Financial Results for the First Quarter ended June 30, 2022
(Japan GAAP)
August 12, 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: August 12, 2022
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, 2022 (April 1, 2022 to June 30, 2022)(1) Consolidated operating results（Percentage indicate a change from the previous year）

Net sales
For the 1st Quarter
ended June 30, 2022
ended June 30, 2021

(Millions of yen)(％)

Operating income

Ordinary income(Millions of yen)

(Millions of yen)(％)

665,58047.1
24,14378.8
452,604－
13,503206.2
Note: Comprehensive income
For the Fiscal Year ended June 30, 2022
For the Fiscal Year ended June 30, 2021
Net income
per share

For the 1st Quarter
ended June 30, 2022
ended June 30, 2021

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

33,332
137.6
23,917152.0
14,028
337.9
9,492
329.3
33,680 million yen
143.3 %
13,843 million yen－ %Net income
per share(diluted)

(yen)

(yen)

588.55－233.59－* 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 ended June 30,
2021.

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

Note: Shareholders' equity

Shareholders'equity ratio

Net assets(Millions of yen)

1,507,932
1,715,394
As of June 30, 2022
As of March 31, 2022

Net assets
per share(％)

272,340
240,497
268,097 million yen
237,117 million yen

17.8
13.8

(yen)

6,597.34
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

100.00

50.00

－

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 Company

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

Annual
2,600,000
20.1
65,0004.2
65,0003.6
46,0005.5
1,131.97* For more information, please refer to "Notice Concerning Amendments to Forecasts of consolidated financial resultsfor FY2022" announced on August 12, 2022.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.

－1－

Financial Results for the First Quarter ended June 30, 2022

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

Millions of yen
March 31, 2022

June 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

115,699
539,474
42,821
265,442
136,029
79,899(1,450)1,177,916

34,67743,211
77,88910,55635,35747,03882,395
10,73981,443
248,541
26,317(1,403)354,898
443,344
1,715,394

84,188125,317
28,563(1,188)236,881330,016
1,507,932

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

329,787
35,903387,326
40,00010,000
10,1122,220
63
72,120123,890
1,011,425

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

10,000185,862
4,476
23,827224,166
1,235,592

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

45,651
26
202,147(3,729)244,094

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

18,136
644
3,191
5,185
(3,155)24,002
4,242
272,340
1,507,932

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
Minority interests
Total net assets
Total liabilities and net assets－2－

Financial Results for the First Quarter ended June 30, 2022

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

Millions of yen
Year ended
June 30, 2021

Year ended
June 30, 2022

Net sales
Cost of sales
Gross profit

452,604
425,764
26,839665,580
626,705
38,874

Selling, general and administrative expenses
Operating income

13,335
13,503

14,731
24,143

331
633
544
―
364
1,873

525
5,947
2,030
2,916
456
11,876

860
224
264
1,349
14,028

2,046
―
640
2,686
33,332Other 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
Total extraordinary loss
Income before income taxes and minority interest

―
―
―

541
248
789

―
―
14,028268
268
33,853

Income taxes
Net income

4,434
9,593

9,394
24,4599,492
101

23,917
542

2,040
(231)
1,952
191

1,414
1,644
5,110
162

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

296

888

4,249
13,843

9,221
33,680Comprehensive income attributable to
Owners of the parent
Non-controlling interests

13,600242

32,816864－3－

Financial Results for the First Quarter ended June 30, 2022

《Segment information》
Segment information by business category for the 1st Quarter ended June 30, 2021 and 2022, is as follows:(Amounts less than one million yen are rounded down)

1st Quarter ended June 30, 2021

Millions of yen

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

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

Primary
Metal
Metal Recycling

Foods

44,7491,024
45,774
2,121

27,7460
27,746846

29,975941
30,916
1,579

Energy& Living
Materials

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

Other

Total

Adjustment

Consolidated

subsidiaries

Subtotal

66,225
1,325
67,551
1,088

430,561
9,006
439,567
15,22022,042
1,132
23,175326

452,604
10,138462,743
15,546―(10,138)(10,138)(1,518)452,604―
452,604
14,028Overseassales

1st Quarter ended June 30, 2022

Millions of yen

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

301,850
6,983
308,834
10,191Primary
Metal
Metal Recycling

Foods

57,418
1,255
58,674
6,751

28,915
184
29,100345

42,378785
43,164
4,926

Energy& Living
Materials

85,301
3,260
88,561
2,818

Other

Total

Adjustment

Consolidated

subsidiaries

Subtotal

111,548
14,532126,081
2,691

627,41427,002
654,416
27,72538,165
1,231
39,397
1,774

665,580
28,233
693,81329,500―(28,233)(28,233)
3,832

665,580―
665,580
33,332

Overseas
sales

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 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 1st quarter of the previous fiscal year.

