Krosaki Harima : Summary of Consolidated Financial Statements for 3Q FY2022

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 Third Quarter of the Fiscal Year Ending March 2023

[Japanese Standards]

			January 30, 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:	February 10, 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 Third Quarter of the Fiscal Year Ending March 31, 2023 (April 1, 2022, to December 31, 2022)

(1) Consolidated Business Results

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

	Net sales		Operating profit		Ordinary profit
	Millions of yen	%	Millions of yen	%	Millions of yen	%
First 3Qs, Fiscal Year Ending	122,481	23.8	7,313	16.6	8,182	20.1
March 2023
First 3Qs, Fiscal Year Ended	98,910	18.6	6,273	111.5	6,812	65.3
March 2022
	Profit attributable to owners	Profit per share		Diluted profit per share
	of parent
	Millions of yen	%		Yen		Yen
First 3Qs, Fiscal Year Ending	5,309	19.1		630.46		-
March 2023
First 3Qs, Fiscal Year Ended	4,456	48.4		529.17		-
March 2022

Note: Comprehensive income was ¥9,012 million (61.5%) for the first three quarters of the fiscal year ending March 2023 and ¥5,581 million (55.1%) for the first three quarters of the fiscal year ended March 2022.

(2) Consolidated Financial Position

	Total assets	Net assets	Equity ratio
	Millions of yen	Millions of yen	%
December 31, 2022	158,490	74,704	44.4
March 31, 2022	142,694	69,084	45.8

Reference: Equity capital was ¥70,403 million as of December 31, 2022, and ¥65,344 million as of March 31, 2022.

2. Dividends

			Dividend
	1Q End	2Q End	3Q End	Year-End	Annual
	Yen	Yen	Yen	Yen	Yen
Fiscal Year Ended March 2022	-	100.00	-	100.00	200.00
Fiscal Year Ending March 2023	-	110.00	-
Fiscal Year Ending March 2023 (Forecast)				150.00	260.00

Note: Revision to the most recent dividend forecasts previously released: Yes *For details, refer to the Notice Regarding Dividend Forecasts released today.

3. Forecast of Consolidated Business Results for the Fiscal Year Ending March 31, 2023 (April 1, 2022, to March 31, 2023)

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

	Net sales		Operating profit		Ordinary profit
	Millions of yen	%	Millions of yen	%	Millions of yen	%
Full Year	163,000	21.8	11,000	45.4	11,500	32.5
	Profit attributable to owners	Profit per share
	of parent
	Millions of yen	%		Yen
Full Year	7,300	33.0		866.82

Note: Revision to the most recent performance forecasts previously released: None

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):

3Q, Fiscal Year ending March 2023:	9,114,528	Fiscal Year ended March 2022:	9,114,528
2. Number of treasury shares as of the period-end:
3Q, Fiscal Year ending March 2023:	693,307	Fiscal Year ended March 2022:	692,845
3. Average number of shares outstanding:
3Q, Fiscal Year ending March 2023:	8,421,471	3Q, Fiscal Year ended March 2022:	8,422,347

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 three quarters of the fiscal year ending March 31, 2023 (April 1, 2022 to December 31, 2022), the Japanese economy continued to face uncertain outlook due to the ongoing high prices of raw materials around the world as well as inflation, rising interest rates and the yen's sharp fall arising from the hike in energy and food prices, which was triggered by Russia's invasion of Ukraine, among other factors.

The steel industry, the Group's main customers, also saw a decline in demand for steel both in Japan and overseas, with the exception of some regions, mainly due to the continued cuts in automobile production against the backdrop of semiconductor shortages and other disruptions in the parts supply chain. Domestic total crude steel output in the first three quarters of the fiscal year ending March 31, 2023 decreased by 8.8% year on year to

66.22 million tons. Worldwide crude steel output from January to November 2022, as announced by the World Steel Association, decreased by 3.7% year on year to 1,691.4 million tons, despite an increase of 6.0% year on year to 114.2 million tons in India.

In this environment, the Group's consolidated net sales for the first three quarters of the fiscal year ending March 31, 2023 increased 23.8% from a year earlier to ¥122,481 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 addition to steady efforts to pass the rising price of raw material and other cost increases on to selling prices in the Refractories segment. Primarily due to the increase in net sales, the Group's consolidated operating profit for the first three quarters of the fiscal year ending March 31, 2023 increased 16.6% from a year earlier to ¥7,313 million, ordinary profit increased 20.1% to ¥8,182 million, and profit attributable to owners of parent increased 19.1% to ¥5,309 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 are based on operating profit.

[Refractories]

Net sales in the Refractories segment increased by 27.7% from a year earlier to ¥104,528 million and segment profit increased by 19.8% from a year earlier to ¥5,436 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 addition to steady efforts to pass the rising price of raw material and other cost increases on to selling prices.

[Furnace]

Net sales in the Furnace segment increased by 9.6% from a year earlier to ¥10,577 million and segment profit increased by 56.4% from a year earlier to ¥640 million owing to orders received for large-scale construction projects including a boiler project for biomass power generation as well as to cost reduction and other efforts, although there was a decline in orders received for maintenance work for steel manufacturing facilities resulting from a drop in crude steel output.

[Ceramics]

Net sales in the Ceramics segment decreased by 1.5% from a year earlier to ¥6,218 million and segment

2

profit decreased by 10.7% from a year earlier to ¥761 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 ¥553 million. Segment profit increased by 0.7% from a year earlier to ¥446 million.

[Others]

Net sales in Others segment increased by 15.3% from a year earlier to ¥604 million. Segment profit decreased by 35.1% from a year earlier to ¥23 million.

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

As of the time this report is prepared, there has been no change to the Group's forecast of consolidated business results for the fiscal year ending March 31, 2023, released on October 31, 2022.

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

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