Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

July 28, 2022

Consolidated Financial Results

for the Three Months Ended June 30, 2022

(Under Japanese GAAP)

Company name:

Kyokuto Securities Co., Ltd.

Listing:

Tokyo Stock Exchange

Securities code:

8706

URL:

http:// www.kyokuto-sec.co.jp

Representative:

Kazuhiro KIKUCHI, President and Chief Executive Officer

Inquiries:

Shunzo KAYANUMA, Senior Managing Director

Telephone:

+81-3-3666-5130

Scheduled date to file quarterly securities report:

August 12, 2022

Preparation of supplementary material on quarterly financial results: Yes

Holding of quarterly financial results briefing:

None

(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the three months ended June 30, 2022 (from April 1, 2022 to June 30, 2022)

(1) Consolidated operating results (cumulative)

(Percentages indicate year-on-year changes.)

Net operating

Operating profit

Ordinary profit

Profit (loss)

Operating revenue

attributable to owners

revenue

(loss)

(loss)

of parent

Three months

Millions of

%

Millions of

%

Millions of

%

Millions of

%

Millions of

%

ended

yen

yen

yen

yen

yen

June 30, 2022

1,201

△34.1

1,189

△34.3

△37

－

125

△82.5

246

△52.6

June 30, 2021

1,822

△11.8

1,811

△11.7

547

△36.1

720

△23.5

519

△19.3

Note: Comprehensive income

For the three months ended June 30, 2022:

¥429 million

[△18.4%]

For the three months ended June 30, 2021:

¥525 million

[△48.8%]

Basic earnings

Diluted earnings

per share

per share

Three months ended

Yen

Yen

June 30, 2022

7.72

－

June 30, 2021

16.29

－

(2) Consolidated financial position

Total assets

Net assets

Equity-to-asset ratio

Net assets per share

As of

Millions of yen

Millions of yen

%

Yen

June 30, 2022

70,477

45,897

65.1

1,438.42

March 31, 2022

71,796

46,106

64.2

1,444.99

Reference: Equity

As of June 30, 2022:

¥45,887 million

As of March 31, 2022:

¥46,097 million

2. Cash dividends

Annual dividends per share

First quarter-end

Second quarter-end

Third quarter-end

Fiscal year-end

Total

Yen

Yen

Yen

Yen

Yen

Fiscal year ended

－

20.00

－

20.00

40.00

March 31, 2022

Fiscal year ending

－

March 31, 2023

Note: Revisions to the forecast of cash dividends most recently announced: None

The company does not disclose forecast of business result, Please refer to page 3 for further information.

* Notes

  1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of consolidation): None

Newly included:

0 companies

Excluded:

0 companies

  1. Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements: None
  2. Changes in accounting policies, changes in accounting estimates, and restatement
    1. Changes in accounting policies due to revisions to accounting standards and other regulations: Yes
    2. Changes in accounting policies due to other reasons: None
    3. Changes in accounting estimates: None
    4. Restatement: None
  4. Number of issued shares (common shares)
    1. Total number of issued shares at the end of the period (including treasury shares)

As of June 30, 2022

As of March 31,2022

32,779,000 shares

32,779,000 shares

(ii) Number of treasury shares at the end of the period

As of June 30, 2022

877,531 shares

As of March 31, 2022

877,531 shares

  1. Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year)

Three months ended March 31, 2022

31,901,469 shares

Three months ended March 31, 2021

31,901,488 shares

  • Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation.
  • Proper use of earnings forecasts, and other special matters
    The company does not disclose forecast of business result, Please refer to page 3 for further information.

