Ube Industries : Consolidated Financial Report for the First Quarter Ended June 30, 2021

Consolidated Financial Report for the First Quarter Ended June 30, 2021

	August 3, 2021
Company name:	Ube Industries, Ltd.
Representative:	Masato Izumihara,
	President and Representative Director
Security code:	4208 (shares listed on First Section of Tokyo
	Stock Exchange and Fukuoka Stock Exchange)
URL:	http://www.ube.co.jp/
Contact:	Hirotaka Ishikawa, General Manager,
	Finance & Investor Relations Department
	Tel: [phone]
	(Amounts rounded to the nearest million yen)

1. Consolidated Financial Results for the First Quarter Ended June 30, 2021

(From April 1, 2021 to June 30, 2021)

(1) Consolidated Operating Results	(% indicates the rate of increase / decrease to the same period of previous year)
		Net sales	Operating profit	Ordinary profit	Profit attributable to
		owners of parent
April - June 2021	146,290	－	8,900	－	8,926	－	4,755	－
April - June 2020	136,108	(17.5)%	(664)	－	(1,291)	－	(1,331)	－
(Note) Comprehensive Income:	From April 1, 2021 to June 30, 2021:	4,203 Million Yen	156.3%
		From April 1, 2020 to June 30, 2020:	1,640 Million Yen	(51.8)%
	Net income	Diluted net income
	per share (Yen)	per share (Yen)
April - June 2021			47.31		47.18
April - June 2020			(13.16)		－

(Note) The Corporate Group has adopted the "Accounting Standard for Revenue Recognition" (ASBJ Statement No.29, March 31, 2020) and other standards since the beginning of the consolidated first quarter of the fiscal year ending March 31, 2022, and that the respective figures reported in the consolidated financial results for the first quarter of the fiscal year ending March 31, 2022 show the amounts after which the above mentioned accounting standard is applied. In addition, the rates of increase and decrease in the respective figures compared with the same quarter of the previous fiscal year are not indicated.

(2) Consolidated Financial Position

	Total assets	Net assets		Shareholders'
		equity ratio (%)
June 30, 2021		762,963	375,206		46.4
March 31, 2021		769,710	380,635		46.6
(Reference) Shareholders' equity:	As of June 30, 2021:	353,885 Million Yen
		As of March 31, 2021:	359,013 Million Yen

[Shareholders' equity = Net assets - Share acquisition rights - Non-controlling interests]

(Note) The Corporate Group has adopted the "Accounting Standard for Revenue Recognition" (ASBJ Statement No.29, March 31, 2020) and other standards since the beginning of the consolidated first quarter of the fiscal year ending March 31, 2022, and that the respective figures reported in the consolidated financial results for the first quarter of the fiscal year ending March 31, 2022 show the amounts after which the above mentioned accounting standard is applied.

2. Cash Dividends

				Cash dividends per share (Yen)
		First		Second		Third		Year end	Annual
		quarter		quarter		quarter
April 2020	- March 2021	－		45.00		－	45.00	90.00
April 2021	- March 2022	－
April 2021	- March 2022 (Forecast)			45.00		－	45.00	90.00
(Note) Revision of the latest forecast of cash dividends: No

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3. Forecast of Consolidated Financial Results for the Fiscal Year Ending March 31, 2022

(From April 1, 2021 to March 31, 2022)

(% indicates the rate of increase / decrease to the same period of previous year)

	Net sales		Operating	Ordinary	Profit attributable	Net income
		profit	profit	to owners of parent	per share(Yen)
April - September 2021	270,000	－	13,500	295.9%	11,500	656.6%	5,500	－	55.00
April 2021 - March 2022	570,000	－	37,000	42.8%	34,500	48.1%	21,000	(8.4)%	210.67

(Note) Revision of the latest forecast of consolidated financial results: No

Please take note that the "Accounting Standard for Revenue Recognition" (ASBJ Statement No.29, March 31, 2020) and other standards are applied from the first quarter of the fiscal year ending March 31, 2022, and that the above forecast of consolidated financial results shows the amounts after which the above mentioned accounting standard is applied. In addition, the rates of increase and decrease in net sales compared with the previous fiscal year and the same quarter of the previous fiscal year are not indicated.

