Mitsubishi Materials : Consolidated Financial Results for the Three Months Ended June 30, 2022(Japanese Accounting Standards)

Consolidated Financial Results for the Three Months Ended June 30, 2022

(Japanese Accounting Standards)

Name of Listed Company: Mitsubishi Materials Corporation

August 9, 2022

Listing:

Tokyo Stock Exchange

Stock Code: 5711

URL:

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

Representative: Naoki Ono, Chief Executive Officer

Contact: Chiaki Kubota, General Manager, Corporate Communications Dept.

Tel: [phone]

Scheduled filing date of Quarterly Report: August 9, 2022

Scheduled date of start of dividend payment: -

Supplementary materials for the quarterly financial results: Yes

Investor conference for the quarterly financial results:

Yes (For Institutional Investors)

(Amounts of less than one million yen are omitted.)

1. Results of the Three Months Ended June 30, 2022 (From April 1, 2022 to June 30, 2022)

(1) Consolidated Results of Operations (cumulative)

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

Net sales

Operating profit

Ordinary profit

Profit attributable to

owners of parent

Million yen

%

Million yen

%

Million yen

%

Million yen

%

The three months ended June 30, 2022

422,628

-1.2

13,924

-6.3

17,095

-32.0

24,135

42.7

The three months ended June 30, 2021

427,685

24.2

14,859

492.7

25,124

705.6

16,913

－

(Note) Comprehensive income:

The three

months ended June 30, 2022: 43,134 million yen (38.4%)

The three months ended June 30, 2021, 31,163 million yen (191.5%)

Profit

Diluted profit per

per share

share

Yen

Yen

The three months ended June 30, 2022

184.73

-

The three months ended June 30, 2021

129.46

-

(2) Consolidated Financial Position

Total assets

Total net assets

Shareholders'

equity ratio

Million yen

Million yen

%

As of June 30, 2022

2,020,002

642,323

29.8

As of March 31, 2022

2,125,032

655,752

27.5

(Reference) Shareholders' Equity:

As of June

30, 2022: 602,020 million

yen

As of March 31, 2022: 584,817 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, 2022

-

40.00

-

50.00

90.00

Year ending March 31, 2023

-

Year ending March 31, 2023 (Forecast)

25.00

25.00

50.00

(Note1) Revision of dividend forecast published most recently: None

(Note2) The interim dividend per share for the year ended March 31, 2022 consists of 25.00 yen ordinary dividend and 15.00 yen special dividend. The year-end dividend per share for the year ended March 31, 2022 consists of 35.00 yen ordinary dividend and 15.00 yen special dividend.

3. Consolidated Earnings Forecast (From April 1, 2022 to March 31, 2023)

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

	Net sales			Operating profit	Ordinary profit	Profit attributable to	Profit per
			owners of parent	share
Year ending March 31,	Million yen		%		Million yen	%	Million yen	%	Million yen	%	Yen
1,640,000		-9.5		45,000	-14.6	32,000	-57.9	20,000	-55.6	153.06
2023
(Note) Revision to forecast published most recently: Yes

* Notes

1. Significant changes of subsidiaries during the term (changes in specific subsidiaries accompanied by a change in the scope of consolidation): Yes
   New: - , Exempt: 1 (MCC Development Corporation)
   (Note) For details, please see "(3) Key notes on consolidated quarterly financial statements, Changes of significant subsidiaries during the three months ended June 30, 2022" under "2. Consolidated Financial Statements and Key Notes" on page 12.
2. Application of special accounting treatment in the preparation of the quarterly consolidated financial statements: Yes (Note) For details, please see "(3) 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 12.
3. Changes in accounting policies, changes of accounting estimates and restatement

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

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

Three months ended June 30, 2022:	131,489,535 shares
Year ended March 31, 2022:	131,489,535 shares

1. Numbers of treasury shares at end of period:

Three months ended June 30, 2022:	811,670 shares
Year ended March 31, 2022:	848,433 shares

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

Three months ended June 30, 2022:	130,649,934 shares
Three months ended June 30, 2021:	130,651,493 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 Three Months Ended June 30, 2022" on page6 or 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, August 9, 2022. 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 Three Months Ended June 30, 2022..............................................	4
(1)	Details of operating results .........................................................................................................................................	4
(2)	Details of financial position ........................................................................................................................................	6
(3)	Information on the consolidated earnings forecasts and other future forecasts...........................................................	6
2. Consolidated Financial Statements and Key Notes ..........................................................................................................	7
(1)	Consolidated balance sheets .......................................................................................................................................	7
(2)	Consolidated statement of profit or loss and consolidated statement of comprehensive income................................	9
Consolidated statement of profit or loss .......................................................................................................................	9
Consolidated statements of comprehensive income ...................................................................................................	10
(3)	Key notes on consolidated quarterly financial statements ........................................................................................	11
Notes on going concern assumption ...........................................................................................................................	11
Segment Information, etc. ..........................................................................................................................................	11
Notes on significant changes in the amount of shareholders' equity, if any ...............................................................	12
Changes of significant subsidiaries during the three months ended June 30, 2022 ....................................................	12
Application of special accounting treatment in the preparation of quarterly consolidated financial statements ........	12
Additional information ...............................................................................................................................................	12
Business combinations and other relationships ..........................................................................................................	13
Contingent liabilities ..................................................................................................................................................	14

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1. Qualitative Information on Financial Results for the Three Months Ended June 30, 2022

(1) Details of operating results

1) Overview of operating results

During the three months ended June 30, 2022, the global economy saw a surge in energy prices and instability in metal prices resulting from the situation in Ukraine, along with a weakening of the yen due to rising interest rates that spread to developed countries. Against this backdrop, although economic activities in China were affected by the prolonged city lockdowns as a countermeasure against COVID-19, the economy in other regions showed signs of recovery due to progress in vaccinations and other factors.

