Interim report
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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 Nine Months Ended May 31, 2025 [Japanese GAAP] July 11, 2025 Company name: Shinwa Co., Ltd. Listing: Tokyo Stock Exchange, Nagoya Stock Exchange Securities code: 7607 URL: https://www.shinwa-jpn.co.jp/ Representative: Yoshiro Takitani President & CEO Inquiries: Seiji Miwa General manager Telephone: +81-52-796-2533 Scheduled date to commence dividend payments: - Preparation of supplementary material on financial results: None Holding of financial results briefing: None (Yen amounts are rounded down to millions, unless otherwise noted.) 1. Consolidated Financial Results for the Nine Months Ended May 31, 2025 (September 1, 2024 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 Nine months ended Millions of yen % Millions of yen % Millions of yen % Millions of yen % May 31, 2025 64,410 13.0 3,810 62.8 3,979 51.1 2,684 48.1 May 31, 2024 56,991 (2.6) 2,340 (43.9) 2,634 (35.5) 1,812 (36.2) (Note) Comprehensive income: Nine months ended May 31, 2025: ¥ 2,349 million [ (14.7) %] Nine months ended May 31, 2024: ¥ 2,754 million [ (1.4) %] Basic earnings per share Diluted earnings per share Nine months ended Yen Yen May 31, 2025 200.34 - May 31, 2024 135.41 - (2) Consolidated Financial Position Total assets Net assets Capital adequacy ratio As of Millions of yen Millions of yen % May 31, 2025 74,569 42,908 57.3 August 31, 2024 65,600 41,628 63.2 (Reference) Equity: As of May 31, 2025: ¥ 42,763 million As of August 31, 2024: ¥ 41,474 million
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2. Dividends Annual dividends 1st quarter-end 2nd quarter-end 3rd quarter-end Year-end Total Yen Yen Yen Yen Yen Fiscal year ended August 31, 2024 - 50.00 - 52.00 102.00 Fiscal year ending August 31, 2025 - 56.00 - Fiscal year ending August 31, 2025 (Forecast) 56.00 112.00 (Note) Revision to the forecast for dividends announced most recently: None 3. Consolidated Financial Results Forecast for the Fiscal Year Ending August 31, 2025(September 1, 2024 to August 31, 2025) (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 Full year 81,000 4.1 4,100 15.2 4,250 8.9 3,000 9.9 224.05 (Note) Revision to the financial results forecast announced most recently: None * Notes: (1) Significant changes in the scope of consolidation during the period: Yes Newly included: １ (Company name: SHINWA (INDIA) ENGINEERING & TRADING PRIVATE LIMITED (India) ) 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: 13,815,319 shares August 31, 2024: 14,415,319 shares 2) Number of treasury shares at the end of the period: May 31, 2025: 413,649 shares August 31, 2024: 1,025,694 shares 3) Average number of shares outstanding during the period: Nine months ended May 31, 2025: 13,397,070 shares Nine months ended May 31, 2024: 13,384,740 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 forward-looking statements, including financial results forecast, contained in this document are based on information currently available to the company and certain assumptions that are deemed reasonable. Actual performance may differ significantly due to various factors. For the assumptions underlying the earnings forecasts and important considerations when using these forecasts, please refer to page 4 of “Attachments”, "Qualitative Information on Semi-annual Financial Results (3) Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information"
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Shinwa Co., Ltd. (7607) Consolidated Financial Results for the Nine Months Ended May 31, 2025 1 Table of Contents - Attachments 1. Qualitative Information on Quarterly Financial Results ........................................................................ 2 (1) Explanation of Operating Results....................................................................................................... 2 (2) Explanation of Financial Position ...................................................................................................... 3 (3) Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information .. 3 2. Quarterly Consolidated Financial Statements and Principal Notes ........................................................ 4 (1) Quarterly Consolidated Balance Sheets ............................................................................................. 4 (2) Quarterly Consolidated Statements of Income and Comprehensive Income ..................................... 6 Quarterly Consolidated Statement of Income ....................................................................................... 6 For the nine months ended May 31, 2024 and 2025 .......................................................................... 6 Quarterly Consolidated Statement of Comprehensive Income ............................................................. 7 For the nine months ended May 31, 2024 and 2025 .......................................................................... 7 (3) Notes to Quarterly Consolidated Financial Statements ...................................................................... 8 (Notes on changes in accounting policies) .......................................................................................... 8 (Notes on Segment information, etc.) .................................................................................................... 9 (Notes in case of significant changes in shareholders’ equity) ............................................................ 11 (Notes on going concern assumption) ................................................................................................. 11 (Notes on statements of cash flows) .................................................................................................... 11
