Summary of Consolidated Financial Results for First Half of FY2017
Nov. 1, 2017
Mitsubishi Gas Chemical, Inc (TSE 4182)
1.Summry of Income Statement (April 1- Sep 30, 2017)
Apr. 1 -Sep. 30,
2016267,935

Net Sales

Millions of yen, rounded down
Apr. 1 -Sep. 30,
Change (%)
2017
302,943
13.1

Operating income

19,26930,267

57.1

Ordinary income

24,66842,00870.3

Net income attributable to owners of the parent

18,57135,45390.9

Comprehensive income

4,718

40,680762.1

Net income per share (Yen)

85.55

164.28*The Company conducted a consolidation of shares at a ratio of one share for every two shares effective October 1,2016. In Accordance with it, Net income per share are caluculated based on the assumption that the shareconsolidation had been carried out at the beginning of the previous fiscal year.
2. Financial Position
Millions of yen, rounded down
As of Sep. 30, 2017

As of Mar. 31, 2017
Total Assets

738,188

770,104

Net Assets

473,370

506,865

57.5

59.3

Equity Ratio(%)
3. Dividends
FY2016FY2017

Interim dividend per share (Yen)

8.00

24.00

Year-end dividend per share (Yen)

22.00

24(Forecast)-48(Forecast)

Annual Dividend per share (Yen)(Note) Revision of cash dividend forecast during this period: Yes*As the Company conducted a consolidation of shares at a ratio of one share for every two shares effective October
1, 2016, figures for the Year-end dividends per share for FY 2016 are amounts that take into account theconsolidation of shares, and total annual dividends are shown as “-.”

4. Consolidated Business Forecasts for FY2017 (April 1, 2017 - March 31, 2018)
Millions of yen, rounded down
Full YearNet Sales610,000

Operating income

52,000Ordinary income

72,000Net income attibutable to owners of the parent

56,000Net income per share (Yen)

260.61(Note) Revision of consolidated business forecasts during this period: Yes

5. Number of Shares Outstanding (Common Stock)
Mar31,2017

Sep30,2017

Number of shares outstanding at term end (including tresury stock)241,739,199

241,739,199

Number of shares of treasury stock at term-end

25,923,628

25,925,545

Apr. 1 -Sep. 30,
2016

Apr. 1 -Sep. 30,
2017

217,070,925

215,814,659

Average shares outstanding during period*The Company conducted a consolidation of shares at a ratio of one share for every two shares effective October 1,
2016. In Accordance with it, number of shares outstanding at term end, number of shares of treasury stock at theterm-end, and average shares outstanding during period are calculated based on the assumption that the shareconsolidation had been carried out at the beginning of the previous fiscal year.
1. These quarterly financial results are not subject to quarterly review procedures. At this time of disclosure of thesefinancial results, the quarterly financial statement review procedures based on the Financial Instrument andExchange Law have not been completed.
2. Forecasts, etc., recorded in this document contain forward-looking statements that are based on management’s
estimates, assumptions and projections at the time of publication. A number of factors could cause actual results todiffer materially from expectations.

Consolidated Financial Statements
1. Consolidated Balance Sheets(Millions of yen, rounded down)
As of Mar. 31, 2017 As of Sep. 30, 2017
ASSETS
Current assets
Cash and deposits
Trade notes and accounts receivable
Short-term investments securities
Merchandise and finished goods
Work in progress
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets

175,017
138,410
139
51,671
10,65232,30619,544(1,067)
326,674

80,017
158,888183
57,637
11,02931,725
18,221(1,242)356,460

79,594
81,14757,315
218,057

80,746
79,91958,412
219,079

4,258
4,111
8,370

4,124
4,377
8,501

175,461
10,307(683)
185,085
411,513738,188

176,293
10,382(613)
186,062
413,643
770,104

Consolidated Balance Sheets (continued)(Millions of yen, rounded down)
As of Mar. 31, 2017 As of Sep. 30, 2017
LIABILITIESCurrent liabilities
Trade notes and accounts payable
Short-term loans payable
Income taxes payable
Provision
Asset retirement obligations
Other
Total current liabilities
Noncurrent liabilities
Bonds payable
Long-term loans payable
Provision
Projected benefit obligations
Asset retirement obligations
Other
Total noncurrent liabilities
Total liabilities
NET ASSETS
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive
Non controlling interest
Total net assets
Total liabilities and net assets

2

68,506
74,669
3,394
6,108
98
35,649188,426

83,56770,034
3,342
5,872
47
33,287
196,153

10,00033,495
1,913
5,936
3,832
21,212
76,391
264,817

10,00024,419
1,723
6,497
3,875
20,56967,085263,238

41,97035,602357,245(21,829)
412,989

41,97034,946
387,951(21,834)
443,033

18,101(0)
222(6,249)(351)
11,722
48,658473,370
738,188

18,619(3)
222(4,514)(385)
13,93849,892506,865
770,1042. Consolidated Statements of Income(Millions of yen, rounded down)
Apr. 1 -Sep. 30, Apr. 1 -Sep. 30,
2016
2017
267,935
302,943
205,896
227,300
62,03975,64342,76945,375
19,26930,267

