Financial Results for the Second Quarter ended September 30, 2022
(Japan GAAP)
November 10, 2022
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: November 10, 2022
Scheduled date of payout of dividend: December 2, 2022

Phone +81-3-3544-2000(Amounts less than one million yen are rounded down)

１．Consolidated financial results for the Second Quarter ended September 30, 2022 (April 1, 2022 to September 30, 2022)(1) Consolidated operating results（Percentage indicate a change from the previous year）

Net sales
For the 2nd Quarter
ended September 30, 2022
ended September 30, 2021

(Millions of yen)(％)

Operating income

Ordinary income(Millions of yen)

(Millions of yen)(％)

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

1,338,965
36.6
41,37436.0
52,95873.0
37,18977.1
980,342－
30,426174.7
30,615198.7
20,996206.0
Note: Comprehensive income
For the Fiscal Year ended September 30, 2022
57,236 million yen
109.9 %For the Fiscal Year ended September 30, 2021
27,266 million yen
465.6 %Net income
per share

For the 2nd Quarter
ended September 30, 2022
ended September 30, 2021

Net income
per share(diluted)

(yen)

(yen)

915.15－516.69－* 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 2nd
quarter ended September 30, 2021 in the above consolidated operating results constitute the figures after applicationof said accounting standard. For this reason, rates of increase/decrease YoY are not shown for net sales ended
September 30, 2021.

(2) Consolidated financial position
Total assets(Millions of yen)
As of September 30, 2022
As of March 31, 2022

Note: Shareholders' equity

Shareholders'equity ratio

Net assets(Millions of yen)

1,362,151
1,715,394
As of September 30, 2022
As of March 31, 2022

Net assets
per share(％)

295,761
240,497289,794 million yen
237,117 million yen

21.3
13.8

(yen)

7,131.27
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

100.00－50.00

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 Second Quarter ended September 30, 2022

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

Millions of yen
March 31, 2022

September 30, 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

137,826
452,739
47,266282,31395,30365,575(1,393)
1,079,631

34,67743,211
77,88910,55635,162
48,42583,587
10,96981,443
248,541
26,317(1,403)354,898
443,344
1,715,394

98,173
61,142
29,884(1,236)
187,962
282,520
1,362,151

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

258,272
37,826327,142
70,00010,00013,3053,478
61
21,51591,006
832,608

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

10,000190,876
4,502
28,402
233,781
1,066,390

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

45,651
26
215,155(3,730)257,102

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

20,412
1,019
3,455
10,807(3,002)
32,691
5,967
295,761
1,362,151

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 Second Quarter ended September 30, 2022

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

Millions of yen
2nd Quarter ended
September 30, 2021

2nd Quarter ended
September 30, 2022

Net sales
Cost of sales
Gross profit

980,342922,80957,532

1,338,965
1,267,834
71,131

Selling, general and administrative expenses
Operating income

27,10530,42629,756
41,374

734
1,020
1,384
―
727
3,866

1,875
6,421
7,141
1,763
1,076
18,278

1,854
747
1,076
3,678
30,615

4,503
―
2,190
6,693
52,958Other 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
Value added taxes for prior periods
Total extraordinary loss
Income before income taxes and non-controlling interests

―
―
―

541
259
800

―
―
―
30,61525157
309
53,450

Income taxes
Net income

9,295
21,31914,09639,35320,996323

37,189
2,164

2,648
240
2,361
382

3,692
2,019
10,103
326

314

1,741

5,946
27,266

17,882
57,236

26,770496

54,513
2,723

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－

HANWA co.,ltd.

