Note: This document has been translated from the Japanese original for reference purposes only. In the event of any
discrepancy between this translated document and the Japanese original, the original shall prevail.

October 30, 2023

Consolidated Financial Results for the Six Months Ended September 30,
2023 (Japanese GAAP)
Company name:NIPPON FINE CHEMICAL CO., LTD.
Listing:
Tokyo
Securities Code: 4362
URL:
https://www.nipponseika.co.jp/en/
Representative:
Hiroshi Yano, Representative Director, President
Inquiries:
Yoshihiro Okura, General Manager Corporate Planning OfficeTEL:+81-6-6231-4781
Scheduled date to file quarterly securities report:
November 10, 2023
Scheduled date to commence dividend payments:
December 1, 2023
Preparation of supplementary material on quarterly financial results: Yes
Holding of quarterly financial results meeting:Yes (for institutional investors andanalysts)(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the six months ended September 30, 2023 (from April 1, 2023 to
September 30, 2023)(1) Consolidated operating results (cumulative)
Net sales
Six months ended
September 30, 2023
September 30, 2022

Operating profit

Millions of yen% Millions of yen

16,17918,677

Note: Comprehensive income(13.4)
15.2

1,960
2,727

Profit attributable toowners of parent

Ordinary profit% Millions of yen(28.1)
14.2

2,122
2,905

% Millions of yen(26.9)
15.4

1,499
1,956

%

(23.4)
15.2

For the six months ended September 30, 2023 ¥2,010 million [2.6%]
For the six months ended September 30, 2022 ¥1,958 million [(5.6)%]

Basic earnings per
share
Six months ended
September 30, 2023
September 30, 2022

(Percentages indicate year-on-year changes.)

Diluted earnings per
share

Yen

65.72
82.84

Yen

–
–

(2) Consolidated financial position
Total assets
As of
September 30, 2023
March 31, 2023
Reference:

EquityAs of September 30, 2023
As of March 31, 2023

Net assets

Equity-to-asset ratio

Millions of yen

Millions of yen

57,74356,67247,506
46,101¥46,604 million¥45,266 million

%

80.7
79.9

2. Status of dividends
Annual dividends per shareFirst quarter-end

Second quarter-end

Third quarter-end

Yen

Yen

Yen

Fiscal year ended
March 31, 2023
Fiscal year ending
March 31, 2024

–

28.00

–

35.00

Fiscal year ending
March 31, 2024
(Forecast)Fiscal year-end

Total

Yen

Yen

–

29.00

57.00

–

35.00

70.00

Note: Revisions to the forecast of cash dividends most recently announced: None

3. Consolidated earnings forecasts for the year ending March 31, 2024 (from April 1, 2023 to March
31, 2024)
Net sales
Millions ofyen(Percentages indicate year-on-year changes.)
Basic
Profit attributable toOrdinary profit
earnings perowners of parent
share

Operating profit%

Millions ofyen%Millions ofyenFull year
35,500(3.6)
4,400 (13.0)
4,700
Note: Revisions to the earnings forecasts most recently announced: Yes%

Millions of
yen

%

Yen

(12.8)

3,250(20.3)

142.28

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in thechange in scope of consolidation): None
Newly included: - (company name) Excluded: - (company name)(2) Adoption of accounting treatment specific to the preparation of quarterly consolidated financial
statements: None
(3) Changes in accounting policies, changes in accounting estimates, and restatement(i) Changes in accounting policies due to revisions to accounting standards, etc.: None(ii) Changes in accounting policies other than (i): None(iii) Changes in accounting estimates: None(iv) Restatement: None
(4) Number of issued shares (common shares)(i) Total number of issued shares at the end of the period (including treasury shares)
As of September 30, 2023

25,372,447 shares

As of March 31, 2023

25,372,447 shares(ii) Number of treasury shares at the end of the period
As of September 30, 2023

2,530,981 shares

As of March 31, 2023

2,563,350 shares(iii) Average number of shares outstanding during the period (cumulative from the beginning of the
fiscal year)
Six months ended September 30, 2023

