Toho Titanium : Consolidated Financial Results for the Three Months Ended June 30, 2023 (Japanese GAAP)

Translation from the Original Japanese Version.

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

July 27, 2023

Company name: Toho Titanium Co., Ltd.

Code number: 5727

Stock Exchange Listings: Tokyo

URL: https://www.toho-titanium.co.jp/

Representative: Yasuji Yamao, Representative Director and President

Contact person: Hiromu Tomeba, General Manager, Planning, Corporate Management Division Telephone: [phone]

Scheduled date of filing of Securities Report: August 9, 2023

Scheduled date of commencement of dividend payments: -

Supplemental materials for the financial results: None.

Quarterly financial results presentation: None.

（Figures of less than ¥1 million are rounded off.）

1. Consolidated Results for the Three Months Ended June 30, 2023 (From April 1, 2023 to June 30, 2023)

(1) Consolidated Operating Results

(Percentage figures are changes from the same period in the previous fiscal year.)

Net sales

Operating income

Ordinary income

Profit attributable to

owners of parent

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

％

Three months Ended

16,155

(19.5)

678

(74.1.)

1,276

(56.8)

953

(52.8)

June 30, 2023

Three months Ended

20,079

70.0

2,622

110.2

2.956

138.0

2,019

157.4

June 30, 2022

(Note) Comprehensive income Three months ended June 30, 2023: ￥918 million [(57.5.%)]

Three months ended June 30, 2022: ￥2,162 million [178.8%]

Net income

Diluted net income

per share

per share

Yen

Yen

Three months Ended

13.39

―

June 30, 2023

Three months Ended

28.38

―

June 30, 2022

(2) Consolidated Financial Position

Total assets

Net assets

Shareholders' equity ratio

Millions of yen

Millions of yen

%

June 30, 2023

112,302

52,847

46.9

March 31, 2023

111,429

53,281

47.7

(For reference) Shareholders' equity

June 30, 2023: ￥52,715 million

March 31, 2023: ￥53,146 million

2. Dividends

Annual cash dividend per share

End of 1Q

End of 2Q

End of 3Q

Year-End

Total

Yen

Yen

Yen

Yen

Yen

FY2022

―

11.00

―

19.00

30.00

FY2023

―

FY2023 (Forecast)

6.00

―

6.00

12.00

(Note) Revisions to the previously announced forecast of cash dividends: None.

3. Consolidated Financial Forecasts for FY2023 (From April 1, 2023 to March 31, 2024)

(Percentage figures are changes from the same period in the previous fiscal year.)

	Net Sales	Operating income	Ordinary income	Profit attributable to	Net income
	owners of parent	per share
	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
FY 2023	37,700	(3.1)	1,200	(79.4)	1,500	(76.6)	1,000	(78.0)	14.05
2nd half
(Cumulative)
FY2023	83,200	3.5	4,600	(57.0)	4,400	(58.2)	2,900	(61.4)	40.75

(Note) Revisions to the previously announced forecasts: Yes.

Notes

1. Changes in the scope of material subsidiaries during the period (i.e. changes in specified subsidiaries involving a change in the scope of consolidation): None.
2. Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements: None.
3. Changes in accounting policies or in accounting estimates, and restatement
4. 1. Changes in accounting policies owing to revisions in accounting rules and standards: None
   2. Changes in accounting policies other than (i) above: None.
   3. Changes in accounting estimates: None.
   4. Restatement: None.
5. Number of shares issued (common stock)
6. 1. Number of issued shares at the end of the period (including treasury stock)

June 30, 2023:	71,270,910 shares
March 31, 2023:	71,270,910 shares

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

June 30, 2023:	98,636 shares
March 31, 2023:	98,590 shares

(iii) Average number of issued and outstanding shares during the period

June 30, 2023:	71,172,297 shares
June 30, 2022:	71,172,576 shares

This document is outside the scope of audit procedures.

