Consolidated Financial Results
for the Six Months Ended September 30, 2022
[Japanese GAAP]
October 26, 2022
Company name: SHIKOKU CHEMICALS CORPORATION
Stock exchange listing: Tokyo Stock Exchange
Code number: 4099
URL: https://www.shikoku.co.jp/
Representative: Naoto Tanaka, President and C.E.O.
Contact: Yoshiaki Ando, Executive Officer, General Manager of Corporate Strategy & FinancePhone: +81-877-22-4111
Scheduled date of filing quarterly securities report: November 14, 2022
Scheduled date of commencing dividend payments: December 2, 2022
Availability of supplementary briefing material on quarterly financial results: Available
Schedule of quarterly financial results briefing session: Scheduled(Amounts less than one million yen are rounded down)
1. Consolidated Financial Results for the Six Months Ended September 30, 2022 (from April 1, 2022 to September
30, 2022)(1) Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Profit attributable to
Net sales
Operating profit
Ordinary profit
owners of parent
Six months ended
Million yen%
Million yen%
Million yen%
Million yen%
September 30, 2022
31,297
23.9
4,371
15.2
5,480
33.1
3,707
26.0
September 30, 2021
25,266
7.9
3,795
45.5
4,116
45.9
2,943
52.9
(Note) Comprehensive income: Six months ended September 30, 2022: ¥3,084 million [4.9 %]Six months ended September 30, 2021: ¥2,941 million [(6.1) %]Basic earnings
per share
Six months ended
September 30, 2022
September 30, 2021

Diluted earnings
per share

Yen

Yen

69.29
53.45

–
–

(2) Consolidated Financial Position
Total assets

Net assets

Million yen

Equity ratio

Million yen%

82,013As of September 30, 2022
114,467
80,908
As of March 31, 2022
113,805(Reference) Equity: As of September 30, 2022: ¥81,177 million
As of March 31, 2022: ¥80,049 million

70.9
70.3

2. Dividends
1stquarter-end

2ndquarter-end

Yen

Yen

Annual dividends
3rdYear-endquarter-end

Total

Yen

Yen

Yen

–
12.00
–
Year ended March 31, 2022–
13.00
Year ending December 31, 2022
Year ending December 31, 2022–
(Forecast)(Note) Revisions to the cash dividends forecasts most recently announced: None

12.00

24.00

13.00

26.00

3. Forecast of Consolidated Financial Results for the Year Ending December 31, 2022 (from April 1, 2022 to
December 31, 2022)(% indicates changes from the previous corresponding period.)
Profit attributable
Basic earnings
Net sales
Operating profit
Ordinary profit
to owners ofper share
parentMillion yen% Million yen% Million yen% Million yen%

Yen

Full year
46,000
–
5,800
–
6,100
–
3,700
–
68.76
(Notes) 1. Revisions to the financial results forecast most recently announced: None
2. The Company plans to change its fiscal year-end (the last day of the fiscal year) from March 31 to December
31 of each year beginning with the 103rd fiscal year. Due to this change in fiscal year-end, the 103rd fiscal
year will be a transitional period of nine months from April 1, 2022 to December 31, 2022. Therefore, theabove forecast of consolidated financial results for the year ending December 31, 2022 represents ninemonth forecast figures, and the percentage changes from the previous corresponding period are omitted.
* Notes:(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes inscope of consolidation): No(2) Accounting policies adopted specially for the preparation of quarterly consolidated financial statements: Yes(3) Changes in accounting policies, changes in accounting estimates and retrospective restatement
1) Changes in accounting policies due to the revision of accounting standards: No
2) Changes in accounting policies other than 1) above: No
3) Changes in accounting estimates: No4) Retrospective restatement: No(4) Total number of issued shares (ordinary shares)
1) Total number of issued shares at the end of the period (including treasury shares):
September 30, 2022: 52,973,563 shares
March 31, 2022: 54,018,563 shares2) Total number of treasury shares at the end of the period:
September 30, 2022: 205,977 shares
March 31, 2022: 205,788 shares
3) Average number of shares during the period:
Six months ended September 30, 2022: 53,514,089 shares
Six months ended September 30, 2021: 55,069,507 shares* These quarterly financial results are outside the scope of quarterly review by certified public accountants or audit
firms* Explanation regarding the appropriate use of financial results forecasts and other special items
Forward-looking statements such as operating results forecasts and other projections contained in this report are
based on information currently available to the Company and certain assumptions deemed reasonable. Actual results
may differ significantly from these forecasts due to a wide range of factors. For the assumptions underlying theoperating results forecasts and cautionary notes concerning their use, please refer to “(3) Explanation ofConsolidated Financial Results Forecast and Other Forward-looking Information” under “1. Qualitative Information
on Quarterly Financial Results for the Period under Review” on page 3 of the attached documents to the quarterly
financial statements.

