Osaka Soda : Consolidated Financial Results for the Three Months Ended June 30, 2023 (Under Japanese GAAP)

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.

August 8, 2023

	Consolidated Financial Results
	for the Three Months Ended June 30, 2023
	(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, Executive Officer, General Manager, Administration Division
Telephone:	[phone]

Scheduled date to file quarterly securities report:	August 9, 2023
Scheduled date to commence dividend payments:	-
Preparation of supplementary material on quarterly financial results: None
Holding of quarterly financial results briefing:	None

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

1. Consolidated financial results for the Three months ended June 30, 2023 (from April 1, 2023 to June 30, 2023)

(1) Consolidated operating results (cumulative)		(Percentages indicate year-on-year changes.)
	Net sales		Operating profit	Ordinary profit	Profit attributable to
		owners of parent
Three months ended	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%
June 30, 2023	23,193		(9.9)	2,807	(45.5)	3,504	(40.8)	2,404	(42.1)
June 30, 2022	25,738		20.1	5,149	68.4	5,921	70.9	4,149	57.5

Note: Comprehensive income	For the Three months ended June 30, 2023:	¥4,544 million	[0.2%]
		For the Three months ended June 30, 2022:	¥4,535 million	[(177.7) %]
	Basic earnings	Diluted earnings
		per share	per share
Three months ended		Yen	Yen
June 30, 2023		94.50	－
June 30, 2022		178.14	159.87

Note: The amount of diluted earnings per share for the Three months ended June 30, 2023, is not provided because there are no dilutive shares.

(2) Consolidated financial position

	Total assets		Net assets	Equity-to-asset ratio
As of	Millions of yen	Millions of yen	%
June 30, 2023	139,229		102,945	73.9
March 31, 2023	138,029		99,543	72.1
Reference: Equity
As of June 30, 2023:	¥102,936 million
As of March 31, 2023:		¥99,535 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	－	45.00		－		45.00	90.00
March 31, 2023
Fiscal year ending	－
March 31, 2024
Fiscal year ending
March 31, 2024		45.00		－		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, 2024 (from April 1, 2023 to March 31, 2024)

(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
First half year	51,000	(1.8)	3,600	(63.0)	4,100	(62.2)	2,800	(62.7)	110.06
（cumulative）
Full year	105,000	0.8	10,000	(35.7)	11,100	(35.3)	7,500	(29.1)	294.81
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 June 30, 2023

As of March 31, 2023

26,732,017 shares

26,732,017 shares

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

As of June 30, 2023

As of March 31, 2023

1,291,570 shares

1,291,509 shares

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

Three months ended June 30, 2023

Three months ended June 30, 2022

25,440,473 shares

23,293,934 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 Three months ended June 30, 2023 (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 Three months ended June 30, 2023	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)	Notes to Quarterly Consolidated Financial Statements	8
	(Notes on Premise of Going Concern)	8
	(Notes on Major Changes in Shareholders' Equity	8
	(Segment Information and Other Items)	9

- 1 -

1. Qualitative Information Concerning Results for the Three months ended June 30, 2023

(1) Analysis of Operating Results

For the first three months of the consolidated fiscal year, the Japanese economy continued to show signs of recovery as social and economic activities moved toward normalization in line with the easing of restrictions on activities imposed as a result of COVID-19. Circumstances remained difficult, however, owing to the impact of factors such as rising raw material and fuel prices, rising commodity prices, the prolonging of the situation in Ukraine, and the risk that a downturn of overseas economies amidst continued global monetary tightening could put downward pressure on the domestic economy.

It is in this environment that the Group decided to postpone the announcement of the new medium-term management plan consisting of three basic principles, the "continuous strengthening of our base in existing businesses," the "strengthening of new product creation capabilities," and the "the promotion of sustainability management," due to the manufacturing equipment problems that occurred at our Mizushima Plant on April 4, 2023. That said, there are no changes to the basic policy that the Company should be focusing on, so we will steadily execute concrete measures in line with that basic policy while doing our best to restore the equipment as soon as possible.

In terms of the "continuous strengthening of our base in existing businesses," we will work to enhance our business base by generating stable cash flows and actively investing in growth areas. In the Basic chemicals business, the entire company has been working together to recover from manufacturing equipment problems to ensure stable supply to customers. In the Functional chemicals business, despite declining demand for major products, we were able to steadily increase the sales volume of Acrylic Rubber by developing new markets. In the Healthcare business, following the decision to construct new manufacturing facilities at the Matsuyama Plant, it was also decided to construct new manufacturing facilities at the Amagasaki Plant as a second phase of expansion in order to meet the growing demand for pharmaceutical purification materials for diabetes treatments and the rapidly expanding obesity treatments.

In terms of the "strengthening of new product creation capabilities," we will work to quickly bring to market the next global niche-top products by focusing on next-generation storage battery materials such as ultra- high ionic conductive polymers for all-solid batteries, which were selected as a Green Innovation Fund Project by NEDO.

In terms of the "promotion of sustainability management," as an appropriate response to Japan's Corporate Governance Code, in addition to taking steps to comply with TCFD recommendations and calculating GHG emissions, we are continuing revision of the personnel system for managers which started last fiscal year and also revised the personnel system for general employees in April of this year, all in an effort to "grow together with our employees as a company" as set forth in our Vision Statement. Under the new personnel systems, we will work to further spread business reform activities, improve employee engagement, and nurture the next generation of human resources.

Due in part to the manufacturing equipment problems at the Mizushima Plant (net sales: ¥1,700 million, operating

income: ¥2,100 million), net sales for the first three months of the consolidated fiscal year decreased 9.9% year on year to ¥23,193 million. In terms of income, operating income decreased 45.5% year on year to ¥2,807 million, ordinary income decreased 40.8% year on year to ¥3,504 million, and net income attributable to owners of parent decreased 42.1% year on year to ¥2,404 million.

As the Healthcare business has been steadily growing as our third profitable business, starting from the first three months of the consolidated fiscal year we are changing our system to four reportable segments, namely, Basic Chemicals, Functional Chemicals, Healthcare, and Trading and Others. Accordingly, in the following year-on-year comparisons, figures for the same period of the previous fiscal year have been reclassified to the post-change segment classifications.

< Basic chemicals >

Despite a decrease in the sales volumes of some products due to the manufacturing equipment problems at the Mizushima Plant, net sales of Chlor-Alkali products increased due in part to a rise in product prices as a result of increases in raw material and fuel prices. Net sales of Epichlorohydrin decreased due to a reduction in demand for epoxy resin both in Japan and overseas, as well as sales adjustments resulting from the manufacturing equipment problems. As a result of the above, net sales in the Basic chemicals business decreased 11.8% year on year to ¥9,045 million.

- 2 -