November 11, 2022

Consolidated Financial Results
for the Six Months Ended September 30, 2022
<Japanese GAAP>
Listed company:
SANKI ENGINEERING CO., LTD.
Listed stock exchange: Tokyo
Securities code:
1961
URL:
https://www.sanki.co.jp/
Representative:
Hirokazu Ishida, President and Representative Director
Contact:
Yoshio Kawabe, Director, Managing Executive Officer, General Manager of the Accounting
Division
TEL: +81-3-6367-7084
Scheduled date to file quarterly securities report: November 11, 2022
Scheduled date to commence dividend payments: December 9, 2022
Preparation of explanatory materials for quarterly financial results: Yes
Holding of a briefing on quarterly financial results: Yes (for securities analysts and institutional investors)(Amounts of less than 1 million yen are truncated)

1. Consolidated Financial Results for the Six Months Ended September 30, 2022
(April 1, 2022 to September 30, 2022)(1) Consolidated operating results (Cumulative)(% figures show year-on-year change)
Net sales
Six months ended

Operating profit

Millions of yen% Millions of yen

Profit attributable toowners of parent

Ordinary profit% Millions of yen% Millions of yen%

September 30, 2022

73,510(12.6)(1,260)

－

(751)

－

(770)

－

September 30, 2021

84,070

4.0

1,025

102.8

1,310

55.5

863

5.1

(Note) Comprehensive income:Six months ended September 30, 2022: ¥ (1,121 million) [－%]
Six months ended September 30, 2021: ¥ 1,655 million [(29.1%)]
Profit per
share – diluted

Profit per share
Six months ended

Yen

Yen

September 30, 2022

(13.79)－September 30, 2021

15.22

15.14

(2) Consolidated financial position
Total assets
As of

Net assets

Shareholders’ equity ratio

Millions of yen

Millions of yen%

September 30, 2022

159,941

90,333

56.4

March 31, 2022

183,609

94,27851.2(Reference) Shareholders’ equity: As of September 30, 2022: ¥90,134 million

As of March 31, 2022: ¥93,967 million

2. Dividends
Annual dividends
First quarter-end

Second quarter-end

Third quarter-end

Fiscal year-end

Yen

Yen

Yen

Yen

Yen

50.00

85.00

35.00

70.00

Fiscal year ended March 31, 2022

35.00

Fiscal year ending March 31, 2023

35.00

Fiscal year ending March 31, 2023
(Forecast)

Total(Note) Amendment to forecasts of dividends recently announced: None
Breakdown of end-FY3/22 dividend: Ordinary dividend ¥35; Extraordinary dividend ¥15
3. Forecast of Consolidated Financial Results for the Fiscal Year Ending March 31, 2023
(April 1, 2022 to March 31, 2023)(% figures show year-on-year change for the full year)

Net sales
Millions of yen
Full year

200,000

Operating profit% Millions of yen
3.5

9,500

Profit attributable toowners of parent

Ordinary profit% Millions of yen
4.2

10,000% Millions of yen
1.9(Note) Amendment to forecasts of consolidated financial results recently announced: None

6,900

Profitper share
%

Yen

6.3

123.51

* Notes(1) Changes in significant subsidiaries during the six months ended September 30, 2022 (changes in specified subsidiaries
resulting in the change in scope of consolidation): None
New: (Company name:)
Excluded: (Company name:)(2) Application of specific accounting for preparing quarterly consolidated financial statements: None
(3) Changes in accounting policies and estimates, and retrospective restatements(i) Changes in accounting policies in accordance with revision of accounting standards: None(ii) Changes in accounting policies other than item (i) above: None(iii) Changes in accounting estimates: None(iv) Retrospective restatements: None
(4) Number of shares issued (common stock)(i) Number of shares outstanding at the end of the period (including treasury shares)
As of September 30, 2022

58,161,156 shares

As of March 31, 2022

59,661,156 shares(ii) Number of treasury shares at the end of the period
As of September 30, 2022

2,302,858 shares

As of March 31, 2022

3,900,458 shares(iii) Average number of shares during period
For the six months ended September 30, 2022

55,872,641 shares

For the six months ended September 30, 2021

56,742,957 shares* Quarterly financial results are not subject to quarterly review by a certified public accountant or audit corporation.
* Proper use of earnings forecasts, and other special matters
There are no changes to our consolidated and non-consolidated earnings forecasts announced on May 13, 2022.
The forward-looking statements such as earnings forecasts contained in these materials are based on the information
available at the time they were prepared, and the actual results could differ from forecasts depending on a variety offactors.
Disclaimer: This is a Japanese–English translation of the summary of financial statements of the Company produced foryour convenience. Officially, only the Japanese version is assumed to be the summary of financial statements of theCompany. This summary does not constitute any guarantee and the Company will not compensate any losses and/or damage
stemming from actions taken based on these statements. In the case that there is any discrepancy between the Japanese andEnglish versions, the Japanese version is assumed to be correct.

