(Reference Translation)
November 7, 2017

Osaka Soda Co., Ltd.
CONSOLIDATED FINANCIAL RESULTS
For the quarterly period ended September 30, 2017
(Prepared under Japan GAAP, unaudited)

Company name:

Osaka Soda Co.,Ltd.

Stock Exchange Listing:Tokyo

Securities code:

4046

URL:

http://www.osaka-soda.co.jp

Representative:

Tamotsu Sato, Representative Director, Chief Executive Officer

For inquiry:

Takuya Kajino, General Manager, Administration Division(Telephone: +81-6-6110-1560)

Scheduled date of filing of quarterly report:

November 8, 2017

Scheduled date of commencement of dividend payment:December 6, 2017

Supplementary materials prepared for the quarterly financial results:
Quarterly financial results briefings:

1. Consolidated Financial Results

Yes

Yes (for institutional investors and investment analysts)(Amounts are rounded down to the nearest million yen)

(1) Results of Operations
Six Months Ended
September 30, 2017

September 30, 2016

Millions of yen

Change *Millions of yen

Change *Net sales

47,9894.5%

45,917(8.8)%

Operating income

3,451

6.2%

3,248

5.5%

Ordinary income

3,809

46.5%

2,600

(20.1)%Net income

2,494

41.4%

1,764

(10.8)%

Comprehensive income

4,154

251.8%

1,178

10.7%

Note: Percent changes for six months are year-on-year comparisons.

Net income per share(Yen)

Diluted net income per share(Yen)

118.00

83.73

95.42

69.48

Note: OSAKA SODA CO., LTD. (the “Company”) will be completed common shares consolidation at the rate of 5 to 1,
effective October 1, 2017. As a result, quarterly net income per share and quarterly diluted net income per share
are calculated assuming that the share consolidation was executed at the beginning of the previous fiscal year.

(2)Financial Condition
September 30, 2017

March 31, 2017

Millions of yen

Ratio

Millions of yen

Ratio

Total assets

116,281－

101,503－

Net assets

57,356－52,725－Equity57,356－52,725

－

－

49.3%

－

51.9%

Equity ratio

12. Dividends
Year ending Mar. 31, 2018Year ending Mar. 31, 2018Year ended Mar. 31, 2017

－－

5.50

5.00

(Forecast)End of first quarterEnd of second quarter－End of third quarterEnd of fourth quarter
Full year－－

6.00

27.50

11.00

Note: The Company will be completed common shares consolidation at the rate of 5 to 1, effective October 1, 2017. As aresult, the forecast of dividend per share for the fiscal year ending March 31, 2018 is effected by the shareconsolidation. Calculating annual dividend for the same fiscal year ending March 31, 2018 is not possible inaccordance with the Ratio.

3. Earnings Forecast for the fiscal year ending March 31, 2018
Full-year
Millions of yen

Change*100,000

6.9%

Operating income

7,000

6.3%

Ordinary income

7,000

7.1%

Net income

4,600

6.5%

Net sales

Note: Percent changes are year-on-year comparisons.
Earnings per share(Yen)

218.32

Note: The Company will be completed common shares consolidation at the rate of 5 to 1, effective October 1, 2017. As aresult, the forecast of earnings per share for the fiscal year ending March 31, 2018 is effected by the shareconsolidation.

* Notes(1) Changes in significant subsidiaries during the period (Changes in specified subsidiaries resulting in thechange in scope of consolidation): None
(2) Application of accounting methods used specifically for the preparation of quarterly consolidated financial
statements: None
(3) Changes in accounting policies, accounting estimates and restatements of revisions
1) Changes in accounting policies due to revisions of accounting standards, etc.: None
2) Changes in accounting policies other than 1: None
3) Changes in accounting estimates: None
4) Restatement of revisions: None2(4) Number of outstanding shares (common stock)1) Number of shares outstanding at the end of the period (including treasury shares)
As of September 30, 2017:

22,844,499

Shares

As of March 31, 2017:

22,354,767

Shares2) Number of treasury shares at the end of period
As of September 30, 2017:

1,286,580

Shares

As of March 31, 2017:

1,285,645

Shares3) Average number of shares outstanding in each period
Six months ended September 30, 2017:21,139,395

SharesSix months ended September 30, 2016:

21,070,157

Shares* Status of quarterly review procedure:This quarterly financial results are not subject to the quarterly review procedure in accordance with theFinancial Instruments and Exchange Act. The quarterly review procedure of consolidated financial
statements has not been completed at the time of disclosure.

