Securities Code: 5333
FY2023
Interim Business Report for Shareholders
(From April 1 to September 30, 2023)
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Note: This document has been translated from part of 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. The Company assumes no responsibility for this translation or for direct, indirect, or any other forms of damages arising from this translation.
Message
With sincere gratitude for your continued support, we hereby present the NGK Group Business Report for the first six months of FY2023 / 158th term (from April 1, 2023, to September 30, 2023).
During the first six months of FY2023, the Japanese economy saw economic and social activities normalizing following the reclassification of COVID-19 into a Class 5 disease, showing a mild recovery in improved employment and income environments. Overseas, with China's recovery stalled by its sluggish real estate market and consumer spending picking up primarily in the United States, the economy made a modest recovery. However, outlook remains uncertain regarding an economic slowdown in the wake of the global trend of extended monetary tightening, developments in the Chinese economy, and so on.
Under these circumstances, the Environment Business of the Group saw an increase in shipments of automotive-related products mainly for the Chinese market, as the number of automobiles produced rebounded amid an easing supply shortage of semiconductors and as emission controls were tightened. In the Digital Society Business, lacklustre investments in semiconductors and data centers caused drops in shipments of products for semiconductor manufacturing equipment and electronic components. In the Energy & Industry Business, shipments of insulators increased mainly for the U.S. market.
As a result, net sales for the first six months of FY2023 increased 3.0% year-on-year to 282,884 million yen. In terms of income, operating income fell 16.3% year-on-year to 32,485 million yen as affected by soaring labor costs associated with inflation in addition to a decline in volumes of products for semiconductor manufacturing equipment, etc., despite the positive effect of an increase in volumes of automotive-related products. Ordinary income decreased 16.2% to 28,940 million yen, while net income attributable to owners of the parent fell 31.4% to 18,181 million yen for reasons of lower ordinary income and the recognition of income taxes for prior fiscal years during the same period of the previous year.
In terms of forecasting the FY2023 full-year results, a downturn in investments in semiconductors and data centers has been protracted, and demand for the Digital Society Business products is declining. Meanwhile, the Japanese yen has significantly weakened compared with the exchange rates estimated at the beginning of the period (1 USD=130 yen and 1 EUR=140 yen), and strong demand is seen in the Environment Business. Thus, our forecasts on a full-year basis are: net sales will increase 2.8% year-on-year to 575 billion yen, operating income will decrease 7.1% to 62 billion yen, and ordinary income will fall 12.0% to 58 billion yen, with net income attributable to owners of the parent down 29.2% to 39 billion yen.
For the period under review, we will pay an interim dividend of 25 yen per share. The year-end dividend is expected to be 25 yen per share at this point.
Our business environment for the second half of FY2023 should continue to be uncertain due to an economic slowdown triggered by the global trend of extended monetary tightening, concerns about sluggish semiconductor investments, and so on. Nevertheless, we will aim to become a company that continues to grow globally, by addressing the following key issues set at the beginning of the fiscal year:
- Advancement of ESG management
- Initiatives for Improving Earning Capacity of Existing Businesses and Creating New Businesses Through these initiatives, the NGK Group will work to further reinforce its management base, offer
products that exceed society's expectations by using its unique ceramic technology, and continue to grow for a sustainable future. We would deeply appreciate your continued support.
December 2023
President
Shigeru Kobayashi
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Consolidated financial highlights | Six month total | Full year | Full year (forecast) |
Net sales | Operating income | Profit attributable to owners of parent | |
(100 million yen) | (100 million yen) | (100 million yen) |
(FY) | (FY) | (FY) |
Topics
NGK Exhibited at CEATEC 2023
NGK participated in CEATEC 2023 Exhibition, which took place at Makuhari Messe (Chiba City, Chiba) from October 17 to 20, 2023, and had a total of around 90,000 visitors.
Under the theme of "a clean and smart future society made by ceramic technology," the exhibit featured products that contribute to the realization of a carbon neutral and digital society by harnessing NGK's unique ceramic technology, such as ceramic substrates for direct air capture (DAC) to absorb CO2 from the atmosphere, power sources for standalone IoT devices "EnerCera," and hybrid bonded wafers for high- performance optical devices, showcasing our products to visitors to our booth.
