Financial Results for the Six Months Ended September 30, 2021
[Japanese GAAP](Consolidated)
November 12, 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:
November 12, 2021
Scheduled date of commencing dividend payments:
December 2, 2021
Availability of supplementary explanatory materials on quarterly financial results: Yes
Schedule of quarterly financial results briefing session:
Yes (for institutional investors and analysts)(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Six Months Ended September 30, 2021 (April 1, 2021–September 30,
2021)(1) Consolidated Operating Results(Percentages represent year-on-year changes.)
Profit attributable to
Net sales
Operating profit
Ordinary profit
owners of parent
Million yen

Six months ended
September 30, 2021
269,133
Six months ended
September 30, 2020
166,594(Note) Comprehensive income:%Million yen%

Million yen%

Million yen

%

−

3,822

−

4,205

−

3,485

−

(11.2)(7,566)−(8,218)−(7,236)Six months ended September 30, 2021: ¥6,727 million [–%]
Six months ended September 30, 2020: ¥(9,099) million [–%]−

Basic earnings per
share

Diluted earnings per
share

Yen

Yen

Six months ended
48.54
September 30, 2021–
Six months ended(100.48)
September 30, 2020–
(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 second 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
Six months ended
September 30,
2021
Fiscal year ended
March 31, 2021
(Reference) Equity:

Net assets

Equity ratio

Million yen

Million yen%

273,765

49,53718.1

275,119

43,581

15.8

Six months ended September 30, 2021: ¥49,489 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 ending–
5.00
March 31, 2022
Fiscal year ending
March 31, 2022–
(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 1)Revision to the earnings forecast announced most recently: None
(Note 2)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):Six months ended September 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:
Six months ended September 30, 2021
3,243,951 sharesFiscal year ended March 31, 2021
3,278,133 shares
3) Average number of shares during the period:
Six months ended September 30, 2021
Six months ended September 30, 2020

71,815,405 shares
72,018,930 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 Six Months Ended September 30, 2021” of the attachments.
(How to obtain supplementary explanatory materials for the quarterly financial results)
The Company plans to hold a briefing for institutional investors and analysts on Friday, December 10, 2021.
Explanatory materials for financial results that are distributed at the meeting will be posted on the Company’s
website immediately after the briefing is closed.

Table of Contents of Attachments
1.

Qualitative Information Regarding Settlement of Accounts for the Six Months Ended September 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(Notes on significant changes in the amount of shareholders’ equity) ....................................................... 8(Changes in accounting policies) ................................................................................................................ 8(Additional Information) ............................................................................................................................ 9(Segment Information, etc.) ...................................................................................................................... 10(Significant subsequent event) ...................................................................................................................111

1.

Qualitative Information Regarding Settlement of Accounts for the Six Months Ended September 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, an
explanation on operating results for net sales for the six months ended September 30, 2021 does not include
year-on-year percentage changes (%).
(1) Financial Position and Status of Operating Results(a) Status of Operating Results
In the six months ended September 30, 2021, business recovered in a wider area thanks to the spread ofvaccines mainly in Europe and the United States, positive effects of large-scale economic measures and theeasing of activity restrictions. On the other hand, the outlook for the global economy remains uncertain
amid the confusion with supply chains and the rise in inflation. In Japan, as the infected population rapidly
grew due to the pandemic and the declaration of the state of emergency and emergency measures were
issued repeatedly, vaccinations progressed. But the impact in terms of a recovery in personal consumption
was limited, keeping the economy sluggish. As the vaccines become more widespread, we expect the weakpersonal consumption will recover in the future by preventing the resurgence of COVID-19 and normalizing
economic activity in a balanced manner.
Under these circumstances, net sales for the six months ended September 30, 2021 were 269,133 million
yen. With regard to profit and loss, gross profit increased year on year owing to the acquisition of Antalis
S.A.S. in the previous fiscal year. Operating profit was 3,822 million yen (compared with an operating lossof 7,566 million yen in the same period of the previous fiscal year), ordinary profit was 4,205 million yen(compared with an ordinary loss of 8,218 million yen in the same period of the previous fiscal year), andprofit attributable to owners of parent was 3,485 million yen (compared with loss attributable to owners ofparent of 7,236 million yen in the same period of the previous fiscal year).
Results for the six months ended September 30, 2021 by segment are as follows.
<Wholesale pulp and paper, domestic locations>
During the six months ended September 30, 2021, the paper field experienced a significant recovery in sales
volume mainly in graphic paper of catalogues and flyers, etc. year on year, as the same period of theprevious fiscal year was one most greatly affected by the declaration of the state of emergency. The
recovery, however, was limited due to the declaration of the state of emergency again in July.
Sales for paperboard decreased significantly in the previous year due to restrictions on going out and thecancellation of events in the context of controlling the pandemic. Even with a favorable recovery trend in
the first six months under review, the recovery was limited as people tended to behave in a suppressed mode
under the declaration of the state of emergency. Net sales for containerboard base paper increased from theprevious fiscal year. This was due to the continuously strong demand for beverage packing materials, and anincrease in exports to overseas, China in particular.
Net sales for waste paper exceeded the previous fiscal year, though sales volume showed little growth aswaste paper production decreased amid low domestic paper consumption.
Both sales volume and net sales of pulp increased significantly from the previous fiscal year due to the risein export and pulp prices.
As a result, net sales were 123,863 million yen, and operating profit was 2,447 million yen (149.2% yearon-year) for the six months ended September 30, 2021.
<Wholesale pulp and paper, overseas locations>
In Europe, both sales volume and net sales increased significantly year on year thanks to the earnings ofAntalis S.A.S., acquired in July of the previous year. Though regional lockdowns were implemented in the2

