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    5486   JP3786200000

HITACHI METALS, LTD.

(5486)
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Hitachi Metals : Consolidated Financial Report for the 6-month period ended September 30, 2018 (IFRS)(PDF: 292KB)

10/25/2018 | 03:38am EDT

Consolidated Financial Report [IFRS]

For the 6-month period ended September 30, 2018

October 25, 2018

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 Office Tel: +81-3-6774-3077

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

1. Performance for the First Half Ended September 30, 2018 (April 1, 2018 to September 30, 2018)

(1) Operating Results

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

Adjusted Operating IncomeOperating IncomeIncome before Income TaxesNet Income

Million yen

Sept., 2018 518,958

Sept., 2017 482,361

7.6 8.1

Million yen33,079 32,188

2.8 3.7

Million yen35,775 26,788

33.5 (7.0)

Million yen37,237 28,025

32.9 13.0

Million yen28,056 19,645

42.8 7.5

Note: In order to give a true view of the condition of the whole Group's business without the effects of business restructuring etc., the Hitachi Metals Group (the

"Group") shows "adjusted operating income" which is the operating income recorded in the consolidated statement of income, excluding non-operating income and expenses, and extraordinary income and losses. Adjusted operating income is a unified profitindicator for the Hitachi Group, including Hitachi, Ltd.

Net Income attributable to Shareholders of the Parent Company

ComprehensiveEarnings per ShareEarnings per Share

Income

(Basic)

(Diluted)

Million yen

Sept., 2018 28,138

Sept., 2017 19,641

43.3 7.1

Million yen

39,282 23,635

66.2

Yen65.81 45.94

Yen- -

(2) Financial Standing

Total AssetTotal EquityEquity attributable to Shareholders of the Parent Company

Equity attributable to

Equity per ShareShareholders of the Parent attributable to ShareholdersCompany Ratio

of the Parent Company

Million yen

Sept., 2018 1,126,536

March, 2018 1,058,832

Million yen605,350 570,192

Million yen598,012 562,720

53.1 53.1

Yen1,398.63 1,316.08

2. Dividends

Dividends per Share

1Q

2Q

3Q

Term-end

AnnualMarch, 2018

March, 2019

Yen

Yen

Yen

Yen

Yen

13.00

13.00

26.00

17.00

March, 2019 (Forecast)

17.00

34.00

Note: 1. Revision of the latest forecasts of results : Yes

2. For the situation of dividends, please refer to the "Notice Concerning Dividends for the Six Months Ended September 30, 2018 (Increase) and Revisions

to the Year-End Dividend Forecasts for the Year Ending March 31, 2019 (Increase)," announced on October 25, 2018.

3. Business results forecast for the year ending March 31, 2019 (April 1, 2018 to March 31, 2019)

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

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

2. In order to give a true view of the condition of the Group's business without the effects of business restructuring etc., the Group shows "adjusted operating income" which is the operating income recorded in the consolidated statement of income, excluding non-operating income and expenses, and extraordinary income and losses. Adjusted operating income is a unified profitindicator for the Hitachi Group, including Hitachi, Ltd.

Other Notes

Numbers of shares issued (Common stock)

() Number of shares outstanding at end of period

(Including treasury stock)

Sept., 2018

428,904,352 March, 2018 428,904,352

() Number of treasury stock outstanding at end of period Sept., 2018 () Average number of shares issued during the term

Sept., 2018 (2Q)

427,571,513

Sept., 2017 (2Q)

427,574,995

1,333,471 March, 2018 1,332,135

*This quarterly consolidated financial report is not subject to the quarterly review procedure by the scope of audit.

*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, 2019, including Consolidated Operating Forecasts" on page 6 for precondition and assumption as the basis of the above forecasts.

