Consolidated Financial Results for the Three Months Ended June 30, 2022 [JGAAP]
Company Name:

August 10, 2022
Stock Exchange Listing: Tokyo

Kanto Denka Kogyo Co., Ltd.

Code Number: 4047 https://www.kantodenka.co.jp/english/
Representative: Jun’ichi Hasegawa, President
Contact: Masanobu Shirokura, General Manager, Legal & General Affairs
Dept.
Scheduled date for submitting the Quarterly Securities Report:
August 10, 2022
Availability of supplementary briefing material on financial results: None
Financial results briefing session: NonePhone: +81-3-4236-8801
Scheduled date to commence dividend payments:—

1. Consolidated financial results for the first quarter of the fiscal year ending March 31, 2023 (April 1, 2022–June 30, 2022)(Amounts are rounded down to the nearest million yen)

(1) Consolidated operating results(% figures are the rate of year-on-year increase or decrease)

Net sales

Operating profit

Millions of yen%

18,375
13,787

33.3
17.1

Three months ended June 30, 2022
Three months ended June 30, 2021

Millions of yen

Profit attributable toowners of parent

Ordinary profit%

Millions of yen

3,625 58.1
2,293 158.3%

Millions of yen%

4,221 76.3
2,393 166.1

2,931
1,690

73.5
452.2

(Note) Comprehensive income:Three months ended June 30, 2022: ¥3,707 million (121.8%)
Three months ended June 30, 2021: ¥1,671 million (179.0%)
Basic earnings per share
Three months ended June 30, 2022
Three months ended June 30, 2021

Diluted basic earnings per share
Yen

Yen

51.03
29.42

——

(2) Consolidated financial position
Total assets

Net assets

Equity ratio

Net assets per share

Millions of yen

Millions of yen%

Yen

112,960
109,90262,788
59,90854.1
53.0

1,063.62
1,014.01

As of June 30, 2022
As of March 31, 2022

(Reference) Equity capital:
As of June 30, 2022: ¥61,103 million
As of March 31, 2022: ¥58,254 million

2. Dividends
Annual dividends per share
End of 2Q
End of 3Q

End of 1Q
Yen

Yen

—
—

Fiscal year ended March 31, 2022
Fiscal year ending March 31, 2023

Fiscal year ending March 31, 2023
(Forecast)(Note) Revision of dividend forecast from the latest announcement: None

Year-end
Yen

Total
Yen

Yen

8.00

—14.00

22.00

10.00

—

12.0022.00

3. Forecast of consolidated financial results for the fiscal year ending March 31, 2023 (April 1, 2022–March 31, 2023)(% figures are the rate of year-on-year increase or decrease)

Net sales
Millions of yen

First half
Full year

Operating profit%

Millions of yen

Profit attributable toowners of parent

Ordinary profit%

37,70033.7
6,300 42.6
76,00022.0
10,900 –2.4(Note) Revision of performance forecast from the latest announcement: Yes

Basic earnings
per share

Millions of yen%

Millions of yen%

Yen

6,500
10,80048.3
–3.1

4,500
7,10048.4–8.5

78.33
123.59

Notes:(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes in scope of consolidation):
Not applicable
New: ― companies (company names); Removed: ― companies (company names)(2) Application of special accounting for preparing quarterly consolidated financial statements: Yes(3) Changes in accounting policies, changes in accounting estimates and retrospective restatementi. Changes in accounting policies accompanying amendments to accounting standards, etc.: Noneii. Changes in accounting policies other than i.: Noneiii. Changes in accounting estimates: Noneiv. Retrospective restatement: None
(4) Number of shares issued (common stock)i. Number of shares issued at the end of the period
As of June 30, 2022
57,546,050 shares As of March 31, 2022 57,546,050 shares(including treasury shares)
As of June 30, 2022
96,900 shares As of March 31, 2022
96,900 shares
ii. Number of treasury shares at the end of the periodiii. Average number of shares during the period
As of June 30, 2022
57,449,150 shares As of June 30, 2021
57,447,576 shares
Notes:- Summary of financial results are not subject to audit by a certified public accountant or an auditing firm.
- Proper use of performance forecasts, and other special matters(Notes to forward-looking statements)
The performance outlooks and other forward-looking statements in this document are based on information currently available to the Company and certain
assumptions that the Company deems reasonable, and are not intended to be a promise by the Company that they will be realized . Actual results may differ
significantly due to various factors. Please refer to "Consolidated earnings forecasts" on page 3 of the attached materials for information on the performance
forecasts.

