Mitsubishi Steel Mfg : Summary of Financial Statements for the First Quarter of the Fiscal Year Ending March 31,2024(Consolidated)

Summary of Financial Statements for the First Quarter of the Fiscal Year

Ending March 31, 2024

[Japanese GAAP] (Consolidated)

		August 8, 2023
		Shares listed on: Tokyo Stock Exchange
Name of listed company:	MITSUBISHI STEEL MFG. CO., LTD.
Code No.:	5632	URL: https://www.mitsubishisteel.co.jp/
Representative:	Jun Yamaguchi, Representative Director and President/Executive Officer
Contact:	Koichi Yaginuma, Senior Executive Officer/Manager, Accounting Department
	Tel.: [phone]

Scheduled date for filing quarterly report:	August 10, 2023
Scheduled start date of dividend payments:	-
Supplementary briefing materials on quarterly results available: Yes
Briefing on quarterly results held:	None

(All figures are rounded down to the nearest million yen.)

1. Financial results for the first quarter of the fiscal year ending March 31, 2024 (April 1, 2023 - June 30, 2023)

(1) Consolidated operating results				(Percentages represent year-on-year changes.)
	Net sales		Operating income	Ordinary income	Net income attributable
		to owners of parent
First quarter of the fiscal year	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%
41,288		3.5	806	(3.2)	662	(23.3)	33	(92.0)
ending March 31, 2024
First quarter of the fiscal year	39,889		25.5	832	(47.8)	863	(37.4)	422	(87.3)
ended March 31, 2023

Note: Comprehensive income: First quarter of the fiscal year ending March 31, 2024: (1,133) million yen (--%); First quarter of the fiscal

year ended March 31, 2023: (248) million yen (--%)
	Net income	Diluted net income per
	per share	share
First quarter of the fiscal year	Yen	Yen
2.20	-
ending March 31, 2024
First quarter of the fiscal year	27.51	-
ended March 31, 2023

(2) Consolidated financial position

	Total assets	Net assets	Shareholders'
	equity ratio
	Millions of yen	Millions of yen	%
First quarter of the fiscal year ending March 31, 2024	152,243	47,928	27.3
Fiscal year ended March 31, 2023	156,409	49,688	27.8

Reference: Shareholders' equity: First quarter of the fiscal year ending March 31, 2024: 41,554 million yen; Fiscal year ended March 31, 2023: 43,479 million yen

2. Dividends

			Annual dividends per share
	End Q1		End Q2	End Q3	Year-end	Total
		Yen	Yen	Yen	Yen	Yen
Fiscal year ended March 31, 2023		-	10.00	-	40.00	50.00
Fiscal year ending March 31, 2024		-
Fiscal year ending March 31, 2024 (forecast)			25.00	-	35.00	60.00

Note: Revisions of projected dividends announced most recently: None

3. Forecast of consolidated financial results for fiscal year ending March 31, 2024 (April 1, 2023 - March 31, 2024)

(Percentages represent changes from the previous year for the full year and changes from the same quarter of the previous year for the quarter.)

								Net income	Net income per
	Net sales		Operating income	Ordinary income	attributable to
		share
								owners of parent
Second quarter	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
80,000		(2.8)	3,500	105.8	2,200	28.4	1,200	(11.5)	78.15
(cumulative)
Full year	165,000		(3.2)	8,000	44.2	5,500	46.9	3,000	37.0	195.37

Note: Revisions of forecasts of consolidated financial results announced most recently: None

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Notes
(1) Changes in significant subsidiaries during the cumulative period through the period under review:	None
(Changes in specific subsidiaries accompanied by changes in the scope of consolidation)
Newly added: - companies (name: -)
Removed:	- companies (name: -)

1. Application of specific account processing in preparation of the quarterly consolidated financial statements: None
2. Changes in accounting policies, changes in accounting estimates, and retrospective restatements

 Changes in accounting policies due to the revisions of accounting standards, etc.:	None
 Any changes in accounting policies other than those under  above:	None
 Changes in accounting estimates:	None
 Retrospective restatements:	None

Note: For more information, see "2. Consolidated Financial Statements and Major Notes: (3) Notes on Consolidated Financial Statements (Changes to Accounting Policies)" on page 9 of the Attached Materials.

