Consolidated Financial Results for the Six Months Ended September 30, 2018
(JPGAAP)
November 5, 2018
Stock Exchange: Tokyo
Name of listed company: NISSAN CHEMICAL CORPORATION
URL: http://www.nissanchem.co.jp/
Code Number: 4021
Representative: Kojiro Kinoshita, President
Inquiry to: Hironori Yoshida, Executive Officer and Director of Finance and Accounting Department Tel. +81 3 4463 8404
Scheduled submission date of quarterly report: November 9, 2018䚷䚷䚷䚷䚷 Scheduled dividend payment date: December 3, 2018
Supplemental information: Yes
Financial results meeting : Yes(Amounts rounded down to the nearest million yen)

1. Consolidated Financial Results for the Six Months Ended September 30, 2018 (From April 1, 2018 to September 30, 2018)(1) Consolidated Operating Results(% indicates the rate of increase/decrease against the same period of the previous year)

OperatingincomeNet sales

Six months ended September 30, 2018
Six months ended September 30, 2017
(Note) Comprehensive income:Ordinary
incomeNet income attributableto owners of parent

Million yen%

Million yen%

Million yen%

Million yen%

98,038

7.7

19,39912.4

20,613

15.6

15,40916.990,9977.7

17,263

17.2

17,831

25.5

13,181

24.4

Six months ended September 30, 2018

: 16,669 million yen , (0.2%)

Six months ended September 30, 2017

: 16,707 million yen , 124.3%

Basic earnings
per share

Diluted net income
per share

Yen

Yen

Six months ended September 30, 2018

103.53㸫

Six months ended September 30, 2017

87.40

㸫

(2) Consolidated Financial Position
Total assets

Net assets

Equity ratio

Million yen

Million yen%

As of September 30, 2018

230,566

182,482

78.4

As of March 31, 2018

246,040

176,364

71.0(Reference) Shareholders' equity:

As of September 30, 2018

: 180,768 million yen

As of March 31, 2018

: 174,586 million yen

2. Cash Dividends
Cash dividends per shareFirst
quarter

SecondquarterYen

Thirdquarter

Yen

Year ended March 31, 2018

䠉

32.00

Year ending March 31, 2019

䠉

40.00

Year ending March 31, 2019
(Forecast)Year-end

Yen

Annual

Yen

Yen

㸫

36.00

68.00

㸫

42.00

82.00

(Note) Revision of the latest released dividend forecast: Yes
Please refer to " Revision of Financial Results Forecast, Interim Dividend Payment and Dividend Forecast" for details.

3. Forecast of Consolidated Financial Results for the Fiscal Year Ending March 31, 2019 (From April 1, 2018 to March 31, 2019)(% indicates the rate of increase/decrease against the same period of the previous year)
OperatingincomeNet salesYear ending March 31, 2019

Ordinary
incomeNet income attributableto owners of parent

Basic earnings
per share

Million yen%

Million yen%

Million yen%

Million yen%

Yen

205,500

6.3

38,1008.9

40,10010.7

30,00010.5

201.79(Note) Revision of the latest released forecast of financial results: Yes
Please refer to " Revision of Financial Results Forecast, Interim Dividend Payment and Dividend Forecast" for details.

4. Notes(1) Changes in significant consolidated subsidiaries(Changes in specified subsidiaries involving changes in scope of consolidation)(2) Application of special accounting treatment to preparation of quarterly financial statements: None: None(3) Changes of accounting policies and accounting estimates, and restatement
1. Changes of accounting policies due to revisions of accounting standards: None2. Changes of accounting policies other than the above: None3. Changes in accounting estimates: None4. Restatements: None(4) Number of shares outstanding (common shares)
1. Number of shares outstanding (including treasury shares)
As of September 30, 2018 : 149,000,000 shares
As of March 31, 2018

: 151,000,000 shares

2. Number of treasury shares
As of September 30, 2018 :As of March 31, 2018

511,222 shares: 1,534,562 shares

3. Average number of shares outstanding
As of September 30, 2018 : 148,836,896 shares
As of September 30, 2017 : 150,826,554 shares* Presentation regarding implementation status of quarterly review procedures
The financial release is not subject to quarterly review.
* Explanations regarding appropriate use of business forecasts and other special notes
The business forecast contained in this report is based on information available at the time of disclosure.
Actual operating results may differ materially from the forecast due to various factors.
For supplemental information, please refer to our website.
Financial results audio webcast will be released on our website as well.

