Consolidated Financial Results for the Six Months Ended September 30, 2021

Note: This document is a translation of the original Japanese version and provided for reference purposes only. In the event of any discrepancy between the Japanese original and this English translation, the Japanese original shall prevail.

Consolidated Financial Results for the Six Months Ended September 30, 2021

(Japanese Accounting Standards)

Name of Listed Company: Mitsubishi Materials Corporation

November 9, 2021

Listing:

Tokyo Stock Exchange

Stock Code:

5711

URL:

https://www.mmc.co.jp/

Representative: Naoki Ono, Chief Executive Officer

Contact:

Yuji Omura, General Manager, Corporate Communications Dept.

Tel: [phone]

Scheduled filing date of Quarterly Report:

November 9, 2021

Scheduled date of start of dividend payment:

December 10, 2021

Supplementary materials for the quarterly financial results: Yes

Investor conference for the quarterly financial results:

Yes (For Institutional Investors)

(Amounts of less than million yen are omitted.)

1. Results of the six months ended September 30, 2021 (From April 1, 2021 to September 30, 2021)

(1) Consolidated Results of Operations (cumulative)

(Figures in percentages denote the year-on-year change.)

Net sales

Operating profit

Ordinary profit

Profit (loss)

attributable to

owners of parent

Million yen

%

Million yen

%

Million yen

%

Million yen

%

The six months ended September 30,

860,026

18.5

29,038

321.4

38,220

132.2

38,181

-

2021

The six months ended September 30,

725,568

-3.1

6,890

-59.4

16,457

-39.6

(19,150)

-

2020

(Note) Comprehensive income: The six months

ended September

30, 2021:

34,368 million

yen (-%)

The six months ended September 30, 2020: -12,574 million yen (-%)

Profit (loss)

Diluted net

per share

income per share

Yen

Yen

The six months ended September 30, 2021

292.24

-

The six months ended September 30, 2020

(146.43)

-

(2) Consolidated Financial Position

Total assets

Total net assets

Shareholders'

equity ratio

Million yen

Million yen

%

As of September 30, 2021

2,042,428

639,610

27.8

As of March 31, 2021

2,035,546

614,394

26.8

(Reference) Shareholders' Equity: As of September 30, 2021: 568,531 million yen

As of March 31, 2021: 545,233 million yen

2. Dividend Payments

Dividend per share

(Record date)

First quarter

Second quarter

Third quarter

Year-end

Annual

Yen

Yen

Yen

Yen

Yen

Year ended March 31, 2021

-

0.00

-

50.00

50.00

Year ending March 31, 2022

-

40.00

Year ending March 31, 2022 (Forecast)

-

40.00

80.00

(Note 1) Revision of dividend forecast published most recently: Yes (Note 2)

The interim dividend per share for the year ending March 31, 2022 consists of 25.00 yen for ordinary dividend and 15.00 yen for special dividend.

The year-end dividend per share for the year ending March 31, 2022 (Forecast) consists of 25.00 yen for ordinary dividend and 15.00 yen for special dividend.

3. Consolidated Earnings Forecast (From April 1, 2021 to March 31, 2022)

(Figures in percentages denote the year-on-year change.)

	Net sales			Operating profit	Ordinary income	Profit attributable to	Profit per
			owners of parent	share
Year ending March 31,	Million yen		%		Million yen	%	Million yen	%	Million yen	%	Yen
1,760,000		18.5		42,000	58.1	59,000	32.5	37,000	51.6	283.20
2022
(Note) Revision to forecast published most recently: Yes

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* Notes

1. Significant changes of subsidiaries during the term (changes in specific subsidiaries accompanied by a change in the scope of consolidation): None
   New: - (Company name: - ), Exempt: - (Company name: - )
2. Application of special accounting treatment in the preparation of the quarterly consolidated financial statements: Yes (Note) For details, please see"(4) Key notes on consolidated quarterly financial statements, Application of special accounting treatment in the preparation of quarterly consolidated financial statements" under "2. Consolidated Financial Statements and Key Notes" on page 15.
3. Changes in accounting policies, changes of accounting estimates and restatement

(i)	Changes in accounting policies due to amendments to accounting standards:	Yes
(ii)	Other changes in accounting policies:	None
(iii)	Changes in accounting estimates:	None
(iv)	Restatements:	None

