Financial Results for the Fiscal Year ended March 31, 2018
(Consolidated financial results have been prepared in accordance with accounting principles generally accepted in Japan)

May 11, 2018
Company name:

HANWA Co.,Ltd.

Listed stock exchange:
Stock exchange code:

Tokyo
8078

Representative:
Enquiries:

Hironari Furukawa
Yoichi Nakagawa(URL http://www.hanwa.co.jp)

The date of Shareholders' Meeting:
The date of issue of audited financial statements:

President
Director, Senior Managing Executive Officer
TEL 81 - 3 - 3544 - 2000
June 22, 2018
June 25, 2018

The date of payout of dividend: June 25, 2018
(Rounded down to millions of yen)

１．Consolidated financial results for the fiscal year ended March 31, 2018
(1) Consolidated operating results
Net sales(Millions of yen)(％)（％ of change from previous year）

Operating income

Ordinary income(Millions of yen)

(Millions of yen)(％)

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

1,791,118
1,514,037
Note: Comprehensive income

18.3
26,21711.9
25,502
11.3
17,3546.1
0.1
23,42628.9
22,90748.5
16,363(35.8)
Year ended March 31, 2018
22,532 million yen
7.3%
Year ended March 31, 2017
20,991 million yen
25.1%
Net income
Net income
Ratio of net income to
Ratio of ordinary
Ratio of operating
per shareper share(diluted) shareholders' equity income to total assets income to net sales

Year ended March 31, 2018Year ended March 31, 2017

(yen)

(yen)

(％)

427.04－400.89－Note: Equity in earnings of unconsolidated subsidiaries and affiliates
Year ended March 31, 2018Year ended March 31, 2017

(％)

9.7
3.3
10.1
3.5
Year ended March 31, 2018Year ended March 31, 2017

(％)

1.5
1.5
(127) million yen(88) million yen* Effective October 1, 2017, HANWA consolidated its common shares at the ratio of 5 shares to 1 share. Accordingly, net income
per share has been calculated as if the said share consolidation was conducted at the beginning of the previous fiscal year.

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

861,965
694,232

March 31, 2018
March 31, 2017

Note: Shareholders' equity

Shareholders'equity ratio

Net assets(Millions of yen)

203,700
171,637
As of March 31, 2018
As of March 31, 2017

Shareholders' equity
per share

(％)

21.8
24.5
187,828 million yen
170,422 million yen(yen)

4,621.96
4,193.50* Effective October 1, 2017, HANWA consolidated its common shares at the ratio of 5 shares to 1 share. Accordingly, shareholders'equity per share has been calculated as if the said share consolidation was conducted at the beginning of the previous fiscal year.

(3) Consolidated cash flows situation
Cash flows fromOperating activities
Year ended March 31, 2018Year ended March 31, 2017

Cash flows from
Investing activities

Cash flows from
Financing activities(Millions of yen)

(Millions of yen)

Cash and cash
equivalents at end of year
(Millions of yen)
(Millions of yen)

(19,755)
3,959(39,971)(18,427)

66,435
15,44734,85527,206

２．Cash dividends
Cash dividends per share（effective date）

First
quarter

Secondquarter

Third
quarterYear-end

AnnualTotalamount ofdividend（Annual）

Dividend on

Dividend shareholders'payout ratio
equity（Consolidated）（Consolidated）

(yen)
(yen)
(yen)
(yen)
(yen) (Millions of yen) (％)(％)
Year ended March 31, 2017
―
9.00
―
10.00
19.00
3,860
23.7
2.4
Year ended March 31, 2018
―
10.00
―
75.00
―
5,079
29.3
2.8
Year ending March 31, 2019
―
75.00
―
75.00
150.0031.3（estimated）* Effective October 1, 2017, HANWA consolidated its common shares at the ratio of 5 shares to 1 share. Accordingly, the impact of
this share consolidation is taken into consideration in the amount presented for the fiscal year-end dividend per share for theyear ended March 31, 2018, and the amount for the total annual dividends per share for the same fiscal year is omitted and shown
as a dash.
If the share consolidation was taken into consideration, the second quarter dividend and annual dividend for the fiscal year ended
March 31, 2017 would be 50.00 yen and 125.00 yen, respectively.