－4－August 12, 2022

Highlights of Consolidated Financial Results for the 1st Quarter of FY2022(Japan GAAP)HANWA Co., Ltd.
(Unit: billion yen, rounded down to 0.1 billions yen)

Outline of Financial Results for the 1st Quarter of FY2022
・During the 1st quarter of the fiscal year, net sales increased to 665.5 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 79% YoY, to 24.1 billion yen, while ordinary income increased by 138% YoY, to33.3 billion yen, as dividend income from strategic investment 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 152% to 23.9 billion yen.
・We plan to pay 100 yen as the annual (50 yen as the interim and 50 yen as the year-end) dividend.

1Q of
FY2021

Operating Results

YoY

1Q of
FY2022

ChangeNet sales

452.6

665.5

212.9

Gross profit

26.8

38.8

12.0

Main Factors

rate

47% (Net sales)
Net sales increased to 665.5 billion yen, because as economic activities
continued to be on the right track for recovery, price of the products
45%
represented by steel, non-ferrous metal and crude oil remained at a high level.
10%
In addition, enhancement in business performance of the overseas sales
subsidiaries contributed to the net sales increase.

SG&A expenses

13.3

14.7

1.3

Operating income

13.5

24.1

10.6

79%

Non-operating income

1.8

11.8

10.0

534% (SG&A expenses)

Non-operating expenses

1.3

2.6

1.3

99%

Ordinary income

14.0

33.3

19.3

138%

Extraordinary gain

―

0.7

0.7

―

Extraordinary loss

―

0.2

0.2

―

14.0

33.8

19.8

141%

4.4

9.3

4.9

112%

9.5

24.4

14.8

155%

9.4
0.1
233.5923.9
0.5
588.5514.4
0.4
354.96

13.8

33.6

19.8

Income before income
taxes and others

Income taxes
Net income
Owners of the parent
Non-controlling interests

EPS (yen)Comprehensive
incomeNet sales

Segment
Information

1Q of
FY2021

Steel

1Q of
FY2022

206.4

Primary Metal

45.7

Metal Recycling

30.9

Foods
Energy&Living Materials
Overseas sales
subsidiaries
Total for reportablesegments

308.8
58.6
43.1

(Non-operating income/expenses)
Non-operating income increased by 10 billion yen and non-operating expenses
increased by 1.3 billion yen.
The main impacts on ordinary income were as follows.
Interest income：increase of 0.1 billion yen(YoY)
Dividend income：increase of 5.3 billion yen(YoY)
Equity in earnings of affiliates：increase of 1.4 billion yen(YoY)
Foreign exchange gain：increase of 3.1 billion yen (YoY)
Interest expenses：increase of 1.1 billion yen(YoY)

152%
436% (Extraordinary gain/loss)
Gain on sale of investment securities：0.5 billion yen
152%

Loss on devaluation of investment securities：0.2 billion yen

143%

rate

50%
28%
40%

1Q of
FY2021

8.1
2.1
1.5

1Q of
FY2022

10.1
6.7
4.9

rate

26%
218%
212%

29.1

5%

0.8

0.3

(59%)

61.1

88.5

45%

1.4

2.8

91%

126.0

87%

1.0

2.6

147%

439.5

654.4

49%

15.2

27.7

82%

Other

23.1

39.3

70%

0.3

1.7

443%

Total

462.7

693.8

50%

15.5

29.5

90%

Adjustment(10.1)(28.2)

179%

(1.5)

3.8

―

Consolidated

452.6

665.5

47%

14.0

33.3 138%

Topics1,507.9(207.4)(12%) (Overview)(Current assets)

1,272.0

1,177.9(94.1)(7%)(Fixed assets)

443.3

330.0

(113.3)(26%)

1,474.8

1,235.5(239.3)

(16%)

722.9
557.4
*
235%/203%

636.2
520.5
*
194%/169%(86.6)(36.8)(41pt)

(12%)
(7%)
(21%)

240.4

272.3

31.8

13%

222.0
244.0
15.0
24.0
3.3
4.2
5,834.98
6,597.34
237.1
268.0
13.8/15.3*% 17.8/19.4*%

22.0
8.9
0.8
762.36
30.9
4.0pt

10%
60%
26%
13%
13%
29%

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

Net DER

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 12% from the end of the previous fiscal year, mainly because of
decreases in accounts receivable-other and long-term guarantee deposits(Liabilities)

Total net assets(Equity capital)(Minority interests)
BPS (yen)
Shareholders' equity
Shareholders' equity ratio

Liabilities decreased by 16% from the end of the previous fiscal year, mainly as a result of
decreases in short-term loans payable and commodity forwards contracts liabilities. As interestbearing debt decreased by 12%, net debt-equity ratio was turned into 194%（*169%).

