HANWA Co.,Ltd.

Financial Results for the First Quarter ended June 30, 2024
(Japan GAAP)
August 8, 2024
Company name:

HANWA Co., Ltd.

Listed stock exchange: Tokyo

Stock exchange code:

8078(URL https://www.hanwa.co.jp)

Representative:
Yoichi Nakagawa
Enquiries:
Hisashi Honda
Scheduled date of payout of dividend: -President
Director, Managing Executive Officer

Phone +81-3-3544-2000(Amounts less than one million yen are rounded down)

１．Consolidated financial results for the First Quarter ended June 30, 2024 (April 1, 2024 to June 30, 2024)(1) Consolidated operating results（Percentage indicate a change from the previous year）

Net sales
For the First Quarter
ended June 30, 2024
ended June 30, 2023

(Millions of yen)(％)

Operating income

Ordinary income(Millions of yen)

(Millions of yen)(％)

618,454
1.6
13,135(19.3)
608,742(8.5)
16,277(32.6)(Note) Comprehensive income
For the First Quarter ended June 30, 2024
For the First Quarter ended June 30, 2023
Net income
per share

For the First Quarter
ended June 30, 2024
ended June 30, 2023

Profit attributable toowners of the parent(％)(Millions of yen)(％)

12,361(22.8)
9,213(19.8)
16,012(52.0)
11,492(51.9)
13,694 million yen
4.1 %13,157 million yen(60.9) %Net income
per share(diluted)

(yen)

(yen)

227.66282.81－－(2) Consolidated financial position
Total assets(Millions of yen)
As of June 30, 2024
As of March 31, 2024

(Note) Shareholders' equity

Shareholders'equity ratio

Net assets(Millions of yen)

1,177,402
1,166,986
As of June 30, 2024
As of March 31, 2024

Net assets
per share(％)

364,503356,765
358,591 million yen
351,212 million yen

(yen)

30.5
30.1

8,885.01
8,636.03

２．Cash dividends
Cash dividends per share
1st Quarter 2nd Quarter 3rd Quarter

Year ended March 31, 2024
Year ending March 31, 2025
Year ending March 31, 2025

Year-end

Annual

(yen)

(yen)

(yen)

(yen)

(yen)

－
－

85.00

－

100.00185.00105.00－105.00210.00（estimated）(Note) Changes in dividends forecast from the latest disclosed information: None

３．Forecast of consolidated financial results for fiscal year ending March 31, 2025 (April 1, 2024 to March 31, 2025)（Percentage indicate a change from the previous year）

Net sales

Operating income

Ordinary income(Millions of yen) (％)(Millions of yen) (％)(Millions of yen) (％)

Annual2,800,000
15.1
61,00022.7
60,00024.3(Note) Changes in earnings forecast from the latest disclosed information: None

－1－

Profit attributable toowners of the parent

Net income
per share(Millions of yen) (％)

43,000

11.9

(yen)

1,057.34

HANWA Co.,Ltd.
Financial Results for the First Quarter ended June 30, 2024

※Notes:(1) Significant changes in the scope of consolidation during the period: Yes
Newly included: 3 Companies (Company name)Guangzhou Hanwa Trading Co., Ltd.
Other subsidiaries (2 companies)(2) Application of specific accounting of the quarterly consolidated financial statements: Yes(3) Changes in accounting policies, accounting estimates and retrospective restatement
1) Changes in accounting policies based on revisions of accounting standards: Yes
2) Changes in accounting policies other than ones based on revisions of accounting standards: None
3) Changes in accounting estimates: None
4) Retrospective restatement: None

(4) Number of shares issued (common shares)
1) Number of shares issued at the end of the period (including treasury stock)
As of June 30, 2024
42,322,640 shares
As of March 31, 2024

42,332,640 shares

2) Number of treasury stock at the end of the period
As of June 30, 2024
1,973,453 shares

As of March 31, 2024

1,664,411 shares

3) Average number of shares during the period
As of June 30, 2024
40,469,823 shares

As of June 30, 2023

40,636,976 shares* Review of the Japanese-language originals of the attached quarterly consolidated financial statements
by certified public accountants or an audit firm: Yes* Explanation regarding the appropriate usage of financial forecasts and other special instructions
Forward-looking statements, such as financial forecasts, presented in this document are based on information
available and certain assumptions the Company deemed to be reasonable at the time of publication,and the Company does not guarantee its future performance. Actual results may differ significantly due to various factors.

