Translation
Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any
discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Summary of Consolidated Financial Results
for the Year Ended March 31, 2018
(Based on Japanese GAAP)May 11, 2018
Company name:

Hodogaya Chemical Co., Ltd.

Stock exchange listing: Tokyo
Stock code:
4112
Representative:
Inquiries:

URL

http://www.hodogaya.co.jp/President
General Manager, Corporate Planning

Department
Scheduled date of ordinary general meeting of shareholders:

Yuto Matsumoto
Taito Muraoka

TEL03-5299-8019

June 26, 2018

Scheduled date to file Securities Report:
Scheduled date to commence dividend payments:

June 25, 2018
June 27, 2018

Preparation of supplementary material on financial results:
Holding of financial results meeting:Yes
No(Amounts less than one million yen are rounded down)
1. Consolidated financial results for the year ended March 31, 2018 (from April 1, 2017 to March 31, 2018)(1) Consolidated operating results
Net salesYear ended March 31, 2018Year ended March 31, 2017

Operating profitMillions of yen
38,69334,739%11.4
2.7

Millions of yen
3,903
2,129

Earnings per share

Diluted earnings pershare

Profit attributable toOrdinary profit/total Operating profit/net
owners ofassets
sales
parent/equity
Yen%
%%
–
8.8
7.7
10.1
–
6.4
4.0
6.1

Yen
362.29246.86

Year ended March 31, 2018Year ended March 31, 2017

%
83.3
156.8

Percentages indicate year-on-year changes
Profit attributable toOrdinary profit
owners of parent
Millions of yen% Millions of yen
%
4,169
99.1
2,862
46.7
2,094 230.6
1,951 140.6(2) Consolidated financial position
Total assets
As of March 31, 2018
As of March 31, 2017

Net assets

Equity ratio

Millions of yen
54,99753,430Millions of yen
35,86933,857

Cash flows fromoperating activities
Millions of yen
4,215
3,100

Cash flows frominvesting activities
Millions of yen
(960)
(507)

Net assets per share%
60.5
59.5

Yen
4,210.82
4,023.85(3) Consolidated cash flows

Year ended March 31, 2018Year ended March 31, 2017

Cash flows from
Cash and cash equivalents
at end of period
financing activities
Millions of yen
Millions of yen(3,210)6,583(2,241)
6,597

2. Cash dividends
Annual dividends per share
1st quarter-end 2nd quarter-end 3rd quarter-end Fiscal year-end

Year ended March 31, 2017
Year ended March 31, 2018Year ending March 31, 2019
(Forecast)of dividends
Total cash
Dividend payout Ratio
to net assets
dividends (Total) ratio (Consolidated) (Consolidated)

Total

Yen

Yen

Yen

Yen

Yen

Millions of yen

%%

––

2.50
25.00

–
–

35.00
25.00

–
50.00

474
395

24.3
13.8

1.6
1.2

–

25.00

–

25.00

50.00

135.9

3. Forecast of consolidated financial results for the year ending March 31, 2019 (from April 1, 2018 to March 31, 2019)
Net sales
Full year

Millions of yen
37,000Percentages indicate year-on-year changes
Profit attributable toOperating profit
Ordinary profit
Earnings per shareowners of parent% Millions of yen% Millions of yen% Millions of yen%Yen(4.4)
2,300 (41.1)
2,300 (44.8)
1,100 (61.6)
139.22

4. Notes(1) Changes in significant subsidiaries during the year ended March 31, 2018(changes in specified subsidiaries resulting in the change in scope of consolidation):No(2) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements
Changes in accounting policies due to revisions to accounting standards and other regulations:
Changes in accounting policies due to other reasons:

No
No

Changes in accounting estimates:
Restatement of prior period financial statements:

NoNo(3) Number of issued shares (common shares)
Total number of issued shares at the end of the period (including treasury shares)
As of March 31, 2018

8,413,726 shares As of March 31, 2017

8,413,726 shares512,650 shares As of March 31, 2017

511,518 shares

Number of treasury shares at the end of the period
As of March 31, 2018
Average number of shares during the period
Year ended March 31, 2018

7,901,360 shares Year ended March 31, 2017

2

7,904,516 shares

Consolidated financial statements
Consolidated balance sheets(Millions of yen)
As of March 31, 2017

As of March 31, 2018

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade

7,172
12,250

6,702
12,335Merchandise and finished goods
Work in process

3,012
415

3,584
416

Raw materials and supplies
Deferred tax assets

1,207554

1,607
518

379
(21)

418
(16)

24,972

25,56518,933(12,519)

18,809(12,876)

Buildings and structures, net

6,414

5,932

Machinery, equipment and vehicles
Accumulated depreciation

27,166(25,154)

27,758(25,844)

Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation

Machinery, equipment and vehicles, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Leased assets
Accumulated depreciation

2,011

1,913

2,762
(2,480)2,726(2,519)281

206

11,234335

11,493347(278)(310)

