Financial Results for the First Quarter ended June 30, 2021
(Japan GAAP)
August 10, 2021
Company name:

HANWA Co.,Ltd.

Listed stock exchange: Tokyo

Stock exchange code:

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

Representative:
Hironari Furukawa President
Enquiries:
Yoichi Nakagawa Director, Senior Managing Executive Officer
Scheduled date of issue of audited financial statements: August 10, 2021
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, 2021 (April 1, 2021 to June 30, 2021)(1) Consolidated operating results（Percentage indicate a change from the previous year）
Net sales
For the 1st Quarter
ended June 30, 2021
ended June 30, 2020

(Millions of yen)(％)

Operating income

Ordinary income(Millions of yen)

(Millions of yen)(％)

452,604
13,503206.2－
375,645(20.5)
4,410(36.4)
Note: Comprehensive income
For the Fiscal Year ended June 30, 2021
For the Fiscal Year ended June 30, 2020
Net income
per share

For the 1st Quarter
ended June 30, 2021
ended June 30, 2020

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

14,028337.9
3,203(50.2)
13,843 million yen
856 million yen

(％)

9,492
2,211

329.3
(46.6)－%(54.9) %Net incomeper share(diluted)

(yen)

(yen)

－233.59－
54.41* From the beginning of the fiscal year ending March 31, 2022, the Company applies the Accounting Standard for
Revenue Recognition (Accounting Standards Board of Japan Statement No. 29). As a result, the figures for the 1stquarter ended June 30,2021 in the above consolidated operating results constitute the figures after application of said
accounting standard. For this reason, rates of increase/decrease YoY are not shown for net sales.

(2) Consolidated financial position(Millions of yen)
As of June 30, 2021
As of March 31, 2021

Note: Shareholders' equity

Shareholders'equity ratio

Net assets

Total assets(Millions of yen)(％)

206,328
191,857
203,441 million yen
189,214 million yen

933,692
824,590
As of June 30, 2021
As of March 31, 2021

Net assets
per share

21.8
22.9

(yen)

5,006.25
4,656.17

２．Cash dividends
Cash dividends per share
1st Quarter 2nd Quarter 3rd Quarter
Year ended March 31, 2021
Year ended March 31, 2022
Year ending March 31, 2022
（estimated）

Year-end

Annual(yen)

(yen)

(yen)

(yen)

(yen)

－－

30.00

－

30.00

60.00

30.00

－

30.00

60.00

３．Forecast of consolidated financial results for fiscal year ending March 31, 2022 (April 1, 2021 to March 31, 2022)（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 Company

Net income
per share(Millions of yen) (％)(yen)

Annual
1,980,000－42,000
43.7
38,00031.8
26,20033.6
644.73* For more information, please refer to "Notice Concerning Amendments to Forecasts of consolidated financial resultsfor FY2021" announced on August 10, 2021.The above forecasts reflect assumptions and prospects based on theinformation currently available. They are subject to various risks and uncertainties that could cause actual results todiffer materially from this information.
* From the beginning of the fiscal year ending March 31, 2022, the Company applies the Accounting Standard forRevenue Recognition (Accounting Standards Board of Japan Statement No. 29). As a result, the figures in the above
forecast of consolidated financial results constitute the figures after application of said accounting standard. For thisreason, rates of increase/decrease YoY are not shown for net sales.

－1－

HANWA Co., Ltd.

Financial Results for the First Quarter ended June 30, 2021

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

Millions of yen
March 31, 2021

June 30, 2021

AssetsCurrent assets;
Cash and deposits
Trade notes and accounts receivableTrade notes, accounts receivable and contract assets
Electronically recorded monetary claims
Inventories
Other
Allowance for doubtful receivables
Total current assets

50,907356,059―
27,895
127,378
69,532(1,679)630,093

58,641―
416,959
30,793
142,297
77,233(1,479)724,446

34,45739,34973,806
7,893

34,68840,89675,585
8,487

72,472
40,779(454)
112,796
194,497824,59073,88752,087(801)
125,173
209,246
933,692

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

213,436
21,77265,85910,013
6,985
3,281
324
67,549389,222

236,353
23,500120,470
20,00020,013
5,071
1,862
320
65,084
492,676

Long-term liabilities;
Bonds payable
Long-term loans payable
Retirement benefits liabilities
OthersTotal long-term liabilities
Total liabilities

30,000193,999
5,326
14,184
243,510
632,733

20,000
193,567
5,409
15,710234,687
727,364

45,651
137,825(3,729)179,747

45,651
147,943(3,729)189,865

15,193372
3,191(4,906)(4,384)
9,467
2,642
191,857
824,590

17,235140
3,191(2,807)(4,185)
13,575
2,886
206,328
933,692

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 and Net Assets

Net assets;
Shareholders' equity;
Common stock
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
Minority interests
Total net assets
Total liabilities and net assets－２－HANWA Co., Ltd.

