Note: This document has been translated from a part of the Japanese original for reference purposes only. In the event of any
discrepancy between this translated document and the Japanese original, the original shall prevail.

November 10, 2022

Consolidated Financial Results
for the Six Months Ended September 30, 2022
(Under Japanese GAAP)
Company name:
Japan Communications Inc.
Listing:
Tokyo Stock Exchange: Prime Market
Securities code:
9424
URL:
http://www.j-com.co.jp/
Representative:
Naohisa Fukuda, Representative Director-President
Inquiries:
Mitsuru Kodaira, Executive Officer and CFO
Telephone:+81-3-5776-1700
Scheduled date to file quarterly securities report:
November 11, 2022
Scheduled date to commence dividend payments:–
Preparation of supplementary material on quarterly financial results: Yes
Holding of quarterly financial results briefing:
Yes (for institutional investors, analysts andthe press)(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the six months ended September 30, 2022 (from April 1, 2022 toSeptember 30, 2022)(1) Consolidated operating results (cumulative)
Net revenue
Six months ended(Percentages indicate year-on-year changes.)

Operating profit

Millions of yen%

Millions of yen%

September 30, 2022

2,762

25.4

293

458.3

September 30, 2021

2,204

41.4

52

–

Note: Comprehensive income

Millions of yen

For the six months ended September 30, 2022:
For the six months ended September 30, 2021:

Basic earnings
per share
Six months ended

Profit attributable toowners of parent

Ordinary profit
%

335

495.0

56

–

¥251 million¥52 million

Millions of yen

%

301

364.7

64

–

[376.1%][–%]

Diluted earnings
per share
Yen

Yen

September 30, 2022

1.83

1.81

September 30, 2021

0.39

0.39

(2) Consolidated financial position
Total assets
As of

Net assets

Equity-to-asset ratio

Net assets per share

Millions of yen

Millions of yen

September 30, 2022

2,610

1,112

37.8

5.97

March 31, 2022

1,944

785

33.6

3.97

Reference:

EquityAs of September 30, 2022:
As of March 31, 2022:¥985 million¥652 million%

Yen2. Cash dividends
Annual dividends per shareFirst quarter-end
Yen

Fiscal year ended
March 31, 2022
Fiscal year ending
March 31, 2023

Second quarter-end

Third quarter-end

Yen

Yen

–

0.00

–

0.00

Fiscal year ending
March 31, 2023
(Forecast)Fiscal year-end

Total

Yen

Yen

–

0.00

0.00

–

0.00

0.00

Note: Revisions to the forecast of cash dividends most recently announced: None

3. Overview and management policy for the fiscal year ending March 31, 2023
Since its founding in 1996, the Company has propounded and implemented the MVNO business model, an
innovative form of telecommunications business, having developed its business with the mission of transferring(communicating) data safely, securely, and conveniently. Specifically, the Company is engaged in threebusinesses: mobile communications business (SIM business), communications business through local mobile
networks (local 4G/5G), and digital ID (FPoS: Fintech Platform over SIM) business for use on smartphones.
The Company plans to build a stable income stream by continuing the evolution of the SIM business, as well as
to develop the local 4G/5G business and FPoS business to become the pillar of future earnings by investing in
the two businesses.
In the local 4G/5G business, the Company aims to build advanced showcases in the U.S. and leverage theexperience to expand in Japan.
In the FPoS business, the Company has acquired certification under the Digital Signature Act for “my Digital
Certificate” (the issuing entity is my FinTech Inc., a subsidiary of the Company.) based on its patented FPoS
technology, and are working on its actual use as a digital ID that can be used safely, securely, and conveniently
on smartphones.
With the surrounding situation above described, the management of the Company perceives a market
capitalization of 500 billion yen as the growth business scale in three to five years from the launch ofcommercial service of FPoS (launched on October 21, 2022).

