Consolidated Financial Results for the Six Months Ended September 30, 2023 [JGAAP]
Company Name:

November 10, 2023
Stock Exchange Listing: TokyoKanto Denka Kogyo Co., Ltd.

Code Number: 4047 URL: https://www.kantodenka.co.jp/english/
Representative:
Jun’ichi Hasegawa, President
Contact: Masanobu Shirokura, General Manager, Public Relations & Investor Relations Dept.
Scheduled date for submitting the Quarterly Securities Report: November 10, 2023
Scheduled date to commence dividend payments: December 7, 2023
Availability of supplementary briefing material on financial results: Yes
Financial results briefing session: Yes (For institutional investors and analysts)

Phone: +81-3-4236-8804

1. Consolidated financial results for the first half of the fiscal year ending March 31, 2024 (April 1, 2023–September 30, 2023)(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%

Millions of yen%Six months ended September 30, 2023
34,840–6.6
Six months ended September 30, 202237,307
32.3(Note) Comprehensive income:Six months ended September 30, 2023: ¥2,077 million (–68.5%)
Six months ended September 30, 2022: ¥6,592 million (80.7%)

–428
6,581

—
48.9

Basic earnings per share

Millions of yen

Total assets

Millions of yen%

257
5,192

–95.0
71.2

Yen

4.48
90.38

(2) Consolidated financial position%

137 –98.1
7,346 67.6

Diluted basic earnings per share

Yen

Six months ended September 30, 2023
Six months ended September 30, 2022

Profit attributable toowners of parent

Ordinary profit——Net assets

Equity ratio

Net assets per share

Millions of yen

Millions of yen%

Yen

124,468
As of September 30, 2023
130,762
As of March 31, 2023
(Reference) Equity capital:
As of September 30, 2023: ¥68,060 million
As of March 31, 2023: ¥67,480 million

69,502
68,77454.7
51.6

1,184.63
1,174.54

2. Dividends
Annual dividends per share
End of 1Q

End of 2Q
Yen

End of 3Q
Yen—
Fiscal year ended March 31, 2023—
Fiscal year ending March 31, 2024
Fiscal year ending March 31, 2024
(Forecast)(Note) Revision of dividend forecast from the latest announcement: NoneYear-end
Yen

10.00
7.00

TotalYenYen

—

23.00

33.00

—

7.00

14.00

3. Forecast of consolidated financial results for the fiscal year ending March 31, 2024 (April 1, 2023–March 31, 2024)(% figures are the rate of year-on-year increase or decrease)

Net sales
Full year

Operating profit

Profit attributable toowners of parent

Ordinary profit

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

63,800–18.9–2,000—–1,600—–1,600—(Note) Revision of performance forecast from the latest announcement: None

Basicearnings pershareYen–27.85

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.: None
ii. 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(including treasury shares)
ii. Number of treasury shares at the end of the periodiii. Average number of shares during the period

As of September 30, 2023 57,546,050 shares As of March 31, 2023

57,546,050 shares

93,137 shares As of March 31, 2023

93,137 shares

As of September 30, 2023

As of September 30, 2023 57,452,913 shares As of September 30, 2022 57,450,059 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 andcertain 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.
(How to obtain supplementary financial results briefing materials)
The Company plans to hold a financial results briefing for institutional investors and securities analysts on Wednesday, November 22, 2023.
Supplementary financial results briefing materials to be used at this briefing will be posted on the Company's website after the session.

