Financial Results for the Three Months Ended June 30, 2021 [Japanese GAAP](Consolidated)
August 11, 2021
Company name: Kokusai Pulp & Paper Co., Ltd.
Stock exchange listing: Tokyo Stock Exchange
Code number: 9274
URL: https://www.kppc.co.jp/
Representative: Tadashi Kurihara, Director of the Board, President & Executive Officer
Contact: Tatsuhiko Tachibana, Managing Executive Officer and General Manager of Administration Division
Phone: +81-3-3542-4169
Scheduled date of filing quarterly securities report: August 12, 2021
Scheduled date of commencing dividend payments: Availability of supplementary explanatory materials on quarterly financial results: Yes
Schedule of quarterly financial results briefing session: No(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Three Months Ended June 30, 2021 (April 1, 2021–June 30, 2021)(1) Consolidated Operating Results(Percentages represent year-on-year changes.)
Profit attributable to
Net sales
Operating profit
Ordinary profit
owners of parent
Three months ended
Million yen%
Million yen%
Million yen%
Million yen%
June 30, 2021
129,687
–
1,551
–
1,797
–
1,412
–
June 30, 2020
82,118 (11.0)(2,717)–(2,515)–(2,690)–(Note) Comprehensive income:Three months ended June 30, 2021: ¥1,857 million [–%]
Three months ended June 30, 2020: ¥(3,618) million [–%]
Basic earnings per
share

Diluted earnings per
share

Three months ended
Yen
Yen
June 30, 2021
19.67–
June 30, 2020
(37.27)–(Note) Effective from the beginning of the first quarter ended June 30, 2021, the Group has adopted the AccountingStandard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020) and others. Therefore, eachamount for the first quarter of the fiscal year ending March 31, 2022 is an amount after the adoption of thesaid accounting standard and others, and does not include any year-on-year percentage changes.
(2) Consolidated Financial Position
Total assets
Three months ended
June 30, 2021
Fiscal year ended
March 31, 2021
(Reference) Equity:

Net assets

Equity ratio

Million yen

Million yen%

273,908

44,67316.3

275,119
43,581
15.8
Three months ended June 30, 2021: ¥44,616 million
Fiscal year ended March 31, 2021: ¥43,489 million

2. Dividends
1st quarter-end

2nd quarter-end

Annual dividends
3rd quarter-end

Yen

Yen

Yen

Year-end

Fiscal year ended–
0.00–
March 31, 2021
Fiscal year ended–
March 31, 2022
Fiscal year ending
March 31, 2022
5.00–
(Forecast)(Note) Revision to the forecast for dividends announced most recently: None

Total
Yen

Yen

10.00

10.00

7.00

12.00

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2022 (April 1, 2021 - March
31, 2022)(Percentages represent year-on-year changes.)
Profit attributable
Basic earnings
Net sales
Operating profit
Ordinary profit
to owners ofper share
parentMillion yen%

Million yen%

Million yen%

Million yen%

Yen

Full year
545,000
–
5,900
–
5,000
–
4,200
–
58.49
(Note) Effective from the beginning of the fiscal year ending March 31, 2022, the Group has adopted the“Accounting Standard for Revenue Recognition” (Corporate Accounting Standard No. 29) and others, andtherefore each amount for the above consolidated financial results forecast is an amount after the adoption of
the said accounting standard and others, and does not include any year-on-year percentage changes.
* Notes:(1) Changes in significant subsidiaries during the fiscal year
(Changes in specified subsidiaries resulting in changes in scope of consolidation): No(2) Accounting methods adopted particularly for the preparation of quarterly consolidated financial statements: No(3) Changes in accounting policies, changes in accounting estimates and retrospective restatement
1) Changes in accounting policies due to the revision of accounting standards: Yes
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting estimates: None
4) Retrospective restatement: None
(4) Total number of issued and outstanding shares (common shares)
1) Total number of issued and outstanding shares at the end of the period (including treasury shares):Three months ended June 30, 2021:
75,077,406 sharesFiscal year ended March 31, 2021:
75,077,406 shares2) Total number of treasury shares at the end of the period:
Three months ended June 30, 2021:
3,267,751 sharesFiscal year ended March 31, 2021:
3,278,133 shares
3) Average number of shares during the period:
Three months ended June 30, 2021:
Three months ended June 30, 2020:

