Non-consolidated Financial Results
for the Six Months Ended June 30, 2023
[Japanese GAAP]
August 10, 2023
Company name: Nippon Aqua Co., Ltd.
Code number: 1429 (listed on the Tokyo Stock Exchange)(URL: https://www.n-aqua.jp)
Representative: Fumitaka Nakamura, President and Representative Director
Contact: Shoji Sato, Executive Officer in charge of Finance and Accounting
Phone: +81-3-5463-1117
Scheduled filing date of quarterly report: August 10, 2023
Scheduled date of dividend payout: －Supplementary quarterly materials prepared: Yes
Quarterly results briefings held: Yes (for institutional investors and analysts)(Figures are rounded down to the nearest million yen.)

1. Non-consolidated Financial Results for the Six Months Ended June 30, 2023 (January 1, 2023-June 30, 2023)(1) Financial Results(Percentage figures indicate year-on-year changes.)
Net sales

Six months ended June 30,2023
Six months ended June 30,
2022

Operating profit

Ordinary profit

ProfitMillion yen%

Million yen%

Million yen%

Million yen%

13,158

12.1

1,380

50.7

1,400

49.6

948

51.2

11,742

9.6

916

176.1

936

179.1

626

193.4

Basic earnings
per share
Six months ended June 30,2023
Six months ended June 30,
2022

Diluted earnings
per share
Yen

Yen

30.20

30.20

19.39

－

(2) Financial Position
Total assets
As of June 30, 2023
As of December 31, 2022

Net assets

Equity ratio

Million yen

Million yen%

18,75021,969

8,250
7,966

44.0
36.3

[Reference] Shareholders’ equity: As of June 30, 2023: 8,248 million yen
As of December 31, 2022: 7,966 million yen

2. Dividends
Dividend per share
End of
1st quarter
Fiscal year ended December 31, 2022
Fiscal year ending December 31,
2023
Fiscal year ending December 31,
2023 (forecast)End of
2nd quarterEnd of
3rd quarter

Year-end

Total

Yen

Yen

Yen

Yen

Yen

－

0.00

－

24.00

24.00

－

0.00
－

30.00

30.00

Note: Revisions to dividend payout forecasts disclosed most recently: No―1―

3. Financial Forecasts for the Fiscal Year Ending December 31, 2023 (January 1, 2023-December 31, 2023)(Percentage figures indicate year-on-year changes.)
Net sales
Fiscal year ending
December 31, 2023

Operating profit

Ordinary profit

Basic earnings
per share

ProfitMillion yen%

Million yen%

Million yen%

Million yen%

Yen

29,021

13.1

2,750

18.1

2,750

16.5

1,828

18.1

58.41

Note: Revisions to financial forecasts disclosed most recently: No* Notes(1) Use of special accounting methods in preparing quarterly financial statements: No(2) Changes in accounting policies, changes in accounting estimates and restatements(i) Changes in accounting policies due to revisions of accounting standards, etc.: No(ii) Changes in accounting policies other than (i): No(iii) Changes in accounting estimates: No(iv) Restatements: No(3) Number of issued shares (common shares)(i) Number of issued shares at end of period under review (including treasury shares)
As of June 30, 2023

34,760,000 shares

As of December 31, 2022

34,760,000 shares(ii) Number of treasury shares at end of period under review
As of June 30, 2023

3,351,871 shares

As of December 31, 2022

3,447,171 shares(iii) Average number of shares during period under review
Six months ended June 30, 2023

31,385,796 shares

Six months ended June 30, 2022

32,311,436 shares* Quarterly financial results are not subject to quarterly review by certified public accountants or audit corporations.
* Notes concerning appropriate use of financial forecasts and other significant matters
Financial forecasts and other forward-looking statements in this release are based on data currently available to theCompany and certain assumptions that the Company believes are reasonable. They are not intended as a guarantee that
the Company will achieve such results. Actual results may differ materially from them for various reasons. For detailsof the assumptions used in the forecast of financial results and cautionary notes concerning appropriate use of thefinancial forecasts, please refer to “(3) Notes on Financial Forecasts and Other Forward-looking Statements” in “1.
Qualitative Information Concerning Financial Results for the Period Under Review” on page 6 of the Attachment.

