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 November 30, 2023
(Based on Japanese GAAP)
January 11, 2024
Company name:Sanko Gosei Ltd.
Stock exchange listing: Tokyo
Stock code:
Representative:

7888
URL https://www.sankogosei.co.jp
Representative Director/President
Kenso Kuroda

Inquiries:
Director/Executive OfficerScheduled date to file Quarterly Securities Report:

Akira Serikawa
January 12, 2024

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

February 1, 2024
Yes

Holding of quarterly financial results meeting:

Yes

TEL

0763-52-7105(for institutional investors and analysts)(Amounts less than one million yen are rounded down)
1. Consolidated financial results for the six months ended November 30, 2023 (from June 1, 2023 to November 30, 2023)(1) Consolidated operating results (cumulative)
Net sales
Six months ended November 30, 2023
Six months ended November 30, 2022

Millions of yen
45,92438,518Percentages indicate year-on-year changes
Profit attributable toOperating profit
Ordinary profit
owners of parent% Millions of yen% Millions of yen% Millions of yen
%
19.2
2,041
24.2
1,977
5.0
1,331(1.0)
32.0
1,644
99.3
1,883 157.1
1,345 120.4

Earnings per share

Diluted earnings per share

Yen
43.68
44.13

Six months ended November 30, 2023
Six months ended November 30, 2022

Yen––(2) Consolidated financial position
Total assets
As of November 30, 2023
As of May 31, 2023

Net assets

Millions of yen
70,45065,580Equity ratio

Millions of yen
27,981
25,950Net assets per share
%
39.0
38.9

Yen
900.43835.82

2. Cash dividends
Annual dividends per share

Year ended May 31, 2023
Year ending May 31, 2024

1st quarter-end

2nd quarter-end

3rd quarter-end

Fiscal year-end

Yen––

Yen
7.00
10.00

Yen–

Yen
9.00

Yen
16.00

–

10.00

20.00

Year ending May 31, 2024 (Forecast)Total

3. Forecast of consolidated financial results for the year ending May 31, 2024 (from June 1, 2023 to May 31, 2024)
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
85,000
4.8
3,800
9.1
3,600
3.8
2,300
9.7
75.44

1

4. Notes(1) Changes in significant subsidiaries during the six months ended November 30, 2023
(changes in specified subsidiaries resulting in the change in scope of consolidation):No(2) Application of special accounting methods for preparing quarterly consolidated financial statements:

Yes(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:

No
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 November 30, 2023

30,688,569 shares As of May 31, 2023

30,688,569 shares

Number of treasury shares at the end of the period
As of November 30, 2023

204,786 shares As of May 31, 2023

204,786 shares

Average number of shares during the period (cumulative from the beginning of the fiscal year)
Six months ended November 30, 2023

30,483,783 shares Six months ended November 30, 2022

230,483,820 shares

Quarterly consolidated financial statements
Consolidated balance sheets(Millions of yen)
As of May 31, 2023

As of November 30, 2023

AssetsCurrent assets
Cash and deposits
Notes receivable - trade

8,775
99

8,549
7

Electronically recorded monetary claims - operating
Accounts receivable - trade

1,044
15,728

1,198
17,303Merchandise and finished goods
Work in process

1,322
4,580

1,370
4,798

Raw materials and supplies
Other

1,763
3,329

1,927
2,959

Total current assets

36,644

38,114

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

10,0389,546

11,42010,461Tools, furniture and fixtures, net
Land

1,881
5,072

2,305
5,136

Construction in progress

1,2851,719

Total property, plant and equipment

27,82431,043

Goodwill
Other80453

64476

Total intangible assets

534540Non-current assets
Property, plant and equipment

Intangible assets

Investments and other assets
Investment securities
Other
Total investments and other assets
Total non-current assets
Total assets

31720

559

731

577

751

28,93532,336

65,58070,450(Millions of yen)
As of May 31, 2023

As of November 30, 2023

Liabilities
Current liabilities
Notes and accounts payable - trade

7,940

8,629

Electronically recorded obligations - operating
Short-term borrowings

3,794
5,811

3,312
5,717

Current portion of long-term borrowings
Income taxes payable

2,194
538

2,340
581

195
53

180
–

Provision for bonuses
Provision for bonuses for directors (and other officers)
Other

