November 2, 2018

Summary of the Consolidated Financial Results for the Second Quarterof the Fiscal Year Ending March 31, 2019 (FY3/19)(Six Months Ended September 30, 2018)[Japanese GAAP]
Company name:

Yodogawa Steel Works, Ltd.
Stock exchange listed: Tokyo, 1st Section
Stock code:
5451
URL: http://www.yodoko.co.jp/
Representative:
Satoshi Nitta, President and Representative Director
Inquiries:
Yasunori Osumi, Executive Officer, General Manager of IR Department
Tel: +(81)6-6245-1113
Scheduled date of filing of Quarterly Report:
November 9, 2018
Scheduled date of payment of dividend:
December 3, 2018
Preparation of supplementary materials for quarterly financial results: Yes
Holding of quarterly financial results meeting:Yes (for analysts and institutional investors)(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Second Quarter (April 1, 2018 to September 30, 2018) of FY3/19(1) Consolidated results of operations(Percentages represent year-on-year changes)
Net sales

Operating profit

Millions of yen

Six months ended Sep. 30, 2018
Six months ended Sep. 30, 2017

% Millions of yen

83,67884,826

Note: Comprehensive income (millions of yen):

(1.4)
15.7

3,052
6,750

% Millions of yen(54.8)
7.9

4,555
7,529

Six months ended Sep. 30, 2018:
Six months ended Sep. 30, 2017:% Millions of yen(39.5)
23.6

2,838
4,449

%

(36.2)
37.7

1,851 (down 77.5%)
8,228 (-%)

Diluted net income
per share

Net income per share
Six months ended Sep. 30, 2018
Six months ended Sep. 30, 2017

Profit attributable toowners of parent

Ordinary profit

Yen

Yen

95.71
149.8095.30
149.17(2) Consolidated financial position
Total assets

Shareholders’ equity ratio

Net assets

Millions of yen

Millions of yen%

213,882
215,638

170,261
170,574

71.4
70.3

As of Sep. 30, 2018
As of Mar. 31, 2018

Reference: Shareholders’ equity (millions of yen):
As of Sep. 30, 2018: 152,807
As of Mar. 31, 2018: 151,586
Starting with the beginning of the first quarter of the current fiscal year, Yodogawa Steel Works is applying “Partial Amendments to
Accounting Standard for Tax Effect Accounting” (Accounting Standards Board of Japan (ASBJ) Statement No. 28, February 16, 201 8).
Prior-year figures have been adjusted retroactively to conform with this accounting standard.

2. Dividends
1Q-endDividend per share
3Q-end2Q-endYear-end

Total

Yen

Yen

Yen

Yen

Yen

-

35.00
30.00

-

40.00

75.00

-

-

-

Fiscal year ended Mar. 31, 2018
Fiscal year ending Mar. 31, 2019
Fiscal year ending Mar. 31, 2019
(Forecast)

Note: Revisions to the most recently announced dividend forecast: None
There is currently no forecast for year-end dividends for the fiscal year ending March 31, 2019.

3. Consolidated Forecasts for FY3/19 (April 1, 2018 to March 31, 2019)
Net sales
Full year(Percentages represent year-on-year changes)
Profit attributable to
Net income
Ordinary profit
owners of parent
per share

Operating profit

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen

%

Yen

-

-

-

-

-

-

-

-

-

Note: Revisions to the most recently announced consolidated earnings forecast: None
No full year forecasts are presented because of the difficulty of determining a reliable forecast for the Yodogawa Steel Group ’s results ofoperations in the fiscal year ending March 31, 2019. For further details, please refer to “1. Qualitative Information on Quarterly
Consolidated Financial Performance, (3) Explanation of Consolidated Forecast and Other Forward-looking Statements” on page 4.

