Krosaki Harima : Summary of Consolidated Financial Statements for 1Q FY2023

Note: This document has been translated from part of the original Japanese version into English for reference purpose only. If there are conflicts between this translated document and the original Japanese version, the original Japanese version shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from this translation.

Summary of Consolidated Financial Statements

for the First Quarter of the Fiscal Year Ending March 2024

[Japanese Standards]

July 28, 2023

Listed Company Name: KROSAKI HARIMA CORPORATION

	Listed on the Tokyo Stock Exchange and the Fukuoka Stock Exchange
Securities Code:	5352	URL: https://www.krosaki.co.jp/
Representative:	Kazuhiro Egawa, President
Date to submit quarterly financial statements:	August 8, 2023
Date to start distributing dividends:		-

Supplementary documents for this summary of financial statements: None

Explanation meeting for institutional investors and analysts on this summary of financial statements: None

(Figures shown are rounded down to the nearest million yen)

1. Consolidated Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2024 (April 1, 2023, to June 30, 2023)

(1) Consolidated Business Results

(Percentages indicate changes from the same period of the previous fiscal year.)

	Net sales		Operating profit		Ordinary profit
1Q, Fiscal Year Ending March	Millions of yen	%	Millions of yen	%	Millions of yen	%
45,357	12.6	4,133	40.6	4,754	38.7
2024
1Q, Fiscal Year Ended March	40,292	27.0	2,940	29.3	3,429	46.3
2023
	Profit attributable to owners	Profit per share		Diluted profit per share
	of parent
1Q, Fiscal Year Ending March	Millions of yen	%		Yen		Yen
3,078	43.3		365.53		-
2024
1Q, Fiscal Year Ended March	2,148	41.6		255.06		-
2023

Note: Comprehensive income was ¥6,570 million (42.2%) for the first quarter of the fiscal year ending March 2024 and ¥4,620 million (132.8%) for the first quarter of the fiscal year ended March 2023.

(2) Consolidated Financial Position

	Total assets	Net assets	Equity ratio
	Millions of yen	Millions of yen	%
June 30, 2023	169,334	82,886	46.1
March 31, 2023	163,340	77,858	45.0

Reference: Equity capital was ¥78,115 million as of June 30, 2023, and ¥73,528 million as of March 31, 2023.

2.	Dividends
				Dividend
		1Q End	2Q End	3Q End	Year-End	Annual
		Yen	Yen	Yen	Yen	Yen
Fiscal Year Ended March 2023	-	110.00	-	180.00	290.00
Fiscal Year Ending March 2024	-
Fiscal Year Ending March 2024 (Forecast)		160.00	-	200.00	360.00

Note: Revision to the most recent dividend forecasts previously released: Yes

*For details, refer to the Notice Regarding Performance and Dividend Forecasts released today.

3. Forecast of Consolidated Business Results for the Fiscal Year Ending March 31, 2024 (April 1, 2023, to March 31, 2024)

(The percentages indicate the rates of increase or decrease compared with the preceding fiscal year.)

	Net sales		Operating profit		Ordinary profit
Interim	Millions of yen	%	Millions of yen	%	Millions of yen	%
88,000	9.2	7,000	42.4	7,500	31.9
Full Year	172,000	4.1	13,000	16.3	13,500	11.7
	Profit attributable to owners	Profit per share
	of parent
Interim	Millions of yen	%		Yen
5,800	62.2		688.78
Full Year	10,000	20.7	1,187.55

Note: Revision to the most recent performance forecasts previously released: Yes

*For details, refer to the Notice Regarding Performance and Dividend Forecasts released today.

Notes:

1. Changes in important subsidiaries involving a change in the scope of consolidation during the period: None
2. Adoption of accounting methods specific to preparation of quarterly consolidated financial statements: None
3. Changes in accounting policies or estimates and retrospective restatements
4. 1. Changes in accounting policies in accordance with revision of accounting standards: None
   2. Changes in accounting policies other than above: None
   3. Changes in accounting estimates: None
   4. Retrospective restatements: None
5. Number of shares issued and outstanding (common stock)
6. 1. Number of shares issued and outstanding as of the period-end (including treasury shares):

1Q, Fiscal Year ending March 2024:	9,114,528	Fiscal Year ended March 2023:	9,114,528
2. Number of treasury shares as of the period-end:
1Q, Fiscal Year ending March 2024:	693,894	Fiscal Year ended March 2023:	693,629
3. Average number of shares outstanding:
1Q, Fiscal Year ending March 2024:	8,420,698	1Q, Fiscal Year ended March 2023:	8,421,595

The Summary of Quarterly Consolidated Financial Statements is exempt from the quarterly review by Certified Public Accountants or an Audit Corporation.

Statement regarding the proper use of financial forecasts and other special remarks:

Forward-looking statements, including the forecast of business results, in this Summary are based on information that has been obtained by the Company to date and certain assumptions that are deemed as reasonable, and the Company does not guarantee the realization of these statements. Please understand that actual results may differ significantly from those statements due to various factors. For details of the forecast of business results, see "(2) Explanation of Forecast of Consolidated Business Results and Other Forward-looking Information" under "1. Qualitative Information on Quarterly Financial Results" on page 3 of the attachment.

