Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In theevent of any discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Consolidated Financial Results
for the Second Quarter of Fiscal Year Ending March 31, 2020
[Japanese GAAP]
October 31, 2019
Company name: Sanoyas Holdings Corporation
Stock exchange listing: Tokyo Stock Exchange
Code number: 7022
URL: http://www.sanoyas.co.jp/
Representative: Takashi Ueda, President
Contact: Atsushi Daimon, General Manager, Finance Department
Phone: +81-6-4803-6171
Email: info@sanoyas.co.jp
Scheduled date of filing quarterly securities report: November 8, 2019
Scheduled date of commencing dividend payments: –Availability of supplementary briefing material on annual financial results: Not available
Schedule of quarterly financial results briefing session: Yes (for investment analysts and institutional investors)(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Second Quarter of Fiscal Year Ending March 31, 2020 (April 1, 2019
to September 30, 2019)(1) Consolidated Operating Results (Cumulative)(% indicates changes from the previous corresponding period.)
Profit (loss)
Operating profit
Ordinary profit
Net sales
attributable to(loss)(loss)
owners of parent
Six months ended
Million yen%
Million yen%
Million yen%
Million yen%
September 30, 201923,3763.0(1,608)–(1,495)–(1,505)–September 30, 2018
22,690(3.6)
1,704 765.4
1,818 794.2
1,790 537.4(Note) Comprehensive income: Second Quarter of fiscal year ending March 31, 2020: ¥ (1,216)million [–%]
Second Quarter of fiscal year ended March 31, 2019: ¥2,380 million [264.2%]
Basic earnings per
share

Six months ended
September 30, 2019
September 30, 2018

Diluted earnings per
share

Yen

Yen

(46.20)
54.94

–

54.45

(2) Consolidated Financial Position
Total assets
Net assets
Equity ratio
As ofMillion yen
Million yen%
13,28921.2
September 30, 2019
62,432
14,654
21.7
March 31, 201967,110(Reference) Equity: As of September 30, 2019: ¥13,211 million As of March 31, 2019: ¥14,590 million

2. Cash Dividends
Annual dividends
1st
2nd
3rd
Year-endquarter-end quarter-end quarter-end
Yen

Yen

Yen

Total

Yen

Yen

Year ended
–
0.00
–
5.00
March 31, 2019Year ending–
0.00
March 31, 2020
Year ending
March 31, 2020–
5.00
(Forecast)(Note) Revision to recently disclosed projected cash dividends: No

5.00

5.00

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2020 (April 1, 2019 to March
31, 2020)(% indicates changes from the previous corresponding period.)
Net sales
Million yen%

Operating profit(loss)

Ordinary profit(loss)

Million yen

Million yen%

Profit (loss)
attributable toowners of parent%

Million yen

Basic earnings
per share%

Yen

Full year
48,000 (0.3)(2,900)–(2,800)–(2,500)–(76.72)(Note 1) Revision to recently disclosed projected consolidated financial results: Yes(Note 2) The exchange rate used for unfixed foreign currency items in assuming the Company’s earnings forecast is
107 yen to the U.S dollar.
* Notes:(1) Changes in significant subsidiaries during the current quarter (changes in specified subsidiaries resulting inchanges in scope of consolidation): No(2) Adoption of special accounting methods for preparing quarterly consolidated financial statements: No(3) Changes in accounting policies, changes in accounting estimates and retrospective restatement
1) Changes in accounting policies due to revision of accounting standards: No
2) Changes in accounting policies other than 1): No
3) Changes in accounting estimates: No4) Retrospective restatement: No(4) Number of issued shares (common shares)
1) Number of issued shares at the end of the period (including treasury shares):
As of September 30, 2019: 32,606,800 shares
As of March 31, 2019: 32,606, 800 shares
2) Number of treasury shares at the end of the period:
As of September 30, 2019: 20,715 shares
As of March 31, 2019: 20,715 shares
3) Average number of outstanding shares during the period:
Six months ended September 30, 2019: 32,586,085 shares
Six months ended September 30, 2018: 32,579,885 shares* These quarterly consolidated financial results are outside the scope of audit* Explanation of the proper use of financial results forecast and other notes

The earnings forecasts and other forward-looking statements herein are based on information currently available.
Actual results may differ significantly from these forecasts due to a wide range of factors.

