Consolidated Financial Results for the First Quarter Ended June 30, 2023
ARE Holdings, Inc. (former company name: Asahi Holdings, Inc.) [IFRS]July 27, 2023

Stock code:
Shares listed:

5857
Tokyo Stock Exchange - Prime Market

URL:
Representative:

https://www.asahiholdings.com/english
Tomoya Higashiura, Representative Director, President & CEO

For further information please contact:

Kunihiko Chogo, General Manager, Corporate Planning &Communications Department

Filing date of Quarterly Report:(Phone) +81–3–6270–1833
August 10, 2023

Start of dividend payment:
Supplementary materials for the financial results:–
Yes

Investor conference for the financial results:

No(Rounded down to the nearest million yen)
1. Results of the three months ended June 30, 2023 (From April 1, 2023 to June 30, 2023)(1) Results of operations (cumulative)(Percentage: Changes relative to corresponding previous period)
OperatingprofitRevenue
The three months ended
June 30, 2023
June 30, 2022

Millions of yen

66,52359,749%Millions of yen

11.3 3,050
18.5 5,691

Profit before
tax%

Millions of yen(46.4) 3,137(17.9) 6,108% Millions of yen(48.6) 2,396(10.6) 4,268%

Millions of yen(43.9) 2,396(11.9) 4,268

Basic earnings per share

Diluted earnings per share

Yen
31.26
54.27

Yen
28.56
49.11

The three months ended
June 30, 2023
June 30, 2022

Profitattributable toowners of parent

Profit%Total
comprehensive
incomeMillions of yen(43.9) 10,688(11.9) 8,977(2) Financial Position

As ofJune 30, 2023
March 31, 2023

Total assets

Total equity

Equity attributable toowners of parent

Equity attributable toowners of parent ratio

Millions of yen
356,802
287,448

Millions of yen
114,255
106,957

Millions of yen
114,255
106,957

32.0
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

Annual

Yen

Yen

Yen

Yen

Yen

–
–

45.00

–

45.00

90.00

45.00

–

45.00

90.00

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

%

19.1
25.8

3. Forecast (From April 1, 2023 to March 31, 2024)(Percentage: Changes relative to corresponding previous period)
OperatingprofitRevenue
Millions of yen

Six months ending
120,000
September 30, 2023
Year ending March 31, 2024 250,000% Millions of yen

(9.5)

8,000

% Millions of yen(30.4)(14.5) 19,000

Profitattributable toowners of parent

Profit beforetax% Millions of yen%

Basic earnings
per share
Yen

7,800

(23.8)

5,500(24.6)

71.76(1.4) 18,500

15.2

13,20020.8

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 June 30, 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 June 30, 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)
Three months ended June 30, 2023

76,643,211 shares

Three months ended June 30, 2022

78,643,251 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 Three Months Ended June 30, 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 Three Months Ended June 30, 2023................................ 6(3) Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended June 30, 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 showed growing signs of recovery in socioeconomic activities during the threemonths ended June 30, 2023 due to such factors as the change in status of the novel coronavirus disease(COVID-19) under the Infectious Diseases Control Law. Although the gradual recovery is expected tocontinue, there is a risk that economic activity could once again stagnate as a result of the downturn inoverseas economies and rising prices in Japan. Under these conditions, the Group’s results in each businesssegment were as follows.
Precious Metals business
Revenue increased from the same period of the previous fiscal year due to the higher sales volume of gold in
the precious metals recycling business and higher commissions from refining and product processing in the
precious metals refining business in North America. On the other hand, operating profit decreased from thesame period of the previous fiscal year due to a decline in rhodium prices that has persisted since the fourth
quarter of the previous fiscal year, and a decrease in the volume of precious metals collected, mainly due toinventory adjustments among clients in the electronics sector.
Environmental Preservation business
Due to the recovery of overall economic activities such as industrial production, the volume of industrial
waste handled and the utilization rate of treatment facilities remained high. On the other hand, revenue andoperating profit declined from the same period of the previous fiscal year due to lower price of processing for
medical waste as a result of the conclusion of the COVID-19 and the partial suspension of existing businesses
due to the construction of a new incinerator at the Yokohama Plant.
As a result of the above, revenue during the three months ended June 30, 2023 was 66,523 million yen, a
year-on-year increase of 6,774 million yen (+11.3 percent). Operating profit was 3,050 million yen, a year-onyear decrease of 2,640 million yen (-46.4 percent). Profit before tax was 3,137 million yen, a year-on-year
decrease of 2,971 million yen (-48.6 percent). Profit was 2,396 million yen, a year-on-year decrease of 1,871
million yen (-43.9 percent). Profit attributable to owners of parent for the period was therefore 2,396 million
yen, a year-on-year decrease of 1,871 million yen (-43.9 percent). By segment, revenue in the Precious Metals
business was 62,435 million yen, a year-on-year increase of 7,130 million yen (+12.9 percent). In theEnvironmental Preservation business, revenue was 4,113 million yen, a year-on-year decrease of 331 million
yen (-7.5 percent).

