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, 2018
(Based on Japanese GAAP)
November 9, 2018
Company name:TOYO KANETSU K.K.

Stock exchange listing: Tokyo
Stock code:
6369

URL

https://www.toyokanetsu.co.jp

Representative:

President and Representative Director
Executive Officer, General Manager ofToru YanagawaInquiries:

Financial Planning Department, Corporate
Management Division

Takeshi Yonehara

Scheduled date to file Quarterly Securities Report:
Scheduled date to commence dividend payments:

November 12, 2018–

Preparation of supplementary material on quarterly financial results:
Holding of quarterly financial results meeting:

Yes
NoTEL

03-5857-3333(Amounts less than one million yen are rounded down)
1. Consolidated financial results for the six months ended September 30, 2018 (from April 1, 2018 to September 30, 2018)(1) Consolidated operating results (cumulative)
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%
Six months ended September 30, 201817,100 (22.6)(57)–
244 (87.2)
121 (91.8)
Six months ended September 30, 201722,10011.5
1,634 (21.9)
1,910 (14.2)
1,482(2.6)
Earnings per share

Diluted earnings per share

Yen
Yen
Six months ended September 30, 2018
13.32–
Six months ended September 30, 2017156.57–(Note) The Company conducted a share consolidation at a ratio of 10 shares of common shares to 1 share, effective on October 1,2017.
Accordingly, the earnings per share is calculated based on the assumption that the share consolidation had been conducted at the beginningof the previous fiscal year.
(2) Consolidated financial position
Total assets

Net assets

Equity ratio

Net assets per share

Millions of yen
Millions of yen%
Yen
As of September 30, 201853,33635,04065.7
3,876.09
As of March 31, 2018
55,81836,66665.7
3,941.68(Note) “Partial revision of Tax Effect Accounting” (Corporate Accounting Standard No.28, February 16, 2018) had been reflected from the year
ending March 31, 2019, the consolidated financial position of previous fiscal year is shown as revision reflected amount.
2. Cash dividends
Annual dividends per share

Year ended March 31, 2018Year ending March 31, 2019

1st quarter-end

2nd quarter-end

3rd quarter-end

Fiscal year-end

Yen––

Yen
0.00
0.00

Yen–

Yen
100.00Total

Year ending March 31, 2019 (Forecast)–
100.00(Note) The Company conducted a share consolidation at a ratio of 10 shares of common shares to 1 share, effective on October 1,2017.

Yen
100.00100.003. Forecast of consolidated financial results for the year ending March 31, 2019 (from April 1, 2018 to March 31, 2019)
Net sales
Full year

Millions of yen
47,900Percentages indicate year-on-year changes
Profit attributable toOperating profit
Ordinary profit
Earnings per shareowners of parent% Millions of yen% Millions of yen% Millions of yen%Yen
14.7
2,270
0.2
2,620(1.0)
1,700 (28.0)
184.5414. Notes(1) Changes in significant subsidiaries during the six months ended September 30, 2018(changes in specified subsidiaries resulting in the change in scope of consolidation):(2) Application of special accounting methods for preparing quarterly consolidated financial statements:

NoNo(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:No
Changes in accounting policies due to other reasons:
Changes in accounting estimates:

No
No

Restatement of prior period financial statements:

No(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, 2018

9,323,074 shares As of March 31, 2018

9,703,074 shares

282,996 shares As of March 31, 2018

401,043 shares

Number of treasury shares at the end of the period
As of September 30, 2018

Average number of shares during the period (cumulative from the beginning of the fiscal year)
Six months ended September 30, 2018
9,138,541 shares Six months ended September 30, 2017
9,469,870 shares(Note) The Company conducted a share consolidation at a ratio of 10 shares of common shares to 1 share, effective on October 1,2017.
Accordingly, the average number of shares during the period is calculated based on the assumption that the share consolidation had been
conducted at the beginning of the previous fiscal year.

2Quarterly consolidated financial statements
Consolidated balance sheets(Millions of yen)
As of March 31, 2018

As of September 30, 2018

AssetsCurrent assets
Cash and deposits

12,421

7,129

9,387
1,781

11,266
1,665

500
40–
38

3,819
1,640

4,765
1,611

494
(21)

570(10)30,06427,036

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

3,457
1,152

3,397
1,132

Tools, furniture and fixtures, net
Land

282
10,707314
10,5741100187
1Notes and accounts receivable - trade
Lease investment assets
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment

Construction in progress
Other, net

15,71015,607

Intangible assets
Investments and other assets

Total property, plant and equipment

368

390

Investment securities
Deferred tax assets

8,730
58

9,302
66

398
778

348
877

Net defined benefit asset
Other
Allowance for doubtful accounts

(292)

(292)

