Osaka Soda : Consolidated Financial Results for the Six Months Ended September 30, 2022

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

November 7, 2022

Consolidated Financial Results

for the Six Months Ended September 30, 2022

(Under Japanese GAAP)

Company name:	OSAKA SODA Co., Ltd.
Listing:	Tokyo Stock Exchange
Securities code:	4046
URL:	http://www.osaka-soda.co.jp
Representative:	Kenshi Terada, Representative Director, President and Chief Executive Officer
Inquiries:	Toru Imamura, General Manager, Administration Division
Telephone:	[phone]

Scheduled date to file quarterly securities report:	November 8, 2022
Scheduled date to commence dividend payments:	December 5, 2022
Preparation of supplementary material on quarterly financial results: Yes
Holding of quarterly financial results briefing:	Yes

(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the Six months ended September 30, 2022 (from April 1, 2022 to September 30)

(1) Consolidated operating results (cumulative)		(Percentages indicate year-on-year changes.)
	Net sales		Operating profit	Ordinary profit	Profit attributable to
		owners of parent
Six months ended	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%
September 30, 2022	51,915		23.1	9,722	70.7	10,854	76.3	7,505	69.7
September 30, 2021	42,157		－	5,694	62.8	6,158	66.5	4,421	78.7

Note: Comprehensive income	For the Six months ended September 30, 2022:	¥8,437 million	[111.1%]
		For the Six months ended September 30, 2021:	¥3,997 million	[(0.7) %]
	Basic earnings	Diluted earnings
		per share	per share
Six months ended		Yen	Yen
September 30, 2022		314.73	－
September 30, 2021		189.55	170.28

Notes: The Company has applied ASBJ Statement No. 29 "Accounting Standard for Revenue Recognition", etc. from the beginning of the previous fiscal year. Therefore, the figures for the Six months ended September 30, 2021 represent amounts after the application of the said accounting standard, etc. and year over year increases/decreases (%) are not provided.

(2) Consolidated financial position

	Total assets	Net assets	Equity-to-asset ratio
As of	Millions of yen	Millions of yen	%
September 30, 2022	138,018	99,750	72.3
March 31, 2022	129,159	83,896	64.9
Reference: Equity
As of September 30, 2022:	¥99,722 million
As of March 31,2022:	¥83,872 million

2. Cash dividends

		Annual dividends per share
	First quarter-end	Second quarter-end	Third quarter-end		Fiscal year-end	Total
	Yen	Yen	Yen		Yen	Yen
Fiscal year ended	－	35.00	－		45.00	80.00
March 31, 2022
Fiscal year ending	－	45.00
March 31, 2023
Fiscal year ending
March 31, 2023			－		45.00	90.00
(Forecast)

Note: Revisions to the forecast of cash dividends most recently announced: None

3. Consolidated financial results forecasts for the fiscal year ending March 31, 2023 (from April 1, 2022 to March 31, 2023)

(Percentages indicate year-on-year changes.)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Basic earnings
		owners of parent	Per share
	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Full year	98,000	11.3	15,700	26.6	16,900	25.8	11,700	23.9	501.97

Note: Revisions to the forecast of consolidated financial results most recently announced: None

* Notes

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of consolidation): None
2. Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements: None
3. Changes in accounting policies, changes in accounting estimates, and restatement
4. 1. Changes in accounting policies due to revisions to accounting standards and other regulations: None
   2. Changes in accounting policies due to other reasons: None
   3. Changes in accounting estimates: None
   4. Restatement: None
5. Number of issued shares (common shares)
6. 1. Total number of issued shares at the end of the period (including treasury shares)

As of September 30, 2022	26,732,017 shares
As of March 31, 2022	26,732,017 shares

(ii) Number of treasury shares at the end of the period

As of September 30, 2022	797,552 shares
As of March 31, 2022	3,399,626 shares

1. Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year)

Six months ended September 30, 2022	23,846,330 shares
Six months ended September 30, 2021	23,328,288 shares

• Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation.
• Proper use of earnings forecasts, and other special matters
  In this document, statements other than historical facts are forward looking statements that reflect the Company's plans and expectations. These forward-looking statements involve risks, uncertainties and other factors that may cause our actual results and achievements to differ from those anticipated in these statements. Please refer to "1. Qualitative Information Concerning Results for the Six month ended September 30, 2022
  (3) Analysis of Forward-looking Statement, Including Consolidated financial results Forecasts" on page 3 of the attached documents.