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes inscope of consolidation): None
(2) Application of special accounting methods for presenting quarterly consolidated financial statements: None
(3) Changes in accounting policies and accounting-based estimates, and restatements
1) Changes in accounting policies due to revisions in accounting standards, others: None
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting-based estimates: None
4) Restatements: None

(4) Number of outstanding shares (common shares)
1) Number of shares outstanding at the end of the period (including treasury shares)
As of Sep. 30, 2018:35,837,230 shares

As of Mar. 31, 2018:35,837,230 shares

As of Mar. 31, 2018:

6,185,228 shares

Six months ended Sep. 30, 2017:

29,706,498 shares

2) Number of treasury shares at the end of the period
As of Sep. 30, 2018:

6,172,579 shares

3) Average number of shares outstanding during the period
Six months ended Sep. 30, 2018:

29,655,892 shares* The current quarterly financial report is not subject to quarterly review by certified public accountants or auditing firms.
* Cautionary statement with respect to forward-looking statements and other special items
Forecasts of future performance in these materials are based on assumptions judged to be valid and information available to theCompany’s management at the time the materials were prepared. These materials are not promises by the Company regarding
future performance. Actual results may differ significantly from these forecasts for a number of reasons. For a discussion of theassumptions for forecasts, precautions concerning usage and other information, please refer to “1. Qualitative Information on
Quarterly Consolidated Financial Performance, (3) Explanation of Consolidated Forecast and Other Forward -looking
Statements” on page 4.

Yodogawa Steel Works, Ltd. (5451) Consolidated Financial Results for 2Q of FY3/19

Contents of Attachments
1. Qualitative Information on Quarterly Consolidated Financial Performance2(1) Explanation of Results of Operations

2(2) Explanation of Financial Position

3(3) Explanation of Consolidated Forecast and Other Forward-looking Statements

4

2. Quarterly Consolidated Financial Statements and Notes

5(1) Quarterly Consolidated Balance Sheet

5(2) Quarterly Consolidated Statements of Income and Comprehensive Income

7

Quarterly Consolidated Statement of Income
For the Six-month Period

7

Quarterly Consolidated Statement of Comprehensive Income
For the Six-month Period

8(3) Notes to Quarterly Consolidated Financial Statements

9

Going-concern Assumption

9

Significant Changes in Shareholders’ Equity

9

Segment and Other Information

9

1

Yodogawa Steel Works, Ltd. (5451) Consolidated Financial Results for 2Q of FY3/19

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
In the first half of the fiscal year ending March 31, 2019, the Japanese economy continued to recover slowly as
the labor market and personal income improved and corporate capital expenditures increased.
In the United States and Europe, there was a continuation of generally steady economic recoveries although there
are concerns about negative effects of trade problems and monetary tightening. In China, there are concerns aboutslowing economic growth caused by U.S. trade friction and other reasons. But the Chinese economy is remaining
generally healthy with the support of the government’s monetary easing, higher infrastructure investments andother actions.
In the Japanese steel industry, there was a decline in automobile production caused by heavy rain and flooding inwestern Japan. However, the business environment was generally favorable due to increasing non -residential
construction starts and other reasons.
The global steel industry maintains its recovery trend as crude steel production volume continues to grow steadilyin China and other countries.
The Yodogawa Steel Group’s net sales in the first half decreased 1,148 million yen to 83,678 million yen.
Operating profit decreased 3,698 million yen to 3,052 million yen, ordinary profit decreased 2,974 million yen to4,555 million yen, and profit attributable to owners of parent decreased 1,611 million yen to 2,838 million yen.
In Japan, sales volume of plated steel sheets for building materials decreased because of sales activities thatplaced priority on profitability. But total sales in Japan were higher because of progress with price revisions.
Earnings decreased mainly because of the higher cost of primary raw materials and the smaller benefit fromvaluation gains on inventories than in the first half of the previous fiscal year.
Overseas sales and earnings declined. This was caused primarily by the challenging business climate for sales
within Taiwan and exports of Sheng Yu Steel Co., Ltd. (SYSCO), a subsidiary in Taiwan.
Yodogawa Steel extends its sincere apology to customers, shareholders and others for the trouble created by
improper activities involving the quality of roll products. This problem did not have a significant effect on resultsof operations in the first half of the current fiscal year.
Results by business segment are as follows.
1) Steel Sheet-related BusinessNet sales totaled 77,533 million yen and operating profit was 3,036 million yen.
Steel Sheet Segment
In Japan, the sales volume of pre-painted sheets increased mainly because of growth in demand for air
conditioners due to unusually hot summer weather and to solid demand for these sheets used for constructing
buildings. However, the sales volume was down for plated steel sheets sold to specific high-demand customers
and for retail sales for general distribution. The main reasons were the policy of conducting sales activities withemphasis on profitability and delays in deliveries due to typhoon damage.
At Taiwan subsidiary SYSCO, sales and earnings declined for two reasons. First is soft demand forsurface-treated steel sheets in Taiwan because of tighter building regulations. Second is a decrease in the sales
volume caused by U.S. trade protectionism. In addition, sales and earnings were down at subsidiaries
Yodogawa-Shengyu (Hefei) High-Tech Steel Co., Ltd. (YSS) in China and PCM Processing (Thailand) Ltd. (PPT)in Thailand as prices revisions did not keep up with the upturn in the cost of primary raw materials.
Building Material & Exterior Products Segment
In the building materials category, the sales volume of core roofing products decreased because of sales activities
that placed priority on profitability. But overall sales increased due to strong sales of YODO fire -proof panel
Grand Wall (Grand Wall). In the exterior products category, a series of natural disa sters in September kept sales