71,801,868 shares
72,185,624 shares* These quarterly consolidated financial results are outside the scope of quarterly review by certified public
accountants or an audit firm.
* Explanation of the proper use of financial results forecast and other notes(Cautionary notes regarding forward-looking statements)
The results forecast and other forward-looking statements contained in this document are based on the information
currently available to the Company and certain assumptions deemed to be reasonable, and are not intended as aguarantee that the Company will achieve them. Actual results may differ significantly due to various factors. For
assumptions for the results forecast and points to consider in utilizing them, please see “(3) Explanation of
consolidated financial results forecast and other forward-looking information” in “1. Qualitative Information
Regarding Settlement of Accounts for the Three Months Ended June 30, 2021” of the attachments.
(How to obtain supplementary explanatory materials for financial results)
Explanatory materials for financial results will be posted on the Company’s website.

Table of Contents of Attachments
1.

Qualitative Information Regarding Settlement of Accounts for the Three Months Ended June 30, 2021 ......... 2(1) Explanation on Operating Results .............................................................................................................. 2(2) Explanation on Financial Position .............................................................................................................. 3(3) Explanation of consolidated financial results forecast and other forward-looking information ................. 3

2.

Quarterly Consolidated Financial Statements and Key Notes ............................................................................ 4(1) Quarterly Consolidated Balance Sheets...................................................................................................... 4(2) Quarterly Consolidated Statements of Income and Comprehensive Income.............................................. 6(3) Notes to Consolidated Financial Statements .............................................................................................. 8(Notes on Going Concern Assumption) ...................................................................................................... 8(Significant Matters Forming the Basis in Preparation of Consolidated Financial Statements)................. 8(Changes in accounting policies) ................................................................................................................ 8(Additional Information) ............................................................................................................................ 9(Segment Information, etc.) ...................................................................................................................... 10(Information Related to Business Combination, etc.)................................................................................111

1.

Qualitative Information Regarding Settlement of Accounts for the Three Months Ended June 30, 2021

