Consolidated Financial Results for the Three Months Ended June 30, 2018 [JGAAP]

Transcription

1 Consolidated Financial Results for the Three Months Ended June 30, 2018 [JGAAP] August 10, 2018 Company Name: DAINICHISEIKA COLOR & CHEMICALS MFG. CO., LTD. Stock Code: 4116 (URL: Stock Exchange Listing: Tokyo Representative: Koji Takahashi, Representative Director and President Contact: Toshiya Sakakibara, Chief Financial Officer Phone: Scheduled date to submit the Quarterly Securities Report: August 10, 2018 Scheduled date to commence dividend payments: - Availability of supplementary briefing material on quarterly results: None Scheduled date of Quarterly Results Briefing Session: Not scheduled (Figures are rounded down to the nearest million yen) 1. Consolidated Financial Results for the Three Months Ended June 30, 2018 (From April 1, 2018 to June 30, 2018) (1) Consolidated Results of Operations (cumulative) (% indicates changes from the previous corresponding term) Net sales Operating profit Ordinary profit Profit attributable to owners of parent Millions of yen % Millions of yen % Millions of yen % Millions of yen % Three months ended June 30, , ,824 (26.8) 2,939 (27.5) 2,049 (28.9) Three months ended June 30, , , , ,883 (5.9) (Note) Comprehensive income: Three months ended June 30, 2018: 645 million [(83.2%)] Three months ended June 30, 2017: 3,842 million [84.9%] Profit per share Fully diluted profit per share Yen Yen Three months ended June 30, Three months ended June 30, (Note) DAINICHISEIKA COLOR & CHEMICALS MFG. CO., LTD. (the Company ) has implemented share consolidation of its common stock on a one for five basis effective October 1, Profit per share and Fully diluted profit per share were calculated on the assumption that the share consolidation was implemented at the beginning of the previous fiscal year. (2) Consolidated Financial Position Total assets Net assets Equity ratio Millions of yen Millions of yen % Three months ended June 30, ,490 96, Year ended March 31, ,948 97, (Reference) Equity: Three months ended June 30, 2018: 94,879 million Year ended March 31, 2018: 94,949 million 2. Dividends Annual cash dividends per share End of 1Q End of 2Q End of 3Q Year-end Annual Yen Yen Yen Yen Yen Year ended March 31, Year ending March 31, 2019 Year ending March 31, 2019 (Forecast) (Note) Revisions of dividend forecast from recently announced figures: Not applicable

2 * The Company has implemented share consolidation of its common stock on a one for five basis effective October 1, Year-end dividend per share for the fiscal year ended March 31, 2018 factors in the influence of the consolidation of, and is indicated for total amount of annual dividends. Annual dividend per share calculated on a post share consolidation basis is 85 for the year ended March 31, Forecast of Consolidated Financial Results for Fiscal Year Ending March 31, 2019 (From April 1, 2018 to March 31, 2019) (% indicates changes from the previous corresponding term) Net sales Operating profit Ordinary profit Profit attributable to owners of parent Profit per share Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen First half 84, ,600 (34.1) 5,200 (31.1) 3,500 (33.3) Full year 170, ,000 (23.5) 10,800 (21.6) 7,500 (10.3) (Note) Revisions of forecast of financial results from recently announced figures: Not applicable * Notes (1) Significant changes of subsidiaries during the three months ended June 30, 2018 (changes in specific subsidiaries involving changes in the scope of consolidation): Not applicable (2) Adoption of specific accounting treatments to the preparation of consolidated quarterly financial statements: Not applicable (3) Changes in accounting policies, changes in accounting estimates and restatements 1) Changes in accounting policies due to the revision of accounting standards: Not applicable 2) Changes in accounting policies other than 1): Not applicable 3) Changes in accounting estimates: Not applicable 4) Restatements: Not applicable (4) Total number of issued (common stock) 1) Total number of issued at the end of the period (including treasury ): As of June 30, ,613,110 As of March 31, ,613,110 2) Total number of treasury at the end of the period: As of June 30, ,900 As of March 31, ,794 3) Average number of during the period (cumulative): Three months ended June 30, ,566,231 Three months ended June 30, ,567,972 (Note) The Company has implemented share consolidation of its common stock on a one for five basis effective October 1, Total number of issued at the end of the period, Total number of treasury at the end of the period and Average number of during the period were calculated on the assumption that the share consolidation was implemented at the beginning of the previous fiscal year. * These consolidated quarterly financial results are outside the scope of quarterly review by a certified public accountant or an audit firm. * Explanation for the appropriate use of performance forecasts and other special notes: (Cautionary note on forward-looking statement) The statements regarding forecast of financial results in this report are based on the information that is available, as well as estimates, assumptions and projections that are believed to be reasonable at the time of publication, and they are not meant to be a commitment by the Company. Therefore, there might be cases in which actual results differ from forecast values. For assumptions used in projecting financial results and instructions to use projected financial results, please refer to 1. Qualitative Information on Quarterly Financial Results (3) Explanation of Forecast of Consolidated Financial Results and Other Forward-Looking Information on page 3 of the appendix to this report.

