Consolidated Financial Results
for the Nine Months Ended December 31, 2023
[IFRS]
February 14, 2024
Company name: Shinwa Co., Ltd.
Stock exchange listing: Tokyo Stock Exchange and Nagoya Stock Exchange
Code number: 3447
URL: http://www.shinwa-jp.com/en/relation/index.html
Representative: Kurio Noritake, President and Representative Director
Contact: Mitsuyoshi Hirasawa, Director, Executive Officer, General Manager of Administration Headquarters
Phone: +81-584-66-4436
Scheduled date of filing the quarterly securities report: February 14, 2024
Scheduled date of commencing dividend payments: –Availability of supplementary briefing material on quarterly financial results: Yes
Schedule of quarterly financial results briefing session: None
(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Nine Months Ended December 31, 2023
(April 1, 2023 to December 31, 2023)(1) Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Revenue
Operating profit
Profit before tax
ProfitNine months ended
Million yen%
Million yen%
Million yen%
Million yen%
December 31, 2023
9,675 (20.2)
694 (50.0)656 (50.9)
441 (52.2)
December 31, 2022
12,130(4.0)
1,389 (26.8)
1,338 (27.4)
923 (27.0)

Nine months ended
December 31, 2023
December 31, 2022

Profit attributable toowners of parent

Comprehensive
incomeMillion yen%

Million yen

%

Yen

Yen

439
932

(52.9)(27.8)

444
914(51.4)(28.0)

31.58
67.06

–
67.05

Basic earnings
per share

Diluted earnings
per share(2) Consolidated Financial Position
Total assets
As of December 31, 2023
As of March 31, 2023

Total equity

Equity attributableto owners of parent
to total assets

Equity attributableto owners of parent

Million yen

Million yen

Million yen%

20,871
21,294

15,33915,552

15,33015,54573.5
73.0

2. Dividends
1stquarter-end

2ndquarter-end

Yen

Yen

Annual dividends
3rdYear-endquarter-end

Fiscal year ended–
0.00
March 31, 2023
Fiscal year ending–
16.00
March 31, 2024
Fiscal year ending
March 31, 2024 (Forecast)
Note: Revision to the dividends forecast announced most recently: None

Total

Yen

Yen

Yen

–

32.00

32.00

16.00

32.00

–

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2024
(April 1, 2023 to March 31, 2024)(% indicates changes from the previous corresponding period.)
Revenue
Operating profit
Profit before tax
ProfitFull year

Million yen%

Million yen%

Million yen%

15,100

2.3

1,371

(8.7)

1,317

(8.2)

Profit attributable toowners of parent
Million yen

Million yen%

907 (8.0)

Basic earnings per share%

Yen

Full year
907 (10.0)
65.24
Note: Revision to the financial results forecast announced most recently: None
* Notes:(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in change inscope of consolidation): None
(2) Changes in accounting policies and changes in accounting estimates
1) Changes in accounting policies required by IFRS: None
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting estimates: None
(3) Total number of issued shares (common shares)
1) Total number of issued shares at the end of the period (including treasury shares):December 31, 2023: 14,103,000 shares
March 31, 2023: 14,103,000 shares2) Total number of treasury shares at the end of the period:
December 31, 2023: 198,634 shares
March 31, 2023: 192,518 shares
3) Average number of shares during the period:
Nine months ended December 31, 2023: 13,905,744 shares
Nine months ended December 31, 2022: 13,901,762 shares*These quarterly consolidated financial results are outside the scope of quarterly review by certified public
accountants or auditing corporations.
*Explanation of the proper use of financial results forecast and other notes
Financial results forecasts were prepared based on information available at the time of the announcement of thisdocument, and actual results may differ from the forecasts owing to a wide range of factors. For the conditions thatform the assumptions for the financial results forecasts, please refer to (4) Explanation of Consolidated Financial
Results Forecast and Other Forward-Looking Information in 1. Qualitative Information on Quarterly Financial
Results on page 4 of the attachments.

Table of Contents
1. Qualitative Information on Quarterly Financial Results ................................................................
(1) Explanation of Operating Results ..............................................................................................
(2) Explanation of Financial Position ..............................................................................................
(3) Overview of Cash Flows ............................................................................................................
(4) Explanation of Consolidated Financial Results Forecast and Other Forward-Looking
Information ................................................................................................................................

