Consolidated Financial Results for the Six Months Ended September 30, 2022
(Under Japanese GAAP）
Company name:Securities code:
Representative:
Inquiries:

DKK Co., Ltd.
6706
URL https://denkikogyo.co.jp/
President & Representative(Title)Director
Managing Officer and Head of(Title)Finance Department

Scheduled date to file quarterly
November 14, 2022
securities report:
Preparation of supplementary material
on quarterly financial results:

Yes

Holding of briefing on quarterly
financial results :Yes

November 11, 2022
Listing: Tokyo Stock Exchange(Name) Tadatoshi Kondo(Name) Toshihisa Takayama Phone: +81-3-3216-1671
Scheduled date tocommence dividend
payments:

December 5, 2022

(Yen amounts are rounded down to millions)
1. Consolidated financial results for the six months ended September 30, 2022 (from April 1, 2022 to September 30, 2022)(1) Consolidated operating results(Percentages indicate year-on-year changes.)
Net income attributable
Net sales
Operating income
Ordinary income
to shareholders of parent
company
Millions ofMillions ofMillions ofMillions of
%
%
%
%
yen
yen
yen
yen
Six months ended
13,185(11.3)(1,192)(906)(637)
September 30, 2022
Six months ended
14,870
(5.0)
(281)
(181)
18
September 30, 2021
Note:
Six months ended
Six months ended
Comprehensive(319) Millions of yen (-%)
9 Millions of yen (-%)
September 30, 2022
September 30, 2021
incomeNet income per share

Diluted net income per
share

yen

yen

(56.69)

-

1.52

-

Six months ended
September 30, 2022
Six months ended
September 30, 2021
(2) Consolidated financial position

Total assets

Net assets

Equity ratio

Millions of yen

Millions of yen%

56,04043,741

76.8

56,336

46,60981.5

Six months ended
September 30, 2022
Fiscal year ended March
31, 2022(Reference) Net asset excluding

Six months ended

non-controlling interests

September 30, 2022

43,040 Millions of yen

Fiscal year ended
March 31, 2022

45,903

Millions of yen

2. Dividends
Annual dividends
End of first quarterEnd of second quarterEnd of third quarter

yen

yen

yen

yen

yen

-

0.00

-

60.00

60.00

-

30.00
-

30.00

60.00

Fiscal year ended March 31,
2022
Fiscal year ending March 31,
2023
Fiscal year ending March 31,
2023 (forecast)

Note: Revision to the most recently announced forecast for dividends:

End of fiscal year

Total

None

3. Forecast of consolidated operating results for the fiscal year ending March 31, 2023 (from April 1, 2022 to March 31, 2023)(Percentages indicate year-on-year changes.)
Net income
attributable to
Net income per
Net sales
Operating income
Ordinary income
shareholders of parent
share
company
Millions
Millions
Millions
Millions
%
%
%
%
yen
of yenof yenof yenof yenFull year
37,000
8.9
100
88.3
400
(10.7)
300(57.5)
26.70
Note: Revision to the most recently announced forecast of operating results:

Yes*Notes:(1) Changes in significant subsidiaries during the six months ended September 30, 2022 (changes in specific subsidiaries resulting in
Nonechanges in scope of consolidation):(2) Application of accounting procedures particular to the
preparation of quarterly consolidated financial statements:

None(3) Changes in accounting policies and accounting estimates, and restatement(a) Changes in accounting policies due to revision ofYesaccounting standards, etc.:(b) Changes in accounting policies other than (a):None(c) Changes in accounting estimates:

None(d) Restatement:
None
Note: For details, refer to “2. Quarterly consolidated financial statements and major notes, (3) Notes to quarterly consolidated
financial statements (Changes in accounting policies)” on page 8 of the attached document.
(4) Number of shares issued (common stock)(a) Shares issued (including treasury stock) at

Six months ended
September 30, 2022

14,084,845 sharesFiscal year ended
March 31, 2022

14,084,845 shares(b) Treasury stock at the end of the period

Six months ended
September 30, 2022

3,150,398 sharesFiscal year ended
March 31, 2022

2,430,669 shares(c) Average number of shares during the period(six months)

Six months ended
September 30, 2022

11,236,924 shares

Six months ended
September 30, 2021

11,937,932 sharesthe end of the period*This Quarterly Consolidated Financial Results report is not subject to quarterly review by certified public accountants or an auditing
firm.
*Explanation of appropriate use of earnings forecast, and other special notes
The forecast and other future projections in this report are based on information currently available to the Company and certain
assumptions the Company believes to be reasonable, and are not intended to be a promise by the Company that they will beachieved. Actual results may differ significantly due to various factors. Refer to “1. Qualitative information on quarterly financial
results, (3) Explanation of forecast of consolidated operating results and other future projections” on page 3 of the attachment for
the assumptions used in earnings forecast and notes on the use of earnings forecast.
The Company plans to hold a financial results briefing because we believe it is important to disclose information about theCompany to the financial markets in a timely and appropriate manner. However, the event will be live-streamed to avoid the
COVID-19 infections, as the health and safety of all participants is our first priority. The live-streamed briefing will be available
on the Company’s website at a later date.

