Consolidated basis results for the second quarter of fiscal 2021

Registered company name: TOPY INDUSTRIES, LIMITED

Stock listing: Tokyo, Nagoya Stock Exchange

Website: http://www.topy.co.jp/en/index.html

Representative Director, President and CEO Nobuhiko Takamatsu

Tetsuya Sakai, Operations Officer, General Manager, General Affairs Department

Tel: 03-3493-0777 / (Overseas) 81-3-3493-0777

The scheduled date for submission of the securities report:

Scheduled dividend payout date:

Preparation of supplementary materials:

Convene a quarterly financial performance meeting:

Yes (for institutional investors and analysts)

(Omitted below 1 million yen)

1. Consolidated financial results for the second quarter of fiscal year 2021 (April 1, 2021-September 30, 2021)

(Percentage figures are changes compared to the same period in the previous fiscal year)

Note: Whether the latest dividend forecast has been changed: Yes

For details, please refer to the "Announcement on Adjusting Financial Forecasts and Dividend Forecasts" released today.

3. Comprehensive financial forecast for 2021 (April 1, 2021 to March 31, 2022)

(Percentage figures are changes compared to the same period in the previous fiscal year)

Note: Whether the latest forecast of the combined figures has been changed: Yes

For details, please refer to the "Announcement on Adjusting Financial Forecasts and Dividend Forecasts" released today.

Newly added: -(name)-

(2) Using special accounting methods to prepare quarterly consolidated financial statements: Yes

Note: For details, please refer to "Application of Special Accounting Treatment Methods in Quarterly Consolidated Financial Statements".

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

(c) Average number of shares issued during the period

(Notes on future descriptions, etc.)

The above estimates are based on the information available at the time this disclosure is made. Actual income may vary from estimated value due to various factors. For the assumptions of the profit forecast and the matters needing attention in the use of the profit forecast, please refer to the "Explanation on Consolidated Financial Performance Estimates and Other Future Estimated Information" on page 5.

(How to obtain supplementary explanatory materials for quarterly financial performance)

The company plans to hold a briefing session for institutional investors and securities analysts. The video and presentation materials of this briefing will be posted on the company's website immediately after the briefing.

1. Qualitative information on the performance of the second quarter of 2021

Explanation on consolidated business performance

Explanation of future estimated information such as consolidated financial performance estimates

2. Quarterly consolidated financial statements and important notes

Quarterly Comprehensive Income Statement and Quarterly Comprehensive Income Statement

Quarterly Comprehensive Income Statement

Consolidated cumulative accounting period for the second quarter

Quarterly consolidated statement of comprehensive income

Consolidated cumulative accounting period for the second quarter

Notes on the quarterly consolidated financial results

(Notes related to the going concern assumption)

(Explanation of significant changes in the amount of shareholders’ equity)

(Application of special accounting treatment methods for quarterly consolidated financial statements)

Note: This document is translated from the original Japanese version and is for reference only. If there is any discrepancy between this translated document and the original Japanese version, the original version shall prevail.

The original Japanese disclosure was published at 13:30 (GMT 9) on November 5, 2021.

The company does not assume any responsibility for this translation or any direct, indirect or any other form of damage caused by the translation.

1. Qualitative information on the performance of the second quarter of 2021

(1) Description of consolidated operating results

Looking back at the first half of the consolidated fiscal year, as the COVID-19 vaccination work progressed, the United States, Europe and other regions showed signs of recovery. However, affected by the epidemic, the global economy continues to face a difficult environment. Among other factors, the number of COVID-19 variants . The Japanese economy is also showing signs of recovery, but it is facing a severe situation, mainly because of continued restrictions on economic activities in the state of emergency, and priority measures to prevent the spread of COVID-19, as well as the shortage of Japanese semiconductor supplies. Looking back at the latter part of the first half of the fiscal year.

Under such circumstances, the Group produces and sells products to meet demand and strives to increase revenue. The Group is committed to optimizing the production system of the automotive and industrial machinery parts business, and implementing the development and sales of unique products based on customer and social needs. The Group implemented measures in accordance with the mid-term management plan "Growth & Change 2021". In addition, the Group has established a new organization sales headquarters to strengthen its sales capabilities, and also take measures for the future, including the decision to establish a business development strategy center, and the basic research phase and practical aspects of strategic new products, new technology development, and new business innovation. Centralized and unified management at the stage.

