Financial Results for theThird Quarter ended December 31, 2021
(Japan GAAP)
February 10 , 2022
Company name:

HANWA Co.,Ltd.

Listed stock exchange: Tokyo

Stock exchange code:

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

Representative:
Hironari Furukawa President
Enquiries:
Yoichi Nakagawa Director, Senior Managing Executive Officer
Scheduled date of issue of audited financial statements: February 10 , 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 Third Quarter ended December 31, 2021 (April 1, 2021 to December 31, 2021)(1) Consolidated operating results（Percentage indicate a change from the previous year）
Net sales
For the 3rd Quarter
ended December 31, 2021
ended December 31, 2020

(Millions of yen)(％)

Operating income

Ordinary income(Millions of yen)

(Millions of yen)(％)

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

1,541,082－
49,234
162.6
49,478175.9
33,177170.4
1,244,969(12.5)
18,749(8.2)
17,93023.3
12,271
23,6
Note: Comprehensive income
For the Fiscal Year ended December 31, 2021
38,617 million yen
161.7 %For the Fiscal Year ended December 31, 2020
14,758 million yen
117.1 %Net income
per share

For the 3rd Quarter
ended December 31, 2021
ended December 31, 2020

Net income
per share(diluted)

(yen)

(yen)

816.43－301.96－* 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.

(2) Consolidated financial position
Total assets(Millions of yen)
As of December 31, 2021
As of March 31, 2021

Note: Shareholders' equity

Shareholders'equity ratio

Net assets(Millions of yen)

1,108,760
824,590
As of December 31, 2021
As of March 31, 2021

Net assets
per share(％)

229,021
191,857
225,759 million yen
189,214 million yen

20.4
22.9

(yen)

5,555.47
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
50.00

－
－

30.00

60.00

50.00

100.00* For more information, please refer to "Notice Concerning Amendments to Forecasts of consolidated financial

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)

Annual2,100,000
62,000112.1
62,000115.1
43,000119.2
1,058.14* For more information, please refer to "Notice Concerning Amendments to Forecasts of consolidated financial
results for FY2021" .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 fromthis information.
* 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 financial results constitute the figures after application of said accounting standard. For
this reason, rates of increase/decrease YoY are not shown for net sales.

－1－

HANWA Co., Ltd.

Financial Results for the Third Quarter ended December 31, 2021

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

Millions of yen
March 31, 2021

December 31, 2021

AssetsCurrent assets;
Cash and deposits
Trade notes and accounts receivable
Trade 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

36,826―491,619
32,614
218,130
110,780(1,467)888,503

34,45739,34973,806
7,893

34,67342,847
77,5209,953

72,472
40,779(454)
112,796
194,497824,590

79,62354,494(1,335)
132,782
220,256
1,108,760

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

306,015
32,741
138,493
60,00010,000
10,1392,043
223
93,965
653,623

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

20,000181,920
5,441
18,752
226,115879,738

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

45,651
169,584(3,729)211,506

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

16,773(160)
3,191(1,748)(3,803)
14,252
3,262
229,021
1,108,760

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 Third Quarter ended December 31, 2021

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

3rd Quarter ended
December 31, 2020

3rd Quarter ended
December 31, 2021

1,244,969
1,189,140
55,829

1,541,082
1,450,578
90,50437,08018,74941,26949,234

1,524
1,622
477
1,107
4,731

1,396
1,498
1,955
1,106
5,957

2,880
1,550
1,118
5,550
17,930

2,872
1,477
1,364
5,714
49,478Extraordinary income;Gain on sale of property and equipment
Gain on sale of investment securities
Total extraordinary income
Extraordinary loss;
Loss on devaluation of investment securities
Provision of allowance for doubtful accounts of affiliates
Total extraordinary loss
Income before income taxes and minority interest

580
114
694

―
―
―

―
148
148
18,476

1,170
106
1,276
48,201

Income taxes
Net income

6,039
12,437

14,56833,633

12,271
166

33,177
455

5,744
(856)
(2,980)
593

1,579
(533)
3,035
574

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 forusing equity method
Total other comprehensive Income
Comprehensive Income
Comprehensive income attributable to;
Owners of the parent
Non-controlling interests

－3－

(181)

328

2,320
14,758

4,984
38,617

14,74137,96216654

HANWA co.,ltd.

