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 Six Months Ended September 30, 2018
(Based on Japanese GAAP)
October 30, 2018
Company name:
Hodogaya Chemical Co., Ltd.
Stock exchange listing: Tokyo
Stock code:
Representative:

4112
President

URL

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

Inquiries:

Director, Senior Managing Executive Officer& General Manager, Corporate Planning
Eiichi SunadaTEL

Department
Scheduled date to file Quarterly Securities Report:

November 9, 2018

Scheduled date to commence dividend payments:
Preparation of supplementary material on quarterly financial results:

December 6, 2018
Yes

Holding of quarterly financial results meeting:No

03-5299-8019(Amounts less than one million yen are rounded down)
1. Consolidated financial results for the six months ended September 30, 2018 (from April 1, 2018 to September 30, 2018)(1) Consolidated operating results (cumulative)
Net sales
Six months ended September 30, 2018
Six months ended September 30, 2017

Millions of yen
17,21318,938Percentages indicate year-on-year changes
Profit attributable toOperating profit
Ordinary profit
owners of parent% Millions of yen% Millions of yen% Millions of yen%
(9.1)
1,129 (44.8)
1,377 (44.9)
993 (39.3)
20.8
2,047 289.1
2,499 803.0
1,637 327.8

Earnings per share

Diluted earnings per share

Yen
125.79207.28Six months ended September 30, 2018
Six months ended September 30, 2017

Yen––(2) Consolidated financial position
Total assets
As of September 30, 2018
As of March 31, 2018

Net assets

Millions of yen
54,39454,737

Equity ratio

Millions of yen
36,92535,869

%
62.9
60.8

2. Cash dividends
Annual dividends per share

Year ended March 31, 2018Year ending March 31, 2019

1st quarter-end

2nd quarter-end

3rd quarter-end

Fiscal year-end

Yen––

Yen
25.00
25.00

Yen–

Yen
25.00

Yen
50.00

–

25.00

50.00

Year ending March 31, 2019 (Forecast)Total

3. Forecast of consolidated financial results for the year ending March 31, 2019 (from April 1, 2018 to March 31, 2019)
Percentages indicate year-on-year changes
Profit attributable toNet sales
Operating profit
Ordinary profit
Earnings per shareowners of parent
Millions of yen% Millions of yen% Millions of yen% Millions of yen%
Yen
Full year
37,000(4.4)
2,300 (41.1)
2,300 (44.8)
1,100 (61.6)
139.22

1

4. Notes(1) Changes in significant subsidiaries during the six months ended September 30, 2018(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:

No
No

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 September 30, 2018

8,413,726 shares As of March 31, 2018

8,413,726 shares

512,480 shares As of March 31, 2018

512,650 shares

Number of treasury shares at the end of the period
As of September 30, 2018

Average number of shares during the period (cumulative from the beginning of the fiscal year)
Six months ended September 30, 2018

7,901,311 shares Six months ended September 30, 2017

2

7,901,859 shares

Quarterly consolidated financial statements
Consolidated balance sheets(Millions of yen)
As of March 31, 2018

As of September 30, 2018

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade

6,702
12,335

7,509
9,445

Merchandise and finished goods
Work in process

3,584
416

4,035
480

Raw materials and supplies
Other

1,607
418

2,084
555

Allowance for doubtful accounts
Total current assets

(16)

(12)

25,04724,098Non-current assets
Property, plant and equipment
Buildings and structures, net

5,932

5,926

Land
Other, net

11,493
2,584

11,502
3,044

Total property, plant and equipment

20,01020,473

Intangible assets
Goodwill

62

Other

169

161

Total intangible assets

175

164

Investment securities
Long-term loans receivable

8,211
246

8,286
248

Deferred tax assets
Net defined benefit asset

263
396

291
430

Other
Allowance for doubtful accounts

583
(197)

599
(197)