1. Numbers of issued shares (common stock)
2. 1. Numbers of issued shares at end of period (including treasury shares):

Six months ended September 30, 2021:	131,489,535 shares
Year ended March 31, 2021:	131,489,535 shares

1. Numbers of treasury shares at end of period:

Six months ended September 30, 2021:	843,584 shares
Year ended March 31, 2021:	836,604 shares

1. Average number of shares issued during period (quarterly cumulative period):

Six months ended September 30, 2021:	130,649,525 shares
Six months ended September 30, 2020:	130,780,804 shares

• This quarterly financial summary is not subject to a quarterly review by certified public accountants or audit firms.
• Explanation about the proper use of financial forecasts and other special notes

(Notes concerning forward-looking statements, etc.)

The operating results forecasts and other forward-looking statements contained in this report are based on information currently available to the Company, as well as certain assumptions that the Company has judged to be reasonable. As such, they do not constitute an assurance that the Company promises to achieve these projected results. Therefore, readers are advised to note that the actual results may vary materially from the forecasts due to a variety of factors.

Please see "(3) Information on the consolidated earnings forecasts and other future forecasts" under "1. Qualitative Information on Financial Results for the First Six Months Ended September 30, 2021" on page 7 for the assumptions about consolidated earnings forecasts.

(Procedure for obtaining supplementary information on quarterly financial results and quarterly financial briefing)

Mitsubishi Materials Corporation plans to hold a quarterly financial briefing for institutional investors on Tuesday, November 9, 2021. The materials used at this briefing are disclosed on the TDnet and the Company's web page at the time that the quarterly financial results are announced.

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Contents
1. Qualitative Information on Financial Results for the First Six Months Ended September 30, 2021................................	4
(1)	Details of operating results .........................................................................................................................................	4
(2)	Details of financial position ........................................................................................................................................	6
(3)	Information on the consolidated earnings forecasts and other future forecasts...........................................................	7
2. Consolidated Financial Statements and Key Notes ..........................................................................................................	8
(1)	Consolidated balance sheets .......................................................................................................................................	8
(2)	Consolidated statement of profit or loss and consolidated statement of comprehensive income..............................	10
Consolidated statement of profit or loss .....................................................................................................................	10
Consolidated statements of comprehensive income ...................................................................................................	11
(3)	Consolidated statements of cash flows .....................................................................................................................	12
(4)	Key notes on consolidated quarterly financial statements ........................................................................................	14
Notes on going concern assumption ...........................................................................................................................	14
Segment Information, etc. ..........................................................................................................................................	14
Notes on significant changes in the amount of shareholders' equity, if any...............................................................	15
Application of special accounting treatment in the preparation of quarterly consolidated financial statements ........	15
Changes in accounting policies ..................................................................................................................................	15
Additional information ...............................................................................................................................................	16
Contingent liabilities ..................................................................................................................................................	16

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1. Qualitative Information on Financial Results for the First Six Months Ended September 30, 2021

(1) Details of operating results

1) Overview of operating results

During the first six months of the current consolidated fiscal year, the economy in China and the United States continued to show a gradual recovery from the downturn caused by the global spread of COVID-19, and the economy in Europe shows movement towards recovery. In Thailand and Indonesia, the economy remained sluggish due to the re-emergence of COVID-19 infection and other factors.

In Japan, due to COVID-19, personal consumption, employment and income environment remained weak. However, exports and industrial production continuously showed signs of recovery.

Regarding the business environment for the Mitsubishi Materials Group (hereinafter referred to as "the Group"), metal prices remained robust, and demands for semiconductor-related and automobile-related products also remained steady. On the other hand, domestic demand for cement has declined.

Under these circumstances, consolidated net sales for the first six months of the current fiscal year were ¥860,026 million (up 18.5% year-on-year), operating profit was ¥29,038 million (up 321.4%), and ordinary profit was ¥38,220 million (up 132.2%). In addition, ¥19,425 million of extraordinary income was recorded as a gain on sales of investment securities. As a result, profit attributable to owners of the parent amounted to ¥38,181 million (net loss of ¥19,150 million in the same period of the previous fiscal year).

