Summary of Consolidated Financial Results for First Quarter of FY2019
Aug. 2, 2019
Mitsubishi Gas Chemical Company, Inc (TSE 4182)
1.Summary of Income Statement (April 1- June 30, 2019)
Apr. 1 -June. 30,
2018
162,580

Net Sales

Millions of yen, rounded down
Apr. 1 -June. 30,
Change (%)
2019
151,219(7.0)

Operating income

15,602

8,796(43.6)

Ordinary income

23,056

5,142(77.7)

Net income attributable to owners of the parent

18,562

3,585(80.7)

Comprehensive income

17,9002,662(85.1)

Net income per share (Yen)

86.90

16.85

2. Financial Position
Millions of yen, rounded down
As of June. 30, 2019

As of Mar. 31, 2019
Total Assets

804,038

798,727

Net Assets

553,282549,588

62.6

62.1

Equity Ratio(%)
3. Dividends
FY2018FY2019(Forecast)Interim dividend per share (Yen)

35.00

35.00

Year-end dividend per share (Yen)

35.00

35.00

Annual Dividend per share (Yen)

70.00

70.00

(Note) Revision of cash dividend forecast during this period: None
4. Consolidated Business Forecasts for FY2019 (April 1, 2019 - March 31, 2020)
Millions of yen, rounded down
Six-month periodFull YearNet Sales

310,000

630,000

Operating income

14,00033,000Ordinary income

12,00035,000Net income attributable to owners of the parent

9,000

25,000Net income per share (Yen)

42.39

117.76(Note) Revision of consolidated business forecasts during this period: Yes
Please refer to ”Revision of Business Performance”for details.
5. Number of Shares Outstanding (Common Stock)
Mar31,2019

June30,2019

Number of shares outstanding at term end (including treasury stock)

231,739,199

229,039,199

Number of shares of treasury stock at term-end

18,099,472

17,679,668

Apr. 1 -June. 30,
2018

Apr. 1 -June. 30,
2019213,604,016

212,790,048

Average shares outstanding during period

1. These quarterly financial results are not subject to quarterly review procedures. At this time of disclosure ofthese financial results, the quarterly financial statement review procedures based on the Financial Instrument andExchange Law have not been completed.
2. Forecasts, etc., recorded in this document contain forward-looking statements that are based on management’sestimates, assumptions and projections at the time of publication. A number of factors could cause actual results
to differ materially from expectations.

Consolidated Financial Statements
1. Consolidated Balance Sheets(Millions of yen, rounded down)
As of Mar. 31, 2019 As of June. 30, 2019ASSETS
Current assets
Cash and deposits
Trade notes and accounts receivable
Short-term investments securities
Merchandise and finished goods
Work in progress
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets

1

91,130155,50723
67,681
13,30838,262
13,965(1,033)378,845

96,497
153,529131
65,43813,37037,461
15,491(1,059)380,860

81,63078,70068,161
228,492

83,07478,97374,703
236,751

3,841
4,772
8,614

5,594
5,790
11,385177,011
11,617(543)
188,086
425,193804,038

157,741
12,527(538)
169,730
417,867
798,727

Consolidated Balance Sheets (continued)(Millions of yen, rounded down)
As of Mar. 31, 2019 As of June. 30, 2019
LIABILITIESCurrent liabilities
Trade notes and accounts payable
Short-term loans payable
Income taxes payable
Provision
Asset retirement obligations
Other
Total current liabilities
Noncurrent liabilities
Bonds payable
Long –term loans payable
Provision
Projected benefit obligations
Asset retirement obligations
Other
Total noncurrent liabilities
Total liabilities
NET ASSETS
Shareholders’ equity
Capital stockCapital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive
Non controlling interest
Total net assets
Total liabilities and net assets

2

80,08958,749
3,439
6,213
113
39,814
188,420

78,73959,372
1,505
3,304
113
42,483
185,519

10,00026,615
4,169
5,247
2,324
13,97862,336
250,756

10,00025,447
4,100
5,890
3,505
14,676
63,620249,139

41,97034,298439,080(19,930)
495,418

41,97034,245433,516(20,054)489,677

13,0231222(6,327)
623
7,542
50,321
553,282804,038

10,984(11)
184(5,422)
255
5,989
53,921
549,588798,727

2. Consolidated Statements of Income

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Equity in earnings of affiliates
Other
Total non-operating incomeNon-operating expenses
Interest expense
Personnel expenses for seconded employees
Rent expenses
Foreign exchange losses
Share of loss of entities accounted for using equity method
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on step acquisitions
Gain on sales of investment securities
Compensation received
Gain on sales of non-current assets
Total extraordinary income
Extraordinary losses
Loss on valuation of investment securities
Provision for loss on guarantees
Total extraordinary losses
Income before income taxes, etc.
Income taxes, etc.
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of the parent

3(Millions of yen, rounded down)
Apr. 1 -June. 30, Apr. 1 -June. 30,
2018
2019
162,580
151,219
123,839
118,676
38,74132,542
23,13923,746
15,602
8,796
133
1,195
7,087
993
9,409