Leased assets, net

5637

Construction in progress

188

426

20,18620,010Total property, plant and equipment
Intangible assets
Goodwill

14

6

Other

198

169

Total intangible assets

212

175

Investment securities
Long-term loans receivable

7,407
15

8,211
246

Deferred tax assets
Net defined benefit asset

–282

5396

Other
Allowance for doubtful accounts

558(205)

583
(197)

Total investments and other assets

8,058

9,245

28,45729,43153,43054,997

Investments and other assets

Total non-current assets
Total assets3

(Millions of yen)
As of March 31, 2017

As of March 31, 2018

Liabilities
Current liabilities
Notes and accounts payable - trade

4,612

5,520

2,185
1,581

2,085
1,327

Lease obligations
Income taxes payable

29291

18261

Accrued consumption taxes
Provision for bonuses

64456

45481

Other provision
Other1
1,269

1
1,685

Short-term loans payable
Current portion of long-term loans payable

Total current liabilities

10,491

11,426

Non-current liabilities
Long-term loans payable

5,346

4,018

Lease obligations
Deferred tax liabilities

30
1,882

22
1,786

Deferred tax liabilities for land revaluation
Provision for environmental measures

1,228
82

1,228
82

Net defined benefit liability
Asset retirement obligations

88
79

83
80

Other

341

400

Total non-current liabilities

9,080

7,702

19,572

19,128

Capital stock
Capital surplus

11,196
9,589

11,196
8,716

Retained earnings
Treasury shares

6,056(1,709)8,444(1,719)Total shareholders' equity

25,132

26,637

2,238

2,737

2,783
1,205

2,783
755

Total liabilities
Net assets
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

437

356

6,664

6,632

Non-controlling interests

2,060

2,599

Total net assets

33,85735,86953,43054,997

Total liabilities and net assets

4Consolidated statements of income and consolidated statements of comprehensive income
Consolidated statements of income(Millions of yen)
Fiscal year ended
March 31, 2017

Fiscal year ended
March 31, 2018

Net sales

34,73938,693

Cost of sales

23,317

24,787Gross profit

11,421

13,905

Shipment expenses
Directors' compensations

1,622
394

1,683
404

Personnel expenses
Provision for bonuses

1,915
195

2,057
208

Retirement benefit expenses
Traveling and transportation expenses

85
217

76
253

Rent expenses
Depreciation

413
155

435
131

Research and development expenses
Amortization of goodwill

2,747
7

3,013
8

Other

1,537

1,729

Total selling, general and administrative expenses

9,292

10,001

2,129

3,903

Selling, general and administrative expenses

Operating profit
Non-operating income
Interest income

2416

Dividend income
Foreign exchange gains

118–

162
342

Rent income on non-current assets
Miscellaneous income

58
54

57
154

Total non-operating income

256

733

Non-operating expenses
Interest expenses

99

80

Foreign exchange losses
Environmental maintenance expenses

17132–
310

Miscellaneous loss

40

76

Total non-operating expenses
Ordinary profit

5291

467

2,094

4,169

(Millions of yen)

Extraordinary income
Gain on sales of non-current assets

Fiscal year ended

Fiscal year ended

March 31, 2017

March 31, 201881

12

Gain on sales of investment securities
Subsidy income

30
3–
1

Total extraordinary income

115

1326

1167
–

–
440

Extraordinary losses
Loss on retirement of non-current assets
Impairment loss
Compensation expenses
Other–

0

Total extraordinary losses

93452

Profit before income taxes

2,115

3,731

Income taxes - current
Income taxes - deferred

390(123)494(318)

Total income taxes

266

176

Profit

1,848

3,555

Profit (loss) attributable to non-controlling interests

(102)

692

Profit attributable to owners of parent

1,951

2,862

6Consolidated statements of comprehensive income(Millions of yen)

ProfitOther comprehensive income

Fiscal year ended

Fiscal year ended

March 31, 2017

March 31, 2018
1,848

3,555

Valuation difference on available-for-sale securities
Foreign currency translation adjustment

1,234
89498(462)

Remeasurements of defined benefit plans, net of tax

37(80)

1,362(45)Comprehensive income

Total other comprehensive income

3,210

3,509

Comprehensive income attributable toComprehensive income attributable to owners of parent

3,283

2,830

(72)

679

Comprehensive income attributable to non-controllinginterests

7

Consolidated statements of changes in equity
Fiscal year ended March 31, 2017
(Millions of yen)
Shareholders' equity
Capital stock
Balance at beginning of current
periodCapital surplus

11,196

Retained earnings

9,589

Treasury shares

4,500

Shareholders' equity(1,700)23,585

Changes of items during period
Dividends of surplus

(395)

(395)

Profit attributable to ownersof parent

1,951

1,951

Purchase of treasury shares
Disposal of treasury shares

(0)

(9)

(9)

00

Net changes of items otherthan shareholders' equity
Total changes of items during
periodBalance at end of current period

–(0)

1,556

(9)

1,546

11,196

9,589

6,056

(1,709)25,132

Accumulated other comprehensive income

Balance at beginning of current
periodValuationdifference on
available-forsale securities

