Consolidated Quarterly Financial Results
for the Six Months Ended September 30, 2017 [Japanese GAAP]
November 13, 2017
Company:
Stock Exchange Listing: Tokyo
Hokuetsu Kishu Paper Co., Ltd.
Stock Code:3865
URL: http://www.hokuetsu-kishu.jp
Representative: Sekio Kishimoto, President & CEO
Contact:
Tomonari Maruyama, General Manager, Accounting Department
TEL: +81-3-3245-4500
Scheduled date of submission of quarterly report:
November 14, 2017
Scheduled date of commencement of dividend payments:
December 4, 2017
Supplementary documents for quarterly results:
Yes
Quarterly results briefing:
Yes (for institutional investors and analysts)(Figures rounded down to the nearest million yen)

1. Consolidated Business Results for the Six Months Ended September 30, 2017
(April 1, 2017 through September 30, 2017)(1) Consolidated results of operations
Net sales

Six months ended
September 30, 2017
Six months ended
September 30, 2016
(Note) Comprehensive income:(% change from the previous corresponding period)
Net income attributable
Operating income
Ordinary income
to owners of parentcompany
Million yen%
Million yen%
Million yen%

Million yen%

132,445

0.1

4,562

(26.3)

6,945

61.3

5,362

63.6

132,319

12.8

6,187

77.0

4,306

14.0

3,277

44.9

Six months ended September 30, 2017: 6,489 million yen (261.2%)
Six months ended September 30, 2016: 1,796 million yen (-9.5%)
Diluted earnings
Basic earnings per shareper share
Yen
Yen

Six months ended
September 30, 2017
Six months ended
September 30, 2016

28.41

27.74

17.40

16.71

(2) Consolidated financial position

As of September 30, 2017
As of March 31, 2017
(Reference) Equity:

Total assets
Net assets
Equity ratio
Million yen
Million yen%
366,229
186,64250.8
362,205
181,034
49.8
As of September 30, 2017:
185,911 million yen
As of March 31, 2017:180,294 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, 2017
Fiscal year ending–
6.00
March 31, 2018
Fiscal year ending
March 31, 2018 (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, 2018
(April 1, 2017 through March 31, 2018)(% change from the previous corresponding period)
Net sales

Operating income

Million yen% Million yen%
Full year
275,000
4.812,000(7.0)(Note) Revisions to business forecasts published most recently: Yes-1-

Net income attributableBasic
to owners of parent earnings percompany
share% Million yen%
Yen
13.8
11,0006.0
58.25

Ordinary income
Million yen
16,000* Notes(1) Changes in significant subsidiaries during the six months ended September 30, 2017 (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 revision of accounting standards: None(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 at the end of period (treasury stock included):
As of September 30, 2017
209,263,814 shares
As of March 31, 2017(ii) Number of treasury stock at the end of period:
As of September 30, 2017
20,294,643 shares
As of March 31, 2017(iii) Average number of shares during period:
Six months ended September 30, 2017 188,734,297 shares
Six months ended September 30, 2016

209,263,814 shares
20,794,944 shares
188,425,994 shares* The quarterly business result report is exempt from the quarterly review procedure based on the FinancialInstruments and Exchange Act.
* Explanation regarding appropriate use of business forecasts and other special instructions
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, etc. for theFirst Half; (3) Qualitative Information Concerning Consolidated Earnings Forecasts” on page 3 of the accompanying materials for mattersrelated 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.

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1. Qualitative Information on Consolidated Operating Results, etc. for the First Half
(1) Qualitative Information Concerning Consolidated Operating Results
During the six months under review, net sales rose, but operating income declined, due primarily to rising raw material and fuel prices.
Ordinary income and net income attributable to owners of parent company increased, chiefly reflecting an improvement in foreignexchange losses and gains. Net sales amounted to 132,445 million yen (up 0.1% year on year) and operating income declined to 4,562
million yen (down 26.3% year on year). Ordinary income rose to 6,945 million yen (up 61.3% year on year). Net income attributable toowners of parent company came to 5,362 million yen (up 63.6% year on year).