－2－

HANWA Co.,Ltd.
Financial Results for the First Quarter ended June 30, 2024

《Consolidated Balance Sheets》(Amounts less than one million yen are rounded down)

Millions of yen
March 31, 2024

June 30, 2024

Assets;Current assets;
Cash and deposits
Trade notes, accounts receivable and contract assets
Electronically recorded monetary claims
Inventories
OthersAllowance for doubtful receivables
Total current assets

76,525445,825
95,615
249,490
51,406(1,694)
917,168

71,951
426,168
89,277
266,875
62,454(1,730)914,996

37,40151,54488,945
10,00637,44352,09389,537
9,818

106,062
47,239(2,436)150,865
249,818
1,166,986

117,697
47,740(2,388)163,049
262,405
1,177,402

Current liabilities;
Trade notes and accounts payable
Electronically recorded obligations
Short-term loans payable
Commercial paper
Income taxes payable
Accrued bonuses to employees
Provision for product warranties
OthersTotal current liabilities

303,848
46,87972,080
－
2,602
3,730
95
57,318486,555

293,684
39,31984,55410,000
5,499
2,679
75
56,914
492,728

Long-term liabilities;
Bonds payable
Long-term loans payable
Retirement benefit liability
OthersTotal long-term liabilities
Total liabilities

50,000239,957
1,353
32,354
323,665
810,220

50,000234,928
1,409
33,831
320,169
812,898

45,651
1,301
260,959(3,662)
304,249

45,651
1,304
266,224(5,662)
307,517

27,511630
1,966
14,4272,426
46,962
5,553
356,765
1,166,986

26,687
1,801
1,966
18,1572,461
51,074
5,911
364,503
1,177,402

Fixed assets;
Property and equipment;
Land
OthersTotal property and equipment
Intangible assets
Investments and other assets;
Investment securities
OthersAllowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets

Liabilities;

Net assets;
Shareholders' equity;
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders' equity
Accumulated other comprehensive income;
Valuation difference on available-for-sale securities, net of taxes
Deferred gains or losses on hedges, net of taxes
Land revaluation difference, net of taxes
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets－3－

HANWA Co.,Ltd.
Financial Results for the First Quarter ended June 30, 2024

《Consolidated Statements of Income and Comprehensive Income》(Amounts less than one million yen are rounded down)

Millions of yen
1st Quarter ended
June 30, 2023

1st Quarter ended
June 30, 2024

Net sales
Cost of sales
Gross profit

608,742576,200
32,542

618,454
586,999
31,454

Selling, general and administrative expenses
Operating income

16,264
16,27718,31813,135

Other income;Interest income
Dividend income
Share of profit of entities accounted for using the equity method
OthersTotal other income
Other expenses;
Interest expenses
Foreign exchange loss
OthersTotal other expenses
Ordinary income

883
1,386
346
661
3,277

1,004
1,337
703
404
3,448

2,179
386
975
3,542
16,012

2,221
1,260
741
4,223
12,361

Extraordinary income;Gain on sales of investment securities
Gain on sales of investments in capital of subsidiaries and associates
Total extraordinary income
Income before income taxes－－－
16,012

1,106
332
1,438
13,799

Income taxes
Net income

4,536
11,475

4,462
9,337

11,492
(16)

9,213
123

(426)
280
1,644
109

(854)
1,171
3,606
40

74

394

1,682
13,157

4,357
13,694

13,182(24)

13,325368

Net income attributable to;
Owners of the parent
Non-controlling interests
Other comprehensive income;
Valuation difference on available-for-sale securities, net of taxes
Deferred gains or losses on hedges, net of taxes
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of taxes
Share of other comprehensive income of entities accounted for using
the equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to;
Owners of the parent
Non-controlling interests－4－

HANWA Co.,Ltd.
Financial Results for the First Quarter ended June 30, 2024

《Other information》(1) Changes in accounting policies
Application of Accounting Standard for Current Income Taxes
The Accounting Standard for Current Income Taxes (ASBJ Statement No. 27; October 28, 2022; hereinafter,“2022 Revised Accounting Standard”) has been applied since the beginning of the first quarter ended June 30,
2024.
Revisions concerning the recognition classification of income taxes follow the transitional treatment set forthin the proviso of paragraph 20-3 of the 2022 Revised Accounting Standard and in the proviso of paragraph 65-2
(2) of the Guidance on Accounting Standard for Tax Effect Accounting (ASBJ Guidance No. 28; October 28,
2022; hereinafter, “2022 Revised Guidance”). This change in accounting policy has no impact on the quarterly
consolidated financial statements.
Regarding the revisions related to the review of treatment in consolidated financial statements when conducting a
tax deferral of gains or losses on sale arising from the sale of subsidiary shares, etc. between consolidated
companies, the 2022 Revised Guidance has been applied since the beginning of the first quarter ended June 30,2024. This change in accounting policy is applied retrospectively, and the consolidated financial statements for theprevious year’s quarters and the previous consolidated fiscal year are after retrospective application. This changein accounting policy has no impact on the consolidated financial statements for the previous year’s quarters andthe previous consolidated fiscal year for ended March 31, 2024.