Contents
1. Qualitative information on the first six months ended September 30, 2023 .............................................. 2(1) Operating results................................................................................................................................. 2(2) Financial position ............................................................................................................................... 3(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(Special accounting for preparing quarterly consolidated financial statements) ................................. 8(Segment information)......................................................................................................................... 911. Qualitative information on the first six months ended September 30, 2023
(1) Operating results
In the first half of the fiscal year ending March 31, 2024, the Japanese economy showed signs of a gradual
recovery due to the positive effects of various government policies under an improving employment andincome environment. However, severe conditions continued to prevail. Overseas, the outlook remained
uncertain due to the need for caution amid downside risks from such fluctuations in financial and capital
markets due to factors as continued global monetary tightening and concerns over the outlook for theChinese economy.
Amid this business environment, net sales for the first half of the fiscal year ending March 31, 2024
amounted to ¥34,840 million, down ¥2,466 million or 6.6% year on year, mainly due to the substantial
decline in demand in the Fine Chemicals Division, despite the Group’s active efforts in marketing. On theprofit front, the Group recorded ordinary profit of ¥137 million, down ¥7,208 million or 98.1% year onyear. This decrease was mainly due to the cost of sales remaining at a high level due to an inventory
balance affected by the surge in the price of raw materials for batteries and a loss on valuation ofinventories to reflect the deterioration in selling prices since the end of the previous period, in addition tothe decrease in net sales. Profit attributable to owners of parent amounted to ¥257 million, down ¥4,934
million or 95.0% year on year.
The following provides an overview for each segment.
a. Fundamental Chemicals Division
For inorganic products, sales of caustic soda were up year on year due to effects from price revisions,despite lower sales volume. Hydrochloric acid sales volume was down and sales decreased year on year.
For organic products, a decline in trichloroethylene and perchloroethylene sales volumes causedsales to decline year on year.
As a result of the above, net sales in the Fundamental Chemicals Division amounted to ¥4,393
million, up ¥263 million or 6.4% year on year. An operating loss of ¥3 million (versus an operating
profit of ¥84 million in the first half of the previous fiscal year) resulted mainly from the increase in
fixed costs related to inventories.
b. Fine Chemicals Division
For fluorochemicals for semiconductors, sales decreased due to a decline in sales volume for nitrogen
trifluoride and tungsten hexafluoride, and a decline in sales volume and decrease in selling price forhexafluoro-1,3-butadiene.
Sales of lithium hexafluorophosphate, a battery material, were down due to a decrease in sales
volume and decrease in selling price.
As a result of the above, net sales in the Fine Chemicals Division amounted to ¥28,203 million,down ¥2,107 million or 7.0% year on year. An operating loss of ¥887 million was recorded (comparedto operating profit of ¥6,007 million in the first half of the previous fiscal year). The loss was mainly
due to the persistent high cost of sales for battery materials and recognition of a loss on valuation ofinventories, in addition to the decline in net sales.
c. Ferrochemicals Division
Sales of reprographic carriers, used in developers for copiers and printers, were down year on year due
to lower sales volumes. Sales of iron oxide were down year on year due to lower sales of colorants.
As a result of the above, net sales in the Ferrochemicals Division amounted to ¥845 million, down
¥600 million or 41.5% year on year. Operating profit amounted to ¥60 million, down ¥337 million or
84.8% year on year.
d. Commercial Business Division
Commercial business sales were down year on year due to lower sales of chemical products.
As a result of the above, net sales in the Commercial Business Division amounted to ¥317 million,down ¥38 million or 10.9% year on year. Operating profit amounted to ¥115 million, up ¥24 million or
27.0% year on year.
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 ¥1,080 million, up ¥16million or 1.6% year on year. Operating profit amounted to ¥362 million, down ¥22 million or 5.9%year on year.
2(2) Financial position
As of the end of the first half of the fiscal year ending March 31, 2024, total assets amounted to ¥124,468
million, down ¥6,294 million from the end of the previous consolidated fiscal year, mainly due todecreases in notes and accounts receivable—trade, contract assets, and inventories, which exceeded theincrease in property, plant and equipment.
Total liabilities amounted to ¥54,966 million, down ¥7,021 million, mainly due to decreases inborrowings and income taxes payable.
Net assets amounted to ¥69,502 million, up ¥727 million, mainly due to increases in the foreign
currency translation adjustment and the valuation difference on available-for-sale securities, which
exceeded the decrease in retained earnings. The equity ratio was 54.7%, versus 51.6% at the end of theprevious fiscal year.
(3) Consolidated earnings forecasts
The consolidated earnings forecast for the full fiscal year ending March 31, 2024 remains unchanged fromthe previous forecast announced on October 25, 2023.
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, 2023

As of September 30, 2023

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
Other
Allowance for doubtful accounts
Total current assets
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
Intangible assets
Investments and other assets
Investment securities
Retirement benefit assets
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

422,355

21,495

20,56016,132

1,130

1,269

7,055

8,646

9,332
7,516

7,121
5,265

5,030

3,206

(62)

(49)

72,91963,087

10,93019,291

10,973
18,573

10,512
6,669

13,9706,630

47,40450,148

676

676

7,399
14
1,404
950

8,380
22
1,244
915

(7)
9,762

(7)
10,55557,842
130,762

61,380124,468(Millions of yen)
As of March 31, 2023

As of September 30, 2023

Liabilities:
Current liabilities
Notes and accounts payable—trade

9,620

8,586

Electronically recorded obligations—operating
Short-term borrowings

1,022
4,516

1,480
4,640

Current portion of long-term borrowings
Income taxes payable

6,914
2,701

8,009
290

134

—

Provision for bonuses for directors (and otherofficers)
Other

8,769

7,974

Total current liabilities

33,68030,980Non-current liabilities
Long-term borrowings

25,591

21,202

143

142

18

25

1,805

1,859

Provision for retirement benefits for directors (andother officers)
Provision for share awards for directors (and otherofficers)
Retirement benefit liability
Other

