July 31, 2024

To whom it may concern,
Company name:
Representative:

Contact:

PACIFIC METALS CO., LTD.
Masayuki Aoyama, President andRepresentative Director(Securities code: 5541
TSE Prime Market)
Terunobu Matsuyama,
Director and Managing
Executive Officer(Telephone: +81-3-3201-6681)

Notice Concerning Recording of Cost of Sales (Reversal of Write-down of Inventories),
Recording of Non-operating Income (Share of Profit of Entities Accounted for Using
Equity Method) and Revisions to Financial Results Forecast
PACIFIC METALS CO., LTD. (the “Company”) hereby announces that it has recorded a reversal of writedown of inventories under cost of sales and share of profit of entities accounted for using equity method under
non-operating income for the three months ended June 30, 2024 (April 1, 2024 through June 30, 2024). The
Company also announces that, in light of the most recent performance trend, it has decided to revise theconsolidated financial results forecast for the six months ending September 30, 2024 (April 1, 2024 throughSeptember 30, 2024) and for the fiscal year ending March 31, 2025 (April 1, 2024 through March 31, 2025)
announced on May 10, 2024.
● Details of cost of sales (reversal of write-down of inventories)
In the previous fiscal year, the Company recorded a write-down of inventories under cost of sales due
to a recognized decline in the profitability of inventories (merchandise and finished goods, work in process,raw materials and supplies) mainly in the nickel business. However, for the three months ended June 30,
2024, the Company expects to record a reversal of the write-down of inventories amounting to 2,025 million
yen under cost of sales (decrease in cost of sales) due to a decrease in inventory volume and other factors.
● Details of non-operating income (share of profit of entities accounted for using equity method)
For the three months ended June 30, 2024, the Company expects to record share of profit of entities
accounted for using equity method of 852 million yen due mainly to strong performance of entities
accounted for using equity method in the Philippines supported by strong demand.

1● Revisions to financial results forecast
1. Revisions to consolidated financial results forecast for the six months ending September 30, 2024
(April 1, 2024 through September 30, 2024)
ProfitBasic
attributable
OperatingOrdinary
earnings perNet sales
to owners of
profitprofitshareparent
Million yen

Million yen

Million yen

Million yen

Yen(Announced on May 10, 2024)

6,641(4,418)(2,376)(2,514)(128.91)

Revised forecast (B)7,248(3,687)(1,261)(1,346)(69.02)

Change (B–A)

607

731

1,115

1,168

Change (%)(Reference)
Actual results for the previous six
months ended September 30, 2023

9.1－－－

8,083(6,194)(2,487)(2,611)

Previously announced forecast (A)(133.90)

2. Revisions to consolidated financial results forecast for the fiscal year ending March 31, 2025
(April 1, 2024 through March 31, 2025)
ProfitBasic
attributable
Operating
Ordinary
earnings per
Net sales
to owners ofprofit
profitshareparent
Million yen

Million yen

Million yen

Million yen

Yen(Announced on May 10, 2024)

13,994(6,838)(2,903)(3,252)(166.76)

Revised forecast (B)14,229(5,979)(1,555)(1,847)(94.71)

Change (B–A)

235859

1,348

1,405

Change (%)(Reference)
Actual results for the previous
fiscal year ended March 31, 2024

1.7－－－

15,521(9,114)(2,119)(1,074)Previously announced forecast (A)(55.10)3. Reason for revisions
With regard to the consolidated financial results forecast, the outlook remains highly uncertain,
mainly affected by stagnation in the real estate market in China, global monetary tightening, growing
tensions in the Middle East and Ukraine, and the remaining high level of inflation rate.
On the volume front of the Company’s ferronickel products, the environment in which the Company
operates has remained largely unchanged. Accordingly, the Company has continued with the policy ofcontrolling volume from the viewpoint of profitability and expects results to be almost the same as thepreviously announced forecast.
In terms of profit and loss, on the selling price front of ferronickel products, the Company also partiallyrefers to the price of nickel pig iron, which has a price advantage over ferronickel products, in addition
to the applicable LME nickel price in setting the selling price of the Company’s products. Therefore,
income was restrained to a certain extent. Moreover, on the procurement front, prices of nickel ore, whichis the main raw material, continue to remain high, as do the prices of raw materials, fuel and electricity.
These and other factors are expected to have a significant impact on procurement prices.
In other areas, regarding a write-down of inventories, the Company expects to record a reversal of thewrite-down of inventories under cost of sales (decrease in cost of sales) due to the progression of areduction in the write-downs accompanying a decrease in inventory volume and other factors from theend of the previous fiscal year to the end of the current fiscal year.
2

Although the situation remains challenging, response measures against such business environment areconsistent with activities to be undertaken under the basic policies set forth in the Group’s Medium-termManagement Plan, and the Company will continue to strongly push forward with these measures.
Accordingly, the consolidated financial results forecast has been revised as described above. For theunderlying assumptions, please refer to “(Reference) Revisions to underlying assumptions” below.
(Note) The forward-looking statements including the financial results forecast contained herein are based on information
currently available to the Company, as well as certain assumptions deemed reasonable by the Company. Actual
results may differ significantly from these forecasts due to various factors.

(Reference) Revisions to underlying assumptions
Sales volume (t)Production volume (t)Applicable LME nickel
price ($/lb)

Applicable exchange rate(¥/$)

1st
half

2nd
half

Full
year

1st
half

2nd
half

Fullyear

1st
half

2nd
half

Fullyear1sthalf

2nd
half

FullyearPreviously announcedforecast(May 10, 2024)

2,869

3,131

6,000

2,777

2,770

5,547

7.83

8.00

7.92

139.28139.15139.21

Revised forecast

3,074

2,926

6,000

2,475

2,770

5,245

8.08

8.00

8.04

151.61

149.17150.42(Reference)
Actual results for theprevious fiscal year
ended March 31, 2024

3,052

2,973

6,025

3,210

2,825

6,035

10.78

8.42

9.62

140.18148.85144.463