Interim report
Page 1
Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. Consolidated Financial Results for the Three Months Ended May 31, 2025 [Japanese GAAP] July 2, 2025 Company name: Daiseki Co., Ltd. Listing: Tokyo Stock Exchange, Nagoya Stock Exchange Securities code: 9793 URL: https://www.daiseki.co.jp/english/index.html Representative: Tetsuya Yamamoto, President and Representative Director Inquiries: Hideki Katase, Managing Executive Officer, General Manager of Headquarters of Planning and Management Telephone: +81-52-728-1155 Scheduled date to commence dividend payments: - Preparation of supplementary material on financial results: Yes Holding of financial results briefing: None (Yen amounts are rounded down to millions, unless otherwise noted.) 1. Consolidated Financial Results for the Three Months Ended May 31, 2025 (March 1, 2025 to May 31, 2025) (1) Consolidated Operating Results (Percentages indicate year-on-year changes.) Net sales Operating profit Ordinary profit Profit attributable to owners of parent Three months ended Millions of yen % Millions of yen % Millions of yen % Millions of yen % May 31, 2025 17,912 7.2 3,830 (1.9) 3,916 (7.2) 2,441 (9.1) May 31, 2024 16,703 (6.5) 3,906 (0.7) 4,220 4.4 2,687 10.5 (Note) Comprehensive income: Three months ended May 31, 2025: ¥ 2,626 million [ (7.8) %] Three months ended May 31, 2024: ¥ 2,850 million [ 8.1%] Basic earnings per share Diluted earnings per share Three months ended Yen Yen May 31, 2025 51.02 - May 31, 2024 55.55 - (2) Consolidated Financial Position Total assets Net assets Capital adequacy ratio As of Millions of yen Millions of yen % May 31, 2025 110,684 91,579 73.9 February 28, 2025 113,635 93,850 74.2 (Reference) Equity: As of May 31, 2025: ¥ 81,906 million As of February 28, 2025: ¥ 84,326 million
Page 2
2. Dividends Annual dividends 1st quarter-end 2nd quarter-end 3rd quarter-end Year-end Total Yen Yen Yen Yen Yen Fiscal year ended February 28, 2025 - 33.00 - 39.00 72.00 Fiscal year ending February 28, 2026 - Fiscal year ending February 28, 2026 (Forecast) 36.00 - 36.00 72.00 (Note) Revision to the forecast for dividends announced most recently: None 3. Consolidated Financial Results Forecast for the Fiscal Year Ending February 28, 2026(March 1, 2025 to February 28, 2026) (Percentages indicate year-on-year changes.) Net sales Operating profit Ordinary profit Profit attributable to owners of parent Basic earnings per share Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen Six months ending August 31, 2025 35,600 8.5 7,900 7.8 7,900 2.3 5,000 2.4 105.11 Full year 70,000 4.0 15,700 9.6 15,800 6.5 9,900 6.3 208.76 (Note) Revision to the financial results forecast announced most recently: None * Notes: (1) Significant changes in the scope of consolidation during the period: None Newly included: - (Company name: ) Excluded: - (Company name: ) (2) Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements: None (3) Changes in accounting policies, changes in accounting estimates, and restatement 1) Changes in accounting policies due to revisions to accounting standards and other regulations: Yes 2) Changes in accounting policies due to other reasons: None 3) Changes in accounting estimates: None 4) Restatement: None (4) Number of issued shares (common shares) 1) Total number of issued shares at the end of the period (including treasury shares): May 31, 2025: 51,000,000 shares February 28, 2025: 51,000,000 shares 2) Number of treasury shares at the end of the period: May 31, 2025: 3,723,261 shares February 28, 2025: 2,923,061 shares 3) Average number of shares outstanding during the period: Three months ended May 31, 2025: 47,854,025 shares Three months ended May 31, 2024: 48,384,757 shares * Review of the Japanese-language originals of the attached consolidated quarterly financial statements by certified public accountants or an audit firm: None * Proper use of earnings forecasts, and other special matters The above forecasts are based on currently available information and are subject to a number of uncertainties. Actual results may differ from the above forecasts due to changes in business performance and other factors.
