Translation
Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any
discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Summary of Consolidated Financial Results
for the Six Months Ended August 31, 2022
(Based on Japanese GAAP)
October 13, 2022
Company name:
MORESCO Corporation
Stock exchange listing: Tokyo
Stock code:
Representative:

5018
URL https://www.moresco.co.jp/
Representative Director, President
Motohisa Morozumi

Inquiries:Director,Senior Executive OffcerScheduled date to file Quarterly Securities Report:

Hirofumi Fujimoto
October 13, 2022

Scheduled date to commence dividend payments:
Preparation of supplementary material on quarterly financial results:

November 11, 2022
Yes

Holding of quarterly financial results meeting:

Yes

TEL

078-303-9220(for institutional investors and analysts)(Amounts are rounded off to the nearest million yen)
1. Consolidated financial results for the six months ended August 31, 2022 (from March 1, 2022 to August 31, 2022)(1) Consolidated operating results (cumulative)
Net salesSix months ended August 31, 2022
Six months ended August 31, 2021

Millions of yen
14,523
13,366Percentages indicate year-on-year changes
Profit attributable toOperating profit
Ordinary profit
owners of parent% Millions of yen% Millions of yen% Millions of yen%
8.7
295 (68.0)
846 (27.3)
504 (62.9)
17.8
923 820.0
1,163
–
1,359
–Earnings per share

Diluted earnings per share

Yen
53.94
144.92Six months ended August 31, 2022
Six months ended August 31, 2021

Yen––(2) Consolidated financial position
Total assets
As of August 31, 2022
As of February 28, 2022

Net assets

Millions of yen
31,09229,008Equity ratio

Millions of yen
21,717
20,551

Net assets per share
%
60.9
61.9

Yen
2,053.05
1,914.94

2. Cash dividends
Annual dividends per share

Year ended February 28, 2022
Year ending February 28, 2023

1st quarter-end

2nd quarter-end

3rd quarter-end

Fiscal year-end

Yen––

Yen
20.00
20.00

Yen–

Yen
20.00

Yen
40.00

–

20.00

40.00

Year ending February 28, 2023 (Forecast)Total

3. Forecast of consolidated financial results for the year ending February 28, 2023 (from March 1, 2022 to February 28, 2023)
Percentages indicate year-on-year changes
Profit attributable toNet sales
Operating profit
Ordinary profit
Earnings per shareowners of parent
Millions of yen% Millions of yen% Millions of yen% Millions of yen%
Yen
Full year
31,50015.4
1,110 (22.6)
1,700 (15.5)
1,000 (44.7)
107.71

1

4. Notes(1) Changes in significant subsidiaries during the six months ended August 31, 2022
(changes in specified subsidiaries resulting in the change in scope of consolidation):Yes(2) Application of special accounting methods for preparing quarterly consolidated financial statements:

No(3) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements
Changes in accounting policies due to revisions to accounting standards and other regulations:
Changes in accounting policies due to other reasons:

Yes
No

Changes in accounting estimates:
Restatement of prior period financial statements:

NoNo(4) Number of issued shares (common shares)
Total number of issued shares at the end of the period (including treasury shares)
As of August 31, 2022

9,696,500 shares As of February 28, 2022

9,696,500 shares

468,970 shares As of February 28, 2022

316,570 shares

Number of treasury shares at the end of the period
As of August 31, 2022

Average number of shares during the period (cumulative from the beginning of the fiscal year)
Six months ended August 31, 2022

9,340,232 shares Six months ended August 31, 2021

29,377,118 shares

Quarterly consolidated financial statements
Consolidated balance sheets(Millions of yen)
As of February 28, 2022

As of August 31, 2022

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade

4,001
6,844

4,166
7,524

Merchandise and finished goods
Raw materials and supplies

2,935
2,391

3,160
2,942

Other
Allowance for doubtful accounts

461
(25)

521
(28)

16,60718,285

Buildings and structures, net
Machinery, equipment and vehicles, net

3,540
2,035

3,577
2,049

Land
Other, net

1,954
774

1,967
802

Total property, plant and equipment

8,304

8,395

219

156

413

494

Total current assets
Non-current assets
Property, plant and equipmentIntangible assets
Goodwill
Other
Total intangible assets