2

Yodogawa Steel Works, Ltd. (5451) Consolidated Financial Results for 2Q of FY3/19

flat but total first half sales increased because of a recovery in consumer spending. Since first half sales in theprevious fiscal year benefited from large projects for the installation of Grand Wall, construction sales were downeven though orders were generally strong for logistics, manufacturing and other facilities.
As a result, total sales in the steel sheet-related business were lower than one year earlier.
2) Roll BusinessNet sales totaled 1,860 million yen and operating profit was 27 million yen.
Sales increased mainly because of the completion of a large project received for rolls for papermaking.
3) Grating BusinessNet sales totaled 1,640 million yen and operating profit was 1 million yen.
Sales increased due to strong private-sector demand mainly in the Kanto and Tokai regions while public-sector
sales were sluggish.
4) Real Estate BusinessNet sales totaled 584 million yen and operating profit was 405 million yen.
Sales increased because of a higher occupancy rate at tenant-occupied buildings and higher sales at other leased
properties.
5) Other Businesses
Net sales totaled 2,060 million yen and operating profit was 171 million yen.
Higher sales in material sales operations raised sales in this segment.
(2) Explanation of Financial Position
AssetsCurrent assets decreased by 244 million yen from the end of the previous fiscal year to 116,414 million yen. This
was attributable mainly to an increase of 2,966 million yen in cash and deposits, decreases of 1,881 million yen innotes and accounts receivable-trade and 1,173 million yen in inventories.
Non-current assets decreased by 1,511 million yen from the end of the previous fiscal year to 97,468 million yen.
This was mainly attributable to decreases of 781 million yen in leased assets and 688 million yen in buildings andstructures.
Total assets decreased by 1,756 million yen from the end of the previous fiscal year to 213,882 million yen.
Liabilities
Current liabilities decreased by 1,314 million yen from the end of the previous fiscal year to 26,932 million yen.
This was attributable mainly to decreases of 755 million yen in lease obligations and 546 million yen in notes andaccounts payable-trade.
Non-current liabilities decreased by 128 million yen from the end of the previous fiscal year to 16,688 million
yen. This was attributable mainly to a decrease of 114 million yen in provision for waste disposal expenses
included in other non-current liabilities.
Total liabilities decreased by 1,443 million yen from the end of the previous fiscal year to 43,621 million yen.
Net assets
Net assets decreased by 312 million yen from the end of the previous fiscal year to 170,261 million yen. This was
attributable mainly to an increase of 1,652 million yen in retained earnings, and decreases of 1,196 million yen inforeign currency translation adjustment and 1,540 million yen in non-controlling interests.
3

Yodogawa Steel Works, Ltd. (5451) Consolidated Financial Results for 2Q of FY3/19(3) Explanation of Consolidated Forecast and Other Forward-looking Statements
Although the global economy is generally healthy, the uncertainty of the economic outlook is increasing. Major
causes are problems involving trade, chiefly U.S.-China trade friction, monetary tightening in the United Statesand Europe, and growing tension in the Middle East.
In Japan, risk factors concerning the economy include increasingly heated trade friction with other countries andthe prolonged negative effects of damage caused by natural disasters. Nevertheless, the Japanese economy willprobably remain healthy because of a recovery in domestic demand resulting from capital expenditures for the2020 Tokyo Olympics and projects to improve productivity.
In the steel industry, market conditions are expected to remain firm in Japan. But the outlook for overseas steelmarkets is becoming increasingly unclear due to the risk of a downturn of the global economy. At the Yodogawa
Steel Group, capturing orders is difficult for overseas subsidiaries because of increasingly widespread tradeprotectionism. Furthermore, prices of hot-rolled steel sheets, zinc and other raw materials are expected to remainhigh. As a result, we expect significant negative pressure on earnings to continue.
The fiscal year ending in March 2019 is the second year of the Yodogawa Steel Group Medium -Term
Management Plan 2019. To achieve the goals of this plan, all companies are working on becoming more
profitable by establishing positions in new markets and increasing sales of value -added products while taking fulladvantage of the speed and flexibility that are key strengths of the group.
No fiscal year forecast is presented because of the difficulty of determining a reliable forecast for the Yodogawa
Steel Group’s results of operations in the fiscal year ending March 31, 2019 at this time due to the extremely
uncertain outlook for the steel market. An announcement will be made promptly once it becomes possible todetermine a reliable forecast.