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change
in scope of consolidation): None
(2) Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements:
None(3) Changes in accounting policies, changes in accounting estimates, and restatement(i) Changes in accounting policies due to revisions to accounting standards and other regulations: None(ii) Changes in accounting policies due to other reasons: None(iii) Changes in accounting estimates: None(iv) Restatement: None
(4) Number of issued shares (common shares)(i)

Total number of issued shares at the end of the period (including treasury shares)
As of September 30, 2022

165,009,239 shares

As of March 31, 2022

164,258,239 shares(ii) Number of treasury shares at the end of the period
As of September 30, 2022

15,004 shares

As of March 31, 2022

15,004 shares(iii) Average number of shares outstanding during the period (cumulative from the beginning of the fiscal
year)
Six months ended September 30, 2022

164,436,114 shares

Six months ended September 30, 2021

164,243,235 shares* Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants
or an audit corporation.
* Proper use of earnings forecasts, and other special matters
A financial results meeting will be held on Friday, November 11, 2022 for institutional investors, analysts andthe press. The Company plans to post a video of this financial results meeting on its website promptly after the
meeting is held.

1. Qualitative Information on Results for the Six Months Ended September 30(1) Explanation on operating results
Since its founding in 1996, the Company has propounded and implemented the MVNO business model, an
innovative form of telecommunications business, having developed its business with the mission oftransferring (communicating) data safely, securely, and conveniently. Specifically, the Company is engaged inthree businesses: mobile communications business (SIM business), communications business through local
mobile networks (local 4G/5G), and digital ID (FPoS: Fintech Platform over SIM) business for use on
smartphones.
The Company plans to build a stable income stream by continuing the evolution of the SIM business, as wellas to develop the local 4G/5G business and FPoS business to become the pillar of future earnings by investingin the two businesses.
(i) Mobile Communications Business (SIM business)
In July 2020, the Company launched the “Nihon Tsushin SIM,” which provides flat-rate voice plans
equivalent to that of major mobile operators, following the June 2020 ruling by the Minister for Internal
Affairs and Communications that set the prices of wholesale telecommunication services relating to voicecommunications services provided to the Company from NTT DOCOMO, INC. shall not exceed theamount of the appropriate costs under efficient management plus appropriate profit. Net sales of “Nihon
Tsushin SIM” are increasing steadily, and with the increase in MNP transfers from major mobile operatorsand major MVNOs, it is beginning to become recognized as a main line.
Although the Company has timely introduced new additional plans to “Nihon Tsushin SIM,” since April
2022, the Company began supporting eSIM, which is embedded in devices such as smartphones, inadvance of other MVNO operators (announced on April 6, 2022). An eSIM is a SIM by which subscriber
identity information (profiles) necessary for using telecommunication services can be remotely written to
the devices which supports eSIM such as iPhone and users can change mobile service operators without
replacing SIM cards, as was the case before. Because this makes users can use multiple lines of different
mobile operators and/or can use separate phone numbers such as for private and business purposes on thesame one (1) smartphone, it is expected to become more popular in the future.
In addition, the Company has requested NTT DOCOMO, INC. for an interconnection of voice networks
in June 2022 (announced on June 10, 2022). This request, which the Company had been considering forlong time, was made as the Information and Communications Council of the Ministry of Internal Affairs
and Communications presented a policy of allocating mobile numbers (090, etc.) to MVNOs in December
2021. The Company will secure a stable business foundation by procuring both data and voicecommunication networks through interconnection and aim to become a “Neo Carrier” who can provide
comparable services as mobile operators without owing mobile base station.
(ii) Local 4G/5G Business through Local Mobile Networks
A U.S. subsidiary of the Company operates a business that provides SIMs used for connections with local
mobile networks in the U.S. market. For connections with local mobile networks, it is necessary to write alarge amount of highly specialized information to SIMs. The Company provides SIMs that are able toconnect to local mobile networks set up by partner and customer companies by accumulating and utilizing
technologies and expertise in relevant fields through the U.S. subsidiary. By utilizing achievements in theleading U.S. market, the Company is working on similar initiatives for the local 4G/5G business in Japan.
(iii) Digital ID (FPoS) Business for Use on Smartphones
Under the “Vision for a Digital Garden City Nation” (vision to realize a comfortable life for everyone sothat they enjoy benefits from digitalization, leaving no one behind by solving regional issues throughdigital implementation) which was declared by the Japanese government in 2021, it was announced onJune 17, 2022 that project applications by Maebashi City, Ebetsu City (Hokkaido Prefecture), and Gunma
Prefecture were adopted.
Among the above, in the project of “Maebashi living-tech promotion business,” which was applied by
Maebashi City, a business corporation named Mebuku Ground Inc., was established on October 6, 2022,