149
1,226
757
2,132

281
524
408
404
336
1,955
23,056

234
521
384
512
3,685
446
5,786
5,142

100
714
814

1,016
967
564
2,548

361
288
650
23,2203,566
19,654
1,091
18,562

7,691
3,263
4,428
842
3,585

(Consolidated Statements of Comprehensive Income)(Millions of yen, rounded down)
Apr. 1 -June. 30, Apr. 1 -June. 30,
2018
2019
Net income
Other comprehensive Income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency statements translation adjustment
Remeasurements of defined benefit plans
Share of other comprehensive income of associates accounted for using equity method
Total other comprehensive Income
Comprehensive income
Comprehensive income attributable to owners of the parent
Comprehensive income attributable to non-controlling interests

4

19,654

4,428

(310)
(4)
(2,376)(169)
1,107(1,754)
17,90017,977(77)(2,006)(13)(1,535)(92)
1,882(1,765)2,662
2,086575

3.Segment Information(Billions of yen, rounded down）
FY 2018

FY 2019

1Q

1Q

FY2018

162.5

151.2

(11.3)

648.9

630.0

Natural Gas Chemicals

43.8

39.1

(4.6)

188.3

168.5

Aromatic Chemicals

53.8

51.2

(2.6)

211.7

207.6

Specialty Chemicals

53.7

49.6

(4.0)

205.7

209.5

Information and Advanced Materials

13.5

13.3

(0.2)

51.9

52.0

(2.4)

(2.1)

0.3(8.7)

(7.7)

15.6

8.7(6.8)

41.3

33.0

Natural Gas Chemicals

0.9

0.1

(0.8)

3.3

3.1

Aromatic Chemicals

5.5

3.8(1.7)

14.6

14.2

Specialty Chemicals

8.3

4.2

(4.0)

21.2

15.0

Information and Advanced Materials

1.4

1.2

(0.1)

3.9

3.6

Other and Adjustment
Non-operating profit

(0.6)

(0.7)

(0)

(1.8)

(3.0)

7.4

(3.6)

(11.1)

27.8

2.0

Ordinary income

23.0

5.1

(17.9)

69.1

35.0

Natural Gas Chemicals

5.5(4.4)

(9.9)

22.6

0.5

Aromatic Chemicals

5.4

3.6(1.7)

13.9

13.3
19.2

ChangeFY 2019

Full Year Full Year
ResultNet sales

Other and Adjustment
Operating income (loss)

Forecast

Specialty Chemicals

10.4

5.1(5.2)

28.2

Information and Advanced Materials

1.6

1.3

(0.2)

4.4

3.7

Other and Adjustment

0.0(0.6)

(0.6)

(0.1)

(2.0)

4.Other Information 1
FY2015FY2016FY2017FY2018FY2019Forecast
50.0

Investments(Billions of yen)

Full year

30.5

35.0

30.9

39.2

1Q

5.9

5.6

6.1

9.1

11.5

Depreciation & amortization(Billions of yen)

Full year

26.725.627.0

27.4

29.0

1Q

6.5

6.1

6.4

6.7

7.1

R&D expenditures(Billions of yen)

Full year

18.9

19.2

18.9

18.6

21.0

1Q

4.5

4.8

4.5

4.5

4.5

Number of Staff

Year-end

8,176

8,034

8,009

8,276

9,026

ROA (Ordinary income)

5.9%

8.4%

10.6%

8.7%

4.3%

ROE (Net income)

9.0%

12.0%

13.6%

11.3%

4.9%

5.Other Information 2
FY2015FY2016FY2017FY2018FY2019ResultResultResultResultForecast

First half

Second halfFirst half

Second halfFirst half

Second halfFirst half

Second halfFirst half

Second half

Exchange Rate
(JPY/USD, Average)

122

118

105

112

111

111

110

112

110

110

Exchange Rate
(JPY/EUR, Average)

135

130

118

119

126

133

130

127

122

120

crude oil (Dubai)(USD/BBL)

56

36

43

51

50

62

73

65

66

65

Methanol (USD/MT, Asian
average spot price)

301

230

230

327

296

381

408

335

300

300

Mixed Xylene(USD/MT)

740

630

660

680

650

725

845

730

720

760

Bisphenol A(USD/MT)*

950

850

1,000

1,000

1,100

1,200

1,600

1,200

1,100

1,100～ 1,500～ 1,100～ 1,200～ 1,400～ 1,300～ 1,700～ 1,900～ 1,800～1,450～1,500

Polycarbonate(USD/MT)*

2,100

2,000

2,200

2,400

2,500

2,900

2,700

2,100

1,850

1,900～ 2,650～ 2,400～ 2,500～ 2,800～ 2,900～ 3,900～ 3,800～ 2,800～2,250～2,400*Describe the minimum and maximum values during the period5Qualitative Information
Consolidated Business Results for This Period
Overview of Results(Billions of yen)
FY2018 / 1Q

FY2019 / 1Q

ChangeNet sales

162.5

151.2

(11.3)

Operating income

15.6

8.7(6.8)

Ordinary income

23.0

5.1(17.9)

