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, 2019
[Japanese GAAP]
October 31, 2018
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 9, 2018
Scheduled date of commencing dividend payments: –Availability of supplementary briefing material on annual financial results: Not available
Schedule of quarterly financial results briefing session: No(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Second Quarter of Fiscal Year Ending March 31, 2019 (April 1, 2018
to September 30, 2018)(1) Consolidated Operating Results (Cumulative)(% indicates changes from the previous corresponding period.)
Profit attributable to
Net sales
Operating profit
Ordinary profit
owners of parent
Six months ended
Million yen%
Million yen%
Million yen%
Million yen%
September 30, 2018
22,690(3.6)
1,704 765.4
1,818 794.2
1,790 537.4
September 30, 201723,529
(0.6)
196
–
203
–
280
–
(Note) Comprehensive income: Second Quarter of fiscal year ending March 31, 2019: ¥2,380million [264.2%]
Second Quarter of fiscal year ended March 31, 2018: ¥653 million [–%]
Basic earnings per
share

Six months ended
September 30, 2018
September 30, 2017

Diluted earnings per
share

Yen

Yen

54.94
8.62

54.45
8.59

(2) Consolidated Financial Position
Total assets
Net assets
Equity ratio
As ofMillion yen
Million yen%
15,67523.8
September 30, 2018
65,726
13,446
19.8
March 31, 2018
67,635(Reference) Equity: As of September 30, 2018: ¥15,622 million
As of March 31, 2018: ¥13,403 million(Note) “Partial Amendments to the Accounting Standard for Tax Effect Accounting” (ASBJ No.28; February 16,2018), etc. have been applied from the beginning of the first quarter of the fiscal year ending March 31, 2019,and results for the fiscal year ended March 31, 2018 are those after retrospective application.

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, 2018Year ending–
0.00
March 31, 2019Year ending
March 31, 2019–
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, 2019 (April 1, 2018 to March
31, 2019)(% indicates changes from the previous corresponding period.)
Net sales
Million yen%

Operating profit

Ordinary profit

Million yen

Million yen%

Profit (loss)
attributable toowners of parent%

Basic earnings
per share

Million yen%

Yen

Full year
46,000 (3.1)
(800)
–
(800)
–
(800)
(Note) Revision to recently disclosed projected consolidated financial results: No–(24.56)* 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, 2018: 32,600,600 shares
As of March 31, 2018: 32,600, 600 shares
2) Number of treasury shares at the end of the period:
As of September 30, 2018: 20,715 shares
As of March 31, 2018: 20 715 shares
3) Average number of outstanding shares during the period:
Six months ended September 30, 2018: 32,579,885 shares
Six months ended September 30, 2017: 32,579,028 shares* These quarterly consolidated financial results are outside the scope of audit* Explanation of the proper use of financial results forecast and other notes
1) 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.

2) 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 inshipping price that are strongly affected by shipping market and presence of new orders, 2.individual profitabilityof shipbuilding on the basis of percentage of completion method, and 3.exchange rates at the end of each quarter.
3) We have not updated the consolidated financial results forecast announced in May 2018 at this point as we took into
consideration the nature of the shipbuilding business, amounts of sales and provision for loss on construction
contracts are strongly linked to the individual profitability of shipbuilding affected by exchange rates andshipbuilding market.

1. Summary of Business Results
In the business environment surrounding the Sanoyas Group, “twin surpluses” of shipping tonnage andshipbuilding capacity continues structurally and the situation is still tough in the Shipbuilding & Engineeringbusiness. Although the charter fee of the bulk carriers is great variability among ship type, the market of bulk
carriers tends in general toward recovery. The expectation for further recovery of the market rise and there are thesigns growing demand for new shipbuilding triggered by new environmental regulations.
In the Shipbuilding business, new 82,000 DWT type PANAMAX bulk carriers and new 64,000 DWT type
SUPRAMAX 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. On the other hand,under the severe shipbuilding market situation, we are also working on adding new item on our menu and receive
building orders of special vessels and working ships following the order of ferries. As to the Marine and Ship
Repair business that we have been working on to complement the Shipbuilding business, the marine LNG fuelsupply systems is jointly developed with Sumitomo Seika Chemicals Company, Limited.(merger with SEIKA
ENGINEERING CO., LTD.) and inquiries are increased, so we are working to extend the market. Regarding LPG
tank business, we decided to manufacture in the Mizushima Shipyard (Kurashiki City, Okayama Prefecture) inaddition to the Osaka Shipyard (Osaka City, Osaka Prefecture), and we are preparing to enhance the business.
We had regarded the Industrial Machinery & Service business and Leisure business as “second core business” andpromoted various business portfolios. We recognize it is important and urgent issue to make our group businessstable and sustainable. Therefore, we restructured the Industrial Machinery & Service business and Leisurebusiness as M & T Group (Machinery & Technology Group) on April 2, 2018, and established Sanoyas MTG
Corporation as a management company for M & T group. Subsequently, we received an approval for the"absorption-type split agreement" to transfer shares of M & T group companies to Sanoyas MTG Corporation at
the annual shareholders' meeting in June. The transaction came into effect on July 2.
Regarding the M & T business, being based on strong domestic and overseas demand, steady results were seen insuch sectors as construction-use elevators, vacuum emulsifying equipment and stirrers for cosmetic manufacturing
and design, other works related to air-conditioning, drainage and sanitation facilities. To improve productivity,
Sanoyas Precision Industry Corporation, mainly engaged in precision machining, is consolidating its threefactories in the Kansai area into new built one in Sanda City, Hyogo Prefecture, with its head office. The firstphase process was completed in March 2018, and the second one is in progress. DAICHU CO., LTD. (Takatsuki
City, Osaka Prefecture), manufacturing shot blast machines, acquired the land next to Miyazaki Factory and built
up new factory to expand their activities by about 1.5 times in August 2018.