22,819,291 shares

Six months ended September 30, 2022

23,621,814 shares* Quarterly financial results reports are exempt from quarterly review conducted by certified public
accountants or an audit corporation.
* Proper use of earnings forecasts, and other special matters
The forward-looking statements of the earnings outlook, etc. described in this document are based on theinformation currently obtained by the Company and certain assumptions that it deems reasonable, andare not intended to promise the achievement of such information. In addition, actual business results may
differ significantly due to various factors. Please refer to page 3 of the attached materials “1. Qualitative
information on financial results for the period under review (3) Explanation of consolidated earnings
forecasts and other forward-looking statements” for the conditions that are the premise of the earnings
forecasts and cautions when using the earnings forecasts.
The Company plans to hold a briefing session for institutional investors and analysts on Monday,
November 13, 2023. The financial results presentation materials to be distributed at this briefing session
will be posted on the Company’s website on the same day.

NIPPON FINE CHEMICAL CO., LTD. (4362)○ Table of contents of attached materials
Index
1. Qualitative information on financial results for the period under review ................................................. 2(1) Explanation of operating results ......................................................................................................... 2(2) Explanation of financial position........................................................................................................ 3(3) Explanation of consolidated earnings forecasts and other forward-looking statements ..................... 3
2. Quarterly consolidated financial statements and main notes .................................................................... 4(1) Quarterly consolidated balance sheet ................................................................................................. 4(2) Quarterly consolidated statement of income and comprehensive income (cumulative) .................... 6(3) Quarterly consolidated statement of cash flows ................................................................................. 7(4) Notes to quarterly consolidated financial statements ......................................................................... 8(Notes on premise of going concern) ................................................................................................. 8(Notes when there are significant changes in amounts of shareholders’ equity) ................................ 8(Segment information) ....................................................................................................................... 8-1-

NIPPON FINE CHEMICAL CO., LTD. (4362)

1. Qualitative information on financial results for the period under review(1) Explanation of operating results
During the six months ended September 30, 2023, the Japanese economy showed signs ofnormalization of economic activities as the legal status of COVID-19 was downgraded to Class 5 in
May and the number of foreign visitors is returning to the pre-pandemic level. At the same time,looking overseas, the outlook remains uncertain due to soaring global resource and energy prices
caused by the protracted situation in Ukraine and concerns about a downturn in the Chinese economy.
In this business environment, the Group has been working to further strengthen its management baseand promoted selection and concentration on products that can be expected to contribute to the
expansion of earnings.
As a result, net sales for the first six months of the fiscal year under review decreased to ¥16,179
million (down 13.4% year-on-year). In terms of profit, operating profit was ¥1,960 million (down
28.1% year-on-year), and ordinary profit was ¥2,122 million (down 26.9% year-on-year). Profit
attributable to owners of parent was ¥1,499 million (down 23.4% year-on-year).
Operating results for each segment are as follows.
The classification of reporting segments has been changed from the first quarter of the fiscal year underreview. The following year-on-year comparisons are comparative analyses based on figures for thesame period of the previous fiscal year that have been reclassified into the new segment classifications.
(i) Functional products
In this segment, net sales was ¥12,589 million (down 13.7% year-on-year). Segment profit(operating profit) was ¥1,693 million (down 25.1% year-on-year).
Reference:Six months ended
September 30, 2022

Six months ended
September 30, 2023

Beauty care
Health careFine chemical
Trading

3,828
2,705
3,908
4,141

4,031
2,326
2,499
3,732

202
(378)
(1,408)(409)

5.3%(14.0%)(36.1%)(9.9%)

Total net sales

14,583

12,589(1,994)(13.7%)

Beauty care
Health careFine chemical
Trading

1,095
366
657
142

1,174
(0)
353
165

79
(366)
(304)
23

7.2%
(100.0%)(46.3%)
16.2%

Total operating profit

2,261

1,693

(568)

(25.1%)(Unit: Millions of yen)

