Consolidated Quarterly Financial Results
for the Three Months Ended June 30, 2019 [Japanese GAAP]
August 9, 2019
Stock Exchange Listing: Tokyo
URL: http://www.hokuetsucorp.com

Company:
Hokuetsu Corporation
Stock Code:
3865
Representative: Sekio Kishimoto, President & CEO
Contact:
Tomonari Maruyama, General Manager, Accounting Department
Scheduled date of filing quarterly report:
August 13, 2019
Scheduled date of commencement of dividend payments:–Supplementary documents for quarterly results:
None
Quarterly results briefing:
NoneTEL: +81-3-3245-4500(Figures rounded down to the nearest million yen)

1. Consolidated Business Results for the Three Months Ended June 30, 2019
(April 1, 2019 through June 30, 2019)(1) Consolidated results of operations
Net sales
Three months ended
June 30, 2019
Three months ended
June 30, 2018
(Note) Comprehensive income:(% change from the previous corresponding period)
Profit attributable toOperating profit
Ordinary profit
owners of parent
Million yen%
Million yen%
Million yen%

Million yen%

71,560

4.7

5,935

114.0

6,828

27.1

4,891

31.2

68,3671.7

2,773(26.8)

5,370

13.5

3,727

(2.6)

Three months ended June 30, 2019: 4,103 million yen (808.2%)
Three months ended June 30, 2018:
451 million yen (-87.5%)
Diluted earnings
Basic earnings per shareper share
Yen
Yen

Three months ended
June 30, 2019
Three months ended
June 30, 2018

25.87

25.51

19.72

19.37

(2) Consolidated financial position

As of June 30, 2019
As of March 31, 2019
(Reference) Equity:

Total assets
Net assets
Equity ratio
Million yen
Million yen%
372,996
195,59052.2
368,082
192,861
52.2
As of June 30, 2019:
194,802 million yen
As of March 31, 2019:
192,104 million yen

2. Dividends
End of 1Q
Yen

Annual dividend per share
End of 2Q
End of 3Q
Yen
Yen

Fiscal year ended–
6.00
March 31, 2019
Fiscal year ending–
March 31, 2020
Fiscal year ending
6.00
March 31, 2020 (forecast)(Note) Revisions to dividend forecasts published most recently: None

Year-end

Total
Yen

Yen–

6.00

12.00

–

6.00

12.00

3. Forecast of Consolidated Financial Results for the Fiscal Year Ending March 31, 2020
(April 1, 2019 through March 31, 2020)(% change from the previous corresponding period)
Net sales

Operating profit

Million yen% Million yen%
2Q (Accumulated)
140,000
3.8
7,000
261.3
Full year
285,000
3.3
16,50062.9(Note) Revisions to business forecasts published most recently: None-1-Ordinary profit
Million yen
7,000
18,000%60.1
38.3

Basicearnings pershare%
Yen
68.7
23.80
25.6
60.83

Profit attributable toowners of parent
Million yen
4,500
11,500Notes(1) Changes in significant subsidiaries during the three months ended June 30, 2019 (changes in specified subsidiaries accompanying changes
in the scope of consolidation): None
(2) Application of accounting procedures specific to preparation of the consolidated quarterly financial statements: None
(3) Changes in accounting policies, accounting estimates and restatement of prior period financial statements(i) Changes in accounting policies due to amendment to accounting standards: Yes(ii) Changes in accounting policies other than (i): None(iii) Changes in accounting estimates: None(iv) Restatement of prior period financial statements: None
(4) Shares outstanding (common stock)(i) Number of shares outstanding (treasury stock included):
As of June 30, 2019
209,263,814 shares(ii) Number of treasury stock:
As of June 30, 201920,213,496 shares(iii) Average number of shares during period:
Three months ended June 30, 2019 189,050,357 shares

As of March 31, 2019

209,263,814 shares

As of March 31, 201920,213,382 shares

Three months ended June 30, 2018

188,976,247 shares* Consolidated Quarterly Financial Results are exempted from quarterly review performed by a certified public
accountant or an audit corporation.
* Explanation regarding appropriate use of business forecasts and other special instructions(Caution regarding forward-looking statements)
The forward-looking statements such as forecasts of financial results contained in this material are based on information available to theCompany at the time of the publication of this document and certain assumptions that the Company considers to be reasonable, and may differ
materially from the actual results due to various factors. Refer to “1. Qualitative Information on Consolidated Operating Results for the First
Quarter; (3) Qualitative Information Concerning Consolidated Earnings Forecasts” on page 3 of the accompanying materials for matters related
to results forecasts.

* This document is an excerpt translation of the original in Japanese and is for reference purposes only. In case ofany discrepancy between this document and the original in Japanese, the latter shall take precedence.

-2-1. Qualitative Information on Consolidated Operating Results for the First Quarter(1) Qualitative Information Concerning Consolidated Operating Results
During the current three months, net sales amounted to 71,560 million yen (up 4.7% year on year) and operating profit amounted to 5,935
million yen (up 114.0% year on year), due primarily to the price revision of paper in January 2019 and increased sales in overseas
subsidiaries. Ordinary profit rose to 6,828 million yen (up 27.1% year on year) and profit attributable to owners of parent came to 4,891
million yen (up 31.2% year on year).