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Foreign exchange income
Dividend income
Equity in earnings of affiliates
OtherTotal non-operating income
Non-operating expenses
Interest expense
Foreign exchange losses
Personnel expenses for seconded employees
Rent expenses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of investment securities
Compensation received
Total extraordinary income
Extraordinary losses
Loss on valuation of investment securities
Loss on disposal of non-current assets
Loss on liquidation of subsidiaries and affiliates
Loss on sales of investment securities
Total extraordinary losses
Income before income taxes, etc.
Income taxes, etc.
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of the parent

3201
1,228
7,569
1,211
10,211

201
735
1,425
10,4991,613
14,475

734
1,801
826
240
1,210
4,813
24,668

527
751
551
903
2,734
42,008

201
201

893
893

135
127
263
24,605
3,189
21,416
2,844
18,571356
154
511
42,391
4,154
38,2372,783
35,453

(Consolidated Statements of Comprehensive Income)(Millions of yen, rounded down)
Apr. 1 -Sep. 30, Apr. 1 -Sep. 30,
2016
2017
Net income
Other comprehensive Income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency statements translation adjustment
Remeasurements of defined benefit plans
Share of other comprehensive income of associates accounted for using equity
Total other comprehensive Income
Comprehensive income
Comprehensive income attributable to owners of the parent
Comprehensive income attributable to non-controlling interests

421,416

38,237931
7(10,983)
148(6,802)(16,697)
4,718
5,956
(1,238)

552
(3)
1,388
(72)
577
2,443
40,68037,6693,011

(3)Segment Information(Billions of yen, rounded down）
FY 2016

FY 2017

1H

1H

267.9

302.935.0

556.4

610.0

Natural Gas Chemicals

70.1

81.4

11.2

153.5

166.8

Aromatic Chemicals

95.5

106.2

10.6

194.4

216.7

Specialty Chemicals

83.5

97.9

14.4

172.2

192.5

Information and Advanced Materials

24.8

25.2

0.3

50.2

49.7

Other and Adjustment

(6.1)

(7.9)

(1.7)

(13.9)(15.8)

19.2

30.2

10.9

43.7

52.0

Net sales

Operating income (loss)

ChangeFY2016

FY 2017

Full Year

Full Year

ResultForecast

Natural Gas Chemicals

0.3

2.2

1.8

2.5

4.6

Aromatic Chemicals

9.0

14.2

5.1

18.3

23.6

Specialty Chemicals

9.6

13.8

4.1

21.6

24.7

2.0

2.4

0.3

4.8

3.6

(1.9)

(2.4)

(0.5)

(3.6)

(4.7)

Non-operating profit

5.3

11.7

6.3

18.6

20.0

Ordinary income

Information and Advanced Materials

Other and Adjustment

24.6

42.0

17.3

62.4

72.0

Natural Gas Chemicals

3.9

8.6

4.6

14.3

15.9

Aromatic Chemicals

8.5

13.8

5.3

17.5

22.6

Specialty Chemicals

11.4

17.6

6.1

26.8

31.2

Information and Advanced Materials

2.7

3.3

0.6

6.1

5.1

(1.9)

(1.5)

0.4

(2.4)

(2.9)

Other and Adjustment(4)Other Information
FY2013FY2014

FY2015FY2016FY2017
Forecast

Investments(Billions of yen)

Full year

25.4

22.2

30.5

35.0

42.0

1H

13.8

10.3

14.9

13.7

13.9

Depriciation & amortization(Billions of yen)

Full year

23.5

23.7

26.7

25.6

27.0

1H

11.4

11.5

13.1

12.2

13.1

R&D expenditures(Billions of yen)

Full year

16.1

16.8

18.9

19.2

20.0

1H

8.0

8.0

9.2

9.6

9.5

Number of Staff

Year-end

5,445

8,254

8,176

8,034

8,150

Numbe

ROA (Ordinary income)

4.8%

5.8%

5.9%

8.4%

9.5%

ROA (Ordin

ROE (Net income)

5.0%

12.6%

9.0%

11.9%

12.6%

ROE (Ne1H

99103

122105111

Full year

100110120108111

First half

375

432

301

230

296

Second half

449

358

230

327305

Excahnge Rate
(JPY/USD, Average)
Methanol (USD/MT, Asian
average spot price)5

Qualitative Information
Consolidated Business Results for This Period
Overview of Results(Billions of yen)
Apr 1-Sep30

Apr 1-Sep30

2016

2017

Net sales

267.9

302.9

35.0

Operating income

19.2

30.2

10.9

Ordinary income

24.6

42.0

17.3

18.5

35.4

16.8

Net income attributable to ownersof the parent

ChangeDuring the first six months of the fiscal year ending March 2018 (April 1 – September 30, 2017), the futureworld economy remained uncertain. Despite the slow recovery, concerns existed about the future
direction of U.S. policy and increasing geopolitical risks around the globe. The Japanese economy
continued to slowly recover due to ongoing improvement in corporate earnings and employment.
The MGC Group revenue increased compared with the previous fiscal year. Specialty and aromatic
chemicals achieved higher sales volumes. Further positive impacts include increased market prices ofmethanol and the weaker yen.
Operating income rose owing to higher sales volumes for specialty and aromatic chemicals, increases in
the market prices of purified isophthalic acid and methanol derivatives, and the weaker yen.
The Group posted a year-on-year increase in ordinary income. In addition to the higher operating income,favorable impacts included improved exchange effects and increased equity in earnings of overseas
methanol producing companies.
The growth in operating income and other positive reasons also enabled the Group to post an increase in
net income attributable to parent company shareholders.
In the six-month period under review, the MGC Group recorded the highest figures ever of net sales andall earnings parameters for April to September.