The Japanese economy remained on a recovery track as economic and social activities moved toward normalization. The business environment surrounding the Mitsubishi Materials Group (hereinafter referred to as "the Group"), saw the impact of a weakening yen, and while demand from the semiconductor and automotive industries remained firm, the palladium price fell and energy prices rose, etc.

Under these circumstances, consolidated net sales for the first quarter of the current fiscal year were ¥422,628 million (down 1.2% year-on-year), operating profit was ¥13,924 million (down 6.3%), and ordinary profit was ¥17,095 million (down 32.0%). In addition, the Company recorded an extraordinary income of ¥11,007 million as gain on change in equity. As a result, profit attributable to owners of parent amounted to ¥24,135 million (up 42.7% year-on-year)

2) Overview by segments

Effective from the first quarter of the current fiscal year, the Company has changed its reportable segments, etc. For details, please refer to "2. Consolidated Financial Statements and Key Notes on consolidated quarterly financial statements (3) Key notes on consolidated quarterly financial statements (Segment Information, etc.)" The following year-on-year comparisons are calculated based on the figures for the same period of the previous year, restated according to the new classification.

(Advanced Products Business)

				(Billion yen)
	FY2022	FY2023	Increase / Decrease (%)
	Q1	Q1
Net sales	115.7	133.2	17.5	(15.2%)
Operating profit	3.2	3.7	0.4	(13.8%)
Ordinary profit	4.2	3.8	-0.4	(-10.6%)

In the Copper & copper alloy products business, both net sales and operating profit increased, mainly weaker yen favoring foreign exchange rates, despite higher energy costs, etc.

In the Electronic materials & components business, both net sales and operating profit increased, mainly due to increased sales of semiconductor-related products.

As a result, net sales and operating profit for the entire Advanced Products Business increased year-on-year. Ordinary profit decreased due to a decline in gain on valuation of derivatives , etc., despite an increase in operating profit.

(Metalworking Solutions Business)

				(Billion yen)
	FY2022	FY2023	Increase / Decrease (%)
	Q1	Q1
Net sales	33.4	36.2	2.8	(8.6%)
Operating profit	2.1	4.3	2.2	(105.0%)
Ordinary profit	2.1	5.0	2.8	(132.3%)

For cemented carbide products, a major product category, both net sales and operating profit increased due to increase in sales mainly in Japan and North America, despite decrease in sales in China caused by the prolonged city lockdowns.

As a result, net sales and operating profit for the entire Metalworking Solutions Business increased year-on-year. Ordinary profit increased because of the increase in foreign exchange gains in addition to the increase in operating profit.

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(Metals Business)

				(Billion yen)
	FY2022	FY2023	Increase / Decrease (%)
	Q1	Q1
Net sales	237.1	288.8	51.6	(21.8%)
Operating profit	7.1	5.8	-1.2	(-17.9%)
Ordinary profit	16.6	11.4	-5.1	(-31.2%)

In the Copper business, net sales increased but operating profit decreased mainly due to higher energy cost, etc., despite an increase 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 decline in the price of palladium, despite an increase in gold sales volume year-on-year.

As a result, net sales for the entire Metals Business increased but operating profit decreased year-on-year. Ordinary profit decreased due to a decrease in dividend income in addition to a decrease in operating profit.

(Environment & Energy Business)

				(Billion yen)
	FY2022	FY2023	Increase / Decrease (%)
	Q1	Q1
Net sales	5.5	5.0	-0.5	(-9.7%)
Operating profit	0.2	1.0	0.7	(354.3%)
Ordinary profit	0.5	1.4	0.9	(171.5%)

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

In the Environmental and recycling-related business, both net sales and operating profit increased reflecting higher unit prices for the sale of valuable materials.

In addition to the above, due to the effect that Dia Consultants Co., Ltd. being removed from the scope of consolidation in July 2021, overall net sales for the entire Environment & Energy Business decreased but operating profit increased year- on-year. Ordinary profit increased due to the increase in operating profit and an increase in share of profit of entities accounted for using equity method.

(Other Businesses)

				(Billion yen)
	FY2022	FY2023	Increase / Decrease (%)
	Q1	Q1
Net sales	108.8	35.1	-73.6	(-67.7%)
Operating profit	3.7	0.7	-3.0	(-80.8%)
Ordinary profit (loss)	3.4	(3.8)	-7.3	(-%)

In the Other Businesses, both net sales and operating profit decreased, mainly due to the impact of the Cement Business and Aluminum Business being removed from the scope of consolidation.

As a result, net sales and operating profit for the Other Businesses decreased year-on-year. Ordinary profit decreased due to a decreased in operating profit and the posting of share of loss of entities accounted for using equity method concerning Mitsubishi UBE Cement Corporation.

Mitsubishi UBE Cement Corporation faced an increase in energy costs mainly due to energy price hikes in both domestic and overseas markets.

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