Consolidated Financial Results for the Third Quarter Ended December 31, 2023
ARE Holdings, Inc. (former company name: Asahi Holdings, Inc.) [IFRS]January 31, 2024

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For further information please contact:
Filing date of Quarterly Report:
Start of dividend payment:
Supplementary materials for the financial results:
Investor conference for the financial results:

5857
Tokyo Stock Exchange - Prime Market
https://www.asahiholdings.com/english
Tomoya Higashiura, Representative Director, President & CEO
Yoko Yanagida, Head of Corporate Communications(Phone) +81–3–6270–1833
February 13, 2024
–
Yes
No

(Rounded down to the nearest million yen)
1. Results of the nine months ended December 31, 2023 (From April 1, 2023 to December 31, 2023)(1) Results of operations (cumulative)(Percentage: Changes relative to corresponding previous period)
OperatingprofitRevenue
The nine months ended
December 31, 2023
December 31, 2022

Millions of yen

235,132
205,827%

Millions of yen

14.2 10,042
42.5 17,506

Profit before
tax%(42.6) 10,104(9.4) 14,380

Basic earnings per share
The nine months ended
December 31, 2023
December 31, 2022

Millions of yen

Profitattributable toowners of parent

Profit% Millions of yen(29.7) 7,097(25.4) 10,174%

Millions of yen(30.2) 7,097(25.0) 10,174

%

Total
comprehensive
incomeMillions of yen(30.2) 10,793 (18.2)(25.0) 13,200
5.6

Diluted earnings per share

Yen
92.60
131.01

Yen
84.69
118.94(2) Financial Position

As ofDecember 31, 2023
March 31, 2023

Total assets

Total equity

Equity attributable toowners of parent

Equity attributable toowners of parent ratio

Millions of yen
421,057
287,448

Millions of yen
111,055
106,957

Millions of yen
111,055
106,957

26.4
37.2

%

2. Dividend payments
Dividends per share

Year ended March 31, 2023
Year ending March 31, 2024
Year ending March 31, 2024
(Forecast)First quarter

Second quarter

Third quarter

Year-end

Yen

Yen

Yen

Yen

Yen

–
–

45.00
45.00

–
–

45.00

90.00

45.00

90.00

(Note) Revisions in dividend forecast in the current quarter: No%

Annual3. Forecast (From April 1, 2023 to March 31, 2024)
Revenue
Millions of yen

Year ending March 31, 2024 290,000(Percentage: Changes relative to corresponding previous period)
ProfitOperating
Profit before
Basic earnings
attributable toprofittax
per shareowners of parent% Millions of yen(0.8) 19,000% Millions of yen(1.4) 18,500% Millions of yen

15.2

13,200

%

20.8

Yen

172.23(Note) Revisions in forecast in the current quarter: No* Notes(1)
Changes in significant subsidiaries during the period: No(2)

Changes in accounting policies and accounting estimates(i) Changes in accounting policies required by IFRS: No(ii) Changes other than (i) above: No(iii) Changes in accounting estimates: No(3)

Number of issued shares (common stock)(i) Number of issued shares at the quarter end (including treasury stock)
As of December 31, 2023

79,708,688 shares

As of March 31, 2023

79,708,688 shares(ii) Number of treasury stock at the quarter end
As of December 31, 2023

3,065,553 shares

As of March 31, 2023

3,065,458 shares(iii) Averaged number of shares during the period (quarterly cumulative period)
Nine months ended December 31, 2023

76,643,160 shares

Nine months ended December 31, 2022

77,661,433 shares* The quarterly financial statements are not subject to quarterly reviews by accounting auditors.
* Statement regarding the proper use of financial forecasts and other special remarks(Notes on forward looking statements, etc.)
These forecast performance figures are based on the information currently available to the Company’s
management and certain assumptions judged rational. Accordingly, there might be cases in which actual resultsmaterially differ from forecasts of this report. Please refer to page 3 “1. Qualitative Information (3) Consolidated
Performance Forecasts” for the assumptions used and other notes.