Table of Contents of Attachment
1. Qualitative information on quarterly financial results ………………………………………………………………

2(1) Explanation of operating results …………………………………………………………………………………

2(2) Explanation of financial position …………………………………………………………………………………

2(3) Explanation of forecast of consolidated operating results and other future projections …………………………

3

2. Quarterly consolidated financial statements and major notes …………………………………………………………

4(1) Quarterly consolidated balance sheet ………………………………………………………………………………

4(2) Quarterly consolidated statement of income and quarterly consolidated statement of comprehensive income ……

6

Quarterly consolidated statement of income
Six months ended September 30 ……………………………………………………………………………

6

Quarterly consolidated statement of comprehensive income
Six months ended September 30 ……………………………………………………………………………

7(3) Notes to quarterly consolidated financial statements ………………………………………………………………

8(Notes on going concern assumptions) ……………………………………………………………………………

8(Notes in case of significant changes in shareholders’ equity) ……………………………………………………

8(Changes in accounting policies) …………………………………………………………………………………

8(Additional information) …………………………………………………………………………………………

8(Segment information, etc.) ………………………………………………………………………………………

9(Material subsequent events) ……………………………………………………………………………………

10

3. Supplementary information ……………………………………………………………………………………………

11(1) Production, orders and sales ………………………………………………………………………………………

11

- 1 -

1. Qualitative information on quarterly financial results(1) Explanation of operating results
During the six months ended September 30, 2022, the Japanese economy showed signs of gradual recovery as people grewaccustomed to the “life with COVID-19,” although the impacts from the new coronavirus infection still remained. However,there is a risk that the momentum of economic recovery may be lost due to spikes in resources prices induced by the tense
situations in Ukraine and rising prices driven by a cheaper yen. As such, the future of the Japanese economy still remains
uncertain.
In terms of the business environment for the DKK Group, demand is on a gradual recovery as that from capital spending in
the automotive-related industry has recovered slowly. However, corporate earnings have been affected by such factors as spikes
in prices of energy, components, etc. and higher costs of procurement from overseas due to a weaker yen, in addition tocontinuous impacts of semiconductor shortage, restrained customer investments, and the delay in components being delivered
caused mainly by a longer time it now takes for orders for them to be fulfilled.
In such circumstances the Group posted orders received of 19.47 billion yen, up 9.7% from a year earlier, and net sales of
13.185 billion yen, down 11.3% year on year, for the six months ended September 30, 2022.
As for profits, the Group posted operating loss of 1.192 billion yen (compared to operating loss of 281 million yen for the
year-earlier period), ordinary loss of 906 million yen (compared to ordinary loss of 181 million yen for the year-earlier period),
and net loss attributable to shareholders of parent company of 637 million yen (compared to net income attributable toshareholders of parent company of 18 million yen for the year-earlier period).
Results by segment are as follows. (Results of reportable segments, etc. include intersegment sales, etc.)(a) Telecommunication BusinessIn the mobile communications-related field, while our customers revised their investment plans, we felt the impact of higher
prices of components and rises in procurement costs due to a weaker yen. In the fixed wireless communication-related field,
construction schedules have been delayed due to intensified competition fueled by biddings, higher outsourcing costs, andlonger lead time for orders for components, etc. Still, deals postponed due to the COVID-19 pandemic are coming back on. In
the broadcasting-related field, demand was expected to increase driven by moves to update digital broadcasting equipment, butsuch demand, as well as demand from maintenance needs, have been postponed. In the solutions-related field, which has been
designated as a growth field, we have been working to generate demand in the network-related markets, mainly for the local 5G
business. We have won orders for the Ministry of Internal Affairs and Communications’ development and testing project, forexample. We are also working to strengthen collaboration with partner companies.
This segment has been facing a tough situation, affected by not only restrained spending by customers but also higher
procurement costs and delivery delays, etc. caused by longer lead time for orders for components, etc. In such an environment,
we continued to work to generate demand and improve productivity in this segment, but posted orders received totaling 13.816
billion yen, up 0.2% year on year, and net sales of 9.150 billion yen, down 15.3% year on year. Segment loss (operating loss)
came to 387 million yen (compared to segment income of 697 million yen in the year-earlier period).
(b) Radio Frequency Business
For the mainstay induction heating equipment-related field, demand from capital spending in the automotive-related industry is
on a recovery track and orders received have remained solid. However, longer lead time for orders for components, etc. and a
spike in prices of energy, components, etc. have had an impact on the field. The contract heat treating service-related field has
faced demand decreases due to production adjustment moves mainly in Japan by automakers, and cost-increasing factors,
including a spike in power bills, still remain. In the new radio frequency areas-related field, which has been designated as a
growth field, we have been doing sales activities aggressively, targeting mainly the industrial waste processing and foodindustries. In some areas, we have also launched a trial operation using actual equipment. In such an environment, we haveworked in this business to capture demand and improve productivity according to the business environment.
As a result, orders received increased 42.5% year on year to 5.654 billion yen, while net sales decreased 0.8% year on year to3.994 billion yen. Segment income (operating income) increased 7.5% year on year to 582 million yen.
(2) Explanation of financial position
Total assets totaled 56.040 billion yen as of September 30, 2022, down 296 million yen from the end of the previous fiscal year.
Current assets decreased 843 million yen from the end of the previous fiscal year to 40.145 billion yen. The main factors
were decreases of 2.3 billion yen in trade receivables including notes receivable-trade and 1.773 billion yen in deposits paid
included in “Other Businesses,” despite increases of 3.042 billion yen in cash and deposits and 395 million yen in inventories.

