SUMMARY OF CONSOLIDATED FINANCIAL STATEMENTS
Results for the Third Quarter of Fiscal Year 2013
(April 1 – December 31, 2013)

February 5, 2014

MITSUBISHI GAS CHEMICAL COMPANY, INC.
Listed exchanges:

First section of the Tokyo Stock Exchange

Stock Code:

4182

URL:

http://www.mgc.co.jp

President:

Toshikiyo Kurai

Inquiries:

Motoyasu Kitagawa
General Manager, Corporate Communications Division
Tel: +81-3-3283-5041
February 12, 2014

Scheduled date of filing of the quarterly financial report:
Scheduled date of payment of dividend:-

1. Summary of Consolidated Results for the Third Quarter of Fiscal Year 2013
(April 1, 2013 – December 31, 2013)
1) Operating results
Millions of yen, rounded down
Percentage figures denote change compared to equivalent period of previous year

April 1 – December 31, 2013

April 1 – December 31, 2012

Change %Net sales......................................................................................
Operating income (loss)...............................................................
Ordinary income (loss)................................................................
Net income (loss)................................................................
Net income (loss) per share (¥) ...................................................
Fully diluted net income (loss) per share (¥) ................................

397,401
11,951
28,31013,172
29.16-

Change %

13.8
26.5
30.4
(18.5)

349,286
9,450
21,717
16,155
35.76
-

1.7
2.8
(4.0)
76.4

(Note) Comprehensive income: third quarter of FY 2013：¥30,620 million [77.1％] ; third quarter of FY 2012：¥17,291 million [ - %]2) Financial position
Millions of yen, rounded down

Total assets .................................................................................
Net assets....................................................................................
Equity ratio (%) ............................................................................

As of December 31, 2013
663,114
318,578
46.3

As of March 31, 2013
613,908
294,895

46.2(Note) Shareholders’ equity as of December 31, 2013: ¥306,953million; as of March 31, 2013: ¥283,855million

2. Cash Dividends
FY 2013
6.00
6.00 (Forecast)
12.00 (Forecast)Interim dividend per share (¥) ......................................................
Year-end dividend per share (¥) ..................................................
Annual dividend per share (¥)......................................................
(Note) Revision of cash dividend forecast during this period: None

FY 2012
6.00
6.00
12.00

3. Consolidated Business Forecasts for Fiscal Year 2012
(April 1, 2012 – March 31, 2013)
Millions of yen, rounded down
Percentage figures denote change compared to equivalent period of previous year

Full Year
Change %Net sales ................................................................................................................................
Operating income (loss) ................................................................................................
Ordinary income (loss) ................................................................................................
Net Income (loss) ....................................................................................................................
Net income (loss) per share (¥) ...............................................................................................
(Note) Revision of consolidated business forecasts during this period: Yes

1

530,000
13,00032,00016,000
35.42

13.3
13.8
15.7
-

4. Other Information
1) Transfer of important subsidiaries during the period under review: None
(Transfers of certain subsidiaries resulting in changes in the scope of consolidation)2) Adoption of simplified accounting methods: None
3) Changes in accounting policies, changes in accounting estimate or restatement of corrections:
1. Changes in accounting policies following revisions to accounting standards: None
2. Changes other than 1: None
3. Changes in accounting estimates: None
4. Restatement of corrections: None4)

Number of shares outstanding (ordinary shares)
December 31, 2013

March 31, 2013

Number of shares issued at end of period(including treasury shares) ...............................................................

483,478,398

483,478,398

Number of treasury shares at end of period ................................

31,794,774

31,769,134

April 1 – December 31, 2013
Average shares outstanding during period ................................

451,698,860

April 1 – December 31, 2012
451,732,813(NOTE)
1. These quarterly financial results are not subject to quarterly review procedures. At this time of disclosure of these financial results, the quarterly financial
statement review procedures based on the Financial Instrument and Exchange Law have not been completed.
2. Forecasts, etc., recorded in this document contain forward-looking statements that are based on management’s estimates, assumptions and projections
at the time of publication. A number of factors could cause actual results to differ materially from expectations.

21. Consolidated business results for this period
Note: All comparisons are with the same period of the previous fiscal year, unless stated otherwise.