Index of Attached Documents

BUSINESS RESULTS

1. Qualitative Information on Business Result for the Three Months Ended June 30, 2022

……………2

  1. Information on Business Results ………………………………………………………………………2
  2. Information on Financial Condition ……………………………………………………………………4

(3) Information on Forecast of Consolidated Business Result

…………………………………………4

2. Quarterly Consolidated Financial Statements and Notes

……………………………………………6

  1. Quarterly Consolidated Balance Sheets ……………………………………………………………6
  2. Quarterly Consolidated Income Statements

and Quarterly Consolidated Comprehensive Income Statements ………8

(Quarterly Consolidated Income Statements) ………………………………………………………8

(Three Months Ended June 30, 2022)

(Quarterly Consolidated Comprehensive Income Statements) ……………………………………10

(Three Months Ended June 30, 2022)

(3) Notes to Quarterly Consolidated Financial Statements ……………………………………………11

(Notes Concerning Going Concern Assumption) ……………………………………………………11

(Notes in the Event of Substantial Changes in Shareholders' Equity) ……………………………11

(Changes in Accounting Policy) …………………………………………………………………………11

【Referential Data】 ………………………………………………………………………………………………12

1. Referential Data on Consolidated Business Results

for the Three Months Ended June 30, 2022 ……12

  1. Commission Received ………………………………………………………………………………12
  2. Net Trading Income ……………………………………………………………………………………12

(3) Consolidated Income Statement for Latest Five Quarters …………………………………………13

2. Referential Data on Business Results for the Three Months Ended June 30, 2022 ………………14

  1. Capital Adequacy Ratio ……………………………………………………………………………14

(2) Number of Directors/Auditors and Employees ……………………………………………………14

1

BUSINESS RESULTS

1.Qualitative Information on Business Result for the Three Months Ended June 30, 2022 (1)Information on Business Results

During the three months ended June 30, 2022 (from April 1, 2022 to June 30, 2022) of the current consolidated fiscal year, the inflation continued to be a major challenge for both domestic and overseas economies. In addition, monetary tightening measures in all major countries except Japan to curb inflation progressed, and there were concerns about the negative impacts of those measures on the economy.

In the stock market, the Nikkei Stock Average (Nikkei225) started a downward trend due to concerns about the U.S. and Chinese economic downturn, and fell to 25,688 yen on May 12. Subsequently, following a softening in the tone of statements on monetary policy by Federal Reserve officials and the lifting of the lock down of Shanghai, China, from June the Nikkei Stock Average rebounded and reached a high of 28,389 yen on June 9. However, the Nikkei Stock Average plummeted due to concerns of recession in the U.S., hitting a low of 25,520 yen on June 20 and closing at 26,393 yen for this three month period. U.S. stocks remained weak due to concerns about recession caused by persistently high inflation and rising policy interest rates. The New York Dow Jones Industrial Average hit a low of $29,653 on June 17 and was at $30,775 at the end of this three month period. While high P/E ratio stocks vulnerable to rising interest rates were sold both domestic and abroad, energy-related stocks tended to be in demand due to soaring oil and gas prices.

In the foreign exchange market, the U.S. Dollar was bought globally, while the Yen was also sold notably. Interms of Dollar-Yen exchange rate, the Yen weakened sharply against the Dollar on the back of the widening interest rate gap between Japan and the U.S. and the clear difference in the monetary policy stance of the two countries. At the end of this three month period, the Dollar-Yen exchange rate was 136.68 yen per dollar, the weakest level in about 24 years since September 1998. The Euro-Yen exchange rate also closed at 142.67 yen per euro. This is the first time in 7 and a half years since January 2015 that the yen has weakened against the Euro. In the bond market, the yield on 10-year Japanese government bonds generally ranged from 0.20% to 0.25%. The Bank of Japan maintained its yield curve control and conducted unlimited purchase operations at 0.25%, but upward pressure on interest rates pushed yields to 0.265% on June 17.

In this environment, we made effort to offer "unique in-season financial products" for responding to customers' varied needs. Also we conducted active management of Assets from the view point of effective management of shareholders' equity.

For this three month period, compared with the same period of previous fiscal year, operating revenue decreased by 34.1% to 1,201 million yen, net operating revenue decreased by 34.3% to 1,189 million yen, operating loss resulted in 37 million yen (operating income resulted in 547 million yen in the same period of the previous year), ordinary profit decreased by 82.5% to 125 million yen, and net profit attributable to owners of the parent decreased by 52.6% to 246 million

2

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KYOKUTO Securities Co. Ltd. published this content on 28 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 July 2022 02:47:02 UTC.