Mitsui Sugar : Summary of Consolidated Financial Results For the Six Months of the Year Ending March 31, 2021

Summary of Consolidated Financial Results

For the Six Months of the Year Ending March 31, 2021 (Based on Japanese GAAP)

			October 30, 2020
Company name:	Mitsui Sugar Co., Ltd.	Stock exchange listings: Tokyo
Stock code:	2109		https://www.mitsui-sugar.co.jp/
Company representative:	Daisuke Saiga, President and Chief Executive Officer
Contact person in charge:	Hideaki Batori	Executive Managing Officer,
		General Manager, Group Strategy Division
			TEL. [phone]
Planned date for submission of quarterly report:		November 10, 2020
Planned date to start dividend payment:		December 4, 2020
Preparation of supplementary material for quarterly financial statements:	None
Briefing session for quarterly financial statements:		None
		(Amounts are	rounded down to the nearest 1 million yen.)

1. Consolidated Financial Results for the Six Months of the Year Ending March 31, 2021 (from April 1, 2020 to September 30, 2020)

(1) Consolidated Results of Operations				(Percentages are year-over-year changes.)
	Net sales		Operating income	Ordinary income	Profit attributable to
		owners of parent
	Million yen	%	Million yen	%	Million yen	%	Million yen	%
First six months of FY2020	53,314	(6.2)	2,151	(30.1)	1,727	(43.5)	440	(73.8)
First six months of FY2019	56,861	11.4	3,078	89.9	3,054	(38.5)	1,677	(46.6)

(Note) Comprehensive income:

Six months ended September 30, 2020: 626 million yen (-66.6%)

Six months ended September 30, 2019: 1,878 million yen (-39.8%)

Earnings per share

Diluted earnings per share

Yen

Yen

First six months of FY2020

17.13

－

First six months of FY2019

63.90

－

(2) Consolidated Financial Position

Total assets

Net assets

Capital adequacy ratio

Net assets per share

Million yen

Million yen

%

Yen

As of September 30, 2020

136,103

92,268

60.6

3,210.57

As of March 31, 2020

141,705

92,395

58.4

3,218.77

(Reference) Equity capital:

As of September 30,

2020: 82,516 million yen

As of March 31, 2020: 82,727 million yen

2. Cash Dividends

Annual dividend

End of 1Q

End of 2Q

End of 3Q

Year end

Total

Yen

Yen

Yen

Yen

Yen

Year ended March 31, 2020

-

25.00

-

25.00

50.00

Year ending March 31, 2021

-

25.00

Year ending March 31, 2021

-

25.00

50.00

(forecast)

(Note) Revision of the dividend forecast

announced most recently: None

3. Consolidated Business Forecasts for the Year Ending March 31, 2021 (from April 1, 2020 to March 31, 2021)

(Percentages are year-over-year changes.)

Operating

Profit attributable

Earnings per

Net sales

Ordinary income

to owners of

income

share

parent

Million yen

%

Million yen

%

Million yen

%

Million yen

%

Yen

Full year

115,000

1.0

4,800

(1.0)

4,800

(3.7)

2,400

(0.9)

93.38

(Note) Revision of the business forecasts

announced

most

recently:

None

• Notes
• 1. Significant changes in subsidiaries during the period
     (Changes in specified subsidiaries resulting in changes of scope of consolidation): None

New:	－ companies (company name):	－
Excluded: － companies (company name):	－

1. Application of accounting method unique to preparation of quarterly consolidated financial statements: None
2. Changes in accounting policy and accounting estimates and restatement

(i)	Changes in accounting policy due to any revision of accounting standards:	Yes
(ii)	Changes in accounting policy other than i) above:	None
(iii)	Changes in accounting estimates:	None
(iv)	Restatement:	None

Note: For more details, please refer to "2. Quarterly Consolidated Financial Statements and Important Notes, (3) Notes on quarterly consolidated financial statements (Changes in accounting policies)" on page 8 of the Appendix.

(4) Number of outstanding shares (common shares)

1. Number of outstanding shares at period end (including treasury shares)
2. Number of treasury shares at period end
3. Average number of shares during period (from the beginning of fiscal year to period end)

As of September 30,	28,333,480 shares	As of March 31,	28,333,480 shares
2020	2020
As of September 30,	2,631,985 shares	As of March 31,	2,631,827 shares
2020	2020
Six months ended	25,701,563 shares	Six months ended	26,245,255 shares
September 30, 2020	September 30, 2019

• The quarterly kessan tanshin document is outside the scope of audit procedures conducted by certified public accountants and the independent auditor.
• Explanation on appropriate use of business forecasts, and other special notes
  Business forecasts and other forward-looking statements contained in this report and supplementary materials are based on information currently available to the Company and on certain assumptions deemed as rational. They do not constitute a guarantee that the Company will achieve its forecasts or other forward-looking statements. Actual results may differ significantly from forecasts due to various factors. For assumptions and other criteria used to formulate business forecasts, please refer to "1. Qualitative Information Regarding the Results for the First Six Months of the Year Ending March 31, 2021, (3) Description of consolidated business forecasts and other information about future forecasts" on page 3 of the Appendix.