Financial Results for the Second Quarter ended September 30, 2022

《Consolidated Statements of Cash Flows》(Amounts less than one million yen are rounded down)

Millions of yen
2nd Quarter ended 2nd Quarter ended
September 30, 2021 September 30, 2022
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 investment securities
Loss on devaluation of investment securities
Arbitration related income
Value added taxes for prior periods(Increase)decrease in trade receivables and contract assets(Increase)decrease in inventories(Increase)decrease in accounts receivable-other(Increase)decrease in advance payment
Increase(decrease) in trade notes and accounts payable
Increase(decrease) in deposits received
Increase(decrease) in advance payment
Increase(decrease) in commodity forwards contracts liabilities(Increase)decrease in long-term guarantee deposits
Increase(decrease) in retirement benefits
Other, net
Sub totalInterest and dividends received
Interest paid
Income taxes (paid) refund
Arbitration related income
Net cash provided by (used in) operating activities

30,615
2,900
196
490
(1,754)
1,854(1,384)――――(81,171)(41,581)(5,746)(11,706)
52,947(2,587)(1,575)
1,839(5,584)604
2,426(59,219)
1,531(1,798)(6,695)―(66,182)

53,450
3,333
152
(451)
(8,297)
4,503(7,141)
(541)
251
(259)
57
91,559(23,201)
127,589
8,669(135,602)(24,963)
7,317(165,264)
187,315476
3,948
122,903
7,956(4,438)(16,566)259
110,114

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 acquisition of investment securities
Proceeds from sale and redemption of investment securities(Increase)decrease in short-term loans receivable, net
Increase in long-term loans receivableCollection of long-term loans receivable
Other, net
Net cash provided by (used in) investing activities(24)
12(3,064)21(3,317)25(5,410)(238)
4,522(1,075)(8,549)(16)369(5,573)425(3,961)
1,164
(258)
(301)
51
(508)
(8,609)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
Payment for redemption of bonds
Payment for cash dividends
Cash dividends paid to non-controlling interests in consolidated subsidiaries
Other, net
Net cash provided by (used in) financing activities

40,61040,0006,605(6,882)(13)(1,223)(12)(438)
78,644(130,745)
30,0005,050(14,245)(10,000)(2,031)(136)(485)(122,593)

(429)
3,482
50,8921,842
956,226(6,647)(27,736)
165,083
464―
137,811

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
Increase in cash and cash equivalents from newly consolidated subsidiaries
Increase in cash and cash equivalents resulting from mergers with unconsolidated subsidiaries

Cash and cash equivalents at end of period－4－Financial Results for the Second Quarter ended September 30, 2022

《Segment information》
Segment information by business category for the 2nd Quarter ended September 30, 2021 and 2022, is as follows:(Amounts less than one million yen are rounded down)

2nd Quarter ended September 30, 2021

Millions of yen

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

438,1939,724
447,918
18,213

Primary
Metal
Metal Recycling

Foods

Energy& Living
Materials

92,5942,800
95,395
3,519

57,982 122,182
280
4,904
58,262 127,087
1,607
3,065

61,665
1,557
63,223
3,234

Overseas
sales

Other

subsidiaries

Subtotal

Total

155,795
5,954
161,750
2,501

928,414
25,222
953,637
32,14351,928 980,342
1,529
26,75153,457 1,007,094
1,201
33,344

2nd Quarter ended September 30, 2022

Adjustment

Consolidated―(26,751)(26,751)(2,728)980,342―980,342
30,615

Millions of yen

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

Primary
Metal
Metal Recycling

595,927 122,476
14,8852,740
610,813 125,216
17,968 12,576

76,366
1,482
77,848
5,421

Foods

Energy& Living
Materials

61,005 173,989
473
7,641
61,478 181,631
(225)
6,663

Overseas
sales
subsidiaries

Subtotal

231,613 1,261,379
23,38450,607
254,998 1,311,986
5,431
47,835

Other

Total

77,586 1,338,965
2,375
52,982
79,961 1,391,948
2,282
50,117

Adjustment

Consolidated― 1,338,965(52,982)―(52,982) 1,338,965
2,840
52,958Notes:
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 2nd quarter of the previous fiscal year.

－5－November 10, 2022

Highlights of Consolidated Financial Results for the 2nd Quarter of FY2022(Japan GAAP)HANWA Co., Ltd.