(1) Explanation on Operating Results
Effective from the beginning of the first quarter ended June 30, 2021, the Group has adopted the AccountingStandard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020) and others. Therefore,
explanation on operating results for net sales for the three months ended June 30, 2021 does not include yearon-year percentage changes (%).
(1) Financial Position and Status of Operating Results(a) Status of Operating Results
The global economy in the three months ended June 30, 2021 experienced a general recovery trend in the
U.S., Europe, and China, mainly due to the dissemination of vaccines and growth in domestic demand fromthe effectiveness of large-scale economic measures, although the situation of the spread of COVID-19
differed by region. The Japanese economy experienced a recovery in capital investment with the
improvement in corporate earnings, following the steady trend in production and export to the U.S. andChina. The economic recovery, however, was limited due to the prolonged sluggish inbound demand andpersonal consumption, resulting from the repeated issuance of a declaration of a state of emergency andpriority preventative measures with the further waves of COVID-19.
Under these circumstances, net sales for the three months ended June 30, 2021 were 129,687 million yen.
With regard to profit and loss, operating profit was 1,551 million yen (compared with an operating loss of
2,717 million yen in the same period of the previous fiscal year), ordinary profit was 1,797 million yen(compared with an ordinary loss of 2,515 million yen in the same period of the previous fiscal year), andprofit attributable to owners of parent was 1,412 million yen (compared with loss attributable to owners ofparent of 2,690 million yen in the same period of the previous fiscal year).
Results for three months ended June 30, 2021 by segment are as follows.
<Wholesale pulp and paper, domestic locations>
During the three months ended June 30, 2021, the paper field experienced a significant recovery in sales
volume mainly in graphic paper year-on-year, as the same period of the previous fiscal year was one mostgreatly affected by the issuance of the declaration of a state of emergency. While sales for books and comic
books also remained strong, in general, the situation has not recovered to the level of sales before the spreadof COVID-19. Net sales for paperboard increased from the previous fiscal year. This was due to thecontinuously strong sales of containerboard base paper for beverage packing materials from the previous
year, and an increase in export of containerboard base paper to overseas, China in particular. Net sales for
waste paper increased significantly, resulting from the rise in export price of Japanese waste paper underincreasing demand. This was in line with the shortage of waste paper due to the increase in global demandfor containerboards. Net sales of pulp also increased significantly due to the rise in pulp price on a global
basis.
As a result, net sales were 60,888 million yen, and operating profit was 1,175 million yen (251.4% year-onyear) for three months ended June 30, 2021.
<Wholesale pulp and paper, overseas locations>
Owing to the great contribution to earnings from the performance by Antalis S.A.S., which was acquired inJuly 2020, sales volume and net sales increased significantly year-on-year.
In Europe, sales volume decreased in the paper business and performance in the visual communication
business experienced a downturn, mainly due to the lockdown imposed since the beginning of the year
following the further waves of COVID-19. But net sales are on a recovery trend mainly due to the recoveryof the visual communication business and hike in sales price in the paper business, resulting from economic
activities that recovered through the dissemination of vaccines and others. Furthermore, even under suchcircumstances, the packaging business continued to be strong supported by active demand.
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In the Oceania region, mainly in Australia, economic activities resumed promptly and performance remained
steady.
In China, both net sales and operating profit increased significantly. This was due to the strong recovery insales volume and steady business restructuring, along with the demand increase in paper and paperboard due
to economic expansion, and soaring sales price combined with a rise in pulp price. As a result, net sales were68,489 million yen, and operating profit was 1,035 million yen (compared with an operating loss of 2,710
million yen in the same period of the previous fiscal year) for three months ended June 30, 2021.
<Real estate leasing>
Owing mainly to the continuous full operation of the KPP Yaesu Building, which is the main property, theGroup’s net sales roughly remained the same. But operating profit decreased mainly due to rent arising fromthe sale of land of KPP Yaesu Building in February 2021.
As a result, net sales were 310 million yen, and operating profit was 43 million yen (25.6% year-on-year)
for the three months ended June 30, 2021.
(2) Explanation on Financial Position
Total assets at the end of the first quarter ended June 30, 2021 were 273,908 million yen, down 1,210
million yen from the end of the previous fiscal year. This was mainly due to a decrease in cash and deposits
resulting mainly from repayment of short-term borrowings.
Liabilities were 229,235 million yen, down 2,302 million yen from the end of the previous fiscal year. Thiswas mainly due to repayment of short-term borrowings.
Net assets came to 44,673 million yen, up 1,091 million yen from the end of the previous fiscal year. Thiswas mainly due to profit attributable to owners of parent. As a result of the above, the equity ratio was
16.3%, up 0.5 points from the end of the previous fiscal year.
(3) Explanation of consolidated financial results forecast and other forward-looking information
The Company has revised the consolidated financial results forecast for the fiscal year ending March 31,
2022 announced on May 14, 2021 based on its recent performance trends.
For details, please refer to “Notice Regarding Revision of Consolidated Financial Results Forecast andDividends Forecast for the Fiscal Year Ending March 31, 2022” announced today (August 11, 2021).

3

2.

Quarterly Consolidated Financial Statements and Key Notes(1) Quarterly Consolidated Balance Sheets(Million yen)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Electronically recorded monetary claims - operating
Merchandise
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Land
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Retirement benefit asset
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

4

Previous Fiscal YearFirst Quarter of Current Fiscal Year

(March 31, 2021)(June 30, 2021)

30,546
112,782
12,92840,012
10,138(5,735)
200,672

15,277
117,113
16,81143,53011,028(5,453)
198,306

6,935
9,581
18,32934,845

6,844
9,605
18,88235,332

4,235
4,541
8,777

4,360
4,509
8,869

17,806
9,230
12,972(9,184)30,82474,447275,119

17,396
10,744
13,062(9,803)31,40075,602273,908

(Million yen)

Liabilities
Current liabilities
Notes and accounts payable - trade
Electronically recorded obligations - operating
Short-term borrowings
Commercial papers
Income taxes payable
Provisions
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Retirement benefit liability
Provisions
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

5Previous Fiscal YearFirst Quarter of Current Fiscal Year

(March 31, 2021)(June 30, 2021)

81,672
3,552
67,9999,273
3,857
24,637
190,993

84,2193,546
51,536
5,000
5,839
2,546
29,277
181,964

15,272
4,811
443
20,01740,544
231,537

26,7074,131
441
15,99047,270229,235

4,723
7,833
31,826(1,089)43,293

4,723
7,833
32,505(1,085)43,9773,798(54)(1,380)(2,167)19592
43,581
275,1193,452(27)(2,169)
(616)
639
56
44,673273,908

