Financial Results for the Second Quarter ended September 30, 2016
(Consolidated financial results have been prepared in accordance with accounting principles generally accepted in Japan)

November 11, 2016
Company name:

HANWA Co.,Ltd.

Listed stock exchange: Tokyo

Stock exchange code:

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

Representative:
Enquiries:

Hironari Furukawa
Yoichi Nakagawa

The date of issue of audited financial statements:

President
Director, Managing Executive Officer
TEL 81 - 3 - 3544 - 2000
November 14, 2016 The date of payout of dividend: December 6, 2016
(Rounded down to millions of yen)

１．Consolidated financial results for the second quarter ended September 30, 2016
(1) Consolidated operating results（％ of change from the same period of previous year）
Net sales
For the second quarter
ended September 30, 2016
ended September 30, 2015

(Millions of yen)(％)

Operating income

Ordinary income(Millions of yen)

(Millions of yen)(％)

Net income attributableto owners of the parent(％)(Millions of yen)(％)

715,619(9.2)
10,937
33.9
9,919
42.7
6,207
2.5
788,216
(8.5)
8,170
(9.4)
6,953
1.36,053
52.0
Note: Comprehensive income
For the second quarter ended September 30, 2016
4,137 million yen 197.0 ％For the second quarter ended September 30, 2015
1,393 million yen (81.1) ％Net income
per share

For the second quarter
ended September 30, 2016
ended September 30, 2015

Net income
per share(diluted)

(yen)

(yen)

30.28
29.22

－－(2) Consolidated financial position
Total assets(Millions of yen)

599,903599,694

September 30, 2016
March 31, 2016

Note: Shareholders' equity

Shareholders'equity ratio

Net assets(Millions of yen)156,615
156,139
As of September 30, 2016
As of March 31, 2016

Shareholders' equity
per share(％)

25.9
25.8
155,536 million yen
154,866 million yen(yen)

765.42747.40２．Cash dividends
Cash dividends per shareFirst quarter
Second quarter
Third quarter
Year-end
(yen)
(yen)
(yen)
(yen)

（effective date）
Year ended March 31, 2016
Year ending March 31, 2017
（estimated）

－－

8.00
9.00

Annual(yen)

－

10.00

18.00

－

9.00

18.00

３．Forecast of consolidated financial results for fiscal year ending March 31, 2017 （％ of change from previous year）
Net sales

Operating income(Millions of yen) (％)(Millions of yen) (％)

Net income attributableto owners of the parent(Millions of yen) (％) (Millions of yen) (％)

Ordinary income

Net income
per share(yen)Annual
1,500,000(0.8)
21,00015.5
19,00023.2
13,000(49.0)
63.42* The above forecasts reflect assumptions and prospects based on the information currently available.They are subject
to a number of risks and uncertainties that could cause actual results to differ materially from this information.

－１－HANWA co.,ltd.

Financial Results for the Second Quarter ended September 30, 2016

《Consolidated Balance Sheets》(Rounded down to millions of yen)

Millions of yen
March 31, 2016

September 30, 2016 Increase(Decrease)

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

27,115
260,151
16,141106,050
42,081(287)
451,253

40,563
262,168
21,247
94,47633,860(272)
452,044

13,4482,016
5,106(11,574)(8,220)14790

30,144
31,41861,563
1,955

30,11429,42459,5391,946(29)(1,993)(2,023)(8)

58,671
26,735(485)
84,921
148,440
599,694

62,691
24,145(464)
86,373
147,859
599,903

4,020(2,589)
21
1,451
(581)
209

Current liabilities;
Trade notes and accounts payable
Short-term loans payable
Current portion of bonds payable
Income taxes payable
Accrued bonuses
Provision for loss on business of subsidiaries and affiliates
OthersTotal current liabilities

149,857
66,734
10,039
326
2,192
512
39,742
269,405

158,137
74,855
10,021
3,595
2,269
512
30,678280,070

8,280
8,120
(18)
3,269
76
―
(9,064)
10,664Long-term liabilities;
Bonds payable
Long-term loans payable
Retirement benefits liabilities
OthersTotal long-term liabilities
Total liabilities

