June 6, 2017
Metal One Corporation

Metal One Corporation and Subsidiaries Consolidated Financial Results for FY2016
Outline of Consolidated Results for FY2016

Income Statements
Performance inFY2016

Performance inFY2015

Sales

18,556

19,740Gross profit(Gross profit ratio)

1,068

1,045

23

(5.8%)(5.3%)(0.5%)

Operating expenses
Provision for doubtful receivables
Amortization of goodwill-817-23-2-848-2-2

31-21
0

Operating income

226

192

34

Interest income

5-28-23

6-33-27-154

Equity in earnings of affiliated companies

141652

17
119-31533

Ordinary income285

203

82

Extraordinary gain and loss

67

85-18

Income before income taxes

352

288

64

Income taxes
Noncontrolling interests-95-31-110-11

15-20Net income

226

16759

(In ¥100 million)

Interest expense
Interest expense–net
Dividend income
Non-operating income and expenses

Business environment

Percentage ofvariance

Variance-1,184In the global economy, the U.S. maintained a positive tone, underpinned by stable individual consumption, and Europe also remained upbeat despite concerns
about the impact of the UK leaving the EU. On the other hand, the continued slowdown in China’s economic growth and an extended slump in crude oil prices
were among the reasons that growth remained moderate overall. In Japan, personal consumption still lacked vigor and the recovery remained sluggish despite an
improved employment environment and a rally in production activities in companies.

(-6.0%)

Business performance
In relation to the business environment that our group faced, steel demand declined slightly in China as compared to the previous year but remained almost thesame in advanced and emerging nations. In FY2016, world steel demand also remained near the previous year’s level.
In Japan, public works and home construction ticked upward in the construction sector, and car production—which had flagged midyear due to the effects of theKumamoto earthquake—also rallied in the second half of the year. Although the worldwide oversupply in steel has continued, international market conditions
bottomed out at the start of the year. Steel prices rose at the start of the third quarter in response to a sharp increase in raw material prices that began in thesecond quarter.
Under these business conditions, the Metal One Group established various strategies in the final year of the mid-term management plan—New Management
Plan 2016—based on five core concepts: reconstruction of earnings base through revival of trading operations; thorough reshuffling of portfolio and effective
utilization of HR and assets; reforming our business model; strengthening our workforce; and upgrading our consolidated management platform.
As a result, the Metal One Group’s consolidated performance this fiscal year exceeded the previous year’s results, with ¥1.8556 trillion in sales (down 6percent), ¥28.5 billion in ordinary income (up 40.1 percent), and net income of ¥22.6 billion (up 34.7 percent).

(+17.5%)Situation with main items
1. Sales and gross profit(+40.1%)

Although business volume was up slightly, the drop in average unit costs had a big impact, and consolidated sales were down by ¥118.4 billion to ¥1.8556
trillion.
On the other hand, consolidated gross profits were up by ¥2.3 billion to ¥106.8 billion because the impact of an expanded spread at some domestic and Southeast
Asian subsidiaries led to a rise in gross profit ratio.

(+22.2%)

2. Operating expenses
Consolidated operating expenses fell by ¥3.1 billion to ¥81.7 billion because operating expenses at subsidiaries declined in conjunction with the yen’s strengthand expenditures were cut.

3. Extraordinary gain and loss
The appropriation of securities and fixed asset sale profits led to ¥6.7 billion in net extraordinary gains.

(+34.7%)

4. Business results by transaction type292

Basic earnings capabilities

20587(+42.7%)

Basic earnings capabilities = Operating income (less provision for doubtful receivables) + Interest expense–net + Dividend income + Equity in earnings of affiliated companies

5. Total assets and shareholders’ equity

Consolidated Balance Sheet
March 31, 2017

Cash and deposits
Accounts receivable
Inventories
Other current assets

6,990
255
4,443
1,954
338

Variance fromMarch 31, 2016

251 Current liabilities
41

Accounts payable

296

Short-term debt

-10

Other current liabilities-76 Non-current liabilities
Long-term debt
OtherNon-current assets
Tangible and intangible non-current assets

Investments and other assets

2,326
1,070
1,256

-115

Total liabilities-59 Common stock and additional paid-in capital-56 Retained earnings, etc.
Assets and liabilities valuation andtranslation adjustments
Total net assets excluding noncontrolling interests

Noncontrolling interests
Total net assets
Total assets

9,316

Increases in accounts receivable and payable represented the primary reason our consolidated total assets rose by ¥13.6 billion, to ¥931.6 billion.
Additionally, total net assets excluding noncontrolling interests increased by ¥13 billion, to ¥340.4 billion, due to an increase in consolidated net income.
As a result, our shareholders’ equity ratio rose 0.8 percent to 36.5 percent, bolstering our already solid financial state.

March 31, 2017

Variance fromMarch 31, 2016

(In ¥100 million)

Current assets

Viewed by type of transaction, consolidated domestic sales accounted for ¥1.0062 trillion (54 percent of the total; down by ¥87.7 billion as compared to theprevious fiscal year), and overseas sales came to ¥849.4 billion (46 percent of the total; down ¥30.7 billion as compared to the previous fiscal year).

136

Total liabilities and net assets

4,972
2,641
2,025
306
608
424
184
5,580
1,504
1,789
111
3,404
332
3,736
9,316

310
228
91

6. Interest-bearing debt
Our business investment affiliate MM&KENZAI Corporation switched to procuring funds directly from bank loans instead of its shareholders, and our income
increased from the sale of listed shares in Japan, which led to our consolidated interest-bearing debt balance falling by ¥24.2 billion to ¥244.9 billion.

Status of affiliates
There were no items worth special mention in this fiscal year.

-9-320-333
13-10-3142

Consolidated Financial Indicators

Number of Group Companies-913016146136

March 31, 2017 March 31, 2016

Subsidiaries

Affiliates

Total (consolidated)

100(-1)42(-1)

142(-2)

Note: Figures in parentheses ( ) show changes from the previous year.

Shareholders’ equity ratio

36.5%

35.7%

Net D/E ratio

0.7

0.8

Shareholders’ equity ratio =Total net assets excluding noncontrolling interests ÷ Total assets
Net D/E ratio =(Short-term and long-term debt + Securitized receivables − Cash and deposit) ÷ Total netassets (excluding noncontrolling interests)