Consolidated Quarterly Financial Results
for the Nine Months Ended December 31, 2023 [Japanese GAAP]
February 13, 2024
Stock Exchange Listing: Tokyo
URL: http://www.hokuetsucorp.com

Company:
Hokuetsu Corporation
Stock Code:
3865
Representative: Sekio Kishimoto, President & CEO
Contact:
Tomonari Maruyama, General Manager, Corporate Management Department
Scheduled date of filing quarterly report:
February 14, 2024
Scheduled date of commencement of dividend payments:–Supplementary documents for quarterly results:
None
Quarterly results briefing:
None

TEL: +81-3-3245-4500(Figures rounded down to the nearest million yen)

1. Consolidated Business Results for the Nine Months Ended December 31, 2023
(April 1, 2023 through December 31, 2023)(1) Consolidated results of operations
Net sales

Operating profit(% change from the previous corresponding period)
Profit attributable toOrdinary profit
owners of parent
Million yen%
Million yen%

Million yen%
Million yen%
Nine months ended
225,324
4.5
10,88813.4
12,884
82.5
December 31, 2023
Nine months ended
215,70211.2
9,604(41.7)
7,059(69.5)
December 31, 2022
(Note) Comprehensive income:Nine months ended December 31, 2023: 21,533 million yen (137.6%)
Nine months ended December 31, 2022: 9,064 million yen (-63.3%)
Basic earnings per share Diluted earnings per share
Yen
Yen
Nine months ended
43.35
43.31
December 31, 2023
Nine months ended
23.35
23.32
December 31, 2022

7,287

85.7

3,923

(82.6)(2) Consolidated financial position
Total assets
Net assets
Equity ratio
Million yen
Million yen%
As of December 31, 2023
419,856
243,680
57.9
As of March 31, 2023
388,444
225,950
58.0(Reference) Equity:
As of December 31, 2023:
242,960 million yen
As of March 31, 2023:
225,209 million yen

2. Dividends
End of 1Q
Yen

Annual dividend per share
End of 2Q
End of 3Q
Yen
Yen

Year ended–
9.00
March 31, 2023
Year ending–
9.00
March 31, 2024
Year ending
March 31, 2024 (forecast)(Note) Revisions to dividend forecasts published most recently None–

Year-end

Total
Yen

Yen

9.00

18.00

9.00

18.00

–

3. Forecast of Consolidated Financial Results for the Year Ending March 31, 2024
(April 1, 2023 through March 31, 2024)(% change from the previous corresponding period)
Net sales

Operating profit

Ordinary profit

Million yen%
Million yen%
Million yen
Full year
310,000
2.913,000(24.8)
14,000(Note) Revisions to business forecasts published most recently None-1-%
22.0

Profit attributable toBasic earnings
owners of parent
per share
Million yen%
Yen
9,000
8.153.55

* Notes(1) Changes in significant subsidiaries during the nine months ended December 31, 2023 (changes in specified subsidiaries accompanying
changes in the scope of consolidation): None
(2) Application of accounting procedures specific to preparation of the consolidated quarterly financial statements: None
(3) Changes in accounting policies, accounting estimates and restatement of prior period financial statements(i) Changes in accounting policies due to amendment to accounting standards: None(ii) Changes in accounting policies other than (i): None(iii) Changes in accounting estimates: None(iv) Restatement of prior period financial statements: None
(4) Shares outstanding (common stock)(i) Number of shares outstanding (treasury stock included):
As of December 31, 2023
188,053,114 shares(ii) Number of treasury stock:
As of December 31, 2023
19,908,344 shares(iii) Average number of shares during period:
Nine months ended December 31, 2023 168,116,953 shares

As of March 31, 2023

188,053,114 shares

As of March 31, 2023

19,972,637 shares

Nine months ended December 31, 2022 168,060,165 shares* Consolidated Quarterly Financial Results are exempted from quarterly review performed by a certified public
accountant or an audit corporation.
* Explanation regarding appropriate use of business forecasts and other special instructions(Caution regarding forward-looking statements)
The forward-looking statements such as forecasts of financial results contained in this material are based on information available to theCompany at the time of the publication of this document and certain assumptions that the Company considers to be reasonable, and may differ
materially from the actual results due to various factors. Refer to “1. Qualitative Information on Consolidated Operating Results for the NineMonth Period; (3) Qualitative Information Concerning Consolidated Earnings Forecasts” on page 3 of the accompanying materials for mattersrelated to results forecasts.

