Translation

Member of Financial Accounting Standards Foundation (FASF)

August 6, 2020

Consolidated Financial Results

for the Three-month Period Ended June 30, 2020 [Japan GAAP]

Name of Company:

The Furukawa Battery Co., Ltd.

Stock Code:

6937

Stock Exchange Listing:

Tokyo Stock Exchange, First Section

URL:

https://www.furukawadenchi.co.jp

Representative

Title:

President & CEO

Name:

Shinichi Ono

Contact Person

Title:

Corporate Officer, General Manager of Finance &

Accounting Department

Name:

Susumu Meida

Tel:

+81-45-336-5034

Scheduled date for filing of quarterly securities report:

August 7, 2020

Scheduled date for commencement of dividend payment:

－

Supplementary documents for quarterly financial results:

None

Quarterly financial results briefing:

None

(Yen in millions, rounded down)

1. Consolidated financial results for the three months ended June 30, 2020 (April 1, 2020 - June 30, 2020)

(1) Consolidated operating results

(Percentage figures represent year on year changes)

Net sales

Operating profit

Ordinary profit

Profit attributable to

owners of parent

Million yen

%

Million yen

%

Million yen

%

Million yen

%

Three months ended June 30, 2020

12,314

(11.6)

282

－

353

－

281

744.0

Three months ended June 30, 2019

13,933

4.6

(40)

－

(54)

－

33

(60.4)

Note: Comprehensive income

Three months ended June 30, 2020:

(440) million yen [yoy - %]

Three months ended June 30, 2019:

(92) million yen [yoy - %]

Earnings per share

Earnings per share

(basic)

(diluted)

Yen

Yen

Three months ended June 30, 2020

8.58

－

Three months ended June 30, 2019

1.02

－

(2) Consolidated financial position

Total assets

Net assets

Equity ratio

Million yen

Million yen

%

As of June 30, 2020

52,660

26,768

49.1

As of March 31, 2020

54,035

27,637

49.1

Reference: Equity

As of June 30, 2020:

25,831 million yen

As of March 31, 2020:

26,504 million yen

2. Dividends

Annual dividends per share

End of Q1

End of Q2

End of Q3

End of Q4

Total

Yen

Yen

Yen

Yen

Yen

Fiscal year ended March 31, 2020

－

－

－

13.00

13.00

Fiscal year ending March 31, 2021

－

Fiscal year ending March 31, 2021 (forecast)

－

－

13.00

13.00

Note: Revisions to the forecasts of dividends most recently announced: Yes

3. Forecast of consolidated financial results for the fiscal year ending March 31, 2021 (April 1, 2020 - March 31, 2021)

(Percentage figures represent year-on-year changes)

Net sales

Operating profit

Ordinary profit

Profit attributable to

Earnings

owners of parent

per share

Million

%

Million

%

Million

%

Million

%

Yen

yen

yen

yen

yen

Fiscal year ending

56,000

(13.2)

2,300

(30.2)

2,200

(32.0)

1,600

(28.5)

48.81

March 31, 2021

Note: Revisions to the consolidated earnings forecasts most recently announced: Yes

Notes:

(1) Changes in significant subsidiaries during the three-month period ended June 30, 2020 (Changes in specific subsidiaries accompanied by changes in the scope of consolidation): Newly included: None Excluded: None

  1. Use of accounting methods that are specific to the preparation of the quarterly consolidated financial statements: Yes Note: For details, please refer to "2. Consolidated Financial Statements and Related Notes (3) Notes on Consolidated Financial Statements (Application of Special Accounting for Preparing Consolidated Financial Statements)" on page 7 of Attachment.
  2. Changes in accounting policies, changes in accounting estimates, and retrospective restatements:
    1. Changes in accounting policies accompanying revisions in accounting standards: None
    2. Changes other than in (a): None
    3. Changes in accounting estimates: None
    4. Retrospective restatements: None
  4. Number of shares outstanding (common stock)
    1. Shares outstanding (including treasury shares)

As of June 30, 2020: 32,800,000 shares

As of March 31, 2020: 32,800,000 shares

(b) Treasury shares

As of June 30, 2020: 22,059 shares

As of March 31, 2020: 22,059 shares

(c) Average number of shares outstanding during the period (cumulative)

Three months ended June 30, 2020:

Three months ended June 30, 2019:

32,777,941 shares

32,777,941 shares

  • Quarterly financial results reports are not required to be subjected to quarterly reviews conducted by certified public accountants or an audit corporation.
  • Appropriate use of performance forecasts and other special items: (Disclaimer on forward-looking statements, etc.)
    Forward-looking statements in these materials are based on information available to management at the time this report was prepared, and on assumptions that management believes are reasonable. Actual results may differ significantly from these statements for a number of reasons. Please refer to "1. Qualitative Information on Consolidated Financial Results for the Three- month Period (3) Explanation of Forecast for the Fiscal Year Ending March 31, 2021" on page 2 of Attachment for details on the assumptions used and other related matters concerning the forecast of consolidated financial results.

