Furukawa Battery : Financial Results for the Three-month Period Ended June 30, 2017

Translation

Member of Financial Accounting Standards Foundation (FASF)

August 1, 2017

Consolidated Financial Results for the Three-month Period Ended June 30, 2017 [Japan GAAP]

Name of Company:	The Furukawa Battery Co., Ltd.
Stock Code:	6937
Stock Exchange Listing:	Tokyo Stock Exchange, First Section
URL:	http://www.furukawadenchi.co.jp
Representative
Title:	President & CEO
Name:	Shinichi Ono
Contact Person
Title:	Director & Executive Corporate Officer
Name:	Shigeru Takaku
Tel:	[phone]
Scheduled date for filing of quarterly securities report:	August 10, 2017
Scheduled date for commencement of dividend payment:	-
Supplementary documents for quarterly financial results:	None
Quarterly financial results briefing:	None

(Yen in millions, rounded down)

1. Consolidated financial results for the three months ended June 30, 2017 (April 1, 2017 - June 30, 2017)

2. ) Consolidated operating results (Percentage figures represent year on year changes)

   Net sales		Operating profit		Ordinary profit		Profit attributable to owners of parent
   Three months ended June 30, 2017	Million yen	%	Million yen	%	Million yen	%	Million yen	%
   	12,712	10.5	192	(15.1)	179	75.6	155	37.6
   Three months ended June 30, 2016	11,505	(4.9)	226	(33.8)	102	(76.6)	113	(72.3)

   Notes: Comprehensive income

   Three months ended June 30, 2017: 347 million yen (yoy - %)

   Three months ended June 30, 2016: (418) million yen (yoy (200.1) %)

   Earnings per share (basic)	Earnings per share (diluted)
   Three months ended June 30, 2017	Yen	Yen
   	4.75	-
   Three months ended June 30, 2016	3.45	-

3. ) Consolidated financial position

4. Total assets	Net assets	Equity ratio
   As of June 30, 2017	Million yen	Million yen	%
   	52,075	21,937	40.0
   As of March 31, 2017	55,023	21,891	37.5

   Reference: Equity

   As of June 30, 2017: 20,822 million yen

   As of March 31, 2017: 20,607 million yen

5. Dividends

   Annual dividends per share
   End of Q1	End of Q2	End of Q3	End of Q4	Total
   Fiscal year ended March 31, 2017	Yen	Yen	Yen	Yen	Yen
   	-	-	-	9.00	9.00
   Fiscal year ending March 31, 2018	-
   Fiscal year ending March 31, 2018 (forecast)	-	-	10.00	10.00

   Note: Revisions to the forecasts of dividends most recently announced: None

6. Forecast of consolidated financial results for the fiscal year ending March 31, 2018 (April 1, 2017 - March 31, 2018)

   (Percentage figures represent year-on-year changes)

   Net sales		Operating profit		Ordinary profit		Profit attributable to owners of parent		Earnings per share
   Six months ending September 30, 2017	Million yen	%	Million yen	%	Million yen	%	Million yen	%	Yen
   	30,000	26.3	400	(49.9)	300	(51.9)	250	(51.5)	7.63
   Fiscal year ending March 31, 2018	62,000	12.1	4,000	19.9	3,600	24.5	2,700	13.7	82.37

   Note: Revisions to the consolidated earnings forecasts most recently announced: None

   Notes:

7. Changes in significant subsidiaries during the three-month period ended June 30, 2017 (Changes in specific subsidiaries accompanied by changes in the scope of consolidation): Newly included: None Excluded: None

8. Use of accounting methods that are specific to the preparation of the quarterly consolidated financial statements: Yes Note: For details, please refer to "2. Consolidated Financial Statements and Related Notes (3) Notes on Consolidated Financial Statements (Application of Special Accounting for Preparing Consolidated Financial Statements)" on page 7 of Attachment.

9. Changes in accounting policies, changes in accounting estimates, and retrospective restatements:

   (a)	Changes in accounting policies accompanying revisions in accounting standards: None
   (b)	Changes other than in (a): None
   (c)	Changes in accounting estimates: None
   (d)	Retrospective restatements: None

10. Number of shares outstanding (common stock)

11. (a) Shares outstanding	(including treasury shares)
    As of June 30, 2017: 32,800,000 shares As of March 31, 2017: 32,800,000 shares
    (b) Treasury shares
    As of June 30, 2017: 21,412 shares As of March 31, 2017: 21,412 shares
    (c) Average number of	shares outstanding during the period (cumulative)
    Three months ended 32,778,588 shares	June 30, 2017: Three months ended June 30, 2016: 32,779,589 shares

    • Quarterly financial results reports are not required to be subjected to quarterly reviews.