Year-on-year
differenceYear-on-yearchangesBeauty care
Overseas sales of wool grease derivatives for cosmetics decreased against the backdrop of aslowdown in overseas economies, but overseas sales of functional esters for cosmetics increased
due to sales expansion activities in response to the needs of sustainable aspect by customers.
Domestic sales of phospholipids for cosmetics also increased due to steady progress in sales
expansion.
Health care
Sales of phospholipids for pharmaceuticals decreased due to the impact of test production being
implemented according to plan for the commencement of commercial production at the new plantfor phospholipids for pharmaceuticals and the postponement of shipments to the second half of the
fiscal year for items that were scheduled to be shipped in the first half of the fiscal year.
Depreciation also increased due to the launch of the new plant.

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NIPPON FINE CHEMICAL CO., LTD. (4362)

Fine chemical
Sales of fatty acid amides, acid chlorides, and industrial wool grease derivatives decreased against
the backdrop of a slowdown in overseas economies.
(ii) Environmental hygiene products
In this segment, sales of hand sanitizers decreased due to inventory adjustments in the market in
addition to a slowing of demand for infection control products after the change in the legal status of
COVID-19. As a result, net sales was ¥3,462 million (down 12.0% year-on-year) and segment
profit (operating profit) was ¥213 million (down 44.3% year-on-year).
(iii) Other
Net sales of other businesses was ¥128 million (down 18.7% year-on-year) and segment profit(operating profit) was ¥54 million (down 34.9% year-on-year).
(2) Explanation of financial position
Total assets at the end of the second quarter of the fiscal year under review increased by ¥1,070 million
from the end of the previous fiscal year (hereinafter referred to as “the previous fiscal year-end”) to¥57,743 million. This was mainly due to an increase in current assets by ¥871 million due mainly to anincrease in cash and deposits, and a ¥199 million increase in non-current assets due mainly to anincrease in investment securities.
Liabilities at the end of the second quarter of the fiscal year under review decreased by ¥334 million
from the previous fiscal year-end to ¥10,236 million. This was mainly due to a decrease in non-current
liabilities by ¥451 million mainly due to a decrease in deferred tax liabilities, while current liabilities
increased by ¥116 million mainly due to an increase in income taxes payable.
The net assets at the end of the second quarter of the fiscal year under review increased by ¥1,405
million from the previous fiscal year-end to ¥47,506 million. This was mainly due to an increase inshareholders’ equity by ¥927 million, mainly due to recording ¥1,499 million in profit attributable toowners of parent, and an increase of ¥410 million in accumulated other comprehensive income, mainly
from an increase in valuation difference on available-for-sale securities, despite a decrease due to ¥661
million in dividends paid.
(3) Explanation of consolidated earnings forecasts and other forward-looking statements
In the field of environmental hygiene products, sales of hand sanitizers decreased due to inventory
adjustments in the market in addition to a slowing of demand for infection control products after thechange in the legal status of COVID-19. We expect that it will take a considerable period of time forsales of hand sanitizers to recover from the third quarter onward, and we have revised our full-year
consolidated earnings forecasts from the forecasts announced on April 28, 2023. The main exchange
rates used in the earnings forecasts are ¥140 per US$ and ¥150 per EUR.
Earnings forecasts are created based on information available at the time, and actual performance mayvary from forecasted values due to a variety of future factors.

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NIPPON FINE CHEMICAL CO., LTD. (4362)

2. Quarterly consolidated financial statements and main notes(1) Quarterly consolidated balance sheet(Thousands of yen)Previous fiscal year
(As of March 31, 2023)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
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
Retirement benefit asset
Other
Total investments and other assets
Total non-current assets
Total assets-4-

Current second quarter(As of September 30, 2023)

8,937,431
8,855,955
4,001,642
2,290,016
4,718,263
788,202(695)
29,590,815

10,336,421
8,548,075
4,077,062
2,743,726
4,466,371
291,164(663)
30,462,159

6,737,425
1,285,637
3,719,989
1,794,239
690,084
14,227,376
521,691

6,623,875
2,812,106
3,719,989
119,115
731,334
14,006,422
640,829

12,017,715
67,408
247,729
12,332,853
27,081,921
56,672,737

12,275,764
75,071
283,049
12,633,885
27,281,137
57,743,296

NIPPON FINE CHEMICAL CO., LTD. (4362)(Thousands of yen)