―2―

Contents of Attachment

1. Qualitative Information Concerning Financial Results for the Period Under Review ...................................................... 4(1) Explanation Regarding Operating Results ................................................................................................................... 4(2) Explanation Regarding Financial Position .................................................................................................................. 5(3) Notes on Financial Forecasts and Other Forward-looking Statements ........................................................................ 6
2. Quarterly Financial Statements and Primary Notes .......................................................................................................... 8(1) Quarterly Balance Sheet .............................................................................................................................................. 8(2) Quarterly Income Statement ...................................................................................................................................... 10(3) Quarterly Cash Flow Statement ................................................................................................................................. 11(4) Notes to Quarterly Financial Statements ................................................................................................................... 12(Notes on Going Concern Assumption) ....................................................................................................................... 12(Notes on Significant Changes in Amount of Shareholders’ Equity) ........................................................................... 12(Changes in Accounting Policies) ................................................................................................................................ 12(Segment Information, Etc.) ........................................................................................................................................ 12(Additional Information) ............................................................................................................................................. 12(Important Subsequent Events) .................................................................................................................................... 12―3―

1. Qualitative Information Concerning Financial Results for the Period Under Review(1) Explanation Regarding Operating Results
During the six months ended June 30, 2023 (January 1, 2023 to June 30, 2023), the Japanese economy recovered
moderately as the employment and income situation improved. However, amid continued global monetary tightening andother developments, there were concerns about the risk that the downturn in overseas economies would exert downward
pressure on Japan's economy, price increases, supply-side constraints, and fluctuations in the financial and capital markets.
In the construction and housing industry where the Company operates, the “Act Partially Revising the Act on the
Improvement of the Energy Consumption Performance of Buildings in Order to Contribute to the Realization of a Carbon
Neutral Society” was promulgated in June 2022. Consequently, it became necessary to improve energy efficiency, andparticularly enhancement of insulation performance has become an important issue. In addition to this, partly due to the
sharp rise in electricity rates, the world’s attention on insulation materials is increasing. Buildings excellent in insulation
performance reduce energy consumption for heating and cooling, help save electricity rates, and can achieve a comfortablehousing environment with less burden on the environment. Under such circumstances, the Company proactively madeefforts to win orders in each division by taking advantage of the product appeal of highly-airtight and highly-insulated
AQUA FOAM series and the strength of our nationwide construction network.
In the Single-family Homes Division, we have secured stable orders with subsidies and preferential housing loans in linewith the Tokyo-based “Tokyo Zero Emission Houses” and other local governments’ moves to introduce their own ZEH(Net Zero Energy Houses). In January 2023, we introduced internal installation work personnel Saturdays and Sundays
holidays in order to accelerate our response to the 2024 issue in the construction industry. This action reduced the numberof construction days, and the division’s net sales was 6,508 million yen, slightly lower than in the same period of theprevious year. However, the number of applications for internal installation work personnel has increased significantly due
to the success of work style innovations such as the introduction of Saturdays and Sundays holidays. We are making steadyprogress in personnel training, so in the future we will work to increase sales by increasing the number of projects inoperation to offset the decline in the number of construction days. In the Buildings Division, demand expanded against the
backdrop of the domestic return of the manufacturing industry and urban redevelopment. In addition, there was anincreasing need to prevent fires during construction. As a result, the division's Net sales rose sharply to 3,848 million yen,driven by the installation of non-flammable insulation "AQUA MOEN NEO." In addition, the Waterproofing Division's
net sales of 248 million yen and other divisions, such as sales of raw materials and machinery, reached 2,552 million yen,marking an increase in both.
(in million yen, %)Single-family Homes

19th fiscal year

20th fiscal year

Six months ended

Six months ended

June 30, 2022

June 30, 2023

Amount of change

Percentage change

6,695

6,508

(187)

(2.8)

2,837

3,848

+1,011

+35.6

120

248

+128

+106.6

Other divisions

2,087

2,552

+464

+22.3

Total

11,742

13,158+1,416+12.1

Division
Buildings Division
Waterproofing Division

Consequently, net sales for the period under review was 13,158 million yen, an increase of 12.1% year on year. In addition
to procurement from multiple companies with the aim of securing raw materials and providing a stable supply of products,
we have worked to secure earnings by continuing to revise prices from the autumn of 2021 and emphasizing the profitabilityof construction work when orders are received. In addition, the recent rise in prices of naphtha and other resources hascome to a halt, and the prices of raw materials for urethane are also peaking out. At the same time, with the aim ofstrengthening our “construction capabilities,”, which is one of our strengths, we are focusing on providing a variety of
support to certified contractors, including increasing the amount of construction fees and leasing of facilities such as our―4―employees' assignments and transfers, as well as storage and warehousing facilities.
As a result of the above, gross margin improved by 3.1 points year on year to 23.7%, operating profit increased by 50.7%
year on year to 1,380 million yen, ordinary profit increased by 49.6% year on year to 1,400 million yen, and profit totaled
948 million yen, rising 51.2% from a year earlier.