4

Yodogawa Steel Works, Ltd. (5451) Consolidated Financial Results for 2Q of FY3/19

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheet(Millions of yen)
Second quarter of FY3/19(as of Sep. 30, 2018)

FY3/18(as of Mar. 31, 2018)
AssetsCurrent assets
Cash and deposits

30,716

33,682

Notes and accounts receivable-trade43,93842,057

Securities

2,888

2,753

Merchandise and finished goods

16,081

15,561Work in process

4,684

4,523

Raw materials and supplies

13,122

12,629

Other

5,376

5,355

Allowance for doubtful accounts

(149)

(148)

116,658

116,41450,50948,889

7

5

Other

1,475

1,436

Total intangible assets

1,482

1,441

46,33846,399649

738

46,987

47,13798,98097,468215,638

213,882

18,154

17,608-245

Income taxes payable

2,165

1,778

Provision for bonuses

1,056

1,237

Other

6,870

6,063

Total current liabilities

28,247

26,932

Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Goodwill

Investments and other assets
Investment securities
Other
Total investments and other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payableNon-current liabilities
Provision for directors’ retirement benefits

66

60

Net defined benefit liability

7,569

7,512

Other

9,181

9,115

Total non-current liabilities

16,817

16,68845,064

43,621

Total liabilities

5

Yodogawa Steel Works, Ltd. (5451) Consolidated Financial Results for 2Q of FY3/19

FY3/18(as of Mar. 31, 2018)(Millions of yen)
Second quarter of FY3/19(as of Sep. 30, 2018)

Net assets
Shareholders’ equity
Capital stock
Capital surplus

23,22020,39323,22020,385Retained earnings

100,775

102,428

Treasury shares(12,679)(12,650)

Total shareholders’ equity

131,710

133,384

Valuation difference on available-for-sale securities

16,42016,998

Revaluation reserve for land

1,646

1,645

Foreign currency translation adjustment

2,798

1,602

Remeasurements of defined benefit plans

(990)

(824)

Total accumulated other comprehensive income

19,875

19,422

Share acquisition rights

223

229

Non-controlling interests

18,764

17,224

Total net assets

170,574

170,261

215,638

213,882

Accumulated other comprehensive income

Total liabilities and net assets

6

Yodogawa Steel Works, Ltd. (5451) Consolidated Financial Results for 2Q of FY3/19(2) Quarterly Consolidated Statements of Income and Comprehensive Income(Quarterly Consolidated Statement of Income)(For the Six-month Period)First six months of FY3/18(Apr. 1, 2017 to Sep. 30, 2017)(Millions of yen)First six months of FY3/19(Apr. 1, 2018 to Sep. 30, 2018)

Net sales

84,826

83,678

Cost of sales

68,974

71,917Gross profit

15,851

11,761

Selling, general and administrative expenses

9,101

8,709

Operating profit

6,750

3,052

Interest income

182

260

Dividend income

430

472

Non-operating income

Foreign exchange gains-

112

Gain on sales of investment securities
Share of profit of entities accounted for using
equity method
Other

26

466

180

177

244

191

1,064

1,680

Interest expenses

58

39

Foreign exchange losses
Cost for employees transferred temporarily tooverseas subsidiaries
Other

72

-

123

101

31

35

Total non-operating expenses

285

177

7,529

4,555

Gain on sales of non-current assets

1-

Gain on sales of investment securities

23-

Total extraordinary income

24

-

69

22

Total non-operating income
Non-operating expenses

Ordinary profit
Extraordinary income

Extraordinary losses
Loss on sales and retirement of non-current
assetsLoss on valuation of investment securities