－1－３．Forecast of consolidated financial results for fiscal year ending March 31, 2019 （％ of change from previous year）
Net sales

Operating income(Millions of yen) (％)

Annual2,000,000

11.7(Millions of yen) (％)

31,000Net income attributableto owners of the parent(Millions of yen) (％) (Millions of yen) (％)

Ordinary income

18.2

30,00017.6

19,50012.4

Net income
per share(yen)

479.84* The above forecasts reflect assumptions and prospects based on the information currently available.They are subject to a numberof risks and uncertainties that could cause actual results to differ materially from this information.

－2－

HANWA co.,ltd.

Financial Results for the Fiscal Year ended March 31, 2018

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

Millions of yen
March 31, 2017

March 31, 2018

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

28,465
307,853
30,742486
111,039
1,919
57,599(334)
537,773

36,198400,317
25,416683
134,877
1,891
47,128(481)
646,032

18,596
29,640
11,25559,492
2,034

20,72432,402
11,34164,4693,426

72,524
10,842283
11,787(504)
94,932
156,458
694,232

109,781
20,366103
18,688(902)
148,037
215,933
861,965

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

191,989
107,262
5,000
21
6,752
2,306
146
512
45,068359,058

266,595
116,245
10,00010,121
5,050
2,474
391
―
40,851
451,730

Long-term liabilities;
Bonds payable
Long-term loans payable
Deferred tax liabilities
Deferred tax liabilities by land revaluation
Retirement benefits liabilities
OthersTotal long-term liabilities
Total liabilities

40,076106,232
5,366
1,634
4,518
5,709
163,536
522,595

40,055
147,601
6,142
1,633
4,943
6,157
206,534
658,264

45,651
117,778(3,720)159,70945,651
131,045(3,726)
172,969

12,580
142
2,966
1,062
(6,037)
10,713
1,214
171,637
694,232

14,342
(169)
2,963
3,110
(5,388)14,85815,872
203,700
861,965

Fixed assets;
Property and equipment;
Buildings and structures
Land
OthersTotal property and equipment
Intangible assets
Investments and other assets;
Investment securities
Long-term loans receivable
Deferred tax asset
OthersAllowance for doubtful receivables
Total investments and other assets
Total fixed assets
Total assets

Liabilities;

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－3－

HANWA co.,ltd.

Financial Results for the Fiscal Year ended March 31, 2018

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

Millions of yen
Year ended
March 31, 2017
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Other income;Interest income
Dividend income
Foreign exchange gain
OthersTotal other income
Other expenses;
Interest expenses
Loss on investment in affiliates
Foreign exchange loss
Guarantee commission
Commission fee
OthersTotal other expenses
Ordinary income

Year ended
March 31, 2018

1,514,037
1,449,522
64,514

1,791,118
1,718,922
72,19541,08823,42645,977
26,217

1,238
1,446
―
1,207
3,891

1,747
1,127
316
1,339
4,531

2,553
88
284
734
167
582
4,411
22,907

3,245
127
―
613
648
611
5,246
25,502Extraordinary income;Gain on sales of long-lived assets
Gain on sales of investment securities
Reversal of allowance for business loss of affiliates
Total extraordinary income
Extraordinary loss;
Loss on sale of property and equipment
Loss on devaluation of investments securities
Loss on devaluation of investment in capitalBusiness loss of affiliates
Provision for product warranties
Total extraordinary loss
Income before income taxes

876
674
―
1,551

―
165
512
678

227
814
―
253
―
1,295
23,163

―
181
217
―
345
744
25,435

Income, inhabitant & business tax - current
Income tax expense-deferred
Total income taxes
Net income

7,354
(625)
6,728
16,434

8,410
(95)
8,315
17,120Net income attributable to
Net income attributable to owners of the parent
Net income(loss) attributable to minority interests

16,36371

17,354
(233)

4,555
518
(723)
360

1,762
(311)
316
587

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 associates
accounted for using equity method
Total other comprehensive Income
Comprehensive Income

(154)

3,057

4,557
20,991

5,411
22,532Comprehensive income attributable toComprehensive income attributable to owners of the parent
Comprehensive income attributable to minority interests

21,017(26)

21,501
1,031－4－

HANWA co.,ltd.