(2) Qualitative Information Concerning Consolidated Financial Position
Total assets increased 4,024 million yen from the end of the previous fiscal year, to 366,229 million yen. Major factors included increases
in cash and deposits of 4,882 million yen and investment securities of 3,254 million yen, chiefly reflecting rising share prices, as well asa fall in property, plant and equipment of 2,982 million yen due mainly to depreciation.
Total liabilities declined 1,583 million yen from the end of the previous fiscal year, to 179,587 million yen. This was attributable mainly
to a decrease in interest-bearing debt of 1,782 million yen.
Net assets rose 5,607 million yen from the end of the previous fiscal year, to 186,642 million yen, chiefly reflecting an increase in retained
earnings of 4,231 million yen due mainly to net income attributable to owners of parent company.

(3) Qualitative Information Concerning Consolidated Earnings Forecasts
The full-year consolidated earnings forecasts for the fiscal year ending March 31, 2018 announced on May 12, 2017 are revised based on
the results in the first half of the fiscal year under review and the outlook for results in the second half. The net sales forecast is revised to275,000 million yen.
The earnings forecasts are based on information that the Company has obtained and certain assumptions that the Company believes
reasonable. Actual results may differ significantly from the forecasts due to a variety of reasons.

-3-2. Consolidated Quarterly Financial Statements and Key Notes(1) Quarterly Consolidated Balance Sheet(Million yen)
As of March 31, 2017
(Assets)
Current assets
Cash and deposits
Notes and accounts receivable - trade
Electronically recorded monetary claims
Merchandise and finished goods
Work in processRaw 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
Machinery, vehicles, tools, furniture and fixtures, net

As of September 30, 201719,49464,1503,858
20,5101,976
22,402
7,254(48)

24,37660,596
4,797
21,196
2,034
23,2587,228(47)

139,598

143,441

80,360(47,394)

80,888(48,239)

32,96632,648

410,774(328,827)

413,851(334,281)

81,946

79,569Other, net

29,46829,181

Total property, plant and equipment

144,381

141,398

3,172

3,048

68,906
8,606(2,460)72,161
8,638(2,458)Intangible assets
Investments and other assets
Investments in securities
OtherAllowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets-4-75,052

78,341

222,606

222,788362,205366,229

(Million yen)
As of March 31, 2017
(Liabilities)
Current liabilities
Notes and accounts payable - trade
Electronically recorded obligations
Short-term loans payable
Commercial papers
Income taxes payable
Provision
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term debt, less current maturities
Provision
Liability for defined benefit
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Unrealized holding gains on available-for-sale securities, netof taxesUnrealized losses on hedging derivatives, net of taxes
Foreign currency translation adjustment
Accumulated adjustments for retirement benefit, net of taxes
Total accumulated other comprehensive income
Share subscription rights
Non-controlling interests
Total net assets
Total liabilities and net assets-5-

As of September 30, 201720,1497,737
26,823
11,0001,334
3,109
13,40919,147
7,587
23,613
12,500965
3,063
14,30583,564

81,18330,00048,540840
13,6562,056
2,511

30,00048,609819
13,792
2,100
3,083

97,60598,403

181,170

179,58742,020
45,39690,75242,02045,537
94,983(9,956)

168,010(10,160)

172,584

10,534

12,453

(56)
1,595
210

(6)
694
184

12,284

13,326

140
600

139
591

181,034

186,642362,205366,229

(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income
Quarterly Consolidated Statements of Income(First six-month period)(Million yen)
For the six-month ended
September 30, 2016

For the six-month ended
September 30, 2017

Net sales
Cost of sales

132,319
105,915

132,445
107,449

Gross profit

26,40324,995Selling, general and administrative expenses

20,216

20,433Operating income

6,187

4,562

Non-operating income
Interest income
Dividends income
Equity in income of affiliates
Foreign currency exchange gains
Other
Total non-operating income

