TOKAI : Financial Results for the Fiscal Year Ended March 31, 2023 – Net sales reached a new record high and the customer base also expanded – (213KB)

May 9, 2023

For Immediate Release

Company Name:	TOKAI Holdings Corporation
Representative Name: Representative Director, President and CEO
	Katsuo Oguri
	(Code No. 3167, TSE Prime Market)
Contact:	Yutaka Horaguchi, Public Relations and
	Investor Relations Office
TEL:	[phone]

Financial Results for the Fiscal Year Ended March 31, 2023

- Net sales reached a new record high and the customer base also expanded -

TOKAI Holdings Corporation (hereinafter, "the Company") today announced its financial results for the fiscal year ended March 31, 2023 (from April 1, 2022 to March 31, 2023).

1. Net sales reached a new record high, rising for the sixth consecutive year

For the fiscal year under review, net sales stood at 230.2 billion yen, up 19.5 billion yen or 9.3% year on

year, rising for the sixth consecutive year to a new record high. This resulted chiefly from sales growth following an increase in energy, CATV and other customers, rises in selling prices linked with energy purchase prices, and expansion of the stock business for corporate clients in the Information and Communication business.

On the profit front, operating profit stood at 14.9 billion yen, down 0.9 billion yen or 5.5% year on year. This is explained by LP gas purchase prices that were far higher than the level in the same period a year earlier and an increase in expenses for gaining customers in the Information and Communication business for consumers, which endeavored to shift towards a net increase in customers. These factors more than offset earnings growth after an increase in the number of monthly fee-paying customers accompanying an increase in the number of customer accounts, as well as a rise in profit in the Information and Communications business for corporate clients.

Profit attributable to owners of parent stood at 6.5 billion yen, down 2.5 billion yen or 27.9% year on year. This is due mainly to impairment losses of goodwill of an equity-method affiliate based in Vietnam and the posting of special investigation expenses under extraordinary losses.

Net sales and all the profit and income figures ended higher than their respective forecast announced on

February 2, 2023.

(Millions of yen)

			Revised forecast
	FY03/23 results	FY03/22 results	for earnings		Change from
	(April 1, 2022 to	(April 1, 2021 to	results	YoY
	forecast
	March 31, 2023)	March 31, 2022)	(Announced on
			February 2, 2023)
Net sales	230,190	210,691	223,000	+19,498	+7,190
Operating profit	14,919	15,794	14,500	-874	+419
Ordinary profit	13,289	15,907	12,600	-2,617	+689
Profit	6,465	8,969	6,300	-2,504	+165
attributable to
owners of parent
E P S ( y e n )	49.41	68.49	48.12	-19.08	+1.29

2. The Company expanded its earnings base through considerable customer gains, pushing the customer count up by more than 100 thousand from the beginning of the fiscal year.

In operating activities in the fiscal year under review, the Company aggressively conducted sales activities to gain customers while thoroughly taking measures to prevent COVID-19 infections and recorded 3,299,000 continuing customers as of March 31, 2023. This continuing customer exceeded the count at the beginning of the fiscal year (3,194,000) by 105,880 (versus an increase of 94,937 in the same period of the previous fiscal year).

With net increase of 35,930 (LP and city) gas customers (40,408 in the previous fiscal year), 55,813 CATV customers (33,840), including 24,674 M&A-related customers, 17,158 Hikari Collaboration customers (9,291) and 15,885 LIBMO (MVNO service) customers (2,481), we further expanded our earnings base.

3. Policy of paying constant and stable dividends

The Company defines the return of profit to shareholders as one of the key management issues and has a basic policy of paying constant and stable dividends.

Annual dividend per share for the fiscal year under review is projected to stay unchanged at 32 yen per share from the previous fiscal year.

	FY03/23	FY03/22	FY03/21
	(Current fiscal year)	(Previous fiscal year)	(Two years earlier)
Interim (end of Q2)	16.00 yen	15.00 yen	14.00 yen
Year-end	16.00yen	17.00 yen	16.00yen
Annual dividend per share	32.00 yen	32.00yen	30.00 yen
Total dividend amount	4,203 million yen	4,203 million yen	3,940 million yen
Payout ratio	64.8％	46.7％	44.6％
(consolidated)
Ratio of dividends to net	5.3％	5.5％	5.6％
assets (consolidated)

For details, please see the attached materials, entitled "Financial Results for the Fiscal Year Ended March 31, 2023." For the Company's earnings announcement for the fiscal year ended March 31, 2023, please see the following URL:

https://www.tokaiholdings.co.jp/english/ir/library/earnings.html

Financial Results for the Fiscal Year

Ended March 31, 2023

TOKAI Holdings Corporation

(Code No. 3167)

May 9, 2023

Net sales reached a new record high

• Net sales rose for the sixth fiscal year to reach a new record high. The result chiefly reflects an increase in customers, rises in selling prices linked with energy purchase prices, and expansion of the Information and Communication business for corporate clients.
• Operating profit fell 0.9 billion yen year on year, primarily because of soaring LP gas purchase prices and an increase in expenses for gaining customers, despite earnings growth after an increase in the number of monthly fee-paying customers accompanying an increase in the number of customer accounts, as well as a rise in profit in the Information and Communications business for corporate clients.
• Profit attributable to owners of parent dropped 2.5 billion yen year on year, due mainly to posting of impairment losses of goodwill of an equity-method affiliate and special investigation expenses.