Financial Results for the Fiscal Year ended March 31, 2018
《Consolidated Statements of Changes in Net Assets》(Rounded down to millions of yen)

Millions of yen
Shareholders' equity

Accumulated other comprehensive income

Net
Total
Total
Total
DeferredForeign
Remeasurem
MinorityLand
valuation
Common Capital Retained Treasury sharehol unrealized hedge
netcurrency
ents ofandholding
revaluation translationinterests
definedprofit andstock
surplus earnings stockders'
assetsgains ondifference adjustments benefit plans translation
loss
adjustments
equity securities

Balance at March 31, 2016

45,651

Increase (decrease) during the term:
Cash dividends paid
Change of scope of consolidated
subsidiaries
Change of scope of equity method
Reversal of land revaluationdifference
Net income attributable to ownersof the parent
Purchase of treasury stocks
Capital increase from purchase ofstock of consolidated subsidiaries
Capital increase from sales ofstock of consolidated subsidiaries
Others
Net increase (decrease) during
the term, except for items undershareholders' equity
Total increase (decrease)
Balance at March 31, 2017

4 104,600(1,449) 148,807(3,900)(3,900)(3,900)

219

219

219

700

700

700

－

－

－

16,363

16,363

16,363(2,270)(2,270)

(200)

(205)

(205)

(0)

(0)

(0)

(4)

(4)

(4)

(2,270)(4)－45,651(4) 13,177－ 117,778(2,270) 10,902(3,720) 159,709

8,024

(376)

2,966

1,842

4,555

518

－

(780)

4,555
12,580

518
142

－
2,966

(780)
1,062

(6,397)

360

6,059

4,654

360
4,654
(6,037) 10,713

1,272 156,139

(58)

4,596

(58) 15,498
1,214 171,637

Millions of yen
Shareholders' equity

Accumulated other comprehensive income

Net
Total
Total
Total
DeferredForeign
Remeasurem
MinorityLand
valuation
Common Capital Retained Treasury sharehol unrealized hedge
netcurrency
ents ofandholding
revaluation translationinterests
definedprofit andstock
surplus earnings stockders'
assetstranslation
gains ondifference adjustments benefit plansloss
adjustments
equity securities

Balance at March 31, 2017

45,651

Increase (decrease) during the term:
Cash dividends paid
Change of scope of consolidated
subsidiaries
Change of scope of equity method
Reversal of land revaluationdifference
Net income attributable to ownersof the parent
Purchase of treasury stocks
Capital increase from purchase ofstock of consolidated subsidiaries
Capital increase from sales ofstock of consolidated subsidiaries
Others
Net increase (decrease) during
the term, except for items undershareholders' equity
Total increase (decrease)
Balance at March 31, 2018

－ 117,778(3,720) 159,709(4,063)(4,063)(4,063)

(25)

(25)

(25)

－

－

－

2

2

2

17,354

17,354

17,354

(6)

(6)

－

－

－

－

－

－

－

－

－

(6)
－

－
45,651－ 13,266－ 131,045(6) 13,260(3,726) 172,969－5－

12,580

142

2,966

1,062

1,762

(311)

(2)

2,047

1,762
14,342

(311)
(169)

(2)
2,963

2,047
3,110

(6,037) 10,713

648

4,144

648
4,144
(5,388) 14,858

1,214 171,637

14,65818,803

14,658 32,063
15,872 203,700

HANWA co.,ltd.