【Appendix】

Table of contents of the appendix

1. Qualitative Information .................................................................................................................................................. 2(1) Consolidated Business Performance ........................................................................................................................... 2(2) Consolidated Financial Position and Cash Flows for the Nine Months Ended December 31, 2023 ........................ 2(3) Consolidated Performance Forecasts .......................................................................................................................... 3
2. Condensed Consolidated Financial Statements ............................................................................................................ 4(1) Condensed Consolidated Statements of Financial Position ....................................................................................... 4(2) Condensed Consolidated Statements of Income for the Nine Months Ended December 31, 2023 ........................... 6(3) Condensed Consolidated Statements of Comprehensive Income for the Nine Months Ended December 31, 2023 7(4) Condensed Consolidated Statements of Changes in Equity ...................................................................................... 8(5) Condensed Consolidated Statements of Cash Flows ................................................................................................ 10(6) Notes on Assumptions for Going Concern ................................................................................................................. 11(7) Notes on Condensed Consolidated Financial Statements ........................................................................................ 11
1. Reporting entity ..................................................................................................................................................... 11
2. Basis of preparation ............................................................................................................................................... 11
3. Material accounting policies .................................................................................................................................. 11
4. Significant accounting estimates and associated judgements ............................................................................. 11
5. Segment information ............................................................................................................................................. 11
6. Subsequent events ................................................................................................................................................. 13－ 1 －1. Qualitative Information(1) Consolidated Business Performance
The Japanese economy had shown signs of a mild recovery during the nine months ended December 31,
2023, but the outlook for the business environment is uncertain mainly due to concerns about the effects ofaggressive monetary tightening by central banks in developed countries and structural adjustments in the
Chinese economy. Under these conditions, the Group’s results in each business segment were as follows.
Precious Metals businessIn the precious metals recycling business, revenue increased from the same period of the previous fiscal
year mainly due to the higher sales volume of gold in Japan and higher income from precious metals refining
in North America. On the other hand, operating profit decreased from the same period of the previous fiscal
year due to the lack of a recovery from the prolonged stagnation in the electronics and catalyst-related trading
markets, in addition to a significant drop in the prices of palladium and rhodium from the same period of theprevious fiscal year.
Environmental Preservation business
The volume of industrial waste handled and the utilization rates at treatment facilities were stable.
However, the price of processing for medical waste has declined after the novel coronavirus disease (COVID19) was reclassified as a Class 5 Infectious Disease under the Act on the Prevention of Infectious Diseases andMedical Care for Patients with Infectious Diseases. In addition, we withdrew from an existing business toconstruct a new incinerator at the Yokohama Plant. As a result, revenue and operating profit decreased fromthe same period of the previous fiscal year.
As a result of the above, revenue during the nine months ended December 31, 2023 was 235,132 million
yen, a year-on-year increase of 29,305 million yen (+14.2 percent). Operating profit was 10,042 million yen, a
year-on-year decrease of 7,463 million yen (-42.6 percent). Profit before tax was 10,104 million yen, a year-onyear decrease of 4,275 million yen (-29.7 percent). Profit was 7,097 million yen, a year-on-year decrease of
3,077 million yen (-30.2 percent). Profit attributable to owners of parent for the period was therefore 7,097
million yen, a year-on-year decrease of 3,077 million yen (-30.2 percent). By segment, revenue in the Precious
Metals business was 222,860 million yen, a year-on-year increase of 30,432 million yen (+15.8 percent). In theEnvironmental Preservation business, revenue was 12,322 million yen, a year-on-year decrease of 1,075
million yen (-8.0 percent).

