Consolidated Quarterly Financial Results
for the Nine Months Ended December 31, 2020 [Japanese GAAP]
February 10, 2021
Stock Exchange Listing: Tokyo
URL: http://www.hokuetsucorp.com

Company:
Hokuetsu Corporation
Stock Code:
3865
Representative: Sekio Kishimoto, President & CEO
Contact:
Tomonari Maruyama, General Manager, Corporate Management Department
Scheduled date of filing quarterly report:
February 12, 2021
Scheduled date of commencement of dividend payments:–Supplementary documents for quarterly results:
None
Quarterly results briefing:
None

TEL: +81-3-3245-4500(Figures rounded down to the nearest million yen)

1. Consolidated Business Results for the Nine Months Ended December 31, 2020
(April 1, 2020 through December 31, 2020)(1) Consolidated results of operations
Net sales

Operating profit(% change from the previous corresponding period)
Profit attributable toOrdinary profit
owners of parent
Million yen%
Million yen%

Million yen%
Million yen%
Nine months ended
161,596(19.9)(2,890)–1,742(86.4)
December 31, 2020
Nine months ended
201,818
(2.1)
9,429
118.9
12,786
107.9
December 31, 2019
(Note) Comprehensive income:Nine months ended December 31, 2020: 7,625 million yen (387.7%)
Nine months ended December 31, 2019: 1,563 million yen(–%)
Basic earnings per share Diluted earnings per share
Yen
Yen
Nine months ended
43.96
42.62
December 31, 2020
Nine months ended
14.21
12.29
December 31, 2019

7,381

174.8

2,685

(26.5)(2) Consolidated financial position
Total assets
Net assets
Equity ratio
Million yen
Million yen%
As of December 31, 2020
359,893
186,258
51.6
As of March 31, 2020
344,731
180,861
52.3(Reference) Equity:
As of December 31, 2020:
185,578 million yen
As of March 31, 2020:
180,183 million yen

2. Dividends
End of 1Q
Yen

Annual dividend per share
End of 2Q
End of 3Q
Yen
Yen

Fiscal year ended–
6.00
March 31, 2020
Fiscal year ending–
7.00
March 31, 2021
Fiscal year ending
March 31, 2021 (forecast)(Note) Revisions to dividend forecasts published most recently: None–

Year-end

Total
Yen

Yen

6.00

12.00

7.00

14.00

–

3. Forecast of Consolidated Financial Results for the Fiscal Year Ending March 31, 2021
(April 1, 2020 through March 31, 2021)(% change from the previous corresponding period)
Net sales

Operating profit

Ordinary profit

Million yen%
Million yen%
Million yen
Full year
210,000(20.6)
1,000(91.1)
5,500(Note) Revisions to business forecasts published most recently: None-1-%(64.9)

Profit attributable toBasic earnings
owners of parent
per share
Million yen%
Yen
7,500(7.1)
44.67

* Notes(1) Changes in significant subsidiaries during the nine months ended December 31, 2020 (changes in specified subsidiaries accompanying
changes in the scope of consolidation): None
(2) Application of accounting procedures specific to preparation of the consolidated quarterly financial statements: None
(3) Changes in accounting policies, accounting estimates and restatement of prior period financial statements(i) Changes in accounting policies due to amendment of accounting standards: None(ii) Changes in accounting policies other than (i): None(iii) Changes in accounting estimates: None(iv) Restatement of prior period financial statements: None
(4) Shares outstanding (common stock)(i) Number of shares outstanding (treasury stock included):
As of December 31, 2020
188,053,114 shares(ii) Number of treasury stock:
As of December 31, 2020
20,137,513 shares(iii) Average number of shares during period:
Nine months ended December 31, 2020 167,919,491 shares

As of March 31, 2020

188,053,114 shares

As of March 31, 2020

20,140,702 shares

Nine months ended December 31, 2019

189,056,306 shares* Consolidated Quarterly Financial Results are exempted from quarterly review performed by a certified public
accountant or an audit corporation.
* Explanation regarding appropriate use of business forecasts and other special instructions(Caution regarding forward-looking statements)
The forward-looking statements such as forecasts of financial results contained in this material are based on information available to theCompany at the time of the publication of this document and certain assumptions that the Company considers to be reasonable, and may differ
materially from the actual results due to various factors. Refer to “1. Qualitative Information on Consolidated Operating Results for the NineMonth Period; (3) Qualitative Information Concerning Consolidated Earnings Forecasts” on page 3 of the accompanying materials for mattersrelated to results forecasts.