Financial Results for the Fiscal Year ended March 31, 2018

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

Millions of yen
Year ended
March 31,2017

Year ended
March 31,2018

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
Revenue from investment in affiliated companies (gain)
Gain on sales of long-lived assets
Gain on sales of investment securities
Reversal of allowance for business loss of affiliates
Loss on sale of property and equipment
Loss on devaluation of investments securities
Loss on devaluation of investment in capitalBusiness loss of affiliates
Provision for product warranties(Increase)decrease in trade receivables(Increase)decrease in inventories
Increase(decrease) in trade notes and accounts payable
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

23,1633,971
217
67(2,684)
2,553
88
(876)
(674)
―
227
814
―
253
―
(60,931)(3,991)
39,538
959
44
2,739
2,766
(2,562)
1,015
3,959

25,435
4,240
532
(193)
(2,875)
3,245
127
―
(165)
(512)
―
181
217
―
345
(82,227)(21,619)
69,366992(7,073)(9,982)
3,681(3,257)(10,196)(19,755)

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 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(1,245)
1,261(3,656)
1,453(2,883)
1,161―(14,829)
(808)
28
1,090
(18,427)(3,039)3,553(4,650)144(35,461)
1,137
1,176
11,665(15,037)
978(436)(39,971)

12,3435,000
15,340(10,460)
9,950(10,039)―(2,270)(3,899)(29)

12,1855,000
84,237(53,860)
9,951
(503)
13,580(6)(4,063)
(28)

(220)

―

(267)
15,447(58)
66,435(370)
609
25,804791
27,206(203)
6,504
27,206
1,144
34,855

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
Redemption of issuance of bonds
Proceeds from stock issuance to minority shareholders
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 scope of
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
Increase in cash and cash equivalents from newly consolidated subsidiaries
Cash and cash equivalents at end of year
－6－

HANWA co.,ltd.

Financial Results for the Fiscal Year ended March 31, 2018

《Segment information》
Overview of the reportable segments
The Group’s reportable segments are determined on the basis that separate financial information for such segments is available andexamined periodically by the Board of Directors, which makes decisions regarding the allocation of management resources and assesses
the business performances of such segments.
The Group’s main business is buying and selling of various products with a focus on steel, and the business department, which is divided
according to products handled or service contents, mainly carries out business activities. For this reason, the Group consists of businesssegments with the business department as the basis. The 6 reportable segments are “steel business,” “metal and alloy business”, “nonferrous metal business”, “food business”, “petroleum and chemical business”, and “Overseas sales subsidiaries”.
The main products and services that fall under these reportable segments are listed below.
Steel： Steel bars and shapes, steel plates and sheets, special steels, wire products, steel pipes, and steelmaking raw materials
Metals and alloys： Nickel, chromium, silicon, manganese and ferroalloys
Non-ferrous metals： Aluminum, copper, and zinc (recycling business)
Foods：Sea foods
Petroleum and chemicals： Petroleum products, industrial chemicals, and chemicals
Overseas sales subsidiaries： Wholesale trade, general merchandise
Sales, income/loss, assets, liability, and other amounts by reportable segment(Rounded down to millions of yen)

Year ended March 31, 2017

Millions of yen

Reportable segment
Steel
Net sales
Customers
Inter-segment
Total
Segment income(loss)
Segment assets
Other
Depreciation
Depreciation of Goodwill
Interest income
Interest expenses
Revenue from investment inaffiliates
Investment in affiliates
Property, plant and equipment
and Intangible assets increase

Metals Non-ferrous& alloys metals

775,725 131,413
11,167
3,210
786,892 134,624
18,082
1,413
371,789 114,436

77,674
1,532
79,206
1,084
21,772

Foods

Overseassales& chemicals
subsidiaries

Petroleum

Subtotal

88,671 257,165 111,993 1,442,643
339
7,299 62,287 85,837
89,011 264,465 174,280 1,528,481
2,872
2,461
196 26,111
34,074 41,128 32,305 615,506

