Performance Trend 1. Overview of performance for FY3/2024 Consolidated performance for FY3/2024 of G-7 Holdings <7508> was 192,992 million yen in increased operating income of 9.1% over the previous year, and increased ordinary income of 7.4% to 7,318 million yen, and attributed to the parent company's net income of 5,175 million yen, an increase of 35.3% over the previous year. Sales were driven by the Business Supermarket Business and the Meat Business, and continued to set a new record high, exceeding the company's plan by 4.3%. However, in terms of profits, the automobile-related business was affected by a decrease in profits due to poor sales of winter tires due to a warm winter, and could not reach the company's plan, it turned to a profit increase for the second time due to the growth of other businesses centered on the Business Supermarket business. The sales cost ratio has increased by 0.8 points over the previous year due to changes in the sales composition ratio; however, the selling, general and administrative expense ratio decreased by 0.7 points due to the effect of increased earnings, and the operating margin decreased by 0.1 points to 3.6%. The main reasons for the increase/decrease of selling, general and administrative expenses were a decrease of 600 million yen in energy costs due to subsidies from rising electricity prices, and an increase of 1 billion yen in labor costs due to improvements in employee treatment and increased education costs. In addition to this, depreciation expenses increased by nearly 600 million yen due to rising construction material costs and rising costs of opening stores etc. The EBITDA margin has increased by 0.1 points from the previous year. Also, the reason for the large increase in the net income of the parent company's shareholders attributable to the current period is due to the elimination of 500 million yen in retirement benefits paid to executives that were recorded as special losses in the previous year, a decrease of 455 million yen in impairment losses, and a gain of 127 million yen on the sale of investment securities in FY3/2024.

2. Financial situation. When looking at the financial situation of Inaboholdings <7539> as of the end of the second quarter of the fiscal year ending September 2024, the current assets increased by 1,954 million yen compared to the previous period end, reaching 32,121 million yen. In major subjects, cash and deposits decreased by 33 million yen, while the receivables from bills and unfinished construction work and other unearned income increased by 1,946 million yen, and construction costs of incomplete construction increased by 28 million yen. Fixed assets decreased by 700 million yen to 13,134 million yen. The breakdown is that tangible fixed assets decreased by 30 million yen to 6,575 million yen, intangible fixed assets increased by 231 million yen to 449 million yen (including goodwill increased by 223 million yen), and investment and other assets decreased by 901 million yen to 6,109 million yen. As a result of these, the total assets increased by 1,253 million yen to 45,255 million yen.

Current liabilities increased by 437 million yen compared to the previous period end to 18,708 million yen. In major subjects, there were payment bills, unpaid construction costs, and other liabilities increased by 770 million yen, short-term borrowings increased by 709 million yen, and other current liabilities decreased by 844 million yen. Fixed liabilities decreased by 5 million yen to 1,546 million yen. As a result of these, the total liabilities increased by 431 million yen to 20,254 million yen. Net assets increased by 821 million yen to 25,001 million yen. This is mainly due to the increase in retained earnings due to the recognition of quarterly net profit attributable to the parent company's shareholders, which increased by 719 million yen.

As of the end of the second quarter of the fiscal year ending September 2024, the net cash on hand (cash and deposits minus borrowings) is abundant at 9,088 million yen, with borrowing of only 1,123 million yen against cash and deposits of 10,212 million yen, and the financial foundation can be determined to be strong.

(Written by FISCO guest analyst Noboru Terashima)