Neturen : Consolidated Financial Results for the Six Months Ended September 30, 2023

Consolidated Financial Results

for the Six Months Ended September 30, 2023

[Japanese GAAP]

November 8, 2023

Company name: Neturen Co., Ltd.

Stock exchange listing: Tokyo Stock Exchange

Code number: 5976

URL: https://www.k-neturen.co.jp/

Representative: Katsumi Omiya, Representative Director, Member of the Board and President

Contact: Hideaki Shinohara, General Manager, Accounting Department, Administrative Headquarters

Phone: [phone]

Scheduled date of filing quarterly securities report: November 10, 2023

Scheduled date of commencing dividend payments: December 6, 2023

Availability of supplementary explanatory materials on quarterly financial results: Available

Availability of quarterly financial results briefing: Available (for institutional investors and analysts)

(Amounts of less than one million yen are rounded down.)

1. Consolidated Financial Results for the Six Months Ended September 30, 2023 (April 1, 2023-September 30,

2023)
(1) Consolidated Operating Results					(% indicates changes from the previous corresponding period.)
				Net sales			Operating income		Ordinary income		Profit attributable to
								owners of parent
	Six months ended		Million yen		%	Million yen	%		Million yen	%		Million yen	%
	September 30, 2023		28,302		1.6	690	(50.4)		1,182	(41.8)		678	(44.4)
	September 30, 2022		27,859	14.2	1,393	(23.8)		2,030	(5.4)		1,221	(10.0)
	(Note) Comprehensive	income: Six months	ended September 30, 2023: ¥2,897 million [(32.4)%]
				Six months ended September 30, 2022: ¥4,288 million [66.1%]
			Basic earnings		Diluted earnings
			per share				per share
	Six months ended				Yen				Yen
	September 30, 2023		18.22				-
	September 30, 2022		31.15				-
(2) Consolidated Financial Position
				Total assets		Net assets	Equity ratio
					Million yen		Million yen		%
	As of September 30, 2023			80,639		66,608		75.0
	As of March 31, 2023				79,888		66,549		74.3

(Reference) Equity: As of September 30, 2023: ¥60,483 million As of March 31, 2023: ¥59,394 million

2. Dividends

				Annual dividends
		1st quarter-end	2nd quarter-end		3rd quarter-end	Year-end	Total
Fiscal year ended		Yen	Yen		Yen	Yen	Yen
	-	15.00		-	15.00	30.00
March 31, 2023
Fiscal year
ending March		-	24.00
31, 2024
Fiscal year ending
March 31, 2024					-	24.00	48.00
(Forecast)

(Note) Revision to the forecast for dividends announced most recently: None

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2024 (April 1, 2023-March 31, 2024) (% indicates changes from the previous corresponding period.)

							Profit attributable	Basic earnings
	Net sales		Operating income	Ordinary income	to owners of
		per share
							parent
Full year	Million yen	%	Million yen	%	Million yen	%	Million yen	%	Yen
63,000	9.5	2,800	16.8	3,300	6.9	2,000	424.2	53.04

(Note) Revision to the financial results forecast announced most recently: None

* Notes:

1. Changes in significant subsidiaries during the period under review: None (Changes in specified subsidiaries resulting in changes in scope of consolidation) Newly included: -
   Excluded: -
2. Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements: Yes (Note) For details, please see "2. Quarterly Consolidated Financial Statements (3) Notes to Quarterly Consolidated Financial Statements (Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements)" on page 7 of the appendix (Japanese version only).
3. Changes in accounting policies, changes in accounting estimates and retrospective restatement
4. 1. Changes in accounting policies due to the revision of accounting standards: None
   2. Changes in accounting policies other than 1) above: None
   3. Changes in accounting estimates: None
   4. Retrospective restatement: None
5. Total number of issued and outstanding shares (common shares)
6. 1. Total number of issued and outstanding shares at the end of the period (including treasury shares):

September 30, 2023:	38,678,700 shares
March 31, 2023:	38,678,700 shares
2) Total number of treasury shares at the end of the period:
September 30, 2023:	1,924,638 shares
March 31, 2023:	970,011 shares
3) Average number of shares during the period:
Six months ended September 30, 2023:	37,262,662 shares
Six months ended September 30, 2022:	39,207,033 shares

• These quarterly consolidated financial results are outside the scope of quarterly review by certified public accountants or an audit firm.

• Explanation of the proper use of financial results forecast and other notes (Notes on forward-looking statements, etc.)
  The forward-looking statements contained in this document are based on judgments made in accordance with information available at the time of the release of this document and include many uncertain factors. Actual results may differ from these forecasts due to changes in business conditions and other factors.
  For the assumptions used for the financial results forecast as well as precautions regarding the use of such forecast, please refer to "1. Qualitative Information on Quarterly Financial Results (3) Explanation Regarding Consolidated Financial Results Forecast and Other Forward-looking Information" on page 3 of the Attachments (Japanese version only).
  (Access to the materials for the quarterly financial results briefing for the second quarter)
  The financial results briefing for the second quarter (for institutional investors and analysts) is scheduled for November 28, 2023. Supplementary materials for the quarterly financial results (materials for the quarterly financial results briefing for the six months ended September 30, 2023) will be disclosed via TDnet and on the Company's website following the briefing.