Other

Total

71,394 1,514,037
1,660 87,498
73,054 1,601,535
1,526 27,638
27,394 642,900

Adjustment― 1,514,037(87,498)―(87,498) 1,514,037(4,731) 22,907
51,332 694,232

2,970
140
190
2,008

121
33
790
1,171

267
44
0
180

41
―
32
324

42
―
50
276

50
―
73
298

3,494
217
1,138
4,260

362
―
10
167

3,857
217
1,148
4,427

114
―
90
(1,874)

3,971
217
1,238
2,553

(66)

―

―

―

―

(120)

(186)

97

(88)

―

(88)

2,671

―

―

―

―

48

2,719

778

3,498

―

3,498

3,479

69

310

58

36

84

4,038

345

4,383

51

4,435

Year ended March 31, 2018

Millions of yen

Reportable segment
Steel
Net sales
Customers
Inter-segment
Total
Segment income(loss)
Segment assets
Other
Depreciation
Depreciation of Goodwill
Interest income
Interest expenses
Revenue from investment inaffiliates
Investment in affiliates
Property, plant and equipment
and Intangible assets increase

Consolidated

Metals Non-ferrous& alloys metals

920,269 198,330
11,678
4,869
931,948 203,200
20,324
4,958
411,990 215,003

97,356
1,704
99,0602,038
23,545

Foods

Overseassales& chemicals
subsidiaries

Petroleum

Subtotal

98,876 233,926 167,388 1,716,148
601
6,768 54,289 79,912
99,477 240,695 221,678 1,796,060
1,057
2,164
950 31,494
41,945 47,925 35,956 776,367

Other

Total

74,970 1,791,118
1,628 81,541
76,598 1,872,659
691 32,185
29,978 806,345

Adjustment

Consolidated― 1,791,118(81,541)―(81,541) 1,791,118(6,683) 25,502
55,620 861,965

3,197
326
182
2,358

98
56
1,227
2,607

240
67
5
270

33
―
20
391

211
82
52
253

62
―
110
685

3,842
532
1,599
6,568

304
―
10
204

4,147
532
1,610
6,772

93
―
137
(3,527)

4,240
532
1,747
3,245

242

(513)

―

―

―

15

(255)

127

(127)

―

(127)

4,023

38,125

―

―

―

107

42,257905

43,162―

43,162

4,803

47

127

11

99

48

5,137

760

5,898

42

5,941

Notes:
1. “Other” comprises businesses that are not included in reportable segments, such as lumber section and machinery section.
2. Adjustments are as follows:(1) Adjustments for segment income include intersegment elimination and Group costs that have not been distributed to reportable segments.
These group costs consist mainly of expenses of administrative departments.
(2) Adjustments for segment assets include Group assets that have not been distributed to reportable segments. These group assets consist mainlyof cash and cash equivalents, investment securities and assets of administrative departments.
(3) Adjustments for depreciation include mainly depreciation and amortization expenses of group assets.
(4) Adjustments for interest income and interest expenses include intersegment elimination, revenue and expense that have not been distributed toreportable segments.
(5) Adjustments for property, plant and equipment and intangible assets increase are increases in Group assets.
－7－

May 11, 2018

Highlights of Consolidated Financial Results for the FY2017
HANWA Co., Ltd.
Outline of Financial Results for the FY2017
・ As for this fiscal year, net sales have increased by 18% from the previous year, hence reached to 1,791.1 billion yen, as market of steel products
and metal resources being higher than the last fiscal year. Net profit attributable to owners of the parent was 17.3 billion yen, increased by 6%,
due to increase in operating income of matals/alloys business and foreign exchange gain as opposed to the loss from the previous year.
・ Having considered that our profitability had exceeded our initial forecasts and FY2017 was 70th anniversary of our foundation, we decided topay 75.0 yen per share as year-end dividend consist of 65.0 yen as common dividend and 10.0 yen as commemorative dividend.

