Consolidated Financial Results
for the Three Months Ended June 30, 2024
[Japanese GAAP]
August 2, 2024
Company name: ARAKAWA CHEMICAL INDUSTRIES, LTD.
Stock exchange listing: Tokyo Stock Exchange
Code number: 4968
URL: https://www.arakawachem.co.jp/en/
Representative: Nobuyuki Takagi, Representative Director and President
Contact: Toru Nobuhiro, Managing Director
Phone: +81-6-6209-8500
Scheduled date of commencing dividend payments: –Availability of supplementary explanatory materials on financial results: Available
Schedule of financial results briefing session: Not scheduled(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Three Months Ended June 30, 2024 (April 1, 2024 - June 30, 2024)(1) Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Profit attributable toNet sales
Operating profit
Ordinary profit
owners of parent%%%%Three months ended
Millions of yen
Millions of yen
Millions of yen
Millions of yen
June 30, 2024
19,261
11.3
622
–
806
–
1,799–
June 30, 2023
17,298 (18.3)(834)–(670) –(314) –(Note) Comprehensive income: Three months ended June 30, 2024: ¥ 2,411 million [–%]
Three months ended June 30, 2023: ¥ 212 million [(71.5)%]
Basic earnings
Diluted earnings
per shareper share
Yen
Yen
Three months ended
June 30, 2024
90.71–
June 30, 2023
(15.84)–(2) Consolidated Financial Position
Total assets

Net assets

Millions of yen

As of June 30, 2024
123,926
As of March 31, 2024
125,418(Reference) Equity: As of June 30, 2024: ¥ 58,428 million
As of March 31, 2024: ¥ 56,134 million

Equity ratio

Millions of yen%

58,85456,91847.1
44.8

2. Dividends
Annual dividends
1st quarter-end

2nd quarter-end 3rd quarter-end

Yen

YenYear-end

Yen

Fiscal year ended
–
24.00
–
March 31, 2024
Fiscal year ending–
March 31, 2025
Fiscal year ending
March 31, 2025
24.00–
(Forecast)(Note) Revision to the forecast for dividends announced most recently: None

Total
Yen

Yen

24.00

48.00

24.00

48.00

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2025 (April 1, 2024 - March 31,2025)(% indicates changes from the previous corresponding period.)
Profit attributable
Basic earnings
Net sales
Operating profit
Ordinary profit
to owners ofper shareparentMillions of yen%

Millions of yen%

Millions of yen%First half
40,000 15.4900–
1,000–(cumulative)
Full year
82,600 14.4
2,200–
1,900–(Note) Revision to the financial results forecast announced most recently: Yes

Millions of yen%

Yen

1,900–

95.77

2,100–

105.85* Notes:(1) Significant changes in the scope of consolidation during the period under review: None
Newly included: – companies (Company name)Excluded: – companies (Company name)(2) Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements:None(3) Changes in accounting policies, changes in accounting estimates and retrospective restatement
1) Changes in accounting policies due to the revision of accounting standards: None
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting estimates: None
4) Retrospective restatement: None
(4) Total number of issued shares (common shares)
1) Total number of issued shares at the end of the period (including treasury shares):
June 30, 2024:
20,652,400 shares
March 31, 2024:
20,652,400 shares2) Total number of treasury shares at the end of the period:
June 30, 2024:
813,611 shares
March 31, 2024:
813,611 shares
3) Average number of shares during the period:
Three months ended June 30, 2024:
Three months ended June 30, 2023:

19,838,789 shares
19,838,909 shares

* Review of the Japanese-language originals of the attached quarterly consolidated financial statements by certified
public accountants or an audit firm: None
* Explanation on the proper use of financial results forecast and other special notes
Forward-looking statements, including financial results forecasts, contained in this document are based on
information currently available to the Company and certain assumptions deemed reasonable. Therefore, thesestatements do not constitute a guarantee that they will be realized. Actual results may differ materially fromthese statements due to various factors.

Quarterly Consolidated Financial Statements and Principal Notes(1) Quarterly Consolidated Balance Sheets(Millions of yen)
As of March 31, 2024
AssetsCurrent 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
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
LandConstruction in progress
Other, net
Total property, plant and equipment
Intangible assets
Investments and other assets
Investment securities
Retirement benefit asset
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Deferred assets
Business commencement expenses
Total deferred assets
Total assets

