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

November 11, 2022
Stock Exchange Listing: TokyoKanto 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
Phone: +81-3-4236-8801
Dept.
Scheduled date for submitting the Quarterly Securities Report:
Scheduled date to commence dividend payments:
November 11, 2022
December 7, 2022
Availability of supplementary briefing material on financial results: Yes
Financial results briefing session: Yes (For institutional investors and analysts)

1. Consolidated financial results for the first half of the fiscal year ending March 31, 2023 (April 1, 2022–September 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%

37,30728,20232.3
15.6

Six months ended September 30, 2022
Six months ended September 30, 2021

Millions of yen

Profit attributable toowners of parent

Ordinary profit%

Millions of yen

6,581 48.9
4,418 139.1%

Millions of yen%

7,346 67.6
4,383 154.3

5,192
3,033

71.2
269.1

(Note) Comprehensive income:Six months ended September 30, 2022: ¥6,592 million (80.7%)
Six months ended September 30, 2021: ¥3,647 million (150.2%)
Basic earnings per share
Six months ended September 30, 2022
Six months ended September 30, 2021

Diluted basic earnings per share
Yen

Yen

90.38
52.80

——(2) Consolidated financial position
Total assets

Net assetsEquity ratio

Net assets per share

Millions of yen

Millions of yen%

Yen

114,981
As of September 30, 2022
109,902
As of March 31, 2022
(Reference) Equity capital:
As of September 30, 2022: ¥64,031 million
As of March 31, 2022: ¥58,254 million

65,67659,90855.7
53.0

1,114.50
1,014.01

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

8.00

Year-endYen

TotalYen

Yen—

14.00

22.00

—

22.00

32.00

10.00

Fiscal year ending March 31, 2023
(Forecast)(Note) Revision of dividend forecast from the latest announcement: Yes

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

Operating profit%

Millions of yen

Profit attributable toowners of parent

Ordinary profit%

Full year
82,30032.1
12,300 10.2
(Note) Revision of performance forecast from the latest announcement: Yes

Basic earnings
per share

Millions of yen%

Millions of yen%

Yen

13,100

17.5

9,100

17.2

158.40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
57,546,050 shares
As of September 30, 2022 57,546,050 shares As of March 31, 2022
(including treasury shares)
93,120 shares As of March 31, 2022
96,900 shares
As of September 30, 2022
ii. Number of treasury shares at the end of the periodiii. Average number of shares during the period
As of September 30, 2022 57,450,059 shares As of September 30, 2021 57,447,954 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 tovarious 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 Tuesday, November 22, 2022. Supplementary financialresults 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 three months ended September 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 six months ended September 30, 2022
(1) Operating results
In the first half of the fiscal year ending March 31, 2023, while the Japanese economy showed signs ofrecovery due to effects of various government policies, severe conditions continued to prevail amid
factors such as rising raw material and fuel prices, sharp fluctuations in exchange rates and distribution
restrictions. Overseas, outlooks remained uncertain due to the need for caution amid downside risks fromsuch factors as the prolonged situation in Ukraine and fluctuations in financial and capital markets.
Amid this business environment, net sales for the first half of the fiscal year ending March 31, 2023
amounted to ¥37,307 million, up ¥9,104 million or 32.3% year on year, due to significantly higher sales
in the Fine Chemicals Division supported by strong demand. For profits, ordinary profit amounted to¥7,346 million, up ¥2,962 million or 67.6%, mainly due to higher sales in the Fine Chemicals Division
despite increased raw material and fuel prices. Profit attributable to owners of parent amounted to ¥5,192
million, up ¥2,159 million or 71.2%.
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 ¥4,130 million,up ¥394 million or 10.6% year on year. Operating profit amounted to ¥84 million (versus operating lossof ¥84 million in the previous fiscal year).
b. Fine Chemicals Division
For fluorochemicals for semiconductors and liquid crystals, sales of nitrogen trifluoride were up due toan increase in sales volumes and effects from price revisions. Sales of tungsten hexafluoride andhexafluoro-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 ¥30,310 million, up¥8,324 million or 37.9% year on year. Operating profit amounted to ¥6,007 million, up ¥2,087 million
or 53.2%.
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 ¥1,446 million, up¥218 million or 17.8% year on year. Operating profit amounted to ¥398 million, up ¥162 million or69.2%.
d. Commercial Business Division
Sales increased slightly compared with the previous fiscal year due to growth in sales of industrial
chemicals. As a result of the above, net sales in the Commercial Business Division amounted to ¥356million, up ¥0 million or 0.2% year on year. Operating profit amounted to ¥90 million, down ¥1 million
or 1.9%.
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 ¥1,063 million, up ¥166
million or 18.6%. Operating profit amounted to ¥384 million, up ¥160 million or 71.2%.
(2) Financial position
As of the end of the second quarter of the fiscal year ending March 31, 2023, assets amounted to ¥114,981
million, up ¥5,079 million from the end of the previous fiscal year, mainly due to increases in property,
plant and equipment, and inventories, which offset a decrease in cash and deposits.
Liabilities totaled ¥49,305 million, down ¥687 million, mainly due to a decrease in borrowings, which2

offset increases in notes and accounts payable—trade and other current liabilities.
Net assets amounted to ¥65,676 million, up ¥5,767 million, mainly due to increases in retainedearnings and foreign currency translation adjustments. The equity ratio was 55.7%, versus 53.0% at theend of the previous fiscal year.