6

Results by Business Segment
Natural Gas Chemicals(Billions of yen)
Apr 1-Sep30

Apr 1-Sep30

2016

2017

Sales

70.1

81.4

11.2

Operating income

0.3

2.2

1.8

Ordinary income

3.9

8.6

4.6

ChangeThe methanol business recovered and revenue increased compared with the same period of the previous
year when it faced low market prices.
Methanol and ammonia-based chemicals marked higher earnings because the negative impact of higher
material prices was more than canceled by increased market prices of neopentylglycol and MMA-basedproducts.
Crude oil and other energy sources posted a slightly higher earnings than in the prior-year period,
primarily due to the increased sales price of crude oil.

Aromatic Chemicals(Billions of yen)
Apr 1-Sep30

Apr 1-Sep30

2016

2017

Sales

95.5

106.2

10.6

Operating income

9.0

14.2

5.1

Ordinary income

8.5

13.8

5.3

ChangeSpecialty aromatic chemical products posted growth in both revenue and earnings compared with theprevious year, primarily due to higher sales volumes of meta-xylenediamine and aromatic aldehydes.
General-purpose aromatic chemicals achieved increases in both revenue and earnings. Positive factors
included higher market prices of purified isophthalic acid, which generated increasing demand from PET
bottle producers mainly in emerging economies, as well as an increase in sales volume resulting fromrecommissioning a line of meta-xylene (MX) production equipment.
Foamed plastics posted growth in revenue due to higher sales volumes and revised product prices toreflect increased raw material prices. However, increases in fuel and raw material prices led toprior-year-level earnings.
7Specialty Chemicals(Billions of yen)
Apr 1-Sep30

Apr 1-Sep30

2016

2017

Sales

83.5

97.9

14.4

Operating income

9.6

13.8

4.1

Ordinary income

11.4

17.6

6.1

ChangeWith the expansion of the semiconductor market, inorganic chemicals achieved higher revenue andearnings compared with the previous year, primarily due to growth in the sales volume of liquid chemicals
for use in semiconductor production.
The engineering plastics business increased both revenue and earnings. Major positive factors included
growth in sales volumes for polycarbonates, polyacetals, and polycarbonate sheets and films. An
additional positive factor was an increase in the market prices of polycarbonates, which enjoyed brisk
demand mainly in China.

Information & Advanced Materials(Billions of yen)
Apr 1-Sep30

Apr 1-Sep30

2016

2017

Sales

24.8

25.2

0.3

Operating income

2.0

2.4

0.3

Ordinary income

2.7

3.3

0.6

ChangeElectronic materials posted prior-year-level net sales due to the dissolution of Japan Circuit Industrial Co.,
Ltd. in September 2016 while achieving higher earnings. This was primarily due to the steady sales
volume of BT materials for semiconductor packaging, and for memory in particular.
Oxygen absorbers such as AGELESS® posted slight year-on-year drops in earnings, despite increased
sales volume, which was the most apparent in exports.

8Consolidated Business Forecasts
Revision of consolidated business forecasts
Half year ending September 30, 2017 (April 1, 2017－ September 30, 2017)(Billions of yen)
Net income
attributable toNet income
owners of theper share (¥)
parentNet sales

Operatingincome

Ordinary
income

290.0

24.0

33.0

26.0

120.47

Result (B)

302.9

30.2

42.0

35.4

164.28Change (B – A)

12.9

6.2

9.0

9.4

-Previously announcedforecasts (A)The final consolidated financial results for the first six months of the fiscal year ending March 2018 havegenerated differences from the forecasts announced on August 2, 2017. This is because of the strong
development of sales volumes and sales prices, mainly for specialty and aromatic chemicals.

Full fiscal year 2017 (April 1, 2017 － March 31, 2018)(Billions of yen)
Net incomeattributable toNet income
owners of theper share (¥)
parentNet sales

Operatingincome

Ordinary
income

580.0

44.0

59.0

46.0

213.15

Revised forecasts (B)

610.0

52.0

72.0

56.0

260.61

Change (B – A)

30.0

8.0

13.0

10.0

-Previously announced
forecasts (A)Full-year results for the fiscal year ending March 2018 are expected to surpass the previous forecasts.
This is partly because the Group performed better than the initial projections during the first six months,
and partly because the Group, and the engineering plastics business in particular, will likely post betterresults for the remaining six months.
For the unelapsed period of the fiscal year, these performance forecasts assume exchange rates of¥110=$1 (same as in the previous forecast) and ¥130=€1 (¥5 lower).
(End)

9