(Attached Documents)
	INDEX
1. Qualitative Information Concerning Results for the Six month ended September 30, 2022	2
(1)	Analysis of Operating Results	2
(2)	Analysis of Financial Position	3
(3)	Analysis of Forward-looking Statement, Including Consolidated financial results Forecasts	3
2. Quarterly Consolidated Financial Statements and Notes to Quarterly Consolidated Financial	4
Statements
(1)	Consolidated Balance Sheets	4
(2)	Consolidated Statements of Income and Consolidated Statements of Comprehensive Income	6
(3)	Consolidated Statements of Cash flows	8
(4)	Notes to Quarterly Consolidated Financial Statements	9
	(Notes on Premise of Going Concern)	9
	(Notes on Major Changes in Shareholders' Equity	9
	(Segment Information and Other Items)	9

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1. Qualitative Information Concerning Results for the Six month ended September 30, 2022

(1) Analysis of Operating Results

During the six months ended September 30, 2022, the Japanese economy continued to show signs of recovery from the impact of COVID-19, as society transitioning to a new phase of living with COVID-19. Although it is expected that the economy will continue to recover going forward, the outlook is uncertain owing to the impact of factors such as supply constraints, rising raw material and fuel prices, the prolonging of the situation in Ukraine, the stagnation of economic activities in China as a result of the country's zero- COVID-19 policy, and rapid fluctuations in foreign exchange rates.

Under these circumstances, the Osaka Soda Group entered the final fiscal year of its seventh medium-term management plan, "EMPOWER THE NEXT-22," and worked together as a company to implement specific measures based on the four basic policies of "building a resilient business foundation," "promotion of market-in-type development," "efforts to achieve the SDGs," and "reforming corporate culture and organizational culture."

In "building a resilient business foundation," we have positioned the Basic chemicals business, Functional chemicals business, and Healthcare Business as our three core businesses and are pursuing strategies to make these businesses more resilient. During the six months ended September 30, 2022, in the Basic chemicals business, we continued focusing on implementing more price revisions in response to rising raw material and fuel prices, while also engaging in replacement investment aimed at enhancing production efficiency, and cost reductions. In the Functional chemicals business, we further promoted the expansion of sales of Allyl Ethers, for which we strengthened our production systems in the previous fiscal year. In the Healthcare business, we are making capital investments in facilities related to active pharmaceutical ingredients (APIs) and their intermediates, as well as pharmaceutical purification materials, and we aim to complete these investments during the current fiscal year.

In relation to the "promotion of market-in-type development," we are making progress on the development of ultra-high ionic conductive polymers for all-solid batteries, which was selected as a Green Innovation Fund Project by NEDO.

In terms of our "efforts to achieve the SDGs," we decided to establish a Sustainability Committee to further strengthen and promote sustainability efforts across the Osaka Soda Group as a whole.

As a result of the above, net sales for the six months ended September 30, 2022, increased 23.1% year on year to ¥51,915 million. In terms of income, operating income increased 70.7% year-on-year to ¥9,722 million, ordinary income increased 76.3% to ¥10,854 million, and net income attributable to owners of the parent increased 69.7% to ¥7,505 million, meaning that the Company recorded its highest ever results at each level of profit for the first six months of the consolidated fiscal year, significantly exceeding the previous records.

An overview of conditions in each segment is as follows.

< Basic chemicals >

In Chlor-Alkali, net sales increased thanks to robust demand, particularly in relation to Caustic Soda, as well as progress on price revisions related to rising raw material and fuel prices.

In Epichlorohydrin, net sales increased thanks to progress on price revisions related to rising raw material and fuel prices, as well the impact of foreign exchange.

As a result of the above, net sales in the Basic chemicals business increased 25.3% year on year to ¥21,988 million.

< Functional chemicals >

In the synthetic rubber business, net sales of Epichlorohydrin Rubber increased as the Company expanded its share of the OA applications market, despite the impact on automotive applications of a decline in the number of automobiles produced. Net sales of Acrylic Rubber increased thanks to its adoption for new applications in Japan and elsewhere in Asia.

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