Table of Contents for Attached Materials

1. Qualitative Information on Quarterly Results(1) Business Performance(2) Financial Position........................................................................................................ 2.............................................................................................................................. 2..................................................................................................................................... 3(3) Forecast of Consolidated Financial Results and Other Forward-looking Information(4) Basic Policy on Distribution of Earnings
2. Consolidated Financial Statements.................................................. 4......................................................................................................... 4................................................................................................................... 5(1) Consolidated Balance Sheets ...................................................................................................................... 5(2) Consolidated Statements of Income and Statements of Comprehensive Income(3) Consolidated Statements of Cash Flows...................................................... 7........................................................................................................ 9(4) Notes to Consolidated Financial Statements.................................................................................................. 10(Notes on Assumption of Going Concern)................................................................................................. 10(Notes on Significant Changes in Shareholders' Equity)................................................................................10(Additional Information)........................................................................................................................10(Segment Information).........................................................................................................................101

1㸬Qualitative Information on Quarterly Results(1) Business Performance
During the year ended September 30 (April 1, 2018 to September 30, 2018), the domestic economy continued torecover moderately such as increase in capital investment and improvement in employment and income conditions
due to steady corporate earnings. In the Chemicals Segment, sales of Basic Chemicals increased, while sales of Fine
Chemicals decreased from the same period of the previous year. In the Performance Materials Segment, Display
Materials and Semiconductor Materials performed well. In the Agricultural Chemicals Segment, shipments of
Fluralaner (active ingredients for veterinary pharmaceuticals) increased. In the Pharmaceuticals Segment, sales
increased due to shipping time shift and other factors.
As a result, business performance for this period was as follows.
    (Million yen)
Consolidated cumulative
period for the second quarterof FY2017

Consolidated cumulative
period for the second quarterof FY2018

ChangeNet sales

90,99798,038+7,041

Operating income

17,263

19,399+2,135

Ordinary income

17,831

20,613+2,781

Net income attributableto owners of parent13,181

15,409+2,228

Explanations by segments are as below.
The Chemicals Segment
In the Basic Chemicals, sales of melamine (adhesives agent for particle board) increased, while sales of high purity
sulfuric acid (agent used for cleaning semiconductor) decreased. In the Fine Chemicals, shipment of "TEPIC" (epoxy
compound for LED sealants) declined, while sales of "HI-LITE" (chlorinated isocyanuric acid for sterilizing) increased.
Despite raw material and freight price increase, the profit rate of department overall was maintained due to pricerevisions.
As a result, sales of this segment was 16,981 million yen (an increase of 275 million yen) and operating income was
1,145 million yen (a decrease of 119 million yen).
The Performance Materials Segment
In the Display Materials, "SUNEVER" (LCD alignment coating) for smartphone had healthy sales. In the
Semiconductor Materials, sales of bottom anti-reflective coatings for semiconductors (ARC®*) and multi-layer processmaterials (OptiStack®*) increased in response to expanding demand. In the Inorganic Materials, sales for "SNOWTEX"(semiconductor polishing, hard coating, etc.) increased, while sales for Organo / Monomer sol (various kinds of coating
materials,resin additive) decreased. Sales of Oilfield materials (for enhancing oil recovery) increased.
As a result, sales of this segment was 31,967 million yen (an increase of 2,844 million yen) and operating income
was 8,120 million yen (an increase of 454 million yen).
*ARC® and OptiStack® are registered trade mark of Brewer Science, Inc.