Outline of Financial Results for the 2nd Quarter of FY2022(Unit: billion yen, rounded down to 0.1 billions yen)・ During the 2nd quarter of the fiscal year, net sales increased by 37% YoY, to 1338.9 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. Profits expanded in all business segments except for Foods business. Operating income increased by 36% YoY, to 41.3 billion yen, while ordinary income increased by 73%
YoY, to 52.9 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 77% to 37.1 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

1Q-2Q
of FY2021

1Q-2Q
of FY2022

YoY
ChangeNet sales

980.3

1,338.9

358.6

37%

Gross profit

57.5

71.1

13.5

24%

SG&A expenses

27.1

29.7

2.6

10%

Operating income

30.4

41.3

10.9

36%

3.8

Non-operating income

18.2

14.4

Main Factors

rate(Net sales)
Net sales increased by 37% YoY, to 1338.9 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 2.6 billion yen YoY, with 0.18 billion yen of thisfigure deriving from newly consolidated subsidiaries. Personnel expenses rose by 1.1
billion yen YoY, with 0.11 billion yen of this figure deriving from newly
consolidated subsidiaries.

373%

Non-operating expenses

3.6

6.6

3.0

82%

Ordinary income

30.6

52.9

22.3

73%

Extraordinary gain

―

0.8

0.8

―

Extraordinary loss

―

0.3

0.3

―

Income before income taxes
and others

30.6

53.4

22.8

75%

Income taxes

9.2

14.0

4.8

52%

21.3

39.3

18.0

85%

Non-operating income increased by 14.4 billion yen and non-operating expenses increasedby 3.0 billion yen.
The main impacts on ordinary income were as follows.
Interest income：increase of 1.1 billion yen(YoY)
Dividend income：increase of 5.4 billion yen(YoY)

Non-controlling interests(loss)

20.9
0.3

37.1
2.1

16.1
1.8

EPS (yen)516.69915.15398.46

77%
570%
77%

Comprehensive
income

27.2

57.2

29.9

110%

Owners of the parent(loss)

Segment
Information

Net sales
1Q-2Q
of FY2021

Steel

447.9

1Q-2Q
of FY2022

610.8

Foreign exchange gain/loss:
loss of 0.7 billion yen (last year)
gain of 1.7 billion yen (this year)
Interest expenses：increase of 2.6 billion yen(YoY)

rate

36%

1Q-2Q
of FY2021

18.2

1Q-2Q
of FY2022

17.9

rate

(1%)

Primary Metal

95.3

125.2

31%

3.5

12.5

257%

Metal Recycling

63.2

77.8

23%

3.2

5.4

68%

Foods

58.2

Energy&Living Materials
Overseas sales
subsidiaries
Total for reportablesegments

61.4

6%

1.6

(0.2)

―

127.0

181.6

43%

3.0

6.6

117%

161.7

254.9

58%

2.5

5.4

117%

953.6

1,311.9

38%

32.1

47.8

49%

Other

53.4

79.9

50%

1.2

2.2

90%

Total

1,007.0

1,391.9

38%

33.3

50.1

50%

Adjustment(26.7)(52.9)

98%

(2.7)

2.8

―

Consolidated

980.3
・
・

1,338.9

37%

30.6

52.9

73%

1,362.1(353.2)(21%) (Overview)

1,272.0443.3

1,079.6
282.5(192.4)(160.8)

(15%)
(36%)

1,474.8

1,066.3(408.5)

(28%)

722.9
557.4

611.3
473.5

235%/203*%

163%/142*%(111.6)(83.9)(72pt)

(15%)
(15%)
(33%)

240.4

295.7

55.2

23%

222.0
257.1
15.0
32.6
3.3
5.9
5,834.98
7,131.27
237.1
289.7
13.8/15.3*% 21.3/23.1*%

35.0
17.6
2.5
1,296.29
52.6
7.5pt

16%
117%
77%
22%
22%
54%

1Q-2Q
of FY2021

1Q-2Q
of FY2022

Change(66.1)

110.1

176.2

―

(Operating cash flows)

(8.5)

(8.6)

(0.0)

1%

78.6

(122.5)(201.2)―(Investment cash flows)Due mainly to purchase of tangible fixed assets and investment securities.

56.2

137.8

81.5

145%

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

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

BPS (yen)
Shareholders' equity

Cash Flow
Cash flows from operating
activities
Cash flows from investing
activities
Cash flows from financing
activities
Cash and cash equivalents
at end of period

Jun Established Hanwa Daisun as a consolidated subsidiary of the Company.
Sep. Established HANWA ITALIA S.R.L. as a subsidiary of the Company.

