Consolidated Quarterly Financial Results
for the Three Months Ended June 30, 2018 [Japanese GAAP]
August 10, 2018
Stock Exchange Listing: Tokyo
URL: http://www.hokuetsucorp.com

Company:
Hokuetsu Corporation
Stock Code:
3865
Representative: Sekio Kishimoto, President & CEO
Contact:
Tomonari Maruyama, General Manager, Accounting Department
Scheduled date of filing quarterly report:
August 13, 2018
Scheduled date of commencement of dividend payments:–Supplementary documents for quarterly results:
None
Quarterly results briefing:
NoneTEL: +81-3-3245-4500(Figures rounded down to the nearest million yen)

1. Consolidated Business Results for the Three Months Ended June 30, 2018
(April 1, 2018 through June 30, 2018)(1) Consolidated results of operations
Net sales

Three months ended
June 30, 2018
Three months ended
June 30, 2017
(Note) Comprehensive income:(% change from the previous corresponding period)
Net income attributable
Operating income
Ordinary income
to owners of parent
company
Million yen%
Million yen%
Million yen%

Million yen%

68,3671.7

2,773(26.8)

5,370

13.5

3,727(2.6)

67,196

1.6

3,786

5.9

4,733

109.3

3,827

74.5

Three months ended June 30, 2018: 451 million yen
Three months ended June 30, 2017: 3,613 million yen
Diluted earnings
Basic earnings per shareper share
Yen
Yen

Three months ended
June 30, 2018
Three months ended
June 30, 2017

19.72

19.37

20.30

20.15

(-87.5%)(91.3%)(2) Consolidated financial position

As of June 30, 2018
As of March 31, 2018
(Reference) Equity:

Total assets
Net assets
Equity ratio
Million yen
Million yen%
366,773
191,19651.9
366,447
191,977
52.2
As of June 30, 2018:
190,408 million yen
As of March 31, 2018:191,154 million yen

2. Dividends
End of 1Q
Yen

Annual dividend per share
End of 2Q
End of 3Q
YenYenFiscal year ended–
6.00
March 31, 2018
Fiscal year ending–
March 31, 2019
Fiscal year ending
6.00
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 incomeMillion yen% Million yen%
First six months
136,000
2.7
4,000 (12.3)
Full year
275,000
2.2
10,000 (12.4)(Note) Revisions to business forecasts published most recently: None-1-

Net income attributable
Basicto owners of parent earnings percompany
share% Million yen%Yen(20.8)
3,000 (44.1)
15.88
(6.5)
8,500 (17.7)
44.98

Ordinary income
Million yen
5,500
13,000* Notes(1) Changes in significant subsidiaries during the three months ended June 30, 2018 (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 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 June 30, 2018
209,263,814 shares(ii) Number of treasury stock:
As of June 30, 2018
20,272,824 shares(iii) Average number of shares during period:
Three months ended June 30, 2018 188,976,247 shares

As of March 31, 2018

209,263,814 shares

As of March 31, 2018

20,298,290 shares

Three months ended June 30, 2017

188,581,784 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 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.

-2-1. Qualitative Information on Consolidated Operating Results for the First Quarter(1) Qualitative Information Concerning Consolidated Operating Results
During the current three months, net sales amounted to 68,367 million yen (up 1.7% year on year) and operating income decreased to 2,773
million yen (down 26.8% year on year), due primarily to a steep rise in raw fuel prices despite increased revenues thanks to strong sales atoverseas subsidiaries. Ordinary income rose to 5,370 million yen (up 13.5% year on year) and net income attributable to owners of parent
company came to 3,727 million yen (down 2.6% year on year).

(2) Qualitative Information Concerning Consolidated Financial Position
Total assets increased 325 million yen from the end of the previous fiscal year, to 366,773 million yen. Major factors included increases
in merchandise and finished goods of 887 million yen, raw materials and supplies of 745 million yen and notes and account receivabletrade of 602 million yen, in spite of decreases in property, plant and equipment of 1,665 million yen due mainly to depreciation.
Total liabilities rose 1,105 million yen from the end of the previous fiscal year, to 175,576 million yen. This was attributable primarily toa rise in interest-bearing debt of 2,265 million yen despite a decrease in provisions of 1,471 million yen.
Net assets declined 780 million yen from the end of the previous fiscal year, to 191,196 million yen. This chiefly reflected a decline inforeign currency translation adjustment of 3,209 million yen despite an increase in retained earnings of 2,488 million yen, due mainly tonet income attributable to owners of the parent company.

(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)
(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
Other
Allowance 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 March 31, 2018

As of June 30, 2018

14,31569,178
5,954
23,5002,030
23,6596,033(82)13,070
69,781
6,469
24,387
2,527
24,405
6,267(79)

144,590

146,829

82,098(49,456)

82,474(49,941)

32,641

32,532418,924(342,140)

420,932(345,408)

76,78375,524

Other, net

30,54730,249Total property, plant and equipment

139,972

138,306

3,091

2,971

71,7259,505(2,437)

71,7639,340(2,437)

Intangible assets
Investments and other assets
Investments in securities
OtherAllowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets-4-78,79378,665

221,857

219,943

366,447

366,773

(Million yen)
As of March 31, 2018

As of June 30, 2018

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

21,227
7,044
22,37913,00010,0001,170
1,843
15,66590,832

92,33020,00045,064977
11,7722,950
2,873

20,00044,835939
11,8292,760
2,880

83,63883,245

Total liabilities

174,470

175,576

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

42,02045,524
98,814(9,976)42,02045,522
101,303(9,964)

176,383178,882

Accumulated other comprehensive income
Unrealized 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

11,3285(145)
336

Total accumulated other comprehensive income

14,77011,525

121
701

117
671

191,977

191,196366,447

366,773(Liabilities)
Current liabilities
Notes and accounts payable - trade
Electronically recorded obligations
Short-term debt
Commercial papers
Current portion of bonds
Income taxes payable
Provision
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term debt, less current maturities
Provision
Liability for defined benefit
Asset retirement obligations
Other
Total 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(First three-month period)(Million yen)
For the three-monthended June 30, 2017

For the three-month
ended June 30, 2018

Net sales
Cost of sales

67,19653,01068,36755,422Gross profit

14,186

12,944

Selling, general and administrative expenses

10,39910,171

Operating income

3,786

2,773

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

15472
165
313
253
1,220

18494
491
1,227
736
2,967

156
117
273

175
195
370

Non-operating expenses
Interest expenses
OthersTotal non-operating expenses
Ordinary income

4,7335,370

Extraordinary income
Gain on sales of property, plant and equipment
Gain on sales of investment in securities
Gain on change in equity of affiliates
Insurance income
Total extraordinary income

199
46–
20266

1–
1624
41

Extraordinary losses
Loss on sales and retirement of property, plant and equipment
Impairment loss
Loss on reduction of property, plant and equipment

181
–
10333
516

Total extraordinary losses

191

354

Income before income taxes

4,807

5,058

539
387

1,231
121

926

1,353

3,881

3,705

Income taxes - current
Income taxes - deferred
Total income taxes
Net income
Net income (loss) attributable to non-controlling interests
Net income attributable to owners of parent company-6-53(22)

3,827

3,727

Quarterly Consolidated Statements of Comprehensive Income(First three-month period)(Million yen)

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 parent
company
Comprehensive income attributable to non-controlling interests-7-

For the three-month
ended June 30, 2017

For the three-month
ended June 30, 2018

3,881

3,705

860
33
(1,378)(19)(182)
8(3,217)
(31)

235

169

(268)

(3,253)

3,613

451

3,568

481

44(29)

(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.
(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 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.”-8-