Financial Results for the First Quarter ended June 30, 2023
(Japan GAAP)
August 8, 2023
Company name:

HANWA Co., Ltd.

Listed stock exchange: Tokyo

Stock exchange code:

8078(URL https://www.hanwa.co.jp)

Representative:
Yoichi Nakagawa President
Enquiries:
Hisashi Honda
Director, Executive Officer
Scheduled date of issue of audited financial statements: August 8, 2023
Scheduled date of payout of dividend: －Phone +81-3-3544-2000(Amounts less than one million yen are rounded down)

１．Consolidated financial results for the First Quarter ended June 30, 2023 (April 1, 2023 to June 30, 2023)(1) Consolidated operating results（Percentage indicate a change from the previous year）
Net sales
For the 1st Quarter
ended June 30, 2023
ended June 30, 2022

(Millions of yen)(％)

Operating income

Ordinary income(Millions of yen)

(Millions of yen)(％)

608,742(8.5)
16,277(32.6)
665,58047.1
24,14378.8
Note: Comprehensive income
For the Fiscal Year ended June 30, 2023
For the Fiscal Year ended June 30, 2022
Net income
per share

For the 1st Quarter
ended June 30, 2023
ended June 30, 2022

Profit attributable toowners of the Parent(％)(Millions of yen)(％)

16,012(52.0)
11,492(51.9)
33,332
137.6
23,917152.0
13,157 million yen(60.9) %33,680 million yen
143.3 %Net income
per share(diluted)

(yen)

(yen)

282.81588.55－－(2) Consolidated financial position
Total assets(Millions of yen)
As of June 30, 2023
As of March 31, 2023

Note: Shareholders' equity

Shareholders'equity ratio

Net assets(Millions of yen)

1,161,053
1,157,747
As of June 30, 2023
As of March 31, 2023

Net assets
per share(％)

319,165
308,807313,379 million yen
303,127 million yen

(yen)

27.0
26.2

7,711.69
7,459.39

２．Cash dividends
Cash dividends per share
1st Quarter 2nd Quarter 3rd Quarter

Year ended March 31, 2023
Year ended March 31, 2024
Year ending March 31, 2024
（estimated）

Year-end

Annual

(yen)

(yen)

(yen)

(yen)

(yen)

－
－

50.00

－

80.00

130.00

85.00

－

85.00

170.00３．Forecast of consolidated financial results for fiscal year ending March 31, 2024 (April 1, 2023 to March 31, 2024)（Percentage indicate a change from the previous year）

Net sales(Millions of yen) (％)

Annual

2,700,000

1.2

Operating income

Ordinary income(Millions of yen) (％)(Millions of yen) (％)

60,000(6.4)

50,000－1－(22.2)

Profit attributable toowners of the Parent(Millions of yen) (％)

36,000(30.1)Net income
per share(yen)

885.89HANWA Co.,Ltd.
Financial Results for the First Quarter ended June 30, 2023

《Consolidated Balance Sheets》(Amounts less than one million yen are rounded down)

Millions of yen
March 31, 2023

June 30, 2023

Assets;Current assets;
Cash and deposits
Trade notes, accounts receivable and contract assets
Electronically recorded monetary claims
Inventories
OthersAllowance for doubtful receivables
Total current assets

84,187448,980
55,570253,964
87,333(1,295)
928,741

86,661
436,383
81,427259,264
60,246(1,644)922,338

36,78650,33087,117
10,80737,98051,51989,49910,651

99,60834,088(2,613)131,082
229,006
1,157,747

99,95040,909(2,295)
138,563
238,714
1,161,053

Current liabilities;
Trade notes and accounts payable
Electronically record obligations
Short-term loans payable
Commercial paper
Current portion of bonds payable
Income taxes payable
Accrued bonuses
Provision for product warranties
OthersTotal current liabilities

