Summary of Financial Results FY2018
May 13, 2019
Mitsubishi Gas Chemical Company, Inc (TSE 4182)(Millions of yen, rounded down)
1.Consolidated Financial Results for the Fiscal Year 2018 (from April 1, 2018 to March 31, 2019)(1)Summary of Income Statement (April 1, 2018- March 31, 2019)
FY2017FY2018Change (%)

Net Sales

635,909648,986

2.1

Operating income

62,741

41,386(34.0)

Ordinary income

80,711

69,199(14.3)Net income attributable to owners of the parent

60,53155,000(9.1)

Comprehensive income

67,63654,318(19.7)Net income per share (Yen)

281.39257.46

Note: Equity in earnings of affiliates: FY2017 JPY18,277 million; FY2018 JPY28,408 million(2) Financial Position
As of Mar. 31, 2018

As of Mar. 31, 2019

Total assets

785,687

804,038

Net assets

519,144553,282

Shareholders equity

467,363

502,961

59.5

62.6

2,187.99

2,354.25

Equity Ratio(%)
Book value per share (Yen)(3) Cash FlowsFY2017FY2018Cash flow from operating activities

90,72064,042

Cash flow from investing activities(33,614)(42,761)

Cash flow from financing activities(33,038)(31,396)

Cash and cash equivalents at end of period

90,30480,3792. Dividends
FY2017FY2018FY2019 (forecast)Interim dividend per share (Yen)

24.00

35.00

35.00

Year-end dividend per share (Yen)

35.00

35.00

35.00

Annual Dividend per share (Yen)

59.00

70.00

70.00

Total dividend payment

12,655

14,954

Dividend payout ratio (consolidated, %)

21.0

27.2

Dividend to net assets ratio (consolidated, %)

2.8

3.1

43.6

3. Consolidated Business Forecasts for FY2019 (April 1, 2019 - March 31, 2020)
First Half

Full Year

Y/Y Change (%)

Net Sales

320,000

650,000

0.2

Operating income

18,00040,000(3.4)

Ordinary income

18,00045,000(35.0)Net income attributable to owners of the parent

14,00034,000(38.2)Net income per share (Yen)

65.95

160.67

4. Number of Shares Outstanding (Common Stock)
FY2017FY2018

Number of shares outstanding at term end (including treasury stock)

231,739,199

231,739,199

Number of shares of treasury stock at term-end

18,135,027

18,099,472

Average number of shares

215,117,047

213,630,153

Reference: Outline of Non-consolidated Financial Results
1. Non-consolidated Financial Results for the Fiscal Year 2018 (from April 1, 2018 to March 31, 2019)(1) Non-consolidated Operating Results
FY2017FY2018Change (%)

Net Sales

364,433

375,129

2.9

Operating income

31,287

23,122(26.1)

Ordinary income

54,14941,329(23.7)Net income

41,386

34,690(16.2)Net income per share (Yen)

192.39162.39(2) Non-consolidated Financial Position
As of Mar. 31, 2018

As of Mar. 31, 2019

Total assets

455,869

457,427

Net assets

275,255

291,198

Shareholders equity

275,255

291,198

60.4

63.7

1,288.62

1,363.04

Equity Ratio(%)
Book value per share (Yen)

1. These financial statements are exempt from audit procedure.
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 todiffer materially from expectations.

Consolidated Financial Statements
1. Consolidated Balance Sheets(Millions of yen, rounded down)
As of Mar. 31, 2018 As of Mar. 31, 2019ASSETS
Current assets
Cash and deposits
Trade notes and accounts receivable
Short-term investments securities
Merchandise and finished goods
Work in progress
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
Land
Lease assets, net
Construction in progress
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Lease assets
Software
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Deferred tax assets
Assets for retirement benefits
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets

