Summary of Consolidated Financial Results For the Second Quarter of Fiscal Year Ending March 31, 2022 [Japan GAAP]

November 10, 2021

Summary of Consolidated Financial Results

For the Second Quarter of the Fiscal Year Ending March 31, 2022 [Japan GAAP]

Company: Takamatsu Construction Group Co., Ltd.

Stock exchange listing: Tokyo Stock Exchange (First Section)

Stock code: 1762

URL: https://www.takamatsu-cg.co.jp/

Representative: Hirotaka Takamatsu, President and Representative Director of the Board

Contact: Masahiro Shimabayashi, Senior Director, Group Integration Division

Contact: 06-6303-8101,[e-mail]

Date of filing of quarterly securities report:	November 11, 2021
Date of commencement of dividend payment:	December 7, 2021
Supplementary explanatory documents:	Yes
Earnings presentation:	No

(Yen in millions, rounded down, figures in parentheses indicate negative amounts or percentages)

1. Financial results for the first half of the fiscal year ending March 2022 (April 1, 2021 - September 30, 2021)

(1) Consolidated result of operations(year-to-date)		(Percentage figures represent year on year changes)
	Net sales		Operating profit	Ordinary profit	Profit attributable to
		owners of parent
	Million yen		%	Million yen	%	Million yen	%	Million yen	%
First half ended September 2021	125,980		(7.8)	3,128	(13.1)	3,148	(12.8)	1,683	(15.2)
First half ended September 2020	136,674		5.6	3,599	(36.7)	3,610	(32.9)	1,984	(20.6)

Note: Comprehensive income: First half of FYMar.2022: 2,189million yen, 2.6% vs. last year First half of FYMar.2021: 2,133million yen, (22.6%) vs. last year

	Earnings per share	Earnings per share
		(diluted)
	Yen	Yen
First half ended September 2021	48.35	－
First half ended September 2020	57.00	－
(2) Consolidated financial position
	Total assets	Net assets	Equity ratio
	Million yen	Million yen	%
As of September 30, 2021	220,025	116,547	53.0
As of March 31, 2021	220,831	115,756	52.4

(Reference) Shareholders' equity: As of September 30, 2021:116,510 million yen As of March 31, 2021: 115,715 million yen

2. Dividends

Dividend per share

End of

End of

End of

End of

Annual

1Q

2Q

3Q

FY

Yen

Yen

Yen

Yen

Yen

FY3/21

－

23.00

－

40.00

63.00

FY3/22

－

23.00

FY3/22 (Est.)

－

40.00

63.00

Note: Change in the estimation of divided from the latest announcement: No

3. Consolidated forecast for the fiscal year ending March 31, 2022 (April 1, 2021 - March 31, 2022)

(Percentage figures represent year on year changes)

Orders received

Net sales

Operating profit

Ordinary profit

Profit attributable to

Earnings

owners of parent

per share

Million yen

%

Million yen

%

Million yen

%

Million yen

%

Million yen

%

Yen

Full year

320,000

24.8

290,000

2.4

13,000

6.6

13,000

7.3

7,700

3.1

221.15

Note: Change in the forecast from the latest announcement: No

• Notes
• 1. Changes in significant subsidiaries (Changes of specific subsidiaries that accompanies scope change of consolidation): No

Included －

(company name) Excluded － (company name)

1. Use of accounting methods specifically for the preparation of the quarterly consolidated financial statements: No
2. Changes in accounting principles and estimates, and retrospective restatement
3. 1. Changes due to revision of accounting standards: Yes
   2. Changes other than (a): No
   3. Changes in accounting estimates: No
   4. Retrospective restatement: No
4. Number of shares outstanding (ordinary shares)
5. 1. Shares outstanding (including treasury shares)

As of September 30, 2021:	38,880,000	As of March 31, 2021:	38,880,000
(b) Treasury shares
As of September 30, 2021:	4,061,422	As of March 31, 2021:	4,061,341
(c) Average number of shares (quarterly cumulative period)
Period ended September 30, 2021:	34,818,612	Period ended September 30, 2020:	34,818,667

• Auditing of financial statements by CPA and/or CPA firm is not conducted to this summary of financial results.
• Cautionary statement regarding forecasts and special notes

(Note on forward looking statements)

Forward-looking statements in this material are based on the information available to management at the time this report was prepared. Actual results may differ significantly from these statements for number of reasons.

Index for Supplementary Information

1. Analysis of Results of Operations and Financial condition...…..……………………………...	2
(1) Overview of operating results……...……………………………….………………………......	2

1. Overview of financial condition…………………………………..…………………………….. 2

(3)	Explanation Regarding the Forecasts for the Consolidated Financial Results ….……..	2
2. Quarterly Consolidated Financial Statements and Major Notes………………………...……	3
(1)	Quarterly consolidated balance sheet................................................................................	3
(2)	Quarterly consolidated statement of income and consolidated statements of comprehensive income...................	5
	Quarterly consolidated statement of income....................................................................	5
	Quarterly consolidated statement of comprehensive income……………………...………	6
(3)	Notes to consolidated financial statements........................................................................	7
	(Going concern assumptions)...............................................................................................	7
	(Significant change in shareholders' equity).......................................................................	7
	(Changes in Accounting Policies)........................................................................................	7
3. Consolidated Orders Received and Net Sales……………………………………………............	8

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1. Analysis of Results of Operations and Financial condition

1. Overview of operating results

During the second quarter of the fiscal year ending March 31, 2022, the Japanese economy was still affected by the COVID-19 infection, and socioeconomic activities were curtailed due to the issuance of priority measures to prevent the spread of the disease and the fourth declaration of a state of emergency. Although complete containment of the COVID-19 infection is not foreseeable, the number of infected people in Japan has reached a lull after peaking in August, and the vaccination rate in Japan is increasing, so it is expected that the economy will pick up.