- 2 -Non-current assets increased 547 million yen from the end of the previous fiscal year to 15.895 billion yen. The main factors
were increases of 184 million yen in investment securities and 312 million yen in deferred tax assets.
Current liabilities increased 1.543 billion yen from the end of the previous fiscal year to 7.873 billion yen. The main factors
were an increase of 2.170 billion yen in short-term loans payable, despite a decrease of 759 million yen in trade payables
including notes payable-trade.
Fixed liabilities increased by 1.027 billion yen from the end of the previous fiscal year to 4.425 billion yen. The main factor
was an increase of 1.019 billion yen in long-term loans payable.
Net assets decreased 2.867 billion yen from the end of the previous fiscal year to 43.741 billion yen. The main factors weredecreases of 1.341 billion yen in retained earnings and 1.767 billion yen in treasury stock as a result of acquisition, etc.
(3) Explanation of forecast of consolidated operating results and other future projections
As a result of reviewing earnings forecasts to reflect recent earnings trends, etc., we revised the forecast of the consolidated
operating results for the fiscal year ending March 31, 2023 announced in ‟Consolidated Financial Results for the Three Months
Ended June 30, 2022” dated August 9, 2022.

- 3 -2. Quarterly consolidated financial statements and major notes(1) Quarterly consolidated balance sheet(Millions of yen)Previous consolidated fiscal year
(March 31, 2022)

Current consolidated fiscal half
(September 30, 2022)

18,886440878

21,928
259
1,188

5,127

1,229

4,489
1,832
117
5,890
3,328
(2)
40,989

4,103
3,686
144
6,258
1,348
(2)
40,145

11,061
9,540
7,510
2,241
237
186
(23,869)6,907
648

11,120
9,642
7,535
2,253
237
424
(24,320)
6,894
629

5,465
2
611
780
980
(49)
7,791
15,34756,336

5,650
2
600
1,093
1,075
(49)
8,372
15,89556,040AssetsCurrent assets
Cash and deposits
Notes receivable-trade
Electronically recorded monetary claims-operating
Accounts receivable from completed construction
contracts
Accounts receivable-trade
Contract assets
Costs on uncompleted construction contracts
Other inventories
Other Businesses
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant, and equipment
Buildings and structures
Machinery, equipment, and vehicles
Tools, furniture, and fixtures
Land
Lease assets
Construction in progress
Accumulated depreciation
Total property, plant, and equipment
Intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Net defined benefit assets
Deferred tax assets
Other Businesses
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets- 4 -(Millions of yen)Previous consolidated fiscal year
(March 31, 2022)

Current consolidated fiscal half
(September 30, 2022)

