マーキュリアホールディングス（7347） – [Delayed] Consolidated Financial Results for 2021

Consolidated Financial Results for 2021 [Japanese GAAP] February 10, 2022 Listing: Tokyo Stock Exchange, First Section URL: https://mercuria-hd.jp/en/ 7347 Company name: Mercuria Holdings Co., Ltd. Stock code: Representative: Toshihiro Toyoshima, CEO Yusuke Takigawa, Executive Officer, Head of Finance & Control Department Contact: Tel: +81-3-3500-9870 Scheduled date of Annual General Meeting of Shareholders: Scheduled date of payment of dividend: Scheduled date of filing of Annual Securities Report: Preparation of supplementary materials for financial results: Holding of financial results meeting: March 29, 2022 March 30, 2022 March 29, 2022 None Yes (for institutional investors and analysts) (All amounts are rounded down to the nearest million yen) 1. Consolidated Financial Results for 2021 (January 1 to December 31, 2021) (1) Consolidated results of operations (Percentages represent year-on-year changes) Operating revenue Operating profit Ordinary profit 2021 2020 Note: Comprehensive income (millions of yen) Million yen 4,170 – % – – Million yen 1,763 – % – – 2021: 1,574 (-%) Million yen 1,817 – 2020: – (-%) % – – Net income per share Return on equity Diluted net income per share Ordinary profit on total assets 2021 2020 Reference: Equity in earnings of affiliates (millions of yen) Note: The results of operations and year-on-year changes for 2020 are not shown above as Mercuria Holdings was established on Yen 76.74 – 2021: (398) % 9.7 – % 11.0 – 2020: – Yen 77.12 – July 1, 2021 through a transfer of stock. (2) Consolidated financial position Total assets Million yen As of Dec. 31, 2021 18,010 – As of Dec. 31, 2020 Reference: Shareholders’ equity (millions of yen) Note: The financial position as of December 31, 2020 is not presented as Mercuria Holdings was established on July 1, 2021 % 83.9 – As of Dec. 31, 2020: – Million yen 15,821 – As of Dec. 31, 2021: 15,108 Yen 733.92 – Net assets Equity ratio Net assets per share Profit attributable to owners of parent Million yen 1,304 – % – – Operating profit to operating revenue % 42.3 – through a transfer of stock. (3) Consolidated cash flows 2021 2020 2. Dividends Cash flows from operating activities Million yen 179 – Cash flows from investing activities Cash flows from financing activities Cash and cash equivalents at end of period Million yen 228 – Million yen 1,346 – Million yen 4,605 – Dividends per share % – 2020 2.8 2021 2022 (forecast) Note: Dividends for 2020 and for the ends of 1Q and 2Q of 2021 are not presented as Mercuria Holdings was established on July – 20.00 20.00 1Q-end Yen – – – 2Q-end Yen – – 0.00 3Q-end Year-end Yen – 20.00 20.00 Yen – – – Total dividends Yen Million yen – 412 Payout ratio (consolidated) % – 25.9 31.7 Dividend on equity (consolidated) Total 1, 2021 through a transfer of stock. 3. Consolidated Forecast for 2022 (January 1 to December 31, 2022) Operating revenue Operating profit Ordinary profit Net income per share Full year Million yen 4,000 % (4.1) Million yen 1,900 % 7.7 Million yen 1,900 % 4.6 Yen 76.85 (Percentages represent year-on-year changes) Profit attributable to owners of parent Million yen 1,300 % (0.3) * Notes (1) Changes in significant subsidiaries during the period (change in scope of consolidation): None Excluded: – Newly added: – (2) Changes in accounting policies and accounting-based estimates, and restatements 1) Changes in accounting policies due to revisions in accounting standards, others: None 2) Changes in accounting policies other than 1) above: None 3) Changes in accounting-based estimates: None 4) Restatements: None (3) Number of shares issued (common stock) 1) Number of shares issued at the end of the period (including treasury shares) As of Dec. 31, 2021: 21,443,100 shares As of Dec. 31, 2020: 2) Number of treasury shares at the end of the period As of Dec. 31, 2021: 857,121 shares As of Dec. 31, 2020: 3) Average number of shares during the period 2021: 16,915,161 shares 2020: – shares – shares – shares 2021 2020 (Reference) Summary of Non-consolidated Financial Results Non-consolidated Financial Results for 2021 (January 1 to December 31, 2021) (1) Non-consolidated results of operations Operating revenue Million yen 834 – % – – Operating profit Million yen 511 – % – – Ordinary profit Million yen 485 – % – – Profit Million yen 655 – % – – (Percentages represent year-on-year changes) Net income per share Diluted net income per share 2021 2020 Note: The results of operations and year-on-year changes for 2020 are not shown above as Mercuria Holdings was established on July 1, 2021 through a transfer of stock. Non-consolidated results of operations are shown for the period from July 1, 2021, when Mercuria Holdings was established, to December 31, 2021. Yen 38.44 – Yen 38.26 – (2) Non-consolidated financial