Financial Results for the Third Quarter ended December 31, 2023
(Japan GAAP)
February 8, 2024
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: February 8, 2024
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 Third Quarter ended December 31, 2023 (April 1, 2023 to December 31, 2023)(1) Consolidated operating results（Percentage indicate a change from the previous year）

Net sales
For the 3rd Quarter
ended December 31, 2023
ended December 31, 2022

(Millions of yen)(％)

Operating income

Ordinary income(Millions of yen)

(Millions of yen)(％)

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

1,826,628(9.7)
42,467(24.3)
42,932(32.6)
30,761(31.5)
2,023,476
31.3
56,06813.9
63,68328.7
44,92435.4
40,447 million yen(36.7) %Note: Comprehensive income
For the Fiscal Year ended December 31, 2023
63,902 million yen
65.5 %For the Fiscal Year ended December 31, 2022
Net income
per share

For the 3rd Quarter
ended December 31, 2023
ended December 31, 2022

Net income
per share(diluted)

(yen)

(yen)

756.66
1,105.49－－(2) Consolidated financial position
Total assets(Millions of yen)
As of December 31, 2023
As of March 31, 2023

Note: Shareholders' equity

Shareholders'equity ratio

Net assets(Millions of yen)

1,152,671
1,157,747
As of December 31, 2023
As of March 31, 2023

Net assets
per share(％)

343,015
308,807337,789 million yen
303,127 million yen

29.3
26.2(yen)

8,305.97
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-end

Annual(yen)(yen)(yen)(yen)

(yen)

－－

50.00
85.00

－－

80.00

130.0085.00

170.00Year ending March 31, 2024

（estimated）

３．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

Operating income

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

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

Net income
per share(yen)Annual
2,700,000
1.2
60,000(6.4)
50,000(22.2)
36,000(30.1)
885.89* The above forecasts reflect assumptions and prospects based on the information currently available. They are subject
to various risks and uncertainties that could cause actual results to differ materially from this information.

－1－HANWA Co.,Ltd.
Financial Results for the Third Quarter ended December 31, 2023

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

Millions of yen
March 31, 2023

December 31, 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

73,809430,266
102,172
243,901
63,820(1,661)
912,30936,78650,33087,11710,807

37,44052,58890,028
10,113

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

103,61139,313(2,704)140,220
240,362
1,152,671

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

295,470
43,88086,904
－－
2,216
2,294
111
49,926
480,804Long-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

50,000237,990
4,330
36,530328,851809,656

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

45,651
1,301
253,295(3,662)
296,585

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

25,727722
1,975
15,200(2,421)
41,2035,226
343,015
1,152,671

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 Third Quarter ended December 31, 2023

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

Millions of yen
3rd Quarter ended
December 31, 2022
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Other income;Interest income
Dividend income
Equity in earnings of affiliates
Foreign exchange gainOthers
Total other income
Other expenses;
Interest expenses
Foreign exchange loss
OthersTotal other expenses
Ordinary income

3rd Quarter ended
December 31, 2023

2,023,476
1,922,068
101,407

1,826,628
1,732,189
94,43945,33956,06851,971
42,467

2,838
7,365
6,389
474
1,719
18,787

3,693
3,375
1,943
－
1,091
10,103

7,311
－
3,861
11,173
63,683

6,588
163
2,885
9,638
42,932Extraordinary income;Gain on sale of property and equipment
Gain on sale of investment securities
Gain on bargain purchase
Arbitration related income
Total extraordinary incomeExtraordinary loss;
Loss on devaluation of investment securities
Value added taxes for prior periods
Total extraordinary loss
Income before income taxes and non-controlling interests

－
655
722
269
1,647

1,170
559
－
－
1,730

278
369
647
64,683

1,158
－
1,158
43,504

Income taxes
Net income

17,93546,747

12,262
31,241

44,924
1,823

30,761
479

3,943
542
10,544
489

1,695
48
6,032
327

1,634

1,101

17,15463,902

9,206
40,447

61,581
2,320

39,704742

Net income 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 attributable to;
Owners of the parent
Non-controlling interests－3－

