Hitachi Metals : Consolidated Financial Report for the 6-month period ended September 30, 2017 (IFRS)（PDF： 280KB）

Consolidated Financial Report [IFRS]

For the 6-month period ended September 30, 2017

Listed Company: Hitachi Metals, Ltd. (URLhttp://www.hitachi-metals.co.jp/e/index.html) Listed Stock Exchanges: Tokyo Stock Exchange, Inc. (First Section, Code Number 5486)

Representative: Akitoshi Hiraki, President and Chief Executive Officer

Contact: Tatsuya Minami, General Manager, Corporate Communications Dept. Tel: [phone]

October 24, 2017

Note: Figures are rounded off to the nearest million yen.

1. Performance for the First Half Ended September 30, 2017 (April 1, 2017 to September 30, 2017)

2. Operating Results (% indicates the rate of +/- compared with the same term of the previous fiscal year)

   Revenues		Adjusted Operating Income		Operating Income		Income before Income Taxes		Net Income
   Million yen	%	Million yen	%	Million yen	%	Million yen	%	Million yen	%
   482,361	8.1	32,188	3.7	26,788	(7.0)	28,025	13.0	19,645	7.5
   446,051	(15.0)	31,032	(14.2)	28,813	(53.2)	24,807	(59.1)	18,278	(58.5)

   Sept., 2017

   Sept., 2016

   Net Income attributable to Shareholders of the Parent Company		Comprehensive Income		Earnings per Share Earnings per Share attributable to Shareholders attributable to Shareholders of the Parent Company of the Parent Company (Basic) (Diluted)
   Million yen 19,641 18,340	% 7.1 (58.1)	Million yen 23,635 (5,945)	% － －	Yen 45.94 42.89	Yen － －

   Note: Adjusted operating income is the operating income recorded in the condensed interim consolidated statement of income, excluding non-operating income and expenses, and extraordinary income and losses. Adjusted operating income is a unified profit indicator for the Hitachi Group, including Hitachi, Ltd.

   Sept., 2017

   Sept., 2016

3. ) Financial Standing

4. Total Asset Total Equity

   Equity attributable to Shareholders of the Parent Company

   Equity attributable to Shareholders of the Parent Company Ratio

   Equity per Share attributable to Shareholders of the Parent Company

   Million yen Million yen Million yen % Yen

   Sept., 2017 1,073,055 566,672 553,321 51.6 1,294.09

   Mar., 2017 1,040,390 548,746 536,563 51.6 1,254.89

5. Dividends

   Dividends per Share

   1Q 2Q 3Q Term-end Annual

   Yen － －	Yen 13.00 13.00	Yen －	Yen 13.00	Yen 26.00
   －	13.00	26.00

   Mar., 2017

   Mar., 2018

   Mar., 2018

   (Forecast)

   Note: Revision of the latest forecasts of results : No

6. Business results forecast for the year ending March 31, 2018 (Apr.1, 2017 to Mar.31, 2018)

   (% indicates the rate of +/- compared with the previous fiscal year)

   Net Income

   Revenues Adjusted Operating Income

   Income before

   Income Taxes

   attributable to Shareholders of the Parent Company

   Basic Earnings

   per Share

   Million yen	%	Million yen	%	Million yen	%	Million yen	%	Yen
   Full-year	950,000	4.3	80,000	21.2	63,000	(4.6)	45,000	(11.1)	105.24

   Note: 1. Revision of the latest forecasts of results : No

   2. Adjusted operating income is the operating income recorded in the condensed interim consolidated statement of income, excluding non-operating income and expenses, and extraordinary income and losses. Adjusted operating income is a unified profit indicator for the Hitachi Group, including Hitachi, Ltd.

   * Other Notes

   Numbers of shares issued (Common stock)

7. Number of shares outstanding at end of period

   Sept., 2017	428,904,352	Mar., 2017	428,904,352
   Sept., 2017	1,330,116	Mar., 2017	1,327,900
   Sept., 2017 (2Q)	427,574,995	Sept., 2016 (2Q)	427,579,301

   (Including treasury stock)

8. Number of treasury stock outstanding at end of period

9. Average number of shares issued during the term

10. *This quarterly consolidated financial report is not subject to the quarterly review procedure.

    *The forecast figures, with the exception of actual results, are based on certain assumptions and predictions of the management at the time of preparation. Changes in business conditions or underlying assumptions may cause actual results may differ from those projected. Please refer to "(3)Forecasts for the Fiscal Year Ending March 31, 2018, including Consolidated Operating Forecasts " on page 6 for precondition and assumption as the basis of the above forecasts.