[Attached Materials]
Index
1. Qualitative Information on the Quarter under Review ............................................................................................................2(1) Qualitative information on consolidated operating results .................................................................................................2(2) Qualitative information on consolidated financial position................................................................................................3(3) Qualitative information on consolidated earnings forecasts ...............................................................................................3
2. Consolidated Financial Statements and Related Notes ...........................................................................................................4(1) Quarterly consolidated balance sheets ...............................................................................................................................4(2) Quarterly consolidated statements of income and comprehensive income ........................................................................6(3) Quarterly consolidated statements of cash flows ...............................................................................................................7(4) Notes on premise of going concern ....................................................................................................................................8(5) Segment information, etc. ..................................................................................................................................................8(6) Notes regarding significant changes in shareholders’ equity [if any] .................................................................................91

1. Qualitative Information on the Quarter under Review
The Group aims to be the “Company of Choice” for even more stakeholders by further enhancing quality and reliability throughour long-term vision “Century 2025.” This fiscal year is the first year of the four-year medium-term management plan Century 2025
Phase 3, which is the final phase of the long-term vision Century 2025. During this phase, we aim to remain the enduring companyof choice by continuing Phase 1 initiatives focused on improving quality and Phase 2 efforts to enhance reliability, while also
implementing new measures, including initiatives to contribute to the sustainability of society, accelerate work-style reforms, andinvest toward the next era. In addition, we will continue building a corporate structure that can flexibly respond to changes in theenvironment, while developing new technologies, strengthening corporate governance, and achieving sustainable growth andincreased corporate value over the medium to long term based on thorough compliance.
The Group’s operating results and financial position for the six months ended September 30, 2022, are as follows.

(1) Qualitative information on consolidated operating results(Millions of yen)
Main factors behind YoYYoY change YoY change (%)
changeAsstatedinthe next
22,40723.2%
section, “Operating
42,029
27.3% results of major
segments”(10,560)(12.6%)Q2 FY2021

Q2 FY2022

Orders received

96,506

118,914

Balance carried forward

154,112

196,142

Net sales

84,07073,510Gross profit

11,0589,161(1,896)

13.2%

12.5%

(0.7%)

1,025(1,260)(2,285)1.2%(1.7%)(2.9%)

1,310

(751)

(2,061)1.6%(1.0%)(2.6%)

863(770)(1,633)1.0%(1.0%)(2.0%)

Margin (%)
Operating profit (loss)
Margin (%)
Ordinary profit (loss)
Margin (%)
Profit (loss) attributable toowners of parent
Margin (%)(17.1%)－－－(Note) Profit or loss margins are the rate of return on net sales.
<Operating results of major segments>〇Facilities Construction BusinessThis business includes HVAC and Plumbing for Buildings, Industrial HVAC (centered on air-conditioning systems for factories),
Electrical Systems and Facility Systems businesses, etc.
Orders received increased on the back of orders for large projects in HVAC and Plumbing for Buildings and Industrial HVAC, but
sales and profit both declined due to delays in project progress resulting mainly from customer revisions to some project schedules.

Orders received
Net sales
Segment profit (loss)

Q2 FY2021
69,196
67,065654

Q2 FY2022
100,893
59,208(1,235)

YoY change
31,696(7,857)(1,890)(Millions of yen)
YoY change (%)
45.8%(11.7%)－〇Machinery Systems BusinessThis business mainly includes conveyance systems and manufacturing and sales business related to transportation equipment.
Orders received were strong, but sales decreased, mainly due to a decline in work carried forward from FY2021, and segment
losses worsened.