3 Table of Contents of Appendix 1. Qualitative Information on Quarterly Financial Results 2 (1) Explanation of Results of Operations 2 (2) Explanation of Financial Position 3 (3) Explanation of Forecast of Consolidated Financial Results and Other Forward-Looking Information 3 2. Consolidated Quarterly Financial Statements and Principal Notes 4 (1) Consolidated Quarterly Balance Sheets 4 (2) Consolidated Quarterly Statements of Income and Comprehensive Income 6 Consolidated Quarterly Statements of Income 6 Consolidated Quarterly Statements of Comprehensive Income 7 (3) Notes to Consolidated Quarterly Financial Statements 8 (Notes to Going Concern Assumption) 8 (Notes to Significant Changes in the Amount of Shareholders Equity) 8 (Additional Information) 8 (Segment Information) 8 1

4 1. Qualitative Information on Quarterly Financial Results (1) Explanation of Results of Operations During the consolidated period of the three months ended June 30, 2018, the Japanese economy saw moderate increases in exports and capital expenditure. Personal consumption also recovered backed by strong employment and income factors. Looking overseas, the U.S. economy continued to expand, and among emerging markets in the Asia region, the Chinese economy remained solid despite weak moves in some areas and economies in other emerging markets remained solid overall. In such an economic environment, net sales for the three months ended June 30, 2018 increased to 42,543 million, up by 3.3% compared with the same period of the previous fiscal year, due to favorable sales in all segments. Operating profit decreased to 2,824 million, down by 26.8% compared with the same period of the previous fiscal year, due mainly to rises in raw materials prices, ordinary profit decreased to 2,939 million, down by 27.5% compared with the same period of the previous fiscal year, and profit attributable to owners of parent decreased to 2,049 million, down by 28.9% compared with the same period of the previous fiscal year. Operating results by segment are as follows: Operating profit is stated at an amount before the allocation of corporate expenses. (Pigments ) In the Pigments, the Group manufactures and sells inorganic-organic pigments, colorants for fabrics, and information-displaying and recording materials. Sales of information-displaying and recording materialsrelated products remained generally robust. In addition, sales of general-purpose pigments remained solid overall. As a result, net sales in the segment stood at 6,456 million, up by 1.4% compared with the same period of the previous fiscal year, and operating profit decreased to 1,034 million, down by 6.4% compared with the same period of the previous fiscal year. (Prepared colors and Chemicals ) In the Prepared colors and Chemicals, the Group manufactures and sells colorants used in plastics and coating materials. Sales of compounds manufactured under contract for the automobile industry remained robust along with those of colorants overseas. Sales of coating materials for the information-electronics industry remained favorable. Among overseas consolidated subsidiaries, results for compounds in Southeast Asia remained solid. As a result, net sales in the segment stood at 23,707 million, up by 5.4% compared with the same period of the previous fiscal year, while operating profit was 1,691 million, down by 16.1% compared with the same period of the previous fiscal year. (Polymers ) In the Polymers, the Group manufactures and sells urethane resins and naturally-derived polymers. Sales of resins for the apparel industry and those of special coating agents for information-displaying and recording materials remained robust. Among overseas consolidated subsidiaries, results of the bases in China and America remained solid. As a result, net sales in the segment stood at 4,866 million, up by 1.2% compared with the same period of the previous fiscal year, while operating profit was 1,012 million, down by 16.9% compared with the same period of the previous fiscal year, due to rises in raw materials prices. (Printing Inks ) In the Printing Inks, the Group manufactures and sells printing inks and also offers merchandise and services associated with the. As for gravure printing ink, sales mainly of packaging products for general packaging materials were strong. Among overseas consolidated subsidiaries, results in Indonesia were solid. Meanwhile, demand for offset printing ink continued to decline. As a result, net sales in the segment stood at 7,366 million, up by 2.6% compared with the same period of the 2