Liabilities
Current liabilities
Notes and accounts payable - trade
Accounts payable - other
Income taxes payable
Provision for bonuses
Provision for bonuses for directors (and otherofficers)
Provision for environmental measures
Accounts payable - facilities
Other
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Retirement benefit liability
Long-term accounts payable - other
Long-term guarantee deposits
Asset retirement obligations
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
Deferred gains or losses on hedges
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-Previous fiscal year
(As of March 31, 2023)

Current second quarter(As of September 30, 2023)

4,256,778
839,820
607,013717,500

3,810,753
630,499
1,090,113
635,323

79,752

18,897–459,535
655,448
7,615,849

426,000
217,148
903,579
7,732,316

2,655,149
144,956
15,600102,890
9,430
27,652
2,955,679
10,571,528

2,232,244
128,113
19,65990,516
9,430
24,5802,504,544
10,236,861

5,933,221
6,821,920
28,513,077(3,171,070)
38,097,149

5,933,221
6,870,796
29,351,430(3,131,121)
39,024,327

6,469,379
3,275
697,997(1,156)
7,169,496
834,562
46,101,208
56,672,737

6,698,245
5,070
877,422(1,055)
7,579,683
902,424
47,506,435
57,743,296

NIPPON FINE CHEMICAL CO., LTD. (4362)(2) Quarterly consolidated statement of income and comprehensive income (cumulative)(Thousands of yen)

Net sales
Cost of sales
Gross profit
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
Foreign exchange losses
Depreciation
Miscellaneous losses
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Gain on sale of investment securities
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Loss on sale of investment securities
Loss on valuation of investment securities
Provision for environmental measures
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable toProfit attributable to owners of parent
Profit attributable to non-controlling interests
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, 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-6-

Previous second quarter(Cumulative)(From April 1, 2022
to September 30, 2022)
18,677,377
13,047,874
5,629,502
2,901,725
2,727,777

Current second quarter(Cumulative)(From April 1, 2023
to September 30, 2023)
16,179,996
11,394,999
4,784,996
2,824,373
1,960,623

6,407
149,120764
22,931
179,223

5,798
156,372–
20,962
183,133

645
–
–
1,227
1,872
2,905,128

644
3,210
15,8301,234
20,9202,122,836

2,247
–
2,247

259
484,271484,531

11,454
13,889––25,3432,882,032
830,015
49,945879,960
2,002,072

5,941–
49,021
426,000
480,963
2,126,405
1,106,954(524,687)
582,266
1,544,138

1,956,872
45,2001,499,815
44,323(223,619)(7,921)
188,787(538)(43,291)
1,958,780

228,866
1,989
235,570101
466,526
2,010,665

1,869,295

1,910,003

89,485

100,662

NIPPON FINE CHEMICAL CO., LTD. (4362)(3) Quarterly consolidated statement of cash flows(Thousands of yen)Previous second quarter(Cumulative)(From April 1, 2022
to September 30, 2022)
Cash flows from operating activities
Profit before income taxes
Depreciation
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in retirement benefit liability
Decrease (increase) in retirement benefit asset
Increase (decrease) in provision for environmental
measuresInterest and dividend income
Interest expenses
Foreign exchange losses (gains)
Loss (gain) on sale of investment securities
Loss (gain) on valuation of investment securities
Loss (gain) on sale and retirement of property, plant andequipment
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in guarantee deposits received
Increase (decrease) in trade payables
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sale of investment securities
Net cash provided by (used in) investing activities
Cash flows from financing activities
Repayments of lease liabilities
Dividends paid
Dividends paid to non-controlling interests
Purchase of treasury shares
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-7-

Current second quarter(Cumulative)(From April 1, 2023
to September 30, 2023)

2,882,032
445,586(1,903)24,365(29,778)