2. About Financing
One of our management tasks is to secure and maintain stable long-term working capital. Sanoyas Shipbuilding
Corporation (wholly-owned by Sanoyas Holdings Corporation) concluded a new syndicated loan agreement on
October 29, 2018 (borrowing amount 9.2 billion yen) and refinanced existing syndicated loan agreement (expiry

1date: December 30, 2019, originally signing date: December 28, 2015) on October 31, 2018. Consequently, theexpiry date is extended to December 30, 2021, and the annual repayment amount is decreased due to setting up analternative tranche of bullet repayment. The covenants (Sanoyas Shipbuilding Corporation and our covenant
provision) are also taken into consideration about high volatility of our business condition in future.

2

Quarterly Consolidated Financial Statements [Japanese GAAP](1) Quarterly Consolidated Balance Sheets [Japanese GAAP](Million yen)
As of March 31, 2018
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Electronically recorded monetary claims
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

3

As of September 30, 2018

23,01913,498
736
－
222
1,330
654
3,040
(23)
42,47920,393
13,334
712
500
240
1,685
727
1,506
(22)
39,078

5,866
2,784
4,980
2,362
15,993

5,862
3,223
5,010
2,432
16,528

409
426
31
868

393
392
31
817

6,715
538
203
273
662
(98)
8,295
25,156
67,635

7,795
472
197
279
659
(101)
9,302
26,64765,726

(Million yen)
As of March 31, 2018
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
Provision for noncurrent assets removal cost
Lease obligations
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Lease obligations
Deferred tax liabilities
Provision for noncurrent assets removal cost
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
Subscription rights to shares
Total net assets
Total liabilities and net assets

4

As of September 30, 201812,044
4,630
4,231
72
3,757
464
253
5,210
－
95
1,497
32,258

10,604
4,330
4,044
136
4,329
498
244
2,990
59
162
1,151
28,552

13,689
1,009
2,373
59
4,309
445
44
21,931
54,18912,697
1,271
2,613
－
4,433
451
30
21,49750,050

2,538
564
7,356
(5)
10,453

2,538
401
9,146
(5)
12,080

3,274
(1)
(31)
(290)
2,950
42
13,446
67,635

3,976
(17)
(181)
(237)
3,541
53
15,67565,726

(2) Quarterly Consolidated Statements of Income [Japanese GAAP](Million yen)Six months ended
September 30, 2017
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity
methodForeign exchange profit
Other
Total non-operating income
Non-operating expenses
Interest expenses
Other
Total non-operating expenses
Ordinary profit
Extraordinary losses
Loss on retirement of non-current assets
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to owners of parent

5

Six months ended
September 30, 2018

23,52920,921
2,608
2,411
196

22,69018,541
4,149
2,444
1,704

8
70

10
66

54

43

－
74
208

107
42
270

156
45
201
203

134
22
156
1,818

27
27
175
43
(148)
(104)
280
280

－
－
1,818
93
(65)
28
1,790
1,790

(3) Quarterly Consolidated Statements of Cash Flows [Japanese GAAP](Million yen)Six months ended
September 30, 2017
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
Increase (decrease) reserve for proposal of property andequipmentInterest and dividend income
Interest expenses
Foreign exchange losses (gains)
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
Income taxes (paid) refund
Net cash provided by (used in) operating activities

6

Six months ended
September 30, 2018
175
782
34
115
(10)
44

1,818
793
34
124
2
33

(14)

(9)

(161)

(2,220)

(182)

－

(78)
156
(0)

(77)
134
(90)

7,878

181

(438)
(29)
(150)
(980)

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

707

678

125
7,972
78
(153)
(422)
7,474

(294)
(288)
76
(133)
202
(143)

(Million yen)Six months ended
September 30, 2017
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of 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
Payments of loans receivableCollection 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