(Notes)

(1) Changes in significant subsidiaries during the first quarter ended June 30, 2021: No

(Note) This item indicates whether there were changes in significant subsidiaries affecting the scope of consolidation during the first quarter ended June 30, 2021.

(2) Adoption of special accounting methods for presenting quarterly consolidated financial statements: Yes

(Note) For more details, please refer to "5. Consolidated Financial Statements (4) Notes to Quarterly Consolidated Financial Statements (Application of the specific accounting methods for preparing the quarterly consolidated financial statements)".

1. Changes in accounting policies applied, changes in accounting estimates and retrospective restatement Changes in accounting policies applied due to revisions of accounting standards: Yes
   Changes in accounting policies other than the above: No
   Changes in accounting estimates: No
   Retrospective restatement: No
   (Note) For more details, please refer to "5. Consolidated Financial Statements (4) Notes to Quarterly Consolidated Financial Statements (Changes in accounting policies)".
2. Number of shares outstanding (common stock)

	June 30, 2021	March 31, 2021
Numbers of shares outstanding at period end	106,200,107	106,200,107
Numbers of shares of treasury stock at period end	6,884,742	5,056,029
	April - June 2021	April - June 2020
Weighted-average number of shares outstanding during period	100,510,075	101,127,869

(Information regarding quarterly review procedures)

The financial information contained in this report is not subject to quarterly review procedures by independent auditors.

(Cautionary statement on forward-looking statements)

The performance forecast and other forward-looking statements contained in this material have been prepared on the basis of information available at this point and certain assumptions which are judged to be rational. It may be substantially different from the actual performance because of various factors such as economic conditions in key markets, supply and demand of products, the prices of raw material and fuel, interest rates, and exchange rates.

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4. Qualitative Information on Operating Results

1. Overview of Operating Results

During the current term, net sales of the Company Group increased despite negative impact resulted from adoption of the Accounting Standard for Revenue Recognition, because sales volume of the products used in the automobile industry such as nylon, synthetic rubber and battery materials increased and pricing of the products such as nylon and caprolactam rose as well, as overall business performance started to recover from the demand slowdown due to the outbreak of COVID-19. Operating profit, ordinary profit and profit attributable to owners of parent also increased mainly because of positive impact by substantial increases in sales volume, particularly in the Chemicals Segment, as well as rising sales price of nylon and caprolactam.

As a result, the Company Group reports its consolidated results during the current term as follows:

										(Billions of yen)
	Item	Net sales		Operating profit	Ordinary profit		Profit attributable to
			owners of parent
	April - June 2021 ①	146.2		8.9		8.9			4.7
	164.9
	April - June 2020 ②	136.1		(0.6)		(1.2)			(1.3)
	Difference ① - ②	10.1		9.5		10.2			6.0
	28.8
	Percentage change	－			－		－			－
	21.2%
(2) Overview by Segment
	Net sales									(Billions of yen)
	Segment	April - June 2021		April - June 2020	Difference	Percentage
	①		②		① － ②	Change
	Chemicals	76.7			52.5		24.1	－
	78.8				26.2	50.0%
	Construction Materials	48.7			69.1	(20.4)	－
	66.1				(3.0)	(4.4)%
	Machinery	21.4			16.7		4.7	－
	20.5				3.8	22.8%
	Others	0.8			0.7		0.0	－
	0.8				0.0	13.0%
	Adjustment	(1.4)			(3.1)		1.6	－
	(1.4)				1.6	－
	Total	146.2			136.1		10.1	－
	164.9				28.8	21.2%
	Operating profit									(Billions of yen)
	Segment	April - June 2021		April - June 2020	Difference	Percentage
	①		②		① － ②	Change
	Chemicals	7.6			(2.7)		10.3	－
	Construction Materials	0.6			1.9		(1.2)	(65.6)%
	Machinery	0.7			0.2		0.4	196.8%
	Others	0.0			0.0		0.0	88.4%
	Adjustment	(0.2)			(0.1)		(0.0)	－
	Total	8.9			(0.6)		9.5	－

(Note) The figures shown at the bottom of each table are reference values for expected results if the Accounting Standard for Revenue Recognition is not adopted.

