Sanyo Chemical Industries : Consolidated Financial Results for the Three Months Ended June 30, 2023

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

Consolidated Financial Results

for the Three Months Ended June 30, 2023

(under Japanese GAAP)

August 4, 2023

Company name:	Sanyo Chemical Industries, Ltd.
Listing:	Tokyo Stock Exchange
Securities code:	4471
URL:	https://www.sanyo-chemical.co.jp/
Representative:	Akinori Higuchi, President & CEO
Inquiries:	Kenichi Nishimura, Director & Executive Officer, General Manager of Administrative
	Affairs Division
TEL:	[phone]

Scheduled date to file quarterly securities report:	August 9, 2023
Scheduled date to commence dividend payments:	-
Preparation of supplementary material on quarterly financial results:	None
Holding of quarterly financial results presentation meeting:	None

(Figures are rounded down to the nearest million yen)

1. Consolidated financial results for the first three months of the fiscal year ending March 31, 2024 (from April 1, 2023 to June 30, 2023)

(1) Consolidated operating results (cumulative)				(% indicates year-on-year changes)
				Net sales	Operating profit		Ordinary profit		Profit attributable to
						owners of parent
	Three months ended	Millions of yen		%	Millions of yen		%		Millions of yen		%		Millions of yen	%
	June 30, 2023	38,914		(12.2)	704		(63.1)		2,842		(33.3)		2,960	16.7
	June 30, 2022	44,336		16.5	1,910		(37.9)		4,259		18.9		2,536	15.6
	Note:	Comprehensive income: Three months ended June 30, 2023	¥3,787 million [(5.0)%]
				Three months ended June 30, 2022	¥3,986 million [116.9%]
				Basic earnings per share	Diluted earnings per
				share
	Three months ended			Yen			Yen
	June 30, 2023		134.13			-
	June 30, 2022		115.00			-
(2) Consolidated financial position
				Total assets	Net assets		Equity ratio			Net assets per share
	As of			Millions of yen	Millions of yen				%			Yen
	June 30, 2023		202,009		150,720				73.2		6,697.14
	March 31, 2023		202,182		148,994				72.2		6,617.11
	Reference:	Equity:	As of June 30, 2023	¥147,833 million
				As of March 31, 2023	¥146,067 million

2. Cash dividends

		Cash dividends per share
	1Q (as of June 30)	2Q (as of Sept. 30)	3Q (as of Dec. 31)	4Q (as of Mar. 31)	Total
	Yen	Yen	Yen	Yen	Yen
Fiscal year ended	-	85.00	-	85.00	170.00
March 31, 2023
Fiscal year ending	-
March 31, 2024
Fiscal year ending		85.00	-	85.00	170.00
March 31, 2024
(Forecast)

Note: Revisions of the latest forecasts for cash dividends announced: None

3. Consolidated earnings forecasts for the fiscal year ending March 31, 2024 (from April 1, 2023 to March 31, 2024)

								(% indicates year-on-year changes)
	Net sales		Operating profit		Ordinary profit	Profit attributable to	Basic
			earnings
			owners of parent
									per share
	Millions of yen		%	Millions of yen	%		Millions of yen	%	Millions of yen	%	Yen
Six months ending	79,000		(10.7)	1,200	(68.5)		3,500	(52.5)	3,000	(36.4)	135.91
September 30, 2023
Fiscal year ending	160,000		(8.6)	5,000	(38.5)		6,000	(39.5)	4,000	(29.6)	181.21
March 31, 2024
Note: Revisions of the latest forecasts for earnings announced: Yes

• For revisions of earnings forecasts, please see the "Notice of Revision of Consolidated Earnings Forecasts for the Fiscal Year Ending March 31, 2024" released today (August 4, 2023).

* Notes

1. Significant changes in subsidiaries during the three months ended June 30, 2023 (changes in specific subsidiaries resulting in the change in scope of consolidation): None
2. Application of special accounting methods for the preparation of quarterly consolidated financial statements: Yes
   Note: See page 11, "2. Quarterly consolidated financial statements and significant notes thereto, (4) Notes to quarterly consolidated financial statements, Application of special accounting methods for the preparation of quarterly consolidated financial statements" for more information.
3. Changes in accounting policies, accounting estimates, and restatements

a.	Changes in accounting policies associated with revised accounting standards, etc.:	None
b.	Changes in accounting policies other than a. above:	None
c.	Changes in accounting estimates:	None
d.	Restatements:	None

1. Number of shares issued (common stock)
   a. Number of shares issued at the end of the period (including treasury shares)

As of June 30, 2023

As of March 31, 2023

23,534,752 shares

23,534,752 shares

b. Number of treasury shares at the end of the period

As of June 30, 2023

As of March 31, 2023

1,460,630 shares

1,460,503 shares

1. Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year)

For the three months ended June 30, 2023

For the three months ended June 30, 2022

22,074,202 shares

22,059,325 shares

Note: Shares of Sanyo Chemical Industries, Ltd. (the "Company") owned by the trust whose beneficiaries are directors, etc. of the Company are included in the treasury shares that are excluded in calculating the number of treasury shares at the end of the period and the average number of shares outstanding during the period.

• Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation.
• Appropriate use of earnings forecasts and other special items
  The forward-looking statements, including earnings forecasts, contained in these materials are based on information currently available to the Company and on certain assumptions deemed to be reasonable. Consequently, any statements herein do not constitute assurances regarding actual results by the Company. Actual earnings may differ significantly due to various factors. See page 5, "1. Qualitative information regarding financial results for the three months ended June 30, 2023, (3) Information concerning future forecast such as consolidated earnings forecasts" for more information regarding the circumstances behind the assumptions used in earnings forecasts and matters to be noted when relying on earnings forecasts.

Attached Material Index
1. Qualitative information regarding financial results for the three months ended June 30, 2023	2
(1)	Information regarding operating results	2
(2)	Analysis of financial position	4
(3)	Information concerning future forecast such as consolidated earnings forecasts	5
2. Quarterly consolidated financial statements and significant notes thereto	6
(1)	Consolidated balance sheets	6
(2)	Consolidated statements of income and consolidated statements of comprehensive income	8
	Consolidated statements of income (cumulative)	8
	Consolidated statements of comprehensive income (cumulative)	9
(3)	Consolidated statements of cash flows	10
(4)	Notes to quarterly consolidated financial statements	11
	Notes to going concern assumptions	11
	Additional information	11
	Notes on significant changes in the amount of shareholders' equity	11
	Application of special accounting methods for the preparation of quarterly consolidated financial
	statements	11
	Segment information	12
3. Supplementary information	14

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1. Qualitative information regarding financial results for the three months ended June 30, 2023

1. Information regarding operating results
   During the first three months (April 1, 2023 to June 30, 2023) of the fiscal year ending March 31, 2024, Japanese economy continued to normalize with the reclassification of COVID-19 as Category V Infectious Diseases under the Infectious Diseases Control Law, and saw a recovery in individual consumption and exports. However, conditions remained challenging due to factors such as cyclical declines in semiconductor demand and a diminished capital investment appetite around the world. The global economy is in an uncertain situation, with the trend of an economic slowdown in the U.S. and Europe through monetary tightening, China's lack of strength in its economic recovery, and resource and energy prices remaining high and inflationary due to the prolonged situation in Russia and Ukraine, and other aspects.
   In the chemical industry, the forex market saw a trend of yen depreciation due to long-term fiscal tightening in the U.S. and Europe. Oil prices involve mixed speculation over rising and falling prices from concerns over the global economic slowdown as well as supply concerns, meaning that the business environment remains unpredictable.
   Under these circumstances, net sales for the period under review decreased by 12.2% year on year to
   ¥38,914 million, primarily due to a decrease in sales volume. In terms of profit, operating profit was ¥704 million (a decrease of 63.1% year on year), primarily due to a decrease in sales volume. Ordinary profit was ¥2,842 million (a decrease of 33.3% year on year), and profit attributable to owners of parent was ¥2,960 million (an increase of 16.7% year on year), primarily due to recording of gain on sale of investment securities.

1. Business performance

						(Millions of yen)
	Three months	Three months
	ended June 30,	ended June 30,	Change		FY2022
	2022	2023
			(Amount)		(Change)
Net sales	44,336	38,914	(5,421)		(12.2)%	174,973
Operating profit	1,910	704	(1,205)		(63.1)%	8,123
Ordinary profit	4,259	2,842	(1,417)		(33.3)%	9,918
Profit attributable to owners	2,536	2,960	423		16.7%	5,684
of parent
Basic earnings per share	¥115.00	¥134.13	¥19.13		16.6%	¥257.57
ROA (Return on assets*)	8.3%	5.6%	-	(2.7) percentage	4.9%
	point
ROE (Return on equity)	7.0%	8.1%	-	1.1 percentage	3.9%
	point
Currency exchange (US$,	US$=¥129.73	US$=¥137.50			¥7.77	US$=¥135.51
CNY)	CNY=¥19.60	CNY=¥19.57			¥(0.03)	CNY=¥19.75
Naphtha price in Japan	¥86,200/kl	¥67,600/kl			¥(18,600)/kl	¥76,600/kl

*ROA (Return on assets) is calculated based on ordinary profit.

Note: ROA and ROE for the three months ended June 30, 2022 and 2023 are annualized.

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