Financial Results for the First Quarter ended June 30, 2021

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

Millions of yen
Year ended
June 30, 2020

Year ended
June 30, 2021

Net sales
Cost of sales
Gross profit

375,645359,250
16,394

452,604
425,764
26,839Selling, general and administrative expenses
Operating income

11,983
4,410

13,335
13,503

715
1,152
238
285
2,392

331
633
544
364
1,873

1,000
2,177
421
3,599
3,203

860
224
264
1,349
14,028Extraordinary income;Gain on sales of property and equipment
Total extraordinary income
Income before income taxes and minority interest

574
574
3,778

――
14,028

Income taxes
Net income

1,577
2,2004,434
9,593

2,211(10)

9,492
101

1,532(577)(2,247)197

2,040(231)
1,952
191

(249)

296

(1,343)856

4,249
13,843

1,021
(164)

13,600242

Other income;Interest income
Dividend income
Equity in earnings of affiliates
OthersTotal other income
Other expenses;
Interest expenses
Foreign exchange loss
OthersTotal other expenses
Ordinary income

Net income (loss) attributable toOwners of parent
non-controlling interests
Other Comprehensive Income
Valuation difference on available-for-sale securities
Deferred hedges profit and loss
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Share of other comprehensive income of entities accounted forusing 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 First Quarter ended June 30, 2021

《Segment information》
Segment information by business category for the 1st Quarter ended June 30, 2020 and 2021, is as follows:(Amounts less than one million yen are rounded down)

Millions of yen

1st Quarter ended June 30, 2020
Reportable segment
Steel
Net sales
Customers
Inter-segment
Total
Segment income(loss)

197,678
2,315
199,993
1,757

Primary
Metal
Metal Recycling

Foods

47,745742
48,488
1,296

22,93016
22,946
166

17,261423
17,684(369)

Energy& Living
Materials

37,2091,630
38,840
1,679

Overseas
sales
subsidiaries

Subtotal

33,904 356,730
7,565 12,694
41,470 369,424
392
4,922

Other

Total

18,915 375,645
902 13,597
19,817 389,242
(118)
4,803

Adjustment― 375,645(13,597)―(13,597) 375,645(1,600)3,203Millions of yen

1st Quarter ended June 30, 2021
Reportable segment
Steel
Net sales
Customers
Inter-segment
Total
Segment income(loss)

Consolidated

202,576
3,877
206,454
8,105

Primary
Metal
Metal Recycling

Foods

44,7491,024
45,774
2,121

27,59398
27,691
827

29,975941
30,916
1,579

Energy& Living
Materials

59,287
1,836
61,124
1,478

Overseas
sales
subsidiaries

Subtotal

66,379 430,561
2,275 10,054
68,654 440,615
1,107 15,220

OtherTotal

22,042 452,604
1,132 11,186
23,175 463,791
326 15,546

Adjustment

Consolidated― 452,604(11,186)―(11,186) 452,604(1,518) 14,028

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 or loss is adjusted between ordinary income on the consolidated statements of income and comprehensive income.
4. Since the 1st Quarter of the fiscal year 2021, the Company has changed its method of classification of business segments, integrating apart of the Steel business into the Primary Metal business. The classification change also applies to segment information for the 1st quarterof the previous fiscal year.
5. From the beginning of the fiscal year ending March 31, 2022, the Company applies the Accounting Standard for Revenue Recognition(Accounting Standards Board of Japan Statement No. 29). For this reason, we change the method of calculating revenue for businesssegments as well.
As a result of this change, compared to the previous method, net sales for the first quarter of this fiscal year decreased by 48,899 million
yen in the Steel segment, 58,605 million yen in the Primary metal segment, 233 million yen in the Metal recycling segment, 33 million yen in
the Foods segment, 116 million yen in the Energy & Living Materials segment, 14,051 million yen in overseas sales subsidiaries anddecreased 273 million yen in the Other segment. In addition, segment income in the Steel segment increased by 890 million yen.

－４－August 10, 2021

Highlights of Consolidated Financial Results for the 1st Quarter of FY2021(Japan GAAP)HANWA Co., Ltd.

Outline of Financial Results for the 1st Quarter of FY2021(Unit: billion yen, rounded down to 0.1 billions yen)・During the 1st quarter of the fiscal year, economic activity progressed on a recovery trend. Net sales increased to 452.6 billion yen, as transaction volume increasedin certain businesses, including Steel and Primary Metal, and prices of steel and non-ferrous metals trended upward. Profits expanded in all business segments
except the Energy & Living Materials business. Operating income increased by 206% YoY, to 13.5 billion yen, while ordinary income rose by 338% YoY, to 14.0
billion yen, as foreign-exchange losses at overseas consolidated subsidiaries shrank and equity in earnings of affiliates expanded, mainly in the Steel business, andnet income attributable to owners of the company increased by 329% to 9.4 billion yen.
・We plan to pay 60 yen as the annual (30 yen as the interim and 30 yen as the year-end) dividend.

