Consolidated Quarterly Financial Results
for the Six Months Ended September 30, 2023 [Japanese GAAP]
November 10, 2023
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, 2023
Scheduled date of commencement of dividend payments:
December 4, 2023
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, 2023
(April 1, 2023 through September 30, 2023)(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
150,174
10.3
12,094202.5
13,772185.2
September 30, 2023
Six months ended
136,1877.8
3,997(63.0)
4,828(67.5)
September 30, 2022
(Note) Comprehensive income:Six months ended September 30, 2023: 21,722 million yen (190.8%)
Six months ended September 30, 2022:
7,469 million yen (-62.6%)
Basic earnings per share Diluted earnings per share
Yen
Yen
Six months ended
55.94
55.89
September 30, 2023
Six months ended
11.66
11.65
September 30, 2022

9,403

379.9

1,959

(87.8)(2) Consolidated financial position
Total assets
Net assets
Equity ratio
Million yen
Million yen%
As of September 30, 2023
415,781245,575
58.9
As of March 31, 2023
388,444
225,950
58.0(Reference) Equity:
As of September 30, 2023:
244,897 million yen
As of March 31, 2022:
225,209 million yen

2. Dividends
End of 1Q
Yen

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

Year ended–
9.00
March 31, 2023
Year ending–
9.00
March 31, 2024
Year ending
March 31, 2024 (forecast)(Note) Revisions to dividend forecasts published most recently: None

Year-end

Total
Yen

Yen–

9.00

18.00

–

9.00

18.00

3. Forecast of Consolidated Financial Results for the Year Ending March 31, 2024
(April 1, 2023 through March 31, 2024)(% change from the previous corresponding period)
Net sales

Operating profit

Ordinary profit

Million yen%
Million yen%
Million yen
Full year
310,000
2.913,000(24.8)
14,000(Note) Revisions to business forecasts published most recently: Yes-1-%
22.0

Profit attributable to
Basic earnings
owners of parent
per share
Million yen%
Yen
9,000
8.153.55

* Notes(1) Changes in significant subsidiaries during the six months ended September 30, 2023 (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 September 30, 2023
188,053,114 shares(ii) Number of treasury stock:
As of September 30, 2023
19,907,594 shares(iii) Average number of shares during period:
Six months ended September 30, 2023 168,104,892 shares

As of March 31, 2023

188,053,114 shares

As of March 31, 2023

19,972,637 shares

Six months ended September 30, 2022

168,054,212 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 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.

-2-

1. Qualitative Information on Consolidated Operating Results for the First Half
(1) Qualitative Information Concerning Consolidated Operating Results
During the first six months of the current fiscal year, net sales, operating profit, ordinary profit and profit attributable to owners of parent
came to 150,174 million yen (up 10.3% year on year), 12,094 million yen (up 202.5% year on year), 13,772 million yen (up 185.2% yearon year) and 9,403 million yen (up 379.9% year on year), respectively, reflecting the implementation of price increases, despite soaring
raw material and fuel prices.
The performance of major segments is as follows:(i) Pulp and paper businessIn the pulp and paper business, both sales and profits increased, mainly reflecting the implementation of price increases, despite soaring
raw material and fuel prices.
As a result, the results of the pulp and paper business were as follows.
Net sales

138,265 million yen (up 10.5% year on year)

Operating profit

11,375 million yen (up 227.9% year on year)(ii) Packaging/Paper processing businessIn the packaging/paper processing business, both sales and profits increased, mainly reflecting higher selling prices due to price increases
and a rise in the sales volume.
As a result, the results of the packaging/paper processing business were as follows.
Net sales
Operating profit

7,810 million yen (up 17.4% year on year)
116 million yen (compared to operating loss of 99 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 decreased due to a decline in external orders in sales of pallets in particular. Even so, in terms of profitability, profits rose due tothe effect of a range of cost reduction measures.
As a result, the results of other businesses were as follows.
Net sales
Operating profit

4,098 million yen (down 6.2% year on year)
456 million yen (up 8.1% year on year)(2) Qualitative Information Concerning Consolidated Financial Position
Total assets increased 27,336 million yen from the end of the previous fiscal year, to 415,781 million yen. Significant factors included
increases of 7,479 million yen in cash and deposits, 4,978 million yen in merchandise and finished goods, 4,152 million yen in notes andaccounts receivable - trade, and contract assets, 3,253 million yen in property, plant and equipment, and 4,096 million yen in investment
securities.
Total liabilities rose 7,710 million yen from the end of the previous fiscal year, to 170,205 million yen. This was primarily due to increases
of 3,544 million yen in notes and accounts payable - trade and 2,966 million yen in interest-bearing debt.
Net assets rose 19,625 million yen from the end of the previous fiscal year, to 245,575 million yen. This mainly reflected increases inretained earnings of 7,769 million yen due to profit attributable to owners of parent, and valuation difference on available-for-sale securitiesof 3,247 million yen and foreign currency translation adjustment of 9,190 million yen.