As of June 30, 2024

11,57825,683

9,821
26,775

2,504

2,397

12,423
1,603
9,267
1,215
(116)
64,15912,365
1,447
9,015
961
(117)
62,667

17,723
14,126
4,996
1,969
1,136
39,952
1,529

17,623
13,652
4,995
2,062
1,086
39,4201,485

11,200
6,087
286
354
(79)
17,85059,332

11,811
6,172
255
366(82)
18,52359,4291,927
1,927
125,418

1,829
1,829
123,926(Millions of yen)
As of March 31, 2024
Liabilities
Current liabilities
Notes and accounts payable - trade
Electronically recorded obligations - operating
Short-term borrowings
Current portion of bonds payable
Income taxes payable
Accrued consumption taxes
Provision for bonuses
Provision for bonuses for directors (and otherofficers)
Provision for repairs
Provision for loss on business liquidation
Asset retirement obligations
Notes payable - facilities
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term borrowings
Deferred tax liabilitiesRetirement benefit liability
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

As of June 30, 2024

9,478
1,403
18,5125,000434100
1,190

7,702
1,370
17,935
5,000
662
147
623

–

10732
110
–
297
6,146
43,406

441
82
158
199
6,015
40,3495,000
13,875
3,847
299
1,919
151
25,09368,5005,000
13,195
4,304
304
1,770
147
24,72265,071

3,343
3,564
38,927(1,211)
44,6233,343
3,564
40,250(1,211)45,946

5,173

5,619

3,530
2,807
11,511
783
56,918125,418

4,134
2,727
12,482425
58,854
123,926

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income
Three Months Ended June 30(Millions of yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit (loss)
Non-operating income
Interest income
Dividend income
Rental income from real estate
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Amortization of business commencement expenses
Other
Total non-operating expenses
Ordinary profit (loss)
Extraordinary income
Gain on sale of non-current assets
Gain on sale of investment securities
Total extraordinary income
Extraordinary losses
Loss on sale and retirement of non-current assets
Total extraordinary losses
Profit (loss) before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Profit (loss)
Loss attributable to non-controlling interests
Profit (loss) attributable to owners of parent

For the three months ended
June 30, 2023

For the three months ended
June 30, 2024

17,298
14,585
2,712
3,547(834)19,261
15,002
4,259
3,637
622

21
77
10
85
59
254

30
79
13
228
45
397

66
2
2090(670)

96
99
17
213
806

4
38
43

979
314
1,293

3636(663)
135(25)
109(773)(459)(314)

1818
2,081
370
326
696
1,384(414)1,799Quarterly Consolidated Statements of Comprehensive Income
Three Months Ended June 30(Millions of yen)

Profit (loss)
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

For the three months ended
June 30, 2023

For the three months ended
June 30, 2024(773)

1,384

850
189(55)985
212

445660
(79)
1,027
2,411

648

2,770(436)(358)

(3) Quarterly Consolidated Statements of Cash Flows(Millions of yen)

Cash flows from operating activities
Profit (loss) before income taxes
Depreciation
Amortization of business commencement expenses
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for bonuses for
directors (and other officers)
Increase (decrease) in retirement benefit liabilityDecrease (increase) in retirement benefit asset
Increase (decrease) in provision for loss on businessliquidation
Loss (gain) on sale and retirement of non-current assets
Loss (gain) on sale of investment securities
Interest and dividend income
Interest expenses
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Increase (decrease) in accrued consumption taxes
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes refund (paid)
Net cash provided by (used in) operating activities
Cash flows from investing activities
Decrease (increase) in time deposits
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchase of investment securities
Proceeds from sale of investment securities
Purchase of intangible assets
Payments for deferred assets
Decrease (increase) in investments and other assets
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Repayments of long-term borrowings
Dividends paid
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cashequivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

For the three months ended
June 30, 2023

For the three months ended
June 30, 2024

(663)
1,370
22(456)

2,081
1,294
99(0)
(574)

–

10

6(66)

5(83)

–

(31)

32(38)
(99)
66
537
(36)
(1,459)195(592)(1,198)97(63)(88)(1,253)

(960)
(314)
(109)
96(690)677(1,907)214(121)
(317)
111
(96)
(162)
(465)

(30)
(1,182)0(11)39(13)(9)(1)(0)(1,210)

676
(689)
768
(11)
355
(6)
–
3
(25)
1,070

1,970
(355)
(476)
(22)
1,117(529)
(875)
(476)
(5)
(1,886)103

136(1,242)
9,286
8,043

(1,144)
9,164
8,020

(4) Notes to Quarterly Consolidated Financial Statements(Segment information, etc.)[Segment information]
For the three months ended June 30, 2023 (from April 1, 2023 to June 30, 2023)
1. Information on net sales and income or loss by reportable segment(Millions of yen)
Reportable segments
Functional
CoatingChemicals

PaperChemicals &Environmental
Business

Adhesive &Biomass
Materials

Fine Chemicals& Electronics

Others(Note)

