Financial Results for the Third Quarter ended December 31, 2022
(Japan GAAP)
February 10, 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
Executive Officer
Scheduled date of issue of audited financial statements: February 10, 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 Third Quarter ended December 31, 2022 (April 1, 2022 to December 31, 2022)(1) Consolidated operating results（Percentage indicate a change from the previous year）

Net sales
For the 3rd Quarter
ended December 31, 2022
ended December 31, 2021

(Millions of yen)(％)

Operating income

Ordinary income(Millions of yen)

(Millions of yen)(％)

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

2,023,476
31.3
56,06813.9
63,68328.7
44,92435.4
1,541,082－
49,234
162.6
49,478175.9
33,177
170.4
Note: Comprehensive income
For the Fiscal Year ended December 31, 2022
63,902 million yen
65.5 %For the Fiscal Year ended December 31, 2021
38,617 million yen
161.7 %Net income
per share

For the 3rd Quarter
ended December 31, 2022
ended December 31, 2021

Net income
per share(diluted)

(yen)

(yen)

1,105.49－
816.43－* 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 3rdquarter ended December 31, 2021 in the above consolidated operating results constitute the figures after application ofsaid accounting standard. For this reason, rates of increase/decrease YoY are not shown for net sales ended
December 31, 2021.

(2) Consolidated financial position
Total assets(Millions of yen)
As of December 31, 2022
As of March 31, 2022

Note: Shareholders' equity

Shareholders'equity ratio

Net assets(Millions of yen)

1,326,105
1,715,394
As of December 31, 2022
As of March 31, 2022

Net assets
per share(％)

301,379
240,497294,829 million yen
237,117 million yen

22.2
13.8

(yen)

7,255.20
5,834.98

２．Cash dividends
Cash dividends per share
1st Quarter 2nd Quarter 3rd Quarter
Year ended March 31, 2022
Year ended March 31, 2023
Year ending March 31, 2023
（estimated）

Year-end

Annual

(yen)

(yen)

(yen)

(yen)

(yen)

－
－

50.00
50.00

－
－

50.00

100.0050.00

100.00３．Forecast of consolidated financial results for fiscal year ending March 31, 2023 (April 1, 2022 to March 31, 2023)（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
2,600,000
20.1
70,00012.2
73,00016.4
51,00016.9
1,255.01* 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－

Financial Results for the Third Quarter ended December 31, 2022

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

Millions of yen
March 31, 2022

December 31, 2022

AssetsCurrent assets;
Cash and deposits
Trade notes, accounts receivable and contract assets
Electronically recorded monetary claims
Inventories
Accounts receivable-other
OthersAllowance for doubtful receivables
Total current assets

165,451
542,444
33,012
243,603
222,549
66,569(1,580)1,272,049

112,333
472,263
44,746279,342
65,73875,211(1,436)
1,048,199

34,67743,211
77,88910,556

39,46950,31889,787
11,12781,443
248,541
26,317(1,403)354,898
443,344
1,715,394

98,14551,72628,336(1,218)
176,990277,905
1,326,105

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
Commodity forwards contracts liabilities
OthersTotal current liabilities

388,294
33,456458,984
40,00010,00016,098
4,223
66
186,766
100,725
1,238,615

299,058
40,307240,364
70,00010,000
7,554
2,312
58
25,95678,378773,990

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

20,000190,890
4,454
20,935236,280
1,474,896

30,000191,020
4,460
25,253
250,734
1,024,725

45,651
26
180,119(3,729)222,066

45,651
26
220,858(3,730)262,805

16,725(1,000)3,191(531)(3,334)
15,0503,379
240,497
1,715,394

20,662(458)
3,455
11,219(2,855)32,0246,550
301,379
1,326,105

Fixed assets;
Property and equipment;
Land
OthersTotal property and equipment
Intangible assets
Investments and other assets;
Investment securities
Long-term guarantee deposits
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－

Financial Results for the Third Quarter ended December 31, 2022

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

Millions of yen

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 gain
OthersTotal other income
Other expenses;
Interest expenses
Foreign exchange loss
OthersTotal other expenses
Ordinary income

3rd Quarter ended
December 31, 2021

3rd Quarter ended
December 31, 2022

1,541,082
1,450,578
90,5042,023,476
1,922,068
101,40741,26949,23445,33956,068

1,396
1,498
1,955
―
1,106
5,957

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

2,872
1,477
1,364
5,714
49,478

7,311
―
3,861
11,173
63,683Extraordinary income;Gain on sale of investment securities
Gain on bargain purchase
Arbitration related income
Total extraordinary income
Extraordinary loss;
Loss on devaluation of investment securities
Provision of allowance for doubtful accounts of affiliates
Value added taxes for prior periods
Total extraordinary loss
Income before income taxes and non-controlling interests

