Sakai Heavy Industries : Consolidated Financial Results for the Nine Months Ended December 31, 2022

Consolidated Financial Results

for the Nine Months Ended December 31, 2022

SAKAI HEAVY INDUSTRIES, LTD.

Stock code: 6358

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

February 14, 2022

Summary of Consolidated Financial Results

(Amounts less than one million yen are rounded down)

１．Consolidated financial results for the nine months ended December 31, 2022 (from April 1, 2022 to December 31, 2022)

（１）Consolidated operating results (cumulative)

Percentages indicate year-on-year changes

Profit attributable to

Earnings

Diluted

Net sales

Operating profit

Ordinary profit

earnings

owners of parent

per share

per share

Millions of yen

％

Millions of yen

％

Millions of yen

％

Millions of yen

％

Yen

Yen

Nine months ended December 31, 2022

22,125

11.8

1,585

36.0

1,586

31.5

1,172

40.2

277.45

－

Nine months ended December 31, 2021

19,793

28.7

1,165

189.0

1,206

286.2

836

－

197.01

－

（２）Consolidated financial position

Total assets

Net assets

Equity ratio

Millions of yen

Millions of yen

％

As of December 31, 2022

41,342

25,214

60.8

As of March 31, 2022

37,858

23,161

61.1

２．Cash dividends

		Annual dividends per share
	1st quarter-end	2nd quarter-end	3rd quarter-end	Fiscal year-end	Total
	Yen	Yen	Yen	Yen	Yen
Year ended March 31, 2022	－	60.00	－	105.00	165.00
Year ending March 31, 2023	－	80.00	－
Year ending March 31, 2023 (Forecast)				100.00	180.00

３．Forecast of consolidated financial results for the year ending March 31, 2023 (from April 1, 2022 to March 31, 2023)

Percentages indicate year-on-year changes

Net sales

Operating profit

Ordinary profit

Profit attributable to

Earnings

owners of parent

per share

Millions of yen

％

Millions of yen

％

Millions of yen

％

Millions of yen

％

Yen

Full year

30,000

12.8

2,020

46.0

2,050

45.6

1,520

6.5

360.08

1

Highlights of Consolidated Business Performance

1. Summary of Consolidated Business Performance for the Nine Months Ended December 31, 2022

1) Consolidated net sales: ¥22,125 million, up 11.8% YoY

Overseas sales was expanded by handling supply chain issues.

2) Operating profit

: ¥1,585 million, up 36.0% YoY

Profit structure reform made progress, especially in overseas business.

3) Sales in Japan

: ¥10,864 million, down 2.0% YoY

Net sales decreased slightly due to a shortage in manufacturing components amid continuing firm sales.

4) Sales in North America: ¥5,028 million, up 56.2% YoY

Strong recovery in demand continued to make progress against the backdrop of robust investment in construction.

5) Sales in Asia

: ¥5,703 million, up 17.1% YoY

Market environment remained firm overall, although there were slowdowns in growth in some markets.

2

Highlights of Consolidated Business Performance

2. Adapting to a Changing Business Environment

1. Shifting to business management with a focus on a sound capital policy

1. Formulating the medium-term management policy with the goals of achieving net sales of ¥30.0 billion, operating profit of ¥3.1 billion, ROE of 8%

Nine Months ended December 31,2022: Net sales of ¥22.12 billion, operating profit of ¥1.58 billion, ROE of 6.5%

Fiscal year ending March 31, 2023 (Forecast): Net sales of ¥30.0 billion, operating profit of ¥2.02 billion, ROE of 6.4%

1. Building a sustainable management structure by ESG and DX including human capital investment.

1. Adaptability to change

1. Dealing with volatile demand

• Inventories of ¥9,800 million（up 33.8% YoY, inventory turnover was reduced by 0.60 times）
• Increasing inventory levels to increase production and reduce the risk of parts stockout

(2) Strengthening product supply capabilities

• Enhancement of supply chain (review of suppliers and dual sourcing)
• Expansion of domestic production capacity (Increasing in production lines)

(3) Reforming our profit structure in the wake of rising of manufacturing component prices and transportation costs

• Further penetration of sales price revisions
• Transportation cost reductions through improving efficiency

3

Highlights of Consolidated Business Performance

3. Mid- to Long-Term Growth Strategy

1) Make more significant inroads into the Asian market:

Expand the ASEAN market centered on our Indonesian hub

2) Expand the scope of overseas business:

Enter the overseas market for road maintenance equipment

3) Pursue business opportunities in North America:

Increase our market share through niche marketing

4) Start developing next-generation businesses:

Focus on developing emergency brakes, compaction management systems, and autonomous vibratory 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 land 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.

4