1. Qualitative Information(1) Summary of Business Results
In the business environment surrounding the Sanoyas Group, “twin surpluses” of shipping tonnage andshipbuilding capacity continues structurally and in China and Korea, which are our competitors, their governments
support the shipbuilding industry as their policies. The situation is still tough in the Shipbuilding & Engineeringbusiness. The market of bulk carriers has weakened since the beginning of 2019. Although the market has been
showing a moderate recovery trend since April 2019, the average prices of charter fee remain low and the
newbuilding shipping price has not recovered yet.
In the Shipbuilding business, new 82,000 DWT type PANAMAX bulk carriers and new 64,000 DWT typeULTRAMAX bulk carriers have been developed. These vessels are applied IMO NOx Tier Ⅲ regulation and
IACS Harmonized Common Structural Rules and further improved fuel consumption. In addition, 41,000 DWT
type HANDY SIZE bulk carriers have been developed newly. This type of vessel with wide beam and shallow
draft has larger cargo hold capacity and applies new regulations. We carry out sales promotion. At the same time,
we are expanding the range of our products to passenger ferries, special vessels and working ships, etc., and we areworking on adding new item on our menu. As to the marine and gas tank business that we have been working on tocomplement the Shipbuilding business, we established "Gas Tank Sales Department" and "Gas Tank Design
Department" as new dedicated organizations which are independent of the existing departments on April 1, 2019.
Regarding LPG tank business, we decided to manufacture in the Mizushima Shipyard (Kurashiki City, Okayama
Prefecture) which is our main shipyard in addition to the Osaka Shipyard (Osaka City, Osaka Prefecture), and we
started the construction of the production facilities.
We had regarded the M & T (Machinery & Technology) business as “second core business” and promoted various
business portfolios. We recognize it is important and urgent issue to make our group business stable andsustainable and we promoted reorganization of the M & T group. Sanoyas Engineering Corporation and DAICHU
CO., LTD. which are mainly engaged in manufacturing and maintenance service of industrial machinery mergedon April 1, 2019. By reorganizing the functional activity in the new company, we have further promoted
improvement of management efficiency and the best allocation of human resources. As for the sales strategy ofshot blast machines, Sanoyas Engineering Corporation signed distributor agreement in Taiwanese markets with
Taiwanese and Japanese trading companies on September 6, 2019 to expand the sales of paint stripping devices"Jig Stripper" to overseas markets. In addition, Sanoyas Engineering Corporation is scheduled to merge withSanoyas Construction Machinery Corporation which is mainly engaged in sales and rental business ofconstruction-use elevator on April 1, 2020. We intend to strengthen and expand the business structure by pursuingof synergies on sharing their factories. Furthermore, for the aim of promoting IT development in our businesses
activities, we are going to assign smoothly and effectively system engineers to our group companies fromSANOTEC Corporation which is engaged in software development and calculation/information processing
business on April 1, 2019. At the same time, SANOTEC Corporation and Sanoyas Business Partner Corporation
merged. We decided to transfer the management and administration of SANOTEC Corporation from Sanoyas
MTG Corporation to Sanoyas Shipbuilding Corporation that is effective on January 1, 2020. As a result of the1business integration and consolidation of SANOTEC, the majority of the business domain has shifted to
shipbuilding-related industries.

Consolidated net sales in the six months ended September 30, 2019 increased by ¥685 million (3.0%) over thesame period of the previous fiscal year, to ¥23,376 million. Operating loss was ¥1,608 million (operating profit of
the same period of the previous fiscal year was ¥1,704 million), ordinary loss was ¥1,495 million (ordinary profitof the same period of the previous fiscal year was ¥1,818 million), and loss attributable to owners of parent was¥1,505 million (profit attributable to owners of parent of the same period of the previous fiscal year was¥1,790million).

