Tokyo Century : FY2023 Consolidated 1Q

These consolidated financial results are an English translation of excerpts from the Japanese "Kessan Tanshin" including attachments filed with the Tokyo Stock Exchange, solely for the convenience of readers outside Japan.

This report has been prepared in accordance with accounting principles and practices generally accepted in Japan. Amounts less than ¥1 million have been omitted unless otherwise stated.

Consolidated Financial Results (Kessan Tanshin)

for the Three Months of Fiscal Year Ending March 31, 2024

[Japan GAAP]

								August 9, 2023
Name of Listed Company: Tokyo Century Corporation			Stock Exchange Listing: Tokyo
Securities Code: 8439
(URL: https://www.tokyocentury.co.jp/en/)
Representative: Koichi Baba, President & CEO, Representative Director
Contact: Tatsuya Hirasaki, Director and Managing Executive Officer		Phone: [phone]
Scheduled Reportable Date of Quarterly Securities Report: August 9, 2023
Scheduled Payment Date of Dividends: -
Preparation of Supplementary Reference Documents: Yes
Holding of Quarterly Earnings Call: Yes (for institutional investors and analysts)
				(Amounts less than one million yen are omitted.)
1. Consolidated Performance
		Three Months Ended	Three Months Ended	YoY
		June 30, 2022	June 30, 2023
			(Millions of yen)			(Percentage change)
(1) Consolidated business results:
Revenues			315,140			328,990		4.4%
Operating income			26,931			28,249		4.9%
Ordinary income			31,986			31,773		(0.7)%
Net income attributable to owners of		(19,492)			18,216		-%
parent
Basic earnings per share (Yen)			(159.45)			148.81
Diluted earnings per share (Yen)		-			148.27
Notes:
Total comprehensive income
For the three months ended June 30, 2023:		¥27,846 million		16.9%
For the three months ended June 30, 2022:		¥23,811 million		(64.6)%
		As of March 31, 2023	As of June 30, 2023
			(Millions of yen)
(2) Consolidated financial condition:
Total assets			6,082,114			6,151,798
Net assets			888,985			903,327
Shareholders' equity ratio			12.5%			12.6%
Reference:
Shareholders' equity
As of June 30, 2023:			¥775,571 million
As of March 31, 2023:			¥761,597 million
2. Dividends
		Dividends per Share (Yen)
First	Second	Third	Year-End	Total
Quarter	Quarter	Quarter
Fiscal 2022	-	71.00	-		72.00	143.00
Fiscal 2023	-
Fiscal 2023 (Forecast)		100.00	-		100.00	200.00

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

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3. Consolidated Results Forecast for the Fiscal Year Ending March 31, 2024 (As of August 9, 2023)

	Full year	YoY
	(Millions of yen)	(Percentage change)
Ordinary income	110,000	3.6%
Net income attributable to	70,000	-%
owners of parent
Basic earnings per share (Yen)	571.89

Note: Revisions to the most recently announced forecast of consolidated results: None

Notes

1. Changes in status of significant subsidiaries during the period under review (changes in status of specified subsidiaries resulting in change in scope of consolidation): None
2. Adoption of special accounting treatments for quarterly consolidated financial statements: Yes
3. Changes in accounting policies, changes in accounting estimates, and retrospective restatements
4. 1. Changes in accounting policies due to reforms of accounting standards: Yes
   2. Changes in accounting policies other than item 1) above: None
   3. Changes in accounting estimates: None
   4. Retrospective restatements: None

Note: For details, please refer to "2. Consolidated Financial Statements and Primary Notes, (3) Notes to the Consolidated Financial Statements, Changes in Accounting Policies" on page 9 of the Attached Documents.

1. Number of shares of common stock issued
2. 1. Number of shares issued at the end of the period (including treasury stock)

As of March 31, 2023:	123,028,320 shares
As of June 30, 2023:	123,028,320 shares

2) Number of shares of treasury stock at the end of the period

As of March 31, 2023:	627,532 shares
As of June 30, 2023:	614,359 shares

1. Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year) Three months ended June 30, 2022: 122,248,389 shares
   Three months ended June 30, 2023: 122,413,777 shares

These quarterly financial results are outside the scope of quarterly review by certified public accountant or audit firm.

Explanation related to forward-lookingstatements and other items warranting special mention(Regarding forward-looking statements)

The statements concerning future performance presented in this document are prepared based on currently available information and certain preconditions that Tokyo Century Corporation and its Group companies believe to be reasonable at the publication of this document. Actual results may be substantially different from any projections presented herein due to various factors.