1

101,090
165,606
121
57,958
11,04434,75014,847(1,170)384,249

91,130155,50723
67,681
13,30838,262
13,965(1,033)378,845

80,82381,35938,458469
12,347
7,260
220,717

81,63078,70039,826377
20,522
7,435
228,492

3,911
14
2,141
2,343
8,411

3,841
5
2,187
2,579
8,614

161,391
2,632
2,094
1,221
5,522
(555)
172,308
401,437
785,687

177,011
2,831
2,510
1,174
5,101
(543)
188,086
425,193804,038

Consolidated Balance Sheets (continued)(Millions of yen, rounded down)
As of Mar. 31, 2018 As of Mar. 31, 2019
LIABILITIESCurrent liabilities
Trade notes and accounts payable
Short-term loans payable
Accrued expenses
Lease obligations
Income taxes payable
Provision for bonuses
Provision for directors' bonuses
Provision for environmental improvements
Provision for loss on business withdrawal
Provision for business structure improvements
Provision for loss on liquidation of subsidiaries and affiliates
Asset retirement obligations
Other
Total current liabilities
Noncurrent liabilities
Bonds payable
Long –term loans payable
Lease obligations
Deferred tax liabilities
Provision for directors' retirement benefits
Provision for loss on guarantees
Provision for environmental improvements
Provision for business structure improvements
Provision for loss on business withdrawal
Provision for loss on liquidation of subsidiaries and affiliates
Other provision
Projected benefit obligations
Asset retirement obligations
Other
Total noncurrent liabilities
Total liabilities
NET ASSETS
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive
Non controlling interest
Total net assets
Total liabilities and net assets

288,72071,155
16,591
100
4,133
5,422
10
66
144
1,522
18,968206,835

80,08958,74920,493
97
3,439
5,539
2
129
17
19
505
113
19,223
188,420

10,00025,328378
10,080
339
1,088
217
1,048
58
577
220
4,592
2,420
3,355
59,707
266,543

10,00026,615
290
9,521
337
2,358
164
1,017
72
218
5,247
2,324
4,166
62,336
250,756

41,97034,578399,033(19,966)
455,616

41,97034,298439,080(19,930)
495,418

17,261(0)
222(7,614)
1,878
11,74751,780519,144785,687

13,023
1
222(6,327)623
7,542
50,321
553,282804,038

2. Consolidated Statements of Income(Millions of yen, rounded down)
FY2017FY2018635,909648,986
481,326
512,857
154,583
136,129
91,841
94,74262,741
41,386

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Equity in earnings of affiliates
Other
Total non-operating income
Non-operating expenses
Interest expense
Personnel expenses for seconded employees
Loss on disposal of noncurrent assets
Rent expenses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of investment securities
Gain on sales of noncurrent assets
Gain on reversal of asset retirement obligations
Insurance income
Compensation income
Total extraordinary income
Extraordinary losses
Provision for loss on guarantees
Loss on valuation of investment securities
Loss on disposal of noncurrent assets
Loss on business withdrawal
Loss on liquidation of subsidiaries and affiliates
Amortization of goodwill
Impairment losses
Total extraordinary losses
Income before income taxes, etc.
Income taxes, etc.
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of the parent

3

485
2,096
18,277
3,546
24,405642
2,200
28,4083,443
34,694

1,069
1,449
1,389
1,264
1,261
6,435
80,711

1,018
1,430
988
1,634
1,810
6,882
69,199

1,926
548
407
2,882

989
714
650
116
2,471

1,088
8,297
274
236
162
102
11
10,17273,421
7,487
65,933
5,402
60,531

1,267
690
646
2,604
69,066
9,087
59,9794,979
55,000(Consolidated Statements of Comprehensive Income)(Millions of yen, rounded down)
FY2017FY201865,93359,979Net income
Other comprehensive Income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency statements translation adjustment
Remeasurements of defined benefit plans

(827)
(0)
2,102
2,204

(4,212)
1(2,232)(1,812)

Share of other comprehensive income of associates accounted for using equity method(1,775)

2,594

Total other comprehensive Income
Comprehensive income
Comprehensive income attributable to owners of the parent
Comprehensive income attributable to non-controlling interests

1,702
67,63660,555
7,080(5,661)
54,31850,7953,522

4

3. Consolidated Statement of Cash Flows(Millions of yen, rounded down)
FY2017FY2018Net cash provided by (used in) operating activities:
Income before income taxes, etc.
Depreciation and amortization
Loss on sale/disposal of property, plant and equipment
Amortization of goodwill
Equity in earnings of affiliates
Impairment loss
Gain on reversal of asset retirement obligations
Insurance income
Decrease (increase) in allowance for doubtful accounts
Increase in net defined benefit liability
Interest and dividend income
Interest expences
Gain on sale of short-term investments and investments in securities
Gain on valuation of short-term investments and investments in securities
Decrease in trade notes and accounts receivable
Decrease in inventories
Decrease in trade notes and accounts payable
Increase (decrease) in accrued consumption taxes
Increase (decrease) in provision for directors' retirement benefits
Increase (decrease) in provision for loss on withdrawal from business
Increase (decrease) in provision for loss on liquidation of subsidiaries and associates
Increase (decrease) in provision for loss on guarantees
Other, net
Sub totalInterest and dividend received
Dividend received from affiliates accounted for by the equity method
Interest paid
Income taxes paid
Insurance received
Net cash provided by (used in) operating activities