*Appropriate use of financial forecasts, other special notes
This material contains forward-looking statements such as earnings forecast about Osaka Soda Co., Ltd. andits group companies (“Osaka Soda Group”). These forward-looking statements are based on the current
assumptions and beliefs of Osaka Soda Group in light of the information currently available to it, and containknown and unknown risks, uncertainties and other factors. Osaka Soda Group therefore wishes to caution
readers that actual results could be materially different from any future results.

DISCLAIMER:

This is an English translation of the original Japanese document and is prepared for reference. Should there
be any inconsistency between the translation and the Japanese original, the latter shall prevail.

34. QUALITATIVE INFORMATION(1)Results of Operations
During the six months ended September 30, 2017, Japan’s economy has continued to recover moderately asa trend against the background of steady improvement in the corporate profit and employment situation,although the international situation has remained uncertain due to Trump administration’s policy andgeopolitical risks.
Basic Chemical Products
The cost competiveness has been strengthened by building an efficient production system. And the sales priceincreases have been implemented, affecting the change of raw material and fuel cost.
Functional Chemical Products
The sales activities have been accelerated to expand market share in synthetic rubber and synthetic resinsthat are our core products, and we focused on the early launch of new products such as acrylic rubber.
We are cultivating the healthcare related business as a third pillar of profit. The contract manufacturing projects
using special equipment have been acquired and the new business has been created in the field of active
pharmaceutical ingredients and their intermediates. The new customers in Eastern Europe, China, and India
have been developed in the purification of pharmaceutical products. As of August 2017, we have agreed to betransferred chromatography business from Shiseido Company, Limited. Accordingly, the integrated production
system will be completed in the field of drugs purification in December 2017.
Housing Facilities and Others
The profitability has been strengthened by continuing to change the business portfolio.
As a result, net sales were ¥47,989 million, an increase of 4.5% compared to the same period of fiscal 2016.
Operating income was ¥3,451 million, an increase of 6.2% compared to the same period of fiscal 2016.
Ordinary income was ¥3,809 million, an increase of 46.5% compared to the same period of fiscal 2016. Net
income attributable to owners of parent was ¥2,494 million, an increase of 41.4% compared to the same periodof fiscal 2016.
Basic Chemical Products
In Chlor-Alkali, net sales increased due to continued steady shipments in caustic soda as well as
implementation of sales price increase.

.