TotalTotal

Net sales
Net sales toexternal customers

3,536

4,708

6,223

2,812

17,281

17

17,298Inter-segment sales
or transfers

–––––

7

7

3,536

4,708

6,223

2,812

17,281

24

17,306Total

33
89(944)
(98)
(920)
7
Note: The "Others" category comprises business segments not included in reportable segments, such as
non-life insurance business and real estate management.
Segment income (loss)(913)

2. Reconciliation of total income or loss of reportable segments with the amount reported in the quarterly
consolidated statements of income and main components of the difference (matters related to adjustments)(Millions of yen)
IncomeAmountTotal of reportable segments(920)
Income in "Others" category

7

Variance from the allocation of corporate expenses (Note 1)

223

Corporate research and development expenses (Note 2)(96)

Non-operating income and expenses (Note 3)(47)

Operating loss in the quarterly consolidated statements of income(834)Notes: 1. The variance from the allocation of corporate expenses primarily represents the difference in theestimated allocation of general and administrative expenses to reportable segments.
2. Corporate research and development expenses represent new research and development costs notallocated to reportable segments, which are the source of medium- to long-term growth.
3. Non-operating income and expenses primarily consist of items recorded as non-operating income andexpenses in reportable segments.
3. Information on impairment losses on non-current assets or goodwill, etc., by reportable segmentNot applicableFor the three months ended June 30, 2024 (from April 1, 2024 to June 30, 2024)
1. Information on net sales and income or loss by reportable segment(Millions of yen)
Reportable segments
Functional
Coating
Chemicals

Paper
Chemicals &Environmental
Business

Adhesive &Biomass
Materials

Fine Chemicals& Electronics

Others(Note)

Total

Total

Net sales
Net sales toexternal customers

4,059

5,314

6,560

3,309

19,24318

19,261

Inter-segment sales
or transfers

–––––

7

7

4,059

5,314

6,560

3,309

19,24325

19,269Total

429
583(493)270
790
8
Note: The "Others" category comprises business segments not included in reportable segments, such as
non-life insurance business and real estate management.
Segment income (loss)

798

2. Reconciliation of total income or loss of reportable segments with the amount reported in the quarterly
consolidated statements of income and main components of the difference (matters related to adjustments)(Millions of yen)
IncomeAmountTotal of reportable segments
790
Income in "Others" category

8Variance from the allocation of corporate expenses (Note 1)

89

Corporate research and development expenses (Note 2)(93)

Non-operating income and expenses (Note 3)(172)

Operating profit in the quarterly consolidated statements of income
622
Notes: 1. The variance from the allocation of corporate expenses primarily represents the difference in theestimated allocation of general and administrative expenses to reportable segments.
2. Corporate research and development expenses represent new research and development costs notallocated to reportable segments, which are the source of medium- to long-term growth.
3. Non-operating income and expenses primarily consist of items recorded as non-operating income andexpenses in reportable segments.
3. Information on impairment losses on non-current assets or goodwill, etc., by reportable segment
Not applicable(Revenue recognition)
Disaggregation of revenue from contracts with customers
For the three months ended June 30, 2023 (from April 1, 2023 to June 30, 2023)(Millions of yen)
Reportable segments
Functional
Coating
Chemicals

Paper
Chemicals &Environmental
Business

Adhesive &Biomass
Materials

Fine Chemicals& Electronics

TotalOthers(Note)

TotalNet sales
Japan

2,864

2,804

2,704

1,858

10,231

1710,249

China

4127761,369

517

3,074–

3,074

236

1,128

972

375

2,712–

2,712

23–

1,177

61

1,262–

1,262

Revenue fromcontracts withcustomers

3,536

4,708

6,223

2,812

17,281

17

17,298Net sales to externalcustomers

3,536

4,708

6,223

2,812

17,281

17

17,298Asia(excluding China)
South and North
America, Europe,
OthersNote: The "Others" category comprises business segments not included in reportable segments, such as
non-life insurance business and real estate management.
For the three months ended June 30, 2024 (from April 1, 2024 to June 30, 2024)(Millions of yen)
Reportable segments
Functional
Coating
Chemicals

PaperChemicals &Environmental
Business

Adhesive &Biomass
Materials

Fine Chemicals& Electronics

TotalOthers(Note)Total

Net sales
Japan

3,271

2,857

2,692

2,120

10,942

18

10,961

China

470

998

1,796

511

3,776

–

3,776

282

1,458

1,113

637

3,491

–

3,491

34–

957

39

1,032

–

1,032

Revenue fromcontracts withcustomers

4,059

5,314

6,560

3,309

19,24318

19,261

Net sales to externalcustomers

4,059

5,314

6,560

3,309

19,24318

19,261Asia(excluding China)
South and North
America, Europe,
OthersNote: The "Others" category comprises business segments not included in reportable segments, such as
non-life insurance business and real estate management.