This document has been translated from a part of the Japanese original for reference purposes only. In the event of any discrepancy between this translated document SENKO Group Holdings Co., Ltd.
Stock Listed on: Tokyo Stock Exchange URL https://www.senkogrouphd.co.jp/en/ Name: Yasuhisa Fukuda Name: Satoru Kokubo Tel. (03) 6862-8842 Scheduled Date of Issue of Quarterly Financial Report: Quarterly Supplemental Information Materials: Quarterly Information Meeting: November 14, 2023 Yes Yes (for analysts) Scheduled Date of Dividend Paid: December 4, 2023 November 13, 2023 (Amounts less than ¥1 million have been rounded down) 1. Consolidated Operating Results for the Six Months Ended September 30, 2023 (1) Consolidated Operating Results (Cumulative)
Six months ended September 30, 2023: ¥13,002 million (7.6%) Six months ended September 30, 2022: ¥12,086 million (54.8%)
As of September 30, 2023: ¥170,607 million As of March 31, 2023: ¥160,510 million
3. Forecast of Consolidated Operating Results for the Fiscal Year Ending March 31, 2024 (From April 1, 2023 to March 31, 2024) (Percentage figures represent year-on-year changes)
Notes (1) Changes in significant subsidiaries during the period (Changes in specified subsidiaries associated with change in scope of consolidation): None (2) Use of accounting methods specifically for the preparation of the quarterly consolidated financial statements: None (3) Changes in accounting principles and estimates, and retrospective restatement (a) Changes due to revision of accounting standards: None (b) Changes other than in (a): None (c) Changes in accounting estimates: None (d) Retrospective restatement: None (4) Shares outstanding (Common shares) (a) Shares outstanding (including treasury shares) 157,070,496 shares As of September 30, 2023: As of March 31, 2023: 157,070,496 shares (b) Treasury shares 6,736,476 shares As of September 30, 2023: As of March 31, 2023: 7,853,758 shares (c) Average number of shares (Cumulative) Six months ended September 30, 2023:   149,609,109 shares Six months ended September 30, 2022: 149,011,419 shares (Note)  Starting with the third quarter of the fiscal year ended March 31, 2018, the number of treasury shares at term-end includes Senko shares owned by the trust accounts of Performance-linked Stock Compensation Plan for Employees (as of September 30, 2023: 805,545 shares; as of March 31, 2023: 334,566 shares) and Performance-linked Stock Compensation Plan for Directors (as of September 30, 2023: 788,972 shares; as of March 31, 2023: 316,723 shares). In addition, starting with the fourth quarter of the fiscal year ended March 31, 2023, the number of treasury shares at term-end includes Senko shares owned by the employee shareholding association support trust ESOP (as of September 30, 2023: 4,644,700 shares; as of March 31, 2023: 5,255,100 shares). Quarterly financial results reports are exempt from quarterly reviews conducted by certified public accountants or an audit corporation. Cautionary statement regarding forecasts of operating results and special notes Forward-looking statements in these materials are based on information available to management at the time this report was prepared and assumptions that management believes are reasonable. Actual results may differ significantly from these statements for a number of reasons. For information about the assumptions used for forecasts and precautions concerning the use of forecasts, please see “Forecast for the full-term of the fiscal year ending March 31, 2024” on page 3. The supplementary material on quarterly earnings will be available on the Company’s website.

1.
Results of Operations and Financial Condition
(1)  Results of operations
In the six-month period of the fiscal year ending March 31, 2024 (April 1, 2023 to September 30, 2023), although economic activities have been normalizing after the reclassification of COVID-19 to Class 5, the outlook for the economic environment overall continues to be unclear with the protraction of the Ukraine situation, concerns about the future of the Chinese economy, and an increasingly frugal mindset due to the rising price of goods. The six-month-period performance was as follows.
Despite facing the impact of declining cargo movements in logistics, along with rising purchase prices and the like, owing to group-wide efforts to expand sales and revise tariffs and prices, along with the effect of promoting M&A, the Group achieved year-on-year increases in operating revenue, operating profit, ordinary profit and profit attributable to owners of parent. The six-month-period operating revenue by segment was as follows.
Logistics

Notwithstanding the impact of declining cargo movements, a focus on sales expansion and initiatives to address tariff revisions, together with the effect of promoting M&A, caused operating revenue to increase ¥6,603 million year on year to ¥243,194 million, and segment income rose ¥224 million year on year to ¥12,611 million.
Trading & Commerce

We strived to revise prices and expand sales while facing rising purchase prices. As a result, operating revenue increased ¥5,696 million year on year to ¥83,022 million, and segment income rose ¥61 million year on year to ¥1,082 million.
Life Support

Owing to the contribution of revenue from M&A and initiatives such as price reevisions, operating revenue increased ¥7,036 million year on year to ¥23,095 million, and segment income rose ¥630 million year on year to ¥624 million.
Business Support