(2) Explanation Regarding Financial Position(Total assets)
Total assets totaled 18,750 million yen as of June 30, 2023, down 3,219 million yen, or 14.7%, from the end of theprevious fiscal year.
(Current assets)
Current assets totaled 13,830 million yen as of June 30, 2023, down 3,305 million yen, or 19.3%, from the end of theprevious fiscal year. Key factors contributing to this decrease include decreases of 1,168 million yen in accounts receivable- other, 411 million yen in notes and accounts receivable - trade, and contract assets, and 181 million yen in electronicallyrecorded monetary claims due to collection, 563 million yen in cash and deposits, and 867 million yen in inventories due
to adjustments to raw material inventories accompanying improvements in the raw material supply market.
(Non-current assets)
Non-current assets totaled 4,919 million yen as of June 30, 2023, up 85 million yen, or 1.8%, from the end of the previous
fiscal year. Key factors included 140 million yen increase in buildings due to the completion of the Kita-Kanto Sales Office,29 million yen increase due to the acquisition of machinery and equipment, 14 million yen increase due to the acquisitionof software, and 64 million yen increase in insurance reserves. On the other hand, there was a decrease of 116 million yen
in assets due to depreciation, and a decrease of 92 million yen in construction-in-progress included in other in property,
plant and equipment due to the completion of the Kita-Kanto Sales Office.
(Total liabilities)
Liabilities totaled 10,499 million yen as of June 30, 2023, down 3,504 million yen, or 25.0%, from the end of the previous
fiscal year.
(Current liabilities)
Current liabilities totaled 10,359 million yen as of June 30, 2023, down 3,542 million yen, or 25.5%, from the end of theprevious fiscal year. Main factors contributing to this decrease include decreases of 1,900 million yen in short-termborrowings due to adjustments to raw material inventories accompanying improvements in the raw material supply market,
1,266 million yen in accounts payable – trade due to payment, 245 million yen in income taxes payable due to tax payment,
and 376 million yen in accounts payable - other and accrued expenses included in other.
(Non-current liabilities)
Non-current liabilities totaled 139 million yen as of June 30, 2023, up 38 million yen, or 37.6%, from the end of theprevious fiscal year. Key factors contributing to this increase include an increase of 50 million yen in long-term accounts
payable - other included in other, partially offset by a decrease of 15 million yen in long-term lease liabilities.
(Net assets)
Net assets totaled 8,250 million yen as of June 30, 2023, up 284 million yen, or 3.6%, from the end of the previous fiscal
year. Main factors contributing to this increase include an increase of 948 million yen in profit and an increase in retained
earnings of 85 million yen due to the disposal of treasury shares, partially offset by the recording of 751 million yen due tothe payment of dividends.
(Equity ratio)
Equity ratio was 44.0% on June 30, 2023, up 7.7% from the end of the previous fiscal year.
(Research and development activities)
The total amount of research and development expenditures by the Company in the three months ended June 30, 2023
was 9 million yen. There was no significant change in the status of research and development activities in the six months
ended June 30, 2023.