(2) Consolidated Financial Position and Cash Flows for the Three Months Ended June 30, 2023
As of June 30, 2023, total assets amounted to 356,802 million yen, up 69,353 million yen from the previous
fiscal year end. This was mainly due to an increase of 49,888 million yen in trade and other receivables and anincrease of 16,852 million yen in other (current) financial assets and (non-current) financial assets.
Total liabilities amounted to 242,546 million yen, up 62,055 million yen from the previous fiscal year end.
This was due mainly to an increase of 65,326 million yen in bonds and loans payable.
Total equity amounted to 114,255 million yen, up 7,297 million yen from the previous fiscal year end. Thiswas due mainly to an increase of 10,688 million yen in comprehensive income and a decrease of 3,448 million
yen used for dividends.
As a result, the equity attributable to owners of parent ratio changed to 32.0%, from 37.2% at the end of theprevious fiscal year.
Net cash provided by operating activities amounted to 3,007 million yen due mainly to 3,137 million yen of
profit before tax, 879 million yen of depreciation and amortization, 3,185 million yen of increase ininventories, 32,585 million yen of increase in trade and other receivables, 34,892 million yen of increase intrade, loans and other payables, 1,555 million yen of income taxes paid.
Net cash used in investing activities amounted to 12,095 million yen due mainly to 2,735 million yen ofproceeds from withdrawal of time deposits, 975 million yen of purchase of property, plant and equipment, 372
million yen of purchase of intangible assets and 13,264 million yen of payments for loans receivable.
Net cash provided by financial activities amounted to 10,199 million yen due mainly to 13,737 million yen ofproceeds from long-term loans payable and 3,428 million yen of cash dividends paid.

－ 2 －As a result, cash and cash equivalents as of June 30, 2023 decreased 852 million yen from March 31, 2023,
to 17,099 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 Fiscal Year
Ended March 31, 2023” made public on April 27, 2023.

－ 3 －2. Condensed Consolidated Financial Statements(1) Condensed Consolidated Statements of Financial Position
As ofMarch 31,
2023

As of
June 30,
2023

Millions of yen

Millions of yen

ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables

17,952
154,046

17,099203,934

Inventories
Income tax receivables

40,854
1,345

44,046
1,929

Other financial assets
Other current assets

3,609
20,567

13,496
19,603

Total current assets

238,374

300,109

Non-current assets
Property, plant and equipment

42,55343,416

Goodwill
Intangible assets

1,003
1,255

1,003
1,366

Deferred tax assets
Net defined benefit asset

3,498
263

3,228
213

Financial assets
Other non-current assets

429
69

7,394
68

Total non-current assets
Total assets－ 4 －49,07356,692

287,448356,802As ofMarch 31,
2023

As of
June 30,
2023

Millions of yen

Millions of yen

LIABILITIES and EQUITY
Liabilities
Current liabilities
Trade and other payables
Loans payable