We strived to expand sales and achieve recovery in the hotel business among other initiatives. As a result, operating revenue increased ¥1,689 million year on year to ¥6,514 million, and segment income rose ¥435 million year on year to ¥896 million.
Results for CHUO KAGAKU CO., LTD., which is a manufacturer of food packaging and containers and was made a consolidated subsidiary during the previous fiscal year, were operating revenue of ¥23,694 million and operating profit of ¥321 million. With the inclusion of CHUO KAGAKU CO., LTD. into the scope of consolidation, we added the Manufacturing segment in the fourth quarter of the fiscal year ended March 31, 2023. As a result, year-on-year changes are not presented.
(2)  Financial condition
1) Assets, liabilities and net assets Total assets Total assets as of September 30, 2023 were ¥612,505 million, ¥30,654 million higher than at the end of the previous fiscal year. Current assets amounted to ¥214,322 million, up ¥12,549 million from the end of the previous fiscal year. This was mainly due to increases of ¥6,855 million in cash and deposits and ¥5,044 million in trade notes and accounts receivable, and contract assets. Non-current assets totaled ¥398,182 million, up ¥18,105 million from the end of the previous fiscal year. This was primarily due to increases of ¥11,703 million in property, plant and equipment, ¥2,842 million in intangible assets, and ¥3,559 million in investments and other assets.
Liabilities
Liabilities as of September 30, 2023 increased ¥15,513 million from the end of the previous fiscal year to ¥418,260 million. Current liabilities totaled ¥154,834 million, down ¥10,522 million from the end of the previous fiscal year. This was mainly due to decreases of ¥8,966 million in short-term borrowings and ¥5,230 million in other current liabilities, despite increases of ¥1,777 million in trade notes and accounts payable, ¥926 million in lease liabilities, and ¥624 million in provision for bonuses. Non-current liabilities totaled ¥263,425 million, up ¥26,035 million from the end of the previous fiscal year. This was mainly due to increases of ¥24,387 million in long-term borrowings, ¥1,024 million in long-term lease liabilities, and ¥734 million in deferred tax liabilities.
Net assets
Net assets as of September 30, 2023 rose ¥15,141 million from the end of the previous fiscal year to ¥194,245 million. This was primarily due to increases of ¥6,220 million in retained earnings, ¥1,079 million in treasury shares, ¥2,107 million in foreign currency translation adjustment, and ¥5,059 million in non-controlling interests. The equity ratio as of September 30, 2023 increased by 0.3 percentage points to 27.9% from the end of the previous fiscal year.
2)   Cash flows
Cash and cash equivalents as of September 30, 2023 increased by ¥6,765 million from the end of the previous fiscal year to ¥62,912 million. Net cash provided by operating activities amounted to ¥22,049 million. This was mainly due to a decrease in funds due to increase in trade receivables and contract assets of ¥4,469 million and income taxes paid of ¥5,024 million, despite profit before income taxes of ¥15,036 million, depreciation of ¥12,979 million, and amortization of goodwill of ¥695 million. Net cash used in investing activities totaled ¥24,801 million. This was mainly due to purchase of property, plant and equipment of ¥21,843 million, payments of guarantee deposits of ¥1,258 million, and purchase of shares of subsidiaries resulting in change in scope of consolidation of ¥1,593 million. Net cash provided by financing activities totaled ¥8,360 million. This was mainly due to proceeds from long-term borrowings of ¥30,629 million, despite net decrease in short-term borrowings of ¥7,708 million, repayments of long-term borrowings of ¥7,423 million, repayments of finance lease liabilities of ¥4,195 million, and dividends paid of ¥2,630 million.
(3)  Forecast for the full-term of the fiscal year ending March 31, 2024
Considering the consolidated operating results for the six months ended September 30, 2023 and the current circumstances, we have revised our full-year forecast of consolidated operating results for the fiscal year ending March 31, 2024 announced on May 12, 2023, as follows. For details, please refer to “Notice Regarding Revision to Full-Year Forecast of Consolidated Operating Results and Dividends of Surplus (Interim Dividend and Increased Dividend)," which was announced today.
(Reference) Fundamental policy for distribution of earnings and dividends for the current fiscal year While securing internal reserves necessary for future business development and management structure reinforcement, the basic policy of the Company is to return profits to shareholders by implementing stable dividends and dividends that are linked to business results with the aim of enhancing the return to its shareholders. In addition, under this policy, the Company aims to pay dividends with a payout ratio of 40% by the final fiscal year of the medium-term business plan (April 2022 to March 2027). In accordance with this policy, we will pay a dividend of ¥19.00 per share for the interim dividend for the fiscal year ending March 31, 2024, an increase of ¥2.00 from the dividend forecast most recently announced, considering the steady progress in consolidated operating results during the six months ended September 30, 2023. Accordingly, the forecast of the total annual dividend for the fiscal year ending March 31, 2024, including the year-end dividend of ¥19.00, is ¥38.00 per share.

2.
Consolidated Financial Statements

(2) Consolidated statements of (comprehensive) income
(Consolidated statements of income)

(Consolidated statements of comprehensive income)
(For the six months ended September 30, 2022 and 2023)