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 Third Quarter of Fiscal Year Ending March 31, 2021
[Japanese GAAP]
January 29, 2021
Company name: Sanoyas Holdings Corporation
Stock exchange listing: Tokyo Stock Exchange
Code number: 7022
URL: http://www.sanoyas.co.jp/
Representative: Takashi Ueda, President & CEO
Contact: Naoya Fukui, General Manager, Accounting Department
Phone: +81-6-4803-6171
Email: info@sanoyas.co.jp
Scheduled date of filing quarterly securities report: February 10, 2021
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 Third Quarter of Fiscal Year Ending March 31, 2021 (April 1, 2020 to
December 31, 2020)(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%
December 31, 2020
33,392(5.5)(3,925)–(3,810)–(5,163)–
December 31, 201935,353
2.3(1,221)–(1,090)–(392)–(Note) Comprehensive income: Third Quarter of fiscal year ended March 31, 2021: ¥(6,423) million [–%]
Third Quarter of fiscal year ended March 31, 2020: ¥(178)million [–%]
Basic earnings per
share

Six months ended
December 31, 2020
December 31, 2019

Diluted earnings per
share

Yen

Yen

(157.71)(12.06)––(2) Consolidated Financial Position
Total assets
Net assets
Million yen
Million yen
As of
5,148
December 31, 2020
63,557
11,660March 31, 2020
63,681(Reference) Equity: As of December 31, 2020: ¥5,050 million
As of March 31, 2020: ¥11,571 million

Equity ratio
%

7.9
18.2

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

Yen

Yen

Total

Yen

Yen

Fiscal year ended
–
0.00
–
5.00
5.00
March 31, 2020
Fiscal year ending–
0.00–
March 31, 2021
Fiscal year ending
March 31, 2021––
(Forecast)(Note 1) Revision to recently disclosed projected cash dividends: No(Note 2) Annual dividend for the Fiscal Year Ending March 31, 2021 has not yet been determined.
3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2021 (April 1, 2020 to March
31, 2021)(% indicates changes from the previous corresponding period.)
Net sales
Million yen%

Operating profit

Ordinary profit(loss)(loss)

Million yen%

Million yen

Profit (loss)
attributable toowners of parent%

Million yen

Basic earnings
per share%

Yen

Full year
45,000(9.6)(4,000)–(4,100)–(6,300)–(192.62)(Note 1) Revision to recently disclosed projected consolidated financial results: No(Note 2) The exchanage rate used for unified foreign currency items in assuming the Company's earnings forecast is104.78 yen to the U.S dollar.
* Notes:(1) Changes in significant subsidiaries during the period under review (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 the revision of accounting standards: No
2) Changes in accounting policies other than 1) above: No
3) Changes in accounting estimates: No4) Retrospective restatement: No(4) Total number of issued shares (common shares)
1) Total number of issued shares at the end of the period (including treasury shares):December 31, 2020: 32,848,066 shares
March 31, 2020: 32,637,500 shares2) Total number of treasury shares at the end of the period:
December 31, 2020: 20,715 shares
March 31, 2020: 20,715 shares
3) Average number of shares during the period:
Six months ended December 31, 2020: 32,743,124 shares
Six months ended December 31, 2019: 32,586,085 shares* These 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
and certain assumptions deemed reasonable. Actual results may differ significantly from these forecasts due to awide range of factors.