Due to the recovery in demand from the automotive and industrial machinery parts business and the improvement in steel sales prices, the financial results for the first half of the year included consolidated net sales of 125.059 billion yen (a year-on-year increase of 28.4%) in response to rising scrap prices. Taking into account the impact of rising scrap prices and the sharp increase in the price of coal for power generation, we announced an operating loss of 1.462 billion yen (compared to an operating loss of 4.231 billion yen). The same period last year), the ordinary loss was 1.588 billion yuan (the ordinary loss in the same period last year was 3.927 billion yuan). The loss attributable to the owners of the parent company was 1.472 billion yen (the loss attributable to the owners of the parent company in the same period last year was 4.226 billion yen).

Since reviewing the beginning of the first quarter of the consolidated financial year, the Group has adopted revenue recognition accounting standards (Statement No. 29 issued by the Accounting Standards Board of Japan (ASBJ) on March 31, 2020). For details, see 2. Quarterly consolidated financial statements and important notes (3) Notes on quarterly consolidated financial performance (changes in accounting policies).

The steel industry continues to face challenges. The price of scrap, which is the main raw material for steel, continued to rise sharply compared with the second half of the previous fiscal year.

Under this circumstance, the Group is committed to increasing the sales price of steel products. Net sales increased to 42.361 billion yen (a year-on-year increase of 29.1%). However, due to the sharp increase in scrap steel prices, we were unable to pass on the increased costs to steel sales prices, resulting in an operating loss of 38 million yen (operating profit of 671 million yen in the same period last year).

(Automotive and Industrial Machinery Parts Business)

In the automotive industry, output was higher than the same period last year, but due to semiconductor supply shortages and other reasons, the industry reduced production in the second half of the first half of the fiscal year, and the operating environment was difficult. In the construction machinery industry, the demand for hydraulic shovel expands mainly in the United States and Southeast Asia. Due to rising resource prices, global demand for mining machinery remains strong.

In this context, sales of commercial vehicle wheels and engineering machinery chassis parts have increased. As a result, net sales totaled 75.936 billion yen (a year-on-year increase of 30.9%), and operating profit was 1.465 billion yen (an operating loss of 3.176 billion yen in the same period last year).

Due to the soaring price of coal for power generation, the business environment for the power business is still full of challenges. Under this circumstance, the Group strived to stabilize the power supply in accordance with the business plan, but was affected by the increase in costs. As a result, net sales were 3.854 billion yen (up 5.7% year-on-year), and operating loss was 783 million yen (operating profit was 146 million yen in the same period last year).

The Group manufactures and sells synthetic mica and robots. Synthetic mica was affected by the weak demand for cosmetics in Japan, which offset the recovery in overseas cosmetics demand. As a result, net sales fell by 14.7% year-on-year to 426 million yen, and operating losses amounted to 162 million yen (operating losses of 204 million yen in the same period of the previous fiscal year).

The leasing business achieved an operating profit of 350 million yuan (a year-on-year decrease of 0.0%).

The Group operates civil engineering and construction business, sports club OSSO and other businesses. Net sales were 2.48 billion yen (a year-on-year increase of 1.2%), and operating profit was 88 million yen (a year-on-year decrease of 30.9%).

Reviewing the total assets at the end of the second quarter of the consolidated fiscal year was 267.983 billion yen, an increase of 3.310 billion yen from the end of the previous consolidated fiscal year. The main factors for the increase include an increase of 3.781 billion yen in goods and manufactured goods.

The total liabilities amounted to 157.787 billion yen, an increase of 1.501 billion yen from the end of the previous consolidated fiscal year. This was mainly due to the electronically recorded debt-operations increased by 1.615 billion yen.

The total net assets amounted to 110.195 billion yen, an increase of 1.809 billion yen from the end of the previous consolidated fiscal year. Mainly due to an increase of 1.763 billion yuan in foreign currency translation adjustments.

(3) Explanation of future forecast information such as consolidated financial performance forecast

Although the global economy is expected to recover from the downturn in economic activities, the business environment surrounding the group may still be difficult due to major concerns such as the Sino-US conflict and the impact of semiconductor shortages on automobile production and the global economy. The supply of sea container transportation services is tight, and the prices of energy and raw materials are rising.

The Group reviewed the consolidated financial forecasts for the fiscal year ending March 31, 2022 (April 1, 2021 to March 31, 2022) announced on May 11, 2021, and predicted net sales of 266 billion yuan Yen, operating profit is 1.5 billion yen, ordinary profit is 1 billion yen, and the profit attributable to parent company owners is 1.5 billion yen. For details, please refer to the "Announcement on Adjusting Financial Forecasts and Dividend Forecasts" released today.

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TOPY Industries Ltd. published this content on November 15, 2021, and assumes full responsibility for the information contained therein. Distributed by the public at 03:29:03, November 15, 2021, UTC time, unedited and unaltered.