(2) Application of specific accounting of the quarterly consolidated financial statements
Calculation of tax expense
Income taxes are determined based on the amount of income before income taxes for the current first quarter
ended June 30, 2024 multiplied by the effective tax rate, after application of tax-effect accounting, estimated forthe entire fiscal year ending March 31, 2025. However, if using this estimated effective tax rate results in extremely
unreasonable tax expenses, the statutory effective tax rate is used after adjusting net income (loss) before income
taxes for material differences that are not temporary.

－5－

HANWA Co.,Ltd.
Financial Results for the First Quarter ended June 30, 2024

(3) Segment information
1 Segment information by business category for the 1st Quarter ended June 30, 2023 and 2024, is as follows:(Amounts less than one million yen are rounded down)

Millions of yen

First Quarter ended June 30, 2023
Reportable segment
Steel
Net sales
Customers
Intersegment
Total
Segment income

301,296
6,519
307,816
8,258

Metal

Primary
Metal

Recycling

52,939913
53,852
4,070

45,163506
45,669
1,186

Foods
28,633
134
28,768497

Energy& Living
Materials

67,686
1,326
69,012
1,329

Overseas
sales
subsidiaries

Subtotal

78,494 574,214
8,294 17,694
86,789 591,909
2,026 17,369

Otherbusiness

Total

34,528 608,742
2,210 19,905
36,739 628,648
1,558 18,927

First Quarter ended June 30, 2024

Net sales
Customers
Intersegment
Total
Segment income

282,650
11,309293,959
7,738

Consolidated－ 608,742(19,905)－(19,905) 608,742(2,914) 16,012

Millions of yen

Reportable segment
Steel

Adjustment

Metal

Primary
Metal

Recycling

43,2762,612
45,8881,189

53,125966
54,091778

Foods
28,754568
29,322
392

Energy& Living
Materials

91,5192,080
93,6001,470

Overseas
sales
subsidiaries

Subtotal

88,266 587,591
9,247 26,785
97,513 614,377
1,638 13,208

Otherbusiness

Total

30,862 618,454
1,214 27,999
32,076 646,453
964 14,172

Adjustment

Consolidated－ 618,454(27,999)－(27,999) 618,454(1,811) 12,361(Notes)1. “Other business” represents businesses such as the housing materials section and machinery section witch are
not included in reportable segments. From the beginning of the first quarter ended June 30, 2024, we havechanged the name of the lumber section to the housing materials section.
2. Adjustments for segment income include intersegment elimination and Group costs that have not been distributed
to reportable segments. These group costs consist mainly of expenses of administrative departments.
3. Segment income is adjusted between ordinary income or loss on the consolidated statements of income andcomprehensive income.
2 Matters Concerning Changes in Reportable Segments
Changes in the Classification Method of Reportable Segments
From the beginning of the first quarter ending June 30, 2024, the Companies have changed their method of classification ofbusiness segments, integrating a part of the steel business into the primary metal business and the other business, andintegrating a part of the primary metal business into the metal recycling business. Segment information of the first quarter
ended June 30, 2023 has been recomposed by the new classification method.

－6－

HANWA Co.,Ltd.
Financial Results for the First Quarter ended June 30, 2024

(4) Note on significant changes in shareholders’ equity.
The Company has acquired 309,000 shares of treasury stock during the first quarter ended June 30, 2024, based on the resolution of theBoard of Directors meeting held on May 10, 2024. As a result of this acquisition, the amount of treasury stocks increased by 1,999 million
yen, resulting in treasury stock of 5,662 million yen as of June 30, 2024.

(5) Note on a going concern
None(6) Note on statement of cash flows
Quarterly consolidated statements of cash flows have not been prepared for the first quarter ended June 30, 2024.
Depreciation and Amortization of goodwill for the first quarter ended June 30, 2023 and 2024 are as follows.