2. Quarterly Consolidated Financial Statements

(1) Quarterly Consolidated Balance Sheets

					(Million yen)
			As of March 31, 2023	As of September 30, 2023
Assets
Current assets
Cash and deposits			18,320		15,956
Notes and accounts receivable - trade, and contract	11,646		11,811
assets
Electronically recorded monetary claims			3,364		4,080
Securities	158		275
Finished goods			1,459		1,767
Work in process	1,877		2,514
Raw materials and supplies			3,547		2,764
Other	2,198		2,150
Allowance for doubtful accounts			(189)		(195)
Total current assets			42,383		41,124
Non-current assets
Property, plant and equipment
Buildings and structures, net			8,093		8,375
Machinery, equipment and vehicles, net	6,225		6,616
Land			9,890		9,950
Construction in progress	560		695
Other, net			717		736
Total property, plant and equipment			25,486		26,374
Intangible assets
Leasehold interests in land	691		736
Other			113		93
Total intangible assets			805		830
Investments and other assets
Investment securities	9,809		10,465
Long-term loans receivable			18		17
Retirement benefit asset	3		-
Other			1,523		1,942
Allowance for doubtful accounts	(141)	(114)
Total investments and other assets			11,212		12,310
Total non-current assets			37,504		39,514
Total assets			79,888		80,639

1

					(Million yen)
			As of March 31, 2023	As of September 30, 2023
Liabilities
Current liabilities
Notes and accounts payable - trade			3,913		3,646
Electronically recorded obligations - operating	3,367		4,275
Short-term borrowings			1,262		671
Income taxes payable	172		349
Provision for bonuses			558		656
Provision for bonuses for directors (and other	12		13
officers)
Provision for share awards for directors (and other			8		15
officers)
Other	2,501		2,799
Total current liabilities			11,797		12,429
Non-current liabilities
Long-term borrowings			138		21
Provision for share awards for directors (and other	6		6
officers)
Retirement benefit liability			362		348
Other	1,033		1,225
Total non-current liabilities			1,540		1,601
Total liabilities			13,338		14,030
Net assets
Shareholders' equity
Share capital			6,418		6,418
Capital surplus	1,627		1,731
Retained earnings			47,639		47,750
Treasury shares	(688)	(1,613)
Total shareholders' equity			54,997		54,287
Accumulated other comprehensive income
Valuation difference on available-for-sale securities			1,868		2,249
Foreign currency translation adjustment			2,361		3,793
Remeasurements of defined benefit plans			167		153
Total accumulated other comprehensive income			4,397		6,196
Non-controlling interests			7,155		6,125
Total net assets			66,549		66,608
Total liabilities and net assets			79,888		80,639

2

1. Quarterly Consolidated Statements of Income and Comprehensive Income For the Six months ended September 30

			(Million yen)
		For the Six months ended	For the Six months ended
		September 30, 2022	September 30, 2023
Net sales		27,859	28,302
Cost of sales	22,613	23,476
Gross profit		5,245	4,825
Selling, general and administrative expenses		3,852	4,135
Operating income		1,393	690
Non-operating income
Interest income		48	71
Dividend income	92	134
Share of profit of entities accounted for using equity		81	81
method
Foreign exchange gains	303	92
Gain on sales of scraps		92	79
Other	52	66
Total non-operating income		671	525
Non-operating expenses
Interest expenses		28	28
Other	5	4
Total non-operating expenses		33	33
Ordinary income		2,030	1,182
Extraordinary income
Gain on sales of non-current assets	12	11
Gain on sales of investment securities		0	13
Insurance claim income	3	6
Other		0	0
Total extraordinary income		17	32
Extraordinary losses
Loss on sales of non-current assets	0	0
Loss on retirement of non-current assets		2	6
Loss on sale of investment securities		-	0
Total extraordinary losses		2	6
Profit before income taxes		2,045	1,208
Income taxes		608	365
Profit		1,436	843

Profit attributable to:

Profit attributable to owners of parent

Profit attributable to non-controlling interests Other comprehensive income

Valuation difference on available-for-sale securities Foreign currency translation adjustment Remeasurements of defined benefit plans, net of tax Share of other comprehensive income of entities

accounted for using equity method

Total other comprehensive income

Comprehensive income

Comprehensive income attributable to:

Comprehensive income attributable to owners of parent Comprehensive income attributable to non-controlling

interests

1,221	678
215	164
(25)
350
2,442		1,475
(6)		(13)
441	242
2,851		2,054
4,288		2,897
3,269
2,477
	419
1,018

3