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 Three Months Ended June 30, 2018
(Based on Japanese GAAP)
July 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 MuraokaScheduled date to file Quarterly Securities Report:
Scheduled date to commence dividend payments:

August 9, 2018–

Preparation of supplementary material on quarterly financial results:
Holding of quarterly financial results meeting:

YesNo

TEL

03-5299-8019(Amounts less than one million yen are rounded down)
1. Consolidated financial results for the three months ended June 30, 2018 (from April 1, 2018 to June 30, 2018)(1) Consolidated operating results (cumulative)
Percentages indicate year-on-year changes
Profit attributable toNet sales
Operating profit
Ordinary profitowners of parent
Millions of yen% Millions of yen% Millions of yen% Millions of yen%
Three months ended June 30, 2018
8,553 (12.0)615 (52.8)
798 (40.4)
542 (29.8)
Three months ended June 30, 2017
9,720
28.3
1,303 589.4
1,341–
772–
Earnings per share

Diluted earnings per share

Yen
68.67
97.75

Three months ended June 30, 2018
Three months ended June 30, 2017

Yen––(2) Consolidated financial position
Total assets

Net assets

Millions of yen
53,682
54,737

As of June 30, 2018
As of March 31, 2018

Equity ratioMillions of yen
35,94535,869

%
62.1
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

Yen–

Yen
25.00

Yen
50.00

25.00

–

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)
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

14. Notes(1) Changes in significant subsidiaries during the three months ended June 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:

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 June 30, 2018

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

8,413,726 shares

512,260 shares As of March 31, 2018

512,650 shares

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

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

7,901,287 shares Three months ended June 30, 2017

27,902,176 shares

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

As of June 30, 2018

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade

6,702
12,335

6,534
11,055Merchandise and finished goods
Work in process

3,584
416

3,808
455

Raw materials and supplies
Other

1,607
418

1,841
506

Allowance for doubtful accounts
Total current assets

(16)

(16)

25,04724,185

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

5,932

5,859

Land
Other, net

11,493
2,584

11,493
2,811

Total property, plant and equipment

20,01020,164

Intangible assets
Goodwill

64

Other

169

159

Total intangible assets

175

163

Investment securities
Long-term loans receivable

8,211
246

7,864
248

Deferred tax assets
Net defined benefit asset

263
396

266
412

Other
Allowance for doubtful accounts583
(197)

573
(197)

Total investments and other assets

9,503

9,168

29,68929,49754,73753,682

Investments and other assets

Total non-current assets
Total assets3

(Millions of yen)
As of March 31, 2018

As of June 30, 2018

Liabilities
Current liabilities
Notes and accounts payable - trade

5,520

4,943

Short-term loans payable
Income taxes payable

3,412
261

3,446
199

Provision
Other482
1,748

248
1,924

Total current liabilities

11,426

10,761

Non-current liabilities
Long-term loans payable

4,018

3,649

1,5261,228

1,453
1,228

Provision
Net defined benefit liability

82
83

82
88

Asset retirement obligations
Other80
422

80
393

Total non-current liabilities

7,441

6,975

18,86817,736

Shareholders' equity
Capital stock

11,196

11,196

Capital surplus
Retained earnings

8,716
8,444

8,717
8,789

Treasury shares(1,719)(1,718)

Total shareholders' equity

26,637

26,984

2,737
2,783

2,503
2,783

755
356

754
321

6,632

6,362

Deferred tax liabilities
Deferred tax liabilities for land revaluation

Total liabilities
Net assetsAccumulated 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

2,598

Total net assets

35,86935,94554,73753,682

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)Three months ended

Three months ended

June 30, 2017

June 30, 2018

Net sales
Cost of sales

9,720
6,040

8,553
5,575

Gross profit

3,679

2,978

Selling, general and administrative expenses

2,376

2,362

Operating profit

1,303

615

Interest income
Foreign exchange gains

4–

251

Dividend income
Rent income on non-current assets

89
14

107
14

Miscellaneous income

2649

Total non-operating income

134

226

Interest expenses
Foreign exchange losses

22
616–

Environmental maintenance expenses
Miscellaneous loss

35
32

21
4

Total non-operating expenses

96

42

1,341

798

Gain on sales of non-current assets
Subsidy income

31––

Total extraordinary income

4–

140–

Non-operating income

Non-operating expenses

Ordinary profit
Extraordinary income

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

24

1,343

794

174

125

1,168

669

Profit attributable to non-controlling interests

396

126

Profit attributable to owners of parent

772

542

Profit5Consolidated statements of comprehensive income (cumulative)(Millions of yen)

ProfitOther comprehensive income

Three months ended

Three months ended

June 30, 2017

June 30, 2018
1,168

669

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

544
(139)

(234)
(48)

Remeasurements of defined benefit plans, net of tax

(29)

(34)

374

(317)

Comprehensive income

Total other comprehensive income

1,543

351

Comprehensive income attributable toComprehensive income attributable to owners of parent

1,190

272

353

78

Comprehensive income attributable to non-controllinginterests

6Consolidated statements of cash flows(Millions of yen)

Cash flows from operating activities
Profit before income taxes

Three months ended

Three months ended

June 30, 2017

June 30, 2018
1,343

794

Depreciation
Amortization of goodwill

359
2329
2

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

(226)
(9)

(235)
(25)

Interest and dividend income
Interest expenses(93)
22(110)16Foreign exchange losses (gains)
Loss (gain) on sales of property, plant and equipment

5(3)

(24)
–

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

104–

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

1,352(474)

1,296(501)

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

(186)
(11)

(602)
(308)

Increase (decrease) in accrued consumption taxes
Other, net

28(19)

135
14

Subtotal

2,090

786

Interest and dividend income received
Interest expenses paid

90(19)

110(11)

Income taxes paid

(291)

(230)

Net cash provided by (used in) operating activities

1,869655

Payments into time deposits
Proceeds from withdrawal of time deposits

–516

(19)
19

Purchase of property, plant and equipment and intangible
assets

(187)

(512)

Proceeds from sales of property, plant and equipment andintangible assets

10

3

Purchase of investment securities
Proceeds from redemption of investment securities

(0)
–

(0)
30

Payments of loans receivableCollection of loans receivable

–
1(10)
4

Payments for guarantee deposits
Proceeds from collection of guarantee deposits

(50)
6(2)
1

Other, net

(0)

(4)

Net cash provided by (used in) investing activities

296(489)

Cash flows from investing activities

7

(Millions of yen)

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

Three months ended

Three months ended

June 30, 2017

June 30, 2018
(100)

–

Repayments of long-term loans payable
Cash dividends paid

(387)
(0)

(335)
(0)

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

(6)
0

(9)
0

Purchase of treasury shares
Repayments of lease obligations

(1)
(8)

(1)
(7)

(504)

(352)

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

(45)

20

Net increase (decrease) in cash and cash equivalents

1,616

(166)

Cash and cash equivalents at beginning of period

6,597

6,583

Cash and cash equivalents at end of period

8,213

6,416

8