Consolidated Quarterly Financial Results
for the Three Months Ended June 30, 2022 [Japanese GAAP]
August 12, 2022
Company:
Stock Exchange Listing: Tokyo
Hokuetsu Corporation
Stock Code:3865
URL: http://www.hokuetsucorp.com
Representative: Sekio Kishimoto, President & CEOContact:
Tomonari Maruyama, General Manager, Corporate Management Department TEL: +81-3-3245-4500
Scheduled date of filing quarterly report:
August 12, 2022
Scheduled date of commencement of dividend payments:–
Supplementary documents for quarterly results:
None
Quarterly results briefing;
None(Figures rounded down to the nearest million yen)

1. Consolidated Business Results for the Three Months Ended June 30, 2022
(April 1, 2022 through June 30, 2022)(1) Consolidated results of operations
Net sales
Three months ended
June 30, 2022
Three months ended
June 30, 2021
(Note) Comprehensive income:(% change from the previous corresponding period)
Profit attributable toOperating profit
Ordinary profit
owners of parent
Million yen%
Million yen%
Million yen%

Million yen%

65,8435.7

3,658(22.4)

5,927(14.9)

3,690(50.8)

62,286

21.1

4,715

–

6,963

693.6

7,499201.1

Three months ended June 30, 2022: 6,003 million yen (-38.8%)
Three months ended June 30, 2021: 9,808 million yen (530.9%)
Diluted earnings
Basic earnings per shareper share
YenYenThree months ended
June 30, 2022
Three months ended
June 30, 2021

21.96

21.93

44.65

44.60

(2) Consolidated financial position

As of June 30, 2022
As of March 31, 2022
(Reference) Equity:

Total assets
Net assets
Equity ratio
Million yen
Million yen%
383,808
220,12657.2
376,956
216,974
57.4
As of June 30, 2022:
219,368 million yen
As of March 31, 2022:
216,252 million yen

2. Dividends
End of 1Q
Yen––

Annual dividend per share
End of 2Q
End of 3Q
YenYen7.00–Year-endTotalYen
17.00

Yen
Year ended March 31, 2022
24.00
Year ending March 31, 2023
Year ending March 31, 2023
9.00
–
9.00
18.00
(forecast)(Note) Revisions to dividend forecasts published most recently: None
Breakdown of year-end dividends for the fiscal year ended March 31, 2022: Ordinary dividend: 7.00 yen Special dividend:
10.00 yen

3. Forecast of Consolidated Financial Results for the Year Ending March 31, 2023
(April 1, 2022 through March 31, 2023)(% change from the previous corresponding period)
Net sales

Operating profit

Million yen% Million yen%
2Q (Accumulated)
130,000
2.9
4,500(58.3)
Full year
280,000
7.0
11,000(46.2)(Note) Revisions to business forecasts published most recently: Yes-1-

Ordinary profit
Million yen
5,500
14,000%(63.0)(52.6)

Basicearnings pershare%Yen(87.6)
11.90(52.8)
59.51

Profit attributable toowners of parent
Million yen
2,000
10,000Notes(1) Changes in significant subsidiaries during the three months ended June 30, 2022 (changes in specified subsidiaries accompanying changes
in the scope of consolidation): None
(2) Application of accounting procedures specific to preparation of the consolidated quarterly financial statements: None
(3) 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
(4) Shares outstanding (common stock)(i) Number of shares outstanding (treasury stock included):
As of June 30, 2022
188,053,114 shares(ii) Number of treasury stock:
As of June 30, 2022
20,001,461 shares(iii) Average number of shares during period:
Three months ended June 30, 2022 168,051,824 shares

As of March 31, 2022

188,053,114 shares

As of March 31, 2022

20,001,115 shares

Three months ended June 30, 2021

167,956,529 shares* Consolidated Quarterly Financial Results are exempted from quarterly review performed by a certified public
accountant 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. Refer to “1. Qualitative Information on Consolidated Operating Results for the First
Quarter; (3) Qualitative Information Concerning Consolidated Earnings Forecasts” on page 3 of the accompanying materials for matters related
to results forecasts.

* This document is an excerpt translation of the original in Japanese and is for reference purposes only. In case ofany discrepancy between this document and the original in Japanese, the latter shall take precedence.

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1. Qualitative Information on Consolidated Operating Results for the First Quarter(1) Qualitative Information Concerning Consolidated Operating Results
During the three months of the current fiscal year, sales increased mainly due to the effects of price revisions to domestic products
implemented in the previous fiscal year and rising prices of exported products. While net sales amounted to 65,843 million yen (up 5.7%year on year), operating profit, ordinary profit and profit attributable to owners of parent came to 3,658 million yen (down 22.4% year onyear), 5,927 million yen (down 14.9% year on year) and 3,690 million yen (down 50.8% year on year), respectively, due to soaring raw
material and fuel prices.
The performance of major segments is as follows:(i) Pulp and paper businessIn the pulp and paper business, sales increased mainly due to the effects of price increases of domestic products implemented in theprevious fiscal year and rising prices of exported products. However, profits decreased due to soaring raw material and fuel prices.
As a result, the results of the pulp and paper business were as follows.
Net sales

60,522 million yen (up 6.5% year on year)

Operating profit

3,366 million yen (down 22.6% year on year)(ii) Packaging/Paper processing businessIn the packaging/paper processing business, sales and profits decreased, mainly because of the transfer of information media businessand rising raw material prices.
As a result, the results of the packaging/paper processing business were as follows.
Net sales
Operating loss