―
―
―
―

655
722
269
1,647

1,170
106
―
1,276
48,201

278
―
369
647
64,683

Income taxes
Net income

14,56833,633

17,93546,74733,177455

44,924
1,823

1,579
(533)
3,035
574

3,943
542
10,544
489

328

1,634

4,984
38,617

17,15463,90237,962654

61,581
2,320

Net income attributable to;
Owners of the parent
Non-controlling interests
Other Comprehensive income;
Valuation difference on available-for-sale securities
Deferred hedge profit and loss
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Share of other comprehensive income of entities accounted
for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to;
Owners of the parent
Non-controlling interests－3－

Financial Results for the Third Quarter ended December 31, 2022

《Segment information》
Segment information by business category for the 3rd Quarter ended December 31, 2021 and 2022, is as follows:(Amounts less than one million yen are rounded down)

3rd Quarter ended December 31, 2021

Millions of yen

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

Primary
Metal
Metal Recycling

703,816 138,100
18,710
4,943
722,527 143,043
28,451
5,863

94,3452,658
97,003
4,118

Foods

Energy& Living
Materials

90,242 196,733
296
7,304
90,538 204,037
3,034
4,775

Overseas
sales
subsidiaries

Subtotal

230,190 1,453,428
11,05744,970241,247 1,498,399
4,833
51,076

Other

Total

87,654 1,541,082
2,297
47,26889,952 1,588,351
2,279
53,356

3rd Quarter ended December 31, 2022

Adjustment― 1,541,082(47,268)―(47,268) 1,541,082(3,878)49,478Millions of yen

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

Consolidated

Primary
Metal
Metal Recycling

Foods

Energy& Living
Materials

918,823 197,873 111,009 100,413 264,356
22,6354,115
2,147
624 10,230
941,458 201,988 113,156 101,038 274,586
25,597 16,146
5,063(883) 10,436

Overseas
sales
subsidiaries

Subtotal

Other

Total

320,330 1,912,806 110,669 2,023,476
32,58572,337
3,326
75,663352,916 1,985,144 113,995 2,099,140
7,369
63,7292,625
66,354

Adjustment

Consolidated― 2,023,476(75,663)―(75,663) 2,023,476(2,671)
63,683

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 on the consolidated statements of income and comprehensive income.
4. Since January 2022, the Company has changed its method of classification of business segments, integrating a part of the Overseas sales subsidiaries
business into the Foods business.The classification change also applies to segment information for the 3rd quarter of the previous fiscal year.

－4－February 10, 2023

Highlights of Consolidated Financial Results for the 3rd Quarter of FY2022(Japan GAAP)HANWA Co., Ltd.
(Unit: billion yen, rounded down to 0.1 billions yen)

Outline of Financial Results for the 3rd Quarter of FY2022
・During the 3rd quarter of the fiscal year, net sales increased by 31% YoY, to 2023.4 billion yen, because as economic activities continued to be on the right track for recovery, price ofthe products represented by steel, non-ferrous metal and crude oil remained at a high level. In addition, enhancement in business performance of the overseas sales subsidiaries
contributed to the net sales increase. Operating income increased by 14% YoY, to 56.0 billion yen, as segment income increased in Primary metals business and Energy & Living
Materials business, while ordinary income increased by 29% YoY, to 63.6 billion yen, as dividend income from strategic investments increased and equity in earnings of affiliates
expanded mainly in the Primary metals business, and net income attributable to owners of the parent increased by 35% to 44.9 billion yen.

・We plan to pay 100 yen as the annual (50 yen as the interim and 50 yen as the year-end) dividend.

Operating Results
Net sales
Gross profit

1Q-3Q
of FY2021

1Q-3Q
of FY2022

YoY
ChangeMain Factors

rate

1,541.0

2,023.4

482.3

31%

90.5

101.4

10.9

12%

SG&A expenses

41.2

45.3

4.0

10%

Operating income

49.2

56.0

6.8

14%

Non-operating income

5.9

18.7

12.8

215%

Non-operating expenses

5.7

11.1

5.4

96%

Ordinary income

49.4

63.6

14.2

29%

Extraordinary gain

―

1.6

1.6

―

Extraordinary loss

1.2

0.6

(0.6)

(49%)

