Fuji Oil : FY2023 Financial Results 1Q

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.

August 8, 2023

Consolidated Financial Results

for the Three Months Ended June 30, 2023 (Q1 FY2023)

(Under Japanese GAAP)

Company name:	FUJI OIL HOLDINGS INC.
Listing:	Tokyo Stock Exchange
Securities code:	2607
URL:	https://www.fujioilholdings.com/en/
Representative:	Mikio Sakai, President and CEO
Inquiries:	Takekuni Takamura, General Manager, Consolidation Accounting Group
Telephone:	[phone]

Scheduled date to file quarterly securities report:	August 8, 2023
Scheduled date to commence dividend payments:	－
Preparation of supplementary material on quarterly financial results:	Yes
Holding of quarterly financial results briefing:	Yes (For institutional investors and analysts)

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

1. Consolidated financial results for the three months ended June 30, 2023 (April 1, 2023 - June 30, 2023)

(1) Consolidated operating results (cumulative)

(Percentages indicate year-on-year changes.)

Net sales

Operating profit

Ordinary profit

Profit attributable to

owners of parent

Three months ended

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

June 30, 2023

131,053

2.4

3,584

51.0

3,274

△3.0

9,070

388.1

June 30, 2022

127,928

29.6

2,374

△42.3

3,376

△9.8

1,858

△47.4

(Note) Comprehensive income

For the three months ended June 30, 2023:

¥26,481 million

[48.1%]

For the three months ended June 30, 2022:

¥17,885 million

[102.9%]

Basic earnings

Diluted earnings

per share

per share

Three months ended

Yen

Yen

June 30, 2023

105.51

－

June 30, 2022

21.62

－

(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, 2023

496,055

235,219

45.2

2,609.21

March 31, 2023

468,789

210,983

43.3

2,359.34

(Reference) Shareholder's equity

As of June 30, 2023:

¥224,300 million

As of March 31, 2023:

¥202,820 million

2. Cash dividends

Annual dividends per share

First

Second

Third

Fiscal year-end

Total

quarter-end

quarter-end

quarter-end

Yen

Yen

Yen

Yen

Yen

Fiscal year ended March 31, 2023

－

26.00

－

26.00

52.00

Fiscal year ending March 31, 2024

－

Fiscal year ending March 31, 2024 (Forecast)

26.00

－

26.00

52.00

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

3. Consolidated forecasts for the fiscal year ending March 31, 2024 (April 1, 2023 - March 31, 2024)

(Percentages indicate year-on-year changes.)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Profit per
		owners of parent	share
	Millions of yen		%	Millions of	%	Millions of	%	Millions of	%	Yen
		yen	yen	yen
Fiscal year ending	265,000		△1.3	6,000	18.5	5,000	△6.8	10,000	209.8	116.33
September 30, 2023
Fiscal year ending	550,000		△1.3	16,500	50.8	15,000	54.8	16,000	161.1	186.12
March 31, 2024
(Note) Revisions to the consolidated forecast most recently announced: None

* Notes

(1)	Changes in significant subsidiaries during the period
	(changes in specified subsidiaries resulting in the change in scope of consolidation):	None
(2)	Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements:	None
(3)	Changes in accounting policies, changes in accounting estimates, and restatement
	(i)	Changes in accounting policies due to revisions to accounting standards and other regulations:	None
	(ii)	Changes in accounting policies due to other reasons:	None
	(iii)	Changes in accounting estimates:	None
	(iv)	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, 2023	87,569,383 shares
As of March 31, 2023	87,569,383 shares

1. Number of treasury shares at the end of the period

As of June 30, 2023	1,604,682 shares
As of March 31, 2023	1,604,642 shares

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

Three months ended June 30, 2023	85,964,727 shares
Three months ended June 30, 2022	85,962,165 shares

• Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation.
• Explanations and other special notes concerning the appropriate use of business results forecasts
  The forward-looking statements such as result forecasts included in this document are based on the information available to the Company at the time of the announcement and on certain assumptions considered reasonable. Actual results may differ materially from the forecast depending on a range of factors.