(1)Consolidated operating results
Overview of results
In the nine months up to the third quarter of the fiscal year ending March 2014 (April 1-December 31, 2013), theJapanese economy showed signs of slow recovery. Despite concerns over an economic downturn in overseas
markets due to slower growth of emerging economies, Japan enjoyed improvements in the export environment due
to the weaker yen as well as stable domestic demand.
The MGC Group achieved an increase in revenue compared with the same prior-year period. Major contributions
came from overall increases in sales prices due to the weaker yen as well as higher market price of methanol during
the latter half of the nine-month period under review.
The Group’s operating income was higher than the corresponding prior-year figure. Even though Group earnings
were adversely affected by the lower profitability of engineering plastics, the improved profitability of export products
made a positive contribution. There were also favorable effects from lower fixed costs for purified isophthalic acid andmeta-xylene thanks to the structural reform conducted during the previous fiscal year.
In addition to the higher operating income, equity in earnings of affiliates grew compared with the prior-year leveldue mainly to the excellent performance of overseas methanol producing companies, resulting in a higher ordinary
income.
By contrast, net income was lower than the prior-year level because the MGC polycarbonate subsidiary in China
recognized an impairment of noncurrent assets. The Chinese company faced difficulty in remaining profitable, and it
is expected that it will take some time to recover.
In the nine-month period under review, the MGC Group achieved ¥397.4 billion in consolidated net sales, anincrease of ¥48.1 billion (13.8%). Consolidated operating income was ¥11.9 billion, an increase of ¥2.5 billion(26.5%). Equity in earnings of affiliates was ¥16.3 billion, a growth of ¥1.2 billion (8.3%). Consolidated ordinary
income rose by ¥6.5 billion (30.4%) to ¥28.3 billion. Consolidated net income was ¥13.1 billion, a decline of ¥2.9
billion (18.5%).

Results by business segment
Natural Gas Chemicals Company
The methanol business achieved an increase in revenue, but posted lower earnings. Although the weaker yen and— in the latter half of the nine-month period under review — an increase in market prices pushed up sales prices,higher purchasing costs undermined the profitability of the business.
Methanol and ammonia-based chemicals posted growth in both revenue and earnings. Despite increases in theprices of major materials including methanol, higher sales prices of exports, due to the weaker yen, and a reduction
in repair costs for ammonia-related equipment had positive effects.
Crude oil and other energy sources achieved prior-year-level earnings. This is because the reduction in the sales
volume of crude oil was offset by increases in unit sales price due to the weaker yen.
Some of the subsidiaries in this segment also achieved growth in earnings. This was due to improved profitability
resulting from the structural reform conducted during fiscal 2012.
In the nine months up to the third quarter of fiscal 2013, the Natural Gas Chemicals Company achieved

3

consolidated net sales of ¥130.4 billion, an increase of ¥17.8 billion (15.9%), and an operating income of ¥2.6 billion,
an increase of ¥1.7 billion (188.1%). An equity in earnings of affiliates of ¥12.9 billion, coming primarily from overseas
methanol producing companies, resulted in ordinary income of ¥14.7 billion, up ¥2.8 billion (24.0%).

Aromatic Chemicals Company
Specialty aromatic chemical products posted growth in both revenue and earnings compared with thecorresponding prior-year period. Not only were exports of core products more profitable due to the weaker yen, butalso there was an increase in the sales volume of aromatic aldehydes.
General-purpose aromatic chemicals such as purified isophthalic acid grew in both revenue and earnings. This waspartly because fixed costs were reduced by the structural reform conducted during fiscal 2012. Another reason wasthat the weaker yen made exports more profitable.
In the nine-month period under review, the Aromatic Chemicals Company achieved consolidated net sales of¥109.5 billion, an increase of ¥14.4 billion (15.2%), an operating income of ¥3.4 billion, up ¥3.3 billion, and an
ordinary income of ¥3.2 billion, an improvement of ¥4.2 billion.

Specialty Chemicals Company
Inorganic chemicals achieved prior-year-level earnings. A decline in the profitability of domestic hydrogen
peroxide operations was offset by increased profitability of the Chinese subsidiary.
Electronic chemicals achieved growth in both revenue and earnings. There was a lower volume of sales of hybrid
chemicals for semiconductors, a core product range of MGC. However, some overseas regions benefited fromstrong developments in the sales volumes of super-pure hydrogen peroxide and hybrid chemicals for LCD
applications.
In the engineering plastics business, polycarbonates suffered a significant decline in earnings as they wereaffected by shrinking margins due to excess supply and sluggish demand. The polyacetal business also posted
lower earnings due to reductions in sales volumes and market prices.
Polycarbonate sheets and films marked higher net sales and lower earnings. Despite a higher sales volume offilms for use in flat panel displays, there was an increase in fixed costs, due partly to new acquisitions of equipment.
Between April and December 2013, the Specialty Chemicals Company achieved consolidated net sales of ¥114.5
billion, an increase of ¥14.4 billion (14.5%) from the previous year and an operating income of ¥3.1 billion, a declineof ¥3.6 billion (53.4%). Due to the recognition of ¥1.2 billion equity in earnings of affiliates, the Company posted an
ordinary income of ¥3.5 billion, a drop of ¥2.9 billion (45.3%).