573,421
27,0271,094
370(18,277)
11
(29)
4
43
(2,581)
1,069(2,146)
8,327(28,607)(9,759)21,357
1,085
33
236
162
1,088
1,016
74,9482,545
20,008(974)(5,838)29
90,72069,06627,451
870
260(28,408)
(650)
(173)
(137)
(682)
(2,842)
1,018(1,041)
837
8,059(15,750)(7,290)(1,141)
68
(107)
(144)
1,270
5,779
56,313
2,804
12,323(1,020)(6,552)
173
64,042

Consolidated Statement of Cash Flows (continued)(Millions of yen, rounded down)
FY2017FY2018Net cash provided by (used in) investing activities
Purchase of noncurrent assets
Proceeds from sales of noncurrent assets
Purchase of investment securities
Proceeds from sales of investment securities
Payments of loans receivableCollection of loans receivable
Proceeds from sales of shares of subsidiaries resulting in change in scope of consolidation
Other, net
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Net increase (decrease) in short-term loan payable
Proceeds from long-term loans payable
Payment of long-term loans payable
Purchase of treasury stock
Cash dividends paid
Cash dividends paid to non-controlling interests
Payments from changes in ownership interests in subsidiaries that do not result in change
in scope of consolidation
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

6(36,546)2,141(1,548)
4,949
(722)
80
804
(2,773)(33,614)(37,409)891(5,039)
648
(493)
445
939
(2,743)(42,761)(7,300)10,359(14,143)(7,010)(9,927)(2,024)(10,599)
16,773(17,893)(6)(14,953)(1,751)(2,883)(2,859)(108)(33,038)(939)
23,127
67,17790,304(105)(31,396)
190(9,925)90,30480,379

4. Segment Information(Millions of yen, rounded down)
FY2017
Information
Specialty&
Chemicals Advanced
Materials

NaturalGas
Chemicals

Aromatic
Chamials

167,035
7,697
174,733
14,277
182,960

212,050
1,102
213,152
24,570214,587

203,561
1,534
205,096
37,988232,967

52,73539
52,774
5,566
76,921

526
79
606
261
31,174(10,454)(10,454)(1,952)47,075635,909
635,90980,711
785,687

5,145
70
89
9,391

8,527
241
190
644
(121)

9,170
0
212
650
7,930

3,595
27
107
899

19
129
0
7
177

568
(17)
(429)
-

27,027
370
485
1,069
18,277

Investment in affiliates accounted
for by the equity method

56,916457

22,344

10,318

3,548

(88)

93,496

Capital expenditures

6,076

11,301

11,004

1,937

0

640

30,959

Sales:
Sales to third parties
Inter segment sales
Ordinary income
Segment aseets
Others:Depreciation and amortization
Amortization of goodwill
Interest income
Interest expenses
Equity in earnings of affiliates

Other

Adjustment
Consolidateds(Millions of yen, rounded down)
FY2018
Information
Specialty&
Chemicals Advanced
Materials

NaturalGas
Chemicals

Aromatic
Chamials

180,554
7,770
188,325
22,665204,278

211,123593
211,717
13,961
211,795

204,634
1,099
205,734
28,206
238,546

51,986
951,996
4,480
72,484

686
127
814
480
30,606(9,601)(9,601)(594)
46,326

648,986
648,986
69,199804,038

5,512
81
76
19,402

8,734
260
218
772
7

8,710
265
633
7,875

3,616
38
109
783

19

858

0
7
340

36
(582)
-

27,451
260
642
1,018
28,408Investment in affiliates accounted
for by the equity method