32
532
990
–
654
2,209

33
664
956
718
646
3,019

325
2,989

323
–

402

–

373
4,091

311
635

4,306

6,945

100–
–
11228
46
29
20
325

1,081–
–
2

1,100
34
54
–

Non-operating expenses
Interest expenses
Foreign currency exchange losses
Costs in relation to suspending the operation of production
equipment
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of property, plant and equipment
Gain on sales of investment in securities
Gain on liquidation of associates
Insurance income
Total extraordinary income
Extraordinary losses
Loss on sales or disposal of property, plant and equipment
Loss on reduction of property, plant and equipment
Loss on sales of shares of associates
Other
Total extraordinary losses

1,083

1,189

Income before income taxes

3,233

6,081

Income taxes - current
Income taxes - deferred

632
(640)

821
(191)

(7)630

3,241

5,451

Total income taxes
Net income
Net income (loss) attributable to non-controlling interests
Net income attributable to owners of parent company-6-(36)

88

3,277

5,362

Quarterly Consolidated Statements of Comprehensive Income(First six-month period)(Million yen)
For the six-month ended
September 30, 2016
Net income
Other comprehensive income
Unrealized holding gains (loss) on available-for-sale securities,
net of taxes
Unrealized gains (loss) on hedging derivatives, net of taxes
Foreign currency translation adjustment
Adjustments for retirement benefit, net of taxes
Share of other comprehensive income of associates accounted
for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to owners of parentcompany
Comprehensive income attributable to non-controlling interests-7-

For the six-month ended
September 30, 2017

3,241

5,451

325

1,224

171
(2,013)(92)

44(903)
(37)

163

711

(1,444)

1,038

1,796

6,489

1,925

6,404

(128)

85

(3) Quarterly Consolidated Statement of Cash Flows(Million yen)
For the six-month ended
September 30, 2016

For the six-month endedSeptember 30, 2017

3,233
9,778
74–
(236)
(564)
325
(990)
–

6,081
9,523
63(20)
2(698)
323
(956)
34

1,070

872

1,975
2,762
95
(2,084)
90
1,309

2,636
(1,650)(15)(1,113)
(655)
(281)

Subtotal

16,83814,144

Interest and dividend income received
Interest paid
Income taxes paid

1,508
(319)
(1,687)884(321)(1,528)Net cash provided by (used in) operating activities

16,34013,179(78)(6,017)117(7)78(524)(26)(4,936)291(57)
11(450)(6,430)(5,169)(3,801)(7,000)412(2,932)
10,000(1,136)
(71)
(0)
(345)

1,733
1,500
3,441
(8,278)–(1,136)
(93)
(1)
(171)

Net cash provided by (used in) financing activities(4,876)(3,006)

Translation (loss) gain on cash and cash equivalents(1,381)19

Net increase (decrease) in cash and cash equivalents

3,651

5,022

Cash and cash equivalents at beginning of period

18,89019,284

Cash and cash equivalents at end of period

22,542

24,307

Cash flows from operating activities
Income before income taxes
Depreciation
Amortization of goodwill
Insurance income
Increase (decrease) in net defined benefit liability
Interest and dividend income
Interest expenses
Equity in (income) losses of affiliates
Loss on reduction of property, plant and equipment
Loss (gain) on sales or disposal of property, plant andequipment
Decrease (increase) in notes and accounts receivable - trade
Decrease (increase) in inventories
Decrease (increase) in consumption taxes refund receivable
Increase (decrease) in notes and accounts payable - trade
Increase (decrease) in accrued consumption taxes
Other

Cash flows from investing activities
Payments for purchases of investment in securities
Payments for purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Payments of loans receivableCollection of loans receivable
OtherNet cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans
Net increase (decrease) in commercial papers
Proceeds from long-term loans
Repayments of long-term loans
Proceeds from issuance of bonds
Dividends paid
Dividends paid to non-controlling interests
Payments for purchases of treasury stock
Other-8-

(4) 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.

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