(Unit: billion yen, rounded down to 0.1 billions of yen)Mar. 2017

861.9

694.2

167.7

24%

646.0
215.9

537.7
156.4

108.2
59.4

20%
38%

Total assets increased by 24% from the end of the previous year, due toincrease in trade receivables and investment securities .
Inventories : 134.8 billion yen (+22% from the end of the previous year)
Investment securities : 109.7 billion yen (+51% from the end of the

Total liabilities

658.2

522.5

135.6

26%

previous year)(Interest-bearing debt)

Net DER

325.5
289.3
154.1%

259.6
231.2
135.7%

65.8
58.1
18.4pt25%(+292%))
25% (Liabilities)
Total liabilities increased by 26% from the end of the previous―

Total net assets

203.7

171.6

32.0

19%

172.9
14.8
15.8
4,621.96
187.8
21.8%

159.7
10.7
1.2
4,193.50
170.4
24.5%

13.2
4.1
14.6
428.4617.4-2.7pt

8%
39%
―
10%
10%
―

FY2017FY2016

Total assets(Current assets)(Fixed assets)

Operating Results
Net sales
Gross profit
SG&A expenses

FY2017Year-on-year

FY2016

Change1,791.1

1,514.0

277.0

18%

72.1

64.5

7.6

12%

45.9

41.0

4.8

12%

Operating income

26.2

23.4

2.7

12%

Non-operating income

4.5

3.8

0.6

16%

Non-operating expenses

5.2

4.4

0.8

19%

Ordinary income

25.5

22.9

2.5

11%

Extraordinary gain

0.6

1.5

(0.8)

-56%

Extraordinary loss
Income before income
taxes and others

0.7

1.2

(0.5)

-43%

25.4

23.1

2.2

10%

8.3

6.7

1.5

24%

17.1

16.4

0.6

4%

17.3
(0.2)
427.0416.3
0.0
400.89

0.9
(0.3)
26.15

6%
-429%
7%

22.5

20.9

1.5

7%

Income taxes
Net income
Owners of the Company(loss)

Minority interests(loss)

EPS (yen)Comprehensive
incomeSegment
Information
Steel
Metals & alloys
Non-ferrous
metalsFoods
Petroleum &chemicals
Overseas sales
subsidiaries

Main Factors

rate(Net sales)
Net sales have increased by 18% from the previous year.
This was due to market recovery of steel products and metal
resources from the second half of the previous fiscal year.
(SG&A expenses)
SG & A expenses have increased 4.8 billion yen from theprevious year. 2.6 out of 4.8 billion yen was accounted for
newly consolidated subsidiaries.
Our personnel expenses have increased 2.4 billion yen,including 1.0 billion yen from newly consolidated
subsidiaries.
(Non-operating income/expenses)
Non-operating income has increased by 16% from theprevious year, mainly due to increase in interest income andforeign exchange gain.
Non-operating expenses have increased by 19%, due toincrease in interest expenses and commission fee.
(Extraordinary gain/loss)
Reversal of allowance in previous year was recorded in
extraordinary income, because the expected loss fromrestructuring of subsidiary was less. Gain on sales ofinvestment securities was recorded.
For extraordinary losses, we recorded provision for productwarranties of subsidiary and loss on valuation of investmentsof sale of other subsidiary.

FY2017931.9

FY2016

786.8

Segment income
rate

18%

FY201720.3

FY2016

18.0

rate

12%

203.2

134.6

51%

4.9

1.4

251%

99.0

79.2

25%

2.0

1.0

88%

99.4

89.0

12%

1.0

2.8

-63%

240.6

264.4

-9%

2.1

2.4

-12%

221.6

174.2

27%

0.9

0.1

383%

Total for reportablesegments

1,796.0

1,528.4

18%

31.4

26.1

21%

Other

76.5

73.0

5%

0.6

1.5

-55%

Total

1,872.6

1,601.5

17%

32.1

27.6

17%

Adjustment(81.5)(87.4)

7%

(6.6)

(4.7)

-41%

Consolidated

1,791.1

1,514.0

18%

25.5

22.9

11%

TopicsMain Factors(Net interest-bearing debt)(Equity capital)(Accumulated othercomprehensive income)(Minority interests)
BPS (yen)
Shareholders' equity
Shareholders' equity ratio

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

・ Oct. Acquired Japanlife Co.,Ltd., the manufacturer of metal hardware products for construction.
・ Nov. Launched the new steel processing center with Daming International holdings in China.
・ Mar. Joined Waterberg project, which the platinum group project is jointly owned by JOGMEC in South Africa.