* This document is an excerpt translation of the original in Japanese and is for reference purposes only. In case ofany discrepancy between this document and the original in Japanese, the latter shall take precedence.

-2-1. Qualitative Information on Consolidated Operating Results for the Nine-Month Period(1) Qualitative Information Concerning Consolidated Operating Results
During the current nine-month period, net sales amounted to 161,596 million yen (down 19.9% year on year), the operating loss was 2,890
million yen (compared to operating profit of 9,429 million yen in the same period of the previous fiscal year), and ordinary profit was
1,742 million yen (down 86.4% year on year), reflecting a sharp decline in demand in the overall industry as a result of the spread of thenovel coronavirus disease (COVID-19). Profit attributable to owners of parent came to 7,381 million yen (up 174.8% year on year)
associated with a gain on sales of investment securities due to the transfer of all shares of Japan Brazil Pulp and Paper Resources
Development Co., Ltd. owned by the Company.

(2) Qualitative Information Concerning Consolidated Financial Position
Total assets increased 15,162 million yen from the end of the previous fiscal year, to 359,893 million yen. This was attributable primarily
to increases of 9,843 million yen in cash and deposits, 4,207 million yen in notes and accounts receivable - trade and 9,455 million yen in
investment securities, which more than offset decreases of 7,290 million yen in merchandise and finished goods and 1,571 million yen inproperty, plant and equipment due mainly to depreciation.
Total liabilities rose 9,765 million yen from the end of the previous fiscal year, to 173,635 million yen. This was attributable primarily to
an increase of 16,842 million yen in interest-bearing liabilities, which more than offset decreases of 4,586 million yen in notes and accounts
payable - trade and 1,165 million yen in provision.
Net assets increased 5,396 million yen from the end of the previous fiscal year, to 186,258 million yen. This chiefly reflected increases of
5,220 million yen in retained earnings due in part to profit attributable to owners of parent and 973 million yen in valuation difference on
available-for-sale securities, which more than offset a decrease of 946 million yen in foreign currency translation adjustment.

(3) Qualitative Information Concerning Consolidated Earnings Forecasts
No change has been made to the full-year financial forecasts announced on September 30, 2020.

-3-2. Consolidated Quarterly Financial Statements and Key Notes(1) Quarterly Consolidated Balance Sheet(Million yen)
As of March 31, 2020
(Assets)
Current assets
Cash and deposits
Notes and accounts receivable - trade
Electronically recorded monetary claims - operating
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
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, vehicles, tools, furniture and fixtures
Accumulated depreciation

As of December 31, 2020

21,38350,0786,427
29,2002,429
22,7225,445(6)31,22654,286
5,660
21,9092,062
21,2747,286(6)

137,679

143,699

84,722(52,954)

85,183(53,909)

31,76731,274429,962(366,006)

435,777(372,650)

63,955

63,126

Other, net

31,66731,417

Total property, plant and equipment

127,390

125,818

2,984

2,731

70,366
8,734(2,425)79,822
10,244(2,423)

Machinery, vehicles, tools, furniture and fixtures, net

Intangible assets
Investments and other assets
Investment securities
OtherAllowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets-4-76,67587,642207,051

216,193344,731359,893(Million yen)
As of March 31, 2020
(Liabilities)
Current liabilities
Notes and accounts payable - trade
Electronically recorded obligations - operating
Short-term loans
Commercial papers
Current portion of bonds payable
Income taxes payable
Provision
Other

As of December 31, 2020

19,3606,317
19,3387,000–
1,086
3,574
14,853

14,773
5,757
19,72615,00020,000577
2,407
14,643

Total current liabilities

71,531

92,886

Non-current liabilities
Bonds payable
Long-term loans
Provision
Retirement benefit liability
Asset retirement obligations
Other

30,00048,460
1,376
7,266
2,441
2,792

10,00057,202
1,378
7,484
2,141
2,541

Total non-current liabilities

92,33780,748

Total liabilities

163,869

173,635

Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares

42,02045,341
100,879(9,708)42,02045,341
106,100(9,704)

