¥9,891 million (up 65.1% year on year), while segment profit was ¥1,405 million (up 90.7% year on year).
- Global Trading Business
The business environment remained challenging as exports of metal scrap to overseas destinations were sluggish with a resurgence of the spread of COVID-19, in addition to the combination of high domestic prices and low overseas prices for ferrous scrap, as well as soaring ocean freight rates due to difficulties in booking freighters. Amid such an environment, despite a decrease in handling volume, we secured revenue mainly through capturing domestic demand and sales that took advantage of price changes, leading to an increase in both sales and profit.
As a result, net sales in the Global Trading Business segment were ¥20,233 million (up 64.9% year on year), while segment profit was ¥371 million (up 125.6% year on year).
- Lithium-ionBattery Recycling Business
In addition to rising prices of cobalt, nickel and copper, handling volume rose due to purchasing from leading battery manufacturers, etc. and acceptance of waste batteries processing by making use of the disposal business license. Also, a decrease in depreciation due to the recording of an impairment loss on non-current assets during the previous fiscal year led to an increase in both sales and profit.
As a result, net sales in the Lithium-ion Battery Recycling Business segment were ¥376 million (up 199.9% year on year), while segment profit was ¥92 million (segment loss was ¥80 million in the same period of the previous fiscal year).
- Others
The Environment Management Consulting Business remained robust and posted increases in both sales and profit, owing to a strong stream of orders for services including CDP evaluation improvement support, formulation of carbon neutral strategies, TCFD response support, and consulting services mainly to facilitate a circular economy.
Concerning the Welfare Service Business for Persons with Disabilities, although the usage rate at the facilities saw firm growth, mainly driven by the increased recognition of the facilities, profitability worsened due to the revision of compensation and personnel expenses increased owing to the improved employee treatment, leading
3
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Envipro Holdings Inc. published this content on 07 February 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 February 2022 07:27:10 UTC.