FOR IMMEDIATE RELEASE
Meidensha Corporation Reports Earnings for the
Nine Months Ended December 31, 2022
Tokyo, Japan, January 31, 2023 - Meidensha Corporation (TSE: 6508) reported consolidated net sales of ¥170,009 million and a net loss attributable to owners of the parent of ¥2,582 million, or minus ¥56.92 per share, for the nine months ended December 31, 2022.
1. Operating Results
- Analysis of Operating Results
[Consolidated Results]
The management environment surrounding the Meiden Group in the nine months ended December 31, 2022 underwent a relaxation of various restrictions that have an impact on economic activity, such as revision of Japanese border controls to address COVID-19, but faced issues such as rising energy costs, rising prices and deterioration of availability of various parts and materials, and significant fluctuations in exchange rates. Amid such conditions, the Group conducted business while swiftly addressing these issues surrounding the Company.
The consolidated results for the nine months under review are provided below.
(Unit: millions of yen) | ||||
Nine months ended | Nine months ended | Change | Change (%) | |
December 31, 2021 | December 31, 2022 | |||
Net sales | 158,441 | 170,009 | 11,568 | 7.3 |
Operating income | (1,121) | (4,692) | (3,571) | - |
(loss) | ||||
Ordinary income | (875) | (4,269) | (3,394) | - |
(loss) | ||||
Net income (loss) | ||||
attributable to | (1,203) | (2,582) | (1,378) | - |
owners of the | ||||
parent |
The results for each business segment are presented below, with the figures for each segment including inter-segment transactions.
- Power Infrastructure Business
Although sales decreased in the Power and Energy business mainly operating in Japan due to factors such as the strong impact of longer delivery times for parts and materials, sales increased in the Power T&D business mainly operating overseas due to increased sales in the United States and Singapore. Furthermore, income increased due to the improvement of earnings in the Power T&D business. As a result, net sales in the segment increased 17.1% year on year to ¥38,424 million and operating loss improved by ¥394 million to ¥1,986 million.
- Public, Industrial & Commercial Sector Business
Although sales increased in the Railways business as demand was seen to recover mainly in Japan, sales decreased in the Social Infrastructure Systems business and the Water Infrastructure business due to the occurrence of delays in shipments associated with longer delivery times for parts and materials, and delays in progress of construction work. Furthermore, income decreased due to a decrease in income associated with reduced sales in the Social Infrastructure Systems business and the Water Infrastructure business, in addition to pressure on revenue caused by high prices of materials and parts materializing across this segment in general. As a result, net sales in the segment decreased 9.0% year on year to ¥54,146 million and operating loss deteriorated by ¥3,806 million to ¥2,236 million.
- Mobility & Electrical Components Business
Although sales decreased in the Mobility T&S business, which continues to face a difficult order environment, sales increased in the Electronics Products business mainly involving products for the semiconductor market and in the EV business due to an increase in the number of models delivered. Although income decreased slightly in the Electronics Products business mainly due to a deterioration of the product mix, income increased for the Motor Drive Solutions business, the EV business and the Mobility T&S business. As a result, net sales in the segment increased 27.2% year on year to ¥54,428 million and operating income improved by ¥717 million to ¥106 million.
- Field Service Engineering Business
Although steady demand for maintenance services is continuing, sales and income/loss deteriorated year on year against the backdrop of delays in progress of projects as a result of longer delivery times for parts and materials. As a result, net sales in the segment decreased 2.9% year on year to ¥19,997 million and operating loss deteriorated by ¥1,034 million to ¥133 million.
5) Real Estate Business
Net sales increased by 0.9% year on year to ¥2,426 million and operating income improved by ¥93 million to ¥972 million.
6) Other
In businesses not included in reportable segments, a recovery was seen as a result of progress in the normalization of the economy, resulting in sales increasing by 6.5% year on year to ¥11,775 million, and operating loss improving by ¥216 million to ¥37 million.
(2) Analysis of Financial Condition
Total assets at December 31, 2022 amounted to ¥296,343 million, an increase of ¥5,444 million from the end of the previous fiscal year (March 31, 2022).
Current assets rose ¥4,907 million to ¥176,201 million from the end of the previous fiscal year due to an increase in inventories and a decrease in trade receivables.
Fixed assets rose ¥537 million to ¥120,141 million due to an increase in construction in progress resulting from capital investment.
Total liabilities were ¥195,153 million, an increase of ¥9,675 million from the end of the previous fiscal year, attributable to an increase in commercial paper.
Net assets amounted to ¥101,190 million, a decrease of ¥4,231 million, owing to recording of net loss attributable to owners of the parent and dividends from surplus.
As a result, the equity ratio came to 33.0% as of December 31, 2022, compared with 35.1% at the end of the previous fiscal year.
(3) Forecast of Consolidated Results
Among the Meiden Group's businesses, sales from electrical equipment for electric power companies and government agencies and water purification and sewerage treatment equipment for local governments tend to be concentrated at the end of fiscal year. For this reason, net sales in the first nine months of the fiscal year are low in comparison with the full year figure, and the Company has recorded a loss. However, business performance has developed broadly as forecast, and there is no revision to the results forecast announced on October 31, 2022.
