Consolidated Quarterly Financial Results
for the Nine Months Ended December 31, 2022 [Japanese GAAP]
February 14, 2023
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, Corporate Management Department
Scheduled date of filing quarterly report:
February 14, 2023
Scheduled date of commencement of dividend payments:–Supplementary documents for quarterly results:
None
Quarterly results briefing:
None

TEL: +81-3-3245-4500(Figures rounded down to the nearest million yen)

1. Consolidated Business Results for the Nine Months Ended December 31, 2022
(April 1, 2022 through December 31, 2022)(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%
Nine months ended
215,70211.2
9,604(41.7)
7,059(69.5)
December 31, 2022
Nine months ended
193,984
20.0
16,473–
23,113–
December 31, 2021
(Note) Comprehensive income:Nine months ended December 31, 2022: 9,064 million yen (-63.3%)
Nine months ended December 31, 2021: 24,707 million yen (224.0%)
Basic earnings per share Diluted earnings per share
Yen
Yen
Nine months ended
23.35
23.32
December 31, 2022
Nine months ended
134.40134.28December 31, 2021

3,923

(82.6)

22,580205.9(2) Consolidated financial position
Total assets
Net assets
Equity ratio
Million yen
Million yen%
As of December 31, 2022
401,313
221,579
55.0
As of March 31, 2022
376,956
216,974
57.4(Reference) Equity:As of December 31, 2022:
220,761 million yen
As of March 31, 2022:
216,252 million yen

2. Dividends
End of 1Q
Yen

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

Year-end

Total
Yen

Yen
Fiscal year ended
–
7.00
–
17.00
24.00
March 31, 2021
Fiscal year–
9.00–
ended March 31, 2022
Fiscal year ending
9.00
18.00
March 31, 2023 (forecast)(Note) Revisions to dividend forecasts published most recently: None
Breakdown of year-end dividends for the fiscal year ended March 31, 2022: Ordinary dividend: 7.00 yen; Special dividend: 10.00
yen

3. Forecast of Consolidated Financial Results for the Year Ending March 31, 2023
(April 1, 2022 through March 31, 2023)(% change from the previous corresponding period)
Net sales

Operating profit

Ordinary profit

Million yen%
Million yen%
Million yen
Full year
300,000
14.7
12,000(41.3)
8,000(Note) Revisions to business forecasts published most recently: None-1-%(72.9)

Profit attributable to
Basic earnings
owners of parent
per share
Million yen%
Yen
3,000(85.9)
17.85

* Notes(1) Changes in significant subsidiaries during the nine months ended December 31, 2022 (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 December 31, 2022
188,053,114 shares(ii) Number of treasury stock:
As of December 31, 2022
19,979,220 shares(iii) Average number of shares during period:
Nine months ended December 31, 2022 168,060,165 shares

As of March 31, 2022

188,053,114 shares

As of March 31, 2022

20,001,115 shares

Nine months ended December 31, 2021 168,009,043 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 NineMonth Period; (3) Qualitative Information Concerning Consolidated Earnings Forecasts” on page 2 of the accompanying materials for mattersrelated 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 Nine-Month Period(1) Qualitative Information Concerning Consolidated Operating Results
During the nine months of the current fiscal year, sales increased mainly due to the effects of price revisions to domestic products
implemented in the previous fiscal year and rising prices of exported products. While net sales amounted to 215,702 million yen (up 11.2%year on year), operating profit, ordinary profit and profit attributable to owners of parent came to 9,604 million yen (down 41.7% year onyear), 7,059 million yen (down 69.5% year on year) and 3,923 million yen (down 82.6% year on year), respectively, due to soaring raw
material and fuel prices.
The performance of major segments is as follows:(i) Pulp and paper businessIn the pulp and paper business, sales increased mainly due to the effects of price revisions to domestic products implemented in theprevious fiscal year and rising prices of exported products. However, profits decreased due to soaring raw material and fuel prices.
As a result, the results of the pulp and paper business were as follows.
Net sales

198,964 million yen (up 12.1% year on year)

Operating profit

8,621 million yen (down 44.0% year on year)(ii) Packaging/Paper processing businessIn the packaging/paper processing business, sales decreased due to the negative impact of the lockdown implemented in some areas inShanghai in line with the Chinese government’s zero-COVID policy, which offset the effects of an increase in orders received and pricerevisions carried out in Japan. Even so, in terms of profitability, an increase in profit was recorded, mainly reflecting the effect of a rangeof cost reduction initiatives.
As a result, the results of the packaging/paper processing business were as follows.
Net sales
Operating profit

10,394 million yen (down 1.1% year on year)
70 million yen (up 359.2% year on year)(iii) Other businesses
In other businesses, including the wood material business, construction business, logistics business and used paper wholesale business,sales increased due to a rise in external orders, especially in the wood material business. However, profits declined chiefly due to cost
increases in the logistics business.
As a result, the results of other businesses were as follows.
Net sales
Operating profit

