Consolidated Quarterly Financial Results
for the Six Months Ended September 30, 2020 [Japanese GAAP]
November 13, 2020
Company:
Stock Exchange Listing: Tokyo
Hokuetsu Corporation
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 filing quarterly report:
November 13, 2020
Scheduled date of commencement of dividend payments:
December 2, 2020
Supplementary documents for quarterly results:
Yes
Quarterly results briefing:
Yes (for institutional investors and analysts)(Figures rounded down to the nearest million yen)

1. Consolidated Business Results for the Six Months Ended September 30, 2020
(April 1, 2020 through September 30, 2020)(1) Consolidated results of operations
Net sales

Operating profit(% change from the previous corresponding period)
Profit attributable toOrdinary profit
owners of parent
Million yen%
Million yen%

Million yen%
Million yen%Six months ended
103,304(24.4)(3,253)–(678)–
September 30, 2020
Six months ended
136,714
1.4
7,301
276.9
9,557
118.7
September 30, 2019(Note) Comprehensive income:Six months ended September 30, 2020: 1,265 million yen (-72.0%)
Six months ended September 30, 2019: 4,515 million yen (173.3%)
Basic earnings per share Diluted earnings per share
Yen
Yen
Six months ended
11.07
9.78
September 30, 2020
Six months ended
34.62
33.22
September 30, 2019

1,859

(71.6)

6,544

145.3

(2) Consolidated financial position
Total assets
Net assets
Equity ratio
Million yen
Million yen%
As of September 30, 2020
354,139
181,058
50.9
As of March 31, 2020
344,731
180,86152.3(Reference) Equity:
As of September 30, 2020:
180,421 million yen
As of March 31, 2020:
180,183 million yen

2. Dividends
End of 1Q
Yen

Annual dividend per share
End of 2Q
End of 3Q
Yen
Yen

Fiscal year ended–
6.00
March 31, 2020
Fiscal year ending–
7.00
March 31, 2021
Fiscal year ending
March 31, 2021 (forecast)(Note) Revisions to dividend forecasts published most recently: None

Year-end

Total
Yen

Yen–

6.00

12.00

–

7.00

14.00

3. Forecast of Consolidated Financial Results for the Fiscal Year Ending March 31, 2021
(April 1, 2020 through March 31, 2021)(% change from the previous corresponding period)
Net sales

Operating profit

Ordinary profit

Million yen%
Million yen%
Million yen
Full year
210,000(20.6)
1,000(91.1)
5,500(Note) Revisions to business forecasts published most recently: None-1-%(64.9)

Profit attributable to
Basic earnings
owners of parentper share
Million yen%
Yen
7,500(7.1)
44.67

* Notes(1) Changes in significant subsidiaries during the six months ended September 30, 2020 (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 of 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 September 30, 2020
188,053,114 shares(ii) Number of treasury stock:
As of September 30, 2020
20,131,547 shares(iii) Average number of shares during period:
Six months ended September 30, 2020 167,921,057 shares

As of March 31, 2020

188,053,114 shares

As of March 31, 2020

20,140,702 shares

Six months ended September 30, 2019

189,055,612 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
Half; (3) Qualitative Information Concerning Consolidated Earnings Forecasts” on page 3 of the accompanying materials for matters relatedto 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 Half
(1) Qualitative Information Concerning Consolidated Operating Results
During the current six months, net sales amounted to 103,304 million yen (down 24.4% year on year), the operating loss was 3,253 millionyen (compared to operating profit of 7,301 million yen in the same period of the previous fiscal year), the ordinary loss was 678 millionyen (compared to ordinary profit of 9,557 million yen in the same period of the previous fiscal year), and profit attributable to owners ofparent came to 1,859 million yen (down 71.6% year on year), due primarily to a sharp decline in demand in the overall industry as a resultof the spread of the novel coronavirus disease (COVID-19).

(2) Qualitative Information Concerning Consolidated Financial Position
Total assets increased 9,408 million yen from the end of the previous fiscal year, to 354,139 million yen. This was attributable primarily
to increases of 11,486 million yen in cash and deposits, 9,205 million yen in investment securities, and 3,721 million yen in deferred tax
assets included in investments and other assets, which more than offset decreases of 7,647 million yen in notes and accounts receivable trade, 1,623 million yen in electronically recorded monetary claims - operating, 1,742 million yen in merchandise and finished goods,
1,460 million yen in raw materials and supplies, and 2,108 million yen in property, plant and equipment due mainly to depreciation.
Total liabilities rose 9,211 million yen from the end of the previous fiscal year, to 173,081 million yen. This was attributable primarily to
an increase of 16,792 million yen in interest-bearing liabilities, which more than offset decreases of 4,108 million yen in notes and accounts
payable - trade, 1,162 million yen in electronically recorded obligations - operating, and 511 million yen in income taxes payable.
Net assets increased 196 million yen from the end of the previous fiscal year, to 181,058 million yen. This chiefly reflected increases of863 million yen in retained earnings due in part to profit attributable to owners of parent and 636 million yen in valuation difference on
available-for-sale securities, which more than offset a decrease of 1,407 million yen in foreign currency translation adjustment.

(3) Qualitative Information Concerning Consolidated Earnings Forecasts
No change has been made to the full-year financial forecasts announced on September 30, 2020.

