Summary of Consolidated Financial Results for the Second Quarter of Fiscal Year Ending March 31, 2022(Six Months Ended September 30, 2021)

November 5, 2021

Summary of Consolidated Financial Results for the Second Quarter

of Fiscal Year Ending March 31, 2022

(Six Months Ended September 30, 2021)

[Japanese GAAP]

Company name: ALCONIX CORPORATION

Listing: Tokyo Stock Exchange, First Section

Stock code:

3036

URL: http://www.alconix.com

Representative: Masato Takei, President and CEO

Contact:

Hiroshi Teshirogi, Director & Senior Managing Executive Officer, Corporate Div.

Tel: [phone]

Scheduled date of filing of Quarterly Report:

November 10, 2021

Scheduled date of payment of dividend:

November 29, 2021

Preparation of supplementary materials for quarterly financial results: Yes

Holding of quarterly financial results meeting:

Yes

Note: The original disclosure in Japanese was released on November 5, 2021 at 12:30 (GMT +9).

(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Second Quarter Ended September 30, 2021

(April 1, 2021 - September 30, 2021)

(1) Consolidated results of operations

(Percentages represent year-on-year changes)

Net sales

Operating profit

Ordinary profit

Profit attributable to

owners of parent

Million yen

%

Million yen

%

Million yen

%

Million yen

%

Six months ended Sep. 30, 2021

74,572

-

5,621

-

6,060

-

4,525

-

Six months ended Sep. 30, 2020

96,147

(18.8)

2,459

(8.9)

2,495

(15.9)

1,212

(36.6)

Note: Comprehensive income (million yen) Six months ended Sep. 30, 2021:

6,429

(-%)

Six months ended Sep. 30, 2020:

1,496

(up 8.3%)

Net income per share

Diluted net income per share

Yen

Yen

Six months ended Sep. 30, 2021

180.70

180.65

Six months ended Sep. 30, 2020

47.89

-

Notes: 1. Diluted net income per share for the six months ended September 30, 2020 is not stated because dilutive shares do not exist.

1. 2. ALCONIX has applied the Accounting Standard for Revenue Recognition (Accounting Standards Board of Japan (ASBJ) Statement No. 29, March 31, 2020), etc. from the beginning of the first quarter of the fiscal year ending March 31, 2022. The figures for the six months ended September 30, 2021 are the amounts after the application of this accounting standard and percentages for year-on-year changes are not shown.

2. Consolidated financial position

		Total assets		Net assets	Equity ratio
			Million yen			Million yen		%
	As of Sep. 30, 2021		162,848			49,002		29.8
	As of Mar. 31, 2021		147,917			43,372		28.9
	Reference: Shareholders' equity (million yen)	As of Sep. 30, 2021:	48,515	As of Mar. 31, 2021:	42,800

2. Dividends

				Dividend per share
		1Q-end	2Q-end	3Q-end		Year-end	Total
		Yen	Yen	Yen		Yen	Yen
	Fiscal year ended Mar. 31, 2021	-	21.00	-			21.00		42.00
	Fiscal year ending Mar. 31, 2022	-	24.00
	Fiscal year ending Mar. 31, 2022			-			24.00		48.00
	(forecast)
	Note: Revisions to the most recently	announced dividend forecast: None

3. Consolidated Earnings Forecasts for the Fiscal Year Ending March 31, 2022 (April 1, 2021 - March 31, 2022)

(Percentages represent year-on-year changes)

	Net sales		Operating profit		Ordinary profit		Profit attributable to	Net income per
				owners of parent		share
	Million yen	%	Million yen	%	Million yen	%	Million yen	%	Yen
Full year	152,000	-	8,700	-	9,000	-	6,200	-	247.32

Notes: 1. Revisions to the most recently announced consolidated earnings forecasts: Yes

Regarding consolidated earnings forecasts for the fiscal year ending March 31, 2022, please refer to "Notice of Revisions to Consolidated Earnings Forecast" that was announced on November 5, 2021 (English translation of this release to be announced shortly.)

2. ALCONIX has applied the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020), etc. from the beginning of the first quarter of the fiscal year ending March 31, 2022. The above forecasts are the amounts after the application of this accounting standard and percentages for year-on-year changes are not shown.

* Notes

(1) Changes in significant subsidiaries during the period (changes in scope of consolidation): None

Newly added: -

Excluded: -

(2) Application of special accounting methods for presenting quarterly consolidated financial statements: Yes

Note: Please refer to "2. Quarterly Consolidated Financial Statements and Notes, (4) Notes to Quarterly Consolidated Financial Statements (Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial Statements)" on page 12 of the attachments for further information.