6,343 million yen (up 6.1% year on year)
585 million yen (down 9.7% year on year)(2) Qualitative Information Concerning Consolidated Financial Position
Total assets increased 24,357 million yen from the end of the previous fiscal year, to 401,313 million yen. This was attributable primarily
to increases of 18,814 million yen in notes and accounts receivable - trade and contract assets, 6,910 million yen in raw materials andsupplies, 3,810 million yen in merchandise and finished goods, and 3,001 million yen in guarantee deposits included in investments andother assets, which more than offset a decrease of 6,165 million yen in cash and deposits.
Total liabilities rose 19,752 million yen from the end of the previous fiscal year, to 179,734 million yen. This was primarily due to increasesof 16,902 million yen in interest-bearing debt and 4,374 million yen in notes and accounts payable - trade, which more than offset adecrease in income taxes payable of 2,827 million yen.
Net assets rose 4,605 million yen from the end of the previous fiscal year, to 221,579 million yen. This mainly reflected an increase of
5,178 million yen in foreign currency translation adjustment.

(3) Qualitative Information Concerning Consolidated Earnings Forecasts
No change has been made to the full-year financial forecasts announced on November 11, 2022.

-3-2. Consolidated Quarterly Financial Statements and Key Notes(1) Quarterly Consolidated Balance Sheet(Million yen)
As of March 31, 2022
(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 structures
Accumulated depreciation
Buildings and structures, net
Machinery, vehicles, tools, furniture and fixtures
Accumulated depreciation

As of December 31, 2022

30,27560,7497,133
27,2602,684
26,4695,741(5)24,11079,5638,134
31,0703,304
33,3795,588(6)160,308

185,144

85,623(54,260)

87,905(56,034)

31,36331,871

439,429(380,000)

446,171(386,373)

59,42959,798Other, net

24,58926,581Machinery, vehicles, tools, furniture and fixtures, net
Total property, plant and equipment

115,382

118,251

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

2,406

2,385

22,022
69,562
7,560(288)

21,86562,992
10,960(285)

Total investments and other assets

98,857

95,532

216,647

216,169

376,956

401,313

Total non-current assets
Total assets-4-(Million yen)
As of March 31, 2022
(Liabilities)
Current liabilities
Notes and accounts payable - trade
Electronically recorded obligations - operating
Short-term loans
Commercial papers
Income taxes payable
Provision
Other

As of December 31, 2022

20,3606,339
40,748
3,000
4,013
3,229
14,10524,734
7,914
17,45025,0001,185
2,056
15,649Total current liabilities

91,79693,990Non-current liabilities
Bonds payable
Long-term loans
Provision
Retirement benefit liability
Asset retirement obligations
Other

20,00033,495
1,477
5,661
2,845
4,704

20,00051,687
1,781
3,914
2,666
5,693

Total non-current liabilities68,184

85,743

Total liabilities

159,981

179,734

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

42,02045,341
131,615(9,639)42,02045,341
131,058(9,629)209,338

208,792

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

3,686
157
1,632
1,437

3,864
11
6,810
1,283

Total accumulated other comprehensive income

6,913

11,9697764487729

216,974

221,579

376,956

401,313

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(Nine-month period)(Million yen)
For the nine-month ended
December 31, 2021

For the nine-month ended
December 31, 2022

Net sales
Cost of sales

193,984
147,530

215,702
172,425

Gross profit

46,453

43,277

Selling, general and administrative expenses

29,97933,673

Operating profit

16,473

9,604

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

19754
4,186
854
1,562
7,376

52875
–
2,523
738
4,188

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

293
–
196
247
737

610
5,589
154
378
6,733

Ordinary profit

23,113

7,059

Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Subsidy income
Insurance claim income
Gain on contribution of securities to retirement benefit trust
Gain on reversal of retirement benefit obligations
Total extraordinary income

6,981
0–
34–
77
7,093

481
230
5
107
1,416
–
2,241

Extraordinary losses
Loss on sales and retirement of non-current assets
Loss on disaster
Loss on tax purpose reduction entry of non-current assets
Loss on valuation of investment securities
Provision for loss related to the Anti-Monopoly Act

665
35
31
18360

677
–
58–1,110

691

Profit before income taxes

29,096

8,609

Income taxes - current
Income taxes - deferred

6,358
108

3,767
866

Total income taxes

6,466

4,634

Profit22,629

3,974

49

51

22,5803,923

Total extraordinary losses

Profit attributable to non-controlling interests
Profit attributable to owners of parent-6-Quarterly Consolidated Statements of Comprehensive Income(Nine-month period)(Million yen)
For the nine-month ended
December 31, 2021
ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedgesForeign 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 nine-month ended
December 31, 2022

22,629

3,974

(344)
29
2,644
(64)

329
(88)
5,212
(126)

(187)

(236)

2,077

5,089

Comprehensive income

24,707

9,064

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

24,62087

8,979
85-7-