278,823
36,701
83,12730,00010,00014,822
4,355
56
101,103558,990

282,558
40,14878,73550,000
―
5,735
2,367
132
62,932522,610Long-term liabilities;
Bonds payable
Long-term loans payable
Retirement benefits liabilities
OthersTotal long-term liabilities
Total liabilities

30,000224,843
4,285
30,820289,949
848,940

50,000229,686
4,326
35,263319,276
841,887

45,651
26
228,920(3,730)270,866

45,651
26
237,482(3,730)279,429

23,972
673
1,975
8,360
(2,720)32,2605,680
308,807
1,157,747

23,600954
1,975
10,047(2,627)33,950
5,785
319,165
1,161,053

Fixed assets;
Property and equipment;
Land
OthersTotal property and equipment
Intangible assets
Investments and other assets;
Investment securities
OthersAllowance for doubtful receivables
Total investments and other assets
Total fixed assets
Total assets

Liabilities;

Net assets;
Shareholders' equity;
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders' equity
Accumulated other comprehensive income;Net unrealized holding gains on securities
Deferred hedge profit and loss
Land revaluation difference
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets－2－

HANWA Co.,Ltd.
Financial Results for the First Quarter ended June 30, 2023

《Consolidated Statements of Income and Comprehensive Income》(Amounts less than one million yen are rounded down)

Millions of yen
Year ended
June 30, 2022

Year ended
June 30, 2023

Net sales
Cost of sales
Gross profit

665,580
626,705
38,874

608,742576,200
32,542

Selling, general and administrative expenses
Operating income

14,731
24,143

16,264
16,277

525
5,947
2,030
2,916
456
11,876

883
1,386
346
―
661
3,277

2,046
―
640
2,686
33,332

2,179
386
975
3,542
16,012Other income;Interest income
Dividend income
Equity in earnings of affiliates
Foreign exchange gain
OthersTotal other income
Other expenses;
Interest expenses
Foreign exchange loss
OthersTotal other expenses
Ordinary income
Extraordinary income;Gain on sale of investment securities
Arbitration related income
Total extraordinary income
Extraordinary loss;
Loss on devaluation of investment securities
Total extraordinary loss
Income before income taxes and non-controlling interests

541
248
789

―
―
―

268
268
33,853――16,012

Income taxes
Net income

9,394
24,4594,536
11,47523,917542

11,492
(16)

1,414
1,644
5,110
162

(426)
280
1,644
109

888

74

9,221
33,6801,682
13,15732,816864

13,182(24)

Net income (loss) attributable to
Owners of the parent
Non-controlling interests
Other Comprehensive Income
Net unrealized holding gains on securities
Deferred hedge profit and loss
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Share of other comprehensive income of associates
accounted for using equity method
Total other comprehensive Income
Comprehensive Income
Comprehensive income (loss) attributable to
Owners of the parent
Non-controlling interests－3－

HANWA Co.,Ltd.
Financial Results for the First Quarter ended June 30, 2023

《Segment information》
Segment information by business category for the 1st Quarter ended June 30, 2022 and 2023, is as follows:(Amounts less than one million yen are rounded down)

1st Quarter ended June 30, 2022

Millions of yen

Reportable segment
Steel
Net sales
Customers
Inter-segment
Total
Segment income

301,850
6,983
308,834
10,191Primary
Metal
Metal Recycling

Foods

57,418
1,255
58,674
6,751

28,915
184
29,100345

42,378785
43,164
4,926

Energy& Living
Materials

85,301
3,260
88,561
2,818

Other

Total

Adjustment

Consolidated

subsidiaries

Subtotal

111,548
14,532126,081
2,691

627,41427,002
654,416
27,72538,165
1,231
39,397
1,774

665,580
28,233
693,81329,500―(28,233)(28,233)
3,832

665,580―
665,580
33,332

Overseassales

1st Quarter ended June 30, 2023

Millions of yen

Reportable segment
Steel
Net sales
Customers
Inter-segment
Total
Segment income

312,977
5,833
318,811
8,401

Primary
Metal
Metal Recycling

Foods

60,845696
61,541
4,302

28,633
134
28,768497

28,910560
29,470868

Energy& Living
Materials

67,686
1,326
69,012
1,329

Other

Total

Adjustment

Consolidated

subsidiaries

Subtotal

78,494
8,294
86,7892,026

577,548
16,845594,393
17,42531,194
1,831
33,025
1,502

608,742
18,677
627,419
18,927―(18,677)(18,677)(2,914)