Contents
1. Qualitative information on the first three months ended June 30, 2022 .................................................. 2(1) Operating results..........................................................................................................................2(2) Financial position ........................................................................................................................2(3) Consolidated earnings forecasts ...................................................................................................3
2. Consolidated financial statements and notes ......................................................................................... 4(1) Consolidated balance sheet ..........................................................................................................4(2) Consolidated statement of income and consolidated statement of comprehensive income ..............6(Consolidated statement of income) ...............................................................................................6(Consolidated statement of comprehensive income) .......................................................................7(3) Notes to the consolidated financial statements ..............................................................................8(Notes on premise of going concern) .............................................................................................8(Notes on significant changes in the amount of shareholders’ equity) .............................................8(Application of special accounting for preparing quarterly consolidated financial statements) .........8(Segment information) ..................................................................................................................81

1. Qualitative information on the first three months ended June 30, 2022
(1) Operating results
In the first quarter of the fiscal year ending March 31, 2023, while the Japanese economy showed signsof recovery due to effects of various government policies, severe conditions continued to prevail amid
factors such as rising raw material and fuel prices and distribution restrictions. Overseas, outlooks
remained uncertain due to the impact on economic activities from the resurgence of COVID-19
infections, as well as the need for caution amid downside risks from such factors as the prolonged
situation in Ukraine and fluctuations in financial and capital markets.
Amid this business environment, net sales for the first quarter of the fiscal year ending March 31,2023 amounted to ¥18,375 million, up ¥4,588 million or 33.3% year on year, due to significantly
higher sales in the Fine Chemicals Division supported by strong demand. For profits, ordinary profit
amounted to ¥4,221 million, up ¥1,827 million or 76.3%, mainly due to higher sales in the Fine
Chemicals Division despite increased raw material and fuel prices. Profit attributable to owners ofparent amounted to ¥2,931 million, up ¥1,241 million or 73.5%.
The following provides an overview for each segment.
a. Fundamental Chemicals Division
Sales of caustic soda and hydrochloric acid were up due to effects from price revisions, despite lowersales volumes.
For organic products, sales of trichloroethylene and perchloroethylene were up due to effects fromprice revisions, despite lower sales volumes.
As a result of the above, net sales in the Fundamental Chemicals Division amounted to ¥2,406million, up ¥311 million or 14.9% year on year. Operating profit amounted to ¥239 million, up ¥134
million or 127.3%.
b. Fine Chemicals Division
For fluorochemicals for semiconductors and liquid crystals, sales of nitrogen trifluoride were up due toeffects from price revisions. Sales of tungsten hexafluoride and hexafluoro-1,3-butadiene were up due
to higher sales volumes.
Sales of lithium hexafluorophosphate, a battery material, were up due to higher sales volumes andeffects from price revisions.
As a result of the above, net sales in the Fine Chemicals Division amounted to ¥14,627 million, up¥4,176 million or 40.0% year on year. Operating profit amounted to ¥2,994 million, up ¥1,050 million
or 54.1%.
c. Ferrochemicals Division
Sales of reprographic carriers, used in developers for copiers and printers, were up year on year due tohigher sales volumes. Sales of iron oxide were down due to lower sales of colorants.
As a result of the above, net sales in the Ferrochemicals Division amounted to ¥705 million, up ¥88million or 14.4% year on year. Operating profit amounted to ¥189 million, up ¥78 million or 69.9%.
d. Commercial Business Division
Commercial business sales were down due to lower sales of chemical products.
As a result of the above, net sales in the Commercial Business Division amounted to ¥165 million,down ¥20 million or 10.9% year on year. Operating profit amounted to ¥53 million, down ¥3 million
or 6.1%.
e. Facilities Division
Net sales in chemical facility plant and general industrial plant construction were up year on year due
to an increase in contract work.
As a result of the above, net sales in the Facilities Division amounted to ¥470 million, up ¥30
million or 7.0%. Operating profit amounted to ¥149 million, up ¥98 million or 191.2%.
(2) Financial position
As of the end of the first quarter of the fiscal year ending March 31, 2023, assets amounted to ¥112,960
million, up ¥3,058 million from the end of the previous consolidated fiscal year, mainly due toincreases in inventories, property, plant and equipment, notes and accounts receivable—trade, andcontract assets, despite a decrease in cash and deposits.
2