Index

of the Attachment

1. Qualitative Information on Consolidated Financial Results for the Three-month Period .........................................

2

(1)

Explanation of Operating Results ........................................................................................................................

2

(2) Explanation of Financial Position ........................................................................................................................

2

(3)

Explanation of Forecast for the Fiscal Year Ending March 31, 2021...................................................................

2

2. Consolidated Financial Statements and Related Notes .............................................................................................

3

(1)

Consolidated Balance Sheets ...............................................................................................................................

3

(2)

Consolidated Statements of Income and Comprehensive Income .......................................................................

5

(Consolidated Statements of Income (Cumulative)) ...........................................................................................

5

(Consolidated Statements of Comprehensive Income (Cumulative)) .................................................................

6

(3)

Notes on Consolidated Financial Statements .......................................................................................................

7

(Going Concern Assumptions) ............................................................................................................................

7

(Material Changes in the Amount of Shareholders' Equity)................................................................................

7

(Application of Special Accounting for Preparing Consolidated Financial Statements) .....................................

7

(Additional Information) .....................................................................................................................................

7

3. Other .........................................................................................................................................................................

8

(Trend in Quarterly Consolidated Results) ................................................................................................................

8

- 1 -

1. Qualitative Information on Consolidated Financial Results for the Three-month Period

  1. Explanation of Operating Results

(Business Environment)

During the three-month period ended June 30, 2020, the global economy has been in an extremely serious situation due to the impact of the global outbreak of the novel coronavirus disease (COVID-19).

Despite this extremely serious situation due to the impact of COVID-19, the Japanese economy is expected to pick up due to the effects of various policy measures.

(Operating Results)

The Furukawa Battery Group recorded consolidated sales of 12,314 million yen for the three-month period ended June 30, 2020, a decrease of 1,619 million yen year on year. Overseas sales were 4,784 million yen and accounted for 38.9% of total sales.

Operating profit increased by 323 million yen year on year to 282 million yen mainly due to the impact of COVID- 19 being limited as overseas subsidiaries used the financial statements from January to March 2020 in consolidated results, and one-time expenses were recorded at the Indonesia subsidiary in the previous fiscal year though sales in Japan have decreased due to the impact of COVID-19. Ordinary profit increased by 407 million yen year on year to 353 million yen mainly due to a decrease of interest expenses and foreign exchange gains.

Profit attributable to owners of parent came to 281 million yen, increasing 247 million yen year on year.

(2) Explanation of Financial Position

Total assets were 52,660 million yen as of June 30, 2020, which is 1,374 million yen less than at the end of the previous fiscal year. Current assets decreased by 341 million yen from the end of the previous fiscal year to 24,797 million yen, while non-current assets decreased by 1,033 million yen to 27,863 million yen.

The main factors leading to the decrease in current assets were decreases in notes and accounts receivable - trade and securities.

There was a 1,368 million yen decrease in property, plant and equipment to 23,085 million yen. The main factor leading to the decrease was foreign currency translation differences of non-current assets owned by overseas subsidiaries.

Investments and other assets increased by 259 million yen to 4,567 million yen.

Total liabilities as of June 30, 2020, decreased by 505 million yen to 25,892 million yen. Current liabilities decreased by 62 million yen to 14,792 million yen, and non-current liabilities decreased by 443 million yen to 11,099 million yen.

Interest-bearing debt, which is the sum of short-term borrowings and long-term borrowings, increased by 1,103 million yen to 7,832 million yen.

Equity decreased by 672 million yen to 25,831 million yen, while the equity ratio was in line with the end of the previous fiscal year at 49.1% at the end of the three-month period.