HANWA Co.,Ltd.
Financial Results for the Third Quarter ended December 31, 2023

《Segment information》
Segment information by business category for the 3rd Quarter ended December 31, 2022 and 2023, is as follows:(Amounts less than one million yen are rounded down)

3rd Quarter ended December 31, 2022

Millions of yen

Reportable segment
Steel
Net sales
Customers
Inter-segment
Total
Segment income(loss)

918,823
22,635
941,458
25,597

Metal

Primary
Metal

Recycling

197,873
4,115
201,988
16,146

111,009
2,147
113,156
5,063

Foods
100,413624
101,038(883)

Energy& Living
Materials

subsidiaries

264,356
10,230274,586
10,436320,330 1,912,806
32,585 72,337
352,916 1,985,144
7,369 63,729

Overseassales

Subtotal

Other

Total

Adjustment110,669 2,023,476－ 2,023,476
3,326 75,663 (75,663)－113,995 2,099,140 (75,663) 2,023,476
2,625 66,354(2,671) 63,683

3rd Quarter ended December 31, 2023

Millions of yen

Reportable segment
Steel
Net sales
Customers
Inter-segment
TotalSegment income

920,394
19,561
939,955
22,957

Consolidated

Metal

Primary
Metal

Recycling

155,318
4,527
159,8456,514

85,8942,150
88,044
1,050

Foods
97,715440
98,156
1,098

Energy& Living
Materials

subsidiaries

241,296
6,154
247,451
5,103

240,929 1,741,549
17,945 50,780
258,875 1,792,329
6,581 43,305

Overseas
sales

Subtotal

Other

Total

Adjustment

Consolidated

85,079 1,826,628－ 1,826,628
5,592 56,372 (56,372)－
90,671 1,883,001 (56,372) 1,826,628
2,398 45,703(2,771) 42,932

Notes:
1. “Other” comprises businesses that are not included in reportable segments, such as lumber section and machinery section.
2. Adjustments for segment income or loss 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 or loss is adjusted between ordinary income or loss on the consolidated statements of income and comprehensive income.

－4－February 8, 2024

Highlights of Consolidated Financial Results for the 3rd Quarter of FY2023(Japan GAAP)HANWA Co., Ltd.
(Unit: billion yen, rounded down to 0.1 billions yen)

Outline of Financial Results for the 3rd Quarter of FY2023
・During the 3rd quarter of this fiscal year, net sales decreased by 10% YoY, to 1,826.6 billion yen, because prices of the products represented by steel, non-ferrous metal and crude oil wereat lower levels on a year-on-year comparison and demand for steel and scrap decreased. Operating income decreased by 24% YoY, to 42.4 billion yen, due to income decreases in all thebusiness segments except the Food business, and ordinary income decreased by 33% YoY, to 42.9 billion yen, mainly because foreign exchange loss was reported after reported gain in theprevious term, and equity in earnings of affiliates shrunk mainly in the Primary metals business, dividend income from strategic investments decreased. Net income attributable to ownersof the parent decreased by 32% to 30.7 billion yen.

Dec. 2023

1,157.7

1,152.6(5.0)(0%) (Total Assets)(Current assets)

928.7

912.3

(16.4)(2%)(Fixed assets)

229.0

240.3

11.3

5%

848.9

809.6

(39.2)(5%)

Net DER

380.9
296.7
98%/83*%

378.5
304.7
90%/77*%

(2.4)
7.9
(8pt)

(1%)
3%
(8%)

Liabilities decreased by 5% from the end of the previous fiscal year, mainly
because of redemption of commercial paper, as well as a decrease in income
taxes payable after payment of taxes including corporate tax in which thebusiness results of the previous fiscal year were reflected. As interest-bearing
debt decreased by 1%, net debt-equity ratio was turned into 90%（*77%).