Liabilities amounted to ¥50,171 million, up ¥178 million, mainly due to increases in notes andaccounts payable—trade and other current liabilities, despite decreases in income taxes payable andborrowings.
Net assets amounted to ¥62,788 million, up ¥2,879 million, mainly due to increases in retained
earnings and foreign currency translation adjustments. The equity ratio was 54.1%, versus 53.0% at theend of the previous fiscal year.

(3) Consolidated earnings forecasts
The consolidated earnings forecast for the first half of the fiscal year ending March 31, 2023 has beenrevised from the previous forecast announced on May 13, 2022. For details, please refer to the “Noticeof Revision of Earnings Forecasts” (in Japanese only) released separately.
The above forecasts were created based on information available as of the date of this document's
publishing, and actual results may differ versus forecast figures due to a variety of factors arising in thefuture.

3

2． Consolidated financial statements and notes(1) Consolidated balance sheet(Millions of yen)
As of March
31, 2022
Assets:Current assets
Cash and deposits
Notes and accounts receivable—trade, and contract
assetsElectronically recorded monetary claims—operating
Merchandise and finished goods
Work in process
Raw materials and supplies

As of June30, 2022

26,72816,921

21,697
18,255

1,101
5,182
4,416
3,526

1,134
5,538
6,741
4,792

Other
Allowance for doubtful accounts
Total current assets

3,896
(68)
61,705

4,116(65)
62,211

Non-current assets
Property, plant and equipment
Buildings and structures, net
Machinery and equipment, net
Construction in progress
Other, net
Total property, plant and equipment

8,872
11,655
11,001
6,692
38,221

8,843
11,29813,8697,003
41,015

728

802

7,464
1,165
621
(4)
9,246
48,196109,902

7,114
1,197
621
(3)
8,930
50,748112,960

Intangible assets
Investments and other assets
Investment securities
Deferred tax assets
OtherAllowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

4

(Millions of yen)
As of March
31, 2022
Liabilities:
Current liabilities
Notes and accounts payable—trade
Electronically recorded obligations—operating
Short-term borrowings
Current portion of long-term borrowings
Income taxes payable
Provision for bonuses for directors (and other officers)
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Provision for retirement benefits for directors (and other officers)
Provision for share awards for directors (and other officers)
Retirement benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets:
Shareholders' equity
CapitalCapital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustmentRemeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

5

As of June30, 2022

8,068
835
4,200
5,886
2,600
134
5,540
27,265

9,369
910
4,230
6,289
1,305
51
6,956
29,112

20,166
137
11
1,754
657
22,72749,993

18,572
140
13
1,545
788
21,05850,171

2,877
1,829
50,483(68)
55,122

2,877
1,830
52,609(68)
57,248

2,527
413
191
3,132
1,654
59,908109,902

2,311
1,194
349
3,855
1,684
62,788112,960

(2) Consolidated statement of income and consolidated statement of comprehensive incomeConsolidated statement of income(Millions of yen)
From April 1, 2021
to June 30, 2021