Total investments and other assets

9,674

10,30125,753

26,30055,81853,336

Total non-current assets
Total assets3

(Millions of yen)
As of March 31, 2018

As of September 30, 2018

Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payable

2,033
4,604

1,587
4,648

Current portion of long-term loans payable
Accrued expenses

15
3,380

–
2,943

Income taxes payable
Advances received

316
417

232
1,023

Provision for bonuses
Provision for loss on order received

242
183

214
168

Provision for warranties for completed construction
Other

580
924

491
484

Total current liabilities

12,698

11,794Non-current liabilities
Long-term loans payable

3,080

3,165

1,591
1,107

1,628
1,095

Net defined benefit liability
Asset retirement obligations

325
321

340
242

Other

27

27

Deferred tax liabilities
Deferred tax liabilities for land revaluation

Total non-current liabilities

6,453

6,501

19,151

18,295

Capital stock
Capital surplus

18,5801,273

18,580
1,273

Retained earnings
Treasury shares

15,750(1,397)

13,645(1,076)

Total shareholders' equity

34,20732,422

Total liabilities
Net assets
Shareholders' equity

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

2,995

3,252

Revaluation reserve for land
Foreign currency translation adjustment

133(676)

106(738)

Remeasurements of defined benefit plans

5(2)

2,458

2,617

00

36,66635,04055,81853,336

Total 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

Six months ended

September 30, 2017

September 30, 2018

Net sales
Cost of sales

22,10017,837

17,10014,509Gross profit

4,263

2,591

Selling, general and administrative expenses

2,628

2,648

Operating profit (loss)

1,634(57)Interest income
Dividend income

6208

6240

Foreign exchange gainsOther

1970

1474

Total non-operating income

305335

18

23

1110

Non-operating income

Non-operating expenses
Interest expenses
Other
Total non-operating expenses

2934

1,910244

94

6

Gain on sales of investment securities
Gain on bargain purchase

––

74
87

Total extraordinary income

94169

Ordinary profit
Extraordinary income
Gain on sales of non-current assets

Extraordinary losses
Loss on sales of non-current assets
Loss on valuation of investment securities
Other
Total extraordinary losses

–6–
2190
272225

Profit before income taxes

2,002

189

Income taxes - current
Income taxes - deferred363
155

158
(90)

Total income taxes
Profit

519

67

1,482

121

1,482–

121
(0)

768

256

14(75)–(62)

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

(27)

(8)

Total other comprehensive income

680

185

2,163

307

2,163–307(0)Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

5Consolidated statements of cash flows(Millions of yen)Six months ended
September 30, 2017
Cash flows from operating activities
Profit before income taxes
Depreciation
Gain on bargain purchase
Increase (decrease) in allowance for doubtful accounts
Decrease (increase) in net defined benefit asset
Increase (decrease) in net defined benefit liability
Increase (decrease) in provision for loss on order received
Increase (decrease) in provision for warranties for completed
construction
Interest and dividend income
Interest expenses
Foreign exchange losses (gains)
Loss (gain) on valuation of investment securities
Loss (gain) on sales of investment securities
Loss on retirement of non-current assets
Loss (gain) on sales of non-current assets
Decrease (increase) in notes and accounts receivable - trade
Decrease (increase) in lease investment assets
Decrease (increase) in inventories
Decrease (increase) in advance payments
Increase (decrease) in notes and accounts payable - trade
Increase (decrease) in advances received
Other, net

Six months ended
September 30, 2018

2,002
373
–
5
13
16(454)189
348(87)(12)
35
12(14)

43(89)(215)
18(24)
––
1(94)
1,172
(254)
302
441
(1,078)
(452)
170

(247)
23
43
190
(74)
1(0)
(1,736)68(873)68(868)623(520)

Subtotal

1,988(2,920)

Interest and dividend income received
Interest expenses paid
Income taxes paid

215
(16)
(557)

246
(23)
(271)

Net cash provided by (used in) operating activities

1,630(2,968)100(238)256(634)
–500
(484)
330
(392)
74–

(373)

Cash flows from investing activities
Proceeds from sales and redemption of securities
Purchase of non-current assets
Proceeds from sales of non-current assets
Purchase of investment securities
Proceeds from sales and redemption of investment securities
Purchase of shares of subsidiaries resulting in change in scopeof consolidation
Other, net

(0)

(40)

Net cash provided by (used in) investing activities

(516)

(385)

Cash flows from financing activities
Net increase (decrease) in short-term loans payableRepayments of long-term loans payable
Purchase of treasury shares
Cash dividends paid

4,241(30)(503)(1,143)–(15)(1,002)(924)

Net cash provided by (used in) financing activities

2,564(1,942)

Effect of exchange rate change on cash and cash equivalents

(0)

3

3,678

(5,292)

Cash and cash equivalents at beginning of period

6,810

12,420Cash and cash equivalents at end of period

10,488

7,127

Net increase (decrease) in cash and cash equivalents

6