Consolidated Financial Results
for the Year Ended March 31, 2024 [Japanese GAAP]May 15, 2024
Company:
Hokuetsu Corporation
Stock Exchange Listing: Tokyo
Stock Code:3865
URL: http://www.hokuetsucorp.com
Representative: Sekio Kishimoto, President & CEO
Contact:
Tomonari Maruyama, General Manager, Corporate Management Department TEL: +81-3-3245-4500
Scheduled date of ordinary general meeting of shareholders: June 27, 2024
Scheduled date of commencement of dividend payments:
June 28, 2024
Scheduled date of filing annual securities reports:
June 27, 2024
Supplementary documents for financial results:
Yes
Results briefing:
Yes (for institutional investors and analysts)(Figures rounded down to the nearest million yen)
1. Consolidated financial results for the year ended March 31, 2024 (April 1, 2023 through March 31, 2024)(1) Consolidated results of operations(% change from the previous corresponding period)
Profit attributable to
Net sales
Operating profit
Ordinary profit
owners of parent
Million yen%
Million yen%
Million yen%
Million yen%
Year ended March 31, 2024
297,056(1.4)
15,267(11.7)
17,766
54.9
8,396
0.9
Year ended March 31, 2023
301,204
15.1
17,288 (15.5)
11,471(61.1)
8,325 (60.7)(Note) Comprehensive income:Year ended March 31, 2024:
30,283 million yen (124.5%)
Year ended March 31, 2023:
13,488 million yen (44.0%)
Basic earnings
Diluted earnings
Ratio of ordinary Ratio of operating
Return on equity
per shareper share
profit to total assets profit to net sales
Yen
Yen
%
%
%
Year ended March 31, 2024
49.94
49.90
3.5
4.4
5.1
Year ended March 31, 2023
49.54
49.48
3.8
3.0
5.7
(Reference) Investment income by equity method: Year ended March 31, 2024:
1,289 million yen
Year ended March 31, 2023:-8,609 million yen(2) Consolidated financial position
Total assets
Net assets
Equity ratio
Net assets per share
Million yen
Million yen%
Yen
As of March 31, 2024
415,629
252,40160.5
1,496.55
As of March 31, 2023
388,444
225,95058.0
1,339.89(Reference) Equity:
As of March 31, 2024:
251,646 million yen
As of March 31, 2023:
225,209 million yen(3) Consolidated cash flows
Cash flows from
Cash flows from
Cash flows from
Cash and cash equivalents
operating activities
investing activities
financing activities
at end of the year
Million yen
Million yen
Million yen
Million yen
Year ended March 31, 2024
22,320(15,494)(3,801)
22,140Year ended March 31, 2023
1,746
(12,753)(2,099)18,063
2. Dividends
Annual dividend per share
End of 1Q End of 2Q End of 3Q Year-end

Year ended March 31, 2023
Year ended March 31, 2024
Year ending March 31, 2025
(forecast)

Total

Yen
–
–

Yen
9.00
9.00

Yen
–
–

Yen
9.00
9.00

Yen
18.00
18.00

–

11.00

–

11.00

22.00

Ratio of
Dividend
dividend to
payout ratio
net assets(Consolidated)(Consolidated)
Million yen
%
%
3,035
36.3
1.4
3,037
36.0
1.3
Total
dividends(Total)26.4

3. Forecast of Consolidated Financial Results for the Year Ending March 31, 2025 (April 1, 2024 through March 31, 2025)(% change from the previous corresponding period)
Basic
Profit attributable to
Net sales
Operating profit
Ordinary profit
earnings perowners of parent
shareMillion yen% Million yen% Million yen% Million yen%
Yen
2Q (Accumulated)
150,000(0.1)
8,000(33.9)
8,000 (41.9)
6,000(36.2)
35.68
Full year
310,000
4.4
17,00011.3
19,0006.9
14,000
66.7
83.26

-1-

* Notes(1) Changes in significant subsidiaries during the year (changes in specified subsidiaries accompanying changes in the scope of
consolidation): Yes
New - None

Excluded - 2 companies

Xing Hui Investment Holdings Co., Ltd.
Jiangmen Xinghui Paper Mill Co., Ltd.