Quarterly results may not necessarily be linked to annual results because these are significantly affected by thefollowings; 1.the nature of order-receiving industry in which Sanoyas group are engaged, especially trends innewbuilding shipping price that are strongly affected by shipping market and presence of new orders, 2.individual
profitability of shipbuilding on the basis of percentage of completion method, and 3.exchange rates at the end ofeach quarter.

(2) Segment Results[1] Shipbuilding & Engineering business
We tried to secure new orders for vessels under the market in which the newbuilding shipping price has not been
recovered, and we received new orders of 3 vessels of new 82,000 DWT type PANAMAX bulk carriers. In
addition, we delivered 1 vessel of 82,000 DWT type PANAMAX bulk carriers, 1 vessel of 64,000 DWT typeULTRAMAX bulk carriers and 1 vessel of 60,000 DWT type SUPRAMAX bulk carriers. The number of backlogof orders has been 16 vessels as of September 30, 2019. We will continue to focus on the sales with the policy of
securing the backlog orders of approximately 2.5 years responding flexibly to the market trends. As marine
business and gas tank business, we focused on sales of repairing services for vessels and LPG tanks. As a result of
the business activities, the segment backlog of orders was ¥ 39,523 million on a percentage of completion method.
The segment net sales in the six months ended September 30, 2019 increased by ¥334 million (2.5%) over thesame period of the previous fiscal year, to ¥13,719 million. The evaluated net sales of the backlog of shipbuilding
orders, including the newly ordered vessels, on a US dollar basis decreased because the yen has been stronger
against the US dollar since April 2019. As a result, the profitability of the vessels deteriorated and the operating
loss was ¥2,193 million (operating profit of the same period of the previous fiscal year was ¥1,475 million).

[2] M & T (Machinery & Technology) business
Regarding the M & T business, the number of visitors to the amusement park increased due to an increase of
inbound tourists to Japan and long holidays. As a result, the location business, which operates and manages
amusement parks in Japan, performed well and drove overall sales and profits in the M & T Group. In addition,
being based on brisk of construction works in Tokyo area, steady results were seen in such sectors as sales andrental of construction-use elevators. The cosmetics market continues to expand every year, and sales of vacuum2emulsifiers and stirrers for cosmetics continue to increase. As a result of the business activities, the segment
backlog of orders was ¥8,290 million. The segment net sales in the six months ended September 30, 2019
decreased by ¥350million (3.8%) over the same period of the previous fiscal year, to ¥9,656 million. The operating
profit increased by ¥365 million (89.7%), to ¥773 million.

(3) Information regarding Consolidated Financial Results Forecasts and other forward-looking statements
We have announced that amendments have been made to the consolidated financial results forecast announced in
May 2019 based on the Consolidated Financial Results for the Second Quarter of Fiscal Year Ending March 31,
2020.
For further details, please refer to the “Notice of Amendments to the Consolidated Financial Results Forecast for
the Fiscal Year Ending March 31, 2020 (April 1, 2019 to March 31, 2020)” which was disclosed on October 31,
2019.

3

Quarterly Consolidated Financial Statements [Japanese GAAP](1) Quarterly Consolidated Balance Sheets [Japanese GAAP](Million yen)
As of March 31, 2019
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Electronically recorded monetary claims - operating
Securities
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
Land
Other, net
Total property, plant and equipment
Intangible assets
Software
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Deferred tax assets
Net defined benefit asset
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