1. Number of shares outstanding (common shares)
2. • Number of shares outstanding at the end of the period (including treasury stock)

• Number of treasury shares at the end of the period

• Average number of shares during the period (cumulative through the period under review)

1Q of fiscal year ending	15,709,968 shares	Fiscal year ended March	15,709,968 shares
March 31, 2024		31, 2023
1Q of fiscal year ending	354,155 shares	Fiscal year ended March	354,074 shares
March 31, 2024		31, 2023
1Q of fiscal year ending	15,355,853 shares	1Q of fiscal year ended	15,356,147 shares
March 31, 2024		March 31, 2023

• Quarterly summaries of financial results are not subject to quarterly review by a certified public accountant or audit firm.
• Explanation of the proper use of financial results forecast and other notes.
  The forecasts of financial results were prepared based on information available at this time. Actual results may differ from forecasts depending on various future factors.
  For detailed information on financial forecasts, refer to "1. Qualitative Information on Quarterly Financial Results: (3) Explanation of Forward-looking Statements Including Forecasts of Consolidated Financial Results" on page 4 of the Attached Materials.

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• Table of Contents for Attached Materials

1.	Qualitative Information on Quarterly Financial Results	4
	(1)	Description of Operating Results	4
	(2)	Description of Financial Position	4
	(3)	Explanation of Forward-looking Statements Including Forecasts of Consolidated Financial Results	4
2.	Consolidated Financial Statements and Major Notes	5
	(1)	Consolidated Balance Sheet	5
	(2)	Consolidated Statement of Income and Consolidated Statement of Comprehensive Income	7
	(3)	Notes on Consolidated Financial Statements	9
		(Notes on the Going Concern Assumption)	9
		(Notes on marked changes in amounts of shareholders' equity)	9
		(Segment Information, etc.)	9
		(Revenue Recognition)	10
3.	Appendix (Consolidated)	11

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1. Qualitative Information on Quarterly Financial Results

1. Description of Operating Results

With respect to the Group's operating environment in the cumulative period through the first quarter of the consolidated fiscal year under review (April through June 2023), production volumes in the automotive industry, the Group's main demand market, recovered from the same period of the previous year, when the industry was affected by the Shanghai COVID-19 lockdowns, partly due to an easing of the prolonged shortage of semiconductors and other components. In the construction machinery industry, while demand had remained strong through last year, recent signs suggest a trend toward inventory adjustments. With regard to procurement costs, the cost of iron ore and coking coal trended downward; nevertheless, a renewed trend of yen depreciation made imported raw materials more costly. Energy prices remained high.

Under these circumstances, the Group posted consolidated net sales of 41,288 million yen in the cumulative period through the first quarter of the fiscal year under review, an increase of 1,398 million yen (3.5%) year-on-year. Consolidated operating income was 806 million yen, down 26 million yen (3.2%) year-on-year.

Net income attributable to owners of parent was 33 million yen, down 388 million yen (92.0%) year-on-year. Results by business segment are reviewed below.

Net sales in the Special Steel Bars Business stood at 23,106 million yen, down 801 million yen (3.4%) year-on-year. The impact of lower demand in Japan outweighed progress on efforts to reflect factors such as price hikes on raw materials and skyrocketing energy prices in domestic and overseas selling prices and year-on-year growth in sales at the overseas Indonesian business, resulting in lower overall sales. Operating income fell by 708 million yen (42.8%) year-on-year to 946 million yen. Despite the positive effects on income of factors such as falling scrap prices at the overseas Indonesian business, income declined due in part to the effects of inventory write-downs as well as use of raw-material inventories from prior to the decrease in market prices and higher costs associated with the yen depreciation, in addition to lower sales volume in Japan.