48.2

64.6

16.4

34%

14.5

17.9

3.3

23%

Income before income
taxes and others

Income taxes
Net income

33.6

46.7

13.1

44.9
1.8

11.7
1.3

35%
300%

EPS (yen)816.43

1,105.49

289.0635%

Comprehensive
incomeSegment
Information
Steel
Primary Metal

Non-operating income increased by 12.8 billion yen and non-operating expenses increased
by 5.4 billion yen. The main impacts on ordinary income were as follows.
Interest income：increase of 1.4 billion yen(YoY)

38.6

63.9

Net sales
1Q-3Q
of FY2021

722.5
143.0

1Q-3Q
of FY2022

941.4
201.9

25.2

Foreign exchange gain/loss:
loss of 1.4 billion yen (last year)
gain of 0.4 billion yen (this year)
Interest expenses：increase of 4.4 billion yen(YoY)(389.2)(23%) (Overview)(Current assets)

1,272.0

1,048.1(223.8)(18%)(Fixed assets)

443.3

277.9

(165.4)(37%)

1,474.8

1,024.7(450.1)

(31%)

722.9
557.4
235/203*%

544.4
432.0
147/127*%(178.5)(125.3)(88pt)

(25%)
(22%)
(38%)

240.4

301.3

60.8

25%

222.0
262.8
15.0
32.0
3.3
6.5
5,834.98
7,255.20
237.1
294.8
13.8/15.3*% 22.2/24.1*%

40.7
16.9
3.1
1,420.22
57.7
8.4pt

18%
113%
94%
24%
24%
61%

Total liabilities(Interest-bearing debt)(Net interest-bearing debt)

Net DER(Equity capital)(Valuation & translation
adjustments)(Non-controlling interests)

BPS (yen)
Shareholders' equity

3000.0

1st half

Value added taxes for prior periods：0.3 billion yen

While we have conducted hedge transactions which involve valuation gains or losses attributable to counterparties based on contracts, accounts receivable-other and long-term guarantee deposits decreased due todecrease in the outstanding contract amount of the commodity forwards contracts, collection of accounts
receivable-other and a fall in futures prices on the London Metal Exchange.
In addition, the Company repaid part of short-term loan payable provided by financial institute.

(Total Assets)
Total assets decreased by 23% from the end of the previous fiscal year, mainly because of
decreases in long-term guarantee deposits and accounts receivable-other.

Liabilities decreased by 31% from the end of the previous fiscal year, mainly because of decrease in
short-term loans payable and commodity forwards contracts liabilities.
As interest-bearing debt decreased by 25%, net debt-equity ratio was turned into 147%（*127%).

(Net assets)
Total net assets increased 25% 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 a fluctuation in foreign currencytranslation adjustments.
Shareholders' equity ratio was 22.2% (*24.1%), which is 8.4 percentage points higher than at the end of theprevious fiscal year.
*Reflecting equity credit attributes of the subordinated loan

【Quarterly Operating Results】

2nd half

3rd quarter
2,600.0

1000.01,261.1

800.0

2500.02,164.0
1,907.4

2000.01,745.5

961.4

1,541.0

1,423.2

Applying the
AccountingStandard for
Revenue
Recognition

1,244.9

946.0

801.0

980.3

FY2019FY2020

FY2021

Net sales

60.0

Operating income

Applyng the Accounting Standard for Revenue Recognition

50.0
665.5

623.0

1,183.7

944.4

1500.0Loss on devaluation of investment securities：0.2 billion yen

65%

Main Factors

rate【Changes in Net Sales】

500.0

Gain on bargain purchase：0.7 billion yen

Change(Liabilities)

Total net assets

Gain on sale of investment securities：0.6 billion yen

2,023.4

600.0

Applying the
AccountingStandard for
Revenue
Recognition

400.0

527.7

40.0

560.7

452.6
13.5

673.4

684.5

30.0

24.1
16.9

18.8

17.2

20.0

14.7

200.0

1,338.9

10.0

13.1

0.0

0.0

0.0
FY2021/1Q 2Q

FY2022 (E)

3Q

4Q FY2022/1Q

2Q

3Q

Segment income
rate

30%
41%

1Q-3Q
of FY2021

28.4
5.8

1Q-3Q
of FY2022

25.5
16.1

rate

Main Factors【Changes in Net Income】
60.0

(10%)
175%

97.0

113.1

17%

4.1

5.0

23%

Foods

90.5

101.0

12%

3.0

(0.8)

―

204.0

274.5

35%

4.7

10.4

119%

241.2

352.9

46%

4.8

7.3

53%

1,498.3

1,985.1

33%

51.0

63.7

25%

Other

89.9

113.9

27%

2.2

2.6

15%

Total

1,588.3

2,099.1

32%

53.3

66.3

24%

Adjustment(47.2)(75.6)