From April 1, 2022
to June 30, 2022

Net sales
Cost of sales
Gross profit

13,787
9,506
4,281

18,375
12,461
5,914

Selling, general and administrative expenses
Operating profit

1,988
2,293

2,288
3,625

1
114
1792
225

3
143
528
118
793

63

89

21
33
6
125

104
—
4197

2,393

4,221

4

31

—
42,389
657
1,731
41
1,690

17
48
4,172
1,177
2,994632,931

Non-operating profit
Interest income
Dividend income
Foreign exchange gains
Other
Total non-operating profit
Non-operating expenses
Interest expenses
Loss on valuation of derivatives
Loss on sale of trial products
Other
Total non-operating expenses
Ordinary profit
Extraordinary losses
Loss on retirement of non-current assets
Loss on valuation of investment securities
Total extraordinary losses
Profit before income taxes
Income taxes payable
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent6Consolidated Statement of Comprehensive Income(Millions of yen)
From April 1, 2021
to June 30, 2021
ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:
Owners of parent
Non-controlling interests

7

From April 1, 2022
to June 30, 2022

1,731

2,994

(387)
328
(0)
(60)

(251)
805
157
712

1,671

3,707

1,627
43

3,65452

(3) Notes to the consolidated financial statements(Notes on premise of going concern)
Not applicable.
(Notes on significant changes in the amount of shareholders’ equity)
Not applicable.
(Application of special accounting for preparing quarterly consolidated financial statements)
Tax expenses are calculated by multiplying profit before income taxes by the reasonably estimated effective tax rate after the application oftax effect accounting to profit before income taxes for the for the fiscal year ending March 31, 2023, including the first quarter. However,in cases where calculating tax expenses using the estimated effective tax rate would significantly lack rationality, tax expenses arecalculated using the statutory effective tax rate.

(Segment information)
I. From April 1, 2021 to June 30, 2021
1. Information on net sales, profit or loss by reportable segment(Millions of yen)
Reportable segment
Fundamental
Chemicals

Fine
Chemicals(1) Net sales to externalcustomers

2,095(2) Inter-segment netsales or transfers

Adjustment(Note 1)

Amount recorded on
the statement ofincome (Note 2)

13,787—

13,787576

906(906)

—

515

1,015

14,693(906)

13,787

56

51

2,269

24

2,293Ferrochemicals

Commercial
Business

Facilities

10,450616

185

439——

0329

Total

2,095

10,450616

Segment profit

105

1,943

111

Total

Net sales(Notes) 1. The segment profit adjustment of ¥24 million is elimination of inter-segment transactions.
2. Segment profit is adjusted with operating profit in the consolidated statement of income.
2. Information about impairment loss and goodwill on non-current assets by reportable segment
Not applicable.
II. From April 1, 2022 to June 30, 2022
1. Information on net sales, profit or loss by reportable segment(Millions of yen)Reportable segment
Fundamental
Chemicals

Fine
Chemicals(1) Net sales to externalcustomers

2,406(2) Inter-segment net
sales or transfers

Adjustment(Note 1)

Amount recorded on
the statement ofincome (Note 2)

18,375—

18,375823

1,139(1,139)

—

481

1,294

19,515(1,139)18,375

53

149

3,627

(2)

3,625

Ferrochemicals

CommercialBusiness

Facilities

14,627

705

165

470

—

—

0315

Total

2,406

14,627705

Segment profit

239

2,994

189

Total

Net sales(Notes) 1. The segment profit adjustment of -¥2 million is elimination of inter-segment transactions.
2. Segment profit is adjusted with operating profit in the consolidated statement of income.
2. Information about impairment loss and goodwill on non-current assets by reportable segment
Not applicable.

8