Explanation concerning appropriate use of performance forecasts and other special notes

(Notes concerning forward-looking statements)

・Business performance forecasts and other forward-looking statements contained in this document are based on the information available to the Company at the time of its announcement and on certain assumptions that the Company considers reasonable. The Company makes no representations that they are achievable. Actual results may differ materially from the forecasts depending on a variety of factors

Attached Materials: Table of Contents
1.	Qualitative Information on the Quarterly Results	2
(1)	Explanations on Operating Results	2
(2)	Explanations on Financial Position	4
(3)	Explanations on Consolidated Financial Forecasts and Other Future Forecast Information	4
2.	Consolidated Financial Statements	5
(1)	Consolidated Balance Sheets	5
(2)	Consolidated Statements of Operations and Comprehensive Income (Loss)	7
	Consolidated Statements of Operations
	Three Months Ended June 30, 2023	7
	Consolidated Statements of Comprehensive Income (Loss)
	Three Months Ended June 30, 2023	8
(3)	Explanatory Notes to Consolidated Financial Statements	9
	Notes on the Assumption of a Going Concern	9
	Notes on Significant Changes in Shareholders' Equity	9
	Segment Information etc	9

1

1. Qualitative Information on the Quarterly Results

1. Explanations on Operating Results

During the three months ended June 30, 2023 (from April 1, 2023 to June 30, 2023), the Japanese economy continued to recover moderately due to the effects of various policies, as the transition to a with-corona economy was in full swing and the employment and income environment improved.

The global economy has been experiencing high price inflation, and policy rate hikes by central banks to curb inflation have been a downside to the economic recovery. Although signs of a slowdown in inflation are beginning to emerge, the outlook remains uncertain. In the Chinese economy, there are signs of a pickup in production and consumption activities, but the recovery lacks strength and there are concerns about a slowdown and stagnation.

In the titanium business, product sales remained strong due to a recovery in demand for aircraft and the avoidance of procurement from Russia as a result of the conflict in Ukraine. On the other hand, in the catalysts and chemicals business, sales remained sluggish due to the prolonged economic stagnation overseas.

Under such circumstances, consolidated net sales for the period were 16,155 million yen (a 19.5% decrease as compared to the corresponding period of the previous year), the operating income was 678 million yen (a 74.1% decrease). The ordinary income was 1,276 million yen (a 56.8% decrease) and the net income attributable to owners of the parent was 953 million yen (compared to a 52.8% decrease in the same period of the previous fiscal year).

Results by business segment were as follows.

Titanium Metal Business

Sales of titanium metal in the first quarter of the current fiscal year, demand for both aircraft and general industrial applications remained steady. However, sales fell below the previous year's level due to a slowdown in demand for high-purity titanium for use in semiconductors, in addition to the completion of a sales cycle resulting from the reversal of product inventories, which had contributed to sales until the previous fiscal year.

In terms of earnings,, despite the price correction, the titanium metal business posted net sales of 11,598 million yen (a 17.0% decrease) and an operating income of 176 million yen (a 89.3% decrease), mainly due to a decrease in sales volume and rising costs caused by soaring raw material ore, electricity prices, and indirect material costs.

Catalysts Business

Sales in the catalyst business in the first quarter of the current fiscal year were below the level of the same period of the previous year due to continued softening demand for polyolefin catalysts in Asia, mainly caused by the economic slowdown in China.

In addition to the above-mentioned decrease in sales volume, the catalyst business was affected by higher costs due to rising prices of raw materials and other items and higher depreciation costs for new plants. Sales in the catalyst business for the period decreased 18.8% to 1,466 million yen and operating income decreased 24.9% to 400 million yen.

2

Chemicals Business

Sales volume in the Chemicals business in the first quarter of the current fiscal year was lower than in the same period of the previous year due to the continued decline in demand for multilayer ceramic capacitors (MLCCs), the main application for ultra-fine nickel powder, a key product, in the wake of the prolonged economic stagnation in China and other factors.

Under these circumstances, mainly due to a decrease in sales volume, net sales of the Chemical Business for the period were 3,091 million yen (a decrease 28.0%, as compared to the corresponding period of the previous year). Operating income was 525 million yen (a decrease 35.7%) due to lower sales and the impact of higher prices for raw materials, materials, and utilities.

3