30,097
129,420
4,075
10,555
174,149
443,555

30,087
118,254
3,979
10,896
163,217443,287(10)(11,166)(96)
341(10,931)(267)

45,651
4
104,600(1,449)148,80745,651―
109,451(3,715)
151,387

―
(4)
4,850
(2,266)2,579

8,024(376)
2,966
1,842
(6,397)
6,059
1,272
156,139599,694

8,129(362)
2,966
(574)
(6,008)4,149
1,079
156,615599,903104
13―(2,417)
389(1,910)
(193)
476
209

Fixed assets;
Property and equipment;
LandOthers
Total 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
Minority interests
Total net assets
Total liabilities and net assets－２－

HANWA co.,ltd.

Financial Results for the Second Quarter ended September 30, 2016

《Consolidated Statements of Income and Comprehensive Income》(Rounded down to millions of yen)

Millions of yen
Second quarter
ended
September 30,

Second quarter
Increase(Decrease)
ended
September 30,

Net sales
Cost of sales
Gross profit

788,216
760,785
27,431

715,619684,823
30,795(72,597)(75,961)
3,363

Selling, general and administrative expenses
Operating income

19,2608,170

19,857
10,937

597
2,766

407
633
1,296
2,337

522
541
728
1,792

114
(92)
(567)
(545)

1,336
1,328
157
732
3,555
6,953

1,281
24
831
672
2,810
9,919

(54)
(1,304)
674
(60)
(745)
2,966

524
1,101
481
2,108

―
―
126
126

(524)
(1,101)(355)(1,981)

200
―
200
8,861

―
209
209
9,836

(200)209
9974

Income taxes
Net income

2,805
6,055

3,609
6,226803
171

Net income attributable toNet income attributable to owners of the parent
Net income(loss) attributable to minority interests

6,053
16,207
19153
17

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 affiliates
Total other comprehensive Income
Comprehensive Income(4,037)(1,514)306
326
255(4,662)
1,393

104
13(2,318)
389(277)(2,089)
4,137

4,142
1,528(2,625)
62(533)
2,572
2,744

Comprehensive income attributable toComprehensive income attributable to owners of the parent
Comprehensive income attributable to minority interests

1,342
50

4,297
(160)

2,954
(210)

Other income;Interest income
Dividend income
OthersTotal other income
Other expenses;
Interest expenses
Loss on investment in affiliates
Foreign exchange loss
OthersTotal other expenses
Ordinary income
Extraordinary income;Gain on sale of property and equipment
Amortization of consolidation negative goodwillGain on sales of investment securities
Total extraordinary incomeExtraordinary loss;
Loss on devaluation of investments securities
Loss on liquidation of businessTotal extraordinary loss
Income before income taxes－３－HANWA co.,ltd.

Financial Results for the Second Quarter ended September 30, 2016

《Consolidated Statements of Cash Flows》(Rounded down to millions of yen)

Millions of yen
Second quarter Second quarter
endedended
September 30, September 30,
2015
2016

Increase(Decrease)

Cash flows from operating activities;
Income before income taxes
Depreciation and amortization
Amortization of goodwill
Increase(decrease) in allowance for doubtful receivables
Interest and dividend income
Interest expense
Equity in earnings of affiliated companies (gain)
Gain on sale of property and equipment
Amortization of consolidation negative goodwill
Gain on sales of investment securities of unconsolidated subsidiaries
Loss on devaluation of investments securities
Loss on liquidation of business(Increase)decrease in trade receivables(Increase)decrease in inventories
Increase(decrease) in trade notes and accounts payable(Increase)decrease in deposits received
Increase(decrease) in advanced payment
Increase(decrease) in retirement benefits
Other, net
Sub totalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities

8,861
2,141
115
(626)
(1,041)
1,336
1,328
(524)
(1,101)(481)
200―
30,71319,807(24,427)
13,065(12,395)354(5,284)32,040909(1,270)(2,365)29,313

9,836
2,001
115
(19)
(1,063)
1,281
24―
―
(126)
―
209
(8,493)
10,911
7,431(9,732)
5,031
472
3,087
20,967758(1,224)
1,537
22,040