Page 3
Daiseki Co., Ltd. (9793) ―1― Attached Material 1. Qualitative Information on Quarterly Consolidated Financial Results ............................................................... 2 (1) Explanation of Operating Results ................................................................................................................. 2 (2) Explanation of Financial Position ................................................................................................................. 2 (3) Explanation of Consolidated Financial Results Forecast and Other Forward-Looking Statements ............. 2 2. Quarterly Consolidated Financial Statements and Principal Notes ..................................................................... 3 (1) Quarterly Consolidated Balance Sheets ........................................................................................................ 3 (2) Quarterly Consolidated Statements of Income and Comprehensive Income ................................................ 5 Quarterly Consolidated Statements of Income (For the three months) ......................................................... 5 Quarterly Consolidated Statement of Comprehensive Income (For the three months) ................................ 6 (3) Notes to Quarterly Consolidated Financial Statements ................................................................................ 7 Notes on premise of going concern .............................................................................................................. 7 Notes on significant changes in the amount of shareholders’ equity ............................................................ 7 Notes on segment information, etc. .............................................................................................................. 7 Notes on statements of cash flows ................................................................................................................ 7
Page 4
Daiseki Co., Ltd. (9793) ―2― 1. Qualitative Information on Quarterly Consolidated Financial Results (1) Explanation of Operating Results During the three months ended May 31, 2025, the Japanese economy saw continued sluggish industrial production due to the impact of soaring prices of energy resources, including crude oil, and for labor and raw material costs due to the impact of U.S. trade policy and changes in the political situation, as well as rising prices. Amid such an economic situation, in a mainstay business of the Company group (the “Group”), the industrial waste treatment business of the Company centered on industrial wastewater treatment achieved record-high sales, ordinary profit, and net income, although they were slightly lower than planned, on account of the aggressive acquisition of wastewater as a raw material for recycled fuels, despite higher raw material and labor costs, and other factors. In the soil remediation business of Daiseki Eco. Solution Co., Ltd., amid concerns about stagnation in construction work due to overtime restrictions in the construction industry and labor shortages caused by an aging workforce, both sales and profits rose, exceeding the plan due to contributions from large-scale, high value-added projects in the Kanto region that have been ongoing since the previous fiscal year. In the lead recycling business of Daiseki MCR Co., Ltd., while factory production remained steady, the impact of market prices for lead and exchange rates, as well as factors such as rising raw materials costs caused profit to fall slightly below expectations. System Kikou Co., Ltd.’s washing business for large tanks saw both sales and profits fall short of plans due to the fact that some construction projects scheduled for completion in the first quarter were brought forward to the previous fiscal year while others were pushed back to the second quarter. The Group has aimed for a company that is well-liked by local communities by conducting management that emphasizes our purpose of becoming “an environment-creating company contributing to society through the environment by making the best use of limited resources” as an environment-creating company, continuing to step up efforts to retain and train human resources while also investing to expand capacity. As a result, for the three months ended May 31, 2025, net sales, operating profit, ordinary profit, and profit attributable to owners of parent were ¥17,912 million (up 7.2% year on year), ¥3,830 million (down 1.9% year on year), ¥3,916 million (down 7.2% year on year), and ¥2,441 million (down 9.1% year on year), respectively. Net sales amounted to a record high for the first quarter. As the Group consists of a single business segment, the environment-related business, the information by segment is omitted. (2) Explanation of Financial Position Total assets as of May 31, 2025 decreased by ¥2,951 million compared with the end of the previous fiscal year, amounting to ¥110,684 million. The decrease was largely due to a decline in cash and deposits of ¥3,927 million, while being offset by an increase in notes and accounts receivable - trade, and contract assets of ¥1,210 million. Liabilities decreased by ¥680 million compared with the end of the previous fiscal year, amounting to ¥19,104 million. The decrease was largely due to decreases in income taxes payable of ¥1,083 million and provision for bonuses of ¥215 million, offset by an increase in short-term borrowings of ¥440 million. Net assets decreased by ¥2,271 million compared with the end of the previous fiscal year, amounting to ¥91,579 million. The decrease was largely due to a ¥2,947 million decrease caused by an increase in treasury shares resulting from purchase of treasury shares, offset by increases in retained earnings of ¥566 million by recording profit gains, etc., and non- controlling interests of ¥149 million. (3) Explanation of Consolidated Financial Results Forecast and Other Forward-Looking Statements No revisions have been made to the consolidated financial results forecast announced on April 8, 2025.