748

756

28,30823,98561,98854,966

CapitalCapital surplus

2,877
1,859

2,877
1,859Retained earnings
Treasury shares

58,486(65)

57,420(65)Total shareholders' equity

63,15762,091

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

2,512
1,534
275

3,314
2,386
267

Total accumulated other comprehensive income

4,323

5,968

Total non-current liabilities
Total liabilities
Net assets:
Shareholders' equity

Non-controlling interests

1,293

1,441

Total net assets
Total liabilities and net assets

68,77469,502

130,762124,468

5

(2) Consolidated statement of income and consolidated statement of comprehensive income
Consolidated statement of income(Millions of yen)
From April 1, 2022
to September 30, 2022

From April 1, 2023
to September 30, 2023

Net sales
Cost of sales

37,30726,047

34,84030,709Gross profit
Selling, general and administrative expenses

11,259
4,678

4,131
4,560

Operating profit (loss)

6,581

(428)

Non-operating profit
Interest income

631

Dividend income
Foreign exchange gains

145
720

152749Gain on sale of trial products

111—12397

Total non-operating profit

1,107

1,030

Non-operating expenses
Interest expenses
Loss on valuation of derivatives

184116249

Other118

Loss on sale of trial products

—

71

Other

41

25

342

463

7,346

137

—

449—

449

130
15118
—

146

118

Profit before income taxes

7,199

468

Income taxes payable
Profit

1,987
5,211

106
362

Profit attributable to non-controlling interests
Profit attributable to owners of parent

19
5,192

104
257

Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of investment securities
Total extraordinary income
Extraordinary lossesLoss on retirement of non-current assets
Loss on valuation of investment securities
Total extraordinary losses

6Consolidated Statement of Comprehensive Income(Millions of yen)
From April 1, 2022
to September 30, 2022

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total other comprehensive income

From April 1, 2023
to September 30, 2023

5,211

362

(386)
1,610

866
856

155(8)

1,380

1,715

Comprehensive income

6,592

2,077

Comprehensive income attributable to:
Owners of parent
Non-controlling interests

6,579

1,902

12174

7

(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.
(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 fiscal year ending March 31, 2024, including the first half. However, in cases
where calculating tax expenses using the estimated effective tax rate would significantly lack rationality, tax expenses are calculated using
the statutory effective tax rate.

8(Segment information)
I. From April 1, 2022 to September 30, 2022
1. Information on net sales, profit or loss by reportable segment
Reportable segment(Millions of yen)Amountrecorded onAdjustment(Note 1) the statementof income(Note 2)Fundamental
Chemicals

Fine
Chemicals

Ferrochemicals

CommercialBusinessFacilities(1) Net sales to externalcustomers

4,130

30,310

1,446

356

1,063

37,307—37,307(2) Inter-segment net sales
or transfers

—

—

0650

1,851

2,502(2,502)

—

Total

4,130

30,310

1,446

1,006

2,915

39,809(2,502)37,307

Segment profit

84

6,007

398

90

384

6,966(385)

6,581

Total

Net sales(Notes) 1. The segment loss adjustment of –¥385 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, 2023 to September 30, 2023
1. Information on net sales, profit or loss by reportable segment
Reportable segment(Millions of yen)Amountrecorded
Adjustment
on the(Note 1)
statementof income(Note 2)Fundamental
Chemicals

Fine
Chemicals

Ferrochemicals

Commercial
Business

Facilities(1) Net sales to externalcustomers

4,393

28,203

845

317

1,080

34,840—34,840(2) Inter-segment net sales
or transfers

——

0847

2,056

2,904

(2,904)

—

Total

4,393

28,203845

1,165

3,13737,745(2,904)

34,840

(3)

(887)

60

115

362(352)

(76)

(428)

Total

Net sales

Segment profit (loss)(Notes) 1. The segment loss adjustment of –¥76 million is elimination of inter-segment transactions.
2. Segment profit (loss) is adjusted with operating loss in the consolidated statement of income.
2. Information about impairment loss and goodwill on non-current assets by reportable segment
Not applicable.

9