4

As of September 30, 201920,10815,305465

15,711
14,744
498

500
251

500
233

1,117
659
2,725
(21)
41,112

1,582
696
2,624
(28)
36,561

6,175
3,410
4,980
2,193
16,760

5,999
3,113
4,286
2,079
15,479

362
357
31
752

374
322
31
728

6,997
475
247
277
591
(103)
8,485
25,997
67,110

7,521
401
237
314
1,290
(103)
9,662
25,87062,432

(Million yen)
As of March 31, 2019
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payable
Current portion of long-term loans payable
Income taxes payable
Advances received
Provision for bonuses
Provision for construction warranties
Provision for loss on construction contracts
Lease obligations
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Lease obligations
Deferred tax liabilities
Net defined benefit liability
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Share acquisition right
Total net assets
Total liabilities and net assets

5

As of September 30, 2019

11,950
4,830
3,853
273
4,505
495
167
3,109
165
1,879
31,22910,401
4,250
4,034
151
3,336
493
148
3,130
176
986
27,10912,699
1,222
2,322
4,501
451
28
21,22652,45613,133
1,230
2,423
4,765
450
28
22,03349,142

2,538
402
8,739
(5)
11,675

2,538
402
7,070
(5)
10,006

3,308
(2)
(169)
(221)
2,915
63
14,654
67,110

3,548
(5)
(156)
(182)
3,204
78
13,28962,432

(2) Quarterly Consolidated Statements of Income and Consolidated Statements of Comprehensive Income[Japanese GAAP]
Quarterly Consolidated Statements of Income [Japanese GAAP](Million yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit (loss)
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity
methodForeign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Other
Total non-operating expenses
Ordinary profit (loss)
Extraordinary income
Gain on sales of non-current assets
Total extraordinary income
Profit (loss) before income taxes
Income taxes – current
Income taxes – deferred
Total income taxes
Profit (loss)
Profit (loss) attributable to owners of parent

Six Months ended September
30, 2018
22,69018,541
4,149
2,444
1,704

Six Months ended September
30, 2019
23,37622,496879
2,488(1,608)

10
66

6
77

43

171

107
42
270

–
29
285

134
22
156
1,818

130
42
173
(1,495)

–
–
1,818
93
(65)
28
1,790
1,790

98
98
(1,397)103
4108(1,505)(1,505)

Quarterly Consolidated Statements of Comprehensive Income [Japanese GAAP](Million yen)

Profit(loss)
Other comprehensive loss (income)
Valuation difference on available-for-sale securities
Deferred gain (loss) on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Comprehensive loss (income) of affiliates accounted forby the equity method attributable to the Company
Total other comprehensive loss (income)Comprehensive income
Comprehensive income (loss) attributable to
Owners of the parent
Non-controlling interests

Six Months ended September
30, 2018
1,790

Six Months ended September
30, 2019(1,505)

702
(18)
(149)
53

239
(5)
19
39

2

(3)

590
2,380

289
(1,216)2,380–(1,216)–6

(3) Quarterly Consolidated Statements of Cash Flows [Japanese GAAP](Million yen)Six months ended
September 30, 2018
Cash flows from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Increase (decrease) in net defined benefit liability
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for construction
warranties
Increase (decrease) in provision for loss on construction
contracts
Interest and dividend income
Interest expenses
Foreign exchange losses (gains)
Gain on sales of non-current assets
Decrease (increase) in notes and accounts receivable trade
Decrease (increase) in inventories
Decrease (increase) in advance payments
Increase (decrease) in notes and accounts payable - trade
Increase (decrease) in advances received
Decrease (increase) in consumption taxes refund
receivable
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Insurance income
Income taxes (paid) refund
Net cash provided by (used in) operating activities

7

Six months ended
September 30, 2019
1,818
793
34
124
2
33

(1,397)
786
34
264
6
(1)

(9)

(18)

(2,220)

21

(77)
134
(90)
(1)

(84)
130
1
(98)

181

518

(450)
(241)
(1,143)
437

(488)
(962)
(1,277)(1,079)

678

479

(292)
(288)
76
(133)
－
202
(143)

(660)
(3,825)
83
(131)
245
174
(3,453)