Depreciation
Amortization of goodwill

First Quarter ended June 30, 2023
(April 1, 2023 to June 30, 2023)

First Quarter ended June 30, 2024
(April 1, 2024 to June 30, 2024)\2,206 million\2,289 million

18

20

－7－

August 8, 2024

Highlights of Consolidated Financial Results for the 1st Quarter of FY2024(Japan GAAP)HANWA Co., Ltd.
(Unit: billion yen, rounded down to 0.1 billions yen)

Outline of Financial Results for the 1st Quarter of FY2024
・During the 1st quarter of this fiscal year, net sales increased by 2% YoY, to 618.4 billion yen, because transaction volume mainly represented by Energy & Living
Materials business and Metal Recycling business increased. Operating income decreased by 19% YoY, to 13.1 billion yen, because prices of certain steel and nonferrous metals were at lower levels on a year-on-year comparison, furthermore costs of transportation and labor increased, and ordinary income decreased by 23% YoY,
to 12.3 billion yen, because foreign exchange loss increased notwithstanding the share of profit of entities accounted for using the equity method increased. Net income
attributable to owners of the parent decreased by 20% YoY, to 9.2 billion yen.
・We plan to pay 210 yen as the annual (105 yen as the interim and 105 yen as the year-end) dividend.

Operating Results

1Q of
FY2023

1Q of
FY2024

YoY
Changerate

Net sales

608.7

618.4

9.7

Gross profit

32.5

31.4

(1.0)

16.2

18.3

2.0

SG&A expenses

Main Factors(Net sales)
Net sales increased by 2% YoY, to 618.4 billion yen, because transaction
volume mainly represented by Energy & Living Materials business and Metal(3%)
Recycling business increased on a year-on-year comparison.

2%

13%

Jun. 2024

1,166.9

1,177.4

10.4

1% (Total Assets)(Current assets)

917.1

914.9

(2.1)

(0%)

(Fixed assets)

249.8

262.4

12.5

5%

810.2

812.8

2.6

0%

Net DER

365.4
288.9
82%/70*%

382.8
310.9
86%/74*%

17.4
21.9
4pt

5%
8%
5%

Total net assets

356.7

364.5

7.7

2%

(Net assets)

304.2
46.9
5.5
8,636.03
351.2
30.1/32.2*%

307.5
51.0
5.9
8,885.01
358.5
30.5/32.6*%

3.2
4.1
0.3
248.98
7.3
0.4pt

1%
9%
6%
3%
2%
1%

Total net assets increased 2% from the end of the previous fiscal year because ofaccumulation of retained earnings from net income attributable to owners ofparent as well as a fluctuation in foreign currency translation adjustments.
Equity ratio was 30.5% (*32.6%), which is 0.4 percentage points higher than at
the end of the previous fiscal year.

Total assets

Total liabilities(Interest-bearing debt)(Net interest-bearing debt)(Shareholders' equity)

Operating income

16.2

13.1

(3.1)

Non-operating income

3.2

3.4

0.1

5%

Non-operating expenses

3.5

4.2

0.6

19%

Ordinary income

16.0

12.3

(3.6)

(23%)

Extraordinary gain

―

1.4

1.4

Extraordinary loss

―

―

―

Income before income taxes

16.0

13.7

(2.2)

Income taxes

4.5

Net income
Owners of the parent
Non-controlling interests

EPS (yen)

4.4

11.4

9.3

(2.1)

11.4
(0.0)

9.2
0.1

(2.2)
0.1

282.81227.6613.1

13.6(Non-operating income/expenses)
Non-operating income increased by 0.1 billion yen and non-operating
expenses incresed by 0.6 billion yen. The main impacts on ordinary income―
were as follows.
Interest income : increase of 0.1 billion yen(YoY)―
Share of profit of entities accounted for using the equity method :increase of 0.3 billion yen(YoY)(14%)
Foreign exchange loss : increase of 0.8 billion yen(YoY)(19%) (Extraordinary gain/loss)
Gain on sales of investment securities：1.1 billion yen(20%)
Gain on sales of investments in capital of subsidiaries and associates：―
increase of 0.3 billion yen

0.5

1Q of
FY2023

307.8

1Q of
FY2024

293.9

(5%)

1Q of
FY20238.2

1Q of
FY20247.7

rate

1st half

3,000.0

2,000.0

(6%)

45.8

(15%)

4.0

1.1

(71%)

Metal Recycling

45.6

54.0

18%

1.1

0.7

(34%)

Foods

28.7

29.3

2%

0.4

0.3

(21%)

69.0

93.6

36%

1.3

1.4

11%

86.7

97.5

12%

2.0

1.6

(19%)

591.9

614.3

4%

17.3

13.2

(24%)

Other

36.7

32.0

(13%)

1.5

0.9

(38%)

Total

628.6

646.4

3%

18.9

14.1

(25%)

Adjustment(19.9)(27.9)

41%

(2.9)

(1.8)

(38%)

608.7
・Apr
・May

618.4

2%

16.0

12.3

Total assets increased by 0.9% from the end of the previous fiscal year, mainly
because inventries and investment securities increased.