Orders received
Net sales
Segment profit (loss)

Q2 FY2021
4,972
4,952
(43)

Q2 FY2022
5,353
3,151
(711)

2

YoY change
380(1,800)(668)(Millions of yen)
YoY change (%)
7.7%(36.4%)－

〇Environmental Systems BusinessThis business mainly includes operations related to water and sewage facilities and waste treatment facilities ordered bygovernment agencies.
Orders received declined, mainly due to a fallback from orders for large-scale maintenance work and waste treatment facilities
in Q2 FY2021. Net sales declined, but segment loss improved, partly due to an overall improvement in the profitability of projects.
Q2 FY2021
21,331
10,879(591)

Orders received
Net sales
Segment profit (loss)

Q2 FY2022
11,667
9,916(416)

YoY change(9,663)(963)
174(Millions of yen)
YoY change (%)(45.3%)(8.9%)－〇Real Estate BusinessThis business mainly includes leasing operations for real estate holdings and building management.
Tenant rental income increased, resulting in higher sales, but profit fell, partly due to expenses incurred removing unneeded
equipment.
Q2 FY2021
1,197
1,197
497

Orders received
Net sales
Segment profit

Q2 FY2022
1,235
1,235
450

YoY change
38
38
(47)

(Millions of yen)
YoY change (%)
3.2%
3.2%
(9.5%)(2) Qualitative information on consolidated financial position(Millions of yen)
End-FY2021
Current
assetsNon-current
assetsTotal assets
Current
liabilities
Non-current
liabilities
Total
liabilities
Total net
assetsEnd-Q2 FY2022

YoY change
YoY change(%)

Main factors behind YoY change

Accounts receivable from completed
construction contracts and otherdeclined from the end of FY2021 due to(1.3%)
seasonal factors.

125,742

102,839(22,903)(18.2%)

57,866

57,101(764)

183,609

159,941(23,668)(12.9%)

79,21059,764(19,446)(24.5%)

10,121

9,843

(277)

(2.7%)

89,331

69,607(19,724)(22.1%)

94,27890,333(3,944)(4.2%)

Accounts payable for construction
contracts declined from the end of
FY2021 due to seasonal factors.

Decreased due to dividend of surplus.

(3) Qualitative information on consolidated earnings forecasts
There are no changes to our consolidated and non-consolidated earnings forecasts announced on May 13, 2022.

3

2. Consolidated Financial Statements and Related Notes(1) Quarterly consolidated balance sheets(Millions of yen)
As of March 31, 2022

As of September 30, 2022

AssetsCurrent assets
Cash and deposits

42,779Notes receivable - trade37,239595

381

Electronically recorded monetary claims - operating
Accounts receivable from completed construction
contracts and other
Contract assets

7,124

3,556

39,412

24,44919,62919,249Securities

5,999

5,999

Costs on construction contracts in progress

2,921

4,365

Raw materials and supplies
Other
Allowance for doubtful accounts

756

804

6,541

6,812

(17)

(18)

125,742

102,839

43,83043,869

Accumulated depreciation(34,123)(34,636)

Buildings and structures, net

9,707

9,233

Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures

Machinery, vehicles, tools, furniture and fixtures

2,028

2,050

Accumulated depreciation
Machinery, vehicles, tools, furniture andfixtures, net
Land(1,630)(1,662)

398

387

3,085

3,033

542

550

Accumulated depreciation

(230)

(251)

Leased assets, net

311

299

Leased assets

Construction in progress
Total property, plant and equipment

1

513,504

12,958Intangible assets
Other

1,255

1,432

Total intangible assets

1,255

1,432

30,447

29,775Investments and other assets
Investment securities
Long-term loans receivable

73

69

Retirement benefit asset

6,303

6,434

Leasehold and guarantee deposits

1,466

1,614

Insurance funds

1,252

1,281

Deferred tax assets

821

795

Other

3,160

3,160

Allowance for doubtful accounts

(419)

(422)

Total investments and other assets

43,10642,710Total non-current assets
Total assets

457,866

57,101

183,609

159,941(Millions of yen)
As of March 31, 2022

As of September 30, 2022

Liabilities
Current liabilities
Electronically recorded obligations - operating

2,588

1,630

Accounts payable for construction contracts

37,932

26,816

Short-term borrowings

8,885

8,361

94

98

Lease obligations
Income taxes payable

2,659

301

Contract liabilities

14,754

15,603

Provision for bonuses

4,143

3,206

234

121

1,289

1,354

9

110

Provision for directors’ bonuses
Provision for warranties for completed
construction
Provision for loss on construction contracts
Other