* This document is an excerpt translation of the original in Japanese and is for reference purposes only. In case ofany discrepancy between this document and the original in Japanese, the latter shall take precedence.

-2-1. Qualitative Information on Consolidated Operating Results for the Nine-Month Period(1) Qualitative Information Concerning Consolidated Operating Results
During the first nine months of the current fiscal year, net sales, operating profit, ordinary profit and profit attributable to owners of parent
came to 225,324 million yen (up 4.5% year on year), 10,888 million yen (up 13.4% year on year), 12,884 million yen (up 82.5% year onyear) and 7,287 million yen (up 85.7% year on year), respectively, reflecting the implementation of price increases, despite soaring raw
material and fuel prices.
The performance of major segments is as follows:(i) Pulp and paper businessIn the pulp and paper business, both sales and profits increased, mainly reflecting the implementation of price increases, despite soaring
raw material and fuel prices.
As a result, the results of the pulp and paper business were as follows.
Net sales

207,300 million yen (up 4.2% year on year)

Operating profit

9,550 million yen (up 10.8% year on year)(ii) Packaging/Paper processing businessIn the packaging/paper processing business, both sales and profits increased, mainly reflecting higher selling prices due to price increases
and a rise in the sales volume.
As a result, the results of the packaging/paper processing business were as follows.
Net sales
Operating profit

11,955 million yen (up 15.0% year on year)
327 million yen (up 361.2% year on year)(iii) Other businesses
In other businesses, including the wood material business, construction business, logistics business and used paper wholesale business,sales decreased due to a decline in external orders in sales of pallets in particular. Even so, in terms of profitability, profits rose due tothe effect of a range of cost reduction measures.
As a result, the results of other businesses were as follows.
Net sales
Operating profit

6,068 million yen (down 4.3% year on year)
742 million yen (up 26.8% year on year)(2) Qualitative Information Concerning Consolidated Financial PositionTotal assets increased 31,411 million yen from the end of the previous fiscal year, to 419,856 million yen. Significant factors included
increases of 15,103 million yen in cash and deposits, 1,453 million yen in notes and accounts receivable-trade and contract assets, 1,280
million yen in electronically recorded monetary claims - operating, 2,413 million yen in raw materials and supplies, 4,576 million yen inproperty, plant and equipment, and 4,268 million yen in investment securities.
Total liabilities rose 13,681 million yen from the end of the previous fiscal year, to 176,176 million yen. This was primarily due to increasesof 863 million yen in notes and accounts payable-trade, 10,540 million yen in interest-bearing debt, and 1,339 million yen in deferred tax
liabilities included in other in non-current liabilities.
Net assets rose 17,730 million yen from the end of the previous fiscal year, to 243,680 million yen. This mainly reflected increases inretained earnings of 3,852 million yen due to profit attributable to owners of parent, and valuation difference on available-for-sale securitiesof 3,357 million yen and foreign currency translation adjustment of 11,158 million yen.

(3) Qualitative Information Concerning Consolidated Earnings Forecasts
No change has been made to the full-year financial forecasts announced on November 10, 2023.