(2) 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
(3) Shares outstanding (common stock)(i) Number of shares outstanding (treasury stock included):
As of March 31, 2024

188,053,114 shares

As of March 31, 2023

188,053,114 shares

19,902,054 shares

As of March 31, 2023

19,972,637 shares

168,124,865 shares

For the year ended March 31, 2023

168,064,868 shares(ii) Number of treasury stock at year-end:
As of March 31, 2024(iii) Average number of shares during the year:
For the year ended March 31, 2024

(Reference) Overview of non-consolidated financial results
1. Non-consolidated financial results for the year ended March 31, 2024 (April 1, 2023 through March 31, 2024)(1) Non-consolidated results of operations(% change from the previous corresponding period)
Net sales
Operating profit
Ordinary profit
Net profit
Million yen%
Million yen%
Million yen%
Million yen%
Year ended March 31, 2024
194,279
3.8
10,457251.1
14,48428.2
3,653(50.9)
Year ended March 31, 2023
187,13113.6
2,978(59.1)
11,298(13.7)
7,448
1.1
Basic earnings
per share

Diluted earnings
per share
Yen
21.64
44.11

Yen
Year ended March 31, 2024
21.66
Year ended March 31, 2023
44.16(2) Non-consolidated financial position
Total assets
Net assets
Equity ratio
Million yen
Million yen%
As of March 31, 2024
288,146
141,206
49.0
As of March 31, 2023
278,051
135,469
48.7(Reference) Equity:
As of March 31, 2024:
141,128 million yen
As of March 31, 2023:
135,378 million yen

Net assets per shareYen
836.41802.67* The summary of financial results is exempt from audits conducted by certified public accountants 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. For assumptions of business forecasts and a note about the use of business
forecasts, please refer to page 5 “1. Summary of Operating Results (4) Future outlook.”* This document is an excerpt translation of the original in Japanese and is for reference purposes only. In case of any discrepancy
between this document and the original in Japanese, the latter shall take precedence.
-2-

1. Summary of Operating Results(1) Summary of operating results during the year
(Operating results during the year)
During the current fiscal year, net sales and operating profit decreased due to the impact of declining international pulp sales prices althoughprice revisions in domestic paper sales implemented in the previous fiscal year did have an effect. Ordinary profit increased due to improved
share of profit of entities accounted for using equity method. Profit attributable to owners of parent increased, reflecting the recording ofextraordinary losses associated with the partial transfer of shares of Xing Hui Investment Holdings Co., Ltd., a consolidated subsidiary of
the Company, and a related decrease in total corporate taxes. The Group’s consolidated financial results for the current fiscal year were as
follows:
Net sales

297,056 million yen(down 1.4% year on year)

Operating profit

15,267 million yen(down 11.7% year on year)

Ordinary profit

17,766 million yen(up 54.9% year on year)

Profit attributable to owners of parent

8,396 million yen(up 0.9% year on year)

The performance of major segments is as follows:(i) Pulp and paper business(Million yen)Previous year

Current year

Difference

Net sales

279,109

272,972(6,136)

Operating profit

16,092

13,681(2,410)In the pulp and paper business, sales and profit declined due to a fall in pulp sales prices and the soaring prices of raw materials and fuels,
despite the effect of price revisions in domestic paper sales. By product type, sales of paper increased due to price revisions implemented
in the previous fiscal year although the sales volumes of products for domestic sales decreased due to a decline in demand caused by thedigitalization of advertising media and mail order catalogs, as well as the suspension of operations at the Niigata Mill because of lightning
strikes and earthquakes.
Sales of paperboard also exceeded the level achieved in the previous fiscal year due to price revisions implemented in the previous fiscal
year. By grade, the sales volumes of special white paperboard and coated duplex board (with gray-back) decreased due to sluggish demandfor packaging applications affected by declined personal consumption spending, but the sales volume of high-grade white paperboard
increased as demand for point-of-purchase (POP) store ad applications recovered in some areas and demand for food applications remained
strong. The sales volume of containerboard base paper decreased due to sluggish demand.
Regarding performance materials, demand for chip carrier tape base paper for transporting electronic components recovered in functional
paper, and sales of special paper and communication paper increased as a result of our efforts to revise prices, in addition to our focus on
expanding sales of crimped postcard paper and products for food packaging materials applications for convenience stores.
Sales of pulp decreased due to a fall in sales prices, although the sales volume surpassed the figure in the previous fiscal year due to theresolution of the freight cars supply shortage in the previous year that affected overseas subsidiaries.
(ii) Packaging/Paper processing business(Million yen)Previous year
Net sales
Operating profit (loss)

Current year

Difference

13,74015,697

1,957

(3)

282

285

In the packaging/paper processing business, sales and profit grew due to the effect of price revisions and increased orders received by the
paper containers and packaging materials business, despite factors increasing costs such as soaring imported base paper prices.

