Consolidated Quarterly Financial Results
for the Six Months Ended September 30, 2018 [Japanese GAAP]
November 12, 2018
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, Accounting Department
TEL: +81-3-3245-4500
Scheduled date of filing quarterly report:
November 13, 2018
Scheduled date of commencement of dividend payments:
December 4, 2018
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, 2018
(April 1, 2018 through September 30, 2018)(1) Consolidated results of operations
Net sales

Operating income(% change from the previous corresponding period)
Net income attributable toOrdinary income
owners of parent company
Million yen%
Million yen%

Million yen%
Million yen%Six months ended
134,8191.8
1,937(57.5)
4,370(37.1)
September 30, 2018
Six months ended
132,4450.1
4,562(26.3)
6,945
61.3September 30, 2017
(Note) Comprehensive income:Six months ended September 30, 2018: 1,652 million yen (-74.5%)
Six months ended September 30, 2017: 6,489 million yen (261.2%)
Basic earnings per share Diluted earnings per share
Yen
Yen
Six months ended
14.12
13.54
September 30, 2018
Six months ended
28.41
27.74
September 30, 2017

2,667

(50.2)

5,362

63.6

(2) Consolidated financial position
Total assets
Net assets
Equity ratio
Million yen
Million yen%
As of September 30, 2018364,912
192,334
52.5
As of March 31, 2018366,447
191,977
52.2(Reference) Equity:
As of September 30, 2018:
191,656 million yen
As of March 31, 2018:
191,154 million yen

2. Dividends
End of 1Q

End of 2Q

Annual dividend per share
End of 3Q
Yen
Yen

Yen
Fiscal year ended–
6.00
March 31, 2018
Fiscal year ending–
6.00
March 31, 2019
Fiscal year ending
March 31, 2019 (forecast)(Note) Revisions to dividend forecasts published most recently: None

Year-end

Total
Yen

Yen–

6.00

12.00

–

6.00

12.00

3. Forecast of Consolidated Financial Results for the Fiscal Year Ending March 31, 2019
(April 1, 2018 through March 31, 2019)(% change from the previous corresponding period)
Net sales

Operating income

Net income attributable to Basic earnings
owners of parent company
per share%
Million yen%
Yen
(6.5)
8,500(17.7)
44.98

Ordinary income

Million yen%
Million yen%
Million yen
Full year
275,000
2.2
10,000(12.4)
13,000(Note) Revisions to business forecasts published most recently: None-1-* Notes(1) Changes in significant subsidiaries during the six months ended September 30, 2018 (changes in specified subsidiaries accompanyingchanges 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 revision of accounting standards: Yes(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, 2018
209,263,814 shares(ii) Number of treasury stock:
As of September 30, 2018
20,263,882 shares(iii) Average number of shares during period:
Six months ended September 30, 2018 188,986,098 shares

As of March 31, 2018

209,263,814 shares

As of March 31, 2018

20,298,290 shares

Six months ended September 30, 2017

188,734,297 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 current six months, due primarily to a steep rise in raw fuel prices despite increased revenues as a result of strong sales atoverseas subsidiaries, net sales amounted to 134,819 million yen (up 1.8% year on year) but operating income decreased to 1,937 millionyen (down 57.5% year on year). Ordinary income fell to 4,370 million yen (down 37.1% year on year) and net income attributable toowners of parent company came to 2,667 million yen (down 50.2% year on year).

(2) Qualitative Information Concerning Consolidated Financial Position
Total assets decreased 1,535 million yen from the end of the previous fiscal year, to 364,912 million yen. Major factors included decreases
in cash and deposits of 903 million yen, notes and accounts receivable of 5,301 million yen, and property, plant and equipment of 1,676
million yen due mainly to depreciation, offsetting an increase in investment securities of 6,457 million yen attributable primarily to risingstock prices.
Total liabilities declined 1,892 million yen from the end of the previous fiscal year, to 172,578 million yen. This was primarily due to adecrease in interest-bearing debt of 4,488 million yen, despite an increase of 1,961 million yen in accounts payable – facilities included inothers under non-current liabilities.
Net assets rose 357 million yen from the end of the previous fiscal year, to 192,334 million yen. This chiefly reflected a decline in foreign
currency translation adjustment of 2,998 million yen, despite an increase in retained earnings of 1,430 million yen chiefly due to an income
attributable to owners of parent company, and an increase in unrealized holding gains on available-for-sale securities, net of taxes, of 2,032
million yen due mainly to an increase in stock prices.

(3) Qualitative Information Concerning Consolidated Earnings Forecasts
The full-year consolidated earnings forecasts announced on May 14, 2018 remain unchanged.

-3-2. Consolidated Quarterly Financial Statements and Key Notes(1) Quarterly Consolidated Balance Sheet(Million yen)
As of March 31, 2018
(Assets)
Current assets
Cash and deposits
Notes and accounts receivable - trade
Electronically recorded monetary claims
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
Machinery, vehicles, tools, furniture and fixtures, net

As of September 30, 2018

14,31569,178
5,954
23,5002,030
23,6596,033(82)

13,412
63,877
6,220
23,2992,393
24,1875,314(64)

144,590

138,640

82,098(49,456)

82,918(49,837)

32,641

33,081

418,924(342,140)

423,075(348,123)

76,78374,952Other, net

30,54730,263Total property, plant and equipment

139,972

138,296

3,091

3,005

71,7259,505(2,437)78,1829,225(2,436)

Intangible assets
Investments and other assets
Investments in securities
OtherAllowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets-4-78,793

84,971

221,857

226,272

366,447

364,912(Million yen)
As of March 31, 2018
(Liabilities)
Current liabilities
Notes and accounts payable - trade
Electronically recorded obligations
Short-term debt
Commercial papers
Current portion of bondsIncome taxes payable
Provision
Other