74,222464

22,23010,5204,178

800

112,417

Capital expenditures

5,792

14,63014,406

2,303

0

2,146

39,279

Sales:
Sales to third parties
Inter segment sales
Ordinary income
Segment aseets
Others:Depreciation and amortization
Amortization of goodwill
Interest income
Interest expenses
Equity in earnings of affiliates

7

Other

Adjustment
Consolidateds-FY2017 Outline of Consoliodated Results(Billions of yen, rounded down)
FY2017FY2018ChangeChange(%)

FY 2019
forecast

Net sales
Natural Gas Chemicals
Aromatic Chemicals
Specialty Chemicals
Information and Advanced Materials
Other and Adjustment
Operating income (loss)
Natural Gas Chemicals
Aromatic Chemicals
Specialty Chemicals
Information and Advanced Materials
Other and Adjustment
Non-operating profit
Ordinary income
Natural Gas Chemicals
Aromatic Chemicals
Specialty Chemicals
Information and Advanced Materials
Other and Adjustment
Extoraordinary income and loss, net
Income before income taxes, etc.

635.9
174.7
213.1
205.0
52.7
(9.8)
62.7
5.4
25.6
29.6
4.2
(2.2)
17.9
80.7
14.2
24.5
37.9
5.5
(1.6)
(7.2)
73.4

648.9
188.3
211.7
205.7
51.9
(8.7)
41.3
3.3
14.6
21.2
3.9
(1.8)
27.8
69.1
22.6
13.9
28.2
4.4
(0.1)
(0.1)
69.0

13.0
13.5
(1.4)
0.6
(0.7)
1.0
(21.3)(2.0)(10.9)
(8.3)
(0.3)
0.3
9.8
(11.5)
8.3(10.6)
(9.7)
(1.0)
1.5
7.1
(4.3)

2.1
7.8
(0.7)
0.3
(1.5)
(34.0)(37.9)(42.8)(28.2)(7.6)
54.8(14.3)
58.7(43.2)(25.7)(19.5)
(5.9)

650.0
182.6
208.6
214.9
52.1
(8.4)
40.0
4.7
15.6
19.0
3.6
(3.0)
5.0
45.0
4.8
14.5
23.7
4.1
(2.2)
3.0
48.0

Net income attributable to owners of the parent

60.5

55.0

(5.5)

(9.1)

34.0

4.Other Information 1

Investments(Billions of yen)
Depreciation & amortization(Billions of yen)
R&D expenditures(Billions of yen)
Number of Staff
ROA (Ordinary income)ROE (Net income)

FY2015FY2016FY2017FY2018Full year
1H
Full year
1H

30.5
14.9
26.7
13.1

35.0
13.7
25.6
12.2

30.9
13.9
27.0
13.1

39.2
18.6
27.4
13.5

FY2019Forecast
50.0
25.0
29.0
14.0

Full year
1H
Year-end

18.9
9.2
8,176
5.9%
9.0%

19.2
9.6
8,034
8.4%
12.0%

18.9
9.5
8,009
10.6%
13.6%

18.6
9.1
8,276
8.7%
11.3%

21.0
10.5
8,508
5.5%
6.7%

5.Other Information 2
FY2014FY2015ResultFirst half Second half
Exchange Rate
(JPY/USD, Average)
Exchange Rate
(JPY/EUR, Average)
crude oil (Dubai)(USD/BBL)
Methanol (USD/MT,
Asian average spot price)
Mixed Xylene(USD/MT)FY2016FY2017FY2018FY2019ResultResultResultResultForecast
First half Second half First half Second half First half Second half First half Second half Full year

103

117

122

118

105

112

111

111

110

112

110

139

139

135

130

118

119

126

133

130

127

125

104

63

56

36

43

51

50

62

73

65

70

432

358

301

230

230

327

296

381

408

335

350

1,100

730

740

630

660

680

650

725

845

730

800

1,600
1,200
950
～2,000～1,900～1,500
2,500
2,300
2,100
Polycarbonate(USD/MT)*～2,700～2,700～2,650*Describe the minimum and maximum values during the period

850～1,1002,000～2,4001,000～1,2002,200～2,5001,000～1,4002,400～2,8001,100～1,3002,500～2,9001,200～1,7002,900～3,9001,600～1,9002,700～3,8001,200～1,8002,100～2,8001,200～1,7002,000～2,500Bisphenol A(USD/MT)*