-3-

(iii) Other businesses(Million yen)Previous year
Net sales
Operating profit

Current year

Difference

8,355

8,387

31

694

866

171

In other businesses, including the wood material business, construction business, logistics business and used paper wholesale business,sales and profits increased due to a rise in external orders, especially in the wood material business.
(2) Summary of financial conditions during the fiscal year
(Million yen)
End of previous year

End of current year

ChangeTotal assets

388,444415,629

27,185

Net assets

225,950

252,401

26,451

58.0%

60.5%

2.6%

Net assets per share

1,339.89 yen

1,496.55 yen

156.66 yenInterest-bearing debt at year-end

103,725

104,362

Equity ratio

636

Total assets increased 27,185 million yen from the end of the previous fiscal year, to 415,629 million yen. This was attributable primarily toincreases of 4,076 million yen in cash and deposits, 1,157 million yen in notes and accounts receivable-trade and contract assets, 1,423
million yen in merchandise and finished goods, 1,665 million yen in raw materials and supplies, 9,654 million yen in investment securities,
and 6,919 million yen in assets for retirement benefits.
Total liabilities rose 733 million yen from the end of the previous fiscal year, to 163,228 million yen. This was primarily due to an increase
in interest-bearing debt of 636 million yen.
Net assets rose 26,451 million yen from the end of the previous fiscal year, to 252,401 million yen. This mainly reflected increases in retained
earnings of 4,928 million yen due to profit attributable to owners of parent, and valuation difference on available-for-sale securities of 6,733
million yen, foreign currency translation adjustment of 10,483 million yen and remeasurements of defined benefit plans of 4,749 million yen.
(3) Summary of cash flow during the fiscal year
(Million yen)Previous year

Current year

ChangeCash flows from operating activities

1,746

22,32020,573

Cash flows from investing activities(12,753)(15,494)(2,741)

Cash flows from financing activities(2,099)(3,801)(1,701)

893

1,052

159

Net increase (decrease) in cash and cash equivalents(12,212)

4,076

16,289Cash and cash equivalents at beginning of period

30,27518,063(12,212)

Cash and cash equivalents at end of the year

18,06322,1404,076

Effect of exchange rate change on cash and cash equivalents

Cash and cash equivalents as of the end of current year increased 4,076 million yen year on year, to 22,140 million yen.
(Cash flow from operating activities)
Net cash provided by operating activities was 22,320 million yen (inflow of 1,746 million yen in the previous fiscal year).
Major inflows were profit before income taxes of 5,869 million yen, depreciation of 12,864 million yen, loss on sale of shares of subsidiaries
and associates of 4,469 million yen, loss on waiver of debt of subsidiaries and associates of 2,603 million yen, an increase in allowance for
doubtful accounts of 2,733 million yen, and interest and dividend income received of 2,283 million yen. Major outflows were an increase in-4-

inventories of 3,079 million yen and income taxes paid of 5,301 million yen.
(Cash flow from investing activities)
Net cash used in investing activities amounted to 15,494 million yen (up 21.5% year on year).
A major factor was the purchase of property, plant and equipment of 13,494 million yen.
(Cash flow from financing activities)
Net cash used in financing activities amounted to 3,801 million yen (up 81.0% year on year).
Major outflows were a decrease in commercial paper of 3,000 million yen, repayments of long-term borrowings of 8,700 million yen,redemption of bonds of 10,000 million yen and dividends paid of 3,035 million yen. Major inflows were proceeds from long-term loans of
7,000 million yen and proceeds from issuance of bonds of 15,000 million yen.
(4) Future outlook(i) Forecast on financial results for the next fiscal year
Although the Japanese economy is expected to gradually recover due to the normalization of economic activity and an improvement in theemployment and income environment thanks to the effects of various policies, the future remains uncertain given factors such as
fluctuations in the foreign exchange and financial markets, prolonged geopolitical risks, and the continued rise of the prices of raw materials
and fuels.
In these circumstances, the business environment surrounding the pulp and paper industry is expected to be difficult due to the continued
decline of demand for domestic paper and the soaring prices of imported raw materials. Although the Group expects to see the prices ofraw materials and fuels rise due to the continued appreciation of the dollar and a decline in the domestic paper sales volume, the Groupplans to increase sales volumes by recovering pulp sales prices and strengthening the export business.
The following business forecast was prepared by considering these circumstances comprehensively.
The following forecast was based on information currently available to the Company at the time of the release of these materials. Actual
result may differ from the above forecast due to various factors.