2. Consolidated Financial Statements and Notes
(1) Consolidated Balance Sheets
As of March 31, | As of December | |
2022 | 31, 2022 | |
millions of yen | millions of yen | |
Assets | ||
Current assets | ||
Cash and time deposits | 14,070 | 18,888 |
Notes and accounts receivable-trade, and | 93,772 | 67,806 |
contract assets | ||
Electronically recorded monetary claims - | 7,034 | 8,594 |
operating | ||
Merchandise and finished goods | 10,174 | 12,188 |
Work in process | 32,159 | 51,241 |
Raw materials and supplies | 8,381 | 8,419 |
Other current assets | 5,890 | 9,225 |
Allowance for doubtful accounts | (188) | (163) |
Total current assets | 171,294 | 176,201 |
Fixed assets | ||
Property, plant and equipment | ||
Buildings and structures, net | 40,297 | 38,874 |
Machinery, equipment and vehicles, net | 14,294 | 13,218 |
Land | 12,955 | 12,754 |
Construction in progress | 2,349 | 5,715 |
Other property, plant and equipment, net | 5,051 | 5,238 |
Total property, plant and equipment | 74,947 | 75,802 |
Intangible assets | ||
Software | 5,325 | 4,759 |
Goodwill | 3,272 | 2,836 |
Other | 968 | 1,042 |
Total intangible assets | 9,565 | 8,638 |
Investments and other assets | ||
Investment securities | 17,132 | 16,619 |
Long-term loans receivable | 36 | 38 |
Deferred tax assets | 15,914 | 17,032 |
Other assets | 2,074 | 2,072 |
Allowance for doubtful accounts | (67) | (60) |
Total investments and other assets | 35,091 | 35,701 |
Total fixed assets | 119,604 | 120,141 |
Total assets | 290,899 | 296,343 |
As of March 31, | As of December | |
2022 | 31, 2022 | |
millions of yen | millions of yen | |
Liabilities | ||
Current liabilities | ||
Notes and accounts payable-trade | 34,796 | 32,371 |
Electronically recorded obligations - operating | 4,369 | 4,113 |
Short-term borrowings | 10,255 | 8,820 |
Commercial paper | 2,000 | 17,000 |
Current portion of bonds payable | 5,000 | - |
Accounts payable-other | 6,405 | 5,076 |
Accrued income taxes | 1,543 | 370 |
Contract liabilities | 11,819 | 22,630 |
Accrued bonuses for employees | 7,601 | 4,470 |
Provision for product warranties | 1,108 | 995 |
Provision for loss on orders | 945 | 943 |
Other current liabilities | 18,560 | 16,525 |
Total current liabilities | 104,406 | 113,318 |
Long-term liabilities | ||
Bonds payable | 6,000 | 6,000 |
Long-term debt | 25,210 | 24,670 |
Net defined benefit liability | 44,808 | 45,983 |
Provision for environmental measures | 406 | 353 |
Other long-term liabilities | 4,645 | 4,827 |
Total long-term liabilities | 81,070 | 81,834 |
Total liabilities | 185,477 | 195,153 |
Net assets | ||
Shareholders' equity | ||
Common stock | 17,070 | 17,070 |
Capital surplus | 10,474 | 10,474 |
Retained earnings | 64,844 | 59,857 |
Treasury stock | (192) | (193) |
Total shareholders' equity | 92,196 | 87,208 |
Accumulated other comprehensive income |
Unrealized gains on available-for-sale securities
Deferred gains or losses on hedging derivatives, net of taxes
Foreign currency translation adjustment Remeasurements of defined benefit plans
6,826 | 6,532 |
5 | 5 |
3,711 | 4,720 |
(774) | (608) |
Total accumulated other comprehensive income | 9,769 | 10,650 |
Non-controlling interests | 3,455 | 3,331 |
Total net assets | 105,421 | 101,190 |
Total liabilities and net assets | 290,899 | 296,343 |
(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive
Income
Consolidated Statements of Income
Nine months | Nine months | |
ended | ended | |
December 31, | December 31, | |
2021 | 2022 | |
millions of yen | millions of yen | |
Net sales | 158,441 | 170,009 |
Cost of sales | 121,783 | 134,157 |
Gross profit | 36,658 | 35,851 |
Selling, general and administrative expenses | 37,779 | 40,544 |
Operating income (loss) | (1,121) | (4,692) |
Non-operating income | ||
Interest income | 36 | 42 |
Dividend income | 576 | 657 |
Rent income | 72 | 75 |
Foreign exchange gains | 207 | 263 |
Other | 373 | 460 |
Total non-operating income | 1,266 | 1,500 |
Non-operating expenses | ||
Interest expenses | 416 | 603 |
Equity in losses of affiliates | 25 | - |
Seconded employee expenses | 92 | 103 |
Litigation expenses | 112 | 29 |
Other | 373 | 340 |
Total non-operating expenses | 1,020 | 1,077 |
Ordinary income (loss) | (875) | (4,269) |
Extraordinary income | ||
Gain on sales of fixed assets | - | 578 |
Gain on sales of investment securities | 138 | 408 |
Compensation income | - | 285 |
Other | - | 6 |
Total extraordinary income | 138 | 1,279 |
Extraordinary loss | ||
Loss on fixed asset retirement | - | 45 |
Loss on sales of investment securities | 284 | 0 |
Loss on liquidation of subsidiaries and associates | - | 190 |
Other | 3 | - |
Total extraordinary losses | 288 | 235 |
Income (loss) before income taxes | (1,025) | (3,225) |
Income taxes | ||
Current | 320 | 415 |
Deferred | (219) | (1,012) |
Total income taxes | 100 | (596) |
Net income (loss) | (1,125) | (2,629) |
Net income (loss) attributable to the non-controlling | 77 | (46) |
interests | ||
Net income (loss) attributable to owners of the parent | (1,203) | (2,582) |
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Meidensha Corporation published this content on 31 January 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 February 2023 03:01:10 UTC.