VALQUA posted summary of financial statement of 2nd Quarter, FY ended March 2022.

October 27, 2021

Summary of Consolidated Financial Results

for the Second Quarter of the Fiscal Year Ending March 31, 2022

VALQUA, LTD. (7995)

English translation from the original Japanese-language document

(All financial information has been prepared in accordance with accounting principles generally accepted in Japan)

Consolidated Balance Sheets

					(Millions of yen)
		As of March 31, 2021			As of September 30, 2021
Assets
Current assets
Cash and deposits	8,099	7,725
Notes and accounts receivable - trade	12,086		－
Notes and accounts receivable - trade, and		－	12,821
contract assets
Electronically recorded monetary claims -	2,272	3,190
operating
Merchandise and finished goods	3,384	4,220
Work in process	612	865
Raw materials and supplies	1,214	1,653
Other	2,043	2,205
Allowance for doubtful accounts	-	14	-	17
Total current assets	29,698	32,664
Non-current assets
Property, plant and equipment
Buildings and structures, net	5,834	5,969
Land	4,002	4,005
Other, net	6,657	7,151
Total property, plant and equipment	16,494	17,126
Intangible assets
Other	1,425	1,513
Total intangible assets	1,425	1,513
Investments and other assets
Investment securities	3,204	4,138
Other	1,868	1,968
Allowance for doubtful accounts		-	0		-	0
Total investments and other assets	5,072	6,106
Total non-current assets	22,993	24,746
Total assets		52,691	57,411

－ 1 －

				(Millions of yen)
		As of March 31, 2021	As of September 30, 2021
Liabilities
Current liabilities
Notes and accounts payable - trade		5,423		5,665
Electronically recorded obligations - operating		－		584
Short-term borrowings		1,538		1,807
Current portion of long-term borrowings		109		99
Income taxes payable		660		580
Provision for bonuses		397		447
Provision for bonuses for directors (and other		31		30
officers)
Other		2,603		3,081
Total current liabilities	10,764	12,297
Non-current liabilities
Long-term borrowings		2,506		3,265
Retirement benefit liability		483		490
Other		1,663		1,882
Total non-current liabilities		4,653		5,639
Total liabilities	15,417	17,936
Net assets
Shareholders' equity
Share capital	13,957	13,957
Capital surplus		3,980		4,004
Retained earnings	17,968	19,002
Treasury shares		1,571		1,515
Total shareholders' equity	34,335	35,448
-		-
Accumulated other comprehensive income
Valuation difference on available-for-sale		1,583		2,008
securities
Foreign currency translation adjustment		321		195
Remeasurements of defined benefit plans		- 49		50
Total accumulated other comprehensive		1,311		2,254
income
Non-controlling interests		1,627		1,771
Total net assets	37,274	39,474
Total liabilities and net assets		52,691	57,411

－ 2 －

Consolidated Statements of Income

			(Millions of yen)
		Six months ended	Six months ended
		September 30, 2020	September 30, 2021
Net sales	21,630	24,740
Cost of sales	13,006	14,939
Gross profit	8,624	9,801
Selling, general and administrative expenses	6,938	7,104
Operating profit	1,685	2,696
Non-operating income
Interest income	1	2
Dividend income	23	21
Rental income from facilities	193	185
Share of profit of entities accounted for using	－	14
equity method
Foreign exchange gains	－	21
Other	96	65
Total non-operating income	314	311
Non-operating expenses
Interest expenses	35	28
Rental expenses on facilities	165	142
Foreign exchange losses	13	－
Share of loss of entities accounted for using	2	－
equity method
Other	21	21
Total non-operating expenses	238	192
Ordinary profit	1,762	2,815
Extraordinary income
Gain on sale of non-current assets	2	－
Gain on sale of investment securities	916	－
Total extraordinary income	919	－
Extraordinary losses
Loss on sale of non-current assets	0	－
Loss on abandonment of non-current assets	9	7
Impairment losses	47	15
Loss on sale of investment securities	46	－
Compensation expenses for health damage	20	19
caused by asbestos
Total extraordinary losses	123	42
Profit before income taxes	2,558	2,772
Income taxes - current	739	722
Income taxes - deferred	10	57
Total income taxes	750	780
Profit	1,807	1,992
Profit attributable to non-controlling interests	4	75
Profit attributable to owners of parent		1,803	1,916

－ 3 －

Consolidated Statements of Comprehensive Income

				(Millions of yen)
	Six months ended			Six months ended
	September 30, 2020			September 30, 2021
Profit	1,807	1,992
Other comprehensive income
Valuation difference on available-for-sale		245	423
securities
Foreign currency translation adjustment	-	234	564
Remeasurements of defined benefit plans, net of
	89	1
tax
Share of other comprehensive income of entities			4	2
accounted for using equity method
Total other comprehensive income		95	991
	-
Comprehensive income	1,903	2,984
Comprehensive income attributable to
Comprehensive income attributable to owners of	1,913	2,860
parent
Comprehensive income attributable to non-		-9	123
controlling interests

－ 4 －

Consolidated Statements of Cash Flows

								(Millions of yen)
		Six months ended						Six months ended
		September 30, 2020					September 30, 2021
Cash flows from operating activities
Profit before income taxes		2,558		2,772
Depreciation		1,237		1,236
Impairment losses					47				15
Interest and dividend income					25				23
Interest expenses				-35			-28
Decrease (increase) in retirement benefit asset						5				83
Increase (decrease) in retirement benefit liability					41					5
Loss on abandonment of non-current assets				- -9			-	-7
Loss (gain) on sale of non-current assets					-	2				－
Loss (gain) on sale of investment securities			870				－
Decrease (increase) in trade receivables		-157		1,225
Decrease (increase) in inventories			465	-1,377
Increase (decrease) in trade payables		-			39	-		640
Other, net					32			475
Subtotal		2,706		2,461
Interest and dividends received					36				24
Interest paid					32				28
Income taxes refund		-		-78	-		-36
Income taxes paid		599	1,029
The amount of payment of the asbestos illness
				70				20
compensation money
Net cash provided by (used in) operating activities		2,118		1,443
			-					-
Cash flows from investing activities
Purchase of property, plant and equipment	-	1,433	-	1,488
Proceeds from sale of property, plant and
					4					2
equipment
Purchase of intangible assets			347			226
Purchase of investment securities		-			－		-312
Proceeds from sale of investment securities		1,395		-150
Payments of guarantee deposits					26				49
Proceeds from refund of guarantee deposits				-		9			-37
Proceeds from sale of shares of subsidiaries					26				－
resulting in change in scope of consolidation
Other, net					16				30
Net cash provided by (used in) investing activities			388		1,916
	-		-			-		-
Cash flows from financing activities
Proceeds from short-term borrowings		2,113		1,221
Repayments of short-term borrowings		1,679		1,003
Proceeds from long-term borrowings	-1,000	-		747
Repayments of long-term borrowings					62			-	58
Repayments of lease obligations				111			97
			-
Purchase of treasury shares		-			0			-		1
Dividends paid			877			878
	-			-			-		-
Dividends paid to non-controlling interests				23			21
Net cash provided by (used in) financing activities			358			-	92
			-
										-
Effect of exchange rate change on cash and cash				-	69			184
equivalents
Net increase (decrease) in cash and cash		2,018		-	380
equivalents
Cash and cash equivalents at beginning of period		6,571		8,026
Cash and cash equivalents at end of period			8,590		7,645

－ 5 －