178,533

183,757

Accumulated 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

2,159
21337
(868)

3,133
(29)
(608)
(674)

Total accumulated other comprehensive income

1,650

1,821

81596

94
585

180,861

186,258

344,731359,893

Total shareholders’ equity

Share acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets-5-(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income
Quarterly Consolidated Statements of Income(Nine-month period)(Million yen)
For the nine-month ended
December 31, 2019
201,818
162,120

Net sales
Cost of sales

For the nine-month ended
December 31, 2020161,596
137,279

Gross profit

39,69824,316

Selling, general and administrative expenses

30,26827,207

Operating profit (loss)

9,429(2,890)Non-operating income
Interest income
Dividends income
Share of profit of entities accounted for using equity method
OthersTotal non-operating income

69981
3,610
1,216
5,877

20746
4,172
1,711
6,651

Non-operating expenses
Interest expenses
Foreign exchange losses
Leave allowance
OthersTotal non-operating expenses

493
1,157–
870
2,520

331
549
464
672
2,018

Ordinary profit

12,786

1,742

31856
10–
89–
988

48
5,323
267
327
315
1
6,282

888
6,354
684
210
15–
666

878
3–
173
1,229
792
–

Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Gain on change in equity
Gain on reversal of asset retirement obligations
Insurance claim income
OthersTotal extraordinary income
Extraordinary losses
Loss on sales and retirement of non-current assets
Impairment loss
Loss on disaster
Loss on tax purpose reduction entry of non-current assets
Loss on sales of investment securities
Loss on valuation of investment securities
Business restructuring expenses
Loss on sales of equity investment of subsidiary
Total extraordinary losses

8,631

2,925

Profit (loss) before income taxes

5,143

5,100

Income taxes - current
Refund of income taxes
Income taxes - deferred

1,904–
547

873(1,071)(2,161)

Total income taxes

2,451(2,358)

Profit

2,691

7,459

677

2,685

7,381

Profit attributable to non-controlling interests
Profit attributable to owners of parent-6-Quarterly Consolidated Statements of Comprehensive Income(Nine-month period)(Million yen)
For the nine-month ended
December 31, 2019
ProfitOther 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
Share of other comprehensive income of entities accounted forusing equity method

For the nine-month ended
December 31, 2020

2,691

7,459

95(1)
(218)
(82)

1,000(39)(950)
100(920)55(1,128)166

Comprehensive income

1,563

7,625

Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

1,560
3

7,552
72

Total other comprehensive income-7-(3) Notes to Quarterly Consolidated Financial Statements(Notes to Going Concern Assumption)
Not applicable.
(Notes on Any Significant Change in the Value of Shareholders’ Equity)
Not applicable.
(Significant Subsequent Events)
Transfer of non-current assets
The Company's Board of Directors resolved at its meeting held on December 23, 2020 to transfer non-current assets the Company owned,
and the Company entered into a sales contract on January 29, 2021.
(1) Reason for the transfer
The Company has decided to transfer non-current assets it owns for the purpose of using its management resources effectively andstrengthening its financial position.
(2) Overview of assets to be transferred(i) Location

11-1, Yokoami 1-chome, Sumida-ku, Tokyo(ii) Contents of assets

Land (685.94 m2) and building(iii) Use before transfer

Lease property(Note) We will refrain from disclosing the transfer price and the book value of the assets at the request of the transferee, but the transfer
price is a fair and reasonable price reflecting the market price through bidding. A gain on sales is an amount obtained by deducting
the book value and expenses for transfer from the transfer price.
(3) Overview of the transferee
While the transferee is a corporation in Japan, we will refrain from disclosing it at the request of the transferee. There is no matter tospecially mention as a capital relationship, a personal relationship and a business relationship between the Company and the transferee,and the transferee does not fall under a related party of the Company.
(4) Schedule of the transfer(i) Date of resolution at the Board of Directors meeting

December 23, 2020(ii) Date of contract

January 29, 2021(iii) Scheduled date of transfer

April 2, 2021

(5) Impact on profit and loss
The Company is expected to record extraordinary income of about 2.7 billion yen in the next fiscal year associated with the transfer of
non-current assets.

-8-