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Shinwa Co., Ltd. (7607) Consolidated Financial Results for the Nine Months Ended May 31, 2025 2 1. Qualitative Information on Quarterly Financial Results (1) Explanation of Operating Results During the nine months ended May 31, 2025, the outlook for the Japanese economy continued to be unclear mainly due to concerns over the impacts of price hikes on individual consumption and a growing labor shortage, in addition to rising geopolitical risks as represented by the situations in Ukraine and the Middle East, a slowdown in the Chinese economy, and heightened uncertainties over the U.S. external economic policies. In the automotive industry, where the primary users of the Group’s products operate, the automobile production volume in Japan recovered from the impact of the suspensions of operations. Capital investment remained solid, centering on investments in electrification, factory automation and labor-saving measures. In this business environment, the Group has endeavored, as part of its efforts toward achieving the performance targets in the 4th Medium-term Management Plan “Change! Shinwa Moving Forward 2026,” to strengthen its profitability, to develop business in growth markets and new domains, which were positioned as the most important issues, and to actively respond to the needs from our users, leading to the growth of sales. As a result, for the nine months ended May 31, 2025, the Group posted net sales of ¥64,410 million (up 13.0% year on year), ordinary profit of ¥3,979 million (up 51.1% year on year), and profit attributable to owners of parent of ¥2,684 million (up 48.1% year on year). Operating results by reportable segment were as follows. 1) Japan Sales of production equipment and materials for automobile manufacturers and automotive components manufacturers remained strong. In particular, sales of production equipment for electric vehicles and vehicle- mounted batteries and autonomous mobile robots (AMR), which automate in-plant logistics, remained solid. As a result of the foregoing and other factors, net sales amounted to ¥55,372 million (up 20.1% year on year), and segment profit amounted to ¥2,676 million (up 155.6% year on year). 2) Americas While sales of materials and consumable supplies for Japanese automobile manufacturers remained solid, we saw a reactionary decline after large-scale projects for Japanese air-conditioning equipment manufacturers in the corresponding period of the previous fiscal year. As a result, net sales amounted to ¥7,502 million (down 18.2% year on year), and segment profit amounted to ¥625 million (down 34.9% year on year). 3) Asia Pacific Sales increased mainly for materials for Japanese automobile manufacturers and automotive components manufacturers in Indonesia. SHINWA (INDIA) ENGINEERING & TRADING PRIVATE LIMITED (India), which had been a non-consolidated subsidiary, has been included in this reportable segment from the first quarter of the fiscal year ending August 31, 2025. Thanks to its contribution to the operating results and the contribution of the aforementioned increase in sales, net sales amounted to ¥3,964 million (up 20.6% year on year), and segment profit amounted to ¥496 million (up 31.5% year on year). In addition, from the first quarter of the fiscal year ending August 31, 2025, SHINWA (INDIA) ENGINEERING & TRADING PRIVATE LIMITED (India), which had been a non-consolidated subsidiary, is included in the scope of consolidation due to its increased materiality. As a result of the inclusion of SHINWA (INDIA) ENGINEERING & TRADING PRIVATE LIMITED (India) in the scope of consolidation, we changed the reportable segment classification. The segment that had covered SHINWA INTEC Co., Ltd. (Thailand), PT. SANTAKU SHINWA INDONESIA (Indonesia) and SHINWA INTEC MALAYSIA SDN. BHD. (Malaysia) was changed from “Southeast Asia” to “Asia Pacific,” and the performance of SHINWA (INDIA) ENGINEERING & TRADING PRIVATE LIMITED (India) is included in this “Asia Pacific” segment from the fiscal year ending August 31, 2025. 4) China The segment was affected by the reduction in capital investment by Japanese automobile manufacturers, which was associated with the slowdown in the Chinese economy. As a result of the foregoing and other factors, net