(3) Explanation of Forecast for the Fiscal Year Ending March 31, 2021

The consolidated forecast for the fiscal year ending March 31, 2021 was undecided as it was difficult to perform a reasonable calculation because of the spread of COVID-19. The Company has announced the consolidated forecast for the fiscal year ending March 31, 2021 as it has been calculated under the assumption that this situation will continue in the fiscal year ending March 31, 2021 and fixed limits will be set regarding economic activity as the timing of the settlement of COVID-19 is uncertain. For details regarding the announcement of this forecast, please refer to the "Notice Regarding the Consolidated Forecast and Dividends Forecast" announced today (August 6, 2020).

- 2 -

2. Consolidated Financial Statements and Related Notes

  1. Consolidated Balance Sheets

(Millions of yen)

As of March 31, 2020

As of June 30, 2020

ASSETS

Current assets

Cash and deposits

2,662

4,238

Securities

1,632

1,536

Notes and accounts receivable - trade

12,255

9,247

Electronically recorded monetary claims -

1,080

1,133

operating

Merchandise and finished goods

2,540

3,163

Work in process

2,856

3,001

Raw materials and supplies

1,363

1,313

Other

761

1,176

Allowance for doubtful accounts

(13)

(12)

Total current assets

25,139

24,797

Non-current assets

Property, plant and equipment

Buildings and structures, net

7,044

6,804

Machinery, equipment and vehicles, net

8,211

7,510

Tools, furniture and fixtures, net

648

603

Land

7,372

7,170

Leased assets, net

623

585

Construction in progress

553

411

Total property, plant and equipment

24,453

23,085

Intangible assets

Leased assets

10

15

Other

124

195

Total intangible assets

135

210

Investments and other assets

Investment securities

2,137

2,511

Deferred tax assets

2,026

1,917

Other

166

162

Allowance for doubtful accounts

(23)

(23)

Total investments and other assets

4,307

4,567

Total non-current assets

28,896

27,863

Total assets

54,035

52,660

- 3 -

(Millions of yen)

As of March 31, 2020

As of June 30, 2020

LIABILITIES

Current liabilities

Notes and accounts payable - trade

3,698

3,359

Electronically recorded obligations - operating

2,360

1,865

Short-term borrowings

4,261

5,669

Lease obligations

135

128

Income taxes payable

520

250

Accrued consumption taxes

430

174

Provision for bonuses

672

307

Provision for environmental measures

2

2

Notes payable - facilities

17

44

Electronically recorded obligations - facilities

243

208

Other

2,510

2,781

Total current liabilities

14,854

14,792

Non-current liabilities

Long-term borrowings

2,467

2,163

Lease obligations

568

540

Deferred tax liabilities

795

798

Provision for environmental measures

2

2

Retirement benefit liability

7,021

6,952

Asset retirement obligations

53

53

Other

634

588

Total non-current liabilities

11,543

11,099

Total liabilities

26,398

25,892

NET ASSETS

Shareholders' equity

Share capital

1,640

1,640

Capital surplus

653

653

Retained earnings

22,847

22,702

Treasury shares

(11)

(11)

Total shareholders' equity

25,130

24,985

Accumulated other comprehensive income

Valuation difference on available-for-sale

578

860

securities

Deferred gains or losses on hedges

(71)

8

Foreign currency translation adjustment

949

48

Remeasurements of defined benefit plans

(82)

(70)

Total accumulated other comprehensive income

1,373

846

Non-controlling interests

1,133

937

Total net assets

27,637

26,768

Total liabilities and net assets

54,035

52,660

- 4 -

  1. Consolidated Statements of Income and Comprehensive Income (Consolidated Statements of Income (Cumulative))

(Millions of yen)

Three months ended

Three months ended

June 30, 2019

June 30, 2020

Net sales

13,933

12,314

Cost of sales

11,136

9,240

Gross profit

2,797

3,073

Selling, general and administrative expenses

2,838

2,791

Operating profit (loss)

(40)

282

Non-operating income

Interest income

9

4

Dividend income

67

61

Share of profit of entities accounted for using equity

0

6

method

Foreign exchange gains

-

22

Other

33

49

Total non-operating income

110

144

Non-operating expenses

Interest expenses

109

67

Foreign exchange losses

7

-

Other

7

5

Total non-operating expenses

124

73

Ordinary profit (loss)

(54)

353

Extraordinary losses

Loss on disposal of non-current assets

0

0

Total extraordinary losses

0

0

Profit (loss) before income taxes

(55)

353

Income taxes

170

109

Profit (loss)