Operating profit

Ordinary profit

Profitattributable toowners of parent

Basic earnings
per share

Million yen

Million yen

Million yen

Million yen

Yen

Year ending March 31, 2025 (forecast)

310,000

17,00019,00014,00083.26

Year ended March 31, 2024 (actual)

297,056

15,267

17,766

8,396

49.94

4.4%

11.3%

6.9%

66.7%

Net sales% change from the previous
corresponding period(ii) Forecast on dividends for the next fiscal year

The Company continues to make investments for growth to boost its corporate value consistently and from a long-term perspective. With
this in mind, it established the basic guidelines for capital policy with an emphasis on the implementation of continuous and stable dividend
payments based on the capital policy of maintaining a balance between financial soundness, capital efficiency and shareholder returns.
Comprehensively considering our achievement of certain results in various management measures in our outlook for the next fiscal year
based on our Long-term Management Vision and Medium-term Management Plan 2026, our dividend forecast for the next fiscal year isfor an interim dividend of 11 yen per share and a year-end dividend of 11 yen per share, giving a total annual dividend of 22 yen per share.
2. Our Basic Philosophy on the Selection of Accounting Standards
Taking into account the period comparability of consolidated financial statements, the Group currently prepares consolidated financial
statements based on Japanese GAAP. With respect to the International Financial Reporting Standards (IFRSs) the Company will address theissue appropriately with consideration to the various circumstances in Japan and overseas.

-5-

3. Consolidated Financial Statements(1) Consolidated Balance Sheet(Million yen)
(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

As of March 31, 2023

As of March 31, 2024

18,06375,827
8,752
28,4582,792
32,4154,469(4)22,14076,984
8,844
29,881
3,252
34,0804,709(15)

170,775

179,879

87,761(56,135)

86,500(57,231)

Buildings and structures, net

31,62529,268

Machinery, equipment and vehicles
Accumulated depreciation

439,463(381,854)

445,517(386,003)

57,60959,513

6,841(5,511)

7,357(5,809)

1,330

1,547

17,981
184(134)

17,746
192(147)

Machinery, equipment and vehicles, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Leased assets
Accumulated depreciation

49

45

Right-of-use assets
Accumulated depreciation

2,803
(762)

2,304
(882)

Right-of-use assets, net

2,040

1,421

Construction in progress
Forestland

3,991
2,431

4,533
2,435

Total property, plant and equipment

117,060

116,511

Intangible assets
Investments and other assets
Investment securities
Shares of subsidiaries and associates
Long-term loans
Asset for retirement benefits
Deferred tax assets
Other
Allowance for doubtful accounts

2,467

2,540

22,272
63,643
223
4,316
1,779
6,189
(283)

31,92665,936
2,946
11,2351,513
6,145(3,006)

Leased assets, net

Total investments and other assets
Total non-current assets
Total assets-6-

98,141

116,698

217,669

235,750

388,444415,629

(Million yen)
(Liabilities)
Current liabilities
Notes and accounts payable - trade
Electronically recorded obligations - operating
Short-term loans
Commercial papers
Current portion of bonds payable
Lease obligations
Income taxes payable
Accrued consumption taxes
Contract liabilities
Provision for bonuses
Provision for directors’ bonuses
Provision for environmental measures
Provision for loss on disaster
Provision for reforestation
Notes payable - facilities
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term loans
Lease obligations
Deferred tax liabilities
Provision for environmental measures
Provision for reforestation
Retirement benefit liability
Asset retirement obligations
Other

As of March 31, 2023

As of March 31, 2024

21,283
7,820
17,05810,00010,000
301
2,919
144
538
2,771
62
39
107
225
1,406
11,18622,9007,578
25,889
7,000
–
357
845
1,384
357
2,999
68
38
351
251
1,801
10,37085,86582,197

10,00054,938
1,427
2,224
1,267
325
3,806
2,410
228

25,00044,718
1,395
1,979
1,371
393
3,755
2,226
189

76,62981,030Total liabilities

162,494

163,228

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

42,02045,342
135,489(9,625)42,02044,953
140,417(9,593)

213,226

217,798

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

11,152(21)
16,3906,326

Total accumulated other comprehensive income

11,982

33,847

91
649

78
676

225,950

252,401

388,444415,629

Total non-current liabilities

Total shareholders’ equity

Share acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets-7-

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income(Million yen)
For the year ended
March 31, 2023