1. Changes in accounting policies and accounting-based estimates, and restatements
2. 1. Changes in accounting policies due to revisions in accounting standards, others: Yes
   2. Changes in accounting policies other than 1) above: None
   3. Changes in accounting-based estimates: None
   4. Restatements: None
3. Number of outstanding shares (common stock)
4. 1. Number of shares outstanding at the end of period (including treasury shares)

As of Sep. 30, 2021:	25,976,400 shares	As of Mar. 31, 2021:	25,943,100 shares
2) Number of treasury shares at the end of period
As of Sep. 30, 2021:	907,207 shares	As of Mar. 31, 2021:	907,207 shares
3) Average number of shares outstanding during the period
Six months ended Sep. 30, 2021:	25,044,534 shares	Six months ended Sep. 30, 2020:	25,323,385 shares

Note: ALCONIX has a Board Benefit Trust for the distribution of stock to eligible individuals. Shares of ALCONIX stock remaining in this trust are included in treasury shares under shareholders' equity and deducted from the average number of shares outstanding during the period that was used to calculate net income per share and diluted net income per share.

• The current quarterly financial report is not subject to quarterly review by certified public accountants or auditing firms.
• Explanation of appropriate use of earnings forecasts, and other special items
  Forecasts of future performance in these materials are based on assumptions judged to be valid and information available to ALCONIX's management at the time the materials were prepared. Actual results may differ significantly from these forecasts for a number of reasons. Please refer to "1. Qualitative Information on Quarterly Consolidated Financial Performance, (3) Explanation of Consolidated Earnings Forecasts and Other Forward-looking Statements" on page 5 of the attachments for assumptions for forecasts and notes of caution for usage.

	ALCONIX CORPORATION (3036) Financial Results for the Second Quarter of FY3/22
Contents of Attachments
1. Qualitative Information on Quarterly Consolidated Financial Performance	2
(1)	Explanation of Results of Operations	2
(2)	Explanation of Financial Position	3
(3)	Explanation of Consolidated Earnings Forecasts and Other Forward-looking Statements	5
2. Quarterly Consolidated Financial Statements and Notes	6
(1)	Quarterly Consolidated Balance Sheet	6
(2)	Quarterly Consolidated Statements of Income and Comprehensive Income	8
	Quarterly Consolidated Statement of Income
	For the Six-month Period	8
	Quarterly Consolidated Statement of Comprehensive Income
	For the Six-month Period	9
(3)	Quarterly Consolidated Statement of Cash Flows	10
(4)	Notes to Quarterly Consolidated Financial Statements	12
	Going Concern Assumption	12
	Significant Changes in Shareholders' Equity	12
	Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial Statements	12
	Changes in Accounting Policies	12
	Additional Information	12
	Segment Information	13

1

ALCONIX CORPORATION (3036) Financial Results for the Second Quarter of FY3/22

1. Qualitative Information on Quarterly Consolidated Financial Performance

(1) Explanation of Results of Operations

In the first half of the current fiscal year, worries about another wave of COVID-19 infections emerged because of a new variant. Despite these concerns, economic activity is returning to normal in many countries as the world looks ahead to the end of the pandemic. The economic recovery is gaining momentum in China, which was the first country to end the COVID-19 outbreak, and the economies of the United States and Europe benefit from government stimulus measures and progress with vaccinations.

In Japan, there are expectations for a significant recovery of corporate earnings and consumer spending following the government's activities to promote vaccination and the end on September 30, 2021 of states of emergency that were declared during 2021, mainly in metropolitan areas. However, the outlook for the Japanese economy was unclear during the fiscal year's first half.

In the automobile industry, where the ALCONIX Group operates, the speed of the diversification of demand is increasing for materials and parts involving the use of electronic components, the reduction of vehicle weight, and technologies for self-driving vehicles. In addition, automobile production and sales started to recover rapidly in the second half of the previous fiscal year. In the semiconductor and electronic component sectors, there is growth of markets associated with the increasing volume of data transmissions due to the IoT, AI and other reasons, the rising use of electronic automobile components, and the progress of 5G mobile telecommunications. The expansion of economic activity and widespread use of telework due to the digital shift is another reason for the consistently strong demand for parts and materials used in IT equipment and semiconductor devices. Companies in many industries are temporarily reducing output due to severe shortages of semiconductors caused by the rapid recoveries of demand and manufacturing activity.

At the ALCONIX Group, metal processing parts for semiconductor manufacturing equipment contributed to earnings as demand was up in market sectors involving semiconductors and data communications. In the Trading sector for electronic and advanced materials, the transaction volumes of electronic and battery materials used in smartphones and other IT products were steady. Due to the strong worldwide demand in the automobile industry, there was rapid growth of shipments of metal precision stamped parts and carbon brushes for small motors. In the Trading sector, demand increased for non-ferrous materials, aluminum rolled products and copper products, which significantly contributed to an increase in earnings.