Table of Contents
1. Qualitative Information on Quarterly Financial Results for the Period under Review ................................ 2(1) Explanation of Operating Results ............................................................................................................. 2(2) Explanation of Financial Position ............................................................................................................ 3(3) Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information ........ 3
2. Quarterly Consolidated Financial Statements and Primary Notes ............................................................... 4(1) Quarterly Consolidated Balance Sheets ................................................................................................... 4(2) Quarterly Consolidated Statements of Income and Comprehensive Income ........................................... 6(3) Quarterly Consolidated Statements of Cash Flows .................................................................................. 8(4) Notes to Quarterly Consolidated Financial Statements ............................................................................ 9(Notes on going concern assumption) ...................................................................................................... 9(Notes in the case of significant changes in shareholders’ equity) ........................................................... 9(Accounting policies adopted specially for the preparation of quarterly consolidated financial statements) .. 9
(Segment information, etc.) .................................................................................................................... 10

1

1. Qualitative Information on Quarterly Financial Results for the Period under Review(1) Explanation of Operating Results
The Japanese economy during the six months ended September 30, 2022 continued to recover with personal
consumption showing signs of recovery as restrictions on economic activities were eased and such activities werenormalized. Overseas economies continued to pick up globally, especially in Europe and the United States.
However, sharp monetary tightening and rising interest rates in multiple countries against the backdrop of
growing global inflation pressure posed downside risks to the economy.
Under these circumstances, for the six months ended September 30, 2022 (from April 1, 2022 to September
30, 2022), the Group posted net sales of ¥31,297 million (up 23.9% year-on-year), operating profit of ¥4,371
million (up 15.2% year-on-year), ordinary profit of ¥5,480 million (up 33.1% year-on-year) and profit attributableto owners of parent of ¥3,707 million (up 26.0% year-on-year), all of which increased from the previous year’s
results. In addition, net sales and profits all hit record highs and achieved high levels, driven by overseas demand,against the backdrop of global economic recovery from the COVID-19 pandemic.
Operating results by segment are as follows.
1) Chemicals operations(Inorganic chemicals)
Sales of insoluble sulfur, a material for radial tires, remained almost unchanged from the previous year, despite
the impact of a decline in automobile production resulting from semiconductor shortages. As for sales of carbon
disulfide for rayon and cellophane, and sodium sulfate for bath agents and detergents, the Company strove toimprove profitability by the price pass-through of the impact of yen depreciation in exchange rates and sharp risein resource prices.
(Organic chemicals)
Regarding chlorinated isocyanuric acid for disinfectants, the domestic market performed better than theprevious year mainly due to a recovery in sales of agents for swimming pools. In the U.S. market, the pool market
continues to be brisk, and production continues at high capacity. In addition, both sales and profits were higher
than the previous year as the Company passed soaring resource prices and distribution costs on selling prices.
(Fine chemicals)
Regarding electronic chemicals, particularly Glicoat-SMD, a heat-resistant soluble OSP (Organic Solderability
Preservative) for printed wiring boards, sales were sluggish due to the lockdown in Shanghai and adjustments inthe semiconductor market. Sales of advanced & specialty chemicals, such as epoxy resin curing agent (imidazoles),resin modifier (glycoluril derivatives, etc.) and semiconductor processing materials, largely surpassed those of theprevious year, thanks to the strong demand on the resin modifier.
As a result, net sales for the chemicals operations segment were ¥22,330 million (up 36.1% year-on-year),and segment profit was ¥4,521 million (up 25.1% year-on-year), both surpassing the previous year’s results.
2) Housing Materials operations
The number of new housing starts continued to be weak for owned houses, and demand for interior, exterior
finishes and paving materials and exterior products remained sluggish. However, net sales increased from theprevious year due to the penetration of the price revision implemented in April 2022. On the other hand, the pricerevision failed to absorb soaring prices of raw materials, and therefore profitability declined from the previous
year.
As a result, net sales for the housing materials operations segment were ¥8,432 million (up 2.8% year-onyear), and segment profit was ¥758 million (down 28.3% year-on-year).