(2) Consolidated Financial Position and Cash Flows for the Nine Months Ended December 31, 2023
As of December 31, 2023, total assets amounted to 421,057 million yen, up 133,608 million yen from theprevious fiscal year end. This was mainly due to increases of 100,502 million yen in trade and otherreceivables, 11,840 million yen in other (current) financial assets and (non-current) financial assets, 10,616
million yen in other current assets, and 9,345 million yen in inventories.
Total liabilities amounted to 310,002 million yen, up 129,510 million yen from the previous fiscal year end.
This was due mainly to an increase of 131,235 million yen in bonds and loans payable.
Total equity amounted to 111,055 million yen, up 4,097 million yen from the previous fiscal year end. Thiswas due mainly to an increase of 10,793 million yen in comprehensive income and a decrease of 6,897 million
yen used for dividends.
As a result, the equity attributable to owners of parent ratio changed to 26.4%, from 37.2% at the end of theprevious fiscal year.
Net cash used in operating activities amounted to 7,759 million yen due mainly to 10,104 million yen of
profit before tax, 2,704 million yen of depreciation and amortization, 9,323 million yen of increase ininventories, 87,463 million yen of increase in trade and other receivables, 87,940 million yen of increase intrade, loans and other payables, 3,537 million yen of income taxes paid and 2,242 million yen of income taxes
refunded.
Net cash used in investing activities amounted to 15,442 million yen due mainly to 2,823 million yen ofproceeds from withdrawal of time deposits, 4,992 million yen of purchase of property, plant and equipment,
558 million yen of purchase of intangible assets and 13,659 million yen of payments for loans receivable.

－ 2 －Net cash provided by financial activities amounted to 23,953 million yen due mainly to 16,971 million yen of
net increase in short-term loans payable, 14,123 million yen of proceeds from long-term loans payable and6,888 million yen of cash dividends paid.
As a result, cash and cash equivalents as of December 31, 2023 decreased 863 million yen from March 31,
2023, to 17,088 million yen.

(3) Consolidated Performance Forecasts
No changes have been made to the forecasts going forward as they are in line with the financial forecast for
the fiscal year ending March 31, 2024 announced in the “Consolidated Financial Results for the Second
Quarter Ended September 30, 2023” made public on October 26, 2023.

－ 3 －2. Condensed Consolidated Financial Statements(1) Condensed Consolidated Statements of Financial Position

ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Income tax receivables
Other financial assets
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Goodwill
Intangible assets
Deferred tax assets
Net defined benefit asset
Financial assets
Other non-current assets
Total non-current assets
Total assets

－ 4 －

As of
March 31,
2023

As of
December 31,
2023

Millions of yen

Millions of yen

17,952
154,046
40,854
1,345
3,609
20,567

17,088254,548
50,2001,360
15,37731,183

238,374

369,759

42,553
1,003
1,255
3,498
263
429
69

45,652
1,003
1,574
2,419
78
501
68

49,07351,297

287,448

421,057

LIABILITIES and EQUITY
Liabilities
Current liabilities
Trade and other payables
Loans payable
Income tax payable
Other financial liabilities
Provisions
Other current liabilities

As ofMarch 31,
2023

As of
December 31,
2023

Millions of yen

Millions of yen

26,02491,494
210
3,740
1,462
2,547

24,751
206,051
1,592
1,246
1,131
2,873

Total current liabilities
Non-current liabilities
Bonds and loans payable
Deferred tax liabilities
Net defined benefit liability
Other financial liabilities
Other non-current liabilities

125,480

237,646

52,868
275
107
1,704
53

69,547
809
124
1,874
–

Total non-current liabilities

55,01072,355

180,491

310,002

7,790
12,103(5,925)96,319(3,330)7,790
12,306(5,925)96,366517

Total liabilities
EquityCapital stock
Capital surplus
Treasury stock
Retained earnings
Other components of equity
Total equity attributable to owners of parent

106,957

111,055

Total equity

106,957

111,055

287,448

421,057

Total liabilities and equity－ 5 －(2) Condensed Consolidated Statements of Income for the Nine Months Ended December 31, 2023
The nine months
ended December 31,
2022

The nine months
ended December 31,
2023

Millions of yen

Millions of yen

Revenue
Cost of sales

205,827(181,603)

235,132(218,351)

Gross profit
Selling, general and administrative expenses
Other operating income
Other operating expenses
Share of profit (loss) of investments accounted forusing equity method

24,223(6,112)
93(80)

16,781(6,800)
144
(82)

(616)