Main Factors

rate(Total Assets)

year, due to the increase in trade payables and long and shortterm loans. As interest-bearing debt increased by 25%, net
debt-equity ratio was turned into 154%.

(Net assets)
Total net assets increased by 19% from the end of the previous
year, due to increase in minority interests of Japan South
Africa Chrome Co., Ltd. and the carryover of retained
earnings. Shareholders' equity ratio was 21.8%, which is a 2.7
percentage points lower than the end of the previous year.

Year-on-year
ChangeMain Factors

rate(19.7)

3.9(23.7)―(39.9)(18.4)(21.5)

-117%

66.4

15.4

50.9

330%

34.8

27.2

7.6

28%

(Operating cash flows)
Due to increase in trade receivables and inventories.
(Investment cash flows)
Due to purchase of investment securities and execution of long-term loan.

(Financial cash flows)
Due to increase of long and short-term debts and bonds payable【Changes in Net Sales】
1st half
1,511.8

2,000

723.5

1,000
500

(Steel business)
Recovery trend of steel demand has been kept. Better market price resulted
increased net sales due to high raw material prices and tightening
supply/demand. Better margins in period of rising prices pushed up the
profit.
(Metals & alloys business)
Net sales increased due to better market and sales expansion of ferro-alloyand stainless steel. In addition to the profit from sales, recovery of Showa
Metal's profit, which was a loss in the previous year, pushed up profit.
(Non-ferrous metals business)
Due to upturn in international commodity markets and increase in copper
sales amount, revenue increased. In addition, foreign exchange loss in theprevious year turned to foreign exchange gain.
(Foods business)
Rising price and strong sales due to reduction of overseas catch and low
inventories pushed up net sales. Segment profit margin was shrunken byhigher purchase costs.
(Petroleum & chemicals business)
Despite slow gain on petroleum products price, net sales decreased due toreduction of spot transactions. Segment income decreased, due to delay inpass-through of purchase cost increase and margin reduction of imported
plastic products.
(Overseas sales subsidiaries)
Revenue increased because of increased sales of bunker fuel in Singapore,
metal scrap in Thailand and Singapore, and steel products in Indonesia andUS.

Change(including 53.9 billion yen of securities of subsidiaries and affiliates

1,500

Net sales

Comparison with Mar. 2017

Mar. 2018

Financial Position

2nd half【Quarterly Operating Results】

1,791.1

2,000.0

1,514.0
954.1

798.4

788.2

715.6

836.9

FY2015FY2016FY2017500
400

Net sales
415.2
383.2

300
200

7.0

20

16.3

9.1

6.0

6.2

8.1

FY2015FY2016FY20170

Forecast(Annual)
Net sales

4Q

2017/1Q

2Q

3Q

Interest-bearing debt

2nd half

400

19.5

300

272.5

200

1.8

4Q

Net DER
325.5

237.5

259.6

1.4

1.4

1.5

FY2015FY2016FY2017100

FY20186
4【Changes in Interest-bearing Debt】

17.3

10.1

10

7.4

2
0
2016/3Q

FY2018

1st half

19.4

10
8

(forecast)【Changes in Net Income】
25.4

5.3

484.5

100
0

0

30

Operating income 469.5
428.6
408.3
7.3
6.1
5.2

2
1

0

(forecast)

FY20170
FY2014FY2018change3

Cash Dividends

FY2016FY2017FY2018(estimated)

2,000.0

1,791.1

12%

Interim (yen)

45.00

50.00

75.00

Operating income

31.0

26.2

18%

Year-end (yen)

50.00

75.00

75.00

Ordinary income

30.0

25.5

18%

Annual (yen)95.00

125.00150.00Net income

19.5

17.3

12%

Dividend payout ratio

24%

29%

31%

（Prior dividend reflected the five-to-one reverse stock split.)