2

Reference information[Overseas net sales]
Six months ended September 30, 2021
(from April 1, 2021 to September 30, 2021)

Six months ended September 30, 2022
(from April 1, 2022 to September 30, 2022)

Net sales(Million yen)

Net sales(Million yen)Overseas net sales toconsolidated net sales (%)

Overseas net sales toconsolidated net sales (%)

Asia

3,798

15.0

4,336

13.9

North America

3,746

14.8

8,006

25.6

Other regions

1,009

4.0

1,181

3.8

Total
Consolidated net
sales

8,554

33.9

13,52443.2

25,226

31,297(Note) Net sales are classified based on the actual destinations of products.

(2) Explanation of Financial Position(Status of assets, liabilities and net assets)
Total assets increased by ¥661 million from the end of the previous fiscal year to ¥114,467 million. Major
increases were ¥2,282 million in machinery, equipment and vehicles and ¥800 million in securities, and major
decreases were ¥1,585 million in investment securities and ¥1,298 million in construction in progress.
Liabilities decreased by ¥443 million from the end of the previous fiscal year to ¥32,453 million. A major
increase was ¥1,283 million in electronically recorded obligations - facilities, and a major decrease was ¥1,260
million in notes and accounts payable - trade.
Net assets increased by ¥1,105 million from the end of the previous fiscal year to ¥82,013 million. A major
increase was ¥1,722 million in retained earnings, and a major decrease was ¥876 million in valuation difference
on available-for-sale securities.
As a result, equity ratio rose to 70.9%, from 70.3% at the end of the previous fiscal year.
(Status of Cash Flows)
Cash flows provided by operating activities totaled ¥3,386 million (an increase of ¥1,110 million year-onyear). Major cash inflows were profit before income taxes of ¥5,149 million, depreciation of ¥1,288 million anddecrease in trade receivables of ¥1,170 million, while major cash outflows were income taxes paid of ¥1,881
million and decrease in trade payables of ¥1,481 million.
Cash flows used in investing activities totaled ¥1,488 million (an increase of ¥862 million year-on-year). A
major cash outflow was purchase of property, plant and equipment of ¥1,224 million.
Cash flows used in financing activities totaled ¥1,937 million (an increase of ¥8 million year-on-year). The
major component was purchase of treasury shares of ¥1,328 million.
As a result, cash and cash equivalents totaled ¥36,373 million (an increase of ¥617 million from the end of
the previous fiscal year).

(3) Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information
The full-year financial results forecast has not been changed from the initial plan (announced on April 28, 2022).
Assumptions for the exchange rates of major currencies are ¥120 to U.S. dollar and ¥130 to Euro.

3

2. Quarterly Consolidated Financial Statements and Primary Notes(1) Quarterly Consolidated Balance Sheets(Million yen)
As of March 31, 2022
AssetsCurrent assets
Cash and deposits
Notes receivable - trade
Electronically recorded monetary claims - operating
Accounts receivable - trade
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
Buildings and structures, net
Machinery, equipment and vehicles, net
LandConstruction in progress
Other, net
Total property, plant and equipment
Intangible assets
Investments and other assets
Investment securities
Deferred tax assets
Retirement benefit asset
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

4

As of September 30, 2022

23,155
1,271
2,622
13,044
15,600
7,373
41
3,689
870
(1)
67,66822,973746
2,762
12,811
16,400
8,001
36
3,782
597
(0)
68,111

5,238
4,136
8,523
3,776
692
22,366
356

5,733
6,418
8,525
2,478
600
23,755
485

22,331
319
364
403
(3)
23,414
46,137
113,805

20,745
423
374
575
(3)
22,11546,356
114,467(Million yen)
As of March 31, 2022
Liabilities
Current liabilities
Notes and accounts payable - trade
Electronically recorded obligations - operating
Short-term borrowings
Current portion of long-term borrowings
Accrued expenses
Income taxes payable
Accrued consumption taxes
Notes payable - facilities
Electronically recorded obligations - facilities
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Deferred tax liabilities
Deferred tax liabilities for land revaluation
Provision for retirement benefits for directors (andother officers)
Retirement benefit liability
Asset retirement obligations
Provision for share awards
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