2
2
3
4
4

2. Condensed Quarterly Consolidated Financial Statements and Primary Notes ............................... 5(1) Condensed Quarterly Consolidated Statement of Financial Position ......................................... 5(2) Condensed Quarterly Consolidated Statements of Profit or Loss and Comprehensive Income . 7(3) Condensed Quarterly Consolidated Statement of Changes in Equity........................................... 9(4) Condensed Quarterly Consolidated Statement of Cash Flows ................................................... 11(5) Notes to Condensed Quarterly Consolidated Financial Statements ........................................... 12(Notes on going concern assumption) ................................................................................... 12(Significant subsequent events)............................................................................................. 121

1. Qualitative Information on Quarterly Financial Results(1) Explanation of Operating Results
During the first nine months of the current fiscal year, the Japanese economy was supported by upturns
in consumer spending, capital expenditures and employment and other positive trends in social activities.
However, the outlook remains uncertain as there is still a risk of an economic downturn due to the prolonged
weakness of the yen, high prices of materials and resources, concerns about the outlook for the Chinese
economy, and the conflicts in the Middle East and Ukraine.
In the construction industry, which is the main source of demand for our products, construction
investments were generally stable, amounting to ¥37 trillion between April and November 2023 (up 2.4%
year on year), according to “Comprehensive Construction Statistics” published by the Ministry of Land,
Infrastructure, Transport and Tourism. However, according to “Building Starts Statistics” by the said ministry,
the number of residential and non-residential construction starts during the same period decreased 6.6% fromone year earlier to 594,496 and the total floor area of construction starts was down 10.2% to 70,249 thousandsquare meters. Although construction investments increased, the level of construction starts is low. This ismainly the result of the high cost and shortage of building materials as well as the shortage of construction
workers and rising wages for these workers. The Japanese government is firmly committed to making
consistent and rapid progress with measures to increase the country’s resilience to natural disasters as unusual
weather events become increasingly severe and frequent. Furthermore, large urban redevelopment projects
are likely to continue for many more years.
In this difficult business climate, there were many activities for generating sales that included proposals
to customers that combine purchases and rentals of scaffolding for more flexibility. In addition, we madeprogress with preparations for increasing sales in categories where long-term demand growth is expected andof new products for projects for resilience to natural disasters. For example, we continued to supply our multilevel linked scaffolding, which is ideal for high-rise buildings, and started selling and renting Rapid Floor™,a suspended system scaffold that was developed with a large bridge construction company and construction
equipment leasing company.
In the Logistics Equipment Division, there was a decline in orders even though demand is generally
recovering. The main reason is variations in different industries regarding the volume and timing of therequired equipment. A delay in the recognition of sales resulting from a large logistics warehouse order also
affected the performance of this division. Sales activities are aimed at adding more market sectors for logistics
equipment by identifying opportunities involving demand and projects in industries not yet served by thisdivision.
Activities to hold down expenses are continuing. To maintain sound relationships with partner companies
and a production framework capable of restoring the volume of products we supply, we responded to requests
from these companies to revise prices. Selling, general and administration expenses decreased because of abig downturn in shipping and delivery expenses due to the smaller volume of products shipped. To maintainthe soundness of our organization, we increased expenditures and benefits for employees. There were also
expenses for the start of a shareholder benefit program as part of measures to distribute earnings toshareholders.
As a result, revenue for the first nine months decreased 20.2% from one year earlier to ¥9,675 million.
Operating profit was down 50.0% to ¥694 million, profit before tax was down 50.9% to ¥656 million, andprofit attributable to owners of parent was down 52.9% to ¥439 million.
The following section explains the performance of business divisions because the Shinwa Group has one
business segment.
21) Scaffolding Equipment Division
Customers are continuing to rent rather than purchase scaffolding equipment because of the high prices
of materials and products and the rising wages for construction workers since the third quarter of the previous
fiscal year. There are also challenges due to postponements and delays of construction projects caused by theshortage of construction workers. Although the demand for scaffolding equipment is stable, some customers
are pushing back purchases of wedge binding type scaffolding. In addition, the sales volume decreased year
on year because there was a large volume of purchases in the first nine months of the previous fiscal year
prior to price revisions.
Sales in this division have been recovering primarily because of the large volume of scaffolding rentals
since October and strong demand for next-generation scaffolding. However, a large order that was expected
earlier in the fiscal year has been delayed to the fourth quarter.
As a result, revenue for the first nine months in the Scaffolding Equipment Division decreased 15.3% to¥7,182 million.
2) Logistics Equipment Division
The Logistics Equipment Division received orders, primarily for large logistics warehouse equipment
and other repeat projects, steadily during the first nine months because of a higher level of production in manyindustries. Sales decreased because of a decline in the volume of orders for bulk containers for shipping
liquids and the delay to the fourth quarter of one-time sales of products for large logistics warehouses, thetransportation of materials for electrical equipment and other applications.
As a result, revenue for the first nine months in the Logistics Equipment Division decreased 31.7% to¥2,493 million.