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Business Overview by Segment
FY2023-1H | FY2022-Q2 | Year-on-year | ||
(100 million yen) | (100 million yen) | change | ||
Environment Business | ||||
Net sales increased 17.5% year-on-year to | Net sales | 1,798 | 1,531 | +17% |
179,849 million yen. A short supply of components | ||||
such as semiconductors subsided, followed by a | ||||
recovery in auto production. Demand for our | Operating | |||
products also increased due to a rising number of | 322 | 262 | +23% | |
truck sales in China and other factors. Operating | income | |||
income increased 23.0% to 32,246 million yen. | ||||
Digital Society Business | ||||
Net sales decreased 25.0% year-on-year to | Net sales | 661 | 882 | -25% |
66,083 million yen. Reduced semiconductor | ||||
investments led to falling demand. Demand for | ||||
piezoelectric elements for hard disk drives (HDD) | Operating | |||
also fell as a result of reduced data center | 7 | 137 | -95% | |
investments. Operating income saw a 94.6% drop to | income | |||
735 million yen. | ||||
Energy & Industry Business | ||||
Net sales increased 9.9% year-on-year to 38,014 | Net sales | 380 | 346 | +10% |
million yen. Shipments of insulators increased | ||||
mainly for the U.S. market. In addition to sale price | ||||
revisions, robust demand from the U.S. was seen. | ||||
Demand for firing furnaces for positive-electrode | ||||
materials for lithium-ion batteries also increased. | Operating | (5) | (11) | - |
Operating losses of 506 million yen were recorded | income | |||
(operating losses were 1,089 million yen for the | ||||
same period last year). |
(Note) Net sales stated above are before elimination of intersegment transactions.
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Condensed Financial Statements (Consolidated) for the Second Quarter
Consolidated Balance Sheets for Six Months (as of September 30, 2023)
(Million yen) | |||
Assets | Liabilities | ||
Account | Amount | Account | Amount |
Current assets | 608,466 | Current liabilities | 161,190 |
Cash and deposits | 189,101 | Notes and accounts payable-trade | 46,527 |
Notes and accounts receivable-trade, | 127,237 | Short-term borrowings | 11,300 |
Current portion of long-term borrowings | |||
and contract assets | 36,757 | ||
(Payment planned within one year) | |||
Securities | 41,216 | Income taxes payable | 7,645 |
Inventories | 229,746 | Other | 58,959 |
Non-current liabilities | 234,690 | ||
Other | 21,323 | Bonds payable | 40,000 |
Long-term borrowings | 160,192 | ||
Allowance for doubtful accounts | (159) | Retirement benefit liability | 20,922 |
Other | 13,574 | ||
Non-current assets | 474,519 | Total liabilities | 395,880 |
Property, plant and equipment | 378,665 | Net assets | |
Shareholders' equity | 578,765 | ||
Buildings and structures, net | 130,124 | Share capital | 70,064 |
Capital surplus | 70,390 | ||
Machinery and vehicles, net | 175,188 | Retained earnings | 448,603 |
Other, net | 73,353 | Treasury shares | (10,293) |
Accumulated other comprehensive | 100,851 | ||
Intangible assets | 6,622 | income | |
Valuation difference on available-for- | 21,476 | ||
Investments and other assets | 89,231 | sale securities | |
Deferred gains on hedges | 19 | ||
Investment securities | 63,980 | Foreign currency translation adjustment | 74,276 |
Other | 25,558 | Remeasurements of defined benefit | 5,078 |
plans | |||
Allowance for doubtful accounts | (307) | Share acquisition rights | 878 |
Non-controlling interests | 6,611 | ||
Total net assets | 687,105 | ||
Total assets | 1,082,986 | Total liabilities and net assets | 1,082,986 |
(Amounts of less than 1 million | yen omitted.) |
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Consolidated Statement of Income for the Six Months (from April 1 to September 30, 2022)
(Millions of yen) | ||
Account | Amount | |
Net sales | 282,884 | |
Cost of sales | 207,958 | |
Gross profit | 74,926 | |
Selling, general and administrative expenses | 42,440 | |
Operating income | 32,485 | |
Non-operating income | 1,989 | |
Non-operating expenses | 5,534 | |
Ordinary income | 28,940 | |
Extraordinary income | 443 | |
Extraordinary losses | 1,501 | |
Income before income taxes | 27,883 | |
Income taxes - current | 8,976 | |
Income taxes - deferred | 790 | |
Net income | 18,116 | |
Net losses attributable to non-controlling interests | (65) | |
Net income attributable to owners of the parent | 18,181 | |
(Amounts of | less than 1 million yen omitted.) |
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Stock Information (As of September 30, 2023)
Major shareholders
Shareholder name | Number of shares held (1,000 shares) | Shareholding ratio (%) |
The Master Trust Bank of Japan, Ltd. (Trust | 51,293 | 16.73 |
Account) | ||
Meiji Yasuda Life Insurance Company | 21,695 | 7.08 |
The Dai-ichi Life Insurance Company, Limited | 21,457 | 7.00 |
Custody Bank of Japan, Ltd. (Trust Account) | 18,260 | 5.95 |
MUFG Bank, Ltd. | 7,204 | 2.35 |
National Mutual Insurance Federation of | 7,029 | 2.29 |
Agricultural Cooperatives | ||
STATE STREET BANK WEST CLIENT-TREATY | 4,437 | 1.44 |
505234 | ||
Aioi Nissay Dowa Insurance Co., Ltd. | 4,387 | 1.43 |
Goldman Sachs Group, Inc., BNYM | 4,365 | 1.42 |
JP MORGAN CHASE BANK 385781 | 3,397 | 1.10 |
(Notes)
- We hold 5,538,241 treasury shares but they are excluded from the major shareholders listed above.