26,02491,49425,054
139,219

Income tax payable
Other financial liabilities

210
3,740

367
270

Provisions
Other current liabilities

1,462
2,547

943
1,757

Total current liabilities

125,480

167,613

Non-current liabilities
Bonds and loans payable

52,86870,470

Deferred tax liabilities
Net defined benefit liability

275
107

2,249
109

Other financial liabilities
Other non-current liabilities

1,704
53

2,025
78

Total non-current liabilities

55,01074,933

Total liabilities
Equity180,491

242,546

Capital stock
Capital surplus

7,790
12,103

7,790
12,162

Treasury stock
Retained earnings(5,925)96,319(5,925)
95,220

Other components of equity(3,330)

5,007

Total equity attributable to owners of parent

106,957

114,255

Total equity

106,957

114,255

287,448356,802

Total liabilities and equity－ 5 －(2) Condensed Consolidated Statements of Income for the Three Months Ended June 30, 2023

Revenue
Cost of sales

The three months
ended June 30,
2022

The three months
ended June 30,
2023

Millions of yen

Millions of yen

59,749(52,385)

66,523(61,287)

Gross profit

7,363

5,235

Selling, general and administrative expenses
Other operating income(1,707)39(2,211)
38

(31)

(12)

27

–

Operating profit

5,691

3,050

Finance income
Finance costs

636
(644)

565
(479)

Other non-operating income

425–

Profit before tax
Income tax expenses

6,108(1,840)

3,137
(741)

Profit

4,268

2,396

Profit attributable to:
Owners of parent

4,268

2,396

Other operating expenses
Share of profit (loss) of investments accounted forusing equity method

Non-controlling interests
Profit

–

–

4,268

2,396

54.27
49.11

31.26
28.56

Earnings per share
Basic earnings per share (Yen)
Diluted earnings per share (Yen)－ 6 －(3) Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended
June 30, 2023

Profit

The three months
ended June 30,
2022

The three months
ended June 30,
2023

Millions of yen

Millions of yen

4,268

2,396

(0)

–

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

(41)

(45)

Share of other comprehensive income ofinvestments accounted for using equity method0–

Total items that will not be reclassified to profit
or loss

(42)

(45)

Cash flow hedges
Translation adjustments of foreign operations

3,224
1,526

5,891
2,447

Total items that may be reclassified to profit or

4,751

8,338

4,709

8,292

8,977

10,688

Owners of parent
Non-controlling interests

8,977
–

10,688–Comprehensive income

8,977

10,688Items that may be reclassified to profit or loss

loss
Other comprehensive income, net of tax
Comprehensive income
Comprehensive income attributable to:－ 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
incomeDividends
Changes due to loss ofcontrol of subsidiaries
Reclassified from othercomponents of equity toretained earnings
Share-based paymenttransactions
Total transactions withownersBalance at June 30, 2022

7,790
–

11,955–(1,819)–92,353
4,268(1,390)–(3,748)
–

–

–

–

–

1,526

3,224

–

–

–

4,268

1,526

3,224

–

–

–

(3,538)

–

–

–

–

–

–

–

–

–

–

–

(41)

–

–

–

38

–

–

–

–

–

38

–

(3,580)

–

–

7,790

11,994(1,819)93,040136(523)(Millions of yen)
Equity attributable to owners of parent
Other components of equity
FinancialassetsRemeasuremeasured atments offair value
definedthrough otherbenefitcomprehenplans
sive income

Balance at April 1, 2022
ProfitOther comprehensive
incomeTotal comprehensive
incomeDividends
Changes due to loss ofcontrol of subsidiaries
Reclassified from othercomponents of equity toretained earnings
Share-based paymenttransactions
Total transactions withownersBalance at June 30, 2022

Total

Total

Total equity

(3)
–

–
–

(5,142)–

105,137
4,268

105,137
4,268

(0)

(41)

4,709

4,709

4,709

(0)

(41)

4,709

8,977

8,977

–

–

–

(3,538)(3,538)

0

–

0

0

0

–

41

41

–

–

–

–

–

38

38

0

41

42

(3,499)(3,499)

(3)

–

(390)

110,615

110,615－ 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 June 30, 2023

7,790
–

12,103–(5,925)–96,319
2,396

(886)
–

(2,443)
–

–

–

–

–

2,447

5,891

–

–

–

2,396

2,447

5,891

–
–

–
–

(0)
–

–
(3,448)