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Shinwa Co., Ltd. (7607) Consolidated Financial Results for the Nine Months Ended May 31, 2025 3 sales amounted to ¥3,235 million (down 16.6% year on year), and segment loss amounted to ¥15 million (segment loss of ¥0 million in the corresponding period of the previous fiscal year). 5) Other The segment was significantly affected by a reactionary decline in sales of production equipment and materials for Japanese air-conditioning equipment manufacturers located in the U.K. As a result, net sales amounted to ¥450 million (down 53.1% year on year), and segment loss amounted to ¥7 million (segment profit of ¥59 million in the corresponding period of the previous fiscal year). Net sales by reportable segment are presented inclusive of intersegment net sales. (2) Explanation of Financial Position Total assets at the end of third quarter under review amounted to ¥74,569 million, an increase of ¥8,969 million compared to the end of the previous fiscal year. Current assets increased by ¥9,366 million from the end of the previous fiscal year to ¥62,374 million. This was mainly due to an increase of ¥8,658 million in cash and deposits, an increase of ¥2,893 million in merchandise and finished goods, an increase of ¥44 million in raw materials and supplies, and an increase of ¥608 million in other under current assets, mainly due to an increase in advance payments to suppliers, despite a decrease of ¥75 million in notes receivable - trade, a decrease of ¥2,354 million in accounts receivable - trade, a decrease of ¥397 million in electronically recorded monetary claims - operating, and a decrease of ¥11 million in work in process. Non-current assets decreased by ¥396 million from the end of the previous fiscal year to ¥12,194 million. This was mainly due to a decrease of ¥208 million in buildings and structures, net and a decrease of ¥168 million in other under intangible assets, despite an increase of ¥200 million in other, net under property, plant and equipment. Current liabilities increased by ¥7,814 million from the end of the previous fiscal year to ¥29,829 million. This was mainly due to an increase of ¥1,928 million in notes and accounts payable - trade, an increase of ¥30 million in electronically recorded obligations - operating, an increase of ¥466 million in income taxes payable, an increase of ¥5,105 million in contract liabilities, and an increase of ¥523 million in other under current liabilities, mainly due to an increase in accrued expenses, etc., despite a decrease of ¥239 million in provisions. Non-current liabilities decreased by ¥125 million from the end of the previous fiscal year to ¥1,831 million. Total net assets increased by ¥1,280 million from the end of the previous fiscal year to ¥42,908 million. As a result, the capital adequacy ratio decreased by 5.9 points from 63.2% at the end of the previous fiscal year to 57.3%. (3) Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information The consolidated financial results forecast for the fiscal year ending August 31, 2025 remains unchanged from the financial results forecast announced on October 15, 2024.
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Shinwa Co., Ltd. (7607) Consolidated Financial Results for the Nine Months Ended May 31, 2025 4 2. Quarterly Consolidated Financial Statements and Principal Notes (1) Quarterly Consolidated Balance Sheets (Thousands of yen) As of August 31, 2024 As of May 31, 2025 Assets Current assets Cash and deposits 19,862,641 28,521,062 Notes receivable - trade 109,877 34,420 Accounts receivable - trade 12,355,581 10,000,650 Electronically recorded monetary claims - operating 7,400,431 7,002,641 Merchandise and finished goods 7,581,588 10,475,564 Work in process 1,666,476 1,654,674 Raw materials and supplies 647,484 691,565 Other 3,388,471 3,997,468 Allowance for doubtful accounts (3,892) (3,225) Total current assets 53,008,661 62,374,823 Non-current assets Property, plant and equipment Buildings and structures, net 3,146,313 2,938,162 Other, net 4,902,139 5,102,855 Total property, plant and equipment 8,048,453 8,041,017 Intangible assets Goodwill 18,900 15,750 Other 869,562 700,827 Total intangible assets 888,462 716,577 Investments and other assets Investment securities 2,857,237 2,765,733 Other 799,298 672,334 Allowance for doubtful accounts (2,100) (900) Total investments and other assets 3,654,435 3,437,168 Total non-current assets 12,591,351 12,194,763 Total assets 65,600,012 74,569,586 Liabilities Current liabilities Notes and accounts payable - trade 11,957,980 13,886,209 Electronically recorded obligations - operating 4,774,243 4,804,503 Income taxes payable 398,568 865,472 Contract liabilities 3,361,942 8,467,169 Provisions 401,956 162,896 Other 1,120,217 1,643,614 Total current liabilities 22,014,908 29,829,866 Non-current liabilities Retirement benefit liability 47,872 66,053 Other 1,908,886 1,765,211 Total non-current liabilities 1,956,759 1,831,265 Total liabilities 23,971,667 31,661,131