(Net assets)
Total net assets increased 13% from the end of the previous fiscal year because ofaccumulation of retained earnings from net income attributable to owners of parent as well asa fluctuation in foreign currency translation adjustments.Shareholders' equity ratio was 17.8%(*19.4%), which is 4.0 percentage points higher than at the end of the previous fiscal year.
*Reflecting equity credit attributes of the subordinated loan

【Changes in Net Sales】
3000.0

1st half【Quarterly Operating Results】

2nd half

1st quarter

1000.02,600.0
800.0

2,164.0
1,907.4
961.4

2000.01,745.5

1,183.7

944.4

1500.0

946.0

24.0
22.0
20.0
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0

18.8

16.9

665.5

623.0

13.5

560.7

527.7

452.6

13.1

400.0
200.0

665.5

0.0

24.1

Operating income

980.3

801.0

500.0

600.0

Applying the
AccountingStandard for
Revenue
Recognition

Applying the
AccountingStandard for
Revenue
Recognition

1000.0Net sales

Applyng the Accounting Standard for Revenue Recognition

2500.0

472.4

375.6

452.6

FY2019FY2020

FY2021Main Factors

0.0
FY2021/1Q

FY2022 (E)【Changes in Net Income】
60.0

27.7

Jun.

1,715.3

Total assets

Change2Q

3Q

4Q

FY2022/1Q

Segment income

67.5

・

Jun. 2022(Valuation & translation
adjustments)

SG & A expenses increased by 1.3 billion yen YoY, with newly consolidated
subsidiaries contributing 90 million yen to this figure. Personnel expenses rose
by 0.4 billion yen YoY, with 58 million yen of this figure deriving from newly
consolidated subsidiaries.

Comparison with Mar. 2022

Mar. 2022

Financial Position

Established Hanwa Daisun as a consolidated subsidiary of the Company.

(Steel business)
Segment income increased. Transaction volume continued to be stable mainly in the domestic constructionindustry and steel prices remained at a high level due to the spread of increases in manufacturing cost werereflected in steel prices. In addition, foreign exchange gains were reported in the steel coil service center in theoverseas countries contributed to segment income increased.
(Primary metals business)
Segment income increased. Transaction volume of stainless base metals continued to be stable and prices ofvarious merchandises, which seemed to have entered an adjustment phase, remained at a relatively high level.
In addition, dividend income from strategic investment as well as equity in earnings of affiliates fromSAMANCOR CHROME HOLDINGS PROPRIETARY LTD. contributed to segment income increased.
(Metal recycling business)
Segment income increased. Base metal prices remained at a high level globally and the value of the yen fell.
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., 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 rose further due to the crisis in
Ukraine, income from the products such as bunker fuel oil increased. In addition, both transaction volume andunit 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 andSingapore., In addition,while profitability at consolidated subsidiaries in the U.S. improved contributed tosegment income increased.

1st half

2nd half【Changes in Interest-bearing Debt】

50.0

46.0

43.6

40.0

19.6

0.0

4.1
5.1

-10.0

-18.8

-20.0

-13.6
FY2019

722.9

600.0

30.0

10.0

4.0

2.4
331.1

12.8

20.9

6.8

9.4

3.0

636.2

22.7

20.0

Interest-bearing debt
Net DER
Reflecting subordinated loan

900.0

1st quarter

23.9

1.6
300.0
1 .3

2.2

1.9
301.6
1.3

2.0

2 .0
1 .7
1.0

1 .1

0.0

FY2020

FY2021

FY2022(E)

0.0

FY2019FY2020

FY2021

FY2022/1Q

FY2022(estimated)change2,164.02,600.0

20%Interim (yen)

30.00

50.00

50.00

Operating income

62.3

65.0

4%

Year-end (yen)

30.00

50.00

50.00

Ordinary income

62.7

65.0

4%

Annual (yen)60.00

100.00100.00Net income attributableto owners of the parent

43.6

46.0

6%

Dividend payout ratio

12%

9%

9%

Forecast(Annual)
Net sales

FY2021

Cash Dividends

FY2020

FY2021

FY2022(estimated)