6,617

2,158

Total current liabilities

79,21059,764Long-term borrowings

320

150

Lease obligations

325

326

Retirement benefit liability
Provision for loss on business of subsidiaries andassociates
Deferred tax liabilities

2,581

3,050

440

440

670

92

Other

5,784

5,784

Total non-current liabilities

10,121

9,843

89,331

69,607

Share capital

8,105

8,105

Capital surplus

4,181

4,189

Retained earnings

75,097

69,486

Non-current liabilities

Total liabilities
Net assets
Shareholders’ equity

Treasury shares(5,243)(3,122)

Total shareholders’ equity

82,14078,658

12,116

11,525(5)(19)

Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment

(19)

150

Remeasurements of defined benefit plans

(265)

(181)

11,827

11,475

Total accumulated other comprehensive income
Share acquisition rights
Total net assets
Total liabilities and net assets

5

310

199

94,27890,333

183,609

159,941

(2) Quarterly consolidated statements of income and comprehensive income
Second quarter of consolidated fiscal year

(Millions of yen)
For the six months ended
September 30, 2021
Net sales
Net sales of completed construction contracts
Net sales in real estate business and otherTotal net sales
Cost of sales
Cost of sales of completed construction contracts
Cost of sales in real estate business and otherTotal cost of sales
Gross profit
Gross profit on completed construction contracts
Gross profit on real estate business and otherTotal gross profit
Selling, general and administrative expenses
Operating profit (loss)
Non-operating income
Interest income
Dividend income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Other
Total non-operating expenses
Ordinary profit (loss)
Extraordinary income
Gain on sale of non-current assets
Gain on sale of investment securities
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Loss on valuation of investment securities
Settlement payments
Total extraordinary losses
Profit (loss) before income taxes
Income taxes – current
Income taxes – deferred
Total income taxes
Profit (loss)(Breakdown)
Profit (loss) attributable to owners of parent
Profit attributable to non-controlling interests
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 other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attributable to owners ofparentComprehensive income attributable to non-controllinginterests

6

For the six months ended
September 30, 2022

82,825
1,245
84,07072,228
1,281
73,51072,319692
73,012

63,599749
64,34810,505552
11,05810,032
1,025

8,629
532
9,161
10,422(1,260)

6
304
160
471

9
339
279
628

57
127
185
1,310

51
68
119
(751)

－
13
13

22
25
47

－
4
－
4
1,320
301
155
457
863

53
－
139
193
(896)
199
(325)
(125)
(770)

863
－

(770)
－

614
(0)
83
94
792
1,655

(591)
(13)
169
83
(351)
(1,121)

1,655(1,121)－－

(3) Quarterly consolidated statements of cash flows(Millions of yen)
For the six months ended
September 30, 2021
Cash flows from operating activities
Profit (loss) before income taxes
Depreciation
Loss on retirement of non-current assets
Office relocation expenses
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in retirement benefit liability
Increase (decrease) in provision for loss on
construction contracts
Interest and dividend income
Interest expenses
Loss (gain) on sale of property, plant and equipment
Loss (gain) on sale of investment securities
Loss on valuation of investment securities
Decrease (increase) in trade receivables and contract
assetsDecrease (increase) in costs on construction contracts
in progress
Increase (decrease) in trade payables
Increase (decrease) in contract liabilities
Increase (decrease) in other current liabilities
Settlement payments
Other
SubtotalInterest and dividends received
Interest paid
Commitment fee payment
Income taxes paid
Income taxes refund
Office relocation expenses paid
Cash flows from operating activities
Cash flows from investing activities
Purchase of securities
Proceeds from redemption of securities
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Payments for retirement of property, plant andequipment
Purchase of investment securities
Proceeds from sale of investment securities
Proceeds from collection of loans receivable
Purchase of intangible assets
Proceeds from maturity of insurance funds
Other
Cash flows from investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Repayments of long-term borrowings
Purchase of treasury shares
Proceeds from exercise of share options
Repayments of lease obligations
Dividends paid
Cash flows from financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

7

For the six months ended
September 30, 2022

1,320
796
7
4
1
(654)
407

(896)
735
53
－
0
(937)
457

4

101

(311)
57
(0)
(13)
4

(348)
51
(22)
(25)
－

12,342

19,201(957)(1,434)(7,760)4,548(2,087)－(5,330)
2,379
311
(50)
(10)
(1,135)
358
(0)
1,852