In Epichlorhydrin, net sales increased due to steady sales volume affecting overseas market conditions byimprovement of supply-demand in Asia.
As a result, net sales in Basic Chemical Products were ¥21,391 million, an increase of 7.5% compared to thesame period of fiscal 2016.
Functional Chemical Products
In Epichlorhydrin Rubber, net sales increased due to recovery in domestic demand and steady increase in
shipment of automobile to Europe and China. And we enhanced sales activities in acrylic rubber.
In Diallyl Phthalate Resin, net sales increased due to continued favorable export sales, backed by sales
expansion of high sensitivity UV inks to Europe and success in pioneering new application.
In Allyl Ethers, net sales increased due to continued steady export sales to USA and China mainly applied forsilane coupling agents.
In Active Pharmaceutical Ingredients and their Intermediates, net sales increased due to continued favorable
domestic sales in “Anti-viral drugs”, “Treatment of insomnia” and “Ingredients of cosmeceuticals” as well as
overseas sales in “Active pharmaceutical Ingredients of cardiotonic drug” and imported sales in generic drug
substance.
In Separation Media in Pharmaceutical Industry (Silica Gel for Liquid Chromatography), net sales increased4due to continued steady sales to China applied for biopharmaceutical purification and domestic market, despite
inventory adjustments by European major customers, and continued steady sales applied for analytical andpurification of active pharmaceutical ingredients.
As a result, net sales in Functional Chemical Products were ¥19,437 million, an increase of 6.1% comparedto the same period of fiscal 2016.
Housing Facilities and Others
Net sales in housing facilities and others were ¥7,159 million, a decrease of 7.0% compared to the same periodof fiscal 2016.
(2) Financial Condition
AssetsCurrent assets were ¥70,874 million, a decrease of 20.7% since March 31, 2017. The increase was due
primarily to an increase of ¥9,999 million in short term investment securities, an increase of ¥196 million innotes and accounts receivable-trade, an increase of ¥438 million in electrically recorded monetary claims.
Noncurrent assets were ¥45,406 million, an increase of 6.2% since March 31, 2017. The increase was due
primarily to an increase of ¥2,303 million in investment securities.
As a result, Total assets were ¥116,281 million as of September 30, 2017, an increase of 14.6% since March31, 2017.
Liabilities
Current liabilities were ¥32,830 million, an increase of 4.6% since March 31, 2017. The increase was due
primarily to an increase of ¥2,020 million in notes and accounts payable-trade.
Noncurrent liabilities were ¥26,094million, an increase of 50.1% since March 31, 2017. The decrease wasdue primarily to an increase of ¥8,879 million in bonds with subscription rights to shares.
As a result, Total liabilities were ¥58,924 million as of September 30, 2017, an increase of 20.8% since March31, 2017.
Net assets
Net assets were ¥57,356 million as of September 30, 2017, an increase of 8.8% since March 31, 2017.
(3) Cash Flows
As of September 30, 2017, cash and cash equivalents were ¥30,321 million, an increase of ¥9,778 million
compared with those as of March 31, 2017.
Cash flows from operating activities
Net cash provided by operating activities totaled ¥3,853 million, due primarily to ¥3,620 million in income
before income taxes and ¥1,542 million in depreciation, a decrease of ¥1,162 million in income tax paid.
Cash flows from investing activities
Net cash used in investing activities totaled ¥2,306 million, due primarily to payments of ¥2,161 million forpurchase of property, plant, and equipment.
Cash flows from financing activities
Net cash used in financing activities amounted to ¥8,044 million, due primarily to proceeds of ¥9,967 million
from the issuance of convertible bond-type bonds with subscription rights.
(4) Earnings Forecast
There are no revisions to the earnings forecast from the previous forecast announced in the "Consolidated
financial results for the year ended March 31, 2018" dated May 9, 2017.

5

5.

CONSOLIDATED FINANCIAL STATEMENTSCONSOLIDATED BALANCE SHEETS(Millions of yen)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Electrically recorded monetary claims
Short term investment securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Other current assets
Less: Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant, and equipment
Property, plant, and equipment - Net
Other - Net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Other
Less: Allowance for doubtful accounts
Total investment and other assets
Total noncurrent assets
Total assets

6

March 31,2017

September 30,
2017

11,03325,397
2,497
9,499
5,743
1,411
1,667
1,491
(3)
58,73910,882
27,357
2,936
19,499
6,059
1,577
1,472
1,152
(3)
70,874

11,33910,216
21,555

10,425
11,662
20,088769
437
1,207716
502
1,218

18,927
1,641(568)
20,001
42,764
101,503

21,2601,405(566)
22,09945,406116,281CONSOLIDATED BALANCE SHEETS (Continued)(Millions of yen)

Liabilities
Current liabilities
Notes and accounts payable- trade
Short term loans payable
Current portion of long term loans payable
Income taxes payable
Provision for bonuses
Other current liabilities
Total current liabilities
Noncurrent liabilities
Bonds with subscription rights to sharesLong term loans payable
Provision for directors retirement benefits
Net defined benefit liability
Other noncurrent liabilities
Total noncurrent liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Unrealized gain on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustments
Re-measurements of defined benefit plans
Total accumulated other comprehensive income
Total net assets
Total net assets and liabilities

7

March 31,2017

September 30,
2017

13,3398,880
2,160
1,311712
4,987
31,39015,359
8,880
1,760
1,165
757
4,907
32,830

9,999
800
567
2,927
3,093
17,387
48,77818,878
－
572
2,916
3,726
26,09458,924

10,882
9,399
27,964(1,670)46,576

11,4439,960
29,826(1,673)49,5566,481(13)24(342)
6,149
52,725
101,503

8,092
621(320)
7,799
57,356116,281CONSOLIDATED STATEMENTS OF INCOME(Millions of yen)

Six Months Ended
September 30,
September 30,
2016
2017
45,91747,98936,837
38,682
9,079
9,306

Net sales
Cost of salesGross profit
Selling, general, and administrative expenses