Mitsui Sugar Co., Ltd. (2109)

Summary of Consolidated Financial Results for the First Six Months Ended September 30, 2020

• Appendix

1.	Qualitative Information Regarding the Results for the First Six Months of the Year Ending March 31, 2021 ...........................	2
(1)	Description of consolidated operating results..............................................................................................................................	2
(2)	Description of consolidated financial position.............................................................................................................................	3
(3)	Description of consolidated business forecasts and other information about future forecasts .....................................................	3
2.	Quarterly Consolidated Financial Statements and Important Notes ............................................................................................	4
(1)	Quarterly consolidated balance sheets .........................................................................................................................................	4
(2)	Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive income........................	6
	(Quarterly consolidated statements of income) ...........................................................................................................................	6
	(Quarterly consolidated statements of comprehensive income)...................................................................................................	7
(3)	Notes on quarterly consolidated financial statements ..................................................................................................................	8
	(Note on assumptions of a going concern) ..................................................................................................................................	8
	(Notes when the amount of the shareholders' equity significantly fluctuates).............................................................................	8
	(Changes in accounting policies) ................................................................................................................................................	8
	(Segment information, etc.).........................................................................................................................................................	8
	(Material subsequent events).......................................................................................................................................................	9

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Mitsui Sugar Co., Ltd. (2109)

Summary of Consolidated Financial Results for the First Six Months Ended September 30, 2020

1. Qualitative Information Regarding the Results for the First Six Months of the Year Ending March 31, 2021

(1) Description of consolidated operating results

In the first six months of fiscal 2020 (April - September 2020), Mitsui Sugar continued to work closely with Group companies to strengthen existing businesses and expand businesses in growth fields. However, sales at Group companies continue to be affected by the highly uncertain outlook for the global economy, including moves to reinstate restrictions on movement in some parts of Europe amid a second wave of COVID-19.

Despite that backdrop, there were some positives, such as an increase in profits in the Food Science Business and higher profits at Chinese affiliates (equity-method affiliate) on the back of increased sales volume. However, the Group's sales and profits declined overall due to a drop in royalty income, the start of redevelopment work at the former Nagata Plant in the Real Estate Business and a slow recovery in profits at affiliates in Thailand (equity-method affiliates) amid a poor sugar cane harvest.

(Sugar Business)

In the overseas crude sugar market, the sugar price fell to the 9-cents per pound level at one point, the lowest price for roughly

13 years, before rebounding strongly. The price then continued to rise at a moderate pace from the middle of September, despite a mixed market environment complicated by the outlook for COVID-19 and speculation around sugar supply and demand. Speculative funds flowed into the market spurred by monetary easing worldwide, lifting the sugar price to the low-13-cent level by the end of the second quarter.

In sales activities, the COVID-19 pandemic continued to have a significant impact, with the cancellation of summer events, voluntary restrictions on homecoming visits and other factors leading to a drop in domestic shipments of commercial-use products for food service companies and beverages. Shipments of both commercial-use products and home-use products started to turn up from late September after the government implemented measures to balance economic activity with efforts to control the virus, but there was no full-fledged recovery in demand. In production activities, the Group worked to stabilize production by adjusting capacity in line with downward revisions to sales volumes, but sales and profits both declined.

In consolidated subsidiaries, sales and profits rose at Showa Sugar Co., Ltd. on a sharp improvement in the cost ratio, supported by an increase in production and yields for sugar cane. However, sales and profits declined at Hokkaido Sugar Co., Ltd. due to a drop in sales volume. SIS' 88 Pte Ltd. benefited from an increase in home-use demand amid restrictions on movement in its domestic market of Singapore, but there was no full-fledged recovery in earnings, with sales and profits both decreasing.

As a result of the above, the Sugar Business reported overall net sales of 42,695 million yen and operating income of 1,249 million yen.

Sugar market status during period

Domestic market price (listed in Nippon Keizai Shimbun, per kilogram of a large bag of superfine sugar, Tokyo) Six months ended September 30, 2020: 187-188 yen

Overseas raw sugar price (NY sugar current delivery, per pound)

Opening price: 10.39 cents, highest price: 13.28 cents, lowest price: 9.05 cents, closing price: 13.07 cents

(Food Science Business)

In the Food Science Business, sales fell slightly year on year and profits increased, supported by firm overseas sales volume for palatinose and rising domestic and overseas demand for sugar cane extract used in disinfection applications.

In consolidated subsidiaries, TAISHO TECHNOS CO., LTD. reported an increase in sales and profits, supported by higher sales volume for lactic acid bacterium and an improvement in the cost ratio due to the consolidation of production facilities in the previous fiscal period. Nutri Co., Ltd. reported lower sales as it was forced to scale back marketing activities amid the COVID- 19 outbreak. However, profits increased year on year, partly due to an improvement in selling, general and administrative expenses.

As a result, net sales in the Food Science Business totaled 9,631 million yen and operating income was 459 million yen.

(Real Estate Business)

The Real Estate Business reported net sales of 986 million yen and operating income of 441 million yen. Sales were steady year on year, but profits declined, mainly reflecting the implementation of maintenance work for aging facilities.

As a result, in the first six months of the fiscal year, net sales decreased 6.2% year on year to 53,314 million yen and operating income dropped 30.1% to 2,151 million yen.

In non-operating income and expenses, the Group booked royalty income of 284 million yen based on a development and marketing rights agreement for fingolimod (FTY720). However, due to an ongoing arbitration process between Novartis Pharma

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