Information & Advanced Materials Company
Electronic materials grew in both revenue and earnings. BT materials for semiconductor packaging, which
represent MGC’s core segment for electronic materials, achieved higher sales volumes, notably forsmartphone-related applications. A further contribution came from the improved profitability of exports due to theweaker yen.
Oxygen absorbers such as AGELESS® achieved prior-year-level earnings due to stable developments in bothfood and non-food segments.
In the nine-month period up to December 2013, the Information & Advanced Materials Company achieved
consolidated net sales of ¥42.4 billion, an increase of ¥1.4 billion (3.6%), an operating income of ¥4.3 billion, an
increase of ¥0.8 billion (22.9%), and an ordinary income of ¥4.6 billion, growth of ¥0.9 billion (26.9%).

4

OtherIn the three-quarter period under review, the other business segment achieved consolidated net sales of¥0.4 billion, a decline of ¥0.1 billion (23.2%), an operating income of ¥0.1 billion, a drop of ¥0.0 billion (16.7%),
and an ordinary income of ¥1.4 billion, an increase of ¥0.2 billion (18.1%).

(2) Consolidated financial position
At the end of the third quarter of fiscal 2013, the MGC Group had ¥663.1 billion in total assets, an increase of¥49.2 billion from the end of fiscal 2012.
Current assets rose by ¥29.0 billion to ¥290.3 billion, primarily due to increases in trade notes and accounts
receivable as well as merchandise and finished goods.
Noncurrent assets increased by ¥20.2 billion to ¥372.7 billion. Property, plant and equipment fell by ¥3.9
billion to ¥191.5 billion. This is because, despite an increase due to capital expenditure, there were negative
effects from an impairment loss recognized by a consolidated subsidiary. Investments and other assets were¥177.8 billion, an increase of ¥24.1 billion, due primarily to an increase in investment securities achieved byequity method companies.
Liabilities increased by ¥25.5 billion to ¥344.5 billion from the end of fiscal 2012.
Current liabilities increased by ¥16.6 billion to ¥212.1 billion, primarily due to increases in short-term loans
payable as well as trade notes and accounts payable.
Noncurrent liabilities rose by ¥8.8 billion to ¥132.4 billion, primarily due to an increase in long-term loans
payable.
Net assets were ¥318.5 billion, an increase of ¥23.6 billion from the end of fiscal 2012. This was because
foreign currency translation adjustments increased by ¥11.5 billion due to the weaker yen and because
retained earnings rose by ¥6.4 billion. As of December 31, 2013 the shareholders’ equity ratio was 46.3%.
(3) Consolidated business forecasts
An unexpectedly rapid increase in methanol market price will reduce the profitability of sales of purchased
methanol and earnings from various derivatives compared with the previous forecasts. Engineering plastics are
expected to fall short of the previous forecasts. Polycarbonate sales have been slow in recovery due to excess
supply and sluggish demand, while polyacetal suffers from the higher price of methanol, its base material, and an
imbalance between supply and demand. The semiconductor package substrates operations are also likely to post
lower earnings due to prolonged inventory adjustments within the supply chain. The MGC Group therefore expects
that consolidated full-year operating income and ordinary income will be lower than their previously forecast figures.
In addition, consolidated full-year net income will be significantly lower than the previous forecast level. This isbecause the MGC polycarbonate subsidiary in China posted an impairment loss. For further details of the above
impairment loss, see the recent release titled “Shanghai MGC Subsidiary Extraordinary Loss.”
As far as MGC’s non-consolidated full-year forecasts are concerned: Nonconsolidated ordinary income will
surpass the previously forecast figure primarily due to increases in dividends received from overseas methanol
producing companies. By contrast, nonconsolidated full-year net income will be significantly lower than thecorresponding forecast. This is because, not only has a loss on valuation of shares in affiliates been recognized
due to the above-mentioned recognition of the impairment loss by the Chinese subsidiary, but the loss expected to
be charged to MGC in the future the above subsidiary’s business has been posted in the form of a provision.
These performance forecasts assume exchange rates of ¥100=$1 and ¥130=€1 for the unelapsed period of the
fiscal year.