(Methods for obtaining supplementary reference documents for quarterly financial statements)

The supplementary reference documents were disclosed on the TDnet on the same date as this document (Japanese only) and were also posted on the Company's website.

The Company plans to hold an earnings call (audio conference) for institutional investors and analysts on Thursday, August 10, 2023.

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1. Qualitative Information Concerning Financial Results for the Three Months of Fiscal Year Ending March 31, 2024

• In this section 1 "Qualitative Information Concerning Financial Results for the Three Months of Fiscal Year Ending March 31, 2024," the amounts expressed in units of millions have been rounded off to the nearest hundred million.

(1) Explanation of Results of Operations

During the three months ended June 30, 2023, revenues increased ¥13,800 million, or 4.4%, to ¥329,000 million, and gross profit increased ¥5,900 million, or 10.1%, to ¥64,200 million, respectively, from the same period of the previous fiscal year. This was due to the elimination of a loss on valuation of operational investment securities in the International Business segment recorded in the previous fiscal year and an increase in income in the Automobility segment, despite a decrease in gain on sales of operational investment securities in the Specialty Financing segment.

Selling, general and administrative expenses increased ¥4,600 million, or 14.5%, to ¥36,000 million from the same period of the previous fiscal year, mainly due to increased bad debt expense for aircraft-related receivables.

Non-operating income and expenses decreased ¥1,500 million, or 30.3%, to an income of ¥3,500 million from the same period of the previous fiscal year. This was mainly caused by a decrease in equity in earnings of affiliates.

Due to the factors mentioned above, ordinary income decreased ¥200 million, or 0.7%, to ¥31,800 million from the same period of the previous fiscal year.

Extraordinary income was ¥500 million.

Income taxes increased ¥6,900 million, or 194.0%, to ¥10,400 million, and net income attributable to non- controlling interests increased ¥300 million, or 8.0%, to ¥3,700 million, respectively, from the same period of the previous fiscal year.

As a result, net income attributable to owners of parent was ¥18,200 million (net loss of ¥19,500 million in the same period of the previous fiscal year).

Average exchange rate during the period for the preparation of consolidated financial statements for the major overseas subsidiaries and affiliates closing accounts in December is ¥132.43/US$ for the first three months of the fiscal year ending December 31, 2023 (January to March 2023) and ¥116.34/US$ for the first three months of the fiscal year ended December 31, 2022 (January to March 2022).

(Overview of Business Results by Segment)

With the organizational change on April 1, 2023, the Group separated and newly established the Environmental Infrastructure segment from the Specialty Financing segment with the aim of strengthening and expanding environmental energy businesses, such as renewable energy in Japan and overseas, to strongly support business strategy toward decarbonization, and changed its operating segments and other matters. With regard to the Mobility

• Fleet Management segment, we renamed it to the Automobility segment. In addition, in the Medium-Term Management Plan 2027 adopted by the Company's Board of Directors meeting held on May 12, 2023, we decided to align financial targets with net income-based figures.
  In line with these changes, effective from the first quarter of the fiscal year ending March 31, 2024, the Group changed the reportable segments to the five segments, Equipment Leasing, Automobility, Specialty Financing, International Business, and Environmental Infrastructure. In addition, segment income was changed from ordinary income to net income attributable to owners of parent.

Business results by segment were as follows.

Revenues for each segment represent "revenues from customers," and segment income or loss represents the amount for the "reportable segment."

The following year-on-year comparisons are made with the figures of the previous fiscal year based on the changed classification.

Equipment Leasing

Revenues decreased ¥4,100 million, or 3.3%, to ¥118,700 million, and segment income decreased ¥200 million, or 3.1%, to ¥6,500 million, respectively, from the same period of the previous fiscal year. The decrease in segment income was mainly because of a decrease in non-consolidated income due to a decrease in segment asset balance primarily affected by promoting portfolio management focused on asset efficiency. The balance of segment assets decreased ¥13,300 million, or 1.0%, to ¥1,273,800 million from the end of the previous fiscal year.

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Automobility

Revenues increased ¥8,200 million, or 9.1%, to ¥97,500 million, and segment income increased ¥2,200 million, or 63.7%, to ¥5,500 million, respectively, from the same period of the previous fiscal year. The increase in segment income was mainly because of a significant improvement in profitability as a result of promoting highly efficient operations in the car rental business and an increase in gains on sales of lease and rental vehicles. The balance of segment assets increased ¥3,600 million, or 0.6%, to ¥615,100 million from the end of the previous fiscal year.