Operating Results
Net sales

YoY

1Q of
FY2020

1Q of
FY2021

375.6

452.6

Gross profit

Change―*Main Factors

rate

16.3

26.810.4

64%

SG&A expenses

11.9

13.3

1.3

11%

Operating income

4.4

13.5

9.0

206%

Non-operating income

2.3

1.8(0.5)-22%

Non-operating expenses

3.5

1.3(2.2)-63%

Net sales increased to 452.6 billion yen, as transaction volume
swelled in some businesses, including the Steel and Primary Metal
businesses, and prices of steel and non-ferrous metals trended
upward.
( *From the beginning of the fiscal year ending March 31, 2022, theCompany applies the Accounting Standard for Revenue Recognition(Accounting Standards Board of Japan Statement No. 29). For thisreason, rates of increase/decrease YoY are not shown for net sales.)

3.2

14.0

10.8

338%

Extraordinary gain

0.5―(0.5)-100%

Extraordinary loss

――――

3.7

14.0

10.2

Income before income
taxes and others

Income taxes

1.5

Net income
Owners of the Company(loss)
Non-controlling interests(loss)

EPS (yen)

2.2

9.5

2.2
(0.0)
54.41

Comprehensive
incomeSegment
Information

4.4

9.4
0.1
233.590.8

13.8

Net sales
1Q of
FY2020

1Q of
FY2021

Steel

199.9

206.4

*Primary Metal

48.4

45.7

2.8
7.3
7.2
0.1179.18
12.9

Jun. 2021

824.5

933.6

109.1

13%

(Current assets)

630.0

724.4

94.3

15%

(Fixed assets)

194.4

209.2

14.7

8%

632.7

727.3

94.6

15%

301.6
250.7
*
133%/105%

375.8
317.1
*
156%/128%

74.1
66.4
23pt

25%
26%
―

191.8

206.3

14.4

8%

179.7
189.8
9.4
13.5
2.6
2.8
4,656.17
5,006.25
189.2
203.4
*
22.9/26.0 % 21.8/24.5*%

10.1
4.1
0.2
350.0814.2-1.1pt

6%
43%
9%
8%
8%
-5%

Total assets

Total liabilities(Net interest-bearing debt)

Net DER
Total net assets(Equity capital)(Valuation & translationadjustments)(Minority interests)
BPS (yen)
Shareholders' equity(SG&A expenses)

Ordinary income

Mar. 2021

Financial Position(Interest-bearing debt)―* (Net sales)

SG & A expenses increased by 1.3 billion yen YoY, with newly
consolidated subsidiaries contributing 0.1 billion yen to this figure.
Personnel expenses rose by 0.7 billion yen YoY, with 0.1 billion yenof this figure deriving from newly consolidated subsidiaries.

Shareholders' equity ratio

Non-operating income decreased by 0.5 billion yen and nonoperating expenses decreased by 2.2 billion yen. The main impacts
on ordinary income were as follows.
Interest income : decrease of 0.3 billion yen(YoY)
Dividend income : decrease of 0.5 billion yen(YoY)
Equity in earnings of affiliates : increase of 0.3 billion yen(YoY)
Interest expenses : decrease of 0.1 billion yen(YoY)
Foreign exchange loss : decrease of 1.9 billion yen (YoY)

181%
336%
329%
―
329%
―

2,500.0

1st half

Main Factors

rate(Total Assets)

Total assets increased by 13% from the end of the previous fiscalyear, mainly because of an increase in trade receivables resulting
from a sales increase.
Trade receivables 447.7billion yen (+17% from the end of theprevious period)(Liabilities)
Liabilities increased by 15% from the end of the previous fiscal year,
mainly as a result of increases in short-term debt and trade payables.
As interest-bearing debt increased by 25%, net debt-equity ratio wasturned into 156%（*128%).