608,742―
608,742
16,012

Overseas
sales

Notes:
1. “Other” comprises businesses that are not included in reportable segments, such as lumber section and machinery section.
2. Adjustments for segment income include inter-segment elimination and Group costs that have not been distributed to reportable segments. These group
costs consist mainly of expenses of administrative departments.
3. Segment income is adjusted between ordinary income on the consolidated statements of income and comprehensive income.

－4－August 8, 2023

Highlights of Consolidated Financial Results for the 1st Quarter of FY2023(Japan GAAP)HANWA Co., Ltd.
(Unit: billion yen, rounded down to 0.1 billions yen)

Outline of Financial Results for the 1st Quarter of FY2023
・During the 1st quarter of fiscal year, net sales decreased by 9% YoY, to 608.7 billion yen, because prices of the products represented by steel, non-ferrous metal and crude oil were atlower levels on a year-on-year comparison and demand for steel and scrap decreased. Operating income decreased by 33% YoY, to 16.2 billion yen, due to income decreases in all thebusiness segments except the Food business, and ordinary income decreased by 52% YoY, to 16.0 billion yen, mainly because dividend income from strategic investments decreased,
foreign exchange loss was reported after reported gain in the previous term, and equity in earnings of affiliates shrunk mainly in the Primary metals business. Net income attributable toowners of the parent decreased by 52% to 11.4 billion yen.

Jun. 2023

1,157.7

1,161.0

3.3

0%(Current assets)

928.7

922.3

(6.4)

(1%)

(Fixed assets)

229.0

238.7

9.7

4%

848.9

841.8

(7.0)

(1%)

Net DER

380.9
296.7
98%/83*%

411.3
324.7
104%/89*%

30.3
27.9
6pt

8%
9%
6%

Liabilities decreased by 0.8% from the end of the previous fiscal year, mainly
because of redemption of current portion of bonds payable, as well as a decreasein accrued income taxes after payment of taxes including corporate tax in which
the business results of the previous fiscal year were reflected. As interest-bearing
debt increased by 8%, net debt-equity ratio was turned into 104%（*89%).

Total net assets

308.8

319.1

10.3

3%

(Net assets)

270.8
279.4
32.2
33.9
5.6
5.7
7,459.39
7,711.69
303.1
313.3
26.2/28.3*% 27.0/29.1*%

8.5
1.6
0.1
252.30
10.2
0.8pt

3%
5%
2%
3%
3%
3%

Total net assets increased 3% from the end of the previous fiscal year because ofaccumulation of retained earnings from net income attributable to owners ofparent as well as a fluctuation in foreign currency translation adjustments.
Shareholders' equity ratio was 27.0% (*29.1%), which is 0.8 percentage points
higher than at the end of the previous fiscal year.

Total assets

・We plan to pay 170 yen as the annual (85 yen as the interim and 85 yen as the year-end) dividend.

YoY

1Q of
FY2022

1Q of
FY2023

Net sales

665.5

608.7

(56.8)(9%) (Net sales)

Gross profit

38.8

32.5

(6.3)

(16%)

SG&A expenses

14.7

16.2

1.5

10%

Operating income

24.1

16.2

(7.8)

(33%) (SG&A expenses)

Non-operating income

11.8

3.2

(8.5)

(72%)

Non-operating expenses

2.6

3.5

0.8

32%

Ordinary income

33.3

16.0

(17.3)

Extraordinary gain

0.7

―

(0.7)

Extraordinary loss

0.2

―

(0.2)

33.8

16.0

(17.8)

Operating Results

ChangeMain Factors

rate

Total liabilities(Interest-bearing debt)

Net sales decreased by 9% YoY, to 608.7 billion yen, because prices of the
products represented by steel, non-ferrous metal and crude oil were at lower
levels on a year-on-year comparison and demand for steel and scrap decreased.