3,208 million yen (down 9.9% year on year)-59 million yen (compared to operating profit of 6 million yen a year ago)(iii) Other businesses
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.
As a result, the results of other businesses were as follows.
Net sales
Operating profit

2,113 million yen (up 12.8% year on year)
228 million yen (up 6.5% year on year)(2) Qualitative Information Concerning Consolidated Financial Position
Total assets increased 6,852 million yen from the end of the previous fiscal year, to 383,808 million yen. This was attributable primarily
to increases of 5,527 million yen in raw materials and supplies and 3,001 million yen in guarantee deposits included in investments andother assets, which more than offset a decrease of 1,930 million yen in notes and accounts receivable - trade, and contract assets.
Total liabilities rose 3,700 million yen from the end of the previous fiscal year, to 163,682 million yen. This was primarily due to anincrease in interest-bearing debt of 5,298 million yen, which more than offset a decrease in income taxes payable of 2,859 million yen.
Net assets rose 3,152 million yen from the end of the previous fiscal year, to 220,126 million yen. This mainly reflected increases inretained earnings of 830 million yen, which is primarily due to profit attributable to owners of parent, and foreign currency translation
adjustment of 1,998 million yen.

(3) Qualitative Information Concerning Consolidated Earnings Forecasts
Looking at the first six months of the fiscal year ending March 31, 2023, consolidated financial forecasts, including operating profit,
ordinary profit and profit attributable to owners of parent, are expected to exceed the previous forecast due to rising sales prices of paperand pulp in overseas markets.
The full-year earnings forecast remains unchanged from the previously announced forecast, given the uncertain outlook for soaring raw
material and fuel prices and trends in exchange rates.
-3-2. Quarterly Consolidated Financial Statements and Key Notes(1) Quarterly 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
OtherAllowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, vehicles, tools, furniture and fixtures
Accumulated depreciation

As of March 31, 2022

As of June 30, 2022

30,27560,7497,133
27,2602,684
26,4695,741(5)29,40958,818
7,077
28,3802,224
31,9974,403(5)160,308

162,304

85,623(54,260)

86,512(54,894)

31,36331,617439,429(380,000)

442,017(382,447)

59,42959,569Other, net

24,58925,300Machinery, vehicles, tools, furniture and fixtures, net
Total property, plant and equipment

115,382

116,487

Intangible assets
Investments and other assets
Investment securities
Shares of subsidiaries and associates
Other
Allowance for doubtful accounts

2,406

2,411

22,022
69,5627,560(288)

22,757
69,321
10,812(286)

Total investments and other assets

98,857

102,605

216,647
376,956

221,504
383,808

Total non-current assets
Total assets-4-

(Million yen)
(Liabilities)
Current liabilities
Notes and accounts payable - trade
Electronically recorded obligations - operating
Short-term loans
Commercial papers
Income taxes payable
Provision
Other

As of March 31, 2022

As of June 30, 2022

20,3606,339
40,748
3,000
4,013
3,229
14,105

20,866
7,233
39,965
7,000
1,154
1,898
14,605

Total current liabilities

91,79692,724Non-current liabilities
Bonds payable
Long-term loans
Provision
Retirement benefit liability
Asset retirement obligations
Other

20,00033,495
1,477
5,661
2,845
4,704

20,00035,431
1,601
5,790
2,799
5,335

Total non-current liabilities

68,18470,958

Total liabilities

159,981

163,682

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

42,02045,341
131,615(9,639)42,02045,341
132,446(9,639)209,338

210,169

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

3,686
157
1,632
1,437

4,051
148
3,630
1,367

Total accumulated other comprehensive income

6,913

9,199

77644

85
673

216,974

220,126

376,956

383,808

Total shareholders’ equity

Share acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets-5-(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income
Quarterly Consolidated Statements of Income(First three-month period)(Million yen)
For the three months
ended June 30, 2021

For the three months
ended June 30, 2022

Net sales
Cost of sales

62,28647,74365,843
51,948Gross profit

14,542

13,895

Selling, general and administrative expenses

9,826

10,237Operating profit

4,715

3,658

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

5404
1,630–
603
2,643

13497
385
1,430
226
2,553

110
140
143
394

138–
144
283

Ordinary profit

6,963

5,927

Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Insurance claim income
Gain on reversal of retirement benefit obligations
Total extraordinary income

2,805
03177
2,9141–––1255
31

169
–286

169

Profit before income taxes

9,591

5,759

Income taxes - current
Income taxes - deferred

1,111
967

1,540
505

Total income taxes

2,078

2,045

Profit

7,512

3,714

Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses

Extraordinary losses
Loss on sales and retirement of non-current assets
Loss on tax purpose reduction entry of non-current assets
Total extraordinary losses

Profit attributable to non-controlling interests
Profit attributable to owners of parent-6-13

23

7,499

3,690Quarterly Consolidated Statements of Comprehensive Income(First three-month period)(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

For the three months
ended June 30, 2021

For the three months
ended June 30, 2022

7,512

3,714(446)
222,9650559(41)
2,002(60)(246)(170)2,295

2,289

Comprehensive income

9,808

6,003

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

9,769
39

5,97528-7-(3) Notes to Quarterly Consolidated Financial Statements(Notes to Going Concern Assumption)
Not applicable.
(Notes on Any Significant Change in the Value of Shareholders’ Equity)
Not applicable.

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