Oji : Summary of Consolidated Financial and Business Results for the Second Quarter of the Year Ending March 2023 (2Q/FY2023)

		November 8, 2022
	Summary of Consolidated Financial and Business Results
	for the Second Quarter of the Year Ending March 2023
Company Name:	Oji Holdings Corporation (Code No. 3861 Tokyo Stock Exchange)
URL:	https://www.ojiholdings.co.jp/
Representative:	Hiroyuki Isono, President & Chief Executive Officer
Contact:	Akio Hasebe, Director of the Board, Executive Officer
Telephone:	03-3563-1111	[phone](overseas)

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

1. Results for the Second Quarter of the Year Ending March 31, 2023 (April 1, 2022 - September 30, 2022) (Unaudited)

1. Consolidated Business Results

(Figures shown in percentage are ratios compared to the same period of the previous year)

Net sales

Operating profit

Ordinary profit

Profit attributable to

owners of parent

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

First Half of FY2022

837,502

18.2

40,395

(36.6)

60,232

(12.5)

37,927

(16.8)

First Half of FY2021

708,529

8.6

63,681

117.3

68,835

211.5

45,582

343.0

Note: Comprehensive income

First Half of FY2022

109,971 million

yen

First Half of FY2021

72,934 million yen

Profit per share

Diluted profit per

share

Yen

Yen

First Half of FY2022

38.28

38.26

First Half of FY2021

46.02

46.00

(2) Consolidated Financial Condition

Total assets

Net assets

Shareholders'

Net assets per share

equity ratio

Millions of yen

Millions of yen

%

Yen

First Half of FY2022

2,277,412

978,315

41.8

960.90

Year ended March 2022

2,053,752

875,470

41.4

859.29

Note: Shareholders' equity

First Half of FY2022

952,418 million yen

FY2021

851,232 million yen

2. Cash Dividends

Dividend per share

End of 1Q

End of 2Q

End of 3Q

End of FY

Annual

Yen

Yen

Yen

Yen

Yen

FY2021

－

7.00

－

7.00

14.00

FY2022

－

8.00

FY2022 (Forecast)

－

8.00

16.00

Note : Change in forecast of dividend … None

3. Consolidated Forecasts for the Year Ending March 2023 (April 1, 2022 - March 31, 2023)

(Figures shown in percentage are ratios compared to the previous year)

	Net sales	Operating profit	Ordinary profit	Profit attributable to	Profit per share
	owners of parent
	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Full year	1,800,000	22.4	105,000	(12.6)	110,000	(18.6)	70,000	(20.0)	70.66

Note : Change in consolidated forecasts … Yes

4. Notes

1. Changes in important subsidiaries

(changes regarding specified subsidiaries accompanying changes in the scope of consolidation) : None

1. Application of simple accounting methods and quarterly peculiar accounting methods : None
2. Changes in accounting methods compared with recent consolidated accounting periods

(i)	Changes due to accounting standard changes :	None
(ii)	Changes besides (i) :	None
(iii)	Accounting estimate change :	None
(iv)	Restatement :	None

1. Outstanding balance of issued shares (common stock)
2. 1. Outstanding balance of issued shares at the end of fiscal year (including treasury shares)

First Half of FY2022	1,014,381,817	FY2021	1,014,381,817
(ii) Outstanding balance of treasury shares at the end of fiscal year
First Half of FY2022	23,203,508	FY2021	23,764,570
(iii) Weighted average number of shares during fiscal year
First Half of FY2022	990,795,483	First Half of FY2021	990,430,547

NOTICE

・This document is exempt from audit procedures required by Financial Instruments and Exchange Act.

・The statements regarding future mentioned in this document are based on the information currently available and thepremise deemed reasonable. The actual results may differ drastically from these forecasts due to various factors that may arise in the future.

・This document is an excerpt translation of the Japanese original and is only for reference purposes. In the event of any discrepancy between this translation and the Japanese original, the latter shall prevail.