5

As of September 30, 2022

7,993
471
2,530
2,074
1,449
1,849
116
36
49
2,537
19,109

6,733
481
2,530
2,091
1,637
1,344
105
2
1,333
2,658
18,91911,017295
1,008

11,051
39
1,008

90

63

625
380
50
318
13,78832,897

606
380
56
328
13,53432,4536,867
5,740
60,475(250)
72,8336,867
5,740
62,197(239)
74,565

4,853
2,298
32
30
7,215
859
80,908113,805

3,977
2,298
296
39
6,611
836
82,013
114,467(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income
Six Months Ended September 30(Million yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Transportation and storage costs
Advertising expenses
Salaries
Retirement benefit expenses
Provision for retirement benefits for directors (and otherofficers)
Research and development expenses
Other
Total selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expenses
Donations
Miscellaneous losses
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Subsidy income
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Loss on valuation of investment securities
Total extraordinary losses
Profit before income taxes
Income taxes
ProfitLoss attributable to non-controlling interests
Profit attributable to owners of parent

Six months
ended September 30, 2021
25,266
14,86910,397Six months
ended September 30, 2022
31,297
18,572
12,724

2,584
204
1,126
79

3,844
313
1,129
72

8

8

598
1,998
6,601
3,795

754
2,230
8,353
4,371

31
284
28
41
385

43
232
826
21
1,124

12
50
2
64
4,116

13
–
1
15
5,480

0
28
28

–
21
21

9
–
9
4,135
1,198
2,937
(5)
2,943

24
327
352
5,149
1,461
3,688
(19)
3,707

6

Quarterly Consolidated Statements of Comprehensive Income
Six Months Ended September 30(Million yen)

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
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

Six months
ended September 30, 2021
2,937

Six months
ended September 30, 2022
3,688

(24)
9
12
6
3
2,941

(876)
–
263
8
(604)
3,084

2,946

3,103

(4)

(19)

7

(3) Quarterly Consolidated Statements of Cash Flows(Million yen)Six months
ended September 30, 2021
Cash flows from operating activities
Profit before income taxes
Depreciation
Increase (decrease) in retirement benefit liability
Decrease (increase) in retirement benefit asset
Contribution to employees' retirement benefits trust
Interest and dividend income
Interest expenses
Loss (gain) on valuation of investment securities
Subsidy income
Loss on retirement of property, plant and equipment
Loss (gain) on sale of property, plant and equipment
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Increase (decrease) in accrued consumption taxes
Other, net
SubtotalInterest and dividends received
Interest paid
Subsidies received
Income taxes refund (paid)
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of securities
Proceeds from redemption of securities
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Payments for retirement of property, plant andequipment
Purchase of investment securities
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from long-term borrowings
Repayments of long-term borrowings
Purchase of treasury shares
Dividends paid
Dividends paid to non-controlling interests
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

8

Six months
ended September 30, 2022

4,135
942
(52)
1
(1,500)
(315)
12
–
(28)
9
(0)
1,632
(412)
(785)
(318)
37
3,357
317
(12)
28
(1,415)
2,275

5,149
1,288
(12)
(4)
–
(276)
13
327
(21)
24
–
1,170
(454)
(1,481)
238
(980)
4,981
277
(13)
21
(1,881)
3,386

(300)
2,000
(1,681)
4––(1,224)
–

(7)

(20)

(510)
(131)
(626)

(5)
(238)
(1,488)100(49)(1,290)
(669)
(3)
(15)
(1,928)48(230)
37,20736,977100(49)(1,328)
(647)
(3)
(9)
(1,937)657
617
35,75536,373