-3-2. Quarterly Consolidated Financial Statements and Key Notes(1) Quarterly Consolidated Balance Sheet(Million yen)
As of March 31, 2023
(Assets)
Current assets
Cash and deposits
Notes and accounts receivable - trade, and contract assets
Electronically recorded monetary claims - operating
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
Accumulated depreciation
Buildings and structures, net
Machinery, vehicles, tools, furniture and fixtures
Accumulated depreciation

As of December 31, 2023

18,06375,827
8,752
28,4582,792
32,4154,469(4)33,166
77,281
10,03328,091
2,647
34,8294,321(5)170,775

190,365

87,761(56,135)

89,320(57,550)

31,62531,770446,305(387,365)

455,549(393,551)

58,93961,998Other, net

26,49527,868

Machinery, vehicles, tools, furniture and fixtures, net
Total property, plant and equipment

117,060

121,637

Intangible assets
Investments and other assets
Investment securities
Shares of subsidiaries and associates
Other
Allowance for doubtful accounts

2,467

2,509

22,272
63,643
12,508(283)

26,54066,747
12,337(281)

Total investments and other assets

98,141

105,343

217,669

229,490

388,444419,856

Total non-current assets
Total assets-4-(Million yen)
As of March 31, 2023
(Liabilities)
Current liabilities
Notes and accounts payable - trade
Electronically recorded obligations - operating
Short-term loans
Commercial papers
Current portion of bonds payable
Income taxes payable
Provision
Other

As of December 31, 2023

21,283
7,820
17,05810,00010,0002,919
3,206
13,577

22,146
8,444
18,372
9,000
10,0001,324
2,246
16,396

Total current liabilities

85,86587,931

Non-current liabilities
Bonds payable
Long-term loans
Provision
Retirement benefit liability
Asset retirement obligations
Other

10,00054,938
1,593
3,806
2,410
3,880

25,00050,097
1,834
3,830
2,265
5,216

Total non-current liabilities

76,62988,244

Total liabilities

162,494

176,176

Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares

42,02045,342
135,489(9,625)42,02044,953
139,341(9,595)

213,226

216,719

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

4,418
79
5,907
1,576

7,776
(18)
17,065
1,417

Total accumulated other comprehensive income

11,982

26,240

91649

76
642

225,950

243,680

388,444419,856

Total shareholders’ equity

Share acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets-5-(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income
Quarterly Consolidated Statements of Income(Nine-month period)(Million yen)
For the nine-month ended
December 31, 2022

For the nine-month ended
December 31, 2023

Net sales
Cost of sales

215,702
172,425

225,324
180,821

Gross profit

43,27744,502

Selling, general and administrative expenses

33,67333,614

Operating profit

9,604

10,888Non-operating income
Interest income
Dividends income
Share of profit of entities accounted for using equity method
Foreign exchange gains
Other
Total non-operating income

52875
–
2,523
738
4,188

551
797
657
112
927
3,046

Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equity method
Other
Total non-operating expenses

610
5,589
533
6,733

616
–
4331,050

Ordinary profit

7,059

12,884Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Subsidy income
Insurance claim income
Gain on contribution of securities to retirement benefit trust

481
230
5107
1,416

110
9–
76
–

2,241

196

677
–
58

1,021
657
––

691

1,678

Profit before income taxes

8,609

11,402

Income taxes - current
Income taxes - deferred

3,767
866

3,538
502

Total income taxes

4,634

4,041

Profit

3,974

7,361

Total extraordinary income
Extraordinary losses
Loss on sales and retirement of non-current assets
Loss on disaster
Loss on tax purpose reduction entry of non-current assets
Loss on valuation of investment securities
Total extraordinary losses

Profit attributable to non-controlling interests
Profit attributable to owners of parent-6-51

73

3,923

7,287

Quarterly Consolidated Statements of Comprehensive Income(Nine-month period)(Million yen)
For the nine-month ended
December 31, 2022
ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities accounted forusing equity method
Total other comprehensive income

For the nine-month ended
December 31, 2023

3,974

7,361

329
(88)
5,212
(126)

3,097
12
7,460
(209)

(236)

3,810

5,089

14,172Comprehensive income

9,064

21,533Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

8,979
85

21,545(11)-7-