(Net assets)
Total net assets increased 8% from the end of the previous fiscal year
because of accumulation of retained earnings from net income
attributable to owners of parent as well as an increase in foreign
currency translation adjustments.
Shareholders' equity ratio was 21.8% (*24.5%), which is 1.1
percentage points lower than at the end of the previous fiscal year.
*Reflecting equity credit attributes of the subordinated loan

【Quarterly Operating Results】

2nd half

1st quarter

1,907.4

2,000.0

1,069.6

600.0

Applying theAccountingStandard for
Revenue
Recognition

400.0

497.4

472.4

FY2018FY2019

16.0

13.5

14.0

443.9

200.0

452.610.4

375.6

12.0
10.0

Applyng theAccountingStandard forRevenue
Recognition

7.6

6.6

1,000.0

946.0

Operating income

500.5
425.4

1,745.5
944.4

961.4

1,004.9

Net sales

1,980.0

1,500.0

8.0
6.0

4.4

801.0

4.0

500.0

0.0

375.6

452.6

FY2020

FY2021(E)

2.0
0.0

0.0
FY2020/1Q

2Q

3Q

4Q

FY2021/1Q

Segment income
1Q of
FY2020

1Q of
FY2021

―

1.7

8.1

361%

―

1.2

2.1

64%

rate

rate

Main Factors【Changes in Net Income】
30.0

Metal Recycling

17.6

30.9―

(0.3)

1.5―Foods

22.9

27.6

―

0.1

0.8

397%

Energy&Living Materials
Overseas sales
subsidiaries
Total for reportablesegments

Change【Changes in Net Sales】
2,074.6

271% (Non-operating income/expenses)

Comparison with Mar. 2021

38.8

61.1

―

1.6

1.4

-12%

41.4

68.6

―

0.3

1.1

182%

369.4

440.6

―

4.9

15.2

209%

Other

19.8

23.1

―

(0.1)

0.3

―

Total

389.2

463.7

―

4.8

15.5

224%

Adjustment(13.5)(11.1)―(1.6)(1.5)-5%

Consolidated

375.6

452.6

―

3.2

14.0

338%

(Steel business)Segment income and profit margin grew. Transaction volume rose amid an upward
trend in demand for steel. Steel products prices continued to rise amid mounting
raw-material costs and tightening supply.
(Primary metals business)
Segment income increased as steel and non-ferrous metal manufacturers resumed
operation, transaction volume in stainless-steel base metals and alloys remained
strong and nickel prices rose. As a result, profit margin expanded.
(Metal recycling business)
Segment income increased. With base metals trending at a high level, profit margin
was secured by expansion of copper and aluminum sales, while transaction volume
increased through utilization of the cargo-collection and inventory functions ofsubsidiaries.
(Foods business)
Profit margin expanded as transaction volume with volume retailers increased andthe product prices followed a rising trend. Segment income also increased amid
improved profitability at consolidated subsidiaries in the U.S. and Japan.
(Energy & Living Materials business)
With prices for crude oil and petroleum products on a rising trend, stable revenues
were secured for these products, while transaction volumes in daily necessities andhousehold goods increased. On the other hand, an export tariff hike in Indonesia
applied downward pressure on sales of palm kernel shells (PKS). Segment incomedecreased.
(Overseas sales subsidiaries)
Segment income increased. Transaction volume in steel increased in some countries,
including Indonesia and Singapore, while steel demand recovered in China andprofitability in the Food business in the U.S. rose.

1st half

2nd half【Changes in Interest-bearing Debt】

1st quarter

400.0

13.9
12.8

10.0

7.3
6.5

5.1

0.0

3.5

4.1

-20.0

-18.8
FY2019Forecast(Annual)

363.2

331.1

1.6

3.0

375.8
2.0

301.6

1.6

9.4

1.6

1.3
200.0

2.2

-10.0

FY2018300.0

6.8-13.6

Net DER

Reflecting subordinated loan

19.6

20.0

Interest-bearing debt

500.0

26.2

1 .3

1 .3

1 .3

1 .1

1.0

100.0
0.0

FY2020

FY2020

FY2021(E)FY2021(estimated)

0.0

FY2018changeFY2019Cash Dividends

FY2020

FY2021/1Q

FY2019FY2020

FY2021(estimated)

1,745.5

1,980.0―

Interim (yen)

75.00

30.00

30.00

Operating income

29.2

42.0

44%

Year-end (yen)

25.00

30.00

30.00Ordinary income

28.8

38.0

32%

Annual (yen)100.00

60.00

60.00

Net income attributable toowners of parent

19.6

26.2

34%

Dividend payout ratio

―12%

9%

Net sales

the 1st Quarter of the fiscal year 2021, the Company has changed its method of classification of business segments, integrating a part of the Steel business into the Primary Metal business. Please note that comparison on a* Since
YoY basis is made in accordance with the classification method after the changing.

・ Apr.

TopicsAcquire the shares in Suzuki-Sumiden Wire Products Guangzhou Co., Ltd. (SWPG), a manufacturer of high-quality stainless wirein China.

* From the beginning of the fiscal year ending March 31, 2022, the Company applies the Accounting Standard for Revenue Recognition(Accounting Standards Board of Japan Statement No. 29). As a result, the figures in the above forecast of consolidated businessresults constitute the figures after application of said accounting standard. For this reason, rates of increase/decrease YoY are not shown for net sales.