Financial Results for the Third Quarter ended December 31, 2021

《Segment information》
Segment information by business category for the 3rd Quarter ended December 31, 2020 and 2021, is as follows:(Amounts less than one million yen are rounded down)

3rd Quarter ended December 31, 2020

Millions of yen

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

Primary
Metal
Metal Recycling

640,407 161,602
8,230
2,123
648,637 163,726
11,454
3,256

54,593
1,291
55,885379

Foods

Energy& Living
Materials

Overseas
sales
subsidiaries

Subtotal

79,520 124,168 123,039 1,183,331
484
5,140 22,501 39,771
80,005 129,308 145,540 1,223,103
1,710
4,375
947 22,124

Other

Total

61,637 1,244,969
2,169 41,941
63,807 1,286,910
453 22,578

3rd Quarter ended December 31, 2021

Adjustment― 1,244,969(41,941)―(41,941) 1,244,969(4,648) 17,930

Millions of yen

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

Consolidated

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

Overseas
sales
subsidiaries

Subtotal

90,133 196,733 230,298 1,453,428
1,485
7,304 12,804 47,907
91,619 204,037 243,103 1,501,335
2,968
4,775
4,899 51,076

Other

Total

87,654 1,541,082
2,297 50,205
89,952 1,591,288
2,279 53,356

Adjustment

Consolidated― 1,541,082(50,205)―(50,205) 1,541,082(3,878) 49,478

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 3rd 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 3rd quarter of this fiscal year decreased by 159,276 million
yen in the Steel segment, 195,042 million yen in the Primary metal segment, 617 million yen in the Metal recycling segment, 87 million yen in
the Foods segment, 424 million yen in the Energy & Living Materials segment, 32,787 million yen in overseas sales subsidiaries anddecreased 1,304 million yen in the Other segment. In addition, segment income in the Steel segment increased by 1,837 million yen.

－４－

February 10, 2022

Highlights of Consolidated Financial Results for the 3rd Quarter of FY2021(Japan GAAP)HANWA Co., Ltd.
(Unit: billion yen, rounded down to 0.1 billions yen)

Outline of Financial Results for the 3rd Quarter of FY2021
・During the 3rd quarter of the fiscal year, economic activity progressed on a recovery trend. Net sales increased to 1,541 billion yen, as transaction volume increased in Steelbusinesses, and prices of steel and non-ferrous metals trended upward. Profits expanded in all business segments. Operating income increased by 163% YoY, to 49.2 billion yen,while ordinary income increased by 176% YoY, to 49.4 billion yen, as equity in earnings of affiliates expanded mainly in the Steel business, and net income attributable to ownersof the company increased by 170% to 33.1 billion yen.

Dec. 2021

824.5

1,108.7

284.1

34%

(Total Assets)(Current assets)

630.0

888.5

258.4

41%

Total assets increased by 34% from the end of the previous fiscal year, mainly
because of an increase in trade receivables resulting from a sales increase.

(Fixed assets)

194.4

220.2

25.7

13%

632.7

879.7

247.0

39%

301.6
413.5
250.7
376.7
*
*
133%/105% 167%/140%

111.9
126.0
34pt

37%
50%
31%

229.0

37.1

19%

(Net assets)

179.7
211.5
9.4
14.2
2.6
3.2
4,656.17
5,555.47
189.2
225.7
22.9/26.0*% 20.4/22.6*%

31.7
4.7
0.6
899.3036.5-2.5pt

18%
51%
23%
19%
19%
-11%

Total net assets increased 19% from the end of the previous fiscal year becauseof accumulation of retained earnings from net income attributable to owners ofparent as well as a fluctuation in foreign currency translation adjustments.
Shareholders' equity ratio was 20.4% (*22.6%), which is 2.5 percentage points
lower than at the end of the previous fiscal year.

