W-SCOPE Corporation

The Group’s core businesses are separators and ion-exchange membranes. Demand for EVs, particularly in Europe, has yet to show a marked recovery, and demand for separators remains weak. However, shipments of separators for ESS applications through our equity-method affiliate W-SCOPE CHUNGJU PLANT CO., LTD. increased from the second quarter. In the ion-exchange membrane business, some products were shipped ahead of schedule in the first quarter, and sales in the second quarter amounted to only several million yen, but existing projects remained stable. Sales in the separator business were ¥1,131 million (133.5% year on year), while sales in the ion-exchange membrane business were ¥796 million (132.1% year on year), bringing total consolidated sales to ¥1,928 million (132.9% year on year). Operating income/loss improved by ¥477 million due to an increase in sales volume accompanying higher sales and changes in the sales mix. Although raw-material costs increased by ¥50 million and utilities costs increased by ¥88 million, personnel expenses decreased by ¥63 million and depreciation expenses by ¥43 million as a result of cost reductions, mainly in manufacturing costs. In addition, inventory valuation losses decreased by ¥448 million. Consequently, operating income/loss improved by ¥1,480 million year on year, resulting in an operating loss of ¥1,388 million. Non-operating income included ¥84 million in subsidy income, including subsidies related to research and development, and ¥42 million in foreign exchange gains on US dollar-denominated receivables and payables. Non-operating expenses included ¥146 million in interest expenses and ¥1,694 million in losses on investments accounted for under the equity method. As a result, the interim loss before income taxes was ¥3,091 million, and the interim net loss attributable to owners of the parent was ¥3,104 million. The average exchange rates were ¥158.27 per US dollar and ¥106.7 per 1,000 Korean won. Cash and cash equivalents at the end of the interim period were ¥681 million, total assets were ¥49,281 million, liabilities were ¥9,964 million, and net assets were ¥39,317 million.