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 Nine Months Ended December 31, 2017
(Based on Japanese GAAP)
January 31, 2018
Company name:
Hodogaya Chemical Co., Ltd.
Stock exchange listing: Tokyo
Stock code:
Representative:

4112
President

URL

http://www.hodogaya.co.jp/
Yuto Matsumoto

Inquiries:

General Manager, Corporate Planning
Department

Taito Muraoka

TEL

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

February 13, 2018–

Preparation of supplementary material on quarterly financial results:
Holding of quarterly financial results meeting:Yes
No03-5299-8019(Amounts less than one million yen are rounded down)
1. Consolidated financial results for the nine months ended December 31, 2017 (from April 1, 2017 to December 31, 2017)(1) Consolidated operating results (cumulative)
Percentages indicate year-on-year changes
Profit attributable toNet sales
Operating profit
Ordinary profit
owners of parent
Millions of yen% Millions of yen% Millions of yen% Millions of yen%
Nine months ended December 31, 201728,15418.9
2,992 233.3
3,582 272.4
2,405 135.7
Nine months ended December 31, 2016
23,675
(2.0)
897
–
961
–
1,020
–
Earnings per share

Diluted earnings per share

Yen
304.46129.11

Nine months ended December 31, 2017
Nine months ended December 31, 2016

Yen––(2) Consolidated financial position
Total assets

Net assets

Millions of yen
57,52353,430

As of December 31, 2017
As of March 31, 2017

Equity ratio

Millions of yen
37,43233,857

%
60.1
59.5

2. Cash dividends
Annual dividends per share

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

1st quarter-end

2nd quarter-end

3rd quarter-end

Fiscal year-end

Yen––Yen
2.50
25.00

Yen––

Yen
35.00

Yen–

25.00

50.00

Year ending March 31, 2018 (Forecast)Total

3. Forecast of consolidated financial results for the year ending March 31, 2018 (from April 1, 2017 to March 31, 2018)
Net sales
Full year

Millions of yen
38,200Percentages 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
10.0
3,700
73.8
3,700
76.7
2,000
2.5
253.1014. Notes(1) Changes in significant subsidiaries during the nine months ended December 31, 2017(changes in specified subsidiaries resulting in the change in scope of consolidation):No(2) Application of special accounting methods for preparing quarterly consolidated financial statements:

Yes(3) 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:

NoNo

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

NoNo(4) Number of issued shares (common shares)
Total number of issued shares at the end of the period (including treasury shares)
As of December 31, 2017

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

8,413,726 shares

513,259 shares As of March 31, 2017

511,518 shares

Number of treasury shares at the end of the period
As of December 31, 2017

Average number of shares during the period (cumulative from the beginning of the fiscal year)
Nine months ended December 31, 2017

7,901,516 shares Nine months ended December 31, 2016

2

7,904,909 shares

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

As of December 31, 2017

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade

7,172
12,250

9,947
10,103Merchandise and finished goods
Work in process

3,012415

4,100
330

Raw materials and supplies
Deferred tax assets

1,207
554

1,620
536

379
(21)

745
(14)

24,972

27,3706,414
11,234

6,164
11,499Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Land
Other, net

2,538

2,398

Total property, plant and equipment

20,186

20,061

Goodwill
Other

14198

8191

Total intangible assets

212

200

Investments and other assets
Investment securities

7,407

9,084

Long-term loans receivable
Net defined benefit asset

1528230346

Other
Allowance for doubtful accounts

558
(205)

627
(197)

Total investments and other assets

8,058

9,891

28,45730,15353,43057,523

Intangible assets

Total non-current assets
Total assets

3(Millions of yen)
As of March 31, 2017

As of December 31, 2017

Liabilities
Current liabilities
Notes and accounts payable - trade

4,612

5,452

Short-term loans payable
Income taxes payable

3,766
291

3,506
392

Provision
Other458
1,363

246
1,802

Total current liabilities

10,491

11,400Non-current liabilities
Long-term loans payable

5,346

4,375

1,882
1,228

2,425
1,228

Provision
Net defined benefit liability

82
88

82
80

Asset retirement obligations
Other

79
372

79
418

Total non-current liabilities

9,080

8,690

19,572

20,090Shareholders' equity
Capital stock

11,196

11,196

Capital surplus
Retained earnings

9,589
6,056

9,588
7,987

Treasury shares(1,709)(1,721)

Total shareholders' equity

25,132

27,051

Valuation difference on available-for-sale securities
Revaluation reserve for land