1. Qualitative Information(1) Summary of Business Results
In the business environment surrounding the Sanoyas Group, our Shipbuilding & Engineering business is still facing
difficult circumstances reflecting continuous “twin surpluses” of shipping tonnage and shipbuilding capacity,
government subsidies to our competing Chinese and South Korean shipyards and sluggish shipping market caused
by global economic slump. The shipping market for bulk carriers remained weak since the beginning of 2020. In
this situation, business negotiations of shipbuilding have stopped since April 2020. Though some dry bulk shipping
indices are showing an upward trend, time charter rates remain at a low level and the price of new ships has notrecovered yet.
In the Shipbuilding business, we have developed new 82,000 DWT type PANAMAX bulk carriers and new 64,000
DWT type ULTRAMAX bulk carriers. These vessels are in accordance with IMO NOx Tier Ⅲ regulation and
IACS Harmonized Common Structural Rules and further improved fuel consumption. In addition, we have newly
developed 41,000 DWT type HANDY SIZE bulk carriers. This type of vessel with wide beam and shallow draft haslarger cargo hold capacity and applies new regulations. We mainly carry out sales promotion for these vessels. On
the other hand, we are working on diversification of the construction menu by promoting sales of passenger ferries,
special purpose vessels and work vessels, etc. in addition to commercial vessels. As to the gas tank business that wehave been working on expanding to complement the Shipbuilding business, we reorganized our gas tank businessstructure by placing "Gas Tank Sales Department" and "Gas Tank Design Department" under newly formed “Gas
Tank Business Department” and we have been constructing gas tank production facilities in the Mizushima Shipyard(Kurashiki City, Okayama Prefecture) in addition to the Osaka Shipyard (Osaka City, Osaka Prefecture) in the
beginning of this fiscal year in order to expand and strengthen our gas tank business. Besides, as previously
announced in a timely disclosure on November 9, 2020, we decided to transfer the ownership of Sanoyas
Shipbuilding Corporation which is our subsidiary of Shipbuilding & Engineering business to SHIN KURUSHIMA
DOCKYARD CO.,LTD. in order for Sanoyas Shipbuilding Corporation to continue its shipbuilding business far into
the future in light of the recent business environment and company scale and financial strength necessary to survive
on its own.
We regard the Machinery & Technology business as “second core business” and are promoting various businessportfolios and strengthening the management base of our subsidiaries. We are currently constructing new businessstrategy and organizational structure based on the premise that we will continue our business as a union of existingnine medium-sized companies after the transfer of the shipbuilding business mentioned above. In particular, we will
aim to create a company that places even greater emphasis on "demonstrating comprehensive strengths of our group,""differentiating and adding value to products and services through technological innovation and the accumulation of
know-how," and "focusing on growth by developing and incorporating new businesses”. In addition, we transferred
the plant division of Sanoyas Shipbuilding Corporation to the newly established Sanoyas Plant Industry Corporation,
and all shares of the newly established company were transferred from Sanoyas Shipbuilding Corporation to Sanoyas
MTG Corporation on January 4, 2021. Moreover, we decided to marge Sanoyas Plant Industry Corporation with
MIZUHO INDUSTRIAL CO., LTD., our consolidated subsidiary, as of April 1, 2021, with the aim of creatingsynergy effects by consolidating the management resources of both companies, strengthening the business1

foundation and mutually complementing their respective technologies and know-how, as well as expanding theirbusiness domains.

Consolidated net sales in the third quarter ended December 31, 2020 decreased by ¥1,960 million (5.5%) over thesame period of the previous fiscal year, to ¥33,392 million. Operating loss was ¥3,925 million (operating loss of thesame period of the previous fiscal year was ¥1,221 million), ordinary loss was ¥3,810 million (ordinary loss of thesame period of the previous fiscal year was ¥1,090 million), and quarterly net loss attributable to parent company
shareholder was ¥5,163 million (quarterly net loss attributable to parent company shareholder of the same period of
the previous fiscal year was ¥392 million).

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 newbuilding prices have not been recovered
with unusual economic climate affected by COVID-19, with the result that we received new orders of 2 vessels of
new 64,000 DWT type ULTRAMAX bulk carriers and 2 vessels of new 82,000 DWT type PANAMAX bulk carriers.
The number of backlog of orders was 13 vessels as of December 31, 2020. We will try to get orders flexibly
responding to demanding marketing conditions and focus on our business policy of securing an order backlog forabout two years. As to marine business and gas tank business, we focused on sales of repairing services for vesselsof public and private sectors and LPG tanks and we received our first order for a large-scale tank of over 7,500 m3
in addition to conventional LPG tanks. As a result, the segment backlog of orders for shipbuilding business including
marine business, gas tank business and plant business was ¥31,502 million on a percentage of completion method.
The segment net sales in the second quarter ended September 30, 2020 decreased by ¥455 million (2.1%) over thesame period of the previous fiscal year, to ¥21,662 million due to slowing down of the building pace of new ships
following current situation on new orders received. The evaluated net sales of the backlog of shipbuilding orders on
a US dollar basis decreased because Japanese Yen has been stronger against the US dollar continuingly during thethird quarter ending December 31, 2020. The allowance for future loss on construction contracts including the newly
ordered vessels increased. As a result, the profitability of the vessels deteriorated and the operating loss was ¥3,127
million (operating loss of the same period of the previous fiscal year was ¥1,970 million).