(Million yen)Six months ended
September 30, 2018
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Net decrease (increase) in short-term investment
securities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Collection of loans receivable
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Cash dividends paid
Proceeds from sales and leasebacks
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

8

Six months ended
September 30, 2019
(465)
325

(150)
365

(500)

－

(1,732)
33
(64)
(9)
－
72
(2)
(2,342)

(910)
231
(109)
(7)
37
71
(33)
(505)

(300)
850
(2,029)
(162)
1,343
(64)
(363)
82
(2,766)22,224
19,457(580)
2,200(1,585)
(162)
－
(90)
(218)
(4)
(4,182)
19,323
15,140(Segment Information)
Ⅰ Six months Ended September 30, 2018 (April 1, 2018 to September 30, 2018)
Information concerning Net sales and Operating profit or loss by Reportable business segment(Million yen)
Reportable segment
Shipbuilding &Engineering
Business

Machinery &Technology
BusinessAmount recorded inconsolidated
statements of income( Note 2)

Adjustments( Note 1)

Total

Net sales
13,384

9,305

22,690－22,690

6

442

448

(448)

－

Total

13,391

9,748

23,139(448)

22,690

Segment profit

1,475

407

1,883

(178)

1,704

External sales
Internal sales ortransfers(Note 1) Details of “Adjustments” are as follows:
Adjustments for the segment profit or loss of ¥178 million include corporate cost of ¥190 million not allocated to eachreportable segment, allowance for doubtful accounts of ¥(1) million and elimination of inter-segment transaction of ¥(10)
million.
Corporate cost consists of general and administrative expenses which do not belong to the reporting segment.
(Note 2) Segment profit is adjusted with operating profit recorded in the quarterly consolidated statements of income.

Ⅱ Six months Ended September 30, 2019 (April 1, 2019 to September 30, 2019)
Information concerning Net sales and Operating profit or loss by Reportable business segment(Million yen)Amount recorded inquarterly
consolidated
statements of income( Note 2)

Reportable segment
Shipbuilding &Engineering
Business

Machinery &Technology
Business

Adjustments( Note 1)

Total

Net sales
External sales
Internal sales ortransfers
Total
Segment profit (loss)

13,7199,656

23,376－23,376

3

272

276

(276)

－

13,722

9,929

23,652(276)

23,376(2,193)773(1,420)(188)(1,608)(Note 1) Details of “Adjustments” are as follows:
Adjustments for the segment profit of ¥188 million include corporate cost of ¥200 million not allocated to each reportablesegment, allowance for doubtful accounts of ¥(0) million and elimination of inter-segment transaction of ¥(12) million.
Corporate cost consists of general and administrative expenses which do not belong to the reporting segment.
(Note 2) Segment profit or loss is adjusted with operating loss recorded in the quarterly consolidated statements of income.

9

Supplementary information
Status of sales and orders
Segmental sales
Six months ended September 30, 2018
(April 1, 2018 to September 30, 2018)
Segment
Composition ratio(Million yen)（％）
Shipbuilding &13,384
59.0
Engineering BusinessSix months ended September 30, 2019
(April 1, 2019 to September 30, 2019)
Composition ratio(Million yen)（％）
13,71958.7

Machinery &Technology Business

9,305

41.0

9,656

41.3

Total

22,690100.0

23,376100.0

Order status and backlog of orders
Six months ended September 30, 2018
(April 1, 2018 to September 30, 2018)
Segment
OrdersBacklog of orders(Million yen)
(Million yen)Six months ended September 30, 2019
(April 1, 2019 to September 30, 2019)
Orders(Million yen)Backlog of orders(Million yen)

Shipbuilding &Engineering Business
Machinery &Technology Business

12,97638,784

12,22639,523

7,100

7,129

7,696

8,290

Total

20,07745,91419,92347,813(Note) The backlog of orders of shipbuilding in the Shipbuilding & Engineering Business as of September 30, 2019 is stated on thepercentage of completion method and the number of backlog of orders is 16 on delivery basis.

10