				YoY		Change from revised
	FY03/23	FY03/22			forecast
	Revised
	results	results
	forecast			% change		% change
	(FY2022)	(FY2021)	Change		Change
			(%)	(%)
Net sales	230,190	210,691	223,000	+19,498		+9.3	+7,190	+3.2
Operating profit	14,919	15,794	14,500	-874		-5.5	+419	+2.9
Ordinary profit	13,289	15,907	12,600	-2,617		-16.5	+689	+5.5
Profit attributable to	6,465	8,969	6,300	-2,504		-27.9	+165	+2.6
owners of parent
EPS (yen)	49.41	68.49	48.12	-19.08		-27.9	+1.29	+2.7

Year-on-year comparison in full-year

operating profit by segment

• In the Energy, CATV and Aqua segments, customer gains pushed up profits, and Information and Communications for corporate clients was also strong.
• The profit decline in the Energy segment is largely attributable to the effect of higher LP gas purchase costs (cost increase of 5.8 billion yen year on year).
• In Information and Communications for individual clients, the customer count far exceeded the level a year earlier; however, acquisition costs were higher.

Operating profit

160.0

(billion yen)

15.79

-1.55

150.0

+0.33

-0.43

+0.02

+0.21

+0.55

14.92

140.0

Energy

Information and

CATV

Construction,

Aqua

Others and

Increase in

Communications

Increase in

Equipment, and

Increase in

adjustments

+0.65

+0.33

Real Estate

+0.04

Wedding

customers

For corporate

+0.48

customers

customers

+0.27

130.0

Purchase

clients

Acquisition

ceremonies

-1.90

Renovation

+0.08

+0.17

For individual

and others

costs

+0.56

costs

Acquisition

clients

Building

Adjustments

-0.25

-0.02

-0.51

Acquisition

costs

-0.49

facilities

Temperature

costs

-0.39

120.0

and others

Other

+0.11

110.0

FY2021

エネルギー

情報通信

CATV

建築不動産

アクア

その他調整額

FY2022

1

分類 7

Results

Results

* Changes in operating profit disregard allocation of indirect costs

2

Large net increase in customers of more than 100 thousand from beginning of fiscal year

• The customer count showed a large net increase of 106 thousand from 3,194 thousand at the beginning of the fiscal year, partly thanks to an increase of 25 thousand through M&A.
• The earnings base continued to expand in the gas business, the CATV business, the Hikari Collaboration business

3,350

and the LIBMO business.

Customer count

3,300 (Thousand)

3,250

3,200

3,194

3,150

Gas

	LP gas	+31
	City gas
	+5

+25

Information and

Communications

	ISP, etc.	-8
	Hikari	+17
	Collaboration
	LIBMO	+16

+56

CATV

Broadcasting +11

Communications +20

M&A+25

-11

Other

Aqua-0

Mobile -12

Others +1

3,299

Large net increase of 106 thousand

3,100

FY2021	FY2022
分類 7
Results	Results

* Rounded to the nearest thousand. Adjustment is made in Others for duplicate communication services for ISP and CATV carrier plans.

3

Investing for growth after strengthening equity capital

• The equity ratio was 41.5%, remaining at a healthy level.
• The increase in cash flows from operating activities mainly reflects an increase in the collection of accounts receivable and a decrease in payment of accounts payable.
• Free cash flow increased despite continuous investment for growth.

Equity ratio	41.9	%		41.5	%
	End of March 2022		End of March 2023
Interest-bearing debt	44.1	billion yen		46.6	billion yen
	End of March 2022		End of March 2023
Operating cash flow	20.8	billion yen		21.2	billion yen
	FY03/22		FY03/23
Investment cash flow	-14.6	billion yen		-14.2	billion yen
	FY03/22		FY03/23
Free cash flow	6.2	billion yen		7.0	billion yen
	FY03/22		FY03/23
Interest-bearingdebt/	1.4	times		1.5	times
EBITDA
FY03/22		FY03/23

4

Policy of paying constant and stable dividends

• In accordance with the Company's policy of paying constant and stable dividends, the annual dividend per share will be 32 yen, the same as the year before
• The payout ratio will remain high.

60											64.8%
50						54.7%
				46.7%			47.2%	44.5%	44.6%	46.7%
40		52.9%			43.4%				32
40.2%
								30	32
					28	28	28	28	yen/share
					yen/share
					yen/share
30					yen/share	yen/share	yen/share	yen/share
			35.1%
				6
				14	14	14	14	16	17	16
20
12	12	12
	11
	yen/share
	yen/share	yen/share	yen/share
10	6	6	6	8
		14	14	14	14	15	16
		11
	6	6	6	6
0
	FY2012	FY2013	FY2014	FY2015	FY2016	FY2017	FY2018	FY2019	FY2020	FY2021	FY2022

Interim dividend		Year-end dividend		Commemorative dividend	Payout ratio	5