–

Operating profit

17,506

10,042Finance income
Finance costs
Other non-operating income
Other non-operating expenses

393
(640)
425
(3,304)

473
(411)
–
–

Profit before tax

14,38010,104

Income tax expenses(4,205)(3,007)

Profit10,174

7,097

Profit attributable to:
Owners of parent
Non-controlling interests

10,174–

7,097–

10,174

7,097

131.01118.94

92.60
84.69

ProfitEarnings per share
Basic earnings per share (Yen)
Diluted earnings per share (Yen)－ 6 －(3) Condensed Consolidated Statements of Comprehensive Income for the Nine Months Ended
December 31, 2023
The nine months
ended December 31,
2022

The nine months
ended December 31,
2023

Millions of yen

Millions of yen

Profit10,174

7,097

(0)

–

(8)

(151)

(0)

–

(8)

(151)

2,663
371

1,813
2,033

3,034

3,847

3,026

3,696

Comprehensive income

13,20010,793Comprehensive income attributable to:
Owners of parent
Non-controlling interests

13,200–10,793–

13,20010,793

Other comprehensive income
Items that will not be reclassified to profit or loss
Financial assets measured at fair value
through other comprehensive income
Remeasurements of defined benefit plans
Share of other comprehensive income ofinvestments accounted for using equity method
Total items that will not be reclassified to profit
or loss
Items that may be reclassified to profit or loss
Cash flow hedges
Translation adjustments of foreign operations
Total items that may be reclassified to profit orloss
Other comprehensive income, net of tax

Comprehensive income－ 7 －(4) Condensed Consolidated Statements of Changes in Equity(Millions of yen)
Equity attributable to owners of parent
Other components ofequityCapitalTreasury
Retained
Translation
surplusstockearnings
adjustments
Cash flowof foreign
hedgesCapitalstock

operations

Balance at April 1, 2022
ProfitOther comprehensive
incomeTotal comprehensive
incomePurchase of treasury stock
Dividends
Changes due to loss ofcontrol of subsidiaries
Increase (decrease) due todiscontinued application ofequity method for equitymethod affiliate
Reclassified from othercomponents of equity toretained earnings
Share-based paymenttransactions
Total transactions withownersBalance at December 31, 2022

7,790
–

11,955–(1,819)–92,353
10,174(1,390)–(3,748)
–

–

–

–

–

371

2,663

–

–

–

10,174

371

2,663

–
–

–
–

(4,106)––(6,987)

–
–

–
–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

(8)

–

–

–

116

–

–

–

–

–

116

(4,106)(6,996)

–

–

7,790

12,072(5,925)

95,531(1,019)(1,085)(Millions of yen)
Equity attributable to owners of parent
Other components of equity
Financial
Remeasureassets
ments ofmeasured atdefinedfair value
through otherbenefitcomprehenplans
sive income

Balance at April 1, 2022
ProfitOther comprehensive
incomeTotal comprehensive
incomePurchase of treasury stock
Dividends
Changes due to loss ofcontrol of subsidiaries
Increase (decrease) due todiscontinued application ofequity method for equitymethod affiliate
Reclassified from othercomponents of equity toretained earnings
Share-based paymenttransactions
Total transactions withownersBalance at December 31, 2022

Total

Total

Total equity

(3)
–

–
–

(5,142)–

105,137
10,174105,137
10,174

(0)

(8)

3,026

3,026

3,026

(0)

(8)

3,026

13,20013,200

–
–

–
–

–
–

(4,106)(6,987)(4,106)(6,987)

0

–

0

0

0

3

–

3

3

3

–

8

8

–

–

–

–

–

116

116

3

8

11

(10,973)(10,973)––(2,104)

107,364

107,364－ 8 －(Millions of yen)
Equity attributable to owners of parent
Other components ofequityCapitalTreasury
Retained
Translation
surplusstockearnings
adjustments
Cash flowof foreign
hedgesCapitalstock

operations

Balance at April 1, 2023
ProfitOther comprehensive
incomeTotal comprehensive
incomePurchase of treasury stock
Dividends
Reclassified from othercomponents of equity toretained earnings
Share-based paymenttransactions
Total transactions withownersBalance at December 31, 2023