    • Appropriate use of performance forecasts and other special items: (Disclaimer on forward-looking statements, etc.)

    Forward-looking statements in these materials are based on information available to management at the time this report was prepared, and on assumptions that management believes are reasonable. Actual results may differ significantly from these statements for a number of reasons. Please refer to "1. Qualitative Information on Consolidated Financial Results for the Three- month Period (3) Explanation of Forecast for the Fiscal Year Ending March 31, 2018" on page 2 of Attachment for details on the assumptions used and other related matters concerning the forecast of consolidated financial results.

    Index of the Attachment

12. Qualitative Information on Consolidated Financial Results for the Three-month Period 2

13. Explanation of Operating Results 2

14. Explanation of Financial Position 2

15. Explanation of Forecast for the Fiscal Year Ending March 31, 2018 2

16. Consolidated Financial Statements and Related Notes 3

17. Consolidated Balance Sheets 3

18. Consolidated Statements of Income and Comprehensive Income 5

    (Consolidated Statements of Income (Cumulative)) 5

    (Consolidated Statements of Comprehensive Income (Cumulative)) 6

19. Notes on Consolidated Financial Statements 7

    (Going Concern Assumptions) 7

    (Material Changes in the Amount of Shareholders' Equity) 7

    (Application of Special Accounting for Preparing Consolidated Financial Statements) 7

20. Other 8

21. (Trend in Quarterly Consolidated Results) 8

22. Qualitative Information on Consolidated Financial Results for the Three-month Period

23. Explanation of Operating Results

    During the three-month period ended June 30, 2017, the global economy continued on a moderate recovery track despite concerns about such issues as the policy trends in the United States and slowing economic growth in China.

    The Japanese economy continued on a moderate recovery track, as seen in developments such as a pickup in personal consumption and improvements in capital investment. On the other hand, due to concerns about factors such as rising personnel expenses caused by a tightening of the gap between labor supply and demand and persistently high prices for resources, the situation going forward remains uncertain.

    Under such a business environment, the Furukawa Battery Group recorded consolidated sales of 12,712 million yen for the three-months period ended June 30, 2017, an increase of 1,206 million yen (+10.5%) year on year. Overseas sales were 5,027 million yen and accounted for 39.5% of total sales.

    Operating profit decreased by 34 million yen year on year to 192 million yen mainly due to the effect of the rise in the price of lead, the primary raw material, while ordinary profit increased by 77 million yen year on year to 179 million yen mainly due to the subsidy income and a decrease in interest expenses, which is the result of declines in interest-bearing debt.

    Profit attributable to owners of parent came to 155 million yen, increasing 42 million yen year on year.

24. Explanation of Financial Position

    Total assets were 52,075 million yen as of June 30, 2017, which is 2,947 million yen less than at the end of the previous fiscal year. Current assets decreased by 3,093 million yen from the end of the previous fiscal year to 21,640 million yen, while non-current assets increased by 145 million yen to 30,435 million yen.

    The main factor leading to the decrease in current assets was a decline in notes and accounts receivable - trade.

    There was a 184 million yen decrease in property, plant and equipment to 24,756 million yen. The main factor leading to the decrease was that the decline resulting from depreciation was greater than the increase in capital investment.

    Investments and other assets increased by 349 million yen to 5,458 million yen.

    Total liabilities as of June 30, 2017 decreased by 2,993 million yen to 30,138 million yen. Current liabilities decreased by 2,418 million yen to 14,420 million yen, and non-current liabilities decreased by 574 million yen to 15,718 million yen.

    Interest-bearing debt, which is the sum of short-term loans payable and long-term loans payable, decreased by 1,821 million yen to 11,429 million yen.

    Equity increased by 214 million yen to 20,822 million yen, resulting in an increase in the equity ratio from 37.5% at the end of the previous fiscal year to 40.0% at the end of the three-month period.

25. Explanation of Forecast for the Fiscal Year Ending March 31, 2018

26. There is no change to the consolidated forecast that was announced on May 10, 2017.