Page 5
Daiseki Co., Ltd. (9793) ―3― 2. Quarterly Consolidated Financial Statements and Principal Notes (1) Quarterly Consolidated Balance Sheets (Millions of yen) As of February 28, 2025 As of May 31, 2025 Assets Current assets Cash and deposits 30,416 26,489 Notes and accounts receivable - trade, and contract assets 11,751 12,961 Electronically recorded monetary claims - operating 1,166 1,325 Securities 500 100 Inventories 2,138 2,199 Other 685 577 Allowance for doubtful accounts (8) (8) Total current assets 46,650 43,644 Non-current assets Property, plant and equipment Buildings and structures, net 14,345 14,650 Machinery, equipment and vehicles, net 6,507 6,319 Land 29,391 29,507 Construction in progress 1,350 1,331 Other, net 808 844 Total property, plant and equipment 52,403 52,654 Intangible assets Goodwill 773 739 Customer-related intangible assets 819 802 Other 362 353 Total intangible assets 1,955 1,895 Investments and other assets Investment securities 7,169 6,907 Long-term time deposits 3,500 3,500 Deferred tax assets 1,402 1,547 Other 554 536 Allowance for doubtful accounts (1) (1) Total investments and other assets 12,625 12,490 Total non-current assets 66,984 67,039 Total assets 113,635 110,684
Page 6
Daiseki Co., Ltd. (9793) ―4― (Millions of yen) As of February 28, 2025 As of May 31, 2025 Liabilities Current liabilities Notes and accounts payable - trade 4,048 3,835 Electronically recorded obligations - operating 1,013 994 Short-term borrowings 1,330 1,770 Current portion of long-term borrowings 928 876 Income taxes payable 2,494 1,411 Provision for bonuses 602 386 Other 3,576 4,229 Total current liabilities 13,993 13,503 Non-current liabilities Bonds payable 4 4 Long-term borrowings 3,772 3,580 Provision for retirement benefits for directors (and other officers) 27 22 Retirement benefit liability 1,286 1,308 Deferred tax liabilities 268 267 Other 432 418 Total non-current liabilities 5,791 5,601 Total liabilities 19,784 19,104 Net assets Shareholders' equity Share capital 6,382 6,382 Capital surplus 7,071 7,071 Retained earnings 82,193 82,760 Treasury shares (11,456) (14,404) Total shareholders' equity 84,190 81,809 Accumulated other comprehensive income Valuation difference on available-for-sale securities 52 33 Remeasurements of defined benefit plans 83 62 Total accumulated other comprehensive income 135 96 Non-controlling interests 9,523 9,673 Total net assets 93,850 91,579 Total liabilities and net assets 113,635 110,684
Page 7
Daiseki Co., Ltd. (9793) ―5― (2) Quarterly Consolidated Statements of Income and Comprehensive Income Quarterly Consolidated Statements of Income (For the three months) (Millions of yen) For the three months ended May 31, 2024 For the three months ended May 31, 2025 Net sales 16,703 17,912 Cost of sales 10,840 11,947 Gross profit 5,862 5,964 Selling, general and administrative expenses 1,956 2,134 Operating profit 3,906 3,830 Non-operating income Interest income 17 26 Dividend income 0 0 Insurance claim income 1 5 Compensation income 5 20 Subsidy income 287 15 Other 14 32 Total non-operating income 326 100 Non-operating expenses Interest expenses 7 9 Commission for purchase of treasury shares 1 2 Other 3 2 Total non-operating expenses 12 14 Ordinary profit 4,220 3,916 Extraordinary income Gain on sale of non-current assets 2 5 Total extraordinary income 2 5 Extraordinary losses Loss on retirement of non-current assets 9 16 Loss on tax purpose reduction entry of non-current assets 19 - Total extraordinary losses 28 16 Profit before income taxes 4,194 3,905 Income taxes - current 1,339 1,327 Income taxes - deferred (30) (117) Total income taxes 1,308 1,209 Profit 2,886 2,696 Profit attributable to non-controlling interests 198 254 Profit attributable to owners of parent 2,687 2,441