7,182

8,644

Total current liabilities

27,71029,407

7,403

8,337

16

16

724

663

Non-current liabilities
Long-term borrowings
Provision for retirement benefits for directors (and otherofficers)
Retirement benefit liability
Other

3,774

4,044

Total non-current liabilities

11,91913,061

39,63042,468

Share capital
Capital surplus

4,008
4,071

4,008
4,071

Retained earnings
Treasury shares

16,399(43)

17,457(43)

Total shareholders' equity

24,43625,494

Total liabilities
Net assets
Shareholders' equity

Accumulated other comprehensive income
Valuation difference on available-for-sale securities(1)0

Remeasurements of defined benefit plans
Foreign currency translation adjustment

(170)
1,214

(146)
2,100

Total accumulated other comprehensive income

1,042

1,954

470

533

25,95027,981

65,58070,450Non-controlling interests
Total net assetsTotal 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

November 30, 2022

November 30, 2023

Net sales
Cost of sales

38,51832,93345,92439,392Gross profit

5,585

6,531

Selling, general and administrative expenses

3,941

4,490

Operating profit

1,644

2,041

Interest income
Dividend income

120340Rental income
Foreign exchange gains

30354

3061

Non-operating income

Other

48

75

Total non-operating income

447

202

Interest expenses
Loss on Derivative

1830198
25

Other

2442

Non-operating expenses

Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets

208

266

1,883

1,977

01

Gain on sale of investment securities
National subsidies–01
14

Total extraordinary income

017

Extraordinary losses
Loss on retirement of non-current assets

2644

Loss on sale of non-current assets
Extra retirement payments

1–2133

Loss on tax purpose reduction entry of non-current assets
Loss on liquidation of subsidiaries and associates––

141

Total extraordinary losses

27115

1,856

1,879

Profit before income taxes
Income taxes
ProfitProfit (loss) attributable to non-controlling interests
Profit attributable to owners of parent

5517

510

1,338

1,368(6)

37

1,345

1,331

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

ProfitOther comprehensive income

Six months ended

Six months ended

November 30, 2022

November 30, 2023

1,338

1,368

Valuation difference on available-for-sale securitiesForeign currency translation adjustment

0600

1908

Remeasurements of defined benefit plans, net of tax

2124623934

Comprehensive income

Total other comprehensive income

1,961

2,303

Comprehensive income attributable toComprehensive income attributable to owners of parent

1,952

2,243

959

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

November 30, 2022

November 30, 2023

1,856

1,879

1,694191,930
20

Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in retirement benefit liability

(0)
(33)

–(38)

Interest and dividend income
Interest expenses

(13)
183

(35)
198

Loss (gain) on sale of property, plant and equipment
Loss on retirement of property, plant and equipment

026

1944

Loss (gain) on valuation of derivatives
Extra retirement payments

0–2533

Decrease (increase) in trade receivables
Decrease (increase) in inventories(1,564)603(1,063)(190)

Decrease (increase) in other asset
Increase (decrease) in trade payables

(236)
479

(636)
(275)

Increase (decrease) in other liability
Other, net

1,037
258

475(4)

Subtotal

4,311

2,383

Interest and dividends received
Interest paid

13(182)35(197)Extra retirement payments
Income taxes paid–(461)(33)(404)

Net cash provided by (used in) operating activities

3,681

1,782(0)(0)–(1,075)1(2,078)

Proceeds from sale of property, plant and equipment
Other, net

0(36)13(45)Net cash provided by (used in) investing activities(1,111)(2,108)DepreciationAmortization of goodwill

Cash flows from investing activities
Purchase of investment securities
Proceeds from sale of investment securities
Purchase of property, plant and equipment

7

(Millions of yen)

Cash flows from financing activities
Net increase (decrease) in short-term borrowings

Six months ended

Six months ended

November 30, 2022

November 30, 2023

1,327(192)

Proceeds from long-term loan payable
Repayments of long-term borrowings–(937)

2,000(1,125)

Repayments of lease liabilities
Dividends paid

(802)
(213)

(583)
(274)

Dividends paid to non-controlling interests
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents

(5)

(1)

(630)

(176)

173

278

Net increase (decrease) in cash and cash equivalents

2,112

(225)

Cash and cash equivalents at beginning of period

6,822

8,775

Cash and cash equivalents at end of period

8,934

8,549

8