5Revision of consolidated business forecasts
Fiscal year ending March 31, 2014 (April 1, 2013 － March 31, 2014)(Millions of yen)
OperatingincomeNet sales

Ordinary income

Net income

Net income pershare (¥)

Previously announced forecasts (A)530,000

16,00034,00026,00057.56

Revised forecasts (B)530,000

13,00032,00016,00035.42

Change (B – A)-

(3,000)(2,000)(10,000)-

Change (%)-(18.8)(5.9)(38.5)-

467,979

11,421

27,651(7,793)(17.25)Results for the previous period(ended March 31, 2012)6

3. Consolidated Quarterly Financial Statements(1) Consolidated Quarterly Balance Sheets
Millions of yen, rounded down
As of March 31, 2013

As of December 31, 2013

Cash and deposits.......................................................................

28,88829,235Trade notes and accounts receivable ..........................................

127,843

143,986ASSETS
Current assets

Short-term investments securities ................................................

140

130

Merchandise and finished goods .................................................

50,172

61,341Work in progress.........................................................................

10,607

10,349Raw materials and supplies .........................................................

27,261

26,847

Other............................................................................................

17,275

19,250Allowance for doubtful accounts ..................................................

(792)

(744)

Total current assets .....................................................................

261,397

290,397

Buildings and structures, net .....................................................

55,57058,925

Machinery, equipment and vehicles, net ...................................

69,78071,409Other, net ..................................................................................

70,103

61,201

Total property, plant and equipment.......................................

195,453

191,536

Other .........................................................................................

3,374

3,300

Total intangible assets ..........................................................

3,374

3,300

Investment securities................................................................

146,762

169,767

Other .........................................................................................

7,182

8,359

Allowance for doubtful accounts ................................................

(260)

(247)

Total investments and other assets ........................................

153,683

177,879

Total noncurrent assets ................................................................

352,511372,716

Total assets....................................................................................

613,908

663,114

Noncurrent assets
Property, plant and equipment

Intangible assets

Investments and other assets

7

Consolidated Quarterly Balance Sheets (contd.)
Millions of yen, rounded down
As of March 31, 2013

As of December 31, 2013

Trade notes and accounts payable ...............................................

73,907

82,175

Short-term loans payable ..............................................................

84,627

98,774

Income taxes payable ...................................................................

1,358

1,266

Provision .......................................................................................

4,318

2,016

Asset retirement obligations ..........................................................

-

(29)

Other .............................................................................................

31,22627,873

Total current liabilities ...............................................................

195,438

212,135

Bonds payable ..............................................................................

15,00015,000Long –term loans payable .............................................................

61,18367,829Provision for retirement benefits ....................................................

7,549

8,089

Other provision ..............................................................................

2,951

2,609

Asset retirement obligations ..........................................................

4,207

4,199

Other .............................................................................................

32,682

34,670Total noncurrent liabilities .........................................................

123,574

132,400

Total liabilities ...........................................................................

319,013344,535

41,97041,970

LIABILITIESCurrent Liabilities

Noncurrent liabilities

NET ASSETS
Shareholders’ equity

Capital stock..................................................................................
Capital surplus ..............................................................................

35,59535,595Retained earnings .........................................................................

231,882

238,312

Treasury stock...............................................................................

(8,094)(8,115)

Total shareholders’ equity ........................................................

301,353

307,762

Valuation difference on available-for-sale securities ......................

8,607

13,754

Revaluation reserve for land ..........................................................

206

206

Foreign currency translation adjustment ........................................

( 26,311)( 14,769 )Total accumulated other comprehensive income ..........................

( 17,497 )( 809 )

Accumulated other comprehensive income

Minority interests ...........................................................................

11,039

11,624

Total net assets ........................................................................

294,895

318,578

Total liabilities and net assets ...............................................

613,908

663,1148

(2) Consolidated Quarterly Statements of Income
Millions of yen, rounded down
April 1 - December 31
2012April 1 - December 31
2013

Net sales........................................................................................

349,286

397,401

Cost of sales ..............................................................................

297,265

339,043

Gross profit ...................................................................................

52,02058,357

Selling, general and administrative expenses ............................

42,57046,406

Operating income ..........................................................................

9,450

11,951Non-operating income

Interest income ...........................................................................

124

131

Dividend income.........................................................................

1,110

1,362

Equity in earnings of affiliates .....................................................
Other ..........................................................................................