974
(139)
―
606
(22)
(54)
(1,304)
524
1,101
355
(200)
209
(39,206)(8,895)31,858(22,797)
17,427117
8,370(11,072)
(150)
46
3,903
(7,272)

Cash flows from investing activities;
Payment for time deposits
Proceeds from refund of time deposits
Payment for purchase of property and equipment
Proceeds from sale of property and equipment
Payment for purchase of investment securities
Proceeds from sale and redemption of investment securities
Net increase(decrease) from purchase of consolidated subsidiaries(Increase)decrease in short - term loans receivable, net
Increase in long - term loans receivableCollection of long-term loans receivable
Other, net
Net cash used in investing activities

(139)
187
(4,335)1,990(2,725)633(2,165)(104)(6,635)13884(12,395)

(106)
1,177
(1,191)79(1,718)386―
182(1,545)1
1,428(1,308)

32
989
3,143
(1,910)
1,006
(247)
2,165
286
5,090
(12)
543
11,087(4,516)(10,000)
6,220(7,624)
9,950(10,028)(2)(1,552)
(34)

(131)
―
250
(900)
―
(28)
(2,266)(2,070)(29)

4,385
10,000(5,970)6,724(9,950)10,000(2,263)
(518)
5―

(217)

(217)

(165)
(17,754)(109)(5,503)55
12,25171(765)24,515884
24,634(1,417)
13,81225,804791
40,408(1,489)14,577
1,289(93)
15,773

Cash flows from financing activities;
Increase(decrease) in short-term loans, net
Increase(decrease) in commercial paper, net
Proceeds from long-term debt
Repayments of long-term debt
Proceeds from issuance of bonds
Payment for redemption of bonds
Purchase of treasury stock
Payment for cash dividends
Cash dividends paid to minority interest in consolidated subsidiaries
Purchase of investments in subsidiaries resulting in no change in scopeof consolidation
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents from newly consolidated subsidiaries
Cash and cash equivalents at end of period－４－

HANWA co.,ltd.

Financial Results for the Second Quarter ended September 30, 2016

《Segment information》
Business segment information
The Companies' operations are classified into five business segments as follows:
Steel: Steel bars and shapes, steel plates and sheets, special steels, wire products, steel pipes,
and steelmaking raw materials
Metals and alloys: Nickel, chromium, stainless scrap and solar cell-related materials and products
Non-ferrous metals: Copper, aluminium, lead, zinc, tin, antimony and other metals
Foods: Frozen seafoods and meat products
Petroleum and chemicals : Petroleum products, chemical products, and cementOverseas sales subsidiaries： Wholesale trade, general merchandise
Segment information by business category for the second quarter ended September 30, 2015 and 2016, is as follows:(Rounded down to millions of yen)

Second quarter ended September 30, 2015

Millions of yen

Reportable segment

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

SteelMetals Non-ferrous
Foods& alloys metals

396,571
9,747
406,318
6,348

72,273
1,693
73,966
1,303

44,726537
45,264515

Petroleum Overseassales& chemicals subsidiarie

Subtotal

47,027 147,202 51,918 759,719
677
2,839 48,155 63,651
47,705 150,042 100,074 823,370
(164)
1,006
(54)
8,954

OtherTotal

28,496 788,216
659 64,310
29,156 852,527
573
9,528

Adjustment― 788,216(64,310)―(64,310) 788,216(2,575)
6,953

Second quarter ended September 30, 2016

Millions of yen

Reportable segment

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

Consolidated

Steel

Metals Non-ferrous
Foods& alloys metals

364,446
6,593
371,040
8,597

60,1401,586
61,727(188)

36,375764
37,140517

Petroleum Overseas

sales& chemicals subsidiarie

44,492 121,771
233
3,302
44,726 125,074
1,009
938

Subtotal

49,632 676,860
33,003 45,483
82,635 722,343
19 10,893

OtherTotal

38,759 715,619
874 46,357
39,633 761,976
983 11,876

Adjustment

Consolidated― 715,619(46,357)―(46,357) 715,619(1,957)
9,919

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 intersegment elimination and Group costs that have not been allocated 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 comprehensiveincome.

－５－