1. Qualitative Information Concerning Business Performance Business Performance for the First Half of FY2022

	Net Sales	Operating Profit	Ordinary Profit	Profit Attributable to	Profit Per Share
	Owners of Parent
	Billions of yen	Billions of yen	Billions of yen	Billions of yen	Yen
1st Half of FY2022	837.5	40.4	60.2	37.9	38.28
1st Half of FY2021	708.5	63.7	68.8	45.6	46.02
Increase (Decrease)	129.0	(23.3)	(8.6)	(7.7)
Increase (Decrease)	18.2%	(36.6%)	(12.5%)	(16.8%)

In its FY2022-2024Medium-term Management Plan, the Oji Group has set "Growth to Evolution", which is long-term vision for 2030, as the basic policy, and is promoting "Initiatives for Environmental Issues -Sustainability-", "Initiatives for Profitability Improvement -Profitability-" and "Initiatives for Product Development -GreenInnovation-" to achieve the consolidated operating profit of ¥150.0 billion or more by FY2024 and stably maintain consolidated profit attributable to owners of parent of ¥100.0 billion or more.

Based on this basic policy, we will continue our efforts on environmental issues by promoting greenhouse gas reduction and expanding net CO2 absorption by forests, as countermeasures against climate change. At the same time, we will enhance the value of our business by deepening the existing businesses through the establishment of an optimal production system, and expanding the highly-expected businesses including overseas packaging business and eco-friendly products. Furthermore, we will develop and quickly commercialize new wood-derived products and materials such as eco-friendly materials and products, based on a range of core technologies we have cultivated through paper manufacturing and forestation. We will continue to contribute to society as a company that "grows and manages the sustainable forest, develops and delivers the products from renewable forest and brings this world a brighter future filled with hope".

Consolidated net sales for the first half of FY2022 increased by ¥129.0 billion to ¥837.5 billion (year-on-year increase of 18.2%) due to a recovery in demand, resulting from the resumption of economic activities that had been stagnant due to the spread of COVID-19, a rise in the pulp market , and the implementation of price revision in response to the impact of the recent sharp rise in raw material and fuel prices. Overseas sales ratio increased by 6.1 points from the previous year to 38.5%.

Consolidated operating profit decreased by ¥23.3 billion to ¥40.4 billion (year-on-year decrease of 36.6%) due to the significant impact of higher raw material and fuel prices in spite of the price revision mentioned above and an increase in sales volume. Ordinary profit decreased by ¥8.6 billion to ¥60.2 billion (year-on-year decrease of 12.5%) despite foreign exchange gains from revaluation of foreign currency-denominated receivables and payables. Profit before taxes decreased by ¥10.3 billion to ¥57.5 billion (year-on-year decrease of 15.2%), and profit attributable to owners of parent decreased by ¥7.7 billion to ¥37.9 billion (year-on-year decrease of 16.8%) .

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Business Performance for the First Half of FY2022 by Segment
(I) Business Performance by Segment				(Unit: Billions of yen)
				Net Sales		Operating Profit（Loss）
			1st Half of	1st Half of	Increase	1st Half of	1st Half of	Increase
			FY2021	FY2022	(Decrease)	FY2021	FY2022	(Decrease)
	Reporting	Household &	342.6	389.8	13.8%	18.1	1.1	(94.1%)
	Segment	Industrial Materials
		Functional Materials	91.4	107.6	17.7%	7.2	7.2	(0.6%)
		Forest Resources &	144.3	204.0	41.4%	23.6	29.3	24.1%
		Environment Marketing
		Printing &	117.6	134.2	14.1%	10.8	(0.2)	-
		Communications Media
		Total	695.8	835.5	20.1%	59.7	37.3	(37.5%)
	Others		142.4	159.5	12.0%	4.3	4.3	-
	Total		838.2	995.1	18.7%	64.0	41.6	(35.0%)
	Adjustment (*)	(129.7)	(157.6)		(0.3)	(1.2)
	Consolidated total	708.5	837.5	18.2%	63.7	40.4	(36.6%)

*Adjustment is mainly those concerning internal transactions.