633

649

Investments and other assets

3,465

3,764

Total non-current assets

12,401

12,80829,00831,092

Total assets
Liabilities
Current liabilities
Notes and accounts payable - trade

4,308

4,926

Short-term borrowings
Income taxes payable

560
427

1,546
185

Provision for bonuses
Other

529
1,437

535
891

Total current liabilities

7,260

8,083

Non-current liabilities
Long-term borrowings

350

382

Retirement benefit liability
Other531
316

550
361

Total non-current liabilities1,197

1,292

8,457

9,375

Total liabilities

3

(Millions of yen)
As of February 28, 2022

As of August 31, 2022

Net assets
Shareholders' equity
Share capital

2,118

2,118

Capital surplus
Retained earnings

1,976
13,517

1,976
13,834

Treasury shares

(384)

(567)

17,227

17,361

Valuation difference on available-for-sale securities
Foreign currency translation adjustment

38505

61
1,335

Remeasurements of defined benefit plans

191

188

Total shareholders' equity
Accumulated other comprehensive income

735

1,583

Non-controlling interests

Total accumulated other comprehensive income

2,589

2,773

Total net assets

20,551

21,71729,00831,092

Total liabilities and net assets

4Consolidated statements of income (cumulative) and consolidated statements of comprehensive income(cumulative)
Consolidated statements of income (cumulative)(Millions of yen)Six months ended

Six months ended

August 31, 2021

August 31, 2022

Net sales
Cost of sales

13,366
8,822

14,523
10,484Gross profit

4,544

4,039

Selling, general and administrative expenses

3,621

3,744923

295

Interest income
Dividend income

12101114Share of profit of entities accounted for using equity method
Foreign exchange gains

90
107

53454

Operating profit
Non-operating income

Other

31

28

Total non-operating income

249

560

Interest expenses
Other

454
5

Total non-operating expenses

99

1,163

846

Gain on sale of non-current assets

833–

Total extraordinary income

833–

Non-operating expenses

Ordinary profit
Extraordinary income

Profit before income taxes

1,996

846

Income taxes - current

655

296

Income taxes - deferred(128)(11)

Total income taxes

527

286

1,469

560

11056

1,359

504

ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

5Consolidated statements of comprehensive income (cumulative)(Millions of yen)

ProfitOther comprehensive income

Six months ended

Six months ended

August 31, 2021

August 31, 2022
1,469

560

9391

26
1,022

2(4)

2942431

1,086

Comprehensive income

1,900

1,647

Comprehensive income attributable toComprehensive income attributable to owners of parent

1,712

1,352

188

294

Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities accounted
for using equity method
Total other comprehensive income

Comprehensive income attributable to non-controllinginterests

6Consolidated statements of cash flows(Millions of yen)

Cash flows from operating activities
Profit before income taxes

Six months ended

Six months ended

August 31, 2021

August 31, 2022
1,996

846

590

612

(90)

(53)

(838)

(2)

Decrease (increase) in net defined benefit asset(benefitliability)

(18)

(28)

Increase (decrease) in provision for bonuses
Increase (decrease) in allowance for doubtful accounts

63(4)

41

Interest and dividend income
Interest expenses

(22)
4(24)
4

Decrease (increase) in trade receivables
Decrease (increase) in inventories

448(544)

(298)
(418)

Increase (decrease) in trade payables
Increase (decrease) in accrued consumption taxes

(283)
(12)

389
(97)

Depreciation
Share of loss (profit) of entities accounted for using equity
methodLoss (gain) on sale of property, plant and equipment

Other, net

(7)

26

Subtotal

1,285

961

Interest and dividends received

226

108

Interest paid
Income taxes paid

(5)
(179)

(4)
(530)

Net cash provided by (used in) operating activities

1,327

535

Cash flows from investing activities
Net decrease (increase) in time deposits
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Other, net

(15)

65

(378)
1,505

(744)
2(29)
(6)

(21)
(2)

(33)

(18)

1,043

(718)

(1,976)
–

1,031
200

Repayments of long-term borrowings
Purchase of treasury shares(239)–(238)(194)

Dividends paid
Dividends paid to non-controlling interests

(235)
(38)

(188)
(111)

Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings

Other, net
Net cash provided by (used in) financing activities

(15)

(13)

(2,504)487

Effect of exchange rate change on cash and cash equivalents

(14)

(77)

Net increase (decrease) in cash and cash equivalents

(147)

227

Cash and cash equivalents at beginning of period

3,675

3,869

Cash and cash equivalents at end of period

3,528

4,096

7