  • ○ Table of Contents

1. Qualitative Information Regarding Financial Results for the Six Months Ended September 30, 2018 ………………………… . 4

(1) Information Regarding Operating Results ……………………………… .. ……………………………………………… 4

(2) Analisys of Financial Condition …………………………………………………………………… . …………………… 6

(3) Forecasts for the Fiscal Year Ending March 31, 2019, including Consolidated Operating Forecasts ………………… 6

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

(1) Condensed Interim Consolidated Statement of Financial Position ……………………………………………………… 7

(2) 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

(3) Condensed Interim Consolidated Statement of Changes in Equity ……………………………………………………… 11

(4) Condensed Interim Consolidated Statement of Cash Flows …………………………………………………………… .. 12

(5) Changes in Accounting Policies ……………………………………………………………………………………… .. 14

(6) Segment Information …………………………………………………………………………………………………… .. 14

1. Qualitative Information Regarding Financial Results for the Six Months Ended September 30, 2018

(1) Information Regarding Operating Results

The global economy during the six months ended September 30, 2018, remained on a modest rebound track primarily in developed countries. Steady economic growth continued in the United States maintained, backed by an improvement in the employment situation and an increase in individual consumption and capital expenditures. Business confidence in European economies weakened on the back of a slowdown in production recovery. The Chinese economy remained stable supported by solid consumption, while economic growth in other Asian emerging countries was also generally on a mild recovery track. Amid such circumstances, the Japanese economy saw a gradual recovery as a result of improvement in the employment and income environment as well as increased exports and capital investment supported by a recovery of the global economy, despite the impact of the natural disasters that hit Japan during the latter half of the six months ended September 30, 2018.

Among the industries in which the Group operates, in the automobile industry, sales increased year on year overall as sales of new vehicles in Japan remained unchanged, on the back of sales of ordinary passenger vehicles and light vehicles supplementing the drop in sales of small passenger cars, robust sales mainly of commercial vehicles in the United States against the backdrop of continued economic recovery, and increases in China and Europe. Demand for steel increased mainly in the manufacturing sector, including industrial machinery. Housing starts remained unchanged in Japan, while they increased in the United States.

In the electronics industry, smartphone shipments were on a declining trend.

Under the business circumstances described above, for the six months ended September 30, 2018, revenues of the Group increased by 7.6% to ¥518,958 million, compared with those for the six months ended September 30, 2017. This result was influenced mainly by a rise in raw material prices (sliding-scale raw materials price system), in addition to an increase in demand for mainstays. Adjusted operating income* increased by ¥891 million to ¥33,079 million, compared with those for the six months ended September 30, 2017, mainly due to an increase in income associated with increased revenue and the effects of cost reduction measures, and an improvement in the earnings of heat-resistant exhaust casting components and aluminum wheels businesses, despite a rise in costs following aggressive investment. Operating income increased by ¥8,987 million to ¥35,775 million as a result of mainly recording ¥5,757 million in gain on bargain purchase, etc. under other income, which was generated from making Santoku Corporation ("Santoku") a consolidated subsidiary of the Company as of April 2, 2018. For the six months ended September 30, 2018, income before income taxes increased by ¥9,212 million to ¥37,237 million and net income attributable to shareholders of the parent company increased by ¥8,497 million to ¥28,138 million, compared with those for the six months ended September 30, 2017.

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, 2018.

The Company has 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. Due to this change, the results of SH Copper Products, etc. for the six months ended September 30, 2017 have been recorded under the Specialty Steel Products segment.

Specialty Steel Products

Revenues in the Specialty Steel Products segment for the six months ended September 30, 2018, were ¥154,263 million, an increase of 9.4%, and adjusted operating income increased by ¥1,969 million to ¥15,493 million, as compared with those for the six months ended September 30, 2017. Operating income of the segment increased by ¥1,579 million to ¥14,772 million for the same period.

Sales of molds and tool steel increased year on year, due to robust sales mainly in Japan. Sales of industrial equipment materials exceeded those for the six months ended September 30, 2017 on the back of an increase in sales of environment-conscious products related to automobiles. Sales of alloys for electronic products increased year on year as a result of an increase in sales of battery-related and organic EL panel-related components, in addition to robust sales of semiconductor package components.

Sales of aircraft-related and energy-related materials increased year on year overall, due to an increase in sales of aircraft-related materials despite weak results of energy-related materials.

Both domestic sales and exports of rolls were strong. Sales of injection molding machine parts increased as capital investment-related demand remained at a high level. As a result, sales of rolls as a whole increased year on year.

Sales of soft magnetic materials and applied products as a whole increased year on year due to a recovery in demand for

amorphous metals and robust sales of applied products for automobiles on the back of increased demand.