Total assets
・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-3Q
of FY2020

1Q-3Q
of FY2021

YoY
ChangeMain Factors

rate

1,244.9

1,541.0

―*

55.8

90.5

34.6

62%

SG&A expenses

37.0

41.2

4.1

11%

Operating income

18.7

49.2

30.4

163%

Non-operating income

4.7

5.9

1.2

26%

Non-operating expenses

5.5

5.7

0.1

3% (SG&A expenses)

Net sales
Gross profit

Net sales increased to 1,541 billion yen, as transaction volume swelled in Steelbusinesses, and prices of steel and nonferrous metals trended upward.

( From the beginning of the fiscal year ending March 31, 2022, the Company applies*
the Accounting Standard for Revenue Recognition (Accounting Standards Board ofJapan Statement No. 29). For this reason, rates of increase/decrease YoY are notshown for net sales.)

49.4

31.5

176%

Extraordinary gain

0.6

―

(0.6)

-100%

Extraordinary loss

0.1

1.2

1.1

761% (Non-operating income/expenses)

Income taxes

6.0

Net income

14.5

12.4

Owners of the parent(loss)
Non-controlling interests(loss)

EPS (yen)Comprehensive
incomeSegment
Information

48.2

33.6

29.7
8.5
21.1

12.2
0.1
301.9633.1
0.4
816.4320.9
0.2
514.47

14.7

38.6

23.8

Non-operating income increased by 1.2 billion yen and non-operating expenses
increased by 0.1 billion yen.
The main impacts on ordinary income were as follows.
Interest income：decrease of 0.1 billion yen(YoY)
Dividend income：decrease of 0.1 billion yen(YoY)
Equity in earnings of affiliates：increase of 1.4 billion yen(YoY)

161%
141%
170%

191.8

(Equity capital)(Valuation & translation
adjustments)(Minority interests)
BPS (yen)

170%
174%
(Extraordinary loss)
170%

Shareholders' equity ratio

Net sales
1Q-3Q
1Q-3Q
of FY2020 of FY2021

648.6*Primary Metal

163.7

722.5
143.0

ChangeMain Factors

rate

Trade receivables

2,500.0

1st half
2,074.6

Liabilities increased by 39% from the end of the previous fiscal year, mainly
as a result of increases in trade payables and short-term debt.
As interest-bearing debt increased by 37%, net debt-equity ratio was turned
into 167%（*140%).

*Reflecting equity credit attributes of the subordinated loan

【Quarterly Operating Results】

2nd half

3rd quarter

1,069.6

Operating income

600.0

1,541.0
1,423.2

1,000.0

946.0

400.0

Applying the
AccountingStandard for
Revenue
Recognition

1,244.9
801.0

500.0

13.5

500.5

944.4

1,500.0

1,004.9

Net sales

200.0

980.3

375.6

425.4

443.9

6.6

7.6

20.0

18.8

16.9

1,119.7

1,745.5

961.4

1,558.2800.0

2,100.0

1,907.4

2,000.0524.2 billion yen (+37% from the end of the previous fiscal year)(Liabilities)【Changes in Net Sales】

18.0
16.0

560.7

527.7

14.0

Applyng the
Applyng the Accounting
Accounting Standard for
Applyng the Standard for Revenue
Recognition
Accounting Revenue
Standard for Recognition
Revenue
Recognition

452.6

10.4

4.4

12.0
10.0
8.0
6.0
4.0
2.0

Loss on devaluation of investments securities：1.1 billion yen

162%

0.0

0.0

FY2018Steel

FY2019FY20200.0
FY2020/1Q 2Q

FY2021(E)

3Q

4Q FY2021/1Q 2Q

3Q

Segment income
rate

―
―

1Q-3Q
1Q-3Q
of FY2020 of FY2021

11.4
3.2

28.4
5.8

rate

Main Factors【Changes in Net Income】
50.0

148%
80%

Metal Recycling

55.8

97.0

―

0.3

4.1

984%

Foods

80.0

91.6

―

1.7

2.9

74%

Energy&Living Materials
Overseas sales
subsidiaries
Total for reportablesegments

Net DER

Shareholders' equity

SG & A expenses increased by 4.1 billion yen YoY, with newly consolidated
subsidiaries contributing 0.5 billion yen to this figure. Personnel expenses rose by 1.9
billion yen YoY, with 0.4 billion yen of this figure deriving from newly consolidated
subsidiaries.