18.5

3.5(14.9)

Net income attributable to owners of
the parent

During the first quarter of the fiscal year ending March 2020 (April 1 - June 30, 2019), the world economy
slowly recovered overall, despite a heightened sense of uncertainty due to trade frictions between theUnited States and China, the deceleration of China’s economic growth, and growing concerns about theimpact of financial and capital markets. The Japanese economy also saw gradual overall recovery,
including continued improvement in employment, despite ongoing stagnation in some areas, particularlyexports.
The management environment of the MGC Group remained challenging, as market prices of such key
products as polycarbonates and purified isophthalic acid continued to decline.
The MGC Group’s net sales decreased year on year, reflecting the decline in market prices for methanol,
polycarbonates and other products.
Group operating income also fell year on year, despite an increase in the sales volume of special
polycarbonates, due to significant drops in market prices for polycarbonates and purified isophthalic acid,
which were high in the same period of the previous fiscal year.
Ordinary income also decreased, due to the fall in operating income as well as a significant deteriorationin equity in earnings (losses) of affiliated companies related to overseas methanol producing companies.
As described below, this reflected one-off costs recorded at a joint venture in Saudi Arabia.
MGC’s equity method affiliate Japan Saudi Arabia Methanol Co., Inc. (JSMC) and Saudi Basic Industries Corp.
(SABIC) reached an agreement on June 24, 2019 regarding the Saudi Methanol Company (AR-RAZI), forwhich their joint venture agreement had expired. Based on this agreement, JSMC sold 50% of its shares inAR-RAZI (representing 25% of all AR-RAZI shares) to SABIC for US$150 million, reducing its shareholding
ratio to 25:75, and the two companies will continue the joint venture business for another 20 years under a newframework that includes the conditions below.
(1) JSMC will pay SABIC US$1,350 million as consideration for the continuation of the joint venture.
(2) MGC and SABIC will discuss undertaking the commercialization of new energy-saving methanol
technology as well as utilizing such technology to update the methanol plants of AR-RAZI.

6

In accordance with the conclusion of this agreement, from the first quarter of the fiscal year ending March2020, the decrease in JSMC’s ownership of AR-RAZI and the amortization of the consideration for thecontinuation of the joint venture have been reflected in equity in earnings of affiliates in the Consolidated
Financial Statements. Furthermore, in the first quarter of the fiscal year ended March 2020, one-off expensesof ¥6.1 billion, including loss related to the sale of shares of AR-RAZI, was recorded under equity in earningsof affiliates.

7Results by Business Segment
Natural Gas Chemicals(Billions of yen)
FY2018 / 1Q

FY2019 / 1Q

ChangeSales

41.6

37.0(4.5)

Operating income

0.90.1(0.8)

Ordinary income

5.5(4.4)(9.9)

The methanol business saw a decline in net sales due to a decrease in market prices compared with thesame period of the previous year.
Methanol and ammonia-based chemicals posted decreased earnings due to lower market prices ofMMA-based products and neopentyl glycol.
Crude oil and other energy sources achieved a year-on-year improvement in results, thanks in part tohigher crude oil sales volume.

Aromatic Chemicals(Billions of yen)
FY2018 / 1Q

FY2019 / 1Q

ChangeSales

53.7

51.1(2.6)

Operating income

5.5

3.8(1.7)

Ordinary income

5.4

3.6(1.7)

Specialty aromatic chemical products posted earnings on par with the previous year, due in part to solid
sales of meta-xylenediamine and aromatic aldehydes.
General-purpose aromatic chemical products suffered a year on year decrease in earnings. Negative
factors included significantly lower market prices of purified isophthalic acid.
Foamed plastics suffered a year-on-year decline in earnings, primarily due to weak demand and a rise in
fixed costs associated with the construction of production systems to meet new demand.

8Specialty Chemicals(Billions of yen)
FY2018 / 1Q

FY2019 / 1Q

Change

Sales

53.4

49.4

(4.0)

Operating income

8.3

4.2

(4.0)

Ordinary income

10.4

5.1

(5.2)

Inorganic chemicals posted lower earnings compared with the previous year, primarily due to higher
fixed costs in connection with the launch of a new production facility in North America and deterioration in
the profitability of hydrogen peroxide.
The engineering plastics business recorded decreased earnings year on year. This was due mainly to asignificant decrease in market prices for polycarbonates, despite growth in special polycarbonate sales
volumes reflecting the growing use of multiple camera lenses in smartphones.

Information & Advanced Materials(Billions of yen)
FY2018 / 1Q

FY2019 / 1Q

ChangeSales

13.5

13.3

(0.2)

Operating income

1.4

1.2

(0.1)

Ordinary income

1.6

1.3

(0.2)

Electronic materials saw a slight decline in earnings. Demand, which was weak in the latter half of theprevious fiscal year, recovered. Sales volumes of BT materials for semiconductor packaging, the coreproduct category for electronic materials, recovered but did not reach the level of the same period of theprevious fiscal year.
Oxygen absorbers such as AGELESS® posted earnings on par with the previous year, reflecting firm
performance, especially in exports.

(End)

9