1. Overview by segments
   (Advanced Products)

				(Billion yen)
	FY2021	FY2022	Increase / Decrease (%)
	Q1-Q2	Q1-Q2
Net sales	156.0	230.5	74.5	(47.7%)
Operating profit (loss)	(1.7)	5.8	7.6	(-%)
Ordinary profit	0.0	7.2	7.2	(-%)

In the Copper & copper alloy products business, both net sales and operating profit increased due to higher sales, mainly of products for the automobile industry.

In the Electronic materials & components business, despite the decrease of net sales due to the application of the "Accounting Standard for Revenue Recognition," both net sales and operating profit increased as a result of higher sales, mainly of products for the semiconductors industries.

As a result, net sales and operating profit for the entire Advanced Products Business increased year-on-year. Ordinary profit increased due to the increase in operating profit.

(Metalworking Solutions Business)

				(Billion yen)
	FY2021	FY2022	Increase / Decrease (%)
	Q1-Q2	Q1-Q2
Net sales	56.6	65.4	8.7	(15.5%)
Operating profit (loss)	(3.0)	5.8	8.9	(-%)
Ordinary profit (loss)	(2.8)	5.7	8.6	(-%)

Both net sales and operating profits increased due to additional demand for cemented carbide products in Japan and major overseas countries and the impact of the removal from the scope of consolidation in December 2020 of Diamet Corporation and its three subsidiaries, which had been recording operating losses on a continuous basis.

As a result, net sales and operating profit for the entire Advanced Products Business increased year-on-year. Ordinary profit increased due to the increase in operating profit.

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(Metals Business)

				(Billion yen)
	FY2021	FY2022	Increase / Decrease (%)
	Q1-Q2	Q1-Q2
Net sales	358.3	469.4	111.1	(31.0%)
Operating profit	7.4	14.8	7.3	(99.2%)
Ordinary profit	15.4	24.9	9.4	(61.2%)

In the Copper business, net sales and operating profit increased mainly as a result of the rise of the cooper price, despite a decrease in production volume compared with the same period of the previous fiscal year.

In the Gold and other valuable metals business, net sales increased but operating profit decreased mainly due to a decline in sales of palladium, despite a hike in palladium prices.

As a result, net sales and operating profit for the entire Advanced Products Business increased year-on-year. Ordinary profit increased due to the increase in operating profit, as well as an increase in share of profit of entities accounted for using equity method.

(Cement Business)

				(Billion yen)
	FY2021	FY2022	Increase / Decrease (%)
	Q1-Q2	Q1-Q2
Net sales	105.7	101.0	-4.7	(-4.5%)
Operating profit	4.1	2.3	-1.8	(-43.7%)
Ordinary profit	3.8	1.5	-2.3	(-60.5%)

In Japan, despite the resumption of redevelopment work in the Tokyo metropolitan area, net sales declined due to the decrease in demand for disaster recovery work in the Tohoku and Chugoku regions and the application of the "Accounting Standard for Revenue Recognition." In addition, there was an increase in energy costs. As a result, net sales decreased and losses increased.

For overseas business, in the United States, although the sales prices of ready-mixed concrete increased, the sales volume of ready-mixed concrete and cement decreased due to shortage of drivers against the backdrop of tight supply and demand in the labor market, and operating expenses such as electricity costs increased. Additionally, in the Coal business in Australia, the sales price of coal business increased. Consequently, sales increased but operating profit decreased.

As a result, net sales and operating profit for the entire Cement Business decreased year-on-year. Ordinary profit decreased due to the decline in share of profit of entities accounted for using equity method in addition to the decrease in operating profit.

(Environment & Energy Business)

				(Billion yen)
	FY2021	FY2022	Increase / Decrease (%)
	Q1-Q2	Q1-Q2
Net sales	9.6	9.1	-0.4	(-4.9%)
Operating profit (loss)	(0.0)	0.7	0.7	(-%)
Ordinary profit	0.4	1.4	1.0	(232.5%)

In the Energy-related business, both net sales and operating profit increased due to higher sales in the nuclear-energy- related services.

In the Environmental and recycling-related business, both net sales and operating profit increased due to an increase in the processing volume of home appliance recycling and other products, and a rise in the unit price of valuable resources sold in addition to.

In addition to the above, operating profit for the entire Environment & Energy Business increased year-on-year, although net sales decreased, due to the transfer of all shares of DIA CONSULTANTS CO., Ltd. in July 2021.

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