Note: Methanol price forecasts are expressed for the following periods.
FY2014:
1H:January-June
2H:July-December
FY2015-FY2019:
1H:April-September
2H:October-March

8

Qualitative Information
Consolidated Business Results for This Period
Overview of Results(Billions of yen)
FY2017FY2018ChangeNet sales

635.9

648.9

13.0

Operating income

62.7

41.3

(21.3)

Ordinary income

80.7

69.1

(11.5)

60.5

55.0

(5.5)

Net income attributable to owners of
the parent

In the fiscal year ended March 31, 2019, the world economy continued to show signs of a slow recovery.
However, concerns about trade friction, the deceleration of China’s economic growth and the volatility offinancial and capital markets reinforced existing economic uncertainty.
The Japanese economy saw gradual but overarching recovery thanks to continued improvement in
employment and private income, overcoming recent stagnation in some export and production areas aswell as the impact of increased costs for manufacturing and logistics brought about by labor shortage.
The management environment surrounding the MGC Group saw such changes as increases in raw
material and fuel prices. However, the market prices of key products including polycarbonates andpurified isophthalic acid saw the end of a prolonged high and began to decline. The Group’s performance
was particularly impacted by this market price decline in the second half of the fiscal year. As such, the
MGC Group continued to face harsh conditions.
Against this backdrop, the MGC Group adhered to the Group Vision of “Creating values to share withsociety” in a bid to improve its corporate value. In the first fiscal year of the MGC Advance 2020
Medium-term Management Plan, the Group moved ahead with the plan’s basic policies: “strengthening
the earning power of existing businesses with a focus on core businesses,” “creating and developing new
businesses” and “implementing investment strategies to form an optimal business portfolio.”
The MGC Group achieved growth in net sales compared with the previous fiscal year, primarily becauseof the market prices of methanol, which, despite a downward trend from last November onward, remained
higher than the levels recorded in the same period of the previous fiscal year. Also contributing werestrong overall sales volumes. Operating income fell compared with results for the previous fiscal year.
While sales volumes of special polycarbonates increased, the market prices of purified isophthalic acidand polycarbonates fell significantly. Furthermore, the profitability of foamed plastics has deteriorated due
to hikes in raw material and fuel prices.
Despite increased equity in earnings of affiliates associated with the Group’s overseas methanol
producing companies, ordinary income decreased year on year due to the decline in operating income.

9

Consequently, net income attributable to owners of the parent decreased year on year. This was mainly
due to the decline in operating income despite a decrease in extraordinary losses from the previous fiscal
year in which the Group posted a loss on valuation of investment securities in connection with a shale gas
and LNG project in Canada.
As announced* in the fiscal year under review, MGC’s equity method affiliate JSMC and Saudi Basic
Industries Corp. (SABIC) reached an agreement regarding the Saudi Methanol Company (AR-RAZI),
whose joint venture agreement was set to expire on November 29, 2018. Based on this agreement,
JSMC will sell 50% of its shares in AR-RAZI (this represents 25% of all AR-RAZI shares) to SABIC for
US$150 million to reduce its shareholding ratio to 25:75. In addition, JSMC has decided to continue thejoint venture status of AR-RAZI until November 29, 2038.
As for the expected impact on MGC’s consolidated financial performance, the transfer of shares is
expected to generate a total loss of around ¥5.0 billion. However, MGC recorded only the originallyprojected ¥1.7 billion in tax-related expenses as equity in earnings (losses) of affiliated companies for the
fiscal year ended March 31, 2019, as the approval of governmental authorities charged with ensuring faircompetition in the relevant countries had yet to be obtained and, accordingly, mandatory procedures
associated with the transfer of the aforementioned shares had not been completed as of the end of said
fiscal year.
The decrease in JSMC’s shareholding for AR-RAZI will subsequently be recorded in MGC’s equity inearnings (losses) of affiliated companies. However, for the fiscal year under review, MGC calculated
equity in earnings (losses) of affiliated companies related to JSMC at the pre-sale 50:50 shareholding
ratio for the period after November 29, 2018, when the former joint venture agreement was set to expire,taking into account that the transfer of shares had yet to be approved.
Due to the same reasons, MGC’s operating results for the fiscal year under review do not include
amortization costs associated with the US$1,350 million to be paid by JSMC to SABIC as consideration
for the continuation of the joint venture status.
* Announced via the two MGC news releases entitled “Notice about the Methanol Joint Venture in Saudi
Arabia of JSMC, a MGC’s Equity Method Affiliate” and “Notice about the Continuation of the Joint Venture
in Saudi Arabia of JSMC, a MGC’s Equity Method Affiliate” dated December 4, 2018 and March 22, 2019,respectively.

