Consolidated Financial Results for the FY2018 Ended March 31, 2019 ( SINCE 1881 ) —1—
1. Overview of Operating Results, etc.
(1) Overview of Operating Results for the Fiscal Year ended March 31, 2019
During the fiscal year ended March 31, 2019, the Japanese economy continued a gradual recovery, supported by an improving employment and income environment. In the construction industry, although orders from the public sector decreased, overall order conditions increased compared to the previous year, with orders from the private sector increasing in both manufacturing and non-manufacturing industries. However, concerns remained including the possibility of construction costs being pushed up by tight labor market and materials supply. Under these circumstances, the Toda Group's consolidated results were as follows. Consolidated net sales increased 19.0% year on year to ¥510.4 billion, mainly owing to an increase in net sales of completed construction contracts at the Company. In terms of operating income and loss, gross profit increased 11.2% year on year to ¥67.1 billion, due primarily to an increase in gross profit in the domestic architectural construction. Meanwhile, while selling, general and administrative expenses rose 9.1% year on year to ¥32.5 billion, consolidated operating income increased 13.3% year on year to ¥34.5 billion. Ordinary income increased 13.5% year on year to ¥37.4 billion, with a solid contribution from interest income and dividend income on investment securities and other factors. Profit attributable to owners of parent increased to ¥25.5 billion, a 0.6% increase over the previous year, in part due to gain on sales of investment securities, despite the recording of impairment loss.
The results for each segment are as follows.
The Group has changed its reportable segments from the fiscal year ended March 31, 2019. Comparison with and analysis of the previous year are based on segment classification after the change. For details, please refer to "1. Overview of reportable segments" of "3. Consolidated Financial Statements," "(5) Notes to Consolidated Financial Statements" (Segment information, etc.). Segment results include internal sales or transfers between segments.
Domestic Architectural Construction Business
The segment recorded net sales of ¥360.1 billion, up 28.0% year on year. Segment operating income came to ¥25.4 billion, up 42.4%. On a non-consolidated basis, overall orders received increased 17.1% year on year to ¥381.7 billion, as orders from the public sector and private sector increased 75.0% and 11.7% year on year, respectively.
Domestic Civil Engineering Business
The segment recorded net sales of ¥100.3 billion, down 8.3% year on year, and operating income of ¥11.2 billion, down 4.9%. On a non-consolidated basis, overall orders received increased 43.1% year on year to ¥155.8 billion. Orders from the public sector increased 44.0% year on year, boosted by orders for large projects.
Investment and Development Business
The segment recorded net sales of ¥10.7 billion, up 62.3% year on year, and operating income of ¥1.8 billion, up 18.4% year on year.
Domestic Group Companies Business
The segment recorded net sales of ¥45.0 billion, up 33.1% year on year, and operating income of ¥1.5 billion, up 78.6% year on year.
New Business
Net sales from new business totaled ¥0.2 billion, up 10.4% year on year. The segment recorded an operating loss of ¥0.8 billion, compared to the previous year's ¥0.3 billion loss.
Overseas Business
Net sales from overseas business totaled ¥17.7 billion, up 28.2% year on year. The segment recorded an operating loss of ¥4.0 billion, compared to the previous year's ¥1.1 billion loss.
(2) Overview of Financial Position for the Fiscal Year ended March 31, 2019
Assets, liabilities, and net assets
Assets
Total assets as of March 31, 2019, were ¥667.7 billion, up 19.6% or a ¥109.4 billion increase from the end of the previous fiscal year. The increase mainly reflects increases of ¥90.2 billion in notes receivable, accounts receivable from completed construction contracts and other and ¥16.8 billion in cash and deposits, despite a decrease of ¥20.0 billion in securities.
Liabilities
Total liabilities as of March 31, 2019, were ¥398.5 billion, up 29.0% or an ¥89.6 billion increase from the end of the previous fiscal year. The major contributors to this increase in liabilities were a ¥50.0 billion increase in commercial papers and a ¥26.8 billion increase in notes payable, accounts payable for construction contracts and other, which were only partially offset by a decrease of ¥2.4 billion in long- term loans payable. Net assets Total net assets as of March 31, 2019, were ¥269.1 billion, up 7.9% or a ¥19.7 billion increase from the end of the previous fiscal year, mainly due to posting of ¥25.5 billion in profit attributable to owners of parent. The equity capital ratio was 39.9%.
(3) Overview of Cash Flows for the Fiscal Year ended March 31, 2019
Cash and cash equivalents at the end of the fiscal year totaled ¥96.5 billion, ¥3.9 billion less than at the end of the previous fiscal year.
