Translation
Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any
discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Summary of Consolidated Financial Results
for the Six Months Ended September 30, 2019
(Based on Japanese GAAP)
November 12, 2019
Company name:TOYO KANETSU K.K.
Stock exchange listing: Tokyo
Stock code:
Representative:

6369
URL https://www.toyokanetsu.co.jp
President and Representative Director
Toru Yanagawa

Inquiries:
Executive OfficerScheduled date to file Quarterly Securities Report:

Takeshi Yonehara
November 13, 2019

Scheduled date to commence dividend payments:
Preparation of supplementary material on quarterly financial results:–Yes

Holding of quarterly financial results meeting:

NoTEL

03-5857-3333(Amounts less than one million yen are rounded down)
1. Consolidated financial results for the six months ended September 30, 2019 (from April 1, 2019 to September 30, 2019)(1) Consolidated operating results (cumulative)

Six months ended September 30, 2019
Six months ended September 30, 2018

Percentages indicate year-on-year changes
Profit attributable toNet sales
Operating profit
Ordinary profit
owners of parent
Millions of yen% Millions of yen% Millions of yen% Millions of yen%
20,50119.9
737–955 290.2
682 460.7
17,100 (22.6)(57)–244 (87.2)
121 (91.8)
Earnings per share

Diluted earnings per share

Yen
76.03
13.32

Six months ended September 30, 2019
Six months ended September 30, 2018

Yen––(2) Consolidated financial position
Total assets
As of September 30, 2019
As of March 31, 2019

Net assets

Millions of yen58,157
64,756Equity ratio

Millions of yen
35,15435,234

Net assets per share%
60.4
54.4

Yen
3,928.09
3,897.68

2. Cash dividends
Annual dividends per share

Year ended March 31, 2019Year ending March 31, 2020

1st quarter-end

2nd quarter-end

3rd quarter-end

Fiscal year-end

Yen––

Yen
0.00
0.00

Yen–

Yen
100.00Yen
100.00–100.00100.00Year ending March 31, 2020 (Forecast)Total

3. Forecast of consolidated financial results for the year ending March 31, 2020 (from April 1, 2019 to March 31, 2020)
Percentages indicate year-on-year changes
Profit attributable toNet sales
Operating profit
Ordinary profit
Earnings per shareowners of parent
Millions of yen% Millions of yen% Millions of yen% Millions of yen%
Yen
Full year
44,700
(1.1)
1,780
26.6
2,080
17.4
1,320
28.7
145.171

4. Notes(1) Changes in significant subsidiaries during the six months ended September 30, 2019(changes in specified subsidiaries resulting in the change in scope of consolidation):No(2) Application of special accounting methods for preparing quarterly consolidated financial statements:

No(3) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements
Changes in accounting policies due to revisions to accounting standards and other regulations:
Changes in accounting policies due to other reasons:

No
No

Changes in accounting estimates:
Restatement of prior period financial statements:

NoNo(4) Number of issued shares (common shares)
Total number of issued shares at the end of the period (including treasury shares)
As of September 30, 2019

9,323,074 shares As of March 31, 2019

9,323,074 shares

373,841 shares As of March 31, 2019283,723 shares

Number of treasury shares at the end of the period
As of September 30, 2019

Average number of shares during the period (cumulative from the beginning of the fiscal year)
Six months ended September 30, 2019

8,975,287 shares Six months ended September 30, 2018

2

9,138,541 shares

Quarterly consolidated financial statements
Consolidated balance sheets(Millions of yen)
As of March 31, 2019

As of September 30, 2019

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade

7,666
23,267

9,238
13,158Investments in leases
Merchandise and finished goods

1,499
38

1,206
45

Work in process
Raw materials and supplies

4,252
1,670

6,033
1,641

534
(22)

468
(16)

38,906

31,777

Buildings and structures, net
Machinery, equipment and vehicles, net

3,321
1,021

3,361
976

Tools, furniture and fixtures, net
Land

310
10,556324
10,556

622
12

1,001
15

Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment

Construction in progress
Other, net

15,845

16,235Intangible assets
Investments and other assets

Total property, plant and equipment

357

378

Investment securities
Deferred tax assets

8,671
63

9,017
54

Retirement benefit asset
Other332
868

121
861

Allowance for doubtful accounts

(289)

(288)

Total investments and other assets
Total non-current assets
Total assets

3

9,646

9,765

25,85026,38064,75658,157

(Millions of yen)
As of March 31, 2019

As of September 30, 2019

Liabilities
Current liabilities
Notes and accounts payable - trade

1,570

982

Short-term borrowings
Current portion of long-term borrowings

7,849
514

4,349980

Accrued expenses
Income taxes payable

7,534
659

4,610
304

Advances received
Provision for bonuses

2,020
227

3,300
255

121
555

107
421

Provision for loss on order received
Provision for warranties for completed construction
Other

