ARE Holdings, Inc.
Financial Results for FY2023 and Mid to Long Term Plan & Aspiration
April 26, 2024
These forecast performance figures are based on information currently available to the company's management and certain assumptions judged rationally. Accordingly, there might be cases in which actual results materially differ from forecasts of this report.
2
- Financial Results for FY2023
(April 1, 2023 ~ March 31, 2024)
- ARE Mid to Long Term Plan & Aspiration
Overview of ARE mid long term Plan
Business environment surrounding ARE
Growth strategy
Precious Metal Recycling Business
North American Refining Business
Environmental Preservation Business
ESG
Copyright © ARE Holdings, Inc. All rights reserved.
3 Summary of FY2023 Financial Results
¥322.3 bn | (YoY +¥48.0 bn) | |||
Sales Revenue | Higher gold sales volume and sales price than the previous year. Growth in the North | |||
American refining business were the main reasons for the year-on-year increase. | ||||
Operating Profit | ¥12.4 bn | (YoY -¥3.9 bn) | ||
Impact of Palladium | Rhodium prices fell approximately 40% from the end of the previous fiscal year, although | |||
prices have generally stabilized since July 2023. | ||||
and Rhodium | ||||
Palladium prices fell approximately 20% from the end of the previous fiscal year. | ||||
Other factors | Slow recovery in electronics and catalysts. | |||
Impairment loss of ¥0.8 bn due to decision to close Ehime Plant. | ||||
Current | The share exchange between Japan Waste Corporation and Renatus Co., Ltd was | |||
Status | completed on March 31, 2024. | |||
Japan Waste has been deconsolidated and it has been classified as discontinued | ||||
operations. Accordingly, discontinued operations have also been excluded from FY2022. | ||||
Share | Discontinued Operations: | |||
Sales Revenue ¥36.6 bn (¥20.4 bn of which is gain on share exchange) | ||||
Exchange | Accounting | |||
Income before income taxes ¥23.6 bn (¥20.4 bn of which is gain on share exchange) | ||||
Net income ¥16.0 bn | ||||
Renatus will become an equity-method affiliate from FY2024, and equity in earnings of | ||||
affiliates will be included in operating income. | ||||
Difference since February | Higher gold prices, contribution from the North American refining business and the | |||
share exchange gain. As a result of these factors, sales and earnings were higher than | ||||
Earnings Forecast | ||||
previously forecasted. | ||||
Copyright © ARE Holdings, Inc. All rights reserved.
4 Business Overview of Q4 FY2023 (YoY)
Precious Metals Business (Asahi Pretec Corp., ASAHI METALFINE, Inc., Asahi Refining)
In Japan, precious metal recycling in the jewelry sector was strong on the back of the elevated gold price, while that in the catalyst sector struggled due to weak yen. In North America, financial transactions such as trading and advance trading were strong, while product processing and sales shrank.
Business sector
Dentistry
Jewelry
Catalyst
Electronic
Refining Business in
North America
Business environment
Despite the soaring gold prices, collection declined due to market shrinkage caused by switch of materials and leveling off of campaign-driven special demand.
Collection grew to about 1.6 times the previous year due to the increased trading in the recycling market to take advantage of the ongoing high gold prices.
Collection decreased in Japan due to weak yen and a decline in the market price. Overseas, collection from some catalyst manufacturers in East Asia decreased.
Collection fell despite continued robust AI-related and EV demand, due to the weak consumer demand resulting from the weakness in the Chinese market.
Financial transactions such as trading and advance trading were strong, while product processing and sales shrank.
Environmental Preservation Business (Japan Waste Corporation)
Handling volume of waste reagents grew further since 3Q due to withdrawals of competitors. Handling volume of medical waste showed an increasing trend excluding COVID-19-related orders in the previous year. Handling volume of liquid waste grew year on year due to spot transactions. Handling volume of sludge and wood waste fell due to the business conversion of the Yokohama Plant.
Items
Liquid waste
Waste reagents
Medical waste
Waste plastics
Other
Business environment
Although there are signs of a turnaround in semiconductor demand, volume decreased in Q4.
Handling volume rose further due to withdrawals of other companies in the industry that started in Q3.
Overall handling volume increased, while the previous year's spike in demand related to COVID-19 levelled off.
Handling volume decreased due to demand increase of cement related alternative fuel continuing from Q2.
Overall handling volume of sludge and wood waste fell due to the business conversion of the Yokohama Plant.
Copyright © ARE Holdings, Inc. All rights reserved.
