Air Water : Financial Summary Results of the First Quarter of FY2018

Date: August 10, 2018

CONSOLIDATED FINANCIAL RESULTS（NEWS FLASH）

AIR WATER INC.

Head Office: 12-8, Minami semba 2-chome,

Chuo-ku, Osaka, Japan

Qualitative Information relating to First Quarter Earnings

(1) Explanation of Operating Results

1) Operating results for the current period

The Japanese economy in the cumulative first quarter of the current consolidated fiscal year was on a gradual recovery trend thanks mainly to strong corporate earnings, improvements in the employment and income environments. However, on the other hand, the sense of uncertainty about the future economic conditions grew due to such factors as labor shortages, rise in raw material prices and impacts of trade disputes overseas.

With regard to the results of our corporate group under these circumstances, our industrial gas business performed satisfactorily as a whole, due to continued steady gas demand from a broad range of domestic manufacturing sectors and also because of recovery in operations of our customers' plants to which our gas is supplied on-site for their blast furnaces. Our chemical business exhibited satisfactory performance due to further improvements in earnings from our organic acid products including phthalic anhydride in line with the recovery in product market conditions, and each of the businesses constituting our other business segment including aerosol, information and electronics materials, and O-ring businesses also performed steadily, contributing to growth in results of our corporate group. In our medical business, despite further improvements in earnings of our medical treatment service, such as SPD (supply, processing and distribution management for hospitals) and sterilization, the business remained at the same level as in the previous year due to the temporary impact of the revision of the sales system in our hypodermic-needle business. Our agriculture and food products business and energy business saw a decline in profits compared to the same period of the previous year due to increases in costs including labor cost.

As a result, for the current first quarter consolidated cumulative period, the group's sales were ¥185,783million (104.4% that of the period of the previous year), operating income was ¥8,303million (103.6%), ordinary income was ¥9,394million (110.4%) and a quarterly net income attributable to shareholders of the parent was ¥5,699 million (118.2%).

2) Consolidated results by segment for this period

Net Sales

Ordinary income

（Million yen）

FY 2018.1Q	YoY Growth	FY 2018.1Q	YoY Growth
Industrial Gas Business	40,719	110.7％	3,356	115.6％
Chemical Business	18,617	103.0％	680	416.3％
Medical Business	38,596	103.7％	920	96.1％
Energy Business	10,882	106.5％	514	71.3％
Agriculture and Food Products
	34,756	101.1％	1,145	87.6％
Products Business
Logistics Business	11,529	105.5％	643	127.4％
Other Business	30,681	101.2％	2,131	109.5％
（Adjustment）	-	-	2	98.7％
Total	185,783	104.4％	9,394	110.4％

(Note)

The adjustments to ordinary income are due to costs incurred at the company's headquarters division and R&D division, and profit/loss from financial operations, which were not allocated to any reporting segment.