Name of product and service

Scaffolding
equipment

Logistics
equipment

For the nine months ended
December 31, 2022

(Thousand yen)
For the nine months ended
December 31, 2023

5,155,426

3,877,435

1,278,559

1,297,181

2,048,569

2,007,720

8,482,555
3,648,386
3,648,386
12,130,942

7,182,337
2,493,087
2,493,087
9,675,425

Wedge binding typescaffolding
Next generation
scaffolding
Other scaffolding
equipment
Subtotal
Pallets
Subtotal
Total

Note: Revenue stated in other scaffolding equipment and pallets includes revenue from leases under IFRS 16 of¥416,811 thousand in the nine months ended December 31, 2022 and ¥345,409 thousand in nine months
ended December 31, 2023.

(2) Explanation of Financial Position(Assets)
Current assets at the end of the third quarter of the current fiscal year decreased by ¥378 million fromthe end of the previous fiscal year to ¥7,583 million, mainly due to factors such as a decrease in cash and cash
equivalents of ¥409 million and a decrease in inventories of ¥303 million despite an increase in trade andother receivables of ¥267 million. Non-current assets decreased by ¥44 million from the end of the previous
fiscal year to ¥13,287 million. As a result, total assets decreased by ¥423 million from the end of the previous
fiscal year to ¥20,871 million.

3

(Liabilities)
Current liabilities at the end of the third quarter of the current fiscal year decreased by ¥2,163 million
from the end of the previous fiscal year to ¥3,078 million, mainly due to factors such as a decrease inborrowings of ¥2,752 million due to the refinancing of the syndicated loan. Non-current liabilities increasedby ¥1,952 million from the end of the previous fiscal year to ¥2,453 million, mainly due to factors such as anincrease in borrowings of ¥1,960 million due to the refinancing of the syndicated loan. As a result, total
liabilities decreased by ¥210 million from the end of the previous fiscal year to ¥5,532 million.
(Equity)
Total equity at the end of the third quarter of the current fiscal year decreased by ¥213 million from theend of the previous fiscal year to ¥15,339 million. This was mainly attributable to factors such as the postingof profit attributable to owners of parent of ¥439 million and dividends paid of ¥667 million.

(3) Overview of Cash Flows
Cash and cash equivalents (hereinafter “cash”) at the end of the first nine months of the current fiscal
year was ¥1,654 million, a decrease of ¥409 million from the end of the previous fiscal year.
Cash flows from each activity for the first nine months of the current fiscal year and their primary factors
are as follows:(Cash flows from operating activities)
Net cash provided by operating activities for the first nine months of the current fiscal year was ¥1,529
million, an increase of ¥1,366 million year on year. Main factors affecting cash inflows were profit before taxof ¥656 million, an increase in trade and other payables of ¥563 million, depreciation and amortization of¥434 million and a decrease in inventories of ¥303 million. The main factors affecting cash outflows wereincome taxes paid of ¥351 million and an increase in trade and other receivables of ¥269 million.
(Cash flows from investing activities)
Net cash used in investing activities for the first nine months of the current fiscal year was ¥396 million,a decrease of ¥198 million year on year. The main factors affecting cash outflows were purchase of property,
plant and equipment of ¥390 million.
(Cash flows from financing activities)
Net cash used in financing activities for the first nine months of the current fiscal year was ¥1,543 million,
an increase of ¥453 million year on year. Main factors include proceeds from long-term borrowings of ¥2,500
million due to the refinancing of the syndicated loan and repayments of long-term borrowings of ¥3,250
million.

(4) Explanation of Consolidated Financial Results Forecast and Other Forward-Looking Information
There are no revisions to the fiscal year forecast for consolidated sales and earnings that was announced
on May 12, 2023, because examinations are under way concerning the outlook for changes in market
conditions and results of operations. An announcement will be made promptly if any revisions are needed.