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The Agricultural Chemicals Segment
Shipments of Fluralaner remained steady. Sales of "Round-up" (non-selective herbicide) decreased due to theimpact of earlier shipments in the previous fiscal year, intense heat and natural disasters in Japan. Sales of "ALTAIR"(paddy rice herbicide) decreased due to the oversea shipment time shift after October, however sales of other oversea
agrochemicals was steady.
As a result, sales of this segment was 28,680 million yen (an increase of 2,532 million yen) and operating income
was 9,846 yen (an increase of 1,708 million yen).
The Pharmaceuticals Segment
Sales of "LIVALO" (anti-cholesterol drug) increased due to early shipment to overseas. Sales of "Custom Chemicals"(custom manufacturing and process researching services for pharmaceutical companies) increased due to shipment
time shift.
As a result, sales of this segment was 3,716 yen (an increase of 198 million yen) and operating income was 605
million yen (an increase of 94 million yen).
Trading
Sales of this segment was 33,443 million yen (an increase of 4,379 million yen) and operating income was 1,100
million yen (an increase of 244 million yen).
OthersSales of this segment was 10,502 million yen (an increase of 838 million yen) and operating income was 235 million
yen (an increase of 76 million yen).
(2) Financial Position(Position of Assets, Liabilities and Net Assets)
Total assets as of September 30, 2018 was 230,566 million yen (a decrease of 15,474 million yen from March 31, 2018). It
is mainly due to the decrease of notes and accounts receivable - trade.
Also, total liabilities as of September 30, 2018 was 48,083 million yen (a decrease of 21,592 million yen). It is mainly due tothe decrease of loans payable.
Net assets as of September 30, 2018 was 182,482 million yen (an increase of 6,117 million yen).
As a result of these factors, equity ratio was 78.4% (an increase of 7.4% from March 31, 2018).
(Position of Cash Flow)
Deducting income taxes paid from income before income taxes and non-controlling interests, depreciation and gain andloss on working capital, net cash provided by operating activities for the six months ended September 30, 2018 was 29,145
million yen (30,035 million yen for the same period of the previous year).
Due to the investment on plant and equipment, net cash used in investing activities for the six months ended September
30, 2018 was 5,966 million yen (6,265 million yen).
Due to the decrease in loans payable, payment for dividends and share repurchase, net cash used in financing activities
for the six months ended September 30, 2018 was 31,478 million yen (26,787 million yen).
As a result of these factors, cash and cash equivalents at the end of this period was 29,493 million yen (32,733 million yen),reflecting exchange of 90 million yen. It decreased by 8,209 million yen from March 31, 2018.

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(3) Forecast of Consolidated Financial Results and Other Forward-looking Information
Forecast for the year ending March 31, 2019 was revised as follows based on the cumulative second quarter anddemand forecasts.
Revision of consolidated financial results’ forecast for the year ending March 31, 2019
(April 1, 2018 to March 31, 2019)(Billion yen)Previous
forecast (A)Revisedforecast (B)Increaseordecrease(B-A)

Rate ofchange(%)(Reference)
Results forthe previous
fiscal year

Net sales

204.0

205.5

+1.5

+0.7%

193.4

Operating income

36.8

38.1

+1.3

+3.5%

 35.0Ordinary income 38.0

40.1

+2.1

+5.5%

 36.2

Net income attributable toowners of parent 28.5

30.0

+1.5

+5.3%

 27.1

Basic earnings per share

191.76 yen

201.79 yen㸫㸫

180.30 yen

Revision of consolidated net sales and operating income forecast for the year ending March 31, 2019      (Billion yen)
 Net sales
 Operating income
Chemicals
Performance Materials
Agricultural Chemicals
Pharmaceuticals
Trading
OthersAdjustment
Total

 Previous
38.0
62.5
63.0

7.2
64.7
23.6

(55.0)
204.0

Revised
37.8
63.8
62.6
 7.0
66.3
22.5
 (54.5)
2,055 Previous
3.9
14.1
17.7
1.5
2.0
0.2
 (2.6)36.8

 Revised
3.9
15.3
18.4
1.2
2.1
0.6
 (3.4)38.1(4) Basic Policy on Distribution of Earnings
The Company’s basic policy of profit allocation is returning to shareholders by improving company value throughincreasing revenue in the medium and long terms.
We aim to realize dividend payout ratio to be 40% in FY2018 and maintain total payout ratio to be 70% in mediumterm business plan “Vista2021” launched from April 2016.