position Total assets Yen 709.27 As of Dec. 31, 2021 – As of Dec. 31, 2020 Reference: Shareholders’ equity (millions of yen) As of Dec. 31, 2021: 14,832 As of Dec. 31, 2020: – Note: The financial position as of December 31, 2020 is not presented as Mercuria Holdings was established on July 1, 2021 Million yen 14,832 – Million yen 16,014 – % 92.6 – Net assets Equity ratio Net assets per share through a transfer of stock. * The current financial report is not subject to audit by certified public accountants or auditing firms. * Cautionary statement with respect to forward-looking statements, and other special items Mercuria Holdings plans to hold a financial results meeting for institutional investors and analysts on Friday, February 25, 2022. Materials to be distributed at this meeting will be available on the Mercuria Holdings’ website immediately thereafter. Mercuria Holdings Co., Ltd. (7347) Financial Results for 2021 (3) Basic Policy for Profit Distribution, and Dividends in the Current and Next Fiscal Years Contents of Attachments 1. Overview of Results of Operations (1) Analysis of Results of Operations (2) Analysis of Financial Position 2. Corporate Group 3. Basic Approach for the Selection of Accounting Standards 4. Consolidated Financial Statements and Notes (1) Consolidated Balance Sheet (2) Consolidated Statements of Income and Comprehensive Income Consolidated Statement of Income Consolidated Statement of Comprehensive Income (3) Consolidated Statement of Changes in Equity (4) Consolidated Statement of Cash Flows (5) Notes to Consolidated Financial Statements Going Concern Assumption Segment and Other Information Per-share Information Subsequent Events 2 2 3 3 4 4 5 5 7 7 8 9 10 11 11 11 11 11 1 Mercuria Holdings Co., Ltd. (7347) Financial Results for 2021 1. Overview of Results of Operations (1) Analysis of Results of Operations Results of Operations On July 1, 2021, Mercuria Holdings Co., Ltd. was established as the parent company and sole shareholder of Mercuria Investment Co., Ltd. by transferring all shares of Mercuria Investment to the new holding company. As there is no effective change in the scope of consolidation, comparisons with 2020 are comparisons of 2020 of Mercuria Investment and comparisons with the end of 2020 are comparisons with the end of 2020 for Mercuria Investment. The consolidated financial statements for 2021 succeed those of Mercuria Investment, which became a wholly owned subsidiary through a transfer of stock. In 2021, the pandemic continued to restrict economic activity in Japan. Although there are signs of an upturn in some sectors, the outlook for the Japanese economy remains uncertain. With the goal of achieving medium to long-term growth, there were sales of stock of existing funds to recover investments, which resulted in the receipt of performance fees. Sales of stock include parts of the holdings of En Fund Limited Partnership, where Mercuria Holdings is the investment adviser, Asuka DBJ Investment Limited Partnership (Growth Fund I), a fund administered and managed by Mercuria Holdings, and other funds. In addition, the Mercuria Group logged gains on the sale of shares held by Mercuria Japan Industrial Growth Fund (Buyout Fund I). This fund was established by Mercuria Investment together with Development Bank of Japan Inc. and Sumitomo Mitsui Trust Bank, Limited. Due to the above strategic exit made by Buyout Fund I, a gain on a fund investment through a “same-boat” investment was recognized. In addition, Buyout Fund I successfully made new investments in domestic operating companies. There was also progress with business plans involving new funds based on Mercuria Group’s investment strategy that reflects current market conditions. One was the establishment of the Infrastructure Warehousing Fund , which attracted investor commitments that exceeded initial expectations. This fund was establish ed with Itochu Enex Co., Ltd., Sumitomo Mitsui Trust and Banking Co., Ltd. and other partners and has the basic strategy of selling solar power facilities to Enex Infrastructure Investment Corporation. In the aircraft leasing business, we established Mercuria Airborne Capital Co., Ltd. with Airborne Capital Limited, a company specializing in the establishment and administration of aircraft leases. This company was formed in anticipation of the growth of investments in aircraft after the pandemic ends. In 2021, operating revenue was 4,169 million yen. Compared with the previous year, there was revenue from performance fees in the fund management business in 2021 and there was revenue in the principal investing business that included a gain on fund investment resulting both from the sale of stock held by Buyout Fund I and from the transfer of solar power facilities to Enex Infrastructure Investment Corporation . However, operating revenue decreased 