[2] M & T (Machinery & Technology) business
Regarding the Machinery & Technology business, COVID-19 have had a significant impact on its performancecontinuously. Precision machining for semiconductor manufacturing equipment continued to increase, and the2machining field was solid due to the recovery of parts for special vehicles. In addition, Mizuho Machine(Wuxi) Co.,
Ltd. won large orders and maintained strong performance. On the other hand, other businesses have been sluggish
owing to decline in sales of shot blast machines, devices for cosmetic products, and construction of air conditioning
and water supply/wastewater facilities. The amusement park business, which had been severely depressed due to thedeclaration of state of emergency and restrictions on overseas travel has shown some signs of recovery owing toeasing of restrictions, but the future is not optimistic due to the arrival of the third wave of COVID-19. As a resultof the business activities, the segment backlog of orders was ¥8,484 million. The segment net sales in the third
quarter ended December 31, 2020 decreased by ¥1,505 million (11.4%) over the same period of the previous fiscal
year, to ¥11,730 million. The operating loss was ¥483 million (operating profit of the same period of the previous
fiscal year was ¥968 million).

(3) Information regarding Consolidated Financial Results Forecasts and other forward-looking statements
We have not updated the consolidated financial results forecast announced in November 9, 2020 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
and shipbuilding market.

3

2. Quarterly Consolidated Financial Statements [Japanese GAAP](1) Quarterly Consolidated Balance Sheets [Japanese GAAP](Million yen)
As of March 31, 2020
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 December 31, 2020

15,62315,085
535
500
179
1,464
829
3,656
(33)
37,83916,305
14,929
508
－
175
3,003
804
3,540
(24)
39,241

6,310
3,003
5,168
1,883
16,365

6,149
2,990
5,249
2,233
16,622

550
901
39
1,490

1,228
830
40
2,098

5,894
401
231
254
1,346
(143)
7,984
25,841
63,681

3,782
400
210
262
1,040
(102)
5,593
24,31563,557

(Million yen)
As of March 31, 2020
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 removal cost of property andequipment
Provision for loss on sales of shares of subsidiaries
and associates
Lease obligations
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Lease obligations
Deferred tax liabilities
Provision for removal cost of property andequipment
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 December 31, 2020

10,973
5,442
3,665
200
2,696
534
287
2,286

12,0375,500
10,077
80
2,793
178
259
3,778

90

85

－

5,343

261
1,845
28,284449
1,402
41,987

14,214
1,823
2,181

6,210
2,905
1,567

8

－

5,024
450
33
23,73652,020

5,269
441
26
16,421
58,408

2,542
405
6,364
(5)
9,306

2,559
259
1,232
(5)
4,045

2,708
11
(286)
(169)
2,264
89
11,66063,681

1,337
2
(208)
(126)
1,004
97
5,148
63,557

(2) Quarterly Consolidated Statements of Income and Consolidated Statements of Comprehensive Income [Japanese
GAAP]
Quarterly Consolidated Statements of Income [Japanese GAAP](Million yen)
Six Months ended December 31, Six Months ended December
201931, 2020
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating 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 loss
Extraordinary income
Gain on sales of investment securities
Gain on sale of non-current assets
Total extraordinary income
Extraordinary loss
Provision for loss on sales of shares of subsidiaries andassociates
Total extraordinary loss
Loss before income taxes
Income taxes – current
Income taxes – deferred
Total income taxes
Loss
Loss attributable to owners of parent

35,35332,9282,424
3,646(1,221)33,392
33,180212
4,137(3,925)

9
129

6
103

205

31

4
33
382

42
251
434

197
53
251
(1,090)260
59
319(3,810)

578
296
875

4,204
－
4,204

－

5,343

－
(214)
140
38
178
(392)
(392)