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2. Consolidated Financial Statements(1) Consolidated Balance Sheets(Million yen)
As ofMarch 31, 2018

As of
September 30, 2018

AssetsCurrent assets
Cash and deposits

37,70229,493

Notes and accounts receivable - trade65,42253,451

Merchandise and finished goods

29,85531,768115

839

Raw materials and supplies

7,797

9,002

Other

4,748

3,649

Work in process

Allowance for doubtful accounts

(34)

(38)

145,606

128,166

Buildings and structures, net

24,411

24,755

Other, net

30,062

29,903

Total property, plant and equipment

54,47354,658

Software

775

794

Other

993

869

1,768

1,663

Investment securities

38,51740,600

Other

5,766

5,569

Total current assets
Non-current assets
Property, plant and equipment

Intangible assets

Total intangible assets
Investments and other assets

Allowance for doubtful accounts

(92)

(92)

Total investments and other assets

44,191

46,077

100,433

102,400

246,040

230,566

Total non-current assets
Total assets

5

(Million yen)
As ofMarch 31, 2018

As of
September 30, 2018

Liabilities
Current liabilities
Notes and accounts payable - trade18,57916,595

Short-term loans payable

26,145

6,172

Income taxes payable

5,156

5,318

Provision for bonuses

2,011

2,026

27

12

Other

10,95012,168

Total current liabilities

62,87142,294

2,446

1,569

Provision for directors' bonuses

Non-current liabilities
Long-term loans payable
Provision for business structure improvement

516

409

Provision for loss on business of subsidiaries and affiliates

309

309

Net defined benefit liability

126

149

3,406

3,352

Other
Total non-current liabilities

6,804

5,789

69,67548,083

Capital stock

18,942

18,942

Capital surplus

13,613

13,613Retained earnings

133,822

135,177

Total liabilities
Net assets
Shareholders' equity

Treasury shares(5,962)(2,290)Total shareholders' equity

160,416

165,442

13,653

14,504Foreign currency translation adjustment

125

455

Remeasurements of defined benefit plans

390

364

14,17015,325

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

6

1,778

1,714

176,364

182,482

246,040

230,566

(2) Consolidated Statements of Income / Consolidated Statements of Comprehensive Income- Consolidated Statements of Income(Million yen)
Six Months Ended
September 30, 2017

Six Months Ended
September 30, 2018

Net sales

90,99798,038

Cost of sales

51,70254,961Gross profit

39,29443,077

Selling, general and administrative expenses

22,03023,677

Operating income

17,263

19,39912

12Non-operating income
Interest income
Dividend income

311

332

Equity in earnings of affiliates

445

408

Other

491

1,023

1,261

1,777

Interest expenses

73

59

Loss on disposal of non-current assets

223

315

Plant stop losses

218

134

Other

177

52

Total non- operating expenses

692

563

17,831

20,613Extraordinary income--

Extraordinary losses--

Income before income taxes and non-controlling interests

17,831

20,613

Income taxes - current

4,778

5,397

Total non-operating income
Non-operating expenses

Ordinary income

Income taxes - deferred

(245)

(276)

Total income taxes

4,533

5,121

Net income

13,29815,492

Net income attributable to non-controlling interests
Net income attributable to owners of parent

7

117

82

13,181

15,409- Consolidated Statements of Comprehensive Income(Million yen)
Six Months Ended
September 30, 2017

Six Months Ended
September 30, 201813,29815,492

Valuation difference on available-for-sale securities

3,562

850

Foreign currency translation adjustment

(127)

352

Remeasurements of defined benefit plans, net of tax

(25)

(26)

Share of other comprehensive income of entities accounted forusing equity method

(0)

0

3,408

1,176

16,707

16,66916,60816,564

99

104

Net income
Other comprehensive income

Total other comprehensive income
Comprehensive income(Comprehensive income attributable to)
Owners of parent
Non-controlling interests8(3) Consolidated Statements of Cash Flows(Million yen)
Six Months Ended
September 30, 2017

Six Months Ended
September 30, 2018

Income before income taxes and non-controlling interests

17,831

20,613

Depreciation and amortization

4,735

5,049

Interest and dividend income

(324)

(345)

Cash flows from operating activities

Interest expenses

73

59

Loss (gain) on disposal of non-current assets

223

315

Decrease (increase) in notes and accounts receivable - trade

9,676

12,093

Decrease (increase) in inventories(2,221)(3,739)

Increase (decrease) in notes and accounts payable - trade

1,109(2,054)

Other

1,887

1,607

Subtotal

32,99033,600Interest and dividend income received

770

789

Interest expenses paid

(73)

(60)

Income taxes paid

(3,651)(5,183)