Cash Flows from Operating Activities
Net cash used in operating activities came to ¥28.3 billion, compared with net cash provided totaling ¥19.3 billion in the previous fiscal year. The main outflows were a ¥90.3 billion increase in notes and accounts receivable-trade and a ¥3.5 billion decrease in advances received on uncompleted construction contracts. Inflows included a ¥25.7 billion increase in notes and accounts payable-trade.
Cash Flows from Investing Activities
Net cash used in investing activities was ¥24.4 billion, compared with the ¥7.8 billion used in the previous fiscal year. The main inflows were the ¥2.9 billion from subsidy income and ¥7.0 billion from sales and redemption of investment securities. The main outflows were purchases of property, plant and equipment totaling ¥22.5 billion, purchases of investment securities totaling ¥7.3 billion and purchase of shares of subsidiaries totaling ¥2.1 billion.
Cash Flows from Financing Activities
Net cash provided by financing activities totaled to ¥49.0 billion, compared with ¥2.0 billion in net cash used in the previous fiscal year. The main outflow was dividends paid totaling ¥6.1 billion. The main inflows were ¥5.0 billion from proceeds from issuance of bonds and ¥50.0 billion from issuance of commercial papers. —3—
Equity ratio on a market price basis = market capitalization / total assets Number of years to redeem debt = interest-bearing debt / cash flows Interest coverage ratio = cash flows / interest payments *The indices are calculated based on consolidated financial figures. * Market capitalization is calculated by multiplying the stock price at the end of the fiscal year by the number of outstanding shares at the end of the fiscal year excluding treasury stock. *Cash flows from operating activities are used for cash flows. *Interest-bearing debt is all of the liabilities recorded on the consolidated balance sheets for which the Company is paying interest
(4) Future Outlook
The Japanese economy is expected to remain in a moderate recovery mode, with both employment and incomes continuing to improve. Meanwhile, uncertainties in the overseas economy and the impacts of fluctuations in the financial and capital markets will require attention. The construction industry expects to continue seeing a firm market environment but the outlook remains clouded by uncertainties, including private-sector business sentiment and the possibility of construction costs being pushed up by a tight labor market. We forecast consolidated net sales of ¥520.0 billion (up 1.9% year on year), operating income of ¥30.7 billion (down 11.1%), ordinary income of ¥32.8 billion (down 12.5%), and profit attributable to owners of parent of ¥22.8 billion (down 10.9%). On a non-consolidated basis, we expect orders received to total ¥470.0 billion (down 14.4% year on year), net sales of ¥471.5 billion (up 0.7%), operating income of ¥28.5 billion (down 11.5%), ordinary income of ¥30.6 billion (down 12.6%), and profit of ¥21.6 billion (down 11.5%).
(5) Basic Policy on Profit Distribution and Dividends in the Fiscal Year ended March 31, 2019 and the
Fiscal Year ending March 31, 2020
The Company's basic policy is to distribute profit based on business results and the business environment after giving consideration to the provision of continuous and stable dividends to shareholders and the need to secure sufficient retained earnings essential for improving the Company's competitiveness and its financial position. In line with this basic policy, for the fiscal year ended March 31, 2019, the Company will pay an annual dividend of ¥20 per share. The Company also plans to pay an annual dividend of ¥22 per share for the fiscal year ending March 31, 2020.
2. Basic Rational for Selection of Accounting Standards
The Toda Group intends to continue producing consolidated financial statements based on Japanese accounting standards to enable comparisons of the Group's consolidated statements from different fiscal years and comparisons with other companies. The Group also intends to make an appropriate response to the International Financial Reporting Standards (IFRS) based on considerations of the situation in Japan and abroad. —5—
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Consolidated Statements of Comprehensive Income Years ended March 31, 2018 and 2019
Year ended March 31, 2018 (April 1, 2017 through March 31, 2018)
Year ended March 31, 2019 (April 1, 2018 through March 31, 2019)
Year ended March 31, 2019 (April 1, 2018 through March 31, 2019)
5. Other
the changes in various factors. 2. Net sales are based on business segments and intercompany sales are eliminated. (2) Summary of Non-consolidated Results and Forecasts
number of risks and uncertainties. Therefore, the actual results of developments may differ from those presented in these forward-looking statements due to the changes in various factors. —22— (3) Orders Received, Net Sales and Balance Brought Forward (non-consolidated)
@TODA CORPORATION