–
–

–
–

–

–

–

(45)

–

–

–

58

–

–

–

–

–

58

(0)

(3,494)

–

–

7,790

12,162(5,925)

95,220

1,560

3,447

(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 June 30, 2023

Total

Total

Total equity––(3,330)–106,957
2,396

106,957
2,396

(45)

8,292

8,292

8,292

(45)

8,292

10,688

10,688

–
–

–
–

(0)
(3,448)(0)(3,448)

45

45

–

–

–

–

58

58

45

45

(3,390)(3,390)–

5,007

114,255

114,255－ 9 －(5) Condensed Consolidated Statements of Cash FlowsThe three months
ended June 30,
2022

The three months
ended June 30,
2023

Millions of yen

Millions of yen

Profit before tax
Depreciation and amortization

6,108
801

3,137
879

Impairment loss
Finance income and finance cost

0
1,595

–
1,211

Other non-operating income and expenses
Share of loss (profit) of investments accounted for using equity

(425)
(27)

–
–

methodDecrease (increase) in inventories(7,419)(3,185)Decrease (increase) in trade and other receivables
Increase (decrease) in trade, loans and other payables

36,232(30,416)(32,585)
34,892Other, net(4,104)207

Subtotal

2,344

4,557

163
(37)

92
(86)

Income taxes paid
Income taxes refunded(4,010)186(1,555)–

Net cash provided by (used in) operating activities(1,353)

3,007

Cash provided by (used in) operating activities

Interest and dividend income received
Interest expenses paid

Cash provided by (used in) investing activities
Payments into time deposits

(98)

(103)

Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment

49(1,598)

2,735
(975)

Proceeds from sales of property, plant and equipment
Purchase of intangible assets

11
(185)

3
(372)

Payments for loans receivable
Proceeds from sales of shares of subsidiaries and affiliated

–
1,371

(13,264)–

companies
Other, net

1,109

(117)

Net cash provided by (used in) investing activities
Cash provided by (used in) financing activities659(12,095)

Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable

7,793
–

(24)
13,737Purchase of treasury stock
Cash dividends paid–
(3,527)(0)(3,428)Other, net

(82)

(84)

4,183

10,199(48)(1,964)

Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period

3,440
6,127

(852)
17,952

Cash and cash equivalents at end of period

9,568

17,099Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents－ 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 three months ended June 30, 2023 comprise the Company and its
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 rules.
(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 threemonths ended June 30, 2023 are the same as those for the consolidated financial statements for the fiscal
year ended March 31, 2023.
The income tax for the three months ended June 30, 2023 was calculated based on the estimated averageannual 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 three months ended June 30, 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 three months ended June 30, 2022 (from April 1, 2022 to June 30, 2022)
Reporting segment(Millions of yen)

Precious
MetalsBusiness

Environmental
Preservation
Business

Subtotal

55,3044,444

59,749–59,749–59,749

–

–

–

–

–

–

–

55,3044,444

59,749–59,749–59,749

4,993

670

5,663

27

5,691

–

5,691

Other

Total

Adjustments

Consolidated

Revenue
External
revenue
Intersegment
revenue
Total
Operating profit
by businesssegment
Finance income

636

Finance costs
Other non-

(644)
425

operating income
Profit before tax

6,108－ 12 －

For the three months ended June 30, 2023 (from April 1, 2023 to June 30, 2023)
Reporting segment(Millions of yen)

Precious
MetalsBusiness

Environmental
Preservation
Business

Subtotal

62,435

4,087

66,523–

66,523–

66,523

–

25

25

–

25

(25)

–

62,435

4,113

66,548–66,548(25)

66,523

2,643

407

3,050

–

3,050

–

3,050

Other

Total

Adjustments

Consolidated

Revenue
External
revenue
Intersegment
revenue
Total
Operating profit
by businesssegment
Finance income

565

Finance costs(479)

Profit before tax

3,137

6. Subsequent events
Not applicable－ 13 －