86

12

Impairment loss

3

2

Loss on disaster
Loss on liquidation of subsidiaries andassociates

-

231

33

-

192

269

Profit before income taxes

7,362

4,286

Income taxes-current

2,006

1,527

Income taxes-deferred

(134)

(316)

Total income taxes

1,871

1,210

Profit

5,490

3,075

Profit attributable to non-controlling interests

1,040

236

Profit attributable to owners of parent

4,449

2,838

Total extraordinary losses

7

Yodogawa Steel Works, Ltd. (5451) Consolidated Financial Results for 2Q of FY3/19(Quarterly Consolidated Statement of Comprehensive Income)(For the Six-month Period)First six months of FY3/18(Apr. 1, 2017 to Sep. 30, 2017)(Millions of yen)First six months of FY3/19(Apr. 1, 2018 to Sep. 30, 2018)

Profit

5,490

3,075

Other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges

2,070

600

(0)

-

406

(2,027)

230

221

30

(17)

2,738

(1,223)

8,228

1,851

6,918

2,385

1,310

(534)

Foreign currency translation adjustment
Remeasurements of defined benefit plans, netof taxShare of other comprehensive income ofentities accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:Comprehensive income attributable to ownersof parent
Comprehensive income attributable tonon-controlling interests

8Yodogawa Steel Works, Ltd. (5451) Consolidated Financial Results for 2Q of FY3/19(3) Notes to Quarterly Consolidated Financial Statements
Going-concern Assumption
Not applicable.
Significant Changes in Shareholders’ Equity
Not applicable.
Segment and Other Information
Segment information
I. First six months of FY3/18 (Apr. 1, 2017 to Sep. 30, 2017)
Information related to net sales and profit/loss for each reportable segment
Reportable segments
Steel
Roll
Sheet-related
Business
Business

Grating
BusinessReal
EstateBusiness

Total

Others(Note 1)

Total

(Millions of yen)Amounts
shown on the
Adjustment consolidated(Note 2)statement ofincome(Note 3)

Net sales
External sales
Inter-segment
sales and transfers
Total
Segment profit

79,147

1,731

1,612

512

83,004

1,822

84,826-84,826

-

-

-

221

221

1,293

1,515

(1,515)-

79,147

1,731

1,612

733

83,225

3,116

86,342(1,515)84,826

6,665

90

49

349

7,155

206

7,362

(611)

6,750

Notes: 1. Others represent businesses which are not included in any of the reportable segments and mainly consist oftransportation, warehouse, golf course, machinery plant, electric power (sale of solar power) and other businesses.
2. The adjustment to segment profit includes unallocated expenses of (613) million yen and an elimination forinter-segment transactions of 1 million yen.
3. Segment profit is adjusted to be consistent with the operating profit on the quarterl y consolidated statement ofincome.

II. First six months of FY3/19 (Apr. 1, 2018 to Sep. 30, 2018)
Information related to net sales and profit/loss for each reportable segment
Reportable segments
Steel
Roll
Sheet-related
Business
Business

Grating
BusinessReal
EstateBusiness

Total

Others(Note 1)

Total

(Millions of yen)Amounts
shown on the
Adjustment consolidated(Note 2)statement ofincome(Note 3)

Net sales
External sales
Inter-segment
sales and transfers
Total

77,533

1,860

1,640

584

81,6182,060

83,678-83,678

-

-

-

221

221

1,188

1,409

(1,409)-77,533

1,860

1,640

805

81,8393,248

85,088(1,409)83,678Segment profit
3,036
27
1
405
3,471
171
3,642
(590)
3,052
Notes: 1. Others represent businesses which are not included in any of the reportable segments and mainly consist oftransportation, warehouse, golf course, machinery plant, electric power (sale of solar power) and other businesses.
2. The adjustment to segment profit includes unallocated expenses of (591) million yen and an elimination forinter-segment transactions of 1 million yen.
3. Segment profit is adjusted to be consistent with the operating profit on the quarterly consolidated statement ofincome.
This summary report is solely a translation of “Kessan Tanshin” (in Japanese, including the attachments), which has been
prepared in accordance with accounting principles and practices generally accepted in Japan, for the convenience of readers
who prefer an English translation.

9