5,343
(4,950)190
23
213(5,163)(5,163)

Quarterly Consolidated Statements of Comprehensive Income [Japanese GAAP](Million yen)Three Months ended December Three Months ended December
31, 2019
31, 2020
Loss
Other comprehensive income loss (loss)
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 income (loss)
Comprehensive income
Comprehensive income (loss) attributable to
Owners of the parent

6

(392)

(5,163)

222
(15)
(49)
59

(1,371)
(13)
78
42

(1)

3

(214)
(178)

(1,260)(6,423)(178)(6,423)

－Non-controlling interests7－

(Segment Information)
Ⅰ Six months Ended December 31,, 2019 (April 1, 2019 to December 31, 2019)
Information concerning Net sales and Operating profit or loss by Reportable business segment(Million yen)Amount recorded inquarterly
consolidated
statements ofincome( Note 2)

Reportable segment
Shipbuilding &Engineering
Business

Adjustments( Note 1)

Total

Machinery &Technology
Business

Net sales
22,117

13,23535,353－35,353

Internal sales or transfers

106

10

117

(117)

－

Total

22,224

13,24635,471(117)

35,353(1,970)968(1,001)(219)(1,221)

External sales

Segment profit (loss)(Note 1) Details of “Adjustments” are as follows:
Adjustments for the segment profit or loss of ¥(219) million include corporate cost of ¥(242) million not allocated to eachreportable segment, allowance for doubtful accounts of ¥2 million and elimination of inter-segment transaction of ¥20 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.
(Note 3) Following the transfer of the shares and the business administration of SANOTEC Corporation from Sanoyas MTG
Corporation to Sanoyas Shipbuilding Corporation in January 2020, we transferred SANOTEC Corporation from a part ofMachinery & Technology Business to a part of Shipbuilding & Engineering Business. The segment information for theprevious period is restated to current period presentation.

Ⅱ Six months Ended December 31, 2020 (April 1, 2020 to December 31, 2020)
Information concerning Net sales and Operating profit or loss by Reportable business segment(Million yen)Amount recorded inquarterly
consolidated
statements ofincome( Note 2)

Reportable segment
Shipbuilding &Engineering
Business

Adjustments( Note 1)

Total

Machinery &Technology
Business

Net sales
21,662

11,73033,392－33,392

Internal sales or transfers

117

2

120

(120)

－

Total

21,78011,73233,512(1205)

33,392(3,127)(483)(3,611)(314)(3,925)External sales

Segment profit (loss)(Note 1) Details of “Adjustments” are as follows:
Adjustments for the segment loss of ¥(314) million include corporate cost of ¥(336) million not allocated to each reportablesegment, allowance for doubtful accounts of ¥2 million and elimination of inter-segment transaction of ¥19 million.
Corporate cost consists of general and administrative expenses which do not belong to the reporting segment.
(Note 2) Segment loss is adjusted with operating loss recorded in the quarterly consolidated statements of income.

8

3. Supplementary information
Status of sales and orders
Segmental sales
Six months ended December 31, 2019
(April 1, 2019 to December 31, 2019)
Segment
Composition ratio(Million yen)（%）
Shipbuilding &22,117
62.6
Engineering BusinessSix months ended December 31, 2020
(April 1, 2020 to December 31, 2020)
Composition ratio(Million yen)（%）
21,66264.9

Machinery &Technology Business

13,23537.4

11,730

35.1

Total

35,353100.0

33,392100.0

Order status and backlog of orders
Six months ended December 31, 2019
(April 1, 2019 to December 31, 2019)
Segment
OrdersBacklog of orders(Million yen)
(Million yen)Six months ended December 31, 2020
(April 1, 2020 to December 31, 2020)
Orders(Million yen)Backlog of orders(Million yen)

Shipbuilding &Engineering Business
Machinery &Technology Business

15,29735,041

15,69631,502

9,850

7,764

11,048

8,484

Total

25,14742,806

26,74539,986(Note) The backlog of orders of shipbuilding in the Shipbuilding & Engineering Business as of December 31, 2020 is stated on
the percentage of completion method and the number of backlog of orders is 13 on delivery basis.

9