(12,235)
836(4,365)
139
(60)
1,251
348
(43)
－
(2,764)
6－(1,201)(9,000)
8,000
(476)
0

(10,000)
11,000
(245)
76

(9)

(55)

(11)
69
6
(356)
19
(73)
(1,832)

(264)
109
6
(238)
68
(239)
216

(1)
(695)
(71)
0
(101)
(2,552)(3,421)

0
(695)
(134)
0
(50)
(2,788)(3,668)56

113(3,344)37,08733,742(4,540)44,77940,238

(4) Notes on premise of going concern
Not applicable(5) Segment information, etc.
I. Second quarter of fiscal year 2021 (April 1, 2021 to September 30, 2021)
1. Information on net sales and profit (loss) by reportable segment(Millions of yen)
Adjustments(Notes) 2

Quarterly
consolidated
profit/loss andcomprehensive
income posted(Notes) 3

Reportable segments
Facilities
EnvironMachinery
Construcmental Sys- Real Estate
Systemstion Busitems Busi- BusinessBusiness
ness
ness

Net sales
Net sales to externalcustomers
Intersegment sales ortransfers
Total
Segment profit (loss)

Total

Other
(Notes) 1

Total

66,986

4,946

10,872

1,195

84,001

69

84,070－84,070

79

5

7

1

93

188

282

(282)

－

67,065

4,952

10,8791,197

84,094257

84,352(282)

84,070

654

(43)

(591)

497

517

(10)

507

803

1,310

(Notes) 1. The “Other” category is a business segment that is not included in reportable segments and includes the leasing businessand insurance agency business, etc.
2. The adjustment amount of ¥803 million to segment profit/loss includes company-wide profit not allocated to eachreportable segment of ¥619 million, the reversal amount of the interest burden allocated to each segment within thecompany of ¥180 million, and an adjustment amount of ¥3 million due to the recording of loss on valuation of
investment securities attributable to each segment as an extraordinary loss. Differences in allocation of company-wide
expenses, etc., are the main source of company-wide profit.
3. Segment profit or loss is adjusted with ordinary profit in the quarterly consolidated statements of income andcomprehensive income.
II. Second quarter of fiscal year 2022 (April 1, 2022 to September 30, 2022)
1. Information on net sales and profit (loss) by reportable segment(Millions of yen)
Adjustments(Notes) 2

Quarterly
consolidated
profit/loss andcomprehensive
income posted(Notes) 3

Reportable segments
Facilities
EnvironMachinery
Construcmental Sys- Real Estate
Systemstion Busitems Busi- BusinessBusiness
ness
ness

Net sales
Net sales to externalcustomers
Intersegment sales ortransfers

Total

Other
(Notes) 1

Total

59,153

3,151

9,908

1,233

73,44663

73,510－73,510

55

0

8

1

65

176

242

(242)

－

Total

59,208

3,151

9,916

1,235

73,512240

73,752(242)

73,510

Segment profit (loss)(1,235)

(711)

(416)

450

(1,913)(26)(1,939)

1,188

(751)

(Notes) 1. The “Other” category is a business segment that is not included in reportable segments and includes the leasing businessand insurance agency business, etc.
2. The adjustment amount of ¥1,188 million to segment profit/loss includes company-wide profit not allocated to eachreportable segment of ¥895 million, the reversal amount of the interest burden allocated to each segment within thecompany of ¥122 million, and an adjustment amount of ¥171 million due to the recording of gain on sale of non-current
assets, loss on retirement of non-current assets, and other items attributable to each segment as extraordinary income andlosses. Differences in allocation of company-wide expenses, etc., are the main source of company-wide profit.
3. Segment profit or loss is adjusted with ordinary loss in the quarterly consolidated statements of income andcomprehensive income.

8

(6) Notes regarding significant changes in shareholders’ equity [if any]
The Company has implemented the purchase and cancellation of treasury shares based on a resolution passed at the meeting of
the Board of Directors on August 5, 2022. As a result, during the six months ended September 30, 2022, treasury shares increasedby ¥134 million due to purchases, while treasury shares and retained earnings decreased by ¥2,016 million due to the cancellationof treasury shares. The balance of treasury shares as of September 30, 2022, was ¥3,122 million.

9