-3-2. Consolidated Quarterly Financial Statements and Key Notes(1) Quarterly Consolidated Balance Sheet(Million yen)
As of March 31, 2020(Assets)
Current assets
Cash and deposits
Notes and accounts receivable - trade
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 September 30, 2020

21,38350,0786,427
29,2002,429
22,7225,445(6)32,86942,431
4,804
27,4582,074
21,2615,834(5)

137,679

136,728

84,722(52,954)

84,544(53,358)

31,76731,185429,962(366,006)

435,115(371,195)

63,95563,919Other, net

31,66730,175

Total property, plant and equipment

127,390

125,281

2,984

2,815

70,366
8,734(2,425)79,571
12,166(2,423)

Machinery, vehicles, tools, furniture and fixtures, net

Intangible assets
Investments and other assets
Investment securities
OtherAllowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets-4-76,67589,314207,051

217,411344,731354,139

(Million yen)
As of March 31, 2020
(Liabilities)
Current liabilities
Notes and accounts payable - trade
Electronically recorded obligations - operating
Short-term loans
Commercial papers
Current portion of bonds payable
Income taxes payable
Provision
Other

As of September 30, 2020

19,3606,317
19,3387,000–
1,086
3,574
14,853

15,252
5,155
22,40915,00010,000574
3,629
13,232Total current liabilities

71,531

85,253

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

30,00048,460
1,376
7,266
2,441
2,792

20,00054,301
1,385
7,465
2,076
2,598

Total non-current liabilities

92,337

87,827

Total liabilities

163,869

173,081

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

42,02045,341
100,879(9,708)42,02045,341
101,743(9,702)

178,533

179,403

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

2,159
21337(868)2,795
8(1,069)(716)

Total accumulated other comprehensive income

1,650

1,018

81596

86550

180,861

181,058

344,731354,139

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(Six-month period)(Million yen)
For the six -month ended
September 30, 2019
136,714109,248

Net sales
Cost of sales

For the six -month ended
September 30, 2020
103,304
88,812Gross profit

27,466

14,491

Selling, general and administrative expenses

20,164

17,745

Operating profit

7,301(3,253)Non-operating income
Interest income
Dividends income
Share of profit of entities accounted for using equity method
OthersTotal non-operating income

47685
2,578
839
4,151

16523
2,297
989
3,828

Non-operating expenses
Interest expenses
Foreign exchange losses
Leave allowance
OthersTotal non-operating expenses

339
941–
614
1,895

226
322
354
349
1,253

Ordinary profit

9,557(678)

Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Gain on change in equity
Gain on reversal of asset retirement obligations
Insurance claim income
Total extraordinary income

27
153––
46
226

17
137
267
327
252
1,002

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 sales of investment securities
Loss on valuation of investment securities
Business restructuring expenses

697
0561
––
16–

658
2–
123
753
799

Total extraordinary losses

1,275

2,230

Profit (loss) before income taxes

8,508(1,906)

Income taxes - current
Refund of income taxes
Income taxes - deferred

1,781
–
176

393
(391)
(3,821)

Total income taxes

1,957(3,819)Profit

6,551

1,912

Profit attributable to non-controlling interests
Profit attributable to owners of parent-6-752

6,544

1,859

Quarterly Consolidated Statements of Comprehensive Income(Six-month period)(Million yen)
For the six -month ended
September 30, 2019
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

For the six -month ended
September 30, 2020

6,551

1,912(856)(1)
47(54)

454(9)(1,421)55(1,170)274(2,035)(646)

Comprehensive income

4,515

1,265

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

4,517
(1)

1,227
38

Total other comprehensive income-7-(3) Quarterly Consolidated Statement of Cash Flows(Million yen)
For the six -month ended
September 30, 2019

For the six -month ended
September 30, 2020

8,508
9,302
063
(46)
105
(732)
339
(2,578)–670–
11,016
1,288
115(2,368)(86)
1,291(1,906)8,074
261(252)
311
(540)
226
(2,297)
12
640
799
8,830
2,788
95
(5,118)
(422)
(913)

Subtotal

26,890

10,393

Interest and dividend income received
Interest paid
Income taxes paid
Proceeds from insurance income

969
(317)
(4,135)
162

903
(162)
(503)
239

Net cash provided by (used in) operating activities

23,57010,870(26)
342(6,037)31(114)123(2,645)(7,064)201(7,563)
21
(151)
119
(559)

(8,327)(14,996)

Cash flows from operating activities
Profit (loss) before income taxes
Depreciation
Impairment lossAmortization of goodwill
Insurance claim income
Increase (decrease) in net defined benefit liability
Interest and dividend income
Interest expenses
Share of profit of entities accounted for using equity method
Loss on tax purpose reduction entry of non-current assets
Loss (gain) on sales and retirement of non-current assets
Business restructuring expenses
Decrease (increase) in notes and accounts receivable - trade
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
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
Proceeds from sales of property, plant and equipment
Payments of loans receivableCollection of loans receivable
Other
Net cash provided by (used in) investing activities-8-(Million yen)
For the six -month ended
September 30, 2019

For the six -month ended
September 30, 2020

(1,990)(10,500)
1,000(1,900)(1,137)(80)(0)(65)1,459
8,000
10,000(2,336)(1,010)
(84)
(0)
(63)

Net cash provided by (used in) financing activities(14,674)

15,963

Translation (loss) gain on cash and cash equivalents

(375)

(352)

Net increase (decrease) in cash and cash equivalents

192

11,486

Cash and cash equivalents at beginning of period

15,202

21,383

Cash and cash equivalents at end of period

15,39532,869Cash 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
Dividends paid
Dividends paid to non-controlling interests
Payments for purchases of treasury stock
Other(4) 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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