Main Factors

rate

While we have conducted hedge transactions which involve valuation gains or losses attributable tocounter parties based on contracts, accounts receivable-other and long-term guarantee deposits decreased
due to decrease 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 21% from the end of the previous fiscal year, mainly becauseof decreases in long-term guarantee deposits and accounts receivable-other.

(Liabilities)
Liabilities decreased by 28% from the end of the previous fiscal year, mainly because of decreasein commodity forwards contracts liabilities and short-term loans payable.
As interest-bearing debt decreased by 15%, net debt-equity ratio was turned into 163%（*142%).

(Net assets)
Total net assets increased 23% from the end of the previous fiscal year because of accumulation ofretained earnings from net income attributable to owners of parent as well as a fluctuation in foreign
currency translation adjustments.
Shareholders' equity ratio was 21.3% (*23.1%), which is 7.5 percentage points higher than at the end of
the previous fiscal year.
*Reflecting equity credit attributes of the subordinated loan

YoY

Main Factors

rate

Due mainly to decrease in long-term guarantee deposits and accounts receivable-other.

(Financial cash flows)

1st half

3,000.0

Due mainly to repayment of loans payable with collection of long-term guarantee deposits.

1,500.0
500.0【Quarterly Operating Results】

2nd half

2,600.0

2,164.0
1,907.4

1,745.5

961.4

1,183.7

946.0

801.0

FY2019FY20200.0

1,000.0
800.0

1,261.1
Applying the
AccountingStandard for
Revenue
Recognition

Applying the
AccountingStandard for
Revenue
Recognition

944.4

1,000.0(Steel business)
Net sales increased. Transaction volume continued to be stable mainly in the domestic construction industry and steel
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. Transaction volume of stainless base metals continued to be stable. Although the prices ofvarious merchandises entered an adjustment phase, some commodities such as nickel and silicon-based ferroalloy
remained at a relatively high level. In addition, dividend income from strategic investments as well as equity in earnings
of affiliates from SAMANCOR 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 tothe 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 wasreported 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 rose further due to the crisis 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 in steel increased in some countries, including Indonesia and Singapore.,
In addition,while profitability at consolidated subsidiaries in the U.S. improved contributed to segment income
increased.

Change【Changes in Net Sales】

2,000.0

Main Factors

1,715.3

Total liabilities

2,500.0

Segment income

Sep. 2022(Current assets)(Fixed assets)(Extraordinary gain/loss)
Gain on sale of investment securities：0.5 billion yen
Loss on devaluation of investment securities：0.2 billion yen

Mar. 2022

Total assets

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

Equity in earnings of affiliates：increase of 5.7 billion yen(YoY)

Net income

Financial Position

Comparison with Mar. 2022

980.3

1,338.9

FY2021

FY2022

600.0
400.0

Net sales

452.6
13.5

1st half

2nd half

20.0
5.1
-18.8

0.0
△20.0

-13.6
FY2019Forecast(Annual)
Net sales

16.9

18.8

900.0

51.0
13.9

17.2

13.1

30.0
20.0
0.0

2Q

3Q

4Q

FY2022/1Q

Interest-bearing debt
722.9
Reflecting subordinated loan

2Q

331.1
300.0

1 .6
1 .3

0.0
FY2021

FY2022

FY2022(estimated)

FY2019change5.0

Net DER Net DER
Reflecting subordinated loan

600.0

20.9

FY2021

40.0
24.1

10.0
FY2021/1Q

37.1

FY202050.0【Changes in Interest-bearing Debt】

22.7

19.6
12.8
6.8

560.7

673.4

0.0

43.6

40.0

527.7

665.5

623.0

200.0

【Changes in Net Income】
60.0

60.0

Operating income

Applyng the Accounting Standard for Revenue Recognition

Cash Dividends

611.3

301.6
1 .3

4.0
3.0

2 .4

1.6

2.0

2 .0

1.0

1 .4

1 .1

0.0

FY2020

FY2021

FY2020

FY2022/2Q

FY2021

FY2022(estimated)

2,164.02,600.0

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 attributable toowners of parent

43.6

51.0

17%

Dividend payout ratio

12%

9%

8%

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