60%(3.8)(2.6) (31%)

Consolidated

1,541.0

2,023.4

31%

49.4

63.6

Topics1,326.1

1000.0(Extraordinary gain/loss)

Metal Recycling

Energy&Living Materials
Overseas sales
subsidiaries
Total for reportablesegments

1,715.3

Total assets

Equity in earnings of affiliates：increase of 4.4 billion yen(YoY)

39%

33.1
0.4

Dec. 2022

Shareholders' equity ratio(Non-operating income/expenses)

Dividend income：increase of 5.8 billion yen(YoY)

Non-controlling interests

Owners of the parent(Net sales)
Net sales increased by 31% YoY, to 2023.4 billion yen, because as economic
activities continued to be on the right track for recovery, price of the products
represented by steel, non-ferrous metal and crude oil remained at a high level. In
addition, enhancement in business performance of the overseas sales subsidiaries
contributed to the net sales increase.
(SG&A expenses)
SG & A expenses increased by 4.0 billion yen YoY, with 0.49 billion yen of thisfigure deriving from newly consolidated subsidiaries. Personnel expenses rose by
1.6 billion yen YoY, with 0.32 billion yen of this figure deriving from newly
consolidated subsidiaries.

Comparison with Mar. 2022

Mar. 2022

Financial Position

29%(Steel business)
Net sales increased. Transaction volume continued to be stable mainly in the domestic construction industry andsteel prices remained at a high level due to the spread of increases in manufacturing cost were reflected in steel
prices.
On the other hand, segment income decreased. Because profit margins shrunk as purchase cost rose and equity inearnings of affiliates from overseas investment decreased.
(Primary metals business)
Segment income increased. Price of the products such as stainless base metals and nickel remained at a relatively
high level. In addition, dividend income from strategic investments as well as equity in earnings of affiliates fromSAMANCOR CHROME HOLDINGS PROPRIETARY LTD. contributed to segment income increased.
(Metal recycling business)
Segment income increased. Transaction volume of various merchandises continued to be stable and purchase costrisings due to the depreciation of yen were reflected in the selling prices. In addition, appraisal gain from
commodity forwards contracts in hedge transactions contributed to segment income increased.
(Foods business)
Segment income decreased. While demand for marine products expanded on a global scale, purchase cost risings
due to the depreciation of yen were not sufficiently reflected in the selling prices.
In addition, as import of crabs from Russia were banned in some countries including the U.S. and decline in crab
market prices due to shrink of stay-at-home demand mainly in Europe and the America, appraisal loss on the
products was reported by the Company and its consolidated subsidiaries, and as the result the segment income
decreased.
(Energy & Living Materials business)
Segment income increased. Market prices of crude oil and petroleum products remained at a high level due to thecrisis in Ukraine, income from the products such as bunker fuel oil increased. In addition, both transaction
volume and unit prices of palm kernel shells (PKS) and wood pellet fuel rose due to a demand increase on a
global scale contributed to segment income increased.
(Overseas sales subsidiaries)
Segment income increased. Transaction volume of steel increased in some countries, including Indonesia andSingapore.

・ Jun. Established Hanwa Daisun Co., Ltd. as a consolidated subsidiary of the Company.
・ Sep. Established Hanwa Italia S.R.L. as a subsidiary of the Company.
・ Dec. Acquire 90.2% of the shares of Tanaka Steel Trading Co., Ltd. and made it a consolidated subsidiary of the Company.

1st half

2nd half【Changes in Interest-bearing Debt】
51.0
13.9
44.9

43.6
40.0

5.1

0.0

600.0

12.8
12.2
6.8

37.1

20.9

-13.6
FY2019

2.4

544.4

2 .0

1.5

331.1
1.6
300.0
1 .3

-18.8
-20.0

722.9

33.1

19.6
9.9

4.0

3.0

22.7

20.0

Interest-bearing debt
Net DER
Reflecting subordinated loan

900.0

3rd quarter

2.0

301.6
1.3

1 .3

1.0

1 .1

0.0

FY2020

FY2021

FY2022(E)

0.0

FY2019FY2020

FY2021

FY2022/3Q

FY2022(estimated)change2,164.02,600.0

20%Interim (yen)

30.00

50.00

50.00

Operating income

62.3

70.0

12%

Year-end (yen)

30.00

50.00

50.00

Ordinary income

62.7

73.0

16%

Annual (yen)60.00

100.00100.00Net income attributableto owners of the parent

43.6

51.0

17%

Dividend payout ratio

12%

9%

8%

Forecast(Annual)
Net sales

FY2021

Cash Dividends

FY2020

FY2021

FY2022(estimated)