(II) Overview of Business Performance by Segment

The Oji Group's four reporting segments are: "Household and Industrial Materials", "Functional Materials", "Forest Resources and Environment Marketing", and "Printing and Communications Media". Each of the reporting segment consists of those that are recognized to be similar in terms of economic characteristics, manufacturing methods or processes of products, markets in which products are sold, and types of customers, among the constituent units of the Oji Group.

Business segments that are not included in the reporting segments are classified as "Others".

From the first half of FY2022, some businesses that had been classified under "Household and Industrial Materials" and "Others" have been reclassified under "Forest Resources and Environment Marketing". Year-on-year comparisons are made with figures for the previous year after reclassification into the new segment classifications.

Major business lineup for the segments are as follows.

- Household and Industrial Materials:

Containerboard/corrugated containers, boxboard/folding cartons, packing paper/paper bags, household paper, disposable diapers, etc.

- Functional Materials:

Specialty paper, thermal paper, adhesive materials, film, etc.

- Forest Resources and Environment Marketing:

Pulp, energy, forest plantation/lumber processing, etc.

- Printing and Communications Media:

Newsprint, printing/publication/communication paper, etc.

- Others:

Real estate, engineering, trading business, logistics, etc.

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○Household and Industrial Materials

In the first half of FY2022, net sales amounted to ¥389.8 billion (year-on-year increase of 13.8%), and operating profit was ¥ 1.1 billion (year-on-year decrease of 94.1%).

Regarding domestic business, sales amount increased from the previous year due to the implementation of price revision in addition to the overall recovery in demand for many products such as containerboard, corrugated containers and boxboard. As for disposable diapers, sales amount decreased from the previous year. As for household paper, sales amount remained stable from the previous year.

Regarding overseas business, sales amount increased from the previous year due to the strong sales and the penetration of price increases of containerboard and corrugated containers mainly in Southeast Asia and India, in addition to the start of operation of a new containerboard machine in Malaysia in October 2021.

○Functional Materials

In the first half of FY2022, net sales amounted to ¥107.6 billion (year-on-year increase of 17.7%), and operating profit was ¥ 7.2 billion (year-on-year decrease of 0.6%).

Regarding domestic business, sales amount increased from the previous year. A recovery trend in demand for thermal paper, which had declined due to the spread of COVID-19, and the implementation of price revision resulted in an increase in the overall sales, although sales amount of specialty papers decreased from the previous year.

Regarding overseas business, sales amount of thermal paper increased from the previous year due to the recovery trend in demand similarly in the domestic market, as well as the completion of enhancement and expansion work in Brazil, which started operation in January 2022.

○Forest Resources and Environment Marketing

In the first half of FY2022, net sales amounted to ¥204.0 billion (year-on-year increase of 41.4%), and operating profit was ¥ 29.3 billion (year-on-year increase of 24.1%).

Regarding domestic business, sales amount of pulp business increased from in the previous year due to a rise in the pulp market. Energy business remained steady as in the previous year.

Regarding overseas business, sales amount of pulp business increased from the previous year due to a rise in the pulp market in addition to the strong sales.

○Printing and Communications Media

In the first half of FY2022, net sales amounted to ¥134.2 billion (year-on-year increase of 14.1%), and operating loss was ¥ 0.2 billion (year-on-year decrease of ¥11.0 billion).

Regarding domestic business, sales amount increased from the previous year. While demand for newsprint continued to decline, demand for printing paper increased for domestic products due to a decline in imported paper. In addition, the price revision has also been implemented.

Regarding overseas business, sales amount increased from the previous year at Jiangsu Oji Paper Co., Ltd..

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