42. Condensed Quarterly Consolidated Financial Statements and Primary Notes(1) Condensed Quarterly Consolidated Statement of Financial Position(Thousand yen)
As ofDecember 31, 2023

As ofMarch 31, 2023
AssetsCurrent assets
Cash and cash equivalents

2,063,796

1,654,684

Trade and other receivables

2,450,073

2,718,005

Inventories

3,406,646

3,103,298

Other current assets

41,560107,565

Total current assets

7,962,077

7,583,554

2,403,561

2,394,131

Non-current assets
Property, plant and equipment
Right-of-use assets

240,048210,289

Goodwill

9,221,769

9,221,769

Intangible assets

1,387,641

1,362,648

Other financial assets

68,25990,594

Other non-current assets

11,537

8,455

Total non-current assets

13,332,817

13,287,889

21,294,895

20,871,443

Total assets5

(Thousand yen)
As ofMarch 31, 2023

As ofDecember 31, 2023

Liabilities and equity
Liabilities
Current liabilities
Trade and other payables
Borrowings

664,207

1,278,635

4,242,189

1,490,019

Income taxes payable

122,676–

Other financial liabilities

89,51067,513

Other current liabilities

122,936

242,201

Total current liabilities

5,241,520

3,078,370–

1,960,078

Non-current liabilities
Borrowings
Provisions

45,122

44,689Other financial liabilities

170,269

150,464

Deferred tax liabilities

281,743294,693

Other non-current liabilities

3,900

3,900

Total non-current liabilities

501,035

2,453,825

5,742,555

5,532,196

Share capital

153,576

153,576

Capital surplus

6,918,346

6,918,346

Retained earnings

8,621,667

8,393,179

Treasury shares(151,505)(151,505)

3,710

16,673

15,545,795

15,330,271

Total liabilities
EquityOther components of equity
Total equity attributable to owners of parent
Non-controlling interests
Total equity
Total liabilities and equity

6

6,543

8,975

15,552,339

15,339,247

21,294,895

20,871,443

(2) Condensed Quarterly Consolidated Statements of Profit or Loss and Comprehensive Income
Condensed Quarterly Consolidated Statement of Profit or Loss
For the Nine-Month Period(Thousand yen)
For the nine months ended
December 31, 2022

For the nine months ended
December 31, 2023

Revenue

12,130,942

9,675,425

Cost of sales(9,211,006)(7,507,067)

Gross profit

2,919,936

2,168,357

Selling, general and administrative expenses(1,499,333)(1,465,314)

Other income

13,276

26,598Other expenses(44,483)(35,463)

Operating profit

1,389,396

694,178

Finance income

641

1,068

Finance costs(51,824)(38,579)

Profit before tax

1,338,213

656,667

Income tax expense(415,176)(215,287)

Profit923,036441,379

Owners of parent

932,238

439,117

Non-controlling interests(9,201)

2,261

Profit923,036441,379

Basic earnings per share (yen)

67.06

31.58

Diluted earnings per share (yen)

67.05

–

Profit attributable toEarnings per share7

Condensed Quarterly Consolidated Statement of Comprehensive Income
For the Nine-Month Period(Thousand yen)
For the nine months ended
December 31, 2022
Profit

For the nine months ended
December 31, 2023

923,036441,379

1,468

4,645

1,468

4,645

104

348

(9,626)(1,636)(9,522)(1,288)Other comprehensive income
Items that will not be reclassified to profit or loss
Net change in fair value of equity instruments
designated as measured at fair value through othercomprehensive income
Total of items that will not be reclassified to profit
or loss
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign
operations
Cash flow hedges
Total of items that may be reclassified to profit orloss
Other comprehensive income, net of tax
Comprehensive income(8,053)

3,356

914,983

444,735

924,133

442,303

Comprehensive income attributable to
Owners of parent
Non-controlling interests(9,150)2,432Comprehensive income

914,983

444,7358

(3) Condensed Quarterly Consolidated Statement of Changes in Equity
For the Nine Months Ended December 31, 2022 (From April 1, 2022 to December 31, 2022)(Thousand yen)SharecapitalBalance at beginning of
periodCapital surplus

Retainedearnings

Treasury shares

153,576

6,919,802

8,211,397(163,101)

Profit––932,238–

Other comprehensive
income––-–Comprehensive income––

932,238–

Dividends––(597,517)–

Share-based paymenttransactions

–

(131)

-

7,971

Total transactions withowners–(131)(597,517)

7,971

153,576

6,919,671

8,546,117(155,130)