Adjustment includes corporate expenses (general expenses that are not distributed to each reportable segment) and internal transactions between the segments.

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Chemicals - Increases in both net sales and operating profit

• Engineering Plastics & Fine Chemicals
  The Caprolactam Business recorded a net sales increase, thanks to an increase in sale volume supported by a firm demand, as well as sales prices increase backed by market price rises of raw materials such as benzene.
  The Nylon Business recorded an increase in net sales because sales volume increased supported by a recovery in demand for products such as those used in the automobile industry, as well as an increase in sales price due to market price rises of caprolactam.
  The Industrial Chemicals Business recorded a sales increase, thanks to increases in both production and shipment volume for the reason that there was no biennial inspection of the ammonia product factory. The Fine Chemicals Business recorded an increase in net sales because sales volume of its products remained stable, particularly the products for automobiles.
  Both net sales and operating profit increased in the Engineering Plastics & Fine Chemicals Businesses as a whole due to increasing sales volume supported by a recovery in demand and increasing sales price due to the rising market price of raw materials. In addition, there was no biennial inspection of the ammonia product factory.
• The Synthetic Rubber Business recorded increases in both net sales and operating profit because shipment of the products mainly used for tires remained strong, as well as the rising product price due to the market price rises of raw materials such as butadiene.
• Specialty Products
  The Battery Materials Business recorded a sales increase, thanks to a sales volume increase supported by demand recovery of the products mounted on automobiles.
  The Polyimide Business recorded an increase in net sales, because sales volume of the COF films mainly used on displays increased and demand for varnish used for organic EL panels remained stable.
  Both net sales and operating profit increased in the Specialty Products Business as a whole because sales recovery in the Battery Materials Business greatly affected it overall.
• In the Pharmaceutical Business, net sales decreased and operating profit increased due to continued strong sales of drugs manufactured under contract that had been ordered in advance, in spite of weak sales of drugs developed by UBE.
• Both net sales and operating profit increased in the Chemicals Segment as a whole due to both sales volume and product pricing increasing, due to the recovery from the impact of the COVID-19 pandemic. In addition, there was no biennial inspection of the ammonia product factory.

Construction Materials - Decreases in both net sales and operating profit

• The Cement and Ready-Mixed Concrete Business recorded a decrease in net sales mainly due to a decrease in shipment resulted from completion of construction works for the earthquake disaster reconstruction and reactionary fall resulted from completion of construction works to extend the railways for bullet trains, as well as substantial negative impact that adoption of the Accounting Standard for Revenue Recognition had on Company Group's sales subsidiaries.
• The Calcia and Magnesia Business recorded an increase in net sales due to increases in sales volume of the quicklime used in the steel industry and the magnesia used in the steel and electric power industries, thanks to recovery of the demand.
• The Energy Business recorded a net sales decrease due to decline of electric power selling, because

biennial inspection took place in the IPP power plant and due to extension of the repair period caused by malfunctioning of the equipment.

• The Construction Materials Segment as a whole recorded decreases in both net sales and operating profit mainly due to adoption of the Accounting Standard for Revenue Recognition and biennial inspection of the IPP power plant.

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Machinery - Increases in both net sales and operating profit

• The Molding Machine Business recorded an increase in net sales because sales of the products used in the automobile industry remained strong in the China and North America markets, although recovery status of demand for the products differs depending on the market.
• The Industrial Machines Business recorded an increase in net sales thanks to the strong sales of products

such as conveyors used in the electric power industry.

• The Steel Products Business recorded an increase in net sales because product pricing rose as raw material prices increased.
• The Machinery Segment as a whole recorded increases in both net sales and operating profit because strong sales of industrial machines and rising steel product pricing greatly affected the overall business.

Others - Increases in both net sales and operating profit

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