Outline of Financial Results
for the 3 rd Quarter of FY2023
February 2024

HANWA CO., LTD.

Copyright© 2024 Hanwa Co., Ltd. All Rights Reserved

Summary of Financial Results

Copyright© 2024 Hanwa Co., Ltd. All Rights Reserved1Summary of Financial Results for the 3 rd Quarter of FY2023◼ Ordinary income for the 3 rd quarter of FY2023 was 42.9 billion yen, making 86% progress toward the full-year
forecasts of 50 billion yen. The Full-year Forecasts remain unchanged.

(billions of yen)

Net Sales
Ordinary Income
Net Income Attributable toOwners of the CompanyConsolidated Trading volumeof Steels (million tons) *1

Net DER(taking account of hybrid loan)

FY2022

FY2023

Y on YFY2023Q1-3

Q1-3

change (Rate)

Forecast

2,023.4

1,826.6

63.6

42.9

44.9

30.7

11.09

10.23

Mar. 2023

Dec. 2023

98%

90%

(83%)

(77%)

-196.8(-10%)-20.7(-33%)-14.1(-32%)

2,700.0

68%

5086%

3685%

---0.87(-8%)

Change-8pt

Progress

FY2023
Target100% or Less

*1: This is a simple sum of the volume of steels handled by the parent company and its all consolidated subsidiaries.

Copyright© 2024 Hanwa Co., Ltd. All Rights Reserved

2Segment Information（Consolidated）(billions of yen)
Business Segments

Income by Segment
63.6

25.5
42.9

22.9

16.1

10.4
7.3
2.6

FY2022
Q1-3

-2.6
-0.8

6.5
2.3

FY2023Q1-3

Q1-3

Change(Rate)

Primary Metal

16.1

6.5

Metal Recycling

5.0

1.0

Foods

-0.8

1.0

10.4

5.1

7.3

6.5

2.6

2.3

Subsidiaries
Others

-2.7

Q1-3

22.9

Energy & Living

1.0

Y on Y

25.5

Overseas Sales

6.5
1.0
5.1

FY2023

SteelMaterials

5.0FY2022

Adjustment

-2.6

-2.7

Total

63.6

42.9-2.6(-10%)-9.6(-60%)-4.0(-79%)+1.9－-5.3(-51%)-0.7(-11%)

Main Factors
Margins shrunk mainly at overseas steel service center
subsidiaries due to falling steel product prices.
Due to falling in dividend income from strategic investments
and equity in earnings of affiliates from SAMANCOR.
Due to decreasing appraisal gain from commodity forward
contracts in hedge transactions.
The increase in the cost of salmon, prawns and chicken started
to be sufficiently reflected in the selling prices.

Due to the sharp decrease in petroleum product prices.

Due to sluggish demand for steel in overseas markets mainly inIndonesia and the U.S.

-0.2

Wood : Product prices remained sluggish due to the rebound(-9%)

Machinery : Several large-scale projects have been completed.

from the wood shock.

+0.0
(+4%)

-20.7
(-33%)

Copyright© 2024 Hanwa Co., Ltd. All Rights Reserved3Segment Income Progress
BusinessSegment

FY2023
Forecast(billions of yen)

FY2023
Q1-3

Progress

Main Factors

Steel29.0

22.9

79%

Despite falling market prices for steel products, income increased due tothe impact of exchange rates.

Primary Metal

5.7

6.5

114%

SAMANCOR's performance exceeded forecasts as of the biginning of thefiscal year.
Transaction volume of chromium and manganese increased.

Metal Recycling

2.7

1.037%

International prices of base metals remain low.
The transaction volume decreased due to the weak demand, mainly forstainless steel scrap.

Foods

1.5

1.067%

Crab market prices have been on a gradual recovery trend, and theincrease in the cost of salmon, prawns and chicken started to be sufficiently
reflected in the selling prices.

Energy & Living
Materials

6.8

5.1

75%

Transaction volume of the products such as palm kernelshells (PKS) and wood pellet increased.

Overseas Sales
Subsidiaries

9.0

6.572%

Although the volume of transactions declined, it has made steady progressin response to the demand.

Others

2.2

2.3

105%

Adjustment-6.9-2.7－

Total

50.0

42.9

86%

Wood and Machinery segment income has been firm.

Copyright© 2024 Hanwa Co., Ltd. All Rights Reserved4

Impacts of Profits/Losses fromMarket Value Accounting and Temporary Factors◼ The reported ordinary income was 42.9 billion yen but can be translated into about 47.0 billion yen after
excluding one-time factors such as period-end valuation gains and losses.
(billions of yen)

Inventory
Valuation

Other
One-time
Factors

Derivative
Valuation

47.0

Foreign
Exchange
Valuation

Accounting
Ordinary Income

ActualOrdinary Income
Copyright© 2024 Hanwa Co., Ltd. All Rights Reserved5

Financial Position (Consolidated)(billions of yen)Mar. 2023

Dec. 2023

1,157.7

1,152.6

Shareholder's Equity

270.8

296.5

Owner's Equity

303.1

337.7

26.2%(28.3%)

29.3%(31.5%)

Interest-bearing Debt

380.9

378.5

Net Interest-bearing Debt

296.7

304.7

Net DER

98%(83%)

90%
(77%)

Total Assets

Owner's equity ratio(taking account of hybrid loan)(taking account of hybrid loan)

ChangeMain Factors（Rate）-5.0(-0%)

Decrease in cash and deposits and inventories.

+25.7(+10%)+34.6(+11%)

Accumulation of retained earnings, etc.

+3.1pt
-2.4
(-1%)

+7.9

Maintained the target level of the Mid-Term(+3%)

Management Plan.

-8pt

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6Reducing Strategic Shareholdings
We achieved our target of having strategic shareholdings represent less than 20% of net assets ahead of schedule, as of the end ofDecember. The sale of them has progressed as planned, although the remaining balance of the strategic shareholdings has increased
due to the recent increase in stock prices. We are working on further reductions of them during the Q4 period.

Ratio of strategic
shareholdings
to net assets

Number of stocksof strategic
shareholdings

Mar. 2023

Dec. 2023

21.7%

19.9%

157 companies

146 companiesListed
Unlisted

Balance ofstrategic
shareholdings(-11 companies)
Listed81 companies
Unlisted 65 companies

92 companies
65 companies

67.0 bil. yen

All shares soldSold &scheduled to Partially soldsell

Approved to sell (not sold yet)

Total

68.1bil. yen
12 companies

0.47 bil. yen

2 companies

0.05 bil. yen

7 companies

0.45 bil. yen

21 companies

0.97 bil. yen* Acquired the stocks of a company (0.8 billion yen) in a domestic unlisted company.
* Consolidated subsidiaries are reducing their strategic shareholdings as well. (Sold:8 stocks/0.04 bil. yen, Approved to sell:21 stocks/1.02 bil. yen, Total:29 stocks/1.06 bil. yen)
Copyright© 2024 Hanwa Co., Ltd. All Rights Reserved

7

Details by Segment

Copyright© 2024 Hanwa Co., Ltd. All Rights Reserved

8Steel Business Segment
Segment income decreased as profit margins shrunk at some overseas steel service center subsidiaries due to declining steel productprices.