Total investments and other assets

9,503

9,659

29,68930,29654,73754,394

Investments and other assets

Total non-current assets
Total assets3

(Millions of yen)
As of March 31, 2018

As of September 30, 2018

Liabilities
Current liabilities
Notes and accounts payable - trade

5,520

4,772

Short-term loans payable
Income taxes payable

3,412
261

3,493
319

Provision
Other4821,748

486
1,690

Total current liabilities

11,426

10,763

Non-current liabilities
Long-term loans payable

4,018

3,235

1,526
1,228

1,541
1,228

Provision
Net defined benefit liability

82
83

82
91

Asset retirement obligations
Other

80
422

80
446

Total non-current liabilities

7,441

6,706

18,86817,469

Shareholders' equity
Capital stock

11,196

11,196

Capital surplus
Retained earnings

8,716
8,444

8,717
9,240

Treasury shares(1,719)(1,719)Total shareholders' equity

26,63727,435

2,737
2,783

2,813
2,783755
356

854
311

6,632

6,763

Deferred tax liabilities
Deferred tax liabilities for land revaluation

Total liabilities
Net assets

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

2,599

2,726

Total net assets

35,86936,92554,73754,394

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)Six months ended

Six months ended

September 30, 2017

September 30, 2018

Net sales
Cost of sales

18,93812,047

17,213
11,309Gross profit

6,891

5,904

Selling, general and administrative expenses

4,843

4,774

Operating profit

2,047

1,129

Interest income
Dividend income

891

6110

Foreign exchange gains
Rent income on non-current assets

409
28

114
29

Miscellaneous income

4869

Total non-operating income

587

330

Interest expenses
Environmental maintenance expenses

4258

32
42

Miscellaneous loss

34

7

Non-operating income

Non-operating expenses

Total non-operating expenses

135

82

2,499

1,377

3–

Subsidy income

1–

Total extraordinary income

4–

Loss on retirement of non-current assets
Loss on valuation of investment securities

406–

Total extraordinary losses

56

2,498

1,371

309

194

2,188

1,177

550

183

1,637993

Ordinary profit
Extraordinary income
Gain on sales of non-current assets

Extraordinary losses

Profit before income taxes
Income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

5Consolidated statements of comprehensive income (cumulative)(Millions of yen)

ProfitOther comprehensive income

Six months ended

Six months ended

September 30, 2017

September 30, 2018

2,188

1,177

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

959
(497)

76
123

Remeasurements of defined benefit plans, net of tax

(54)

(44)

407

154

Comprehensive income

Total other comprehensive income

2,596

1,331

Comprehensive income attributable toComprehensive income attributable to owners of parent

2,077

1,124

518

207

Comprehensive income attributable to non-controllinginterests

6Consolidated statements of cash flows(Millions of yen)

Cash flows from operating activities
Profit before income taxes

Six months ended

Six months ended

September 30, 2017

September 30, 2018

2,498

1,371

Depreciation
Amortization of goodwill

705
4662
4

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

0(96)

(1)
(54)

Interest and dividend income
Interest expenses(100)
42(117)32

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

(394)
(3)

(79)
–406–

Decrease (increase) in notes and accounts receivable - trade
Decrease (increase) in inventories

2,089(495)

2,931
(954)

Increase (decrease) in notes and accounts payable - trade
Increase/decrease in other assets/liabilities

400
178(797)(373)

Increase (decrease) in accrued consumption taxes
Other, net

(48)
74

(17)
(2)

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

Subtotal

4,861

2,610

Interest and dividend income received
Interest expenses paid

99(41)

117(33)

Income taxes paid
Income taxes refund(413)
49(252)51

Net cash provided by (used in) operating activities

4,555

2,493

Cash flows from investing activities
Payments into time deposits

(19)

(19)

535

19(374)

(878)

13

3(0)

(0)

Proceeds from sales and redemption of investment securities
Payments of loans receivable

50(24)

30(17)

Collection of loans receivable
Payments for guarantee deposits

4(75)14(24)

Proceeds from collection of guarantee deposits
Other, net

30(3)

3(4)

Net cash provided by (used in) investing activities

136(875)

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

7

(Millions of yen)

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

Six months ended

Six months ended

September 30, 2017

September 30, 2018
(100)

–

Repayments of long-term loans payable
Cash dividends paid

(800)
(276)

(702)
(198)

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

(6)
0(9)
–

Purchase of treasury shares
Repayments of lease obligations

(7)
(15)

(1)
(13)

(1,206)(924)

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

(9)

111

3,476804

Cash and cash equivalents at beginning of period

6,597

6,583

Cash and cash equivalents at end of period

10,073

7,388

Net increase (decrease) in cash and cash equivalents

8