Balance at
end of period(Thousand yen)
Other components of equity
Financial assets
Exchangemeasured at fairdifferences onvalue throughtranslation ofotherforeigncomprehensive
operations
incomeBalance at beginning of
periodCash flow
hedgesTotal equity
attributable to Non-controllinginterests
owners ofparent

Total

Equity

(138)

9,203

–

9,065

15,130,740

27,84015,158,581

–

–

–

–

932,238(9,201)

923,036

Other comprehensive
income1,468

53(9,626)(8,104)(8,104)51(8,053)Comprehensive income

1,468

53

(9,626)(8,104)924,133(9,150)914,983

Dividends

–

–

–

–

(597,517)–(597,517)

Share-based paymenttransactions

–

–

–

–

7,839

–

7,839

Total transactions withowners––––(589,678)–(589,678)

1,330

9,257

(9,626)961

15,465,196

18,68915,483,886

ProfitBalance at
end of period

9For the Nine Months Ended December 31, 2023 (From April 1, 2023 to December 31, 2023)(Thousand yen)SharecapitalBalance at beginning of
periodCapital surplus

Retainedearnings

Treasury shares

153,576

6,918,346

8,621,667(151,505)

Profit––439,117–

Other comprehensive
income––-–Comprehensive income––

439,117–

Dividends––(667,605)–

Share-based paymenttransactions

–

–

-

–

Total transactions withowners––(667,605)–

153,576

6,918,346

8,393,179(151,505)

Balance at
end of period(Thousand yen)
Other components of equity
Financial assets
Exchangemeasured at fairdifferences onvalue throughtranslation ofotherforeigncomprehensive
operations
incomeBalance at beginning of
periodCash flow
hedgesTotal equity
attributable to Non-controllinginterests
owners ofparent

Total

Equity

2,025

9,825

(8,140)3,710

15,545,795

6,543

15,552,339

–

–

–

–

439,1172,261

441,379

Other comprehensive
income4,645

177(1,636)

3,186

3,186

170

3,356

Comprehensive income

4,645

177

(1,636)3,186

442,303

2,432

444,735

Dividends

–

–

–

–

(667,605)–(667,605)

Share-based paymenttransactions

–

–

9,777

9,777

9,777

–

9,777

Total transactions withowners

–

–

9,777

9,777

(657,827)–(657,827)

6,670

10,003–

16,673

15,330,271

8,975

15,339,247

ProfitBalance at
end of period10(4) Condensed Quarterly Consolidated Statement of Cash Flows(Thousand yen)
For the nine months ended
December 31, 2023

For the nine months ended
December 31, 2022
Cash flows from operating activities
Profit before tax

1,338,213

656,667

Depreciation and amortization

453,287

434,039

Finance income and finance costs

51,18337,511

Loss (gain) on sale of fixed assets(5,396)(14,713)

11

5,661

Loss on disposal of property, plant and equipment
Share-based payment expenses

4,694

1,184

Decrease (increase) in inventories(988,194)303,348

Decrease (increase) in trade and other receivables

150,691(269,167)

Increase (decrease) in trade and other payables(221,779)

563,544

Other
SubtotalInterest and dividends received

190,659

183,499

973,371

1,901,575

641

1,068

Interest paid

(34,926)(21,069)

Income taxes paid

(775,869)(351,938)

Income taxes refund
Net cash provided by (used in) operating activities-

142

163,217

1,529,778

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

5,507

14,259Purchase of property, plant and equipment(556,733)(390,952)

Purchase of intangible assets(34,629)(9,632)

Payments for acquisition of financial assets(9,141)(9,752)45(154)(594,950)(396,232)

Proceeds from short-term borrowings

1,425,432

1,000,000

Repayments of short-term borrowings(1,554,979)(1,000,000)

Other
Net cash provided by (used in) investing activities
Cash flows from financing activities

Proceeds from long-term borrowings-

2,500,000

Repayments of long-term borrowings(250,000)(3,250,000)

Payments of financial expenditures
Dividends paid
Repayments of lease liabilities(7,808)(59,482)(599,029)(665,700)(102,801)(67,900)(1,089,186)(1,543,082)(1,304)424(1,522,223)(409,112)

Cash and cash equivalents at beginning of period

3,460,569

2,063,796

Cash and cash equivalents at end of period

1,938,346

1,654,684

Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents11(5) Notes to Condensed Quarterly Consolidated Financial Statements(Notes on going concern assumption)
There is no relevant information.

(Significant subsequent events)
There is no relevant information.

12