Accompanying Materials - Contents

1. Qualitative Information on Results for the Three Months Ended June 30, 2023……………………………………………	2
(1) Details of Operating Results………………………………………………………………………………………………	2
(2) Details of Financial Position………………………………………………………………………………………………	3
(3) Information on the Future Outlook, Including Consolidated Business Results Forecasts.……………………………….	4

2. Quarterly Consolidated Financial Statements and Key Notes………………………………………………………………... 5

1. Quarterly Consolidated Balance Sheets…………………………………………………………………………………... 5
2. Quarterly Consolidated Statements of Income and Comprehensive Income.…………………………………………….. 7

Quarterly Consolidated Statements of Income…………………………………..……………………..……..…………	7
Quarterly Consolidated Statements of Comprehensive Income …………………………………..…………………….	8
(3) Quarterly Consolidated Statements of Cash flows………………………………………………………………………...	9
(4) Notes to Quarterly Consolidated Financial Statements……………………………………………………………………	10
(Notes Relating to Assumptions for the Going Concern) …………………………………………………….…………	10
(Notes for Case Where Shareholders' Equity underwent Significant Changes in Value) ………………………………	10
(Segment Information) ………………………………………………………………………………………….……….	10

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1. Qualitative Information on Results for the Three Months Ended June 30, 2023

(1) Details of Operating Results

During the first three months of the current consolidated fiscal year, concerns of an economic slowdown continued due to inflation trends in the Europe and America and a rapid downturn in China's economic growth, among other factors. In japan, we faced rising food prices and yen depreciation in foreign exchange rates due to continued easy monetary policy by Bank of Japan. However, the Japan's economy remains firm from a pause of rising raw material prices and a significant recovery in the accommodation industry and food service industry on account of the shift to a post-COVID-19 environment driving a recovery in consumer behavior and an increase in inbound tourists.

Although future outlook continues uncertainly due to a historic surge in international cacao bean prices, the situation in Ukraine and the effect of yen depreciation on manufacturing costs in Japan, prices for palm oil and soybeans, our main raw materials, remain stable compared to the first quarter of the previous fiscal year.

Amid this environment, we are working to strengthen the business specific management which we have been promoting since the previous fiscal year to ensure the optimal allocation of management resources, with the group headquarters supporting the implementation of profit improvement measures for each group company. In addition to advancing a shift in product portfolio in existing businesses to high-value-added products, which included measures such as the transfer of the non-current assets of Fuji Oil New Orleans, LLC (Louisiana, USA) in April 2023, we are also building a competitive advantage by strengthening our supply structure in Southeast Asia for certified sustainable oils.

As a result of the above, earnings for the first three months of the current consolidated fiscal year were as follows.

	Net sales	Operating profit	Ordinary profit	Profit attributable to
	owners of parent
Three months ended	Millions of yen	Millions of yen	Millions of yen	Millions of yen
June 30, 2023	131,053	3,584	3,274	9,070
June 30, 2022	127,928	2,374	3,376	1,858
Year-on-year change	+3,125	+1,209	△102	＋7,211
(Year-on-year change rate)	(+2.4%)	(+51.0%)	(△3.0%)	(+388.1%)

Net sales increased due to higher sales prices to reflect rising raw material prices in the Industrial Chocolate segment and the effect of yen depreciation in foreign exchange rates. Operating profit increased due to improved profitability responding to lower raw material prices in the Vegetable Oils and Fats segment in Japan, North America and Europe and a decrease in fixed cost as a result from the transfer of the non-current assets at Fuji Oil New Orleans, LLC, despite the decline in sales volume against the U.S. economic slowdown in the Industrial Chocolate segment and the rebound from the strong performance in the previous fiscal year in Southeast Asia. Profit attributable to owners of parent increased mainly because of the gain on sale of non-current assets mentioned above.

The operating results by reported segment are shown below.