Cash Flows―5―

Cash and cash equivalents (hereinafter “net cash”) in the six months ended June 30, 2023 amounted to 2,112
million yen (1,840 million yen in the same period a year earlier), decreasing 563 million yen from the end of theprevious fiscal year.
(Cash flows from operating activities)
Net cash from operating activities increased 2,177 million yen in the fiscal year under review, compared to a 25
million yen decrease in the previous fiscal year. This was due mainly to increases in net cash driven by 1,399
million yen in profit before income taxes, 116 million yen in depreciation, a 498 million yen decrease in tradereceivables, and a 867 million yen decrease in inventories, a 1,168 million yen decrease in accounts receivable other, and decreases in net cash, driven by a 1, 226 million yen increase in trade payables, and 631 million yen inincome taxes paid.
(Cash flows from investing activities)
Net cash from investing activities decreased 197 million yen in the fiscal year under review, compared to a 25
million yen decrease in the previous fiscal year. This was due mainly to purchase of property, plant and equipment
totaling 124 million yen, purchase of intangible assets totaling 11 million yen, and the funding of insurance reserves
64 million yen.
(Cash flows from financing activities)
Net cash from financing activities decreased 2,544 million yen in the fiscal year under review, compared to a 34
million yen decrease in the previous fiscal year. This was due mainly to the net decrease in short-term borrowingsof 1,900 million yen and the payment of dividends of 751 million yen.
(3) Notes on Financial Forecasts and Other Forward-looking Statements
Regarding the future outlook, we are focusing on support measures, such as the continuation of the current economic
recovery and revisions to the legal system for housing and buildings, subsidies and preferential tax treatment for energy
conservation, and low-interest loans. In response to the growing demand for insulation materials, we are taking thefollowing initiatives to realize our sustainable development.
1. Companywide Measures
1) General business activities
Given the recent rise in awareness of energy conservation and decarbonization, insulation materials are becoming
increasingly important. We will utilize the unique knowledge of the Company, which has placed insulation materials at thecore of its business since establishment, to maximize the insulation performance of houses and buildings, and we will
expand our business by proposing ways to ease the economic burden on clients and make their life comfortable throughthe use of various subsidy programs.
2) Sustainability strategies
Based on our management philosophy of “Contributing to society by creating a housing environment that is friendly topeople and the earth,” we will contribute to the realization of a sustainable society by reducing CO2 emissions from homes
and buildings through the AQUA FOAM series of products and a focus on recycling urethane insulation materials.
3) Securing construction capability
In order for the Company to achieve sustainable growth, it is vital to establish a construction system, or securing workers
in other words. To this end, we are implementing Saturdays and Sundays off work, raising wages in conjunction with the
expansion of various allowances such as the Childcare Support Allowance and Metropolitan Region Allowance, offering
an attractive work environment, building career paths and holding a safety convention, among other initiatives.
4) Maintaining Prime Market listingOn December 20, 2021, we disclosed our “Plan to Meet the Continued Listing Criteria for New Market Segments,” and―6―

in order to meet the listing maintenance requirements for the Prime Market by the end of December 2023, we aim toincrease our corporate value, contribute to sustainability, receive a proper valuation in the stock market, and improve theliquidity of our shares. On the other hand, following the revision of the rules of the Tokyo Stock Exchange, Inc., which
took effect on April 1, 2023, there was an opportunity to re-select the Standard Market, which reduces the risk of delisting.
In response, we once again examined whether to maintain listing on the Prime Market or the Standard Market within ourcompany. As our Board of Directors, we reaffirmed our intention to maintain listing on the Prime Market as originallyplanned by working to achieve sustainable growth and improve corporate value and market capitalization over the medium
to long term. Please also refer to the "Notice of Acquisition and Cancellation of the 2nd Stock Acquisition Rights (withExercise Price Revision Clauses)," which was separately disclosed today.
2. Financial Forecasts for the Fiscal Year Ending December 31, 2023
There are no changes to the financial forecasts announced on February 10, 2023. Should any revisions need to be madeto financial forecasts in the future, we will disclose the information as soon as possible.

―7―2. Quarterly Financial Statements and Primary Notes(1) Quarterly Balance Sheet(in thousand yen)
As of December 31, 2022

As of June 30, 2023

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade, and contract
assetsElectronically recorded monetary claims

2,676,798

2,112,804

6,898,860

5,732,965

754,166

572,460

Inventories
Accounts receivable - other

3,121,628
4,216,577

2,254,452
3,048,383

248,481(25,979)

131,560(21,753)

17,136,367

13,830,872

2,285,532
1,680,298

2,365,785
1,680,298

Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Land
Other, net

380,272

301,371

4,346,104

4,347,455

Leasehold interests in land
Other

15,00081,29615,00078,292

Total intangible assets

96,296

93,292458,450(67,254)545,968(67,571)

Total property, plant and equipment
Intangible assets

Investments and other assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets―8―

391,195

478,396

4,833,596

4,919,144

21,969,963

18,750,016

(in thousand yen)
As of December 31, 2022

As of June 30, 2023

Liabilities
Current liabilities
Accounts payable - trade
Short-term borrowings

6,272,179
6,000,000

5,005,994
4,100,000

Current portion of long-term borrowings
Lease liabilities

33,20032,79016,50030,698

Income taxes payable
Provision for bonuses

424,892
25,812

Consumption tax payable

670,554
19,890－Other873,654507,562

13,902,269

10,359,908

Total current liabilities
Non-current liabilities
Lease liabilities

248,448

48,21732,965

Asset retirement obligations
Other

39,543
13,36839,65866,511

Total non-current liabilities

101,129

139,135

14,003,399

10,499,044

Shareholders’ equity
Share capital

1,903,649

1,903,649

Capital surplus
Retained earnings

1,885,273
6,270,636

1,912,505
6,467,131

Treasury shares(2,093,016)(2,035,198)