first half of the fiscal year, a recovery in regional economic activity is showing a steady trend as vaccinations
have progressed, making a positive contribution to business performance.
In the Oceania region, mainly in Australia, both sales volume and net sales of Spicers Limited increased
significantly year on year, boosted by the recovery from the COVID-19 crisis in the previous year and abusiness newly acquired.
In China, earnings improved sharply. This was because the stock business of KEISHIN PAPERS TRADE
started at six sites, and because of China’s healthy economy and the sudden rise in market prices.
As a result, net sales were 144,647 million yen, and operating profit was 2,752 million yen (compared with
an operating loss of 8,202 million yen in the same period of the previous fiscal year) for the six months ended
September 30, 2021.
<Real estate leasing>In the office building market in major cities throughout Japan, office demand slumped due to the spread of
COVID-19. The average rent started to decline in the Tokyo area, and has also been weakening in otherareas.
Under these circumstances, owing mainly to the continuous full operation of the KPP Yaesu Building, whichis the main property, the Group’s net sales roughly remained the same. But operating profit decreased due inlarge part to rent arising from the sale of land of the building in February 2021.
As a result, net sales were 622 million yen, and operating profit was 86 million yen (25.4% year-on-year)
for the six months ended September 30, 2021.
(2) Explanation on Financial Position
Total assets at the end of the second quarter ended September 30, 2021 were 273,765 million yen, down
1,354 million yen from the end of the previous fiscal year. This was mainly due to a decrease in cash anddeposits resulting chiefly from repayment of short-term borrowings.
Liabilities were 224,228 million yen, down 7,309 million yen from the end of the previous fiscal year. Thiswas mainly due to repayment of short-term borrowings and a decrease in income taxes payable.
Net assets came to 49,537 million yen, up 5,955 million yen from the end of the previous fiscal year. Thiswas mainly due to an increase in foreign currency translation adjustments and profit attributable to ownersof parent. As a result of the above, the equity ratio was 18.1%, up 2.3 points from the end of the previous
fiscal year.
(3) Explanation of consolidated financial results forecast and other forward-looking information
Our consolidated financial results forecast for the fiscal year ending March 31, 2022 is unchanged from theannouncement on August 11, 2021.

3

2.

Quarterly Consolidated Financial Statements and Key Notes(1) Quarterly Consolidated Balance Sheets(Million yen)
Second Quarter of Current Fiscal
Year

Previous Fiscal Year

(March 31, 2021)
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(September 30, 2021)

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

13,371
116,958
12,93847,462
12,131(5,188)
197,673

6,935
9,581
18,32934,845

6,747
9,607
18,90435,259

4,235
4,541
8,777

4,153
4,588
8,741

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

17,32011,775
12,825(9,829)32,091
76,092
273,765

(Million yen)Previous Fiscal Year

(March 31, 2021)
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

5

Second Quarter of Current Fiscal
Year(September 30, 2021)

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

87,856
3,782
40,193
1,000
1,386
2,674
30,299167,192

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

35,733
3,788
490
17,02257,035224,228

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

4,723
7,833
34,579(1,076)
46,0603,798(54)(1,380)(2,167)19592
43,581
275,119

3,424
(47)
(504)
557
3,429
47
49,537273,765

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income
Six Months Ended September 30, 2021
(Million yen)
Cumulative Second Quarter of
the Previous Fiscal Year
(From April 1, 2020
to September 30, 2020)

Cumulative Second Quarter of
the Current Fiscal Year
(From April 1, 2021
to September 30, 2021)

166,594
155,272
11,322
18,888(7,566)269,133
225,188
43,944
40,122
3,822

344
262

66
221

−

72

30
13
148
798

362
737
322
1,782

381
15

876
8

941

−

112
1,450
(8,218)

