FY2023 First Half Financial Results Report
Marubeni-Itochu Steel Inc.
November 6, 2023

Copyright © 2023 Marubeni-Itochu Steel Inc.

FY2023 First Half Financial Results Summary Despite stagnant growth in steel product demand in the wake of sluggish global economic growth, the weakening yen and otherfactors helped increase revenues.
 Amid a major drop in steel product prices, our business benefitted from the strength of our North American operations, limiting theresulting decline in profit to 11 percent.
First half ofFY2022

First half ofFY2023

Over the firsthalf of FY2022

Consolidated
net income¥ 50.2 billion¥ 44.7 billion- ¥5.5 billion

PL rate ¥/US$

133.97141.00+7.03

End of FY2022

End of firsthalf of FY2023

Over the end ofFY2022¥ 1.76 trillion¥ 1.89 trillion+ ¥0.13 trillion

5.8%

4.9%

- 0.9 pt

27.2%

27.4%

+ 0.2 pt

1.28 times

1.38 times+ 0.10 times

133.53149.58+16.05

Total assets
ROA
Ratio of shareholders’ equity (*1)

Net debt equity ratio (DER) (*2)
BS rate ¥/US$*1: Ratio of shareholders’ equity = equity attributable to owners of the parent/total assets*2: Net debt equity ratio (DER) = net interest-bearing liabilities/equity attributable to owners of the parent

Factors affecting financial results

ImpactSolid demand in the U.S. construction
materials business
Slowed growth in the Chinese economy
Weakened market for energy-related steel
pipe
Depressed demand under monetary
tightening measures
Recovery in automobile production

Copyright © 2023 Marubeni-Itochu Steel Inc.

2Profit and Loss Statement(Unit: Millions of yen)

(Unaudited, IFRS basis)

Operating Results

FY2023 FirstHalf Result

FY2022 First
Half Result

ChangeRevenue

1,882,713

1,793,853+88,860

Gross profit

135,137

130,418+4,719(60,672)(53,621)-7,051(1,274)

(793)

-481

Operating income (*1)

73,191

76,004-2,813

Net interest expenses(13,101)(5,964)-7,1371,341

1,109+232

133

(360)

+493

Gain (loss) on property, plant and equipment

1,796

125

+1,671Other non-operating income (loss)
Share of profits (losses) of associates andjoint ventures(114)(3,244)+3,130

4,296

6,690

-2,394

Profit before tax

67,54274,360-6,818

Income taxes(16,471)(17,743)+1,272

Profit51,071

56,617-5,546

Profit attributable to owners of the parent

44,72650,179-5,453

Profit attributable to non-controlling interests

6,345

6,438

-93

Selling, general and administrative
expenses
Provision for doubtful accounts

Dividend income
Gain (loss) on investments*1

Operating income is presented in accordance with Japanese accounting practices for the convenience ofinvestors and is not required by the IFRS. Ordinary income reflecting the Japanese GAAP standard has
been provisionally calculated at ¥65.6 billion.

Gross profit
Gross profit increased by approximately 4 percent, reflecting the robust
North American construction materials business, benefits from the yen’sdepreciation, and other factors.
Operating income
Operating income declined by approximately 4 percent, pushed down by
higher labor costs, increased miscellaneous costs prompted by inflation,and other factors.
Net interest expenses
Deterioration resulting from upper interest rates on the dollar
Share of profits (losses) of associates and joint ventures
This decreased by approximately 36 percent due to falling revenues forNorth American steel pipe business and other factors.

Comprehensive Income
ProfitNet unrealized gain (loss) on FVTOCI
Exchange differences on translating
foreign operations
Other
Comprehensive income(Unit: Millions of yen)
FY2023 First FY2022 First
ChangeHalf Result Half Result
51,071
8,729

56,617414-5,546+8,31532,01040,115-8,1052,156
93,966

2,769
99,915-613-5,94987,27993,310-6,031

6,687

6,605

+82

Copyright © 2023 Marubeni-Itochu Steel Inc.

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Comprehensive income attributable toowners of the parent
Comprehensive income attributable tonon-controlling interestsBalance Sheet(Unaudited, IFRS basis)
Financial position(Unit: Millions of yen)
End of FY2023 End of FY2022
First Half Result
ResultChangeCurrent assets
Cash and cash equivalents
Trade receivables
Inventories
Other
Non-current assets
Property, plant and equipment
Intangible assets
Investments and other assets

1,576,428
57,778857,812580,945
79,893317,385
113,842
31,455172,088

1,463,029
56,092
827,510511,264
68,163300,823
108,373
29,981
162,469+113,399+1,686+30,302+69,681+11,730+16,562+5,469+1,474+9,619Total assets

1,893,813

1,763,852+129,961

Current liabilities
Trade payables
Short-term debts
Other
Non-current liabilities
Long-term debts
Other

1,144,343
427,956
620,234
96,153
195,914
153,542
42,372

1,059,911
452,679
519,571
87,661
187,562
149,623
37,939+84,432-24,723+100,663+8,492+8,352+3,919+4,433

Total liabilities

1,340,257

1,247,473+92,784

Non-controlling interests

519,047
50,154
340,799
128,094
34,509479,529
50,154
343,723
85,65236,850+39,518-2,924+42,442-2,341

Total equity

553,556

516,379+37,177

1,893,813

1,763,852+129,961

Equity attributable to owners of the parent

Capital/Capital surplus
Retained earnings
Accumulated other comprehensive income

Total liabilities and equity

Management Indicators

FY2023 First
Half Result

FY2022
Results

ChangeRatio of shareholders’ equity (*2)

27.4%

27.2%

+0.2ptNet debt equity ratio (DER) (*3)

1.38 times

1.28 times+0.10 times

4.9%

5.8%

-0.9ptReturn on Assets (ROA)*2: Ratio of shareholders’ equity = equity attributable to owners of the parent/totalassets*3: Net DER = net interest-bearing liabilities/equity attributable to owners of the parent

Total assets¥1,893.8 billion (+¥130.0 billion from the end of FY2022)→ Increase in trade receivables and inventories

Ratio of shareholders’ equity
27.4% (+0.2 points from the end of FY2022)

Net DER
1.38 times (compared to +0.10 times from the end of FY2022)

Copyright © 2023 Marubeni-Itochu Steel Inc.

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