32.6% because of the substantial revenue generated in 2020 by t he sale of Spring REIT units held by the Mercuria Group. Performance fees in the fund management business and operating revenue in the principal investing business generated earnings. In addition, earnings in 2020 were held down by a loss on the sale of th e Spring REIT units. As a result, ordinary profit increased 139.8% to 1,816 million yen. Profit attributable to owners of parent increased 148.4% to 1,304 million yen. Outlook The business climate is expected to remain uncertain in 2022 because of the abs ence of signs of an end of the pandemic and concerns about the outlook for the global economy. In this circumstance, we expect consolidated operating revenue of 4,000 million yen (down 4.1% year-on-year), operating profit of 1,900 million yen (up 7.7%), ordinary profit of 1,900 million yen (up 4.6%), and profit 2 Mercuria Holdings Co., Ltd. (7347) Financial Results for 2021 attributable to owners of parent of 1,300 million yen (down 0.3%) for 2022. The above forecasts are based on assumptions judged to be valid and information currently available to Mercuria Holdings’s management. Actual results may differ from the forecasts for a number of reasons. (2) Analysis of Financial Position Assets, Liabilities and Net Assets Total assets amounted to 18,010 million yen at the end of 2021, an increase of 2,957 million yen over the end of 2020. The main reasons were increases of 1,794 million yen in cash and deposits primarily resulting from fund procurement by the issue of new shares, and 983 million yen in operational investment securities mainly due to payments of capital commitments for Buyout Fund I and changes in the market values of securities. Total liabilities amounted to 2,188 million yen, a decrease of 394 million yen over the end of 2020. The main reason was a decrease of 293 million yen in short-term borrowings through repayment. Net assets totaled 15,821 million yen, an increase of 3,352 million yen. The main reasons were increases of 1,031 million yen in share capital, 1,207 million yen in capital surplus mainly due to fund procurement by the issue of new shares and 959 million yen in retained earnings. (3) Basic Policy for Profit Distribution, and Dividends in the Current and Next Fiscal Years Distributing earnings to shareholders is one of our highest priorities. The basic policy is to consistently distribute earnings to shareholders in a manner that reflects results of operations while taking into consideration the current financial position, business performance and status of business operations and retaining earnings as needed. We plan to pay a dividend of 20 yen per share for 2021 and 20 yen per share for 2022 in accordance with this basic policy. 3 Mercuria Holdings Co., Ltd. (7347) Financial Results for 2021 2. Corporate Group On July 1, 2021, Mercuria Holdings Co., Ltd. was established as the parent company and sole shareholder of Mercuria Investment Co., Ltd. by transferring all shares of Mercuria Investment to the new holding company. In its role as a holding company, Mercuria Holdings performs the management and administration of group companies as well as other related functions. The business activities of the Mercuria Group are as follows. The Mercuria Group consists of Mercuria Holdings, 12 consolidated subsidiaries, 14 non -consolidated subsidiaries, one equity-method affiliate, and seven affiliates not accounted for using the equity method. Group companies operate a fund management business, which manages investment partnerships and other types of funds in which investors in Japan and other companies make contributions, and a principal investing business. A flowchart of the Mercuria Group’s business operations is as follows. The Mercuria Group Mercuria Holdings Co., Ltd. Mercuria Investment Co., Ltd. Spring Asset Management Limited MIBJ Consulting (Beijing) Co., Ltd. Mercuria (Thailand) Co., Ltd. Business Market Co., Ltd. Enex Asset Management Co., Ltd. Other subsidiaries and affiliates Management fees Performance fees Fund Management Business Principal Investing Business Equity in earnings Dividends/Gain on sales Investors Funds Fund procurement Investment targets (Business investment/ asset investment) Investment 3. Basic Approach for the Selection of Accounting Standards The Mercuria Group will continue to prepare consolidated financial statements using the generally accepted accounting principles in Japan for the time being to permit comparisons with prior years and with the financial data of other companies. We will take suitable actions with regard to the application of International Financial Reporting Standards by taking into account associated factors in Japan and other countri es. 4 Mercuria Holdings Co., Ltd. (7347) Financial Results for 2021 4. Consolidated Financial Statements and