Sakai Heavy Industries : Consolidated Financial Results for the Fiscal Year Ended March 31,2023

Consolidated Financial Results

for the Fiscal Year Ended March 31, 2023

SAKAI HEAVY INDUSTRIES, LTD.

Stock code: 6358

URL https://www.sakainet.co.jp/en/

May 10, 2023

Summary of Consolidated Financial Results

							(Amounts less than one million yen are rounded down)
1. Consolidated financial results for the year ended March 31, 2023 (from April 1, 2022 to March 31, 2023)
(1) Consolidated operating results									Percentages indicate year-on-year changes
	Net sales		Operating profit	Ordinary profit	Profit attributable to
		owners of parent
	Millions of yen	%	Millions of yen		%	Millions of yen		%	Millions of yen	%
Year ended March 31, 2023	31,459	18.3	2,506		81.2		2,327		65.4	1,694	18.7
Year ended March 31, 2022	26,599	23.0	1,383		97.3		1,407		113.6	1,427	-
	Earnings per share	Profit attributable to	Ordinary profit/total	Operating profit/net sales
	owners of parent/equity		assets
			Yen				%					%			%
Year ended March 31, 2023			400.75				7.0					5.9			8.0
Year ended March 31, 2022			336.87				6.3					3.9			5.2
(2) Consolidated financial position
	Total assets	Net assets		Equity ratio		Net assets per share
	Millions of yen	Millions of yen					%			Yen
As of March 31, 2023			40,804				25,295					61.8		5,957.01
As of March 31, 2022			37,858				23,161					61.1		5,489.91
(3) Consolidated cash flows
	Cash flows from	Cash flows from	Cash flows from	Cash and cash equivalents
	operating activities	investing activities	financing activities	at end of period
	Millions of yen	Millions of yen		Millions of yen	Millions of yen
Year ended March 31, 2023			1,893				(399)					(2,242)			7,416
Year ended March 31, 2022			2,359				(263)					(1,227)			7,926
2. Cash dividends
			Annual dividends per share				Total cash	Dividend payout	Ratio of dividends
										to net assets
	1st quarter-end	2nd quarter-end	3rd quarter-end	Fiscal year-end	Total		dividends (Total)	ratio (Consolidated)	(Consolidated)
	Yen		Yen	Yen		Yen		Yen	Millions of yen	%		%
Year ended March 31, 2022	-		60.00	-		105.00	165.00			694	49.0		3.1
Year ended March 31, 2023	-		80.00	-		120.00	200.00			847	49.9		3.5
Year ending March 31, 2024	-		90.00	-			125.00	215.00				49.7
(Forecast)

3. Forecast of consolidated financial results for the year ending March 31, 2024 (from April 1, 2023 to March 31, 2024)

							Percentages indicate year-on-year changes
	Net sales		Operating profit	Ordinary profit	Profit attributable to	Earnings per share
		owners of parent
	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Six months ending	16,100	8.1	1,300	21.8	1,250	14.1	770	(5.9)	182.12
September 30, 2023
Full year	33,000	4.9	2,950	17.7	2,800	20.3	1,830	8.0	432.82	１

Highlights of Consolidated Business Performance

1. Summary of Consolidated Business Performance for the Fiscal Year Ended March 31, 2023

1. Consolidated net sales: ¥31,459 million, up 18.3% YoY

Overseas sales was expanded by handling supply chain issues under a favorable business environment.

2) Operating profit: ¥2,506 million, up 81.2% YoY

Profit structure reform made progress through price revisions and rationalization, especially in overseas business.

3) Sales in Japan:¥15,208 million, up 6.4% YoY

Strong demand continued against the backdrop of measures to accelerate national resilience.

4) Sales in North America: ¥7,751 million, up 53.8% YoY

Despite a decline in housing starts, road construction investment expanded against the backdrop of the Infrastructure Investment and Jobs Act.

5) Sales in Asia:¥7,796 million, up 20.1% YoY

The market environment remains firm, especially in the large markets of Indonesia
and Vietnam.	２

Highlights of Consolidated Business Performance

2. Adapting to a Changing Business Environment

1. Initiatives for enhancing the profitability of capital

(1) Progress of medium-term management policy

Five-yearmedium-term management plan: Net sales of ¥30.0 billion, operating profit of ¥3.1 billion, ROE of 8.0%

Second-year results: Net sales of ¥31.4 billion, operating profit of ¥2.5 billion, ROE of 7.0%

(2) Measures to comply with the Continued Listing Criteria for the Tokyo Stock Exchange Prime Market

Tradable share market capitalization: Achieved ¥10.3 billion, up 63% from June two years ago,

satisfying all criteria

2) Profit structure reform through sales price revision and cost cuts

Cost-of-sales ratio improvement: 74.0％, improvement of 1.9％ YoY

Profit structure reform progressed with sales price revisions and transportation cost reductions, especially in overseas business.

1. Strengthening product supply capabilities

1. Enhancement of supply chain (review of suppliers and dual sourcing)
2. Modification of global business activities (expansion of production capacity at domestic plants, expansion of parts business at Chinese plants)

1. Dealing with volatile demand

Inventory turnover: 3.33 times, down 0.36 times YoY
Inventory level increased by 31.2% to increase production and reduce parts
shortage issues.	３

Highlights of Consolidated Business Performance

3. Mid- to Long-Term Growth Strategy

1) Make more significant inroads into the Asian market:

Market development centered on our Indonesian hub (net sales up 20.1% YoY)

2) Expand the scope of overseas business:

Enter the overseas market for road maintenance equipment (launch of local production in Indonesia)

3) Pursue business opportunities in North America:

Increase our market share through niche marketing (net sales up 53.8％ YoY)

4) Start developing next-generation businesses:

Overseas expansion of emergency brakes, creation of market for compaction management systems, expansion of on-site testing of autonomous vibratory rollers, R&D for EV rollers

4. Outlook for Business Environment

1) Japan

Demand for construction machinery is projected to remain strong, buoyed by the Japanese government's ¥15-trillion initiative to accelerate national resilience over the next five years to prevent and mitigate natural disasters.

2) Overseas

Overseas construction machinery demand is firm with infrastructure investment totaling $1.2 trillion planned in the U.S., infrastructure investment and mine development becoming active in ASEAN and emerging countries, among other factors, although the demand has repeatedly fluctuated amid a rapidly changing global situation.

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