with jointly investment by prominent companies and prominent financial institutions in Gunma
Prefecture, and the above corporation started issuing digital IDs called “mebuku ID” on October 21, 2022.
Users can use “mebuku ID,” on their smartphone for both public services (such as administrative
procedures) and private services.
The “mebuku ID” platform is FPoS based, and the Company will support “mebuku ID” as the first case of
the FPoS business.
Gunma Prefecture and Ebetsu City also plan to use “mebuku ID,” and the Company plans to provide
FPoS based services in these three regions during the current fiscal year.
As a result of the above, the Group’s consolidated net revenue for the six months ended September 30, 2022
were 2,762 million yen, an increase of 558 million yen (up 25.4%) compared to the six months ended
September 30, 2021 (hereinafter referred to as the “same period of the previous year”). This was mainly due
to an increase in sales from the flat-rate or semi-flat rate voice services of “Nihon Tsushin SIM.”
Cost of sales was 1,577 million yen, an increase of 214 million yen (up 15.7%) compared to the same periodof the previous year. Increases in cost of sales compared to increases in net sales are largely avoidable because
the mobile networks of both data and voice communications procured by the Company from NTT DOCOMO,
INC. have been set not to exceed the amount of the appropriate costs under efficient management plus
appropriate profit.
As a result, gross profit amounted to 1,185 million yen, an increase of 344 million yen (up 41.0%) comparedto the same period of the previous year.
Operating profit amounted to 293 million yen (52 million yen for the same period of the previous year) andprofit attributable to owners of parent amounted to 301 million yen (64 million yen for the same period of theprevious year).
Financial results by business are as follows
Net revenue

For six months ended For six months ended
Year-on-year change
September 30, 2021 September 30, 2022

(Millions of yen)
Year-on-year change(%)

MVNO Business

1,237

1,477

240

19.4

Enabler Business

966

1,285

318

33.0

2,204

2,762

558

25.4

Total

Revenue of 67 million yen (58 million yen in the same period of the previous year) from overseas operationsin the segment information are included in the Enabler Business.
(2) Explanation on financial position(i) Assets, liabilities and net assets
AssetsCurrent assets at the end of the current second quarter were 1,946 million yen, an increase of 536 million yen
compared to the end of the previous year. This was mainly due to increases of 429 million yen in cash anddeposits and 80 million yen in accounts receivable - trade. Of the 1,358 million yen balance of cash anddeposits, 250 million yen is substantially restricted in use as it has been temporarily entrusted as capital tojointly establish a corporation with other companies, etc., by the companies, etc., that plan to make theinvestments. In addition, included in the 291 million yen deposits received balance in liabilities is the sameamount of 250 million yen. Non-current assets were 662 million yen, an increase of 131 million yen comparedto the end of the previous year. This was mainly due to increases of 67 million yen in intangible assets and 57
million yen in investments and other assets.
As a result, total assets amounted to 2,610 million yen, an increase of 666 million yen compared to the end of
the previous year.