Magnetic Materials and Applications

Revenues in the Magnetic Materials and Applications segment for the six months ended September 30, 2018 were ¥58,426

million, an increase of 12.1% year on year, while adjusted operating income decreased by ¥1,984 million year on year to ¥2,855

million due to an increase in costs associated with aggressive investment and changes in raw material prices. Operating income

increased by ¥3,726 million year on year to ¥8,514 million as a result of recording ¥5,757 million in gain on bargain

purchase, etc. under other income, which was generated from making Santoku a consolidated subsidiary of the Company as

of April 2, 2018.

Sales of rare earth magnets exceeded those for the six months ended September 30, 2017 overall. This increase in sales is

attributable to solid demand for automotive electronic components for electric power steering and hybrid/electric vehicles, and

unchanged sales of industrial equipment, due to a drop in capital investment-related demand for semiconductor-related products.

Santoku becoming a consolidated subsidiary also had an effect on overall sales.

Sales of ferrite magnets increased year on year on the back of strong demand for automotive electronic components, reflecting

increased automobile production, despite a decrease in demand for household appliance parts.

Functional Components and Equipment

Revenues in the Functional Components and Equipment segment for the six months ended September 30, 2018, were ¥184,373

million, an increase of 3.4% year on year, due in part to a rise in raw material prices (sliding-scale raw materials price system).

Adjusted operating income increased by ¥656 million year on year to ¥6,890 million, and operating income decreased by ¥604

million year on year to ¥4,886 million.

Sales of casting components for automobiles increased as a whole compared with those for the six months ended September 30,

2017. This was due to an increase in demand for casting components for commercial vehicles, farming machinery, and

construction machinery in North America, and increased demand for automobiles in Asia.

We have positioned heat-resistant exhaust casting components and aluminum wheels as "businesses with issues" and are making

efforts in structural reforms including productivity improvement, correction of selling prices, and adjustment of production

volumes with the aim of improving profitability. As a result, sales of businesses with issues fell below those for the six months

ended September 30, 2017 but profits improved year on year.

Sales of pipe fittings as a whole remained unchanged from the six months ended September 30, 2017. This mainly reflected an

increase in housing starts in the United States despite the effect of price revisions and a decreased in capital investment-related

demand due to the heat wave during summer in Japan. Sales of semiconductor manufacturing equipment decreased year on year

due to the delay of some capital investment projects. As a result, sales of piping components as a whole decreased year on year.

Wires, Cables, and Related Products

Revenues in the Wires, Cables, and Related Products segment for the six months ended September 30, 2018, were ¥121,008

million, an increase of 9.5%, and adjusted operating income increased by ¥296 million to ¥7,200 million, as compared with

those for the six months ended September 30, 2017. Operating income of the segment increased by ¥4,083 million to ¥6,879

million for the same period, mainly due to an decrease in other expenses.

Sales of wires and cables for rolling stock grew significantly, mainly for China. Sales of electric wires for FA/robots

increased, while sales of magnet wires were also robust mainly for automobiles. As a result, sales of electric wires and

cables as a whole increased year on year.

Demand for various sensors, harnesses for electric parking brakes and hybrid automobiles increased, and demand for brake

hoses was also firm. Sales of high performance components for medical use increased year on year supported by solid

demand for both probe cables and tubes. As a result, sales of high performance components as a whole increased year on year.

Disclaimer

Hitachi Metals Ltd. published this content on 25 October 2018 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 25 October 2018 07:37:05 UTC


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Sales 2022 874 B 7 890 M 7 890 M
Net income 2022 20 732 M 187 M 187 M
Net Debt 2022 113 B 1 016 M 1 016 M
P/E ratio 2022 43,8x
Yield 2022 0,85%
Capitalization 908 B 8 188 M 8 195 M
EV / Sales 2022 1,17x
EV / Sales 2023 1,09x
Nbr of Employees 28 620
Free-Float 46,3%
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Number of Analysts 4
Last Close Price 2 123,00 JPY
Average target price 1 894,25 JPY
Spread / Average Target -10,8%
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Managers and Directors
Mitsuaki Nishiyama Co-Chairman, CEO & Executive President
Hiroaki Nishioka Chief Financial Officer & Head-Administration
Kenichi Nishiie Co-Chairman
Kazuya Murakami Managing Executive Officer, General Manager-R&D
Ryoichi Aida Chief Quality Officer & Head-Technology
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