Total shareholders’ equity

7,966,543

8,248,088

Valuation difference on available-for-sale securities

20

151

Total valuation and translation adjustments

20
－

151
2,732

7,966,564

8,250,972

21,969,963

18,750,016

Total liabilities
Net assets

Valuation and translation adjustments

Share acquisition rights
Total net assets
Total liabilities and net assets―9―(2) Quarterly Income Statement
Six months ended June 2023
(in thousand yen)Six months ended
June 30, 2022
Net sales
Cost of sales

Six months ended
June 30, 2023

11,742,034

13,158,259
10,034,487

Gross profit

9,324,784
2,417,249

Selling, general and administrative expenses

1,500,896

1,743,110

916,353

1,380,662

21,366
2,142－

11,8102,054

Operating profit

3,123,772

Non-operating income
Interest income
Insurance claim income
Surrender value of insurance policies
Other
Total non-operating income

6,527
7,108

4,136
27,64427,500

5,464
2,168

7,491
92

Non-operating expenses
Interest expenses
Other
Total non-operating expenses

7,633

7,584

936,364

1,400,578

Gain on sale of non-current assets

220

842

Total extraordinary income

220

842

Loss on sale of non-current assets
Loss on retirement of non-current assets

1,098
0

－

Total extraordinary losses

1,098

1,677

Profit before income taxes

935,487

1,399,743

Income taxes - current

262,003

390,080

Income taxes - deferred

46,682

61,660Total income taxes

308,686

451,740

Profit626,800

948,002

Ordinary profit
Extraordinary income

Extraordinary losses

―10―

1,677

(3) Quarterly Cash Flow Statement(in thousand yen)Six months ended
June 30, 2022
Cash flows from operating activities
Profit before income taxes

Six months ended
June 30, 2023

935,487

1,399,743

Depreciation
Increase (decrease) in allowance for doubtful accounts

109,095(9,431)

116,649(3,908)

Increase (decrease) in provision for bonuses
Interest income(1,648)(21,366)

5,921(11,810)

Interest expenses
Insurance claim income

5,464(2,142)－

7,491(2,054)(6,527)877

835

715,104

498,871(1,377,889)
160,490

867,176(1,266,185)

Decrease (increase) in accounts receivable - other
Other, net

72,081(408,445)

1,168,194
10,979Subtotal

177,677

2,785,377

Interest and dividends received
Proceeds from insurance income

21,366
2,142－

11,8102,054

Surrender value of insurance policies
Loss (gain) on sale and retirement of non-current
assetsDecrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables

Proceeds from insurance surrender value
Interest paid

(5,464)

17,214(7,491)

Income taxes paid

(221,685)(631,026)

Net cash provided by (used in) operating activities(25,963)

2,177,938

Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment(20,547)
4,979(124,099)
4,500

Purchase of intangible assets
Purchase of investment securities(6,161)(119)－(11,840)(119)

Cash flows from investing activities

Purchase of insurance funds
Other, net(3,709)(64,608)(1,466)(25,558)(197,635)

Net increase (decrease) in short-term borrowings
Repayments of long-term borrowings

600,000(16,700)(1,900,000)(16,700)

Repayments of finance lease obligations
Repayment of long-term accounts payable(18,627)－

Proceeds from sale and leaseback transactions
Proceeds from sale and installment back transactions

46,591－(17,344)(2,736)－

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

56,209

－

3,020

－

84,762

Proceeds from issuance of stock acquisition rights
Disposal of treasury shares upon exercise of stockacquisition rights
Dividends paid

(646,217)(751,507)

Net cash provided by (used in) financing activities(34,953)(2,544,297)

Net increase (decrease) in cash and cash equivalents(86,475)(563,993)

Cash and cash equivalents at beginning of period

1,926,921

2,676,798

Cash and cash equivalents at end of period

1,840,445

2,112,804―11―

(4) Notes to Quarterly Financial Statements(Notes on Going Concern Assumption)
Not applicable.
(Notes on Significant Changes in Amount of Shareholders’ Equity)
Not applicable.
(Segment Information)
No disclosure is made about segments as the Company operates in only one business segment of heat insulation
work and related services.
(Additional Information)
Not applicable.
(Important Subsequent Events)
Not applicable.

―12―