5 previous fiscal year, while operating profit was 567 million, down by 34.9% compared with the same period of the previous fiscal year, due to rises in raw materials prices. (Other ) In the Other, the Group engages in leasing of real estate properties and financial for group companies, and others. Net sales in this segment stood at 145 million, down by 56.2% compared with the same period of the previous fiscal year, while operating loss was 83 million. (2) Explanation of Financial Position The Company applied Partial Amendments to Accounting Standard for Tax Effect Accounting, etc. (Accounting Standards Board of Japan ( ASBJ ) Statement No. 28, February 16, 2018) from the beginning of the three months ended June 30, Regarding the financial position, comparison is made with previous yearend figures after retrospective application of the above amendments. (Assets) Total assets as at the end of the first quarter ended June 30, 2018 increased by 541 million compared with the end of previous fiscal year to 201,490 million. Current assets decreased by 76 million due mainly to a decrease in cash and deposits. Non-current assets increased by 618 million due mainly to an increase in property, plant and equipment. (Liabilities) Total liabilities as at the end of the first quarter ended June 30, 2018 increased by 694 million compared with the end of the previous fiscal year to 104,616 million. This is largely because of an increase in provision for bonuses. (Net assets) Net assets as at the end of the first quarter ended June 30, 2018 decreased by 152 million compared with the end of the previous fiscal year to 96,873 million. This is largely because of a decrease in foreign currency translation adjustment, despite the increase in retained earnings due to the recording of profit attributable to owners of parent. (3) Explanation of Forecast of Consolidated Financial Results and Other Forward-Looking Information With regard to the forecast of financial results, there is no change to the following forecasts announced on May 15, Net sales Operating profit Ordinary profit Profit attributable to owners of parent Millions of yen Millions of yen Millions of yen Millions of yen First half 84,000 4,600 5,200 3,500 Full year 170,000 10,000 10,800 7,500 3

6 2. Consolidated Quarterly Financial Statements and Principal Notes (1) Consolidated Quarterly Balance Sheets (Millions of yen) As of March 31, 2018 As of June 30, 2018 Assets Current assets Cash and deposits 31,746 30,164 Notes and accounts receivable - trade 53,911 53,848 Inventories 27,719 29,481 Other 2,416 2,217 Allowance for doubtful accounts (95) (91) Total current assets 115, ,621 Non-current assets Property, plant and equipment Land 18,521 18,487 Other, net 28,991 30,215 Total property, plant and equipment 47,512 48,702 Intangible assets Other 3,044 3,147 Total intangible assets 3,044 3,147 Investments and other assets Investment securities 24,385 23,757 Net defined benefit asset 7,385 7,492 Other 2,957 2,927 Allowance for doubtful accounts (36) (158) Total investments and other assets 34,693 34,019 Total non-current assets 85,250 85,869 Total assets 200, ,490 4

7 (Millions of yen) As of March 31, 2018 As of June 30, 2018 Liabilities Current liabilities Notes and accounts payable - trade 34,491 35,301 Short-term loans payable 14,943 15,358 Current portion of long-term loans payable 8,372 8,442 Income taxes payable 2,009 1,176 Provision for bonuses 2,181 3,358 Provision for loss on liquidation of subsidiaries and associates Provision for environmental measures 2,086 2,091 Other 6,276 5,397 Total current liabilities 70,602 71,360 Non-current liabilities Long-term loans payable 18,098 18,391 Provision for directors retirement benefits Provision for loss on liquidation of subsidiaries and associates Provision for environmental measures 3,109 3,090 Net defined benefit liability 9,021 9,103 Other 2,282 2,056 Total non-current liabilities 33,319 33,256 Total liabilities 103, ,616 Net assets Shareholders equity Capital stock 10,039 10,039 Capital surplus 9,772 9,772 Retained earnings 66,279 67,539 Treasury (107) (107) Total shareholders equity 85,985 87,245 Accumulated other comprehensive income Valuation difference on available-for-sale securities 9,673 9,396 Deferred gains or losses on hedges (19) (19) Foreign currency translation adjustment (97) (1,186) Remeasurements of defined benefit plans (593) (556) Total accumulated other comprehensive income 8,963 7,634 Non-controlling interests 2,076 1,993 Total net assets 97,026 96,873 Total liabilities and net assets 200, ,490 5

8 (2) Consolidated Quarterly Statements of Income and Comprehensive Income (Consolidated Quarterly Statements of Income) Three months ended June 30, 2017 (From April 1, 2017 to June 30, 2017) (Millions of yen) Three months ended June 30, 2018 (From April 1, 2018 to June 30, 2018) Net sales 41,186 42,543 Cost of sales 32,904 34,856 Gross profit 8,282 7,686 Selling, general and administrative expenses 4,424 4,862 Operating profit 3,857 2,824 Non-operating income Interest income Dividend income Share of profit of entities accounted for using equity method Foreign exchange gains 42 - Insurance income 1 91 Other Total non-operating income Non-operating expenses Interest expenses Foreign exchange losses - 21 Compensation expenses 7 95 Other Total non-operating expenses Ordinary profit 4,053 2,939 Extraordinary income Gain on sales of non-current assets 8 20 Total extraordinary income 8 20 Extraordinary losses Loss on retirement of non-current assets Loss on valuation of investment securities - 71 Provision for loss on liquidation of subsidiaries and associates - 17 Environmental expenses 1 25 Other 0 0 Total extraordinary losses Profit before income taxes 4,038 2,834 Income taxes - current 1,358 1,093 Income taxes - deferred (211) (313) Total income taxes 1, Profit 2,891 2,054 Profit attributable to non-controlling interests 8 5 Profit attributable to owners of parent 2,883 2,049 6