Page 8
Daiseki Co., Ltd. (9793) ―6― Quarterly Consolidated Statement of Comprehensive Income (For the three months) (Millions of yen) For the three months ended May 31, 2024 For the three months ended May 31, 2025 Profit 2,886 2,696 Other comprehensive income Valuation difference on available-for-sale securities (40) (47) Remeasurements of defined benefit plans, net of tax 4 (22) Total other comprehensive income (35) (69) Comprehensive income 2,850 2,626 Comprehensive income attributable to Comprehensive income attributable to owners of parent 2,655 2,402 Comprehensive income attributable to non-controlling interests 195 224
Page 9
Daiseki Co., Ltd. (9793) ―7― (3) Notes to Quarterly Consolidated Financial Statements Notes on premise of going concern Not applicable. Notes on significant changes in the amount of shareholders’ equity (Purchase of treasury shares) The Company resolved a matter regarding repurchase of its own shares at the Board of Directors’ meeting held on April 8, 2025 in accordance with the provisions of Article 156 of the Companies Act as applied mutatis mutandis pursuant to Article 165, Paragraph 3 of the same Act, and acquired 800,000 shares of its common stock. As a result, treasury shares increased by ¥2,947 million in the three months ended May 31, 2025. Changes in accounting policies (Application of Accounting Standard for Current Income Taxes) The “Accounting Standard for Current Income Taxes” (ASBJ Statement No. 27, October 28, 2022; hereinafter, “Revised Accounting Standard 2022”), etc. has been applied since the beginning of the first quarter of the current consolidated fiscal year. Revisions concerning the categories in which current income taxes should be recorded (taxes on other comprehensive income) are subject to the transitional treatment set forth in the proviso of paragraph 20- 3 of the Revised Accounting Standard 2022 and the transitional treatment set forth in the proviso of paragraph 65-2 (2) of the Guidance on Accounting Standard for Tax Effect Accounting (ASBJ Guidance No. 28, October 28, 2022; hereinafter, “Revised Guidance 2022”). The change in accounting policies had no impact on the consolidated financial statements for the first quarter under review. With regard to revisions related to changes in the accounting treatment for consolidated financial statements when gains/losses on sale of shares, etc. in subsidiaries resulting from transactions between consolidated subsidiaries are deferred for tax purposes, the Company has applied the Revised Guidance 2022 from the beginning of the first quarter of the current consolidated fiscal year. The change in accounting policies was applied retrospectively to the consolidated financial statements for the first quarter of the previous fiscal year and the entire previous fiscal year. The change in the accounting policies had no impact on the consolidated financial statements for the first quarter of the previous fiscal year or the entire previous fiscal year. Notes on segment information, etc. This information has been omitted as the Group consists of a single business segment, the environment- related business. Notes on statements of cash flows Quarterly consolidated statements of cash flows for the three months ended May 31, 2025 are not prepared. Depreciation and amortization (including amortization of intangible assets excluding goodwill and customer-related assets), amortization of goodwill and amortization of customer-related assets for the three months ended May 31, 2025 are as follows. (Millions of yen) For the three months ended May 31, 2024 For the three months ended May 31, 2025 Depreciation and amortization 794 820 Amortization of goodwill 34 34 Amortization of customer-related assets 16 16