3,916

3,156

80
180
53
221
323

2,250
198
52
113
539

26

13

173
621
6
47
680
6,330

160
676
32
680
7,873

279
67
29

1,298
56
26

52

62

2,840
49
78
3,397
9,727

2,865
49
66
4,425
12,2998,774
9,723
32,028(5,940)44,586

8,774
9,723
30,686(7,707)
41,477

873
37
87
318
1,317
705
46,60956,336

759
3
535
264
1,563
700
43,741
56,040Liabilities
Current liabilities
Notes payable, accounts payable for construction
contracts, and others
Short-term loans payable
Long-term loans payable to be repaid within a year
Lease obligations
Income taxes payable
Contract liabilities
Allowance for warranties on completed
construction contracts
Allowance for product warranties
Allowance for employees’ bonuses
Allowance for directors’ bonuses
Allowances for losses on construction contracts
Other Businesses
Total current liabilities
Fixed liabilities
Long-term loans payable
Lease obligations
Allowance for product warranties
Allowances for share-based remuneration for
directors and corporate auditors
Net defined benefit liability
Asset retirement obligations
Other Businesses
Total fixed liabilities
Total liabilities
Net assets
Shareholders’ equity
CapitalCapital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets- 5 -(2) Quarterly consolidated statement of income and quarterly consolidated statement of comprehensive income(Quarterly consolidated statement of income)(Six months ended September 30)(Millions of yen)
Year-earlier consolidated fiscal half Current consolidated fiscal half(from April 1, 2021
(from April 1, 2022
to September 30, 2021)
to September 30, 2022)
Net sales
Sales of completed construction contracts
Net sales of goods
Sales in other businessTotal net sales
Cost of sales
Cost of sales of completed construction contracts
Cost of finished goods soldCost of sales in other businessTotal cost of sales
Gross profit
Gross profit on completed construction contracts
Gross profit on finished goods
Gross profit on other businessTotal gross profit
Selling, general, and administrative expenses
Operating loss
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Other Businesses
Total non-operating income
Non-operating expenses
Interest expenses
Commitment fees
Other Businesses
Total non-operating expenses
Ordinary loss
Extraordinary income
Gain on sales of investment securities
Total extraordinary income
Net loss before income taxes
Income taxes-current
Income taxes-deferred
Total income taxes
Net income (loss)
Net loss attributable to non-controlling interests
Net income (loss) attributable to shareholders of parent
company

- 6 -

5,756
9,062
51
14,870

4,383
8,744
57
13,185

4,850
7,267
22
12,140

4,208
7,293
22
11,523

905
1,794
28
2,729
3,011
(281)

175
1,451
35
1,662
2,854
(1,192)

4
97
62
163

9
91
295
52
449

13
38
11
63
(181)

13
124
26
163
(906)

33
33
(147)
96
(254)
(157)
10
(8)

105
105
(800)
55
(201)
(145)
(655)
(18)

18

(637)

(Quarterly consolidated statement of comprehensive income)(Six months ended September 30)(Millions of yen)
Year-earlier consolidated fiscal half Current consolidated fiscal half(from April 1, 2021
(from April 1, 2022
to September 30, 2021)
to September 30, 2022)
Net income (loss)
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attributable to shareholdersof parent
Comprehensive income attributable to noncontrolling interests

- 7 -

10

(655)

4
(5)
52
(50)
(0)
9

(114)
(33)
536
(53)
335
(319)

17

(390)

(8)

70

(3) Notes to quarterly consolidated financial statements(Notes on going concern assumptions)
There are no matters to be noted.
(Notes in case of significant changes in shareholders’ equity)
There are no matters to be noted.
(Changes in accounting policies)(Application of Accounting Standard for Fair Value Measurement, etc.)
The Company began applying the “Revised Implementation Guidance on Accounting Standard for Fair Value
Measurement” (Revised ASBJ Guidance No. 31 released June 17, 2021; the “Guidance” hereafter) at the beginning of thethree months ended June 30, 2022 and decided to continue to apply the new accounting policies prescribed in the Guidancein accordance with the transitional procedures stipulated in Paragraph 27-2 of the Guidance. There is no impact on thequarterly consolidated financial statements.
(Additional information)(Impacts of COVID-19 pandemic on accounting estimates)
The impact of the spread of COVID-19 on the Group has been easing but still remains. The industry the Group is involved
in also experienced some impacts on sales activities. Although it is difficult to predict how COVID-19 will spread and when
it will be contained, we assume based on information from internal and external sources that this trend will continue for acertain period of time, and have made accounting estimates for impairment losses on non-current assets and therecoverability of deferred tax assets, etc. We note that if COVID-19 pandemic further spreads or remains for longer, it may
affect the Group’s earnings and financial position.