(3) Qualitative Information Concerning Consolidated Earnings Forecasts
Based on the results of the first half of the current fiscal year and the outlook for business trends in the second half, the Company has
revised the forecast of full-year consolidated financial results for the year ending March 31, 2024, which was announced on May 12, 2023,
to 13,000 million yen in operating profit.
The forecast of financial results is based on information available to the Company at the time of the publication of this document andcertain assumptions that the Company considers to be reasonable, and may differ materially from the actual results due to various factors.

-3-2. Quarterly Consolidated Financial Statements and Key Notes(1) Quarterly Consolidated Balance Sheet(Million yen)
As of March 31, 2023
(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 structuresAccumulated depreciation
Buildings and structures, net
Machinery, vehicles, tools, furniture and fixtures
Accumulated depreciation

As of September 30, 2023

18,06375,827
8,752
28,4582,792
32,4154,469(4)25,542
79,9798,819
33,436
3,266
33,4863,304(5)170,775

187,830

87,761(56,135)

88,842(57,463)

31,62531,379446,305(387,365)

452,805(391,643)

58,93961,162Other, net

26,49527,772

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

117,060

120,314

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

2,467

2,481

22,272
63,643
12,508(283)

26,36966,58912,477(281)

Total investments and other assets

98,141

105,154

217,669

227,950

388,444415,781

Total non-current assets
Total assets-4-(Million yen)
As of March 31, 2023
(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, 2023

21,283
7,820
17,05810,00010,0002,919
3,206
13,577

24,828
7,982
13,504–10,0002,616
3,156
13,695

Total current liabilities

85,86575,783

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

10,00054,938
1,593
3,806
2,410
3,880

25,00056,197
1,862
3,812
2,437
5,111

Total non-current liabilities

76,62994,421

Total liabilities

162,494

170,205

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

42,02045,342
135,489(9,625)42,02044,967143,258(9,594)

213,226

220,651

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

7,666
(32)
15,098
1,513

Total accumulated other comprehensive income

11,982

24,245

91
649

71
607

225,950

245,575

388,444415,781

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 six-month period)(Million yen)
For the six months ended
September 30, 2022

For the six months ended
September 30, 2023

Net sales
Cost of sales

136,187
110,750

150,174
116,231

Gross profit

25,43733,942

Selling, general and administrative expenses

21,43921,847

Operating profit

3,997

12,094Non-operating income
Interest income
Dividends income
Share of profit of entities accounted for using equity method
Foreign exchange gains
Other
Total non-operating income

34554
–
2,479
538
3,607

301
487
1,121
30
426
2,368

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

333
2,002
441
2,777

386
–
304
690

Ordinary profit

4,828

13,772

35
–
–

104
84935

162

527
–

730
312

527

1,043

Profit before income taxes

4,335

12,892

Income taxes - currentIncome taxes - deferred

2,366(11)

3,331
113

Total income taxes

2,354

3,444

Profit

1,981

9,447

Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Insurance claim income
Total extraordinary income
Extraordinary losses
Loss on sales and retirement of non-current assets
Loss on disaster
Total extraordinary losses

Profit attributable to non-controlling interests
Profit attributable to owners of parent-6-22

44

1,959

9,403

Quarterly Consolidated Statements of Comprehensive Income(First six-month period)(Million yen)
For the six months ended
September 30, 2022
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 six months ended
September 30, 2023

1,981

9,447

789
(29)
4,973
(59)

2,976
0
6,799
(136)

(185)

2,634

5,488

12,274Comprehensive income

7,469

21,722Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

7,414
55

21,66656-7-(3) Quarterly Consolidated Statement of Cash Flows(Million yen)
For the six months ended
September 30, 2022

For the six months ended
September 30, 2023

4,335
6,042
68–
118
(589)
333

12,892
6,235
74
(49)
(20)
(789)
386

2,002

(1,121)492(2,490)(7,728)
538
2,340
(200)
(926)

626
(2,288)(4,724)
770
3,380
222
(1,281)

Subtotal

4,338

14,312

Interest and dividend income received
Interest paid
Income taxes paid
Proceeds from insurance income
Payments for deposit money

1,106(323)(4,660)–(3,000)

1,178
(413)
(3,757)49–

Net cash provided by (used in) operating activities(2,540)11,369(411)
0(5,362)49(90)36(614)(35)
39(5,077)108(29)
11(835)(6,393)(5,817)

Cash flows from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Insurance claim income
Increase (decrease) in net defined benefit liability
Interest and dividend incomeInterest expenses
Share of loss (profit) of entities accounted for using equity
methodNet loss (gain) on sales and retirement of non-current assets
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
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 equipmentProceeds 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 months ended
September 30, 2022

For the six months ended
September 30, 2023

(472)
20,0008,729(19,152)–(2,862)–(57)(1,002)(10,000)
4,000(6,212)
15,000(1,498)(99)(26)

Net cash provided by (used in) financing activities

6,183

161

Translation (loss) gain on cash and cash equivalents

1,881

1,766

Net increase (decrease) in cash and cash equivalents

(868)

7,479

Cash and cash equivalents at beginning of period

30,27518,063

Cash and cash equivalents at end of period

29,40725,542

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
Dividends paid
Dividends paid to non-controlling interests
Other-9-(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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