17.9

18.4

(Net interest-bearing debt)

Total net assets

Ordinary income

Income before income
taxes and others

Total liabilities(Interest-bearing debt)―* (Net sales)

Comparison with Mar. 2021

Mar. 2021

Financial Position

129.3

204.0

―

4.3

4.7

9%

145.5

243.1

―

0.9

4.8

417%

1,223.1

1,501.3

―

22.1

51.0

131%

Other

63.8

89.9

―

0.4

2.2

402%

Total

1,286.9

1,591.2

―

22.5

53.3

136%

Adjustment(41.9)(50.2)

―

(4.6)

(3.8)

-17%

Consolidated

1,244.9

1,541.0

―

17.9

49.4

176%

(Steel business)
Segment income and profit margin grew. Transaction volume increased amid an upward trend
in demand for steel. Steel products prices continued to rise amid mounting raw-material costs.
(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 pricesrose. 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 aluminum and copper-scrap sales, while transaction volume instainless-scrap increased through utilization of the cargo-collection and inventory functions ofsubsidiaries.
(Foods business)
Profit margin expanded as transaction volume with volume retailers increased and the productprices followed a rising trend. Segment income also increased amid improved profitability at
consolidated subsidiaries in the U.S. and Japan.
(Energy & Living Materials business)
Segment income increased. With prices for crude oil and petroleum products on a rising trend,
profit margin was secured as transaction volume in palm kernel shells (PKS) and wood pellets
increased, while transaction volume in daily necessities and household goods increased.
(Overseas sales subsidiaries)
Segment income increased. Transaction volume in steel increased in some countries, includingIndonesia and Singapore, while transaction volume in imported steel materials increased amid
mounting tightening supply in the U.S..

1st half

2nd half【Changes in Interest-bearing Debt】

3rd quarter

40.0

33.1

30.0

13.9
11.3

20.0
10.0

7.3
6.5

0.0

12.8

5.1

12.2
6.8

400.0
300.0

-20.0

FY2018

1.6

3.0

413.5

331.1
301.6

1.6

2.0

1.7

1.3

20.9

200.0

1 .4

1 .3

1 .3

FY2018FY2019

1.0

1 .1

100.0

-18.8

-10.0

363.2

22.1

19.6
9.9

Interest-bearing debt
Net DER
Reflecting subordinated loan

500.0

43.0

0.0

-13.6
FY2019FY2020

FY2021(E)

0.0

FY2020

FY2021/3Q

FY2021(estimated)change1,745.5

2,100.0―

Interim (yen)

75.00

30.00

50.00

Operating income

29.2

62.0

112%

Year-end (yen)

25.00

30.00

50.00

Ordinary income

28.8

62.0

115%

Annual (yen)100.0060.00

100.00Net income attributableto owners of parent

19.6

43.0

119%

Dividend payout ratio

―

12%

9%

Forecast(Annual)
Net sales

FY2020Cash Dividends

FY2019FY2020

FY2021(estimated)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 YoY basis is made in* Sinceaccordance with the classification method after the changing.

・・

Topics・

Apr. Acquire the shares in Suzuki-Sumiden Wire Products Guangzhou Co., Ltd. (SWPG), a manufacturer of high-quality stainless wire in China.
Sep. Acquire the shares in Da Ming International Holdings Limited, a holding company of Daming Group which is one of China’s largest distributor of steel products and also
a comprehensive steel service center.
Oct. Hanwa Trading (Shanghai) Co., Ltd. , a consolidated subsidiary of the Company, acquire the shares in JiangYin XiaoDa Metal Products Manufacturing Co., Ltd..

* 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.