(4) Notes to Quarterly Consolidated Financial Statements(Notes on going concern assumption)
There is no relevant information.
(Notes in the case of significant changes in shareholders’ equity)(Purchase of treasury shares)
The Company resolved on August 26, 2022 to purchase its treasury shares pursuant to the provisions of thearticles of incorporation, as set forth in Article 459, Paragraph 1 of the Companies Act, and purchased 1,045,000
shares of treasury shares. As a result, during the six months ended September 30, 2022, treasury shares increased by¥1,328 million.
(Cancellation of treasury shares)
The Company resolved on August 26, 2022 to cancel its treasury shares pursuant to the provisions in Article 178of the Companies Act, and cancelled 1,045,000 shares of treasury shares on September 9, 2022. As a result, during
the six months ended September 30, 2022, retained earnings and treasury shares decreased by ¥1,338 million and¥1,338 million, respectively.
(Accounting policies adopted specially for the preparation of quarterly consolidated financial statements)(Calculation of tax expenses)
The Company makes a reasonable estimate of the effective tax rate after the application of tax effect accounting
to profit before income taxes for the current fiscal year, including the second quarter under review, and multiply
profit before income taxes for the quarter by the estimated effective tax rate.
Income taxes - deferred is included in income taxes.

9

(Segment information, etc.)
I. For the six months ended September 30, 2021 (from April 1, 2021 to September 30, 2021)
Information on net sales and profit (loss) by reportable segment and information on composition of revenue(Million yen)

Reportable segment

Net sales
Inorganic chemicals
Organic chemicals
Fine chemicals
Interior, exterior finishes
and paving materials
Exterior products
Other
Revenue from contracts
with customers
Net sales to outside
customers
Inter-segment net sales ortransfers
Total

Other
(Note) 1

Amount recorded inquarterly
Adjustment
consolidated(Note) 2
statement of income(Note) 3

Chemicals
operations

Housing
Materials
operations

5,877
5,991
4,538

–
–
–

5,877
5,991
4,538

–
–
–

5,877
5,991
4,538

–
–
–

5,877
5,991
4,538

–

672

672

–

672

–

672

–
–

7,527
–

7,527
–

–
658

7,527
658

–
–

7,527
658

16,407

8,199

24,607658

25,266–25,266

16,407

8,199

24,607658

25,266–25,266

0

1

1

147

149

(149)

–

16,4088,201

24,609806

25,416(149)

25,266

Total

Total

Segment profit
3,614
1,058
4,672
75
4,748
(952)
3,795
(Notes) 1. The “Other” category represents business segments not included in the reportable segments, and includes
the IT systems operations and food operations.
2. The adjustment for segment profit of ¥(952) million includes inter-segment eliminations of ¥0 million
and corporate expenses in the amount of ¥(952) million not allocated to each reportable segment. The
relevant corporate expenses are mainly general and administrative expenses not allocated to thereportable segments.
3. Segment profit is adjusted with operating profit on the quarterly consolidated statement of income.

10II. For the six months ended September 30, 2022 (from April 1, 2022 to September 30, 2022)
Information on net sales and profit (loss) by reportable segment and information on composition of revenue(Million yen)

Reportable segment

Net sales
Inorganic chemicals
Organic chemicals
Fine chemicals
Interior, exterior finishes
and paving materials
Exterior products
Other
Revenue from contracts
with customers
Net sales to outside
customers
Inter-segment net sales ortransfers
Total

Other
(Note) 1

Amount recorded inquarterly
Adjustment
consolidated(Note) 2
statement of income(Note) 3

Chemicals
operations

Housing
Materials
operations

7,088
10,314
4,927

–
–
–

7,088
10,314
4,927

–
–
–

7,088
10,314
4,927

–
–
–

7,088
10,314
4,927

–

647

647

–

647

–

647

–
–

7,784
–

7,784
–

–
534

7,784
534

–
–

7,784
534

22,3308,432

30,762534

31,297–

31,297

22,3308,432

30,762534

31,297–

31,297

0

1

2

123

125

(125)

–

22,3308,433

30,764657

31,422(125)

31,297

Total

Total

Segment profit
4,521
758
5,279
57
5,337
(965)
4,371
(Notes) 1. The “Other” category represents business segments not included in the reportable segments, and includes
the IT systems operations and food operations.
2. The adjustment for segment profit of ¥(965) million includes inter-segment eliminations of ¥0 million
and corporate expenses in the amount of ¥(965) million not allocated to each reportable segment. The
relevant corporate expenses are mainly general and administrative expenses not allocated to thereportable segments.
3. Segment profit is adjusted with operating profit on the quarterly consolidated statement of income.

11