- 8 -(Segment information, etc.)[Segment information]
Ⅰ Six months ended September 30, 2021 (from April 1, 2021 to September 30, 2021)
Information on amounts of net sales and income/loss by reportable segment
Reportable segment
TelecommuniRadiocationFrequency
Business
Business

Other
Businesses(Note) 1

Total

Total

(Millions of yen)Amountrecorded inquarterly
Adjustments
consolidated(Note) 2
statement ofincome(Note) 3

Net sales
Sales to external customers
Intersegment sales ortransfers
Total
Segment income (loss)

10,793

4,025

14,81851

14,870-14,870

7

－

7

115

122

(122)

-

10,801

4,025

14,826

166

14,993(122)

14,870

697

542

1,239

86

1,325

(1,607)(281)(Notes) 1 The “Other Businesses” segment, which is not included in reportable segments, includes equipment leasing and electric
power sales businesses.
2 The segment income (loss) adjustment of (1,607) million yen includes elimination of intersegment transactions of (57)
million yen and corporate expenses of (1,549) million yen that are not allocated to any reportable segment. Corporate
expenses are mainly general and administrative expenses that are not attributable to any reportable segments.
3 Adjustments are made to reconcile segment income (loss) with operating loss in the quarterly consolidated statement ofincome.
Ⅱ Six months ended September 30, 2022 (from April 1, 2022 to September 30, 2022)
Information on amounts of net sales and income/loss by reportable segment
Reportable segment
TelecommuniRadiocationFrequency
Business
Business

Other
Businesses(Note) 1

Total

Total

(Millions of yen)Amountrecorded inquarterly
Adjustments
consolidated(Note) 2
statement ofincome(Note) 3

Net sales
Sales to external customers
Intersegment sales ortransfers
Total
Segment income (loss)

9,133

3,994

13,12857

13,185-

13,185

16

-

16

96

113

(113)

-

9,150

3,994

13,144

154

13,299(113)

13,185

(387)

582

195

77

272

(1,465)(1,192)(Notes) 1 The “Other Businesses” segment, which is not included in reportable segments, includes equipment leasing and electric
power sales businesses.
2 The segment income (loss) adjustment of (1,465) million yen includes elimination of intersegment transactions of (42)million yen and corporate expenses of (1,422) million yen that are not allocated to any reportable segment. Corporate
expenses are mainly general and administrative expenses that are not attributable to any reportable segments.
3 Adjustments are made to reconcile segment income (loss) with operating loss in the quarterly consolidated statement ofincome.

- 9 -(Material subsequent events)(Cancellation of treasury stock)
Cancellation of treasury stock was resolved at the Company’s Board of Directors’ Meeting on November 11, 2022 inaccordance with Article 178 of the Companies Act.
(1) Reason of cancellation
In order to enhance shareholder returns in accordance with the policy on acquisition and cancellation of treasury stock,which was disclosed on February 10, 2022.
(2) Details of shares to be cancelled(a) Type of shares to be cancelled: Common stock of the Company(b) Total number of shares to be cancelled: 1,984,845(Ratio to the pre-cancellation total number of shares issued (excluding treasury stock): 18.31%)(c) Effective date: November 30, 2022
(Reference) Post-cancellation total number of shares issued: 12,100,000- 10 -

3. Supplementary information(1) Production, orders and sales(a) Production results
Production results by reportable segment for the six months ended September 30, 2022 are shown below.
Reportable segment

Output (millions of yen)

Year-on-year change (%)

Telecommunication Business

5,559

0.9

Radio Frequency Business

4,304

6.9

9,863

3.5

Total

(Notes) 1 Amounts are based on sales prices, and intersegment transactions have been offset.
2 In the Telecommunication Business, production results related to construction projects are excluded from the above
production results due to difficulty in defining the results.
(b) Results of orders received
Results of orders received by reportable segment for the six months ended September 30, 2022 are shown below.
Reportable segment

Orders received(millions of yen)

Telecommunication

13,816

0.2

Radio Frequency Business

5,654

Total

19,470Business

Order backlog(millions of yen)

Year-on-year change (%)

Year-on-year change (%)

13,498

22.3

42.5

4,426

92.6

9.7

17,92434.4(c) Sales results
Sales results by reportable segment for the six months ended September 30, 2022 are shown below.
Reportable segment

Net sales (millions of yen)

Year-on-year change (%)

Telecommunication Business
Construction work

4,383

(23.8)

Equipment and materials sales

4,750

(5.7)

Subtotal of Telecommunication
Business

9,133(15.4)

Radio Frequency BusinessTotal of reportable segments
Other Businesses
Total

3,994

(0.8)

13,128(11.4)

57

12.3

13,185(11.3)(Notes) 1 Intersegment transactions have been offset.
2 The “Other Businesses” segment, which is not included in reportable segments, includes equipment leasing and electric
power sales businesses.

- 11 -