ALCONIX reported consolidated net sales of 74,572 million yen compared with 96,147 million yen one year earlier, operating profit of 5,621 million yen compared with 2,459 million yen one year earlier, ordinary profit of 6,060 million yen compared with 2,495 million yen one year earlier, and profit attributable to owners of parent of 4,525 million yen compared with 1,212 million yen one year earlier.

The ALCONIX Group has applied the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020), etc. from the beginning of the fiscal year ending March 31, 2022. Due to the use of this new standard, explanations of results of operations are provided without stating the year-on-year changes for consolidated sales and earnings. For more information, please refer to "2. Quarterly Consolidated Financial Statements and Notes, (4) Notes to Quarterly Consolidated Financial Statements (Changes in Accounting Policies)."

Business segment performance was as follows, with sales in each segment including inter-segment sales.

• Trading-Electronicand Advanced Materials

Sales of materials used in smartphones and tablets were stronger than in the same period of the previous year as economic activity restricted by the COVID-19 pandemic recovered gradually. There was a temporary downturn in sales of materials for secondary batteries and environmental applications. While orders associated with remote work and telework were strong, some customers had to reduce output temporarily because of the global semiconductor shortage. In the minor metals and rare earths category sales and earnings increased significantly as the demand associated with the automobile industry continued to recover. As a result, there was a big increase in segment profit because of the recovery in transaction volume as described above.

As a result, the segment recorded sales of 16,847 million yen compared with 24,670 million yen one year earlier and segment profit of 1,939 million yen compared with 726 million yen one year earlier.

2

ALCONIX CORPORATION (3036) Financial Results for the Second Quarter of FY3/22

• Trading-Aluminumand Copper Products

In the non-ferrous products category, the pace of the growth of demand for non-ferrous metals for automotive electronic components and lighter vehicle weight increased along with the rising speed of the shift to electric vehicles. During the fiscal year's first half, the demand for aluminum and copper products was temporarily held down as production cuts caused by the semiconductor shortage affected manufacturers of parts and materials too. The transaction volume of materials for construction was higher than one year earlier as demand for building construction continued to recover. Although the transaction volume of aluminum rolled products and copper products was higher than one year earlier, the transaction volume of titanium and new materials, which were newly added to this segment in the first half of the current fiscal year, was sluggish because of the low level of aircraft production. In the non-ferrous resources category, prices in key markets rose sharply and the price of copper reached an all-time high in May 2021. Demand for home appliances increased because of the need to stay home during the pandemic. In addition, there was a rapid increase in demand for materials used in the automobile industry due to the shift to electric vehicles. As a result, there was a large transaction volume of copper scrap, aluminum scrap and recycled aluminum ingots, the primary materials in this category.

As a result, the segment recorded sales of 29,553 million yen compared with 52,316 million yen one year earlier and segment profit of 1,464 million yen compared with 414 million yen one year earlier.

• Manufacturing-Equipmentand Materials

There was a large volume of shipments of plating materials in the United States and China, where the economies are recovering quickly, because of very strong growth in demand for these materials used for electronic materials and in the automotive sector. First half shipments of carbon brushes for small motors, cashew resin products for brake friction materials, and welding rods were strong in relation to the first half of the previous fiscal year. The main reason is the rapid recovery of worldwide demand for automobiles. In the non-destructive testing equipment and marking devices category, shipments of large marking equipment for applications involving steel and paints and other consumables in Japan and other countries contributed to first half performance.

As a result, the segment recorded sales of 17,163 million yen compared with 11,314 million yen one year earlier and segment profit of 738 million yen compared with a loss of 118 million yen one year earlier.

• Manufacturing-MetalProcessing

Shipments of precision grinding processing parts were down from one year earlier. The demand for semiconductor chip mounting equipment remains firm but customers reduced output because of the semiconductor shortage. Shipments of precision machining processing parts for semiconductor manufacturing equipment were firm as the growth of remote work raise the demand for semiconductors. In the metal precision stamped parts category, shipments remained high in order to meet the enormous demand worldwide in the automobile industry for these parts. Shipments of metal processed parts for air conditioning equipment were firm in Japan.

As a result, the segment recorded sales of 13,912 million yen compared with 10,458 million yen one year earlier and segment profit of 1,900 million yen compared with 1,460 million yen one year earlier.

1. Explanation of Financial Position 1) Financial position
   a. Current assets

At the end of the second quarter of the current fiscal year, current assets totaled 120,671 million yen, an increase of 14,066 million yen from the end of the previous fiscal year. The main factors were an 8,482 million yen increase in inventories, a 4,947 million yen increase in notes and accounts receivable-trade and a 330 million yen increase in cash and deposits.

b. Non-current assets

Non-current assets totaled 42,177 million yen, an increase of 864 million yen. The main factors were the purchase of property, plant and equipment by a consolidated subsidiary, an increase of 1,547 million yen in property, plant

3