Notes (1) Consolidated Balance Sheet (Thousands of yen) 2021 (As of Dec. 31, 2021) Assets Current assets Cash and deposits Trade accounts receivable Operational investment securities Operating loans Advances paid Other Total current assets Non-current assets Property, plant and equipment Buildings, net Tools, furniture and fixtures, net Total property, plant and equipment Intangible assets Software Total intangible assets Investments and other assets Investment securities Leasehold and guarantee deposits Deferred tax assets Other Total investments and other assets Total non-current assets Total assets Liabilities Current liabilities Current portion of long-term borrowings Accounts payable-other Accrued expenses Income taxes payable Other Total current liabilities Non-current liabilities Long-term borrowings Provision for retirement benefits for directors (and other officers) Provision for share-based remuneration for directors (and other officers) Provision for share-based remuneration for employees Retirement benefit liability Long-term accounts payable-other Long-term deposits received Other Total non-current liabilities Total liabilities 5 4,674,764 541,075 10,606,504 536,581 29,340 411,802 16,800,068 1,124,569 1,210,058 18,010,126 72,951 12,256 85,206 282 282 280,965 75,247 753,651 14,706 130,000 369,198 239,642 144,956 52,373 936,169 743,500 102,000 162,794 12,500 127,810 84,483 19,337 86 1,252,511 2,188,680 Mercuria Holdings Co., Ltd. (7347) Financial Results for 2021 (Thousands of yen) 2021 (As of Dec. 31, 2021) Net assets Shareholders’ equity Share capital Capital surplus Retained earnings Treasury shares Total shareholders’ equity Accumulated other comprehensive income Valuation difference on available-for-sale securities Foreign currency translation adjustment Total accumulated other comprehensive income Share acquisition rights Non-controlling interests Total net assets Total liabilities and net assets 4,057,656 4,510,925 7,718,834 (712,893) 15,574,522 (417,793) (48,367) (466,160) 83 713,001 15,821,445 18,010,126 6 Mercuria Holdings Co., Ltd. (7347) Financial Results for 2021 (2) Consolidated Statements of Income and Comprehensive Income Consolidated Statement of Income (Thousands of yen) 2021 (Jan. 1 – Dec. 31, 2021) Selling, general and administrative expenses Operating revenue Operating costs Operating gross profit Operating profit Non-operating income Interest income Foreign exchange gains Rent revenue Other Total non-operating income Non-operating expenses Interest expenses Share issuance costs Financing fees Other Total non-operating expenses Ordinary profit Profit before income taxes Income taxes-current Income taxes-deferred Total income taxes Profit Profit attributable to non-controlling interests Profit attributable to owners of parent 4,169,925 531,554 3,638,371 1,875,004 1,763,367 7,845 83,897 565 3,927 96,234 16,468 18,631 6,000 1,687 42,786 1,816,815 1,816,815 572,391 (146,847) 425,544 1,391,271 86,844 1,304,427 7 Mercuria Holdings Co., Ltd. (7347) Financial Results for 2021 Consolidated Statement of Comprehensive Income Profit Other comprehensive income Valuation difference on available-for-sale securities Foreign currency translation adjustment Share of other comprehensive income of entities accounted for using equity method Total other comprehensive income Comprehensive income Comprehensive income attributable to Comprehensive income attributable to owners of parent Comprehensive income attributable to non-controlling interests (Thousands of yen) 2021 (Jan. 1 – Dec. 31, 2021) 1,391,271 (34,877) 214,220 3,623 182,967 1,574,238 1,439,109 135,128 8 (3) Consolidated Statement of Changes in Equity 2021 (Jan. 1 – Dec. 31, 2021) Mercuria Holdings Co., Ltd. (7347) Financial Results for 2021 Share capital Capital surplus Retained earnings Treasury shares Balance at beginning of period 3,026,174 3,303,411 6,759,762 (597,190) (30,168) 145,863 (115,695) 1,061,651 1,061,651 Changes during period Increase and decrease by share transfers Issuance of new shares Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Change in scope of consolidation Net changes in items other than shareholders’ equity Total changes during period Balance at end of period Changes during period Increase and decrease by share transfers Issuance of new shares Dividends of surplus Profit attributable to owners of parent Purchase of treasury shares Change in scope of consolidation Net changes in items other than shareholders’ equity Shareholders’ equity (342,268) 1,304,427 (3,087) (Thousands of yen) Total shareholders’ equity 12,492,156 2,123,301 (342,268) 1,304,427 (7) (3,087) (7) – – – 2,123,301 (342,268) 1,304,427 (7) (3,087) 1,031,483 4,057,656 1,207,514 4,510,925 959,072 (115,703) 3,082,366 7,718,834 (712,893) 15,574,522 Accumulated other comprehensive income Valuation difference on available-for- sale