(Liabilities)
Liabilities increased by 0.3% from the end of the previous fiscal year, mainly
because of increase of short-term loans payable, as well as issuance ofcommercial paper. As interest-bearing debt increased by 5%, net debt-equity
ratio was turned into 86%（*74%).

*Reflecting equity credit attributes of the subordinated loan

【Quarterly Operating Results】

2nd half

1st quarter

2,164.0

1000.02,800.0

2,668.2

50.0

1,230.7

608.7

600.0

625.4

592.5

605.3

40.0

618.4

30.0
400.0

1,000.0

665.5

452.6

618.4

608.7

980.3

1,338.9

1,201.2

2022/32023/32024/316.2

1st half
43.6

2nd half
51.5

200.0

7.3

10.0
0.0

FY2023/1Q

2025/3(E)

2Q

3Q

4Q

FY2024/1Q【Changes in Interest-bearing Debt】
Interest-bearing debt

900.0

Net DER

5.0

Reflecting subordinated loan

722.9

14.4

38.4

37.1

3.0

19.4

2.4

23.9

300.0

2.0

19.0
11.4

9.4

4.0

600.0

43.0
20.9

20.0

13.1

0.0

1st quarter

40.0

22.7

16.1
10.1

【Changes in Net Income】

20.0

60.0

Operating income

800.0

2,431.9

1,329.3

Net sales

1,183.7

Main Factors(Steel )Net sales decreased, because transaction volume of steel sheets and wire products
decreased. In addition, segment income decreased, due to increase of labor costs.
(Primary metal)
Net sales decreased, because transaction volume mainly represented by nickel and ferro
chrome decreased. In addition, segment income decreased, due to the result of lower
market prices of various products and rising transportation cost.
(Metal recycling)
Net sales increased, because transaction volume of gold ingots and copper scraps
increased. On the other hand, segment income decreased due to the result of lower market
prices of nickel compared to the same period of the previous fiscal year.
(Food)Net sales increased, because the market of foods represented by crab was high compared tothe same period of the previous fiscal year. On the other hand, segment income decreased
due to the purchase costs of various products arising attributed to the depreciation of theyen.
(Energy & Living Materials)
Net sales increased, because transaction volume of bunker oil products increased. In
addition, segment income increased due to the transaction volume and sales price of urea
products increased.
(Overseas sales subsidiaries)
Net sales increased, because of the increase of new transaction in China and the newly
consolidation of companies, which were accounted for the equity method in the previous
fiscal year. Segment income decreased, due to the result of lower prices of steel pruducts in
Asia, compared to the same period of the previous fiscal year.

Main Factors

rate

1,500.0

60.0

53.8

Consolidated

3,500.0

Segment income
rateChange【Changes in Net Sales】

4%

Primary Metal

Energy &Living Materials
Overseas sales
subsidiaries
Total for reportablesegments

BPS (yen)
Equity capital
Equity ratio

2,500.0

(2%)

(19%)

(Non-controlling interests)

0.0

Net salesSteel(55.15)(Accumulated Other
Comprehensive Income)

500.0

Comprehensive
incomeSegment Information(0.0)(19%) (SG&A expenses)
SG&A expenses increased by 2 billion yen YoY, with 0.1 billion yen of thisfigure deriving from newly consolidated subsidiaries.

Comparison with Mar. 2024

Mar. 2024

Financial Position

9.2

0.0

380.9

365.4

382.8

0.8

0.9

0.8

0.7

0.7

FY2022

FY2023

FY2024/1Q

1.0

2.0
1.0

0.0

FY2021

Forecast(Annual)

Net sales

FY2022

FY2023

FY20230.0

FY2024(E)FY2024(estimated)

FY2021changeCash Dividends

FY2022

FY2023

FY2024(estimated)

2,431.92,800.0

15%Interim (yen)

50.00

85.00

105.00Operating income

49.7

61.0

23%

Year-end (yen)80.00

100.00105.00Ordinary income

48.2

60.0

24%

Annual (yen)130.00185.00210.00Net income attributable toowners of the parent

38.4

43.0

12%

DOE *

―

2.7%

2.8%

(23%)

Established HANWA BUSSINESS PARTNERS LTD. as a subsidiary of the Company.
PT. HANWA INDONESIA, a subsidiary of the Company, acquired 15% of the shares of PT GARUDA YAMATO STEEL.

Topics* DOE (Dividend on equity ratio) = Total dividend / Beginning total shareholders' equity