2,126,405
605,644(32)(16,843)(7,663)–426,000(155,527)
645(11,792)
13,889–(162,171)644(21,689)(484,271)
49,021

9,206

5,681

(506,876)(1,309,725)
382
48,147(241,632)
1,167,019
155,527(645)(1,063,208)
258,693

347,919(208,076)(12,373)(415,335)
448,792
2,681,651
162,171(644)(639,867)
2,203,310–
101,450(452,295)
2,600(84,778)(804)
25,125(408,703)(206,600)–(530,392)
260(231,260)(818)
519,875(448,934)(3,968)(684,849)(36,841)(76)
47(725,688)(4,277)(661,463)(32,801)(618)–(699,160)

47,882

58,139(827,815)
11,410,777
10,582,961

1,113,354
7,766,215
8,879,570

NIPPON FINE CHEMICAL CO., LTD. (4362)(4) Notes to quarterly consolidated financial statements(Notes on premise of going concern)
Not applicable.
(Notes when there are significant changes in amounts of shareholders’ equity)
Not applicable.
(Segment information)[Segment information]
I.

Previous second quarter (Cumulative) (From April 1, 2022 to September 30, 2022)
1. Information on net sales and profits or losses for each reporting segment, and information on
the decomposition of profits
Reporting segment(Thousands of yen)
Quarterly
consolidated
statement of
Adjustment
income andamountcomprehensive income
amounts
Note: 2Functional
products

Environmental
hygieneproducts

Total

14,583,716

3,936,018

18,519,734–

18,519,734–

18,519,734

–

–

–

157,642

157,642–

157,642

14,583,716

3,936,018

18,519,734

157,642

18,677,377–

18,677,377

146,475

16,467

162,942

15,808

178,751(178,751)

–

Total

14,730,191

3,952,485

18,682,676

173,451

18,856,128(178,751)

18,677,377

Segment profit

2,261,095

383,626

2,644,721

83,0552,727,777–

2,727,777

Net sales
Revenue from contracts
with customers
Other revenue
Revenues from externalcustomers
Intersegment sales ortransfers

Other
Note: 1

Total

Notes: 1. The “Other” segment is a business segment that is not included in the reporting segment, and includes the realestate business.
2. Segment profit is consistent with the operating profit in the quarterly consolidated statement of income andcomprehensive income.

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NIPPON FINE CHEMICAL CO., LTD. (4362)

II. Current second quarter (Cumulative) (From April 1, 2023 to September 30, 2023)
1. Information on net sales and profits or losses for each reporting segment, and information on
the decomposition of profits
Reporting segment(Thousands of yen)
Quarterly
consolidated
statement of
Adjustment
income andamountcomprehensive income
amounts
Note: 2Functional
products

Environmental
hygieneproducts

Total

12,589,611

3,462,195

16,051,806–

16,051,806–

16,051,806

–

–

–

128,189

128,189–

128,189

12,589,611

3,462,195

16,051,806

128,189

16,179,996–

16,179,996

90,631

15,643106,275

70,981

177,256(177,256)

–

Total

12,680,242

3,477,839

16,158,082

199,171

16,357,253(177,256)

16,179,996

Segment profit

1,693,060

213,523

1,906,584

54,0381,960,623–

1,960,623

Net sales
Revenue from contracts
with customers
Other revenue
Revenues from externalcustomers
Intersegment sales ortransfers

Other
Note: 1

Total

Notes: 1. The “Other” segment is a business segment that is not included in the reporting segment, and includes the realestate business.
2. Segment profit is consistent with the operating profit in the quarterly consolidated statement of income andcomprehensive income.

2. Disclosure of changes, etc. in reporting segments
Segments have been reorganized based on business fields from the first quarter of the fiscal year
under review.
The former “Industrial products” segment has been renamed the “Functional products” segment.
The Company’s household products in the “Household products” segment and the business of
entrusting pharmacology and safety tests in the “Other” segment have been incorporated into the“Functional products” segment. The former “Household products” segment has been renamed the“Environmental hygiene products” segment.
Segment information for the previous second quarter (cumulative) is disclosed based on the newreporting segment classifications.

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