Consolidated Financial Results in First Half of FY2019 (April 1 to September 30)(Unaudited, IFRS basis)(Unit: Millions of yen)

Operating Result

FY2019 First
Half Results

FY2018 First
Half Results

Financial Position

Change1,231,757

1,157,791+73,966

Gross profit

68,227

68,388-161

Selling, general and administrative expenses(45,980)(44,241)690

Total volume of trading transactions (*1)

(Unit: Millions of yen)
FY2019 First
Half Results

887,396

Current assets

Outline of consolidated financial results
FY2018 Results

Change1,013,462-126,066

Reflecting on the global economy during the first half of FY2019, the numerous causes for concern included a continuing growth in trade protectionism in manynations, slackened economic growth in China prompted by bilateral trade friction with the United States, fears of economic stagnation in Europe and other factors.
Against this backdrop, no recovery emerged to counter the underlying tone of weakness that began in the second half of FY2018. The global economic decline also
affected the Japanese economy, with exports of major industrial products slowing. Greater personal spending in the runup to Japan’s consumption tax hike waslimited, resulting in a slower growth rate.
Turning to the steel industry, China engineered a recovery in crude steel production as the nation emerged from the Lunar New Year, posting an increase of around
10 percent over the first half of FY2018. As a result, global crude steel production for the first half of 2019 (January to June) was tracked at 925.06 million tons, up
4.9 percent from the same period the previous year based on figures from the World Steel Association. This development further fueled concerns about excessive
supply.
In Japan, the previously robust construction sector experienced a lull in momentum, together with lower unit production for automobiles, construction equipment
and industrial machinery. Exports of steel products likewise lapsed into negative territory, with Japan’s domestic crude steel production output for the first half of
FY2019 (April through September) decreasing by 3 percent from the same period the previous year at 50.67 million tons based on figures from the Japan Iron andSteel Federation.
Within this environment, solid trends in the U.S. construction material business and a recovery in energy-related demand bolstered MISI’s earnings. While total
trading transaction volume charted a small advance over the same period last year, higher financial expenses linked to rising interest rates, the impact of transient
losses on affiliated companies, and other issues made their presence felt. In summary, the MISI Group’s consolidated performance for the first half of FY2019
produced a total trading transaction volume of ¥1,231.8 billion, operating income of ¥22.9 billion, and profit attributable to owners of the parent of ¥12.1 billion.
This reflected a trend of rising income and falling profit compared to the same period the previous year.

Cash and cash equivalents

32,08046,836-14,756

Trade receivables

557,460

637,061-79,601-1,739Inventories

263,574

289,990-26,416(834)+1,524Other

34,282

39,575-5,293

226,282

214,979+11,303

22,93723,313-376

Property, plant and equipment

85,82474,419+11,405

Net interest expense(4,824)(3,480)-1,344

Intangible assets

16,474

18,031-1,557

Dividend income

963

840

+123

Investments and other assets

123,984

122,529+1,455Gain (loss) on investments

(12)

666

-678

Total assets

1,113,678

1,228,441-114,763

1. Total volume of trading transactions and gross profits

Provision for doubtful accounts
Operating income(*1)

Non-current assets

Explanation of consolidated statements

Gain (loss) on property, plant and equipment

(22)

(9)

-13

Current liabilities

624,660

745,873-121,213

Other non-operating income (loss)

850

(931)

+1,781

Trade payables

273,872

357,297-83,425

Solid progress in the U.S. construction materials business, a recovery in energy-related demand and other factors combined to boost trading transactions in the firsthalf of FY2019 by ¥74 billion over the same period last year to ¥1,231.8 billion. Although benefiting from the increase in total trading transactions, gross profits
declined by ¥0.2 billion year-on-year to finish the period at ¥68.2 billion, due largely to the impact of the stronger yen.

Share of profits of associates and joint ventures

(602)

(15)

-587

Short-term debts

293,142

327,510-34,368

2. Selling, general and administrative expenses and provision for doubtful accounts

61,066-3,42020,384-1,094Other

57,646

19,290Non-current liabilities

174,970

161,020+13,950

Although ¥0.7 billion was listed for the first half under review as a reversal of the provision for doubtful accounts, higher personnel expenses and othercontributing factors drove selling, general and administrative expenses up by ¥1.7 billion year-on-year. Reflecting these movements, FY2019 first-half operating
income fell by ¥0.4 billion from the first half of FY2018 to ¥22.9 billion.