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Shinwa Co., Ltd. (7607) Consolidated Financial Results for the Nine Months Ended May 31, 2025 5 (Thousands of yen) As of August 31, 2024 As of May 31, 2025 Net assets Shareholders' equity Share capital 951,106 951,106 Capital surplus 1,735,112 1,310,712 Retained earnings 36,554,566 38,133,365 Treasury shares (771,685) (311,389) Total shareholders' equity 38,469,098 40,083,795 Accumulated other comprehensive income Valuation difference on available-for-sale securities 991,618 1,082,620 Deferred gains or losses on hedges 7,021 - Revaluation reserve for land (641,184) (646,954) Foreign currency translation adjustment 2,647,833 2,244,296 Total accumulated other comprehensive income 3,005,289 2,679,962 Non-controlling interests 153,956 144,696 Total net assets 41,628,345 42,908,454 Total liabilities and net assets 65,600,012 74,569,586
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Shinwa Co., Ltd. (7607) Consolidated Financial Results for the Nine Months Ended May 31, 2025 6 (2) Quarterly Consolidated Statements of Income and Comprehensive Income Quarterly Consolidated Statement of Income For the nine months ended May 31, 2024 and 2025 (Thousands of yen) For the nine months ended May 31, 2024 For the nine months ended May 31, 2025 Net sales 56,991,115 64,410,610 Cost of sales 48,299,256 53,788,882 Gross profit 8,691,858 10,621,727 Selling, general and administrative expenses 6,351,016 6,811,441 Operating profit 2,340,842 3,810,286 Non-operating income Interest income 39,556 68,075 Dividend income 31,623 36,397 Foreign exchange gains 10,863 - Rental income 25,824 27,436 Refund income 154,396 43,384 Other 35,197 31,759 Total non-operating income 297,462 207,053 Non-operating expenses Interest expenses 1,191 1,120 Foreign exchange losses - 31,941 Other 2,789 4,779 Total non-operating expenses 3,981 37,841 Ordinary profit 2,634,323 3,979,498 Extraordinary income Gain on sale of non-current assets 11,254 3,112 Total extraordinary income 11,254 3,112 Extraordinary losses Loss on sale and retirement of non-current assets 4,578 4,902 Other 618 - Total extraordinary losses 5,197 4,902 Profit before income taxes 2,640,380 3,977,708 Income taxes - current 993,901 1,453,470 Income taxes - deferred (164,597) (160,504) Total income taxes 829,303 1,292,966 Profit 1,811,076 2,684,742 Profit (loss) attributable to non-controlling interests (1,383) 722 Profit attributable to owners of parent 1,812,460 2,684,019
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Shinwa Co., Ltd. (7607) Consolidated Financial Results for the Nine Months Ended May 31, 2025 7 Quarterly Consolidated Statement of Comprehensive Income For the nine months ended May 31, 2024 and 2025 (Thousands of yen) For the nine months ended May 31, 2024 For the nine months ended May 31, 2025 Profit 1,811,076 2,684,742 Other comprehensive income Valuation difference on available-for-sale securities 381,061 91,002 Deferred gains or losses on hedges 2,852 (7,021) Revaluation reserve for land - (5,769) Foreign currency translation adjustment 559,590 (413,656) Total other comprehensive income 943,504 (335,445) Comprehensive income 2,754,580 2,349,296 Comprehensive income attributable to Comprehensive income attributable to owners of parent 2,749,666 2,358,693 Comprehensive income attributable to non-controlling interests 4,914 (9,396)
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Shinwa Co., Ltd. (7607) Consolidated Financial Results for the Nine Months Ended May 31, 2025 8 (3) Notes to Quarterly Consolidated Financial Statements (Notes on changes in accounting policies) (Application of Accounting Standard for Current Income Taxes and other standards) The Company applied the “Accounting Standard for Current Income Taxes” (ASBJ Statement No. 27 on October 28, 2022; hereinafter, the “Revised Accounting Standard 2022”) and other standards from the beginning of the first quarter of the fiscal year ending August 31, 2025. Regarding the amendment to the accounting classification of income taxes (taxation of other comprehensive income), the Company follows the transitional treatment set forth in the proviso to Paragraph 20-3 of the Revised Accounting Standard 2022 and the transitional treatment set forth in the proviso to Paragraph 65-2 (2) of “Guidance on Accounting Standard for Tax Effect Accounting” (ASBJ Guidance No. 28 on October 28, 2022; hereinafter, the “Revised Implementation Guidance 2022”). This change in accounting policies has no impact on the quarterly consolidated financial statements. Regarding the amendment related to revisions of the treatment of profits and losses on sales of shares of subsidiaries between consolidated companies in the case of tax deferral in the consolidated financial statements, the Company applied the Revised Implementation Guidance 2022 from the beginning of the first quarter of the fiscal year ending August 31, 2025. This change in accounting policies is applied retrospectively, including the quarterly consolidated financial statements for the previous corresponding quarterly period and the consolidated financial statements for the previous fiscal year, which have been adjusted retrospectively. This change in accounting policies has no impact on the quarterly consolidated financial statements for the previous corresponding quarterly period and the consolidated financial statements for the previous fiscal year.