514
1,399
4,205

2
6
1,679
−
−
−
1,688

29
125
−
187
164
13
521

175
1
−
18
169
−
365
(6,894)95
274
370(7,265)(28)(7,236)

326
39
0
−
−
2
368
4,358
942
(76)
865
3,493
7
3,485

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit (loss)
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 bargain purchase
Gain on reversal of impairment losses
Penalty income
Other
Total extraordinary income
Extraordinary losses
Business restructuring expenses
Loss on retirement of non-current assets
Loss on sales of non-current assets
Impairment loss
Loss on valuation of investment securities
Loss on sales 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
Six Months Ended September 30, 2021
(Million yen)
Cumulative Second Quarter of the Cumulative Second Quarter of thePrevious Fiscal Year
Current Fiscal Year
(From April 1, 2020 to September (From April 1, 2021 to September
30, 2020)
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(7,265)

3,493

(372)
3
(620)
(15)

(373)
6
859
2,725

(829)

17

(1,834)(9,099)

3,234
6,727

(9,070)

6,719

(29)

7

Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests7

(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 be received in
exchange for such goods or services. Major changes due to the adoption of the Revenue Recognition
Accounting Standard 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 6,664 million yen, respectively, for the six months ended
September 30, 2021. There are no impacts on the retained earnings of the beginning balance of the first quarterof the 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) and others effective from the beginning of the first quarter ended June 30, 2021. In accordance withthe transitional treatment set forth in Paragraph 19 of the Fair Value Measurement Accounting Standard andParagraph 44-2 of the Accounting Standard 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 beapplied 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 six months ended September 30, 2020 (from April 1, 2020 to September 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,
Real estate leasing
domestic
overseas locations
locations

Net sales
Net sales toexternal customers
Intersegment net
sales or transfers
Total
Segment income(loss)(Notes) 1.

2.
3.

Total

Adjustment(Note 1)

Amountrecorded in
Quarterly
Consolidated
Statements ofIncome(Note 2)

120,879

45,090623

166,594−

166,594

2,072

147

8

2,228

(2,228)−122,951

45,237

632

168,822(2,228)

166,594

1,640(8,202)339(6,222)(1,344)(7,566)

The adjustment to segment profit or loss of (1,344) million yen consists of intersegment eliminations of(3) million yen and corporate expenses of (1,340) million yen. Corporate expenses are mainly generaland administrative expenses at administrative divisions of the head office that are not attributable to any
reportable segment.
Segment profit or loss is adjusted with operating loss in the Quarterly Consolidated Statements ofIncome.
In the six months ended September 30, 2020, the Group acquired the shares in Antalis S.A.S. andincluded the company and its 73 subsidiaries in the scope of consolidation. This resulted in an increasein the assets of the “Wholesale pulp and paper, overseas locations” segment by 101,351 million yen
compared with before consolidation.

2. Information on impairment loss on non-current assets and goodwill by reportable segment(Significant gain on bargain purchase)
Due to the acquisition of shares in Antalis S.A.S., the “Wholesale pulp and paper, overseas” segment
has included the company and its 73 subsidiaries in the scope of consolidation since the second quarterof the fiscal year ended March 2021. The gain on bargain purchase for the six months ended September
30, 2020 was 1,679 million yen due to this change. The amount is provisional at this time because
allocation of acquisition cost is not completed.

10

II

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

Adjustment(Note 1)

Amountrecorded in
Quarterly
Consolidated
Statements ofIncome(Note 2)

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

2.

Total

123,863

144,647622

269,133−

269,133

2,959

136

13

3,109

(3,109)−126,822
2,447

144,784
2,752

635
86

272,2435,286(3,109)(1,463)

269,133
3,822

The adjustment to segment profit of (1,463) million yen consists of intersegment eliminations of (9)million yen and corporate expenses of (1,454) 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 first quarter ended June 30, 2021, and has changed the method of accounting
treatment on revenue recognition. Accordingly, the measurement method of business segment profit orloss has also been changed.
As a result of such change, net sales of wholesale pulp and paper in domestic locations for the six
months ended September 30, 2021 decreased by 6,664 million yen as compared with the amount under
the previous method.
(Significant subsequent event)(Cancellation of treasury shares)
The Company resolved to cancel treasury shares at the meeting of Board of Directors held on September 22,
2021 in accordance with Article 178 of the Companies Act, and repurchased those shares for cancellation on
October 1, 2021.
1. Type of shares cancelled
Common shares of the Company
2. Number of shares cancelled
1,832,998 shares (2.44% of total number of shares outstanding before cancellation)
3. Date of cancellation
October 1, 2021

11

4. Total number of shares outstanding after cancellation
73,244,408 shares

12