Net sales in the Springs Business were 16,165 million yen, up 2,696 million yen (20.0%) year-on-year. Efforts to reflect price hikes on raw materials and skyrocketing energy prices in domestic and North American selling prices contributed significantly to this result. Volumes of sales to the automotive industry also recovered from the same period of the previous year, when the industry was burdened by the Shanghai COVID-19 lockdowns and other factors. Operating losses dropped by 810 million yen year-on-year to 295 million yen (vs. an operating loss of 1,105 million yen in the same period of the previous fiscal year). While income at the North American subsidiary improved substantially thanks to factors including resolution of its production disruptions and progress in reflecting higher costs in selling prices, the subsidiary recorded a loss because this recovery was unable to reach expected levels due to recent renewed increases in raw material prices.

Net sales in the Formed & Fabricated Products Business were 2,228 million yen, down 585 million yen (20.8%) year-on-year due to lower sales volumes following discontinued production of Esco cast steel products, although progress was made on improving selling prices. Operating income was 23 million yen, down 159 million yen (87.1%) year-on-year, due mainly to lower sales volumes.

Growth in sales of power machinery both in Japan and overseas, forging machinery, and other products boosted net sales in the Machinery Business to 2,008 million yen, up 298 million yen (17.5%) year-on-year. Higher sales and improved productivity boosted operating income to 117 million yen, up 55 million yen (87.7%) year-on-year.

Other businesses, including distribution and service businesses, posted net sales of 848 million yen, 11 million yen (1.3%) lower year-on-year, and operating income of 24 million yen, or 7 million yen (24.3%) lower year-on-year.

(2) Description of Financial Position

Total assets at the end of the first quarter of the consolidated fiscal year under review stood at 152,243 million yen, down 4,166 million yen from the end of the previous consolidated fiscal year. This was due to a decrease in cash resulting from the repayment of loans payable, operating fund outflows, income tax payments, and dividend payments, while fixed assets increased due to capital investments and other factors.

Total liabilities at the end of the first quarter of the consolidated fiscal year under review stood at 104,314 million yen, down 2,406 million yen from the end of the previous consolidated fiscal year. This was due to a decrease in liabilities following payments of various liabilities, including accounts payable-trade, income tax, and loans payable.

Net assets at the end of the first quarter of the consolidated fiscal year under review were 47,928 million yen, down 1,759 million yen from the end of the previous consolidated fiscal year. Contributing factors included dividend payments and a decline in foreign currency translation adjustments.

(3) Explanation of Forward-looking Statements Including Forecasts of Consolidated Financial Results

Forecasts of consolidated financial results for the fiscal year ending March 2024 remain unchanged from forecasts announced May 15, 2023.

During the first quarter of the consolidated fiscal year under review, the Springs Business recorded a loss due in part to recent renewed hikes in the cost of materials at the North American subsidiary. However, we expect income to improve in the second quarter and beyond as we continue striving to reflect costs, including rising material costs, in selling prices. In addition, while the Special Steel Bars Business was affected by inventory write-downs and other factors in the first quarter, we expect income to recover in the second quarter and beyond as these effects diminish.

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2. Consolidated Financial Statements and Major Notes

1. Consolidated Balance Sheet

			(Unit: millions of yen)
		Consolidated fiscal year ended	Consolidated first quarter
		March 31, 2023	(June 30, 2023)
Assets
Current assets
Cash and deposits	25,621	19,284
Notes and accounts receivable-trade and contract	31,861	28,769
assets
Electronically recorded monetary claims	4,899	5,166
Securities	5,000	5,000
Merchandise and finished goods	14,060	13,133
Work in process	7,851	8,601
Raw materials and supplies	11,154	10,791
Other	5,422	9,064
Allowance for doubtful accounts	(63)	(77)
Total current assets	105,808	99,732
Fixed assets
Property, plant and equipment
Buildings and structures, net	8,069	8,140
Machinery, equipment and vehicles, net	12,431	13,232
Land	14,707	15,135
Other, net	2,683	2,787
Total property, plant and equipment	37,893	39,296
Intangible fixed assets
Other	744	765
Total intangible fixed assets	744	765
Investments and other assets
Investment securities	5,298	5,427
Net defined benefit assets	4,777	5,091
Other	1,887	1,929
Allowance for doubtful accounts	(0)	(0)
Total investments and other assets	11,964	12,447
Total fixed assets	50,601	52,510
Total assets		156,409	152,243

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