(Net interest-bearing debt)(Equity capital)

Income before income
taxes and others

9.3

4.5

24.4

11.4

(4.8)
(12.9)

Non-controlling interests

23.9
0.5

11.4
(0.0)

(12.4)(0.5)

EPS (yen)

588.55282.81(305.74)

Owners of the parent

Comprehensive
incomeSegment
Information
Steel(Non-operating income/expenses)
Non-operating income decreased by 8.5 billion yen and non-operating expenses
increased by 0.8 billion yen. The main impacts on ordinary income were as(100%)
follows.
Interest income：increase of 0.3 billion yen(YoY)(52%)(100%)

Dividend income：decrease of 4.5 billion yen(YoY)

Income taxes
Net income

33.6

13.1

Net sales
1Q of
FY2022

308.8

1Q of
FY2023318.8(20.5)(53%)

Equity in earnings of affiliates：decrease of 1.6 billion yen(YoY)
Interest expenses：increase of 0.1 billion yen(YoY)

(53%)

(61%)

Loss on devaluation of investment securities：decrease of 0.2 billion yen(YoY)

rate

3%

10.1

1Q of
FY2023

8.4

rate

(18%)
(36%)

Metal Recycling

43.1

29.4

(32%)

4.9

0.8

(82%)

(1%)

0.3

0.4

44%

Energy&Living Materials
Overseas sales
subsidiaries
Total for reportablesegments

88.5

69.0

(22%)

2.8

1.3

(53%)

126.0

86.7

(31%)

2.6

2.0

(25%)

654.4

594.3

(9%)

27.7

17.4

(37%)

Other

39.3

33.0

(16%)

1.7

1.5

(15%)

Total

693.8

627.4

(10%)

29.5

18.9

(36%)

Adjustment(28.2)(18.6)

(34%)

3.8

(2.9)

―

Topics3500.0

1st half(Total Assets)
Total assets increased by 0.3% from the end of the previous fiscal year, mainly
because of increases in trade receivables and Inventories.

(Liabilities)*Reflecting equity credit attributes of the subordinated loan

【Quarterly Operating Results】

2nd half

1000.0

1st quarter

Net sales

60.0

Operating income

Applyng the Accounting Standard for Revenue Recognition

3000.02,700.0

2,668.2

2500.02000.01,745.5944.4

0.0

2,164.0

1,329.3

1,183.7

Applying the
AccountingStandard for
Revenue
Recognition

Applying the
AccountingStandard for
Revenue
Recognition

375.6

452.6

FY2020

FY2021

50.0

800.0

684.5

673.4

665.5

644.8

Applying the
AccountingStandard for
Revenue
Recognition

1,338.9

30.0

24.1
400.0

17.2

608.7

FY2022

FY2023(E)

20.0

16.2

14.7
8.1

200.0
665.5

40.0

608.7

600.0

980.3

801.0

500.0

(9%)

33.3

16.0

Main Factors

10.0

0.0

0.0
FY2022/1Q【Changes in Net Income】
60.0

4.3

608.7

Main Factors

rate

2Q

3Q

4Q

FY2023/1Q

Segment income
1Q of
FY2022

6.7

665.5

Change【Changes in Net Sales】

1000.0Arbitration related income：decrease of 0.2 billion yen(YoY)

5%

Consolidated

Shareholders' equity ratio

Gain on sale of investment securities：decrease of 0.5 billion yen(YoY)

(52%)

61.5

28.7

BPS (yen)
Shareholders' equity

1500.0(52%)(Extraordinary gain/loss)
―

58.6

29.1

(Non-controlling interests)

Foreign exchange gain：decrease of 3.3 billion yen(YoY)(52%)

Primary Metal

Foods(Valuation & translation
adjustments)

SG & A expenses increased by 1.5 billion yen YoY, with 50 million yen of
this figure deriving from newly consolidated subsidiaries.