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income
Three Months Ended June 30(Million yen)
Cumulative First Quarter of thePrevious Fiscal Year

Cumulative First Quarter of theCurrent Fiscal Year

(From April 1, 2020
to June 30, 2020)(From April 1, 2021
to June 30, 2021)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit (loss)

82,11876,5595,558
8,276(2,717)

129,687
108,762
20,924
19,372
1,551

190
210

6
169

-

34

12
15
54
484

4
559
85
860

185
7

424
70

70

-

18
282
(2,515)

120
615
1,797

1
3
4

22
13
0
36

0
169
170
(2,681)41(1)40(2,721)(30)(2,690)

0
19
19
1,813
194
205
400
1,413
1
1,412

Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity
methodForeign exchange gains
Reversal of allowance for doubtful accounts
Other
Total non-operating income
Non-operating expenses
Interest expenses
Loss on sales of trade receivables
Share of loss of entities accounted for using equity
methodOther
Total non-operating expenses
Ordinary profit (loss)
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Gain on sales of shares of subsidiaries and associates
Other
Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
Loss on retirement of non-current assets
Loss on valuation of investment securities
Total extraordinary losses
Profit (loss) before income taxes
Income taxes–current
Income taxes–deferred
Total income taxes
Profit (loss)
Profit (loss) attributable to non-controlling interests
Profit (loss) attributable to owners of parent

6

Quarterly Consolidated Statements of Comprehensive Income
Three Months Ended June 30(Million yen)
Cumulative First Quarter of thePrevious Fiscal Year

Cumulative First Quarter of theCurrent Fiscal Year

(From April 1, 2020
to June 30, 2020)(From April 1, 2021
to June 30, 2021)

Profit (loss)
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

7(2,721)

1,413

255
(3)
(1,079)
(7)

(345)
27
(806)
1,551

(62)

18

(897)
(3,618)444
1,857(3,587)

1,856

(31)

1

(3) Notes to Consolidated Financial Statements(Notes on Going Concern Assumption)
Not applicable.
(Notes on significant changes in the amount of shareholders’ equity)
Not applicable.
(Changes in accounting policies)(Application of Accounting Standard for Revenue Recognition, etc.)
The Group has adopted the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March
31, 2020; hereinafter referred to as “Revenue Recognition Accounting Standard”) and others effective fromthe beginning of the first quarter ended June 30, 2021. Accordingly, revenue is recognized at the time of thetransfer of control for promised goods or services to customers in the amount expected to receive in exchange
for such goods or services. Major changes due to the adoption of the Revenue Recognition AccountingStandard and others are as follows.
- Revenue recognition regarding transactions acted as agent
In the wholesale pulp and paper business, the entire amount of consideration received from customers waspreviously recognized as revenue. The method has been changed to recognize revenue by the net amount,which is the entire amount less the amount paid to the supplier, for transactions performed as agent to provide
goods or services, after the role (whether as entity itself or as agent) in the provision of goods or services tocustomers has been assessed.
- Variable consideration (sales rebate, transaction by provisional price)
Portion of the revised amount for sales rebates or transactions by provisional price previously have beentreated as cost of sales. The method has been changed to estimate the amount of variable portion of
consideration for transactions when providing goods or services to customers, and to include such amount in
the transaction price.
In adopting the Revenue Recognition Accounting Standard and others, in accordance with the transitional
treatment set forth in the proviso of Paragraph 84 of the Revenue Recognition Accounting Standard, thecumulative impact of retrospective application of the new accounting policies prior to the beginning of thefirst quarter ended June 30, 2021 was added to or subtracted from retained earnings at the beginning of thefirst quarter ended June 30, 2021. The new accounting policy has been applied from the beginning balance ofthe first quarter ended June 30, 2021.
As a result, net sales and cost of sales decreased by 3,888 million yen, respectively, for three months ended
June 30, 2021. There are no impacts on the retained earnings of the beginning balance of the first quarter ofthe fiscal year under review.