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Shinwa Co., Ltd. (7607) Consolidated Financial Results for the Nine Months Ended May 31, 2025 9 (Notes on segment information, etc.) [Segment information] I For the nine months ended May 31, 2024 (from September 1, 2023 to May 31, 2024) 1. Information on net sales and income (loss) by reportable segment (Thousands of yen) Reportable segments Other (Note) Total Japan Americas Asia Pacific China Total Net sales Net sales to external customers 40,785,369 8,579,234 3,257,271 3,533,304 56,155,180 835,935 56,991,115 Intersegment net sales or transfers 5,309,368 586,627 30,270 346,973 6,273,239 125,957 6,399,197 Total 46,094,738 9,165,861 3,287,541 3,880,278 62,428,420 961,892 63,390,312 Segment profit (loss) 1,047,429 960,050 377,861 (393) 2,384,946 59,582 2,444,529 (Note) “Other” is a business segment not included in any reportable segments and includes business activities of local subsidiaries in Europe. 2. Difference between the total amount of income (loss) in reportable segments and the amount recorded in Quarterly Consolidated Statement of Income, and main components of the difference (Matters related to difference adjustment) (Thousands of yen) Income Amount Reportable segments total 2,444,529 Elimination of intersegment transfers (26,563) Unrealized gain adjustment (77,123) Operating profit in Quarterly Consolidated Statement of Income 2,340,842
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Shinwa Co., Ltd. (7607) Consolidated Financial Results for the Nine Months Ended May 31, 2025 10 II For the nine months ended May 31, 2025 (from September 1, 2024 to May 31, 2025) 1. Information on net sales and income (loss) by reportable segment (Thousands of yen) Reportable segments Other (Note) Total Japan Americas Asia Pacific China Total Net sales Net sales to external customers 50,417,961 6,911,810 3,872,874 2,870,537 64,073,183 337,426 64,410,610 Intersegment net sales or transfers 4,954,181 590,259 91,197 365,109 6,000,747 113,402 6,114,149 Total 55,372,143 7,502,069 3,964,071 3,235,647 70,073,931 450,829 70,524,760 Segment profit (loss) 2,676,719 625,327 496,869 (15,300) 3,783,615 (7,254) 3,776,361 (Note) “Other” is a business segment not included in any reportable segments and includes business activities of local subsidiaries in Europe. 2. Difference between the total amount of income (loss) in reportable segments and the amount recorded in Quarterly Consolidated Statement of Income, and main components of the difference (Matters related to difference adjustment) (Thousands of yen) Income Amount Reportable segments total 3,776,361 Elimination of intersegment transfers 194,065 Unrealized gain adjustment (160,141) Operating profit in Quarterly Consolidated Statement of Income 3,810,286 3. Matters relating to changes in reportable segments From the first quarter of the fiscal year ending August 31, 2025, SHINWA (INDIA) ENGINEERING & TRADING PRIVATE LIMITED (India), which had been a non-consolidated subsidiary, has been included in the scope of consolidation due to its increased materiality. As a result of the inclusion of SHINWA (INDIA) ENGINEERING & TRADING PRIVATE LIMITED (India) in the scope of consolidation, we changed the reportable segment classification. The segment that had covered SHINWA INTEC Co., Ltd. (Thailand), PT. SANTAKU SHINWA INDONESIA (Indonesia) and SHINWA INTEC MALAYSIA SDN. BHD. (Malaysia) was changed from “Southeast Asia” to “Asia Pacific,” and the performance of SHINWA (INDIA) ENGINEERING & TRADING PRIVATE LIMITED (India) is included in this “Asia Pacific” segment from the fiscal year ending August 31, 2025. Segment information presented for the nine months ended May 31, 2024 is prepared based on the presentation method after the change.
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Shinwa Co., Ltd. (7607) Consolidated Financial Results for the Nine Months Ended May 31, 2025 11 (Notes in case of significant changes in shareholders’ equity) (Cancellation of treasury shares) In accordance with the resolution passed at a meeting of the Board of Directors held on April 21, 2025, the Company cancelled 600,000 treasury shares on May 12, 2025. As a result, capital surplus and treasury shares have both decreased by ¥451,200 thousand during the third quarter of the fiscal year ending August 31, 2025. (Notes on going concern assumption) Not applicable. (Notes on statements of cash flows) No quarterly consolidated statements of cash flows have been prepared for the nine months ended May 31, 2024 and 2025. Depreciation (including amortization of intangible assets, excluding goodwill) and amortization of goodwill for the nine months ended May 31, 2024 and 2025 are as follows: (Thousands of yen) For the nine months ended May 31, 2024 For the nine months ended May 31, 2025 Depreciation 815,435 815,976 Amortization of goodwill 10,631 3,150