Comparison with Mar. 2023

Mar. 2023

Financial Position(52%)(Steel business)
Net sales increased. The number of the projects handled increased thanks to enhanced ability to provide
solutions mainly in the domestic construction industry, and good business performance of Tanaka Steel Trading
Co., Ltd. that became a consolidated subsidiary in the third quarter in previous financial year contributed to theoverall business performance of the Company. On the other hand, segment income decreased, because profit
margin shrunk at some overseas sales subsidiaries due to price declines of steel products.
(Primary metals business)
Net sales increased, because of increases in transaction volume of some products represented by nickel and ferro
chrome. On the other hand, segment income decreased due to falls in dividend income from strategic investments
and equity in earnings of affiliates from SAMANCOR CHROME HOLDINGS PROPRIETARY LTD., inaddition to shrink of profit margin as the result of lower market prices.
(Metal recycling business)
Net sales decreased, because prices of base metal were at a lower level on a global basis on a year-on-yearcomparison as the result of the concerns about economic slowdown in each country, and transaction volume
decreased due to weak demand for stainless scrap and copper scrap. In addition, segment income decreased due
to appraisal gain from commodity forwards contracts in hedge transactions shrunk.
(Foods business)
Net sales decreased both in the Company and consolidated subsidiaries despite the transaction volume that wasalmost same with the previous fiscal year, due to crab market prices that had continued to decrease from theprevious fiscal year. On the other hand, segment income increased due to purchase cost risings of prawns andchickens started to be sufficiently reflected in the selling prices.
(Energy & Living Materials business)
Net sales and segment income decreased. Although transaction volume of the products such as palm kernel
shells (PKS) and wood pellet increased, sharp decrease in petroleum products had affected greatly on thebusiness performance.
(Overseas sales subsidiaries)
Net sales and segment income decreased. Transaction volume at sales subsidiaries mainly in Indonesia and U.S.
decreased due to sluggish demand for steel in overseas markets. In addition, decreases in market prices of steel
products and non-ferrous metal products put downward pressure on profit margins of overseas sales subsidiaries
as a whole.

・Apr Established HANWA AUSTRALIA PTY LTD. as a subsidiary of the Company.
Established HANWA PHILIPPINES CORPORATION as a subsidiary of the Company.
Acquired 80% of the shares of TOHO METAL Co., Ltd. and made it a subsidiary of the Company.

1st half

2nd half【Changes in Interest-bearing Debt】
Interest-bearing debt

900.0

1st quarter
51.5

Net DER

5.0

Reflecting subordinated loan

722.9

43.6
40.0

600.0

36.0
22.7

2.4

23.9

20.9

300.0

6.8
2.2
FY2020

Forecast(Annual)

Net sales

1.3

11.4

9.4

411.3

380.9

301.6

12.8
0.0

3.0

37.1

19.6

20.0

4.0

14.4

2.0

2.0

1.0

1.0

0.8

0.9

FY2022

FY2023/1Q

1.1

1.0

0.0

FY2021

FY2022

FY20220.0

FY2023(E)FY2023(estimated)

FY2020changeCash Dividends

FY2021

FY2021

FY2022

FY2023(estimated)

2,668.2

2,700.0

1%Interim (yen)

50.00

50.00

85.00

Operating income

64.1

60.0

(6%)

Year-end (yen)

50.00

80.00

85.00

Ordinary income

64.2

50.0

(22%)

Annual (yen)100.00130.00170.00Net income attributable toowners of the parent

51.5

36.0

(30%)

DOE*

―

―

2.5%

* DOE (Dividend on equity ratio) = Total dividend / Beginning total shareholders'