15,1391,426

16,396
3,219

Total non-operating income ....................................................

17,801

21,110Interest expense ........................................................................

1,898

2,277

Personnel expenses for seconded employees ..........................

1,144

1,142

Other ..........................................................................................

2,490

1,331

Non-operating expenses

Total non-operating expenses ................................................

5,533

4,750

Ordinary income ............................................................................

21,71728,310

180

361

-

245

Insurance income.......................................................................

163

238

Total extraordinary income .....................................................

344

845

Impairment loss..........................................................................

50

11,525

Environmental improvement expensive

420

382

Extraordinary income

Gain on sales of noncurrent assets ............................................
Gain on sales of investment securities

Extraordinary losses

Compensation for products ........................................................

-

339

Business structure improvement expenses................................

828

240

Loss on fire accident ..................................................................

-

120

Loss on valuation of investment securities ................................

1,437

-

Provision for compensation expenses........................................

838

Loss on litigation ........................................................................

159

Loss on disposal of noncurrent assets .......................................

120-

Total extraordinary losses .......................................................

3,855

12,607

Income before income taxes and minority interests .......................

18,206

16,548

Income taxes, etc. ........................................................................................

1,486

3,558

Net income before minority interests .....................................................

16,71912,989Minority interests in income............................................................

564

(182)

Net income.....................................................................................

16,155

13,1729

(Consolidated Quarterly Statements of Comprehensive Income)April 1 - December 31
2012

Millions of yen, rounded down
April 1 – December 31
2013

16,71912,989Valuation difference on available-for-sale securities ................................

340

5,068

Deferred gains or losses on hedges ................................................................

(51)

-

Foreign currency statements translation adjustment................................
Share of other comprehensive income of associates
accounted for using equity method ............................................

289

4,054

(6)

8,507

571

17,630Comprehensive Income ................................................................................................ 17,291

30,620

Income before minority Interests ................................................................
Other comprehensive Income

Total other comprehensive Income ................................................................

Total comprehensive Income Attributable to
Owners of the parent .....................................................................
Minority interests ................................................................................................

10

16,63329,860657

759

4. Consolidated Quarterly Segment Information(1) Nine-month period ended December 31, 2012(April 1 – December 31, 2012)
1. Revenue and earnings by segment
Millions of yen, rounded down
Aromatic
chemicals

Specialty
chemicals

Information
andadvancedmaterials

Sales to outside customers ................................
112,515
95,151

100,047

40,969601－

349,286

Natural gas
chemicals

Other(Note 1)

Adjustment(Note 2)

Consolidated(Note 3)

Inter-segment sales ................................
5,704

1,505

711

1

39

( 7,963 )－Total ................................ 118,220

96,656

100,759

40,971641( 7,963 )349,286( 956)

6,553

3,654

1,265

(657)

21,717

Segment income (loss)
11,858[Ordinary income (loss)] ................................

Notes：
1. The ‘Other’ segment includes operations not included in the other segments, such as listed related companies and real estate business.
2. The adjustment amounts are as follows:
The ¥657 million segment income adjustment consists of ¥-23 million income in inter-segment sales, and ¥634 million loss of overall
costs not allocated to segments.
Overall costs include SG&A expenses, financing expenses, and other expenses not allocated to segments.
3. Segment income (loss) is based on ordinary income as provided in the quarterly consolidated statement of income.

(2) Nine-month period ended December 31, 2013(April 1 – December 31, 2013)
1. Revenue and earnings by segment
Millions of yen, rounded down
Aromatic
chemicals

Specialty
chemicals

Information
andadvancedmaterials

Sales to outside customers ................................
130,404
109,576

114,515

42,442461－

397,401

1,451

865

1

96

(9479)－

137,468

111,028

115,380

42,444558(9,479)397,401

Segment income (loss)
14,709[Ordinary income (loss)] ................................

3,292

3,582

4,635

1,494

595

28,310Natural gas
chemicalsInter-segment sales ................................
7,064
Total ................................

Other(Note 1)

Adjustment(Note 2)

Consolidated(Note 3)

Notes：
1. The ‘Other’ segment includes operations not included in the other segments, such as listed related companies and real estate business.
2. The adjustment amounts are as follows:
The ¥595 million segment loss adjustment consists of ¥65 million loss in inter-segment sales, and ¥661 million loss of overall costs notallocated to segments.
Overall costs include SG&A expenses, financing expenses, and other expenses not allocated to segments.
3. Segment income (loss) is based on ordinary income as provided in the quarterly consolidated statement of income.

11