3. Profit attributable to owners of the parent

Profit before tax
Income taxes(5,579)(5,721)+142

Long-term debts

146,674

141,346+5,328

Profit13,711

14,663

-952

Other

28,296

19,674+8,622

Profit attributable to owners of the parent

12,07913,308-1,229Total liabilities

799,630

906,893-107,263

Profit attributable to non-controlling interests

1,632

1,355+277

Equity attributable to owners of the parent

290,226

297,300-7,074

1,032,344

984,419+47,925

Revenue*1

Total volume of trading transactions includes all transactions involving the Company and its consolidated
subsidiaries regardless of transaction type. Total volume of trading transactions and operating income arepresented in accordance with Japanese accounting practice for investors’ convenience and are not required byIFRS. Ordinary income reflecting the Japanese GAAP basis has been provisionally calculated at ¥19.3 billion.

Capital/Capital surplus

51,08851,102-14

Retained earnings

205,914206,607-693

Accumulated other comprehensive income

33,224

39,591-6,367

Non-controlling interests

23,822

24,248-426

Total equity

314,048

321,548-7,5001,113,678

1,228,441-114,763

Total liabilities and equityComprehensive Income

FY2019 First
Half Results

FY2018 First
Half Results

Change§ Management indexes pertaining to assets, liabilities and capital
Ratio of shareholders’ equity

(*2)

26.1%

24.2%

+1.9%

Net debt equity ratio (DER)(*3)

1.4 times

1.4 times- 0.0 times

13,711

14,663-952*2: Ratio of shareholders’ equity = equity attributable to owners of the parent/total assets

(851)

(369)

-482

*3: Net debt equity ratio (DER) = net interest-bearing liabilities/equity attributable to owners of the parent(5,154)

8,695-13,849

Other(399)

(965)

+566

§ Exchange rate information (¥/US$)FY2019 First Half

FY2018 First Half

Comprehensive income

7,307

22,024-14,717

Average rate during period (PL rate)

108.63110.26

End September 2019

End March 2019107.92110.99ProfitNet unrealized gain (loss) on FVTOCI
Exchange differences on translating foreign operations

Comprehensive income attributable to owners of the parent

5,660

20,741-15,081Comprehensive income attributable to non-controlling interests

1,647

1,283+364

Net interest expenses worsened by ¥1.3 billion compared to the first half of FY2018, linked to factors such as the increase in U.S. dollar interest rates. Gain/loss oninvestments decreased by ¥0.7 billion year-on-year, linked to rebounding profits accompanying changes in the consolidation method of domestic subsidiaries.
Gain/loss results for other categories improved by ¥1.8 billion versus the first half of FY2018 under the impact of foreign exchange gains and losses and otherfactors. The share of profits from associates and joint ventures finished ¥0.6 billion below the first half of FY2018, reflecting the impact of transient losses atoverseas associates and other factors. As a collective result, profit before tax worsened by ¥1.1 billion versus the first half of FY2018, while profit attributable toowners of the parent declined by ¥1.2 billion year-on-year to ¥12.1 billion (after subtracting income taxes and profit attributable to non-controlling interests).

4. Comprehensive income attributable to owners of the parent
Comprehensive income attributable to owners of the parent for the first half of FY2019 stood at ¥15.1 billion below the first half of FY2018, finishing the period at¥5.7 billion. Factors behind this decline included a decrease in the foreign exchange adjustment account under the impact of the strong yen, decreased profit
attributable to the parent and a fall in unrealized gains from securities evaluations.

5. Equity attributable to owners of the parent
Equity attributable to owners of the parent at the end of the first half of FY2019 was ¥290.2 billion, down ¥7.1 billion from the previous fiscal year’s close. Factors
contributing to this outcome—despite an increase in accumulated current profits attributable to owners of the parent—included dividend payments to shareholders,the drop in the foreign exchange adjustment account under the impact of the strong yen, and other events. The shareholder equity ratio improved by 1.9 percent to26.1 percent. That reflected a decline in total assets of ¥114.8 billion from the end of FY2018 to ¥1,113.7 billion, linked to decreased trade receivables and asset
inventory and other dynamics.

6. Interest-bearing liabilities
Gross interest-bearing liabilities at the end of the first half of FY2019 totaled ¥439.8 billion, down ¥29 billion from the level posted at the end of FY2018. The key
factor behind this result was lower demand for operating capital because of a decrease in trade receivables and asset inventory. Net interest-bearing liabilities fellby ¥14.3 billion compared to the end of FY2018, closing out the half year at ¥407.7 billion. This contributed to a net debt equity ratio (DER) of 1.4.

Number of Group companies reporting a profit/loss

End of period rate (BS rate)

No. of Companies

Profitable and unprofitable companies: a breakdown by numbers

End of this term

Change from thePrevious TermDomestic

20-

200100.0%

Overseas52-421080.8%

No. of subsidiaries

72-

62

1086.1%

Domestic

14-13192.9%

Overseas28-141450.0%42-271564.3%

114-892578.1%

No. of associates and joint ventures

Total

ProfitRatio of Companies
Making a Profit

Loss