Revaluation
reserve for land

1,004

2,783

Foreigncurrencytranslation
adjustment
1,146

Remeasurementsof defined
benefit plans

399

Total
accumulated Non-controlling
Total net assetsinterests
othercomprehensive
income
5,333

2,137

31,056

Changes of items during period
Dividends of surplus(395)

Profit attributable to ownersof parent

1,951

Purchase of treasury shares(9)

Disposal of treasury shares0

Net changes of items otherthan shareholders' equity

1,234–

5837

1,331(76)1,254

Total changes of items during
period1,234–

5837

1,331(76)2,801Balance at end of current period

2,238

2,783

1,205

437

6,664

2,060

33,857

8Fiscal year ended March 31, 2018
(Millions of yen)
Shareholders' equity
Capital stockBalance at beginning of current
periodCapital surplus

11,196

Retained earnings

9,589

Treasury shares

6,056

Shareholders' equity(1,709)25,132

Changes of items during period
Dividends of surplus

(474)

(474)

Profit attributable to ownersof parent

2,862

2,862

Purchase of treasury shares

(13)

(13)

36

Disposal of treasury shares

2

Capital increase of
consolidated subsidiaries

(1)

(1)

Purchase of shares ofconsolidated subsidiaries

(874)

(874)

Net changes of items otherthan shareholders' equity
Total changes of items during
periodBalance at end of current period–(873)

2,388

(9)

1,505

11,196

8,716

8,444

(1,719)26,637

Accumulated other comprehensive income

Balance at beginning of current
periodValuationdifference on
available-forsale securities

Revaluation
reserve for land

2,238

2,783

Foreigncurrencytranslation
adjustment
1,205

Remeasurementsof defined
benefit plans

437

Total
accumulated Non-controlling
Total net assetsinterests
othercomprehensive
income
6,664

2,060

33,857

Changes of items during period
Dividends of surplus(474)

Profit attributable to ownersof parent2,862

Purchase of treasury shares(13)

Disposal of treasury shares

6

Capital increase ofconsolidated subsidiaries(1)

Purchase of shares ofconsolidated subsidiaries(874)

Net changes of items otherthan shareholders' equity

498

–

(450)

(80)

(32)

538

506

Total changes of items during
period

498

–

(450)

(80)

(32)

538

2,011

Balance at end of current period

2,737

2,783

755

356

6,632

2,599

35,8699Consolidated statements of cash flows(Millions of yen)

Cash flows from operating activities
Profit before income taxes

Fiscal year ended

Fiscal year ended

March 31, 2017

March 31, 2018
2,115

3,731

1,561
67

1,425–

724

812

Increase (decrease) in net defined benefit liability
Interest and dividend income

(89)
(142)

(165)
(178)

Interest expenses
Foreign exchange losses (gains)

99
(36)

80
(340)

Loss (gain) on sales of property, plant and equipment
Loss on retirement of property, plant and equipment(81)
26(12)
11

Loss (gain) on valuation of investment securities
Loss (gain) on sales of investment securities

–(30)

0–

Compensation expenses
Decrease (increase) in notes and accounts receivable - trade–(606)

440(117)

Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable - trade

(180)
228

(990)
946

Increase/decrease in other assets/liabilities
Increase (decrease) in accrued consumption taxes

499
(56)

319
(78)

Other, net

3725

Subtotal

Depreciation
Impairment loss
Amortization of goodwill
Increase (decrease) in provision

3,444

5,117

Interest and dividend income received

142

178

Interest expenses paid
Compensation expenses paid

(105)
–(79)
(440)

Income taxes paid
Income taxes refund(394)
13(609)49

Net cash provided by (used in) operating activities

3,100

4,215

10

(Millions of yen)

Cash flows from investing activities
Payments into time deposits

Fiscal year ended

Fiscal year ended

March 31, 2017

March 31, 2018
(1,176)

(119)

1,434

574(635)(1,017)88

25(230)

(142)

62(2)

51(259)Collection of loans receivable
Payments for guarantee deposits

19(116)21(132)

Proceeds from collection of guarantee deposits
Other, net

81
(31)

39(2)

Net cash provided by (used in) investing activities(507)(960)Cash flows from financing activities
Net increase (decrease) in short-term loans payable(2,500)(100)

Proceeds from long-term loans payable
Repayments of long-term loans payable

2,500(1,801)–(1,581)

Cash dividends paid
Dividends paid to non-controlling interests

(392)
(3)

(471)
(6)

Proceeds from sales of treasury shares
Purchase of treasury shares

0(9)

0(13)

Repayments of lease obligations
Payments from changes in ownership interests in subsidiaries

(34)

(29)

–

(1,008)(2,241)(3,210)Effect of exchange rate change on cash and cash equivalents

69(58)Net increase (decrease) in cash and cash equivalents

421(14)

Cash and cash equivalents at beginning of period

6,175

6,597

Cash and cash equivalents at end of period

6,597

6,583

Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment and intangible
assetsProceeds from sales of property, plant and equipment andintangible assets
Purchase of investment securities
Proceeds from sales and redemption of investment securities
Payments of loans receivablethat do not result in change in scope of consolidation
Net cash provided by (used in) financing activities

11