Total net assets

308.8

343.0

34.2

11%

(Net assets)

270.8
32.2
5.6
7,459.39
303.1
26.2/28.3*%

296.5
41.2
5.2
8,305.97
337.7
29.3/31.5*%

25.7
8.9(0.4)
846.58
34.6
3.1pt

10%
28%
(8%)
11%
11%
12%

Total net assets increased 11% from the end of the previous fiscal year becauseof accumulation of retained earnings from net income attributable to owners ofparent as well as a fluctuation in foreign currency translation adjustments.
Shareholders' equity ratio was 29.3% (*31.5%), which is 3.1 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.

Operating Results
Net sales
Gross profit
SG&A expenses

YoY

1Q-3Q ofFY2022

1Q-3Q ofFY2023

2,023.4

1,826.6(196.8)

101.4

94.4

(6.9)

(7%)

45.3

51.9

6.6

15%

ChangeMain Factors

rate

Total liabilities(Interest-bearing debt)(10%) (Net sales)
Net sales decreased by 10% YoY, to 1,826.6 billion yen, because prices of theproducts 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)
Operating income

56.0

42.4(13.6)(24%) (SG&A expenses)

Non-operating income

18.7

10.1

(8.6)

(46%)

Non-operating expenses

11.1

9.6(1.5)(14%)

Ordinary income

63.6

42.9

(20.7)(33%)

Extraordinary gain

1.6

1.7

0.05%

Extraordinary loss

0.6

1.1

0.5

79%

Income before income taxes
and others

64.6

43.5

(21.1)(33%)

Income taxes

17.9(Valuation & translationadjustments)

SG & A expenses increased by 6.6 billion yen YoY, with 0.1 billion yen of
this figure deriving from newly consolidated subsidiaries.
(Non-operating income/expenses)
Non-operating income decreased by 8.6 billion yen and non-operating expenses
decreased by 1.5 billion yen. The main impacts on ordinary income were as follows.
Interest income : increase of 0.8 billion yen(YoY)
Dividend income : decrease of 3.9 billion yen(YoY)
Equity in earnings of affiliates : decrease of 4.4 billion yen(YoY)

Net income
Owners of the parent
Non-controlling interests

EPS (yen)Comprehensiveincome

12.2

46.7

31.2

Steel(15.5)

44.9
1.8

30.7
0.4

(14.1)(1.3)

1,105.49

756.66(348.83)(32%)(33%) (Extraordinary gain/loss)
Gain on sales of property and equipment：1.1 billion yen(32%)
Gain on bargain purchase：decrease of 0.7 billion yen(YoY)
(74%)
(32%)

63.9

40.4

1Q-3Q ofFY2022941.4

1Q-3Q ofFY2023939.9(23.4)(37%)

Value added taxes for prior periods：decrease of 0.3 billion yen(YoY)

rate

(0%)

25.5

1Q-3Q ofFY202322.9rate

(10%)

159.8

(21%)

16.1

6.5(60%)

Metal Recycling

113.1

88.0(22%)5.0

1.0(79%)

Foods

101.0

98.1

(3%)

(0.8)

1.0

―352.9

247.4
258.8

(10%)
(27%)

10.4
7.3

5.1
6.5(51%)(11%)

1,985.1

1,792.3

(10%)

63.7

43.3(32%)

Other

113.9

90.6(21%)

2.6

2.3(9%)

Total

2,099.1

1,883.0(10%)

66.3

45.7(31%)

Adjustment(75.6)(56.3)

(26%)

(2.6)

(2.7)

4%

Consolidated

Topics2,023.4

1,826.6

Shareholders' equity ratio

Main Factors

rate

Total assets decreased by 0.4% from the end of the previous fiscal year, mainly
because of a decrease in cash and deposits and inventories.