(3) Consolidated earnings forecasts
The consolidated earnings forecast for the fiscal year ending March 31, 2023 has been revised from theprevious forecast announced on August 10, 2022. The dividend forecast has also been revised. For details,
please refer to the “Notice of Revision of Earnings and Dividend 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

As of September
30, 2022

26,72818,518Notes and accounts receivable—trade, and contract
assetsElectronically recorded monetary claims—operating
Merchandise and finished goods

16,921

19,075

1,101
5,182

1,153
5,096

Work in process
Raw materials and supplies4,416
3,526

7,171
5,431

Other
Allowance for doubtful accounts

3,896
(68)

4,550
(68)

Total current assets

61,70560,929Buildings and structures, net
Machinery and equipment, net

8,872
11,655

9,784
17,935Construction in progress
Other, net
Total property, plant and equipment

11,001
6,692
38,221

9,451
6,907
44,079Intangible assets
Investments and other assets

728

769

Investment securities
Deferred tax assets

7,464
1,165

6,947
1,297

Other
Allowance for doubtful accounts

621
(4)

963
(5)

Total investments and other assets
Total non-current assets

9,246
48,196

9,202
54,051

109,902

114,981

Non-current assets
Property, plant and equipment

Total assets

4

(Millions of yen)
As of March
31, 2022
Liabilities:
Current liabilities
Notes and accounts payable—trade

As of September
30, 2022

8,068

8,734

Electronically recorded obligations—operating
Short-term borrowings

835
4,200

1,305
4,515

Current portion of long-term borrowings
Income taxes payable

5,886
2,600

6,666
2,160

Provision for bonuses for directors (and other officers)
Other134
5,540

53
6,332

Total current liabilities

27,26529,769Non-current liabilities
Long-term borrowings

20,16617,002

137
11132
13

Retirement benefit liability
Other

1,754
657

1,598
789

Total non-current liabilities

22,727

19,53549,99349,305

CapitalCapital surplus

2,877
1,829

2,877
1,829

Retained earnings
Treasury shares

50,483(68)

54,870(65)

Total shareholders' equity

55,12259,512

2,527
413
191
3,132

2,195
1,976
347
4,519

Non-controlling interests
Total net assets

1,654
59,9081,644
65,676

Total liabilities and net assets

109,902114,981

Provision for retirement benefits for directors (and other officers)
Provision for share awards for directors (and other officers)

Total liabilities
Net assets:
Shareholders' equity

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income5(2) Consolidated statement of income and consolidated statement of comprehensive income
Consolidated statement of income(Millions of yen)
From April 1, 2021
to September 30, 2021From April 1, 2022
to September 30, 2022

Net sales
Cost of sales
Gross profit

28,202
19,646
8,556

37,30726,047
11,259Selling, general and administrative expenses
Operating profit

4,137
4,418

4,678
6,581

2
122

6145

Foreign exchange gains
Gain on sale of trial products
Other
Total non-operating profit

58
136
319

720
111
123
1,107

Non-operating expenses
Interest expenses
Loss on valuation of derivatives

137
35184
116

Loss on sale of trial products
Other137
45

41

Total non-operating expenses
Ordinary profit

355
4,383

342
7,346202013015146

Profit before income taxes
Income taxes payable

4,362
1,217

7,199
1,987

ProfitProfit attributable to non-controlling interests

3,144
111

5,211
19

Profit attributable to owners of parent

3,033

5,192

Non-operating profit
Interest income
Dividend income

Extraordinary losses
Loss 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, 2021
to September 30, 2021
ProfitFrom April 1, 2022
to September 30, 2022

3,144

5,211

122(386)381
(1)

1,610
155

Total other comprehensive income
Comprehensive income

502
3,647

1,380
6,592

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

3,472
174

6,579
12

Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans7(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 fiscal year ending March 31, 2023, 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.

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

Amount recorded on
the statement ofincome (Note 2)

Fundamental
Chemicals

Fine
Chemicals

Ferrochemicals

Commercial
Business

Facilities(1) Net sales to externalcustomers

3,735

21,986

1,227

355

897

28,202—

28,202(2) Inter-segment netsales or transfers

—

—

0691

1,451

2,143

(2,143)—

3,735

21,986

1,227

1,047

2,348

30,345(2,143)28,202(84)

3,920

235

92

224

4,389

28

4,418

Total

Net sales

TotalSegment profit (loss)(Notes) 1. The segment profit (loss) adjustment of ¥28 million is elimination of inter-segment transactions.
2. Segment profit (loss) 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 September 30, 2022
1. Information on net sales, profit or loss by reportable segment(Millions of yen)
Reportable segment
Adjustment(Note 1)

Amount recorded on
the statement ofincome (Note 2)

Fundamental
Chemicals

Fine
Chemicals

Ferrochemicals

Commercial
BusinessFacilities

Total(1) Net sales to externalcustomers

4,130

30,310

1,446

356

1,063

37,307—37,307(2) Inter-segment netsales 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

Net sales(Notes) 1. The segment profit 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.

8