	Net sales			Operating profit
		Year-on-year change			Year-on-year change
	Millions of yen	Millions of yen	%	Millions of yen		Millions of yen	%
Vegetable Oils and Fats	45,718	△3,458	△7.0%	3,129		+1,515	+93.8%
Industrial Chocolate	54,965	+7,067	+14.8%	406		△577	△58.7%
Emulsified and Fermented Ingredients	21,455	△1,079	△4.8%	587		+370	+170.3%
Soy-based Ingredients	8,914	+595	+7.2%	397		△175	△30.6%
Adjustment	－	－	－	△936		+77	－
Total	131,053	+3,125	+2.4%	3,584		+1,209	+51.0%

(Vegetable Oils and Fats)

Net sales decreased due to declined sales prices to reflect falling prices for palm oil, our main raw material, and other raw materials, although sales of frying oils and fats in Japan was strong due to recovering demand.

Despite the rebound in Southeast Asia which performed in good shape in the previous fiscal year, operating profit increased due to decreased fixed cost associated with the transfer of the non-current assets at Fuji Oil New Orleans, LLC and improved profitability responding to lower raw material prices in Japan, North America and Europe.

(Industrial Chocolate)

Net sales increased due to higher sales prices to reflect rising raw material prices, increased sales volumes by sales promotion in Brazil, the effect of yen depreciation and other. Operating profit decreased due to decreased sales volumes from economic slowdown in the U.S. and increased manufacturing overhead in the U.S., although sales volumes for food service sector in Brazil and souvenir market in Japan and Europe recovered.

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(Emulsified and Fermented Ingredients)

Net sales decreased due to a decrease in sales volume caused by economic slowdown in China and lower sales prices to reflect falling raw material prices in Southeast Asia and China. Operating profit increased due to the steady demand of a whipping cream and other in Japan and improved profitability in line with price revision in Southeast Asia and China.

(Soy-based Ingredients)

Net sales increased due to higher sales prices to reflect rising raw material prices caused by the effect of yen depreciation. Despite of effort to optimize sales prices, operating profit decreased due to increased fixed cost such as amortization cost and other accompanied with the start of operations at new plant in Europe.

(2) Details of Financial Position

➀Details of the Consolidated Financial Position

Total assets at the end of the three months of the consolidated fiscal year under review increased by 27,265 million yen from the end of the previous consolidated fiscal year to 496,055 million yen. Under our Mid-term Management Plan, Reborn 2024, we are working to improve our financial structure by strengthening and rebuilding our business foundation. We will improve capital efficiency and strengthen our financial monitoring.

The consolidated financial position at the end of the three months of the fiscal year under review is as follows.

				(Millions of yen)
		As of	As of	Year-on-year change
		March 31, 2023	June 30, 2023
	Current assets	227,771	261,605	+33,833
	Property, plant and equipment	159,855	149,438	△10,416
	Intangible assets	57,322	60,091	+2,769
	Other	23,841	24,920	+1,079
Assets	468,789	496,055	+27,265
	Interest-bearing debt	168,417	175,156	+6,739
	Other	89,389	85,679	△3,709
Liabilities	257,806	260,836	+3,030
Net assets	210,983	235,219	+24,235

(Assets)

At the end of the three months of the consolidated fiscal year under review, current assets increased due to increases in cash and deposits for the transfer of the non-current assets of Fuji Oil New Orleans, LLC and in working capital attributable to increased raw materials. Property, plant and equipment decreased due to the transfer.

From the reason of aforementioned, assets increased by 27,265 million yen from the end of the previous consolidated fiscal year to 496,055 million yen.

(Liabilities)

Liabilities at the end of the three months of the consolidated fiscal year under review increased by 3,030 million yen from the end of the previous consolidated fiscal year to 260,836 million yen due to an increase in interest-bearing debt associated with an increase in working capital.

(Net assets)

Net assets at the end of the three months of the consolidated fiscal year under review increased by 24,235 million yen from the end of the previous year to 235,219 million yen due to an increase in foreign currency translation adjustments on account of the yen depreciation against the US dollar, euro and real.

Net assets per share increased by 249.87 yen from the end of the previous consolidated fiscal year to 2,609.21 yen. Equity ratio increased by 1.9 points from the end of the previous fiscal year to 45.2%.

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