securities Foreign currency translation adjustment Total accumulated other comprehensive income (583,725) Share acquisition rights Non- controlling interests Total net assets Balance at beginning of period (382,916) (200,808) 472 560,053 12,468,956 (34,877) 152,441 117,564 (389) 152,948 270,123 Total changes during period (34,877) 152,441 117,564 (389) 152,948 3,352,489 Balance at end of period (417,793) (48,367) (466,160) 83 713,001 15,821,445 9 Mercuria Holdings Co., Ltd. (7347) Financial Results for 2021 (Thousands of yen) 2021 (Jan. 1 – Dec. 31, 2021) (4) Consolidated Statement of Cash Flows Cash flows from operating activities Profit before income taxes Depreciation Amortization of goodwill Financing fees Share issuance costs Increase (decrease) in provision for retirement benefits for directors (and other officers) Increase (decrease) in provision for share-based remuneration for directors (and other officers) Increase (decrease) in provision for share-based remuneration for employees Increase (decrease) in retirement benefit liability Interest and dividend income Interest expenses Foreign exchange losses (gains) Decrease (increase) in trade receivables Decrease (increase) in investment securities for sale Decrease (increase) in operating loans receivable Decrease (increase) in other current assets Increase (decrease) in other current liabilities Increase (decrease) in other non-current liabilities Subtotal Interest and dividends received Interest paid Income taxes paid Net cash provided by (used in) operating activities Cash flows from investing activities Purchase of property, plant and equipment Payments of leasehold and guarantee deposits Proceeds from refund of leasehold and guarantee deposits Purchase of investment securities Collection of loans receivable from subsidiaries and associates Net cash provided by (used in) investing activities Cash flows from financing activities Proceeds from short-term borrowings Repayments of short-term borrowings Repayments of long-term borrowings Proceeds from issuance of shares Dividends paid Purchase of treasury shares Net cash provided by (used in) financing activities Effect of exchange rate change on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Increase (decrease) in cash and cash equivalents resulting from change in scope of consolidation Cash and cash equivalents at end of period 10 1,816,815 51,602 1,868 6,000 18,631 (1,400) 25,597 1,250 10,600 (7,845) 16,468 (10,847) (143,625) (847,303) 110,361 (102,654) 254,117 (199,697) 999,938 7,845 (18,267) (810,913) 178,603 (33,268) (36,181) 14,611 (10,000) 292,400 227,561 1,100,000 (1,386,450) (130,000) 2,104,281 (342,268) (7) 1,345,556 30,195 1,781,915 2,810,262 12,588 4,604,764 Mercuria Holdings Co., Ltd. (7347) Financial Results for 2021 (5) Notes to Consolidated Financial Statements Going Concern Assumption Not applicable. Segment and Other Information Segment Information There is no segment information because the Mercuria Group operates only in the investment operations business segment. Per-share Information 2021 (Jan. 1 – Dec. 31, 2021) (Yen) 733.92 77.12 Net assets per share Net income per share Net income per share Diluted net income per share Notes: 1. Basis for the calculation of net income per share and diluted net income per share is as follows: 76.74 2. Mercuria Holdings’ stock remaining in the trust (325,600 shares in 2021) is included in treasury shares in shareholders’ equity and deducted from the number of shares outstanding at the end of the period that is used to calculate net assets per share. Moreover, the shares (325,600 shares in 2021) are included in treasury shares deducted from the number of shares used to calculate the average number of shares outstanding during the period that is used to c alculate net income per share and diluted net income per share. Profit attributable to owners of parent (Thousands of yen) 1,304,427 2021 (Jan. 1 – Dec. 31, 2021) – – – 1,304,427 16,915,161 82,509 [82,509] Amount not attributable to common shareholders (Thousands of yen) Profit attributable to owners of parent applicable to common stock (Thousands of yen) Average number of common stock outstanding during the period (Shares) Diluted net income per share Adjustment to profit attributable to owners of parent (Thousands of yen) Increase in number of common stock (Shares) [of which share acquisition rights (Shares)] Summary of potentially dilutive shares not included in the calculation of diluted net income per share due to their anti-dilutive effect Subsequent Events Not applicable. The above is an English translation of provided for information purpose only. The original Japanese version was released through our website (https://mercuria-hd.jp). If any discrepancy is identified between this translation and the Japanese original, the Japanese original shall prevail. 11