Contents of the Attachment
1. Qualitative Information on Quarterly Financial Results	2
(1)	Explanation of Business Results	2
(2)	Explanation of Forecast of Consolidated Business Results and Other Forward-looking
	Information	3
2. Quarterly Consolidated Financial Statements and Major Notes	4
(1)	Quarterly Consolidated Balance Sheets	4
(2)	Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of
	Comprehensive Income	6
(3)	Notes to Quarterly Consolidated Financial Statements	8
	(Notes on Going Concern Assumption)	8
	(Notes on Significant Changes in Shareholders' Equity)	8
3. Others	8

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1. Qualitative Information on Quarterly Financial Results

(1) Explanation of Business Results

During the first quarter of the fiscal year ending March 31, 2024 (April 1, 2023 to June 30, 2023), the Japanese economy continued to face an uncertain outlook due to the hike in resource and energy prices, which was triggered by the prolonged Russia's invasion of Ukraine, rising prices around the world, and sharp foreign exchange rate fluctuations due to monetary tightening in many countries, among other factors, while economic activities have resumed following the easing of the restrictions on activities caused by COVID-19.

The steel industry, the Group's main customers, saw a decline in demand for steel both in Japan and overseas, with the exception of some regions, mainly due to a decline in demand for steel for the construction industry, while such demand for automobile production has been recovering, backed by the easing of semiconductor shortages. Domestic total crude steel output in the first quarter of the fiscal year ending March 31, 2024 decreased by 3.4% year on year to 22.21 million tons. Worldwide crude steel output from January to June 2023, as announced by the World Steel Association, decreased by 1.1% year on year to 943.9 million tons, despite an increase of 7.4% year on year to 67.9 million tons in India.

In this environment, the Group's consolidated net sales for the first quarter of the fiscal year ending March 31, 2024 increased 12.6% from a year earlier to ¥45,357 million. This was mainly attributable to the Group's efforts to expand business in the strong Indian steel market and to expand sales to non-ferrous metals fields in the first quarter of the fiscal year ending March 31, 2024, in addition to the steady progress in passing the rising prices of raw material and energy and other cost increases on to selling prices in the Refractories segment since last fiscal year.

Primarily due to the increase in net sales, the Group's consolidated operating profit for the first quarter of the fiscal year ending March 31, 2024 increased 40.6% from a year earlier to ¥4,133 million, ordinary profit increased 38.7% to ¥4,754 million, and profit attributable to owners of parent increased 43.3% to ¥3,078 million.

Operating results for each business segment are as follows.

The net sales of each segment represent sales to external customers and do not include inter-segment sales or transfers. The amounts of segment profit (loss) are based on operating profit (loss).

[Refractories]

Net sales in the Refractories segment increased by 14.8% from a year earlier to ¥39,595 million and segment profit increased by 56.0% from a year earlier to ¥3,584 million. This was mainly attributable to the Group's efforts to expand business in the strong Indian steel market and to expand sales to non-ferrous metals fields in the first quarter of the fiscal year ending March 31, 2024, in addition to the steady progress in passing the rising prices of raw material and energy and other cost increases on to selling prices since last fiscal year.

[Furnace]

Net sales in the Furnace segment decreased by 0.4% from a year earlier to ¥3,424 million and segment profit increased by 2.8% from a year earlier to ¥214 million owing to the progress in orders received for small to medium-sized construction projects, although there was a trough in orders received for large-scale

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construction projects, in addition to a drop in crude steel output. [Ceramics]

Net sales in the Ceramics segment decreased by 1.5% from a year earlier to ¥1,954 million and segment profit decreased by 37.1% from a year earlier to ¥188 million. This was mainly attributable to the decline in orders received for ceramic materials for electronic components as customers worked to adjust their supply and demand.

[Real Estate]

Net sales in the Real Estate segment remained unchanged from a year earlier at ¥184 million. Segment profit decreased by 0.3% from a year earlier to ¥149 million.

[Others]

Net sales in Others segment increased by 8.3% from a year earlier to ¥198 million. Segment loss was ¥1 million (compared with a segment loss of ¥21 million for the same period in the previous fiscal year).

(2) Explanation of Forecast of Consolidated Business Results and Other Forward-looking Information

The Group announced today the forecast of consolidated business results for the first two quarters of the fiscal year ending March 31, 2024, which had been undetermined in "Summary of Consolidated Financial Statements for the Fiscal Year Ended March 2023 [Japanese Standards]" released on May 12, 2023. In addition, the Group revised the forecast of consolidated business results for the fiscal year ending March 31, 2024. For details, please refer to the "Notice Regarding Performance and Dividend Forecasts" announced today.

Business results forecasts may vary significantly due to factors such as fluctuations in demand for refractories associated with changes in crude steel output as well as market trends for refractory materials.

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