7

Six months ended
September 30, 2018

(354)
479
－
(1,438)
1
(80)
(10)
3
(3)
2
(37)
(1,436)

(465)
325
(500)
(1,732)
33
(64)
(9)
－
(1)
72
(1)
(2,342)

(450)
3,100
(2,032)
(162)
－
(133)
320
(4)
6,354
17,301
23,656(300)
850(2,029)
(162)
1,343
(64)
(363)
82
(2,766)22,224
19,457

(Segment Information)
Ⅰ Six months ended September 30, 2017 (April 1, 2017 to September 30, 2017)
Information concerning Net sales and Operating profit or loss by Reportable business segment
Reportable segment
Industrial
Shipbuilding &Machinery &Engineering
ServiceBusiness
Business

Adjustments(Note 1)

Total

LeisureBusiness(Million yen)Amountrecorded inquarterly
consolidated
statements ofincome(Note 2)

Net sales
External sales
Internal sales or transfers
Total
Segment profit (loss)

15,016

6,452

2,060

23,529－23,529

4

446

－

450

(450)

－

15,021

6,898

2,060

23,979(450)

23,529

360

271

(57)

574

(377)

196

(Note 1) Details of “Adjustments” are as follows:
Adjustments for the segment profit or loss of ¥377 million include corporate cost of ¥384llion not allocated to eachreportable segment, allowance for doubtful accounts of ¥2 million and elimination of inter-segment transaction of ¥(9)
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 profit recorded in the quarterly consolidated statements of income.

Ⅱ Six months ended September 30, 2018 (April 1, 2018 to September 30, 2018)
１ Information concerning Net sales and Operating profit or loss by Reportable business segment
Reportable segment
Shipbuilding &Engineering
Business

Machinery &Technology
Business

Adjustments(Note 1)

Total

(Million yen)Amount recorded inquarterly
consolidated
statements ofincome(Note 2)

Net sales
External sales
Internal sales or transfers
Total
Segment profit

13,384

9,305

22,690－22,690

6

442

448

(448)

－

13,391

9,748

23,139(448)

22,690

1,475

407

1,883

(178)

1,704

(Note 1) Details of “Adjustments” are as follows:
Adjustments for the segment profit of ¥178llion include corporate cost of ¥190 million not allocated to each reportablesegment, 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.

8

２ Changes in Reportable segments
During the three months ended June 30, 2018, “Industrial Machinery & Service Business” and “LeisureBusiness” were integrated into “Machinery & Technology Business” as a result of the review of the
management unit.
Since Sanoyas MTG Corporation was established in April 2018 to supervise "Machinery & Technology
Business", it is difficult to collect information to prepare segment information for the Second Quarter ended
September 30, 2017 based on the segment classification for the Second Quarter ended September 30, 2018.
Therefore, the Second Quarter ended September 30, 2018 is prepared based on the reportable segments for
the Second Quarter ended September 30, 2017.
Reportable segment
Industrial
Shipbuilding &Machinery &Engineering
ServiceBusiness
Business

Adjustments(Note 1)

Total

LeisureBusiness(Million yen)Amountrecorded inquarterly
consolidated
statements ofincome(Note 2)

Net sales
External sales
Internal sales or transfers
Total
Segment profit

13,384

7,246

2,059

22,690－22,690

6

471

－

477

(477)

－

13,391

7,717

2,059

23,168(477)

22,690

1,475

504

155

2,136

(431)

1,704

(Note 1) Details of “Adjustments” are as follows:
Adjustments for the segment profit of ¥431 million include corporate cost of ¥443 million not allocated to each reportablesegment, 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.

9

Supplementary information
Status of sales and orders
Segmental sales
Segment

Six months ended September 30, 2017 (April 1,2017 to September 30, 2017)(Million yen)

Shipbuilding &Engineering Business
Machinery &Technology Business
Total

Composition ratio (%)

Six months ended September 30, 2018 (April 1,2018 to September 30, 2018)(Million yen)

Composition ratio (%)

15,016

63.8

13,384

59.0

8,512

36.2

9,305

41.0

23,529100.0

22,690100.0

Order status and backlog of orders
Six months ended September 30, 2017 (April 1,2017 to September 30, 2017)
Segment

Shipbuilding &Engineering Business
Machinery &Technology Business
Total

Orders(Million yen)Backlog of orders(Million yen)Six months ended September 30, 2018 (April 1,2018 to September 30, 2018)
Orders(Million yen)Backlog of orders(Million yen)

9,192

52,406

12,97638,784

5,869

4,396

7,100

7,129

15,06156,80320,07745,914(Note) The backlog of orders of the shipbuilding in the Shipbuilding & Engineering Business as of September 30, 2018 is stated on
the percentage of completion method and the number of backlog of orders is 15 ships on a delivery basis.

10