5,831
3,248

5,855
3,451

15
193－
41250

7212
220
45485

34－
845
18
898
2,600

68
32－
25
127
3,809－
－

106
106

262
262
2,338

295
295
3,620

Net income
Net income attributable to non-controlling interests

673
(100)
573
1,764－

1,027
98
1,125
2,494－Net income attributable to owners of parent

1,764

2,494

Operating income
Non-operating income
Interest income
Dividend income
Foreign exchange gain
OtherTotal non-operating income
Non-operating expenses
Interest expenses
Bond issuance cost
Foreign exchange loss
OtherTotal non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of investment securities
Total extraordinary income
Extraordinary loss
Loss on retirement of noncurrent assets
Total extraordinary loss
Income before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes

8

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(Millions of yen)

Net income
Other comprehensive income
Unrealized gain on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustments
Re-measurements of defined benefit plans
Total
Comprehensive income
Comprehensive income attributable to:
Owners of parent
Minority interests

9Six Months Ended
September 30,
September 30,
2016
2017
1,764
2,494(605)
40(51)
29(586)
1,178

1,611
19(3)
22(1,650)
4,145

1,178
－

4,145
－

CONSOLIDATED STATEMENTS OF CHASH FLOWS(Millions of yen)

Six Months Ended
September 30,
September 30,
2016
2017
Cash flows from operating activities
Income (loss) before income taxes
Depreciation
Amortization of goodwill
Increase (decrease) in allowance for doubtful accountsIncrease (decrease) in provision for bonuses
Increase (decrease) in provision for directors' retirement
benefits
Increase (decrease) in allowance for retirement benefits foremployees
Interest and dividend income
Interest expenses
Foreign exchange losses (gains)
Loss on retirement of non-current assets
Loss (gain) on sales of non-current assets
Bond issuance cost
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable-trade
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities

10

2,338
1,44077
(13)
15(3)

3,620
1,542
77
(1)
44
5

1(10)

(208)
34678
262－－
934
552
210
(98)
6,220
208
(35)
(1,254)
5,138

(219)
68(193)295(106)
32(2,390)
(282)
2,003
373
4,859
219
(63)
(1,162)
3,853

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)(Millions of yen)

Six Months Ended
September 30,
September 30,2016
2017
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Repayments of long-term loans payable
Proceeds from issuance of bonds with subscription rights
to shares
Cash dividends paid
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
Cash and cash equivalents

11(1,175)
－(97)
(252)
(244)
(1,769)(2,161)
115
(178)
(9)
(72)
(2,306)(1,220)－(1,200)
9,967

(525)
(1)
(1,747)
(745)

(631)
(90)
8,044
196

876
19,036
19,912

9,788
20,53230,321

6. Notes to the Consolidated Financial Statements(1) Notes regarding the going concern assumption
None(2) Notes regarding significant changes in the amount of shareholders’ equity
None(3) Segment information
Six months ended September 30, 2016

(Millions of yen)
Net sales

Externalsales
19,902
18,3137,700
45,917Intersegment sales
or reclassifications
90694704(704)

TotalSegment
incomeBasic Chemical Products
19,912498
Functional Chemical Products
18,314
3,163
Housing Facilities and Others
8,395
55
Total
46,622
3,717
Adjustments *1(704)(468)－
Consolidated operating income *2
45,91745,917
3,248－
Notes 1: Adjustments of segment income of ¥(468) million are corporate expenses not allocated toreportable segments. Corporate expenses are mainly expenses not attributable to a reporting
segment and related to fundamental research and development as well as administrative
departments.
Notes 2: Segment Income is reconciled with consolidated operating income.

Six months ended September 30, 2017

(Millions of yen)

Net sales
Segment
ExternalIntersegment sales
incomeTotalsales
or reclassifications
Basic Chemical Products
21,391
4
21,396986
Functional Chemical Products
19,437
10
19,4482,900
Housing Facilities and Others
7,159
606
7,766
43
Total
47,989621
48,611
3,929
Adjustments *1(621)
(621)
(478)
－
Consolidated operating income *2
47,98947,9893,451－Notes 1: Adjustments of segment income of ¥(478) million are corporate expenses not allocated toreportable segments. Corporate expenses are mainly expenses not attributable to a reporting
segment and related to fundamental research and development as well as administrative
departments.
Notes 2: Segment Income is reconciled with consolidated operating income.

12