    • Table of Contents

11. Qualitative Information Regarding Financial Results for the Six Months Ended September 30, 2017…………………………. 4

12. Information Regarding Operating Results………………………………..……………………………………………… 4 (2) Analisys of Financial Condition…………………………………………………………………….…………………… 6

    (3) Forecasts for the Fiscal Year Ending March 31, 2018, including Consolidated Operating Forecasts………………… 6

13. Condensed Interim Consolidated Financial Statements and Notes to Condensed Interim Consolidated Financial Statements… 7

14. Condensed Interim Consolidated Statement of Financial Position……………………………………………………… 7

15. Condensed Interim Consolidated Statement of Income and Condensed Interim Consolidated Statement of Comprehensive Income………………………………………………………………………………………….……… 9 [ Condensed Interim Consolidated Statement of Income ]……………………………………………………………… 9 [ Condensed Interim Consolidated Statement of Comprehensive Income ]……………………………………………. 10

16. Condensed Interim Consolidated Statement of Changes in Equity……………………………………………………… 11

17. Condensed Interim Consolidated Statement of Cash Flows…………………………………………………………….. 12 (5) Segment Information…………………………………………………………………………………………………….. 14

18. Qualitative Information Regarding Financial Results for the Six Months Ended September 30, 2017
19. Information Regarding Operating Results

20. The global economy during the six months ended September 30, 2017, remained on a modest rebound track primarily in developed countries. The United States maintained steady economic growth, backed by an improvement in the employment situation and an increase in individual consumption and capital expenditures. European economies, especially in the euro-zone, continued a moderate recovery due to an improvement in capital investment and productivity. The Chinese economy showed some signs of a partial rally in the market due to the effects of the government's various economic measures, and economic growth in other emerging countries in Asia also remained on a recovery track. Amid these conditions, the Japanese economy continued to recover gradually as a result of the ongoing improvement in the employment and income environment and increased exports and capital investment supported by the steady recovery of the global economy.

    Among the industries in which Hitachi Metals Group (the "Group") operates, in the automobile industry, sales in Japan significantly increased, led by strong demand for new models; and Europe and China also showed steady demand, while sales in new vehicles decreased in the United States compared with those for the six months ended September 30, 2016. Demand for steel increased mainly in the manufacturing sector, including automobile and industrial machinery. The number of new housing starts remained at the same level. In the electronics industry, mobile device shipments increased.

    Under the business circumstances described above, for the six months ended September 30, 2017, revenues of the Group increased by 8.1% to ¥482,361 million, compared with those for the six months ended September 30, 2016. This result was affected mainly by a rise in raw materials prices (a sliding-scale raw material price system) and the depreciation of the yen, in addition to an increase in demand for mainstays. Adjusted operating income* increased by ¥1,156 million to ¥32,188 million, compared with those for the six months ended September 30, 2016, mainly due to an increase in income associated with increased revenue and effects of cost reduction activities, despite a rise in costs associated with active investment. Operating income decreased by ¥2,025 million to ¥26,788 million, compared with that for the six months ended September 30, 2016, because of an increase in non-operating expenses. For the six months ended September 30, 2017, income before income taxes increased by ¥3,218 million to ¥28,025 million and net income attributable to shareholders of the parent company increased by

    ¥1,301 million to ¥19,641 million, compared with those for the six months ended September 30, 2016.

    Results by business segment are as follows. Note that revenues for each segment include intersegment revenues. There were no changes to the businesses of the Group during the six months ended September 30, 2017.

    The Group has changed its segment names from "High-Grade Metal Products and Materials" to "Specialty Steel Products" and from "High-Grade Functional Components and Equipment" to "Functional Components and Equipment" effective from April 1, 2017. This change in segment names does not affect the segment information.

    The Company has also changed the business segment of SH Copper Products Co., Ltd, a subsidiary of the Company, and one other subsidiary from the Wires, Cables, and Related Products segment to the Specialty Steel Products segment as of July 1, 2017, aiming to strengthen battery-related components in the Specialty Steel Products segment. The segment information for the six months ended September 30, 2017, is prepared and disclosed under the segments reflecting this change.

    Specialty Steel Products

    Revenues in the Specialty Steel Products segment for the six months ended September 30, 2017, were ¥140,954 million, an increase of 21.7%, and adjusted operating income increased by ¥2,426 million to ¥13,524 million, as compared with those for the six months ended September 30, 2016. Operating income of the segment increased by ¥3,231 million to ¥13,193 million for the same period.

    Sales of molds and tool steel exceeded those for six months ended September 30, 2016, due to a recovery in demand for both Japan and Asia. Sales of industrial equipment materials increased overall compared with those for the six months ended September 30, 2016, as sales of environmentally friendly products related to automobiles as well as other industrial components, in particular, components for semiconductor-related equipment, increased. Sales of alloys for electronic products significantly increased compared with those for the six months ended September 30, 2016, due to strong sales in semiconductor package