Net cash provided by (used in) operating activities

30,03529,145Purchase of investment securities

(5)

(905)

Proceeds from sales of investment securities

65

398

Cash flows from investing activities

Purchase of property, plant and equipment(6,436)(5,168)

Payments for retirement of property, plant and equipment

(190)

(268)

Purchase of intangible assets

(293)

(116)

Net decrease (increase) in short-term loans receivable

601

91

Purchase of long-term prepaid expenses

(54)

(13)

Other

48

17

(6,265)(5,966)

Net increase (decrease) in short-term loans payable(15,954)(19,650)

Repayments of long-term loans payable(1,535)(1,277)

Cash dividends paid

(4,249)(5,380)Net cash provided by (used in) investing activities
Cash flows from financing activities

Dividends paid to non-controlling interests

(39)

(167)

(5,001)(5,002)(8)(0)(26,787)(31,478)

48

90

Net increase (decrease) in cash and cash equivalents(2,968)(8,209)Cash and cash equivalents at beginning of period

35,70137,702

Cash and cash equivalents at end of period

32,73329,493

Share repurchase
Other
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents9(4) Notes to Consolidated Financial Statements(Notes on Assumption of Going Concern)
Not applicable.
(Notes on Significant Changes in Shareholders' Equity)
The Company canceled 1,000,000 treasury shares on May 8, 2018 based on the resolution of Board of Directors' meeting held on April 24, 2018.
In addition, the Company canceled 1,000,000 treasury shares on August 31, 2018 based on the resolution of Board of Directors' meeting held on
August 21, 2018. As a result, retained earnings and treasury shares decreased by 8,674 million yen during the second quarter ofcurrent consolidated fiscal year.
Also, the Company repurchased its own shares based on the resolution of Board of Directors' meeting held on May 11, 2018. As a result, treasury
shares increased by 4,999 million yen during the second quarter of current consolidated fiscal year.
(Additional Information)"Partial Amendments to Accounting Standard for Tax Effect Accounting" (ASBJ Statement No. 28, February 16, 2018) was adopted from the
beginning of the first quarter of this fiscal year. As a result, deferred tax assets are classified as "Investment and other assets" and deferred
tax liabilities are classified as "Non-current liabilities" respectively.
Segment Information
1. Information Regarding Sales, Income (Loss) of Reportable Segments(Million yen)

1) For the Six Months Ended September 30, 2017 (From April 1, 2017 to September 30, 2017)
Chemicals

Performance Agricultural
Materials
Chemicals

Pharmaceuticals

Trading

Others

Total

Adjustment(1)

Consolidated
Total

Sales
Sales to outside customers

12,13825,812

24,254

3,491

21,654

3,645

90,997

䠉

90,997

Intersegment Sales

4,566

3,310

1,893

26

7,410

6,018

23,225(23,225)

㻙Total Sales

16,70529,123

26,147

3,518

29,064

9,663

114,223(23,225)

90,997

Segment Income or Loss
(Operating Income or Loss)

1,264

7,666

8,138

510

856

158

18,595(1,331)

17,263

Notes: (1) The (1,331) million yen adjustment in segment income includes (131) million yen in intersegment eliminations and (1,199) million yen
corporate expenses not attributable to any reportable segment. The corporate expenses are mainly group administrative expenses
which do not belong to any segment.
(Million yen)

2) For the Six Months Ended September 30, 2018 (From April 1, 2018 to September 30, 2018)
Chemicals

Performance Agricultural
Materials
Chemicals

Pharmaceuticals

Trading

Others

Total

Adjustment(1)

Consolidated
Total

98,038

Sales
Sales to outside customers

12,29928,403

26,732

3,716

23,115

3,771

98,038䠉Intersegment Sales

4,681

3,563

1,947

䠉

10,327

6,731

27,252(27,252)

㻙Total Sales

16,981

31,967

28,6803,716

33,443

10,502

125,291(27,252)

98,038Segment Income or Loss
(Operating Income or Loss)

1,145

8,120

9,846

605

1,100

235

21,054(1,655)

19,399Notes: (1) The (1,655) million yen adjustment in segment income includes (205) million yen in intersegment eliminations and (1,450) million yen
corporate expenses not attributable to any reportable segment. The corporate expenses are mainly group administrative expenses
which do not belong to any segment.

10