Liabilities
Current liabilities at the end of the current second quarter were 1,431 million yen, an increase of 324 million
yen compared to the end of the previous year. This was mainly due to increases of 263 million yen in deposits
received and 48 million yen in valuation reserve for inventory purchase commitments. Included in the 291
million yen deposits received balance is the corresponding 250 million yen in restricted deposits included in
cash and deposits. Non-current liabilities were 66 million yen, an increase of 13 million yen compared to theend of the previous year. This was due to an increase of 14 million yen in long-term unearned revenue.
As a result, liabilities amounted to 1,497 million yen, an increase of 338 million yen compared to the end of
the previous year.
Net assets
Net assets at the end of the current second quarter were 1,112 million yen, an increase of 327 million yen
compared to the end of the previous year. This was mainly due to recording 301 million yen in profit
attributable to owners of parent. Along with decreasing the amounts of capital and capital reserve, on August
10, 2022, the Company implemented an appropriation of surplus. Capital and capital reserve were decreased
by 4,028 million yen and 2,789 million yen, respectively, and the entire decreased amount was transferred toother capital surplus. By transferring the increase in other capital surplus to retained earnings brought forward,
the deficit was covered, and there was no impact on net assets.
As a result, the equity ratio was 37.8% (33.6% at the end of the previous year).
(ii) Status of cash flows
Cash and cash equivalents at the end of the six months ended September 30, 2022 were 1,108 million yen, an
increase of 179 million yen compared to the end of the previous year.
The status of cash flows and their factors during the six months ended September 30, 2022 are as follows.
Cash flows from operating activities
Net cash provided by operating activities totaled 250 million yen (an outflow of 94 million yen in the same
period of the previous year). This was mainly due to an increase in trade receivables of 73 million yen despite
recording of profit before income taxes of 335 million yen.
Cash flows from investing activities
Net cash used in investing activities totaled 75 million yen (an outflow of 214 million yen in the same periodof the previous year). This was mainly due to purchase of intangible assets of 57 million yen.
Cash flows from financing activities
There were no cash flows from financing activities (an inflow of 150 million yen in the same period of theprevious year).
(3) Explanation on future forecast information such as consolidated business forecast
Since its founding in 1996, the Company has propounded and implemented the MVNO business model, an
innovative form of telecommunications business, having developed its business with the mission oftransferring (communicating) data safely, securely, and conveniently. Specifically, the Company is engaged inthree businesses: mobile communications business (SIM business), communications business through local
mobile networks (local 4G/5G), and digital ID (FPoS: Fintech Platform over SIM) business for use on
smartphones.
The Company plans to build a stable revenue stream by continuing the evolution of the SIM business, as wellas to develop the local 4G/5G business and FPoS business to become the pillar of future earnings by investingin the two businesses.
In the local 4G/5G business, the Company aims to build advanced showcases in the U.S. and leverage theexperience to expand in Japan.

In the FPoS business, the Company has acquired certification under the Digital Signature Act for “my Digital
Certificate” (the issuing entity is my FinTech Inc., a subsidiary of the Company.) based on its patented FPoS
technology, and are working on its actual use as a digital ID that can be used safely, securely, andconveniently on smartphones.
With the surrounding situation above described, the management of the Company perceives a market
capitalization of 500 billion yen as the growth business scale in three to five years from the launch ofcommercial service of FPoS (launched on October 21, 2022).

Quarterly consolidated financial statements
Quarterly consolidated balance sheets(Thousands of yen)
As of March 31, 2022
AssetsCurrent assets
Cash and deposits
Accounts receivable - trade
Merchandise
Supplies
Accounts receivable - other
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
VehiclesAccumulated depreciation
Vehicles, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Leased assets
Accumulated depreciation
Leased assets, net
Construction in progress
Total property, plant and equipment
Intangible assets
Patent right
Trademark right
Software
Software in progress
Total intangible assets
Investments and other assets
Investment securities
Leasehold and guarantee deposits
Other
Total investments and other assets
Total non-current assets
Deferred assets
Share issuance costs
Bond issuance costs
Total deferred assets
Total assets

As of September 30, 2022

928,688378,641
47,55271
576
57,440△2,692
1,410,277

1,358,638
458,957
59,57064543
73,035△4,1301,946,680

84,111△83,292
818
7,027△4,881
2,145
795,689△766,969
28,719263,727△263,727－
90,093
121,777

86,193△85,041
1,152
7,027△5,2381,788
858,258△822,611
35,646
263,727△263,727－
90,140128,727

3,834
2,097
73,999125,984
205,916

5,127
3,425
109,195
155,176
272,924

63,281
140,335456
204,073
531,767

71,034145,146
45,005
261,186
662,838

376
1,937
2,313
1,944,359

63
880
944
2,610,463

(Thousands of yen)
As of March 31, 2022
Liabilities
Current liabilities
Accounts payable - trade
Accounts payable - other
Income taxes payable
Unearned revenue
Deposits received
Valuation Reserve For Inventory PurchaseCommitments
Other
Total current liabilities
Non-current liabilities
Long-term accounts payable - other
Long-term unearned revenue
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Foreign currency translation adjustment
Total accumulated other comprehensive
incomeShare acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets

As of September 30, 2022

421,105
85,27062,055
117,785
27,918435,013103,563
70,283116,821291,140

263,951

312,306

127,992
1,106,078

101,919
1,431,047

2,149
50,92053,0701,159,149

1,952
64,937
66,8891,497,937

4,528,440
2,977,376△6,977,888△2,192525,737

529,260
220,827
140,766△2,192888,662

126,815

97,164

126,815

97,164

67,86464,792785,210
1,944,359

81,60545,093
1,112,525
2,610,463

Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive income
Quarterly consolidated statements of income(Thousands of yen)Six months ended
September 30, 2021
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Foreign exchange gains
Share of profit of entities accounted forusing equity method
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expenses
Amortization of share issuance costs
Amortization of bond issuance costs
Miscellaneous losses
Total non-operating expenses
Ordinary profit
Profit before income taxes
Income taxes - current
Total income taxes
ProfitLoss attributable to non-controlling interests
Profit attributable to owners of parent

Six months ended
September 30, 2022

2,204,069
1,362,988
841,080
788,450
52,6292,762,949
1,577,123
1,185,825
891,984
293,841

5
2,463

433,611

1,752

7,571

1,144
5,365

1,792
42,980

28
575
1,057
16
1,677
56,31656,3162,045
2,045
54,271△10,52264,794

286
312
1,057
92
1,747
335,074
335,074
53,64953,649281,424△19,699
301,123(Thousands of yen)
2nd quarter ended
September 30, 2021
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Foreign exchange gains
Share of profit of entities accounted forusing equity method
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expenses
Amortization of share issuance costs
Amortization of bond issuance costs
Miscellaneous losses
Total non-operating expenses
Ordinary profit
Profit before income taxes
Income taxes - current
Total income taxes
ProfitLoss attributable to non-controlling interests
Profit attributable to owners of parent

2nd quarter ended
September 30, 2022

1,147,608
724,547
423,060
394,570
28,4891,409,187
809,888599,299
463,866
135,432

5
2,916

412,370

122

6,249

377
3,421

774
19,398

6
287
528
15
838
31,072
31,072
1,022
1,022
30,050△5,91935,969

33
95
528
55
712
154,118
154,118
24,39324,393
129,725△10,034
139,759

Quarterly consolidated statements of comprehensive income(Thousands of yen)Six months ended
September 30, 2021
ProfitOther comprehensive income
Foreign currency translation adjustment
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to ownersof parent
Comprehensive income attributable to noncontrolling interests

Six months ended
September 30, 2022

54,271

281,424△1,388△1,38852,883△29,651△29,651
251,773

63,405

271,472△10,522△19,699

(Thousands of yen)
2nd quarter ended
September 30, 2021
ProfitOther comprehensive income
Foreign currency translation adjustment
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to ownersof parent
Comprehensive income attributable to noncontrolling interests

2nd quarter ended
September 30, 2022

30,050129,725△2,624△2,62427,426△11,645△11,645
118,079

33,345

128,114△5,919△10,034

Quarterly consolidated statement of cash flows(Thousands of yen)Six months ended
September 30, 2021
Cash flows from operating activities
Profit before income taxes
Depreciation
Interest and dividend income
Interest expenses
Share of loss (profit) of entities accounted
for using equity method
Foreign exchange losses (gains)
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Decrease (increase) in accounts receivable other
Increase (decrease) in unearned revenue
Increase (decrease) in Long-term unearned
revenue
Increase/decrease in consumption taxes
payable/consumption taxes refund receivable
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating
activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Proceeds from refund of leasehold andguarantee deposits
Payments of leasehold and guarantee deposits
Other, net
Net cash provided by (used in) investing
activities
Cash flows from financing activities
Repayments of long-term borrowings
Proceeds from share issuance to noncontrolling shareholders
Net cash provided by (used in) financing
activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash
equivalents
Cash and cash equivalents at beginning of
periodCash and cash equivalents at end of period

Six months ended
September 30, 2022

56,3168,688△5
28335,074
17,998△4286△1,752△7,571△1,591△2,641
4,202△81,835△35,263△73,711△9,21012,111△6,92035△34,977△6,116

8,324

4,083

△42,328△38,808

5,135△89,3565△28△4,63079,045277,949
4△67△27,838△94,010250,047△87,651△124,639△16,673△57,753－

3,013△2,203△336△3,650－△214,831△75,065△9,600－160,050－

150,450

－

246

4,967

△158,145

179,950

1,025,466

928,688※ 867,320※ 1,108,638