- The shareholding ratio above is calculated based on the number of shares after deducting the number of treasury shares (5,538,241 shares) from the total number of shares issued and rounded down to the second decimal place.
Stock information
Total number of shares authorized Total number of shares issued Number of shareholders
735,030,000
311,956,996
52,332
Individuals and others 46,413 thousand shares (14.9%)
Foreign corporations, etc. 84,382 thousand shares
Number of shares 311,956 thousand shares
Financial institutions 165,312 thousand shares (53.0%)
(27.0%)
Domestic corporations 15,849 thousand shares (5.1%)
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Stock price
Trading volume (1,000 shares)
Stock price (yen) | High |
Low |
The Company's stock price | Trading volume |
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Company Information (As of September 30, 2023)
Company profile
Way of writing company name | 日本ガイシ株式会社 (Japanese) | ||
Registered trade name | 日本碍子株式会社 (Japanese) | ||
NGK INSULATORS, LTD. | |||
Representatives | Representative Director and Chairman | Taku Oshima | |
Representative Director and President | Shigeru Kobayashi | ||
Representative Director and Executive Vice President | Chiaki Niwa | ||
Representative Director and Executive Vice President | Ryohei Iwasaki | ||
Founded | May 5, 1919 | ||
Share capital | 70,064 million yen | ||
Directors | * Representative Director | ||
* Director and Chairman | Taku Oshima | ||
* Director and President | Shigeru Kobayashi | ||
* Director and Executive Vice President | Chiaki Niwa | ||
* Director and Executive Vice President | Ryohei Iwasaki | ||
Director and Senior Vice President | Tadaaki Yamada | ||
Director and Senior Vice President | Hideaki Shindo | ||
Director (Outside) | Hiroyuki Kamano | ||
Director (Outside) | Emiko Hamada | ||
Director (Outside) | Kazuo Furukawa | ||
Statutory Auditor | Nobumitsu Saji | ||
Statutory Auditor | Naoya Yagi | ||
Auditor (Outside) | Masayoshi Sakaguchi | ||
Auditor (Outside) | Takashi Kimura |
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Executive Officers | * Concurrently serving as a director |
* President | Shigeru Kobayashi |
* Executive Vice President | Chiaki Niwa |
* Executive Vice President | Ryohei Iwasaki |
* Senior Vice President | Tadaaki Yamada |
Senior Vice President | Shuhei Ishikawa |
Senior Vice President | Tsutomu Nanataki |
Senior Vice President | Hiroto Matsuda |
* Senior Vice President | Hideaki Shindo |
Senior Vice President | Jun Mori |
Senior Vice President | Hiroshi Kurachi |
Senior Vice President | Masanobu Inoue |
Senior Vice President | Hiroharu Kato |
Senior Vice President | Atsushi Miyajima |
Senior Vice President | Hiroyuki Shinohara |
Vice President | Iwao Ohwada |
Vice President | Tatsumi Ichioka |
Vice President | Ryo Ishihara |
Vice President | Mayumi Inagaki |
Vice President | Hirofumi Sakamoto |
Vice President | Hideki Shimizu |
Vice President | Kazushi Tada |
Vice President | Ryugo Takeda |
Vice President | David Miller |
Vice President | Takao Onishi |
Vice President | Takashi Yoshino |
Vice President | Motoo Noritake |
Vice President | Yoshihide Natsume |
Vice President | Masato Nozaki |
Vice President | Yasuyoshi Imai |
Vice President | Hiroki Fujita |
Shareholder's memo
Business year | From April 1 of each year to March 31 of the following year |
Annual shareholders' meeting | June |
Record date for distribution of surplus | (Year-end) March 31 |
(Interim) September 30 | |
Shareholder registry administrator | Mitsubishi UFJ Trust and Banking Corporation |
Account management institution for special accounts | |
Contact information | 137-8081 |
Shin-Tokyo Post Office, PO Box #29 | |
Stock Transfer Agency Dept., Mitsubishi UFJ Trust and | |
Banking Corporation | |
Phone: 0120-232-711 (toll free; 9:00-17:00 weekdays) | |
Method of public notice | Public notices will be posted on our company website |
(https://www.ngk.co.jp/ir/koukoku). If an electronic public | |
notice cannot be posted due to an accident or any other | |
unavoidable circumstances, it will be released in the Nihon | |
Keizai Shimbun and the Chunichi Shimbun, which is | |
published in Nagoya City. |
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Disclaimer
NGK Insulators Ltd. published this content on 01 December 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 December 2023 01:48:13 UTC.