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

【Changes in Net Sales】3500.0

1st half【Quarterly Operating Results】

2nd half

1000.0

3rd quarter

Net sales

60.0

Operating income

Applyng the Accounting Standard for Revenue Recognition

3000.02,700.0

2,668.2

2500.02,164.0

2000.01500.0944.4

1000.01,244.9

2,023.4

1,541.0

0.0

673.4

665.5

684.5

644.8

625.4

400.0

Applying theAccountingStandard for
Revenue
Recognition

17.2

980.3

1,338.9

1,201.2

FY2020

FY2021

FY2022

FY2023(E)

16.2

14.7

16.1

20.0

10.1

8.1

200.0

801.0

40.0
30.0

24.1

1,826.6

Applying theAccountingStandard forRevenue
Recognition

592.5

608.7

600.0

Applying theAccountingStandard for
Revenue
Recognition

500.0

50.0

800.0

1,498.8

1,329.3

1,183.7

1,745.5

(10%)

63.6

42.9

Main Factors

10.0

0.00.0
FY2022/1Q

2Q【Changes in Net Income】
60.0

201.9

274.5

BPS (yen)
Shareholders' equity

Change

3Q

4Q

FY2023/1Q

2Q

3Q

Segment income
1Q-3Q ofFY2022

Primary Metal

Energy&Living Materials
Overseas sales
subsidiaries
Total for reportablesegments(Non-controlling interests)

Arbitration related income：decrease of 0.2 billion yen(YoY)Loss on devaluation of investment securities：increase of 0.8 billion yen(YoY)

Net sales
Segment Information(5.6)

Foreign exchange gain/loss : 0.4 billion yen gain(last year): 0.1 billion yen loss(this year)
Interest expenses：decrease of 0.7 billion yen(YoY)

Comparison with Mar. 2023

Mar. 2023

Financial Position(Steel business)
Overall transaction volume decreased due to sluggish demand for stainless steel and a decline in the numberof new housing starts. In addition, segment income decreased, because the profit margin, mainly at overseas
subsidiaries, shrunk due to the impact of lower steel product prices compared to the same period of theprevious fiscal year.
(Primary metal business)
Net sales decreased, because the transaction volume of stainless steel products decreased, as well as current
adjustment phase of various merchandises. In addition, segment income decreased due to falls in dividend
income from strategic investments and equity in earnings of affiliates from SAMANCOR CHROMEHOLDINGS PROPRIETARY LTD.
(Metal recycling business)
Net sales decreased, because prices of base metal were at a lower level on a global basis compared to the same
period of the previous fiscal year, and transaction volume decreased due to weak demand for mainly stainlessscrap. In addition, segment income decreased due to appraisal gain from commodity forwards contracts inhedge transactions shrunk.
(Foods business)
Although the crab market prices remained low compared to the same period of the previous fiscal year, which
pushed down profits, they have recently been on a gradual recovery trend. In addition, the purchase costrisings of salmon, prawns and chickens 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 kernelshells (PKS) and wood pellet increased, lower petroleum product prices compared to the same period of theprevious fiscal year had affected greatly on the business performance.
(Overseas sales subsidiaries)
Net sales and segment income decreased. Transaction volume at sales subsidiaries, mainly in Indonesia andU.S., decreased. 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.

1st half

40.0

2nd half【Changes in Interest-bearing Debt】

43.6

14.4

22.7

44.9

3.0

2.4

30.7

380.9

301.6
300.0

20.9

4.0

600.0

36.0

17.0

33.1

1.3

19.0

12.2
6.8

0.0

5.0

722.9

19.6
12.8

Net DER

Reflecting subordinated loan

37.1

20.0

Interest-bearing debt

900.0

3rd quarter
51.5

2.0

378.5

1.0

0.9

0.8

0.8

FY2022

FY2023/3Q

1.1

1.0

0.0

FY2020

Forecast(Annual)

Net sales

FY2021

FY2022FY2022

0.0

FY2023(E)FY2023(estimated)

FY2020change2.0

Cash 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%

(33%)

・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.

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