8

(Application of Accounting Standard for Fair Value Measurement, etc.)
The Group has adopted the Accounting Standard for Fair Value Measurement (ASBJ Statement No. 30, July4, 2019; hereinafter referred to as “Fair Value Measurement Accounting Standard”) and others effective fromthe beginning of the first quarter ended June 30, 2021. In accordance with the transitional treatment set forthin Paragraph 19 of the Fair Value Measurement Accounting Standard and Paragraph 44-2 of the AccountingStandard for Financial Instruments (ASBJ Statement No. 10, July 4, 2019), the new accounting policy set
forth by the Fair Value Measurement Accounting Standard and others will be applied in the future. There
are no impacts on the Quarterly Consolidated Financial Statements.
(Additional Information)(Impact of COVID-19)

There are no significant changes on the impact of COVID-19 described in the securities report (significant
accounting estimates) for the previous fiscal year.

9

(Segment Information, etc.)[Segment Information]
I

For the three months ended June 30, 2020 (from April 1, 2020 to June 30, 2020)
1. Information on net sales and profit (loss) by reportable segment(Million yen)

Reportable segment
Wholesale pulp Wholesale pulp
and paper,and paper,
domestic
overseas
locationslocations
Net sales
Net sales toexternal customers
Intersegment net
sales or transfers
Total
Segment income(loss)(Notes) 1.

2.

Real estateleasing

Total

Amountrecorded in
Quarterly
Adjustment
Consolidated(Note 1)
Statements ofIncome(Note 2)

58,082

23,724311

82,118-82,118

948

100

3

1,052

(1,052)-59,03023,824314

83,170(1,052)

82,118467(2,710)168(2,073)(643)(2,717)

The adjustment to segment profit of (643) million yen consists of intersegment eliminations of 0 million
yen and corporate expenses of (644) million yen. Corporate expenses are mainly general andadministrative expenses at administrative divisions of the head office that are not attributable to any
reportable segment.
Segment profit is adjusted with operating profit in consolidated financial statements.

2. Information on impairment loss on non-current assets and goodwill by reportable segment(Significant change in the amount of goodwill)In the “wholesale pulp and paper, overseas locations” segment, Spicers Australia Pty Ltd, abusiness company of Spicers Limited, the Company’s consolidated subsidiary, acquired thewholesale business of paper and paperboard from Wilmaridge Pty Ltd.
The increase in goodwill for the three months ended June 30, 2021 was 1,785 million yen due to thischange.

10

II

For the three months ended June 30, 2021 (from April 1, 2021 to June 30, 2021)
1. Information on net sales and profit (loss) by reportable segment(Million yen)

Reportable segment
Wholesale pulp Wholesale pulp
and paper,and paper,
domestic
overseas
locationslocations
Net sales
Net sales to externalcustomers
Intersegment net
sales or transfers
Total
Segment income(Notes) 1.

2.

Real estateleasing

Total

Amountrecorded in
Quarterly
Adjustment
Consolidated(Note 1)
Statements ofIncome(Note 2)60,88868,489310

129,687-

129,687

1,409

60

6

1,476

(1,476)-62,297
1,175

68,549
1,035

316
43

131,164
2,253(1,476)(702)

129,687
1,551

The adjustment to segment profit of (702) million yen consists of intersegment eliminations of (2)million yen and corporate expenses of (699) million yen. Corporate expenses are mainly general andadministrative expenses at administrative divisions of the head office that are not attributable to any
reportable segment.
Segment profit is adjusted with operating profit in the Quarterly Consolidated Statements of Income.

2. Information on impairment loss on non-current assets and goodwill by reportable segment
Not applicable.
3. Matters on changes in reportable segments, etc.
As described in (Changes in accounting policies), the Group has adopted the Accounting Standard for Revenue
Recognition (ASBJ Statement No. 29, March 31, 2020) and others effective from the beginning of the firstquarter ended June 30, 2021, and has changed the method of accounting treatment on revenue recognition.
Accordingly, the measurement method of business segment profit or loss has also been changed.
As a result of such change, net sales of wholesale pulp and paper in domestic locations for the three months
ended June 30, 2021 decreased by 3,888 million yen as compared with the amount under the previous method.
(Information Related to Business Combination, etc.)
Settlement of provisional treatment for business combinations
The business combination with Antalis S.A.S. conducted on July 21, 2020 was provisionally accounted for in
the previous fiscal year and settled in the first quarter ended June 30, 2021.
With this settlement of provisional accounting treatment, the initial allocation amount of the acquisition cost,
included under comparative information in the Quarterly Consolidated Financial Statements for the threemonths ended June 30, 2021 has been reviewed. As a result, there are no impacts on the Consolidated Financial
Statements for the previous fiscal year.

11