In the construction industry, public construction sector, including the national resilience plan, is expected to remain firm. Private construction sector is expected to recover in the manufacturing industry, etc., with favorable performance as a tailwind. However, the outlook for material price trends remains uncertain and cannot be optimistic, such as soaring prices of materials such as iron and rising global timber prices called "the sticker shock of lumber price." At the TCG Group, material and lumber price hikes are not currently a factor that is putting pressure on profits. However, we will continue to focus on the price trend of materials.

TCG Group's orders received for the second quarter of the fiscal year ending March 31, 2022, were up 40.3％ YoY to 143,535 million yen. This was a reaction to the weak orders received in the same period of the previous fiscal year due to the voluntary restraint of sales activities associated with the COVID-19 infection. Net sales were 125,980 million yen (down 7.8％ vs. previous Q2) due to the impact of weak orders in the previous fiscal year. Operating profit was 3,128 million yen (down 13.1％ vs. previous Q2), Ordinary profit was 3,148 million yen (down 12.8％ vs. previous Q2), Profit attributable to owners of parent was 1,683 million yen (down 15.2％ vs. previous Q2).

Results by business segment are as follows.

Segment profit is adjusted with operating profit on the quarterly consolidated profit statement. Adjustments to segment profit include -1,885 million yen in general and administrative expenses that do not belong to any reportable segment and -103 million yen in other adjustments.

(Architecture)

Orders received were 80,753 million yen (up 75.3％ vs. previous Q2), net sales were 55,884 million yen (down 22.1％ vs. previous Q2), resulting in segment profit of 72 million yen (down 96.0％ vs. previous Q2).

(Civil Engineering)

Orders received were 41,070 million yen (down 6.5％ vs. previous Q2), net sales were 48,382 million yen (down 8.0％ vs. previous Q2) resulting in segment profit of 3,110 million yen (up 3.8％ vs. previous Q2).

(Real Estate)

Net sales from real estate sales and leasing were 21,712 million yen (up 75.7％ vs. previous Q2) and segment profit were 1,935 million yen (up 183.3％ vs. previous Q2).

1. Overview of financial condition (Assets)
   Total assets at the end of the second quarter of the fiscal year ending March 31,2022, decreased by 805 million yen compared to the end of the previous fiscal year to 220,025 million yen.
   This was mainly due to a decrease of 1,190 million yen in real estate for sale. (Liabilities)
   Total liabilities decreased by 1,597 million yen from the end of the previous fiscal year to 103,477 million yen.
   This was mainly due to an increase of 4,249 million yen in advances received on construction contracts in progress, while accounts payable for construction contracts decreased by 3,278 million yen and income taxes payable decreased by 1,295 million yen, and short-term borrowings decreased by 1,000 million yen.
   (Net Assets)
   Net assets increased by 791 million yen compared to the end of the previous fiscal year to 116,547 million yen.
   The main reason for this was an increase of 290 million yen in retained earnings due to the posting of 1,683 million yen in profit attributable to owners of parent, despite the payment of 1,392 million yen in dividends and increases of 166 million yen in valuation difference on available-for-sale securities and 260 million yen in foreign currency translation adjustments.
   As a result of the above, the amount of shareholders' equity, which is net assets minus non- controlling interests, amounted to 116,510 million yen, and the shareholders' equity ratio increased by 0.6 percentage points from the end of the fiscal year ended March 2021 to 53.0％.
2. Explanation Regarding the Forecasts for the Consolidated Financial Results

There is no change to the full-year consolidated earnings forecast announced on May 12, 2021.

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2. Quarterly Consolidated Financial Statements and Major Notes

1. Quarterly consolidated balance sheet

(Million yen)

	Fiscal year ended March	Second quarter ended
	September 2021
	2021 (As of March 31, 2021)
	(As of September 30, 2021)
ASSETS
Current assets
Cash and deposits	73,372	72,824
Notes receivable, accounts receivable
from completed construction contracts	70,948	72,181
and other
Real estate for sale	11,699	10,509
Costs on construction contracts in	1,443	1,580
progress
Costs on real estate business	3,397	2,837
Accounts receivable - other	3,339	3,359
Other	1,894	1,765
Allowance for doubtful accounts	(112)	(79)
Total current assets	165,982	164,976
Non-current assets
Property, plant and equipment
Buildings and structures, net	6,138	6,025
Machinery, vehicles, tools, furniture	1,551	1,413
and fixtures, net
Vessels, net	757	726
Land	28,642	27,823
Leased assets, net	168	166
Construction in progress	1,213	2,323
Total property, plant and equipment	38,472	38,478
Intangible assets
Goodwill	1,822	1,699
Other	980	959
Total intangible assets	2,803	2,658
Investments and other assets
Investment securities	6,573	6,931
Deferred tax assets	4,356	4,229
Other	2,858	2,974
Allowance for doubtful accounts	(214)	(223)
Total investments and other assets	13,573	13,911
Total non-current assets	54,849	55,049
Total assets	220,831	220,025

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