9 (Consolidated Quarterly Statements of Comprehensive Income) Three months ended June 30, 2017 (From April 1, 2017 to June 30, 2017) (Millions of yen) Three months ended June 30, 2018 (From April 1, 2018 to June 30, 2018) Profit 2,891 2,054 Other comprehensive income Valuation difference on available-for-sale securities 1,465 (276) Deferred gains or losses on hedges (2) 0 Foreign currency translation adjustment (555) (1,013) Remeasurements of defined benefit plans, net of tax Share of other comprehensive income of entities accounted for using equity method 31 (155) Total other comprehensive income 951 (1,409) Comprehensive income 3, Comprehensive income attributable to Comprehensive income attributable to owners of parent 3, Comprehensive income attributable to non-controlling interests (44) (74) 7

10 (3) Notes to Quarterly Consolidated Financial Statements (Notes to Going Concern Assumption) Not applicable. (Notes to Significant Changes in the Amount of Shareholders Equity) Not applicable. (Additional Information) (Application of Partial Amendments to Accounting Standard for Tax Effect Accounting, etc.) The Company applied Partial Amendments to Accounting Standard for Tax Effect Accounting, etc. (ASBJ Statement No. 28, February 16, 2018) from the beginning of the three months ended June 30, Accordingly, deferred tax assets are presented under investments and other assets and deferred tax liabilities are presented under non-current liabilities. (Segment Information) [Segment Information] I. For the three months ended June 30, 2017 (From April 1, 2017 to June 30, 2017) 1. Information regarding net sales and operating profit or loss by the reportable segments Net sales (1) Net sales to external customers (2) Intersegment net sales and transfer Segment profit [Operating profit] (loss) Pigments Prepared colors and Chemicals Reportable segments Polymers Printing Inks Other (Note 1) Total Adjusted amount (Notes 2, 3) (Millions of yen) Posted amount to the consolidated quarterly financial statements 6,370 22,497 4,808 7, ,186-41, ,404 4,588 (4,588) - Total 6,492 22,506 4,857 7,180 4,737 45,775 (4,588) 41,186 1,104 2,016 1, (106) 5,104 (1,247) 3,857 Notes: 1. Operating loss is reported in Other, as the segment includes the loss from the company which provides services such as property management and financial es for the Group companies. The revenue associated with Other is reported as non-operating income, and operating expenses are not allocated to each reportable segment. 2. The adjusted amount of segment profit includes corporate expenses of 1,247 million not allocated to each reportable segment. Corporate expenses refer to the expenses at the head office organizations, such as general affairs and accounting divisions that do not belong to the reportable segments, as well as research and development expenses. 3. Adjustments have been made to segment profit with operating profit in the consolidated quarterly statements of income. 8

11 II. For the three months ended June 30, 2018 (From April 1, 2018 to June 30, 2018) 1. Information regarding net sales and operating profit or loss by the reportable segments Net sales (1) Net sales to external customers (2) Intersegment net sales and transfer Segment profit [Operating profit] (loss) Pigments Prepared colors and Chemicals Reportable segments Polymers Printing Inks Other (Note 1) Total Adjusted amount (Notes 2, 3) (Millions of yen) Posted amount to the consolidated quarterly financial statements 6,456 23,707 4,866 7, ,543-42, ,031 5,177 (5,177) - Total 6,563 23,718 4,894 7,367 5,177 47,720 (5,177) 42,543 1,034 1,691 1, (83) 4,221 (1,397) 2,824 Notes: 1. Operating loss is reported in Other, as the segment includes the loss from the company which provides services such as property management and financial es for the Group companies. The revenue associated with Other is reported as non-operating income, and operating expenses are not allocated to each reportable segment. 2. The adjusted amount of segment profit includes corporate expenses of 1,397 million not allocated to each reportable segment. Corporate expenses refer to the expenses at the head office organizations, such as general affairs and accounting divisions that do not belong to the reportable segments, as well as research and development expenses. 3. Adjustments have been made to segment profit with operating profit in the consolidated quarterly statements of income. 9