As of September 30, 2018

21,8407,118
21,941
11,00010,0001,801
3,277
13,852

21,038
7,169
18,249–10,0001,153
3,489
16,80890,832

77,90820,00045,064977
11,7722,950
2,873

20,00055,235
1,553
11,9282,738
3,214

83,63894,669Total liabilities

174,470

172,578

Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock

42,02045,524
98,814(9,976)42,02045,523
100,245(9,947)

176,383

177,842

Accumulated other comprehensive incomeUnrealized holding gains on securities, net of taxes
Unrealized losses on hedging derivatives, net of taxes
Foreign currency translation adjustment
Remeasurements of retirement benefit, net of taxes

11,360(21)
3,064
367

13,39229
65
326

Total accumulated other comprehensive income

14,77013,814

121
701

112
565

191,977

192,334

366,447

364,912

Total current liabilities
Non-current liabilities
Bonds payable
Long-term debt, less current maturities
Provision
Liability for defined benefit
Asset retirement obligations
OtherTotal non-current liabilities

Total shareholders’ equity

Subscription rights to shares
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, 2017

For the six -month ended
September 30, 2018

Net sales
Cost of sales

132,445
107,449

134,819
112,660

Gross profit

24,995

22,158Selling, general and administrative expenses

20,433

20,221

Operating income

4,5621,937

Non-operating income
Interest income
Dividends income
Equity in income of affiliates
Foreign currency exchange gains
OthersTotal non-operating income

33
664
956
718
646
3,019

38
594
1,110
951
1,120
3,814

323–
311
635

406
669
304
1,380

6,945

4,370

228
46–
29–
20
325

214
0241–
87
24
567

1,100–
–
34
54

734
5322
16–

Non-operating expenses
Interest expenses
Environmental expenses
OthersTotal non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of property, plant and equipment
Gain on sales of investment in securities
Gain on change in equity of affiliates
Gain on liquidation of subsidiaries and associates
Gain on transfer of businessInsurance income
Total extraordinary income
Extraordinary losses
Loss on sales and retirement of property, plant and equipment
Impairment loss
Loss on disaster
Loss on reduction of property, plant and equipment
Loss on sales of shares of subsidiaries and associates
Total extraordinary losses

1,189

1,078

Income before income taxes

6,081

3,859

Income taxes - current
Income taxes - deferred821
(191)

1,397
(162)

Total income taxes

630

1,235

5,451

2,624

88(43)

5,362

2,667

Net income
Net income (loss) attributable to non-controlling interests
Net income attributable to owners of parent company-6-Quarterly Consolidated Statements of Comprehensive Income(Six-month period)(Million yen)
For the six -month ended
September 30, 2017
Net income
Other comprehensive income
Unrealized holding gains (loss) on securities, net of taxes
Unrealized gains (loss) on hedging derivatives, net of taxes
Foreign currency translation adjustment
Remeasurements of retirement benefit, net of taxes
Share of other comprehensive income of associates accounted
for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to owners of parentcompany
Comprehensive income attributable to non-controlling interests-7-

For the six -month ended
September 30, 2018

5,451

2,624

1,224
44(903)(37)

1,52735(3,013)
(60)

711

540

1,038(971)

6,489

1,652

6,404

1,711

85(58)

(3) Quarterly Consolidated Statement of Cash Flows(Million yen)
For the six-month ended
September 30, 2017

For the six-month ended
September 30, 2018

6,081
9,523
–
63(20)
2(698)
323
(956)
34

3,859
9,119
5
67(24)
111
(632)
406
(1,110)
16

872

520

2,636
(1,650)(15)(1,113)
(655)
(281)

4,333
(1,605)
529
(526)
181
901

Subtotal

14,144

16,153

Interest and dividend income received
Interest paid
Income taxes paid

884
(321)
(1,528)881(381)(2,287)

Net cash provided by (used in) operating activities

13,17914,365(26)(4,936)291(57)
11(450)(2,824)(6,158)
627
(112)
57
(667)

(5,169)(9,078)

1,733
1,500
3,441
(8,278)(1,136)
(93)
(1)
(171)

(3,033)(11,000)
12,200(2,826)(1,136)
(77)
(0)
(46)

Net cash provided by (used in) financing activities(3,006)(5,921)

Translation (loss) gain on cash and cash equivalents

19(235)

Cash flows from operating activities
Income before income taxes
Depreciation
Impairment loss
Amortization of goodwill
Insurance income
Increase (decrease) in net defined benefit liability
Interest and dividend income
Interest expenses
Equity in (income) losses of affiliates
Loss on reduction of property, plant and equipment
Loss (gain) on sales or disposal of property, plant andequipment
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
OtherCash flows from investing activities
Payments for purchases of investment in 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
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
Dividends paid
Dividends paid to non-controlling interests
Payments for purchases of treasury stock
Other

Net increase (decrease) in cash and cash equivalents

5,022

(869)

Cash and cash equivalents at beginning of period

19,284

14,281

Cash and cash equivalents at end of period

24,307

13,412-8-(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.
(Changes in Accounting Policies)
Overseas consolidated subsidiaries that have adopted IFRSs commenced the application of IFRS 15: Revenue from Contracts withCustomers in the first quarter of the current fiscal year. The impact of the application of these accounting standards on the Company’s
consolidated quarterly financial statements is immaterial.
(Additional Information)
The Company commenced the application of the Partial Amendments to Accounting Standard for Tax Effect Accounting (ASBJ Statement
No. 28, February 16, 2018) in the first quarter of the current fiscal year; accordingly, the amount of deferred tax assets is presented under“investments and other assets,” and the amount of deferred tax liabilities is presented under “non-current liabilities.”-9-