(2) Qualitative Information Concerning Consolidated Financial Position
Total assets increased 4,913 million yen from the end of the previous fiscal year, to 372,996 million yen. This was attributable primarily
to a rise in notes and accounts receivable – trade of 2,753 million yen and a rise in property, plant and equipment of 1,835 million yen due
to a rise in right-of-use assets from the application of IFRS 16.
Total liabilities rose 2,185 million yen from the end of the previous fiscal year, to 177,405 million yen. This was attributable primarily toa rise in interest-bearing debt of 2,713 million yen due to a rise in lease liabilities from the application of IFRS 16, offsetting a decrease inprovisions of 1,294 million yen.
Net assets rose 2,728 million yen from the end of the previous fiscal year, to 195,590 million yen. This chiefly reflected an increase inretained earnings of 3,508 million yen, due mainly to profit attributable to owners of parent
available-for-sale securities of 1,388 million yen.

(3) Qualitative Information Concerning Consolidated Earnings Forecasts
The full-year consolidated earnings forecasts announced on May 17, 2019 remain unchanged.

-3-despite a decline in valuation difference on2. Consolidated Quarterly Financial Statements and Key Notes(1) Quarterly Consolidated Balance Sheet(Million yen)
(Assets)
Current assets
Cash and deposits
Notes and accounts receivable - trade
Electronically recorded monetary claims - operating
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, vehicles, tools, furniture and fixtures
Accumulated depreciation

As of March 31, 2019

As of June 30, 201915,202
67,7086,228
26,012
2,247
26,6796,075(55)

13,76470,462
6,420
27,3772,170
28,4146,790(55)

150,098

155,345

83,736(50,949)

84,273(51,527)

32,78732,746427,956(354,882)

430,160(358,276)

73,07471,883

Other, net

29,01832,085

Total property, plant and equipment

134,880

136,715

2,907

3,165

73,287
9,335(2,427)

71,598
8,597(2,426)

Machinery, vehicles, tools, furniture and fixtures, net

Intangible assets
Investments and other assets
Investments in securities
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets-4-80,19577,769217,983

217,650

368,082

372,996(Million yen)
(Liabilities)
Current liabilities
Notes and accounts payable - trade
Electronically recorded obligations - operating
Short-term borrowings
Commercial papers
Income taxes payable
Provision
Other

As of March 31, 2019

As of June 30, 2019

21,4096,632
25,655
10,5002,531
3,413
14,152

22,045
6,630
22,70913,500969
2,069
15,812

Total current liabilities

84,29383,736

Non-current liabilities
Bonds payable
Long-term borrowings
Provision
Retirement benefit liability
Asset retirement obligations
Other30,000
43,331
1,386
12,014
2,3761,818

30,00044,188
1,435
12,1362,430
3,478

Total non-current liabilities

90,926

93,669Total liabilities

175,220

177,405

Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares

42,02045,348105,599(9,933)42,02045,348109,107(9,933)

183,034

186,543

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans

8,876
(1)
(388)
583

7,487
(14)242543

Total accumulated other comprehensive income

9,070

8,259

104
651

112
675

192,861

195,590368,082

372,996

Total shareholders’ equity

Share acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets-5-(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income
Quarterly Consolidated Statements of Income(First three-month period)(Million yen)
For the three-month
ended June 30, 2018

For the three-month
ended June 30, 2019

Net sales
Cost of sales

68,36755,422

71,56055,138Gross profit

12,944

16,421

Selling, general and administrative expenses

10,171

10,486

Operating profit

2,773

5,935

Non-operating income
Interest income
Dividends income
Share of profit of entities accounted for using equity method
Foreign exchange gains
OthersTotal non-operating income

18494
491
1,227
736
2,967

21455
547
–
537
1,561

175–
195
370

172
305
189
668

5,370

6,828

Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment in securities
Gain on change in equity
Insurance claim income
Total extraordinary income1–1624
41

2088–
7115

Extraordinary losses
Loss on sales and retirement of non-current assets
Impairment loss
Loss on tax purpose reduction entry of non-current assets
Loss on valuation of investment securities

333
5
16–

302
––
17

Non-operating expenses
Interest expenses
Foreign exchange losses
OthersTotal non-operating expenses
Ordinary profit

354

320

Profit before income taxes

5,058

6,624

Income taxes - current
Income taxes - deferred

1,231
121

1,330
389

Total income taxes

1,353

1,719

Profit3,705

4,904(22)133,7274,891

Total extraordinary losses

Profit (loss) attributable to non-controlling interests
Profit attributable to owners of parent-6-

Quarterly Consolidated Statements of Comprehensive Income(First three-month period)(Million yen)

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities accounted forusing equity method

For the three-month
ended June 30, 2018

For the three-month
ended June 30, 2019

3,705

4,904

(182)
8(3,217)(31)(1,397)
7640
(27)

169

(23)

(3,253)(800)

Comprehensive income

451

4,103

Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

481
(29)

4,080
23

Total other comprehensive income-7-

(3) Notes to Quarterly Consolidated Financial Statements(Notes to Going Concern Assumption)
Not applicable.
(Notes on Any Significant Change in the Value of Shareholders’ Equity)
Not applicable.
(Changes in Accounting Policies)
Overseas consolidated subsidiaries that have adopted IFRS commenced the application of IFRS 16: Lease in the first quarter of the current
fiscal year. Therefore, the lessee shall recognize assets and liabilities for all leases in the balance sheet, in principle. In applying IFRS 16,
practical expedient is followed and the cumulative effect of initially applying IFRS 16 at the date of application is recognized as anadjustment to retained earnings at the beginning of the first quarter of the current fiscal year.
As a result, other, net in property, plant and equipment, other in current liabilities, and other in non-current liabilities at the end of the firstquarter of the current fiscal year rose 2,250 million yen, 209 million yen, and 1,597 million yen, respectively. Other in current assets, otherin investments and other assets declined 110 million yen and 632 million yen, respectively. The impact on income in the first quarter ofthe current fiscal year is immaterial. In addition, retained earnings at the beginning of the current fiscal year was decreased by 248 millionyen.

-8-