For the year ended
March 31, 2024

Net sales
Cost of sales

301,204
237,186

297,056
236,908

Gross profit

64,01860,148Selling, general and administrative expenses

46,72944,880Operating profit

17,28815,267

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

128
1,402
–
2,238
1,024
4,793

788
825
1,289
–
1,160
4,062

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

796
8,609
210
993
10,610

841
–
210
513
1,564

Ordinary profit

11,471

17,766Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Gain on contribution of securities to retirement benefit trust
Subsidy income
Insurance claim income

845
233
1,416
6
689

934
9
–
31
79

3,192

1,054

899
–
–
6
–
–
–
–

1,221
403
1,484
30
4,469
2,603
2,735
1

905

12,950

Profit before income taxes

13,757

5,869

Income taxes - current
Income taxes - deferred

6,364(1,010)

1,691(4,332)

Total income taxes

5,354(2,641)

Profit

8,403

8,510

78

113

8,325

8,396

Total extraordinary income
Extraordinary losses
Loss on sales and retirement of non-current assets
Impairment loss
Loss on disaster
Loss on tax purpose reduction entry of non-current assets
Loss on sale of shares of subsidiary
Loss on waiver of debt of subsidiary
Provision of allowance for doubtful accounts
Other
Total extraordinary losses

Profit attributable to non-controlling interests
Profit attributable to owners of parent-8-

Consolidated Statements of Comprehensive Income(Million yen)

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
Comprehensive income:Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests-9-

For the year ended
March 31, 2023

For the year ended
March 31, 2024

8,403

8,510

719
(104)
847
152

6,171
(8)
7,957
4,463

3,470

3,189

5,085

21,773

13,48830,283

13,39493

30,26122

(4) Consolidated Statement of Cash Flows(Million yen)
For the year ended
March 31, 2023

For the year ended
March 31, 2024

13,757
11,854
–
141
(689)
233
(1,530)796

5,869
12,864
403
155
(79)
(81)
(1,613)841

8,609(1,289)

(233)
6
53

(9)
30
287

(1,416)–(15,973)(5,960)
252
2,074
(290)
–
–
(4)
(780)

(29)
(3,079)
648
1,407
1,237
4,469
2,603
2,733
(1,243)

Subtotal

10,89926,128Interest and dividend income received
Interest paid
Income taxes paid
Proceeds from insurance income
Payments for deposit money

2,338
(730)
(7,450)689(4,000)

2,283
(868)
(5,301)79–

Net cash provided by (used in) operating activities

1,746

22,320(432)
415(12,515)
(715)
1,047

(1,122)
51(13,494)(1,057)
1,545

–

(872)

(92)
45
(506)

(44)
19
(519)

(12,753)(15,494)

Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment loss
Amortization of goodwill
Insurance claim income
Increase (decrease) in net defined benefit liability
Interest and dividend income
Interest expenses
Share of loss (profit) of entities accounted for using equity
methodLoss (gain) on sale of investment securities
Loss on tax purpose reduction entry of non-current assets
Net loss (gain) on sales and retirement of non-current assets
Loss (gain) on contribution of securities to retirement benefit
trust
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Decrease (increase) in consumption taxes refund receivable
Increase (decrease) in notes and accounts payable - trade
Increase (decrease) in accrued consumption taxes
Loss on sale of shares of subsidiary
Loss on waiver of debt of subsidiary
Increase (decrease) in allowance for doubtful accounts
Other

Cash flows from investing activities
Payments for purchases of investment securities
Proceeds from sales of investment securities
Payments for purchases of property, plant and equipment
Payments for retirement of property, plant and equipment
Proceeds from sales of property, plant and equipment
Payments for sale of shares of subsidiaries resulting in change
in scope of consolidation
Payments of loans receivableCollection of loans receivable
Other
Net cash provided by (used in) investing activities- 10 -

(Million yen)

Cash flows from financing activities
Net increase (decrease) in short-term loans
Net increase (decrease) in commercial papers
Proceeds from long-term loans
Repayments of long-term loans
Proceeds from issuance of bonds
Redemption of bonds
Dividends paid
Dividends paid to non-controlling interests
Other

For the year ended
March 31, 2023

For the year ended
March 31, 2024

(8,427)7,000
31,380(27,324)––(4,380)
(89)
(258)

(691)
(3,000)7,000(8,700)15,000(10,000)(3,035)(99)(274)

Net cash provided by (used in) financing activities(2,099)(3,801)

Translation (loss) gain on cash and cash equivalents

893

1,052

Net increase (decrease) in cash and cash equivalents(12,212)

4,076

Cash and cash equivalents at beginning of period

30,27518,063

Cash and cash equivalents at end of the year

18,06322,140- 11 -