7,790
–

12,103–(5,925)–96,319
7,097

(886)
–

(2,443)
–

–

–

–

–

2,033

1,813

–

–

–

7,097

2,033

1,813

–
–

–
–

(0)
–

–
(6,897)

–
–

–
–

–

–

–

(151)

–

–

–

202

–

–

–

–

–

202

(0)

(7,049)

–

–

7,790

12,306(5,925)96,366

1,146

(629)

(Millions of yen)
Equity attributable to owners of parent
Other components ofequityRemeasurements ofdefinedbenefit plans
Balance at April 1, 2023
ProfitOther comprehensive
incomeTotal comprehensive
incomePurchase of treasury stock
Dividends
Reclassified from othercomponents of equity toretained earnings
Share-based paymenttransactions
Total transactions withownersBalance at December 31, 2023

Total

Total

Total equity––(3,330)–106,957
7,097

106,957
7,097

(151)

3,696

3,696

3,696

(151)

3,696

10,793

10,793

–
–

–
–

(0)
(6,897)(0)(6,897)

151

151

–

–

–

–

202

202

151

151

(6,695)(6,695)–517

111,055

111,055－ 9 －(5) Condensed Consolidated Statements of Cash FlowsThe nine months
ended December
31, 2022

The nine months
ended December
31, 2023

Millions of yen

Millions of yen

14,380
2,467
0
1,283
1,354

10,104
2,704
–
716
–

616

–

(1,510)(62,992)
61,108(5,935)(9,323)(87,463)
87,940(11,297)

SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Income taxes refunded

10,774211(95)(7,620)4,139(6,618)242(88)(3,537)2,242

Net cash provided by (used in) operating activities

7,409(7,759)(2,504)50(2,944)
48
(623)
–

(122)
2,823
(4,992)50(558)(13,659)

2,491–

Cash provided by (used in) operating activities
Profit before tax
Depreciation and amortization
Impairment loss
Finance income and finance cost
Other non-operating income and expenses
Share of loss (profit) of investments accounted for using equity
methodDecrease (increase) in inventories
Decrease (increase) in trade and other receivables
Increase (decrease) in trade, loans and other payables
Other, net

Cash provided by (used in) investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Payments for loans receivable
Proceeds from sales of shares of subsidiaries and affiliatedcompanies
Other, net

1,105

1,015

Net cash provided by (used in) investing activities(2,376)(15,442)

Cash provided by (used in) financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Proceeds from issuance of bonds
Purchase of treasury stock
Cash dividends paid
Other, net

(287)
2,000
4,924
(4,106)(6,985)(267)

16,971
14,123–(0)(6,888)(252)

Net cash provided by (used in) financing activities(4,722)

23,953

Effect of exchange rate change on cash and cash equivalents

2,960(1,615)

Net increase (decrease) in cash and cash equivalents

3,271

(863)

Cash and cash equivalents at beginning of period

6,127

17,952

Cash and cash equivalents at end of period

9,398

17,088－ 10 －

(6) Notes on Assumptions for Going Concern
Not applicable(7) Notes on Condensed Consolidated Financial Statements
1. Reporting entity
ARE Holdings, Inc. (hereinafter the “Company”) is a company located in Japan. The Company’s condensed
consolidated financial statements for the nine months ended December 31, 2023 comprise the Company andits subsidiaries (hereinafter the “Group”).
For the main activities of the Group, please refer to Note “5. Segment information.”
Effective July 1, 2023, the Company changed its name from Asahi Holdings, Inc. to ARE Holdings, Inc.

2. Basis of preparation(1) Statement of compliance with IFRSThe condensed consolidated financial statements of the Group have been prepared based on IAS 34“Interim Financial Reporting.”
Having met the requirements for a Specified Company Complying with Designated International
Accounting Standards, as prescribed in Article 1-2 of the Regulation on the Terminology, Forms, andPreparation Methods of Quarterly Consolidated Financial Statements (Cabinet Office Order No. 64 of
2007), the Group adopts the provisions of Article 93 of the aforementioned regulation.
(2) Functional currency and presentation currency
The condensed consolidated financial statements of the Group are presented in Japanese yen, which isthe functional currency of the Company, and figures less than one million yen are rounded down to thenearest million yen.