2,238
2,783

3,444
2,783

Foreign currency translation adjustment
Remeasurements of defined benefit plans

1,205
437

930
358

Total accumulated other comprehensive income

6,664

7,516

Deferred tax liabilities
Deferred tax liabilities for land revaluation

Total liabilities
Net assets

Accumulated other comprehensive income

Non-controlling interests

2,060

2,864

Total net assets

33,85737,43253,43057,523

Total liabilities and net assets

4Consolidated statements of income (cumulative) and consolidated statements of comprehensive income(cumulative)
Consolidated statements of income (cumulative)(Millions of yen)
Nine months ended

Nine months ended

December 31, 2016

December 31, 2017

Net sales
Cost of sales

23,67516,02028,154
17,837Gross profit

7,655

10,317

Selling, general and administrative expenses

6,757

7,324

897

2,992

Interest income
Dividend income

19115

13158

Foreign exchange gains
Rent income on non-current assets

1943

409
43

Miscellaneous income

49

145

Total non-operating income

247

770

Interest expenses
Environmental maintenance expenses

77
90

63
80

Miscellaneous loss

1636

Total non-operating expenses

Operating profit
Non-operating income

Non-operating expenses

183

180

Ordinary profit

961

3,582

Extraordinary income
Gain on sales of non-current assets

8012

Gain on sales of investment securities
Subsidy income

113–
1

Total extraordinary income

95

13

65–

0

Extraordinary losses
Loss on retirement of non-current assets
Loss on valuation of investment securities
Total extraordinary losses
Profit before income taxes

65

1,051

3,589

Income taxes

283

501

Profit767

3,088

Profit (loss) attributable to non-controlling interests

(253)

682

Profit attributable to owners of parent

1,020

2,4055Consolidated statements of comprehensive income (cumulative)(Millions of yen)

ProfitOther comprehensive income

Nine months ended

Nine months ended

December 31, 2016

December 31, 2017
767

3,088

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

1,109
(111)

1,205
(146)

Remeasurements of defined benefit plans, net of tax(43)

(78)

954

980

Comprehensive income

Total other comprehensive income

1,722

4,068

Comprehensive income attributable toComprehensive income attributable to owners of parent

2,006

3,257(284)811

Comprehensive income attributable to non-controllinginterests

6

Consolidated statements of cash flows(Millions of yen)

Cash flows from operating activities
Profit before income taxes

Nine months ended

Nine months ended

December 31, 2016

December 31, 2017

1,051

3,589

Depreciation
Amortization of goodwill

1,161
5

1,064
6

Increase (decrease) in provision
Increase (decrease) in net defined benefit liability

(210)
(66)

(227)
(131)

Interest and dividend income
Interest expenses(135)
77(172)63

Foreign exchange losses (gains)
Loss (gain) on sales of property, plant and equipment

(27)
(80)

(389)
(12)

6–

50

Loss (gain) on sales of investment securities
Decrease (increase) in notes and accounts receivable - trade

(11)
1,631

–
2,158

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

(893)
988

(1,383)
831

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

539
(112)

144
(115)

Loss on retirement of non-current assets
Loss (gain) on valuation of investment securities

Other, net21(40)

Subtotal

3,943

5,390

Interest and dividend income received

130

171

Interest expenses paid
Income taxes paid

(80)
(375)

(60)
(496)

Income taxes refund

12

49

3,631

5,053

Payments into time deposits
Proceeds from withdrawal of time deposits

(827)
814

(19)
543

Purchase of property, plant and equipment and intangible
assets

(367)

(824)

Proceeds from sales of property, plant and equipment andintangible assets

85

24

Purchase of investment securities
Proceeds from sales and redemption of investment securities

(0)
30

(0)
51

Payments of loans receivableCollection of loans receivable(2)
15(29)
15

Payments for guarantee deposits
Proceeds from collection of guarantee deposits(72)
84(123)32

Net cash provided by (used in) operating activities
Cash flows from investing activities

Other, net
Net cash provided by (used in) investing activities

712(3)

(227)

(334)

(Millions of yen)

Cash flows from financing activities
Net increase (decrease) in short-term loans payable

Nine months ended

Nine months ended

December 31, 2016

December 31, 2017–(100)(1,257)(214)(1,130)(277)

Dividends paid to non-controlling interests
Proceeds from sales of treasury shares

(3)
0

(6)
0

Purchase of treasury shares
Repayments of lease obligations

(3)
(25)

(12)
(22)

(1,503)(1,549)

Repayments of long-term loans payable
Cash dividends paid

Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents

11128

Net increase (decrease) in cash and cash equivalents

1,911

3,298

Cash and cash equivalents at beginning of period

6,175

6,597

Cash and cash equivalents at end of period

8,087

9,896

8