870

447

21,922

15,759Long-term borrowings
Deferred tax liabilities

4,627
1,267

4,141
1,555

Deferred tax liabilities for land revaluation
Retirement benefit liability

1,095
358

1,095
199

224
27

223
27

Total current liabilities
Non-current liabilities

Asset retirement obligations
Other
Total non-current liabilities

7,599

7,243

29,522

23,002

Shareholders' equity
Share capital

18,58018,580Capital surplus
Retained earnings

1,273
14,5491,273
14,188

Total liabilities
Net assets

Treasury shares(1,077)(1,139)Total shareholders' equity

33,32432,902

Valuation difference on available-for-sale securities
Revaluation reserve for land

2,621
106

2,962
106

Foreign currency translation adjustment
Remeasurements of defined benefit plans

(759)
(61)

(767)
(50)

Total accumulated other comprehensive income

1,907

2,250

1

1

35,23435,15464,75658,157

Accumulated other comprehensive income

Non-controlling interests
Total net assets
Total liabilities and net assets

4Consolidated statements of income (cumulative) and consolidated statements of comprehensive income(cumulative)(Millions of yen)Six months ended
September 30, 2018

Six months ended
September 30, 2019

Net sales

17,10020,501

Cost of sales

14,50916,495Gross profit

2,591

4,006

Selling, general and administrative expenses

2,648

3,268

Operating profit (loss)

(57)

737

Non-operating income
Interest income

65

Dividend income
Foreign exchange gains

24014208–

Other

74

53

Total non-operating income

335

267

Interest expenses
Foreign exchange losses

23–

29
12

Other

108

Total non-operating expenses

34

50

Ordinary profit

244

955

Extraordinary income
Gain on sales of investment securities

Non-operating expenses

74

290

Gain on bargain purchase
Other

87
6–
0

Total extraordinary income

169

291

Extraordinary losses
Loss on valuation of investment securities

190

93

Merger expenses
Other–
34

22
7

Total extraordinary losses

225

123

Profit before income taxes

189

1,123

Income taxes - currentIncome taxes - deferred

158
(90)

278
163

Total income taxes

67

441

Profit121

682

Profit attributable to owners of parent
Loss attributable to non-controlling interests

121
(0)

682
(0)

Other comprehensive income
Valuation difference on available-for-sale securities

256

340

Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax

(62)
(8)

(7)
10

Total other comprehensive income

185

343

Comprehensive income

307

1,025

Comprehensive income attributable toComprehensive income attributable to owners of parent

307

1,025

Comprehensive income attributable to non-controlling interests

(0)

(0)

Profit attributable to5

Consolidated statements of cash flows(Millions of yen)

Cash flows from operating activities
Profit before income taxes

Six months ended

Six months ended

September 30, 2018

September 30, 2019
189

1,123

Depreciation
Gain on bargain purchase348(87)

367–

Increase (decrease) in allowance for doubtful accounts
Decrease (increase) in retirement benefit asset

(12)
35(8)
220

Increase (decrease) in retirement benefit liability
Increase (decrease) in provision for loss on order received

12(14)(153)(13)

Increase (decrease) in provision for warranties for completedconstruction

(89)

(134)

Interest and dividend income
Interest expenses(247)
23(213)29

Merger expenses
Foreign exchange losses (gains)

–
43

2218

Loss (gain) on valuation of investment securities
Loss (gain) on sales of investment securities

190
(74)

93(290)Loss on retirement of non-current assets
Loss (gain) on sales of non-current assets

1(0)06(1,736)
68

10,104293

Decrease (increase) in inventories
Increase (decrease) in trade payables(873)(868)(1,759)(3,516)

Increase (decrease) in advances received
Other, net623
(451)

1,278
(455)

(2,920)7,012Interest and dividends received
Interest paid

246
(23)

213
(33)

Payments for Merger expenses
Income taxes paid–(271)(22)(539)(2,968)

6,630

–

(115)

Proceeds from withdrawal of time deposits
Proceeds from sales and redemption of securities

–
500

76–

Purchase of non-current assets
Proceeds from sales of non-current assets

(484)
330

(769)
0

Purchase of investment securities
Proceeds from sales and redemption of investment securities(392)
74(97)
440

Purchase of shares of subsidiaries resulting in change in scopeof consolidation(373)–Decrease (increase) in trade receivables
Decrease (increase) in investments in leases

Subtotal

Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits

Other, net

(40)

1

Net cash provided by (used in) investing activities

(385)

(463)

6

(Millions of yen)

Cash flows from financing activities
Net increase (decrease) in short-term borrowings

Six months endedSix months ended

September 30, 2018

September 30, 2019–(3,500)

(15)
–(19)
149

Purchase of treasury shares
Dividends paid

(1,002)
(924)

(350)
(900)

Net cash provided by (used in) financing activities(1,942)(4,620)

Repayments of long-term borrowings
Proceeds from disposal of treasury shares

Effect of exchange rate change on cash and cash equivalents

3(13)Net increase (decrease) in cash and cash equivalents(5,292)

1,533

Cash and cash equivalents at beginning of period

12,4207,609

Cash and cash equivalents at end of period

7,127

9,143

7