(225)

243

Loss attributable to non-controlling interests

(258)

(37)

Profit attributable to owners of parent

33

281

- 5 -

(Consolidated Statements of Comprehensive Income (Cumulative))

(Millions of yen)

Three months ended

Three months ended

June 30, 2019

June 30, 2020

Profit (loss)

(225)

243

Other comprehensive income

Valuation difference on available-for-sale securities

(57)

293

Deferred gains or losses on hedges

(9)

79

Foreign currency translation adjustment

209

(1,058)

Remeasurements of defined benefit plans, net of tax

(11)

12

Share of other comprehensive income of entities

0

(11)

accounted for using equity method

Total other comprehensive income

132

(684)

Comprehensive income

(92)

(440)

Comprehensive income attributable to

Comprehensive income attributable to owners of

156

(246)

parent

Comprehensive income attributable to non-

(248)

(194)

controlling interests

- 6 -

  1. Notes on Consolidated Financial Statements (Going Concern Assumptions)
    Not applicable.

(Material Changes in the Amount of Shareholders' Equity)

Not applicable.

(Application of Special Accounting for Preparing Consolidated Financial Statements)

Income taxes for the three-month period are calculated by multiplying profit before income taxes for the three-month period by a reasonable estimate of the effective tax rate, after application of tax effect accounting, for estimated profit before income taxes in the three-month period of the current fiscal year. Deferred taxes are included in income taxes.

(Additional Information)

It is difficult to read the outlook due to uncertainty regarding the timing of the settlement of COVID-19. However, the Group made accounting estimates such as the recoverability of deferred tax assets based on information available at the time of preparation of the quarterly consolidated financial statements, and under the assumption that the impact will continue at least through the current fiscal year. There are no significant changes to these estimates from the details presented in annual securities report from the previous fiscal year.

Although these estimates are the best current estimates, there may be deviation between the above estimates and subsequent results in the event that there occur changes to the timing of the settlement of COVID-19 and the impact on the economic environment.

- 7 -

3. Other

(Trend in Quarterly Consolidated Results)

Fiscal year ending March 31, 2021 (from April 1, 2020 to March 31, 2021)

(Million yen)

Accounting period

Cumulative period

Q1

Q2

Q3

Q4

6 months

9 months

Full year

(Apr-Sep)

(Apr-Dec)

Net sales

12,314

-

-

-

-

-

-

Operating profit

282

-

-

-

-

-

-

Ordinary profit

353

-

-

-

-

-

-

Profit attributable to

281

-

-

-

-

-

-

owners of parent

Fiscal year ended March 31, 2020 (from April 1, 2019 to March 31, 2020)

(Million yen)

Accounting period

Cumulative period

Q1

Q2

Q3

Q4

6 months

9 months

Full year

(Apr-Sep)

(Apr-Dec)

Net sales

13,933

15,434

16,301

18,817

29,367

45,669

64,486

Operating profit (loss)

(40)

727

1,046

1,560

686

1,732

3,293

Ordinary profit (loss)

(54)

721

1,093

1,476

666

1,760

3,237

Profit attributable to

33

541

804

859

575

1,379

2,238

owners of parent

Fiscal year ended March 31, 2019 (from April 1, 2018 to March 31, 2019)

(Million yen)

Accounting period

Cumulative period

Q1

Q2

Q3

Q4

6 months

9 months

Full year

(Apr-Sep)

(Apr-Dec)

Net sales

13,320

14,862

17,881

17,536

28,182

46,064

63,600

Operating profit

52

261

1,464

1,022

314

1,779

2,801

Ordinary profit

78

233

1,455

931

312

1,767

2,698

Profit attributable to

84

251

1,139

792

335

1,474

2,267

owners of parent

Fiscal year ended March 31, 2018 (from April 1, 2017 to March 31, 2018)

(Million yen)

Accounting period

Cumulative period

Q1

Q2

Q3

Q4

6 months

9 months

Full year

(Apr-Sep)

(Apr-Dec)

Net sales

12,712

13,534

16,680

17,609

26,247

42,927

60,536

Operating profit

192

226

1,204

1,357

419

1,623

2,980

Ordinary profit

179

37

1,259

1,335

216

1,475

2,810

Profit attributable to

155

93

967

920

249

1,216

2,136

owners of parent

- 8 -

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Furukawa Battery Co. Ltd. published this content on 06 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 August 2020 04:17:16 UTC