10

Results by Business Segment
Natural Gas Chemicals(Billions of yen)
FY2017FY2018Change

Sales

167.0

180.5

13.5

Operating income

5.4

3.3

(2.0)

Ordinary income

14.2

22.6

8.3

The methanol business grew in revenue due to an increase in methanol market prices compared with theprevious year. Methanol and ammonia-based chemicals had higher revenue due mainly to an overall
increase in sales volumes. Earnings from these chemicals, however, decreased year on year, due tohigher raw material prices and a drop in neopentyl glycol market price as well as rises in repair expenses
and other fixed costs.
Crude oil and other energy sources achieved prior-year-level earnings. Despite a crude oil price increase,crude oil sales volume dropped.

Aromatic Chemicals(Billions of yen)
FY2017FY2018Change

Sales

212.0

211.1

(0.9)

Operating income

25.6

14.6

(10.9)

Ordinary income

24.5

13.9

(10.6)

Specialty aromatic chemical products posted growth in both revenue and earnings compared with thesame period of the previous fiscal year. The negative impact of higher raw material and fuel prices wasmore than offset by solid sales of meta-xylenediamine and aromatic aldehydes. General-purpose
aromatic chemical products suffered significantly lower earnings. Negative influences included lower
market prices and higher raw material and fuel prices, which together caused the profitability of purified
isophthalic acid to deteriorate.
Foamed plastics saw a decline in earnings primarily due to higher raw material and fuel prices.

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Specialty Chemicals(Billions of yen)
FY2017FY2018Change

Sales

203.5

204.6

1.0

Operating income

29.6

21.2

(8.3)

Ordinary income

37.9

28.2

(9.7)

Although higher sales volumes helped drive up sales of inorganic chemicals, lower earnings wereposted due to increasing competition in liquid chemicals used for semiconductor and LCD displays, aswell as higher fixed costs in connection with the launch of a new production facility in North America.
The engineering plastics business saw a sales volume increase for special polycarbonates used insmartphone camera lenses. However, earnings decreased due to the deteriorating profitability ofpolycarbonates as well as a lower sales volume for films used in flat panel displays.

Information & Advanced Materials(Billions of yen)
FY2017FY2018Change

Sales

52.7

51.9

(0.7)

Operating income

4.2

3.9

(0.3)

Ordinary income

5.5

4.4

(1.0)

Electronic materials recorded earnings that are virtually on par with the previous fiscal year. Despite firmsales volume in the first half, this result was mainly attributable to the lower sales volume of mainstay BT
materials for semiconductor packaging due to declining demand for materials for smartphones and thoseused in memory devices in the second half. Oxygen absorbers such as AGELESSTM saw a drop in
earnings, primarily due to increasing competition in Japan.

12Consolidated Business Forecasts(Billions of yen)

Net sales

OperatingincomeOrdinary
incomeNet income
attributableto owners of
the parent

FY2018 Results (A)

648.9

41.3

69.1

55.0

FY2019 Forecasts (B)

650.0

40.0

45.0

34.0

Change (B – A)

0.1

(1.3)

(24.1)(21.0)

Going forward, the economic outlook remains unclear due to such uncertainties as developments related
to trade friction and the volatility of financial and capital markets.
With regard to operating results forecasts for the fiscal year ending March 31, 2020, MGC expects
operating income to edge down slightly from the fiscal year under review. Moreover, equity in earnings ofaffiliated companies, ordinary income, and net income attributable to owners of the parent are expected todecrease year on year. In particular, MGC’s equity in earnings of affiliates associated with theaforementioned methanol business in Saudi Arabia will significantly decrease due to such factors as the
projected decrease in JSMC’s equity in AR-RAZI following the transfer of AR-RAZI shares, the loss thatwill be recorded in connection with said share transfer, and amortization costs associated with cash to be
paid by JSMC to SABIC as consideration for the continuation of the joint venture status.
These performance forecasts assume exchange rates of ¥110=$1 and ¥125=€1.
(End)

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