3. Material accounting policies
The material accounting policies adopted for the condensed consolidated financial statements for the ninemonths ended December 31, 2023 are the same as those for the consolidated financial statements for the fiscal
year ended March 31, 2023.
The income tax for the nine months ended December 31, 2023 was calculated based on the estimatedaverage annual effective tax rate.

4. Significant accounting estimates and associated judgements
In preparing condensed consolidated financial statements, the management is required to make judgement,
estimates and assumptions that affect the adoption of accounting policies and the amounts of assets, liabilities,
revenues and expenses. Actual results may differ from such estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. The effect of a change inaccounting estimates is recognized in the accounting period in which such change occurs as well as theaccounting periods to be affected in the future.
The judgement, estimates and assumptions made by the management that may have material impacts on
the figures in the condensed consolidated financial statements are the same as those for the consolidated
financial statements for the fiscal year ended March 31, 2023.

5. Segment information(1) Overview of reporting segments
The Group’s business segments are those Group constituent units for which separate financial
information is obtainable, and which the Board of Directors subjects to regular examination in order todecide the allocation of management resources and evaluate business results.
As a pure holding company, the Company is in charge of overall strategic function for the Group,
whereas operating companies of the Group engage in the precious and rare metals recycling business andthe refining and processing business, industrial waste management and other environmental
preservation business.

－ 11 －

Therefore, the Group is composed of product and service segments based on business sectors. The tworeporting segments are the Precious Metals business and the Environmental Preservation business.
Meanwhile, these reporting segments are not aggregated.
The Precious Metals business engages mainly in recycling and selling precious and rare metals such as
gold, silver, palladium, and platinum from scrap containing precious metals, as well as refining andprocessing of precious metals centered on gold and silver.
The main work of the Environmental Preservation business is the collection, transport andintermediate processing of industrial waste.
(Matters related to changes in reporting segments, etc.)
Effective from the first quarter ended June 30, 2023, due to changes in corporate organization andperformance management classifications within the Group, corporate expenses previously included in“Adjustments” are now allocated to “Precious Metals Business” and “Environmental Preservation
Business,” and recorded as such.
Segment information for the nine months ended December 31, 2022 is presented according to the newclassification.
(2) Segment revenue and performance
Accounting policies of the reporting segments are the same as those of the Group stated in Note “3.
Material accounting policies.”
Revenue and other performance of each reporting segment of the Group are as follows.
For the nine months ended December 31, 2022 (from April 1, 2022 to December 31, 2022)
Reporting segment(Millions of yen)

Precious
MetalsBusiness

Environmental
Preservation
Business

Subtotal

192,428

13,397

205,825

1

205,827–

205,827

–

–

–

–

–

–

–

Total

192,428

13,397

205,825

1

205,827–

205,827

Operating profit
by businesssegment

15,5092,738

18,247(741)

17,506–

17,506

Revenue
External
revenue
Intersegment
revenue

Other

Finance income
Finance costs
Other nonoperating income
Other nonoperating
expenses

Total

Adjustments

Consolidated

393
(640)
425

(3,304)

Profit before tax

14,380－ 12 －

For the nine months ended December 31, 2023 (from April 1, 2023 to December 31, 2023)
Reporting segment(Millions of yen)

Precious
MetalsBusiness

Environmental
Preservation
Business

Subtotal

222,860

12,249235,11022

235,132–

235,132

–

72

72

–

72

(72)

–

Total

222,860

12,322

235,18322

235,205(72)

235,132

Operating profit
by businesssegment

8,447

1,859

10,307(264)

10,042–

10,042

Revenue
External
revenue
Intersegment
revenue

Other

Total

Adjustments

Consolidated

Finance income
Finance costs

473
(411)

Profit before tax

10,104

6. Subsequent events
Not applicable－ 13 －