Specialty Financing

Revenues decreased ¥5,700 million, or 8.9%, to ¥58,900 million, and segment income amounted to ¥3,700 million (segment loss of ¥18,000 million in the same period of the previous fiscal year mainly caused by the recording of impairment loss on Russia-related aircraft). The balance of segment assets increased ¥75,500 million, or 3.0%, to ¥2,566,100 million from the end of the previous fiscal year.

International Business

Revenues increased ¥5,700 million, or 18.3%, to ¥37,200 million, and segment income amounted to ¥2,500 million (segment loss of ¥8,100 million in the same period of the previous fiscal year mainly caused by the recording of a loss on valuation of operational investment securities held by consolidated subsidiaries). The balance of segment assets increased ¥27,200 million, or 4.2%, to ¥682,900 million from the end of the previous fiscal year.

Environmental Infrastructure

Revenues increased ¥9,800 million, or 148.9%, to ¥16,400 million, and segment income increased ¥1,800 million, or 346.4%, to ¥2,300 million, respectively, from the same period of the previous fiscal year. The increase in segment income was mainly due to the elimination of commission cost and revenue recognition of the electric power generation business. The balance of segment assets decreased ¥7,400 million, or 2.7%, to ¥270,500 million from the end of the previous fiscal year.

(2) Explanation of Financial Conditions

Total assets at the end of the first quarter of the fiscal year ending March 31, 2024 increased ¥69,700 million, or 1.1%, to ¥6,151,800 million, and segment assets increased ¥85,400 million, or 1.6%, to ¥5,449,200 million from the end of the previous fiscal year. Total liabilities increased ¥55,300 million, or 1.1%, to ¥5,248,500 million, and interest-bearing debts increased ¥121,200 million, or 2.7%, to ¥4,635,800 million, respectively, from the end of the previous fiscal year.

Total net assets increased ¥14,300 million, or 1.6%, to ¥903,300 million from the end of the previous fiscal year. This was mainly caused by a ¥9,000 million increase in retained earnings and a ¥6,100 million increase in net unrealized holding gains on securities.

As a result, the shareholders' equity ratio increased by 0.1 percentage points compared with the end of the previous fiscal year to 12.6%.

Exchange rate at the end of the period for the preparation of consolidated financial statements for the major overseas subsidiaries and affiliates closing accounts in December is ¥133.54/US$ at the end of the first quarter of the fiscal year ending December 31, 2023 (March 31, 2023) and ¥132.70/US$ at the end of the previous fiscal year (December 31, 2022).

(3) Explanation of Future Forecast Information such as Consolidated Results Forecast

We have made no revision to the consolidated results forecast which was announced on May 12, 2023.

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2. Consolidated Financial Statements and Primary Notes

1. Consolidated Balance Sheets

		(Millions of yen)
	As of March 31, 2023	As of June 30, 2023
Assets
Current assets
Cash on hand and in banks	216,437	206,221
Accounts receivable - installment sales	161,678	161,853
Lease receivables and investment assets	1,565,153	1,559,400
Loans	450,576	455,577
Operational investment securities	326,042	333,014
Accounts receivable - leases	74,572	71,242
Short-term investment securities	300	300
Inventories	28,147	25,336
Other current assets	180,748	189,578
Allowance for doubtful accounts	(6,862)	(6,999)
Total current assets	2,996,794	2,995,526
Non-current assets
Property and equipment
Leased assets	2,229,830	2,300,962
Advances for purchases of property for lease	81,147	63,640
Other operating assets	214,976	213,171
Construction in progress	5,105	5,082
Own assets in use	23,773	24,245
Total property and equipment	2,554,833	2,607,103
Intangible assets
Computer programs leased to customers	2,640	2,348
Goodwill	58,064	57,301
Other intangible assets	34,751	40,188
Total intangible assets	95,455	99,839
Investments and other assets
Investments in securities	325,745	339,325
Claims provable in bankruptcy or rehabilitation	10,432	10,383
Deferred tax assets	30,279	25,593
Retirement benefit asset	177	181
Other investments	73,362	78,978
Allowance for doubtful accounts	(7,533)	(7,605)
Total investments and other assets	432,464	446,858
Total non-current assets	3,082,753	3,153,801
Deferred assets	2,567	2,470
Total assets	6,082,114	6,151,798

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