5 Consolidated Results
FY2022
FY2023
Unit:billion yen
FY2024
Revenue
Operating profit
Ratio
Profit before tax
Profit※1
Results
274.2
16.3
5.9%
12.6
10.9
Results
322.3
12.4
3.8%
12.4
24.5
YoY
Change
48.0
(3.9)
(2.1%)
(0.2)
13.6
Revised
Forcasst
370.0
18.0
4.9%
17.6
13.1
YoY
Change
47.7
5.6
1.0%
5.2
(11.4)
Capex
Depreciation
4.9
3.3
8.5 | 3.5 | |
3.6 | 0.3 |
12.9 | 4.4 |
3.1 (0.5)
※1 Profit attributable to owners of parent
Copyright © ARE Holdings, Inc. All rights reserved.
6 Precious Metals Business
Precious metals recycling business (Japan and Asia)
FY2023 Results
As collection amount from jewelry sector increased. gold sales volume and prices also increased.
On the other hand, there is a prolonged stagnation in the catalyst and electronics sectors, and it is being impacted by the decline in the prices of palladium and rhodium.
- Increase in revenue and decrease in profit
North American refining business
FY2023 Results
Refining fee, trading and advance trading fee increased.
On the other hand, due to a decrease in demand, product sales and processing have declined.
- Increase in revenue and profit
[Unit: billion yen] | |||||||||||||
Precious | FY2022 | FY2023 | FY2024 | ||||||||||
Metals | Results* | Results | YoY Change | Forecast | YoY Change | ||||||||
Revenue | 274.2 | 322.2 | 48.0 | 370.0 | 47.8 | ||||||||
Operating Profit | 17.2 | 12.7 | (4.5) | 16.0 | 3.3 | ||||||||
Ratio | 6.3% | 3.9% | (2.3%) | 4.3% | 0.4% | ||||||||
*The actual achievement in FY2022 was processed retroactively due to the changes in Segment Accounting Standard which became effective since FY 2023
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7 Impact of Gold Collection
- Gold share in revenue is increasing on YoY because both collection amount and selling price increased.
Breakdown of revenues* | Breakdown of Au collected | |||||||
Sales of Au | Unit: : billion yen | Jewelry sector | Unit:kg | |||||
Sales of Others | Other sectors | |||||||
323.3
233.6
173.9
*FY2021 and FY2022 reflected exclusion of Japan Waste Corporation.
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8 Ref: Volume of Precious Metals Collected
- Gold collections increased due to increase the volume in the market as a result of soaring prices and the reinforcement of the production system at the Bando Plant as part of our green gold strategy.
- Collection amount of palladium decreased mainly from catalyst sector.
Au | Pt | Unit:kg | ||
Business | Business | |||
sector | ||||
sector | ||||
・Jewelry | ||||
・ Jewelry | Plan | |||
・ Catalyst | ||||
Plan | ||||
・ Electronic | achievement | |||
rate | achievement | |||
・ Dentistry | ||||
121.0% | rate | |||
99.3% |
Pd | Rh | ||
Business | Business | ||
sector | sector | ||
・ Dentistry | ・ Catalyst | ||
・ Catalyst | |||
Plan | |||
Plan | |||
・Jewelry | |||
achievement | achievement | ||
rate | rate | ||
85.0% | 72.0% | ||
Copyright © ARE Holdings, Inc. All rights reserved.
9 Rhodium Trend
- Rhodium prices fell in Q1 but stopped falling in Q2 and remained stable thereafter.
- On the other hand ,rhodium price fell About 40% from the end of December 2022 and YoY is approximately ¥2.7 billion which is the negative impact.
- The hedging ratio has reached 50 % of the total handling volume as planned.
Hedge ratio
FY2022 | FY2023 | 60% | |
50% | |||
40% | |||
2023/3/31 | 30% | ||
7,400 | |||
2024/3/29 | |||
4,500 | 20% |
10%
0%
2023/3 | 2023/6 | 2023/9 | 2023/12 | 2024/3 |
※Ref:Metals Week NY Dealer Prices
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10 Palladium Trend
- Palladium prices have been declining throughout the last 18 months, and 20% declined against the end of March 2023.
- The decline in the price of palladium and a decrease in the volume of palladium collected contributed to a decrease in profit of approximately 4.5 billion yen for FY 2023 compared with the previous fiscal year.
Unit: yen/g | Palladium Price | |
FY2022 | ||
FY2023 |
2023/3/31
6,335
2024/3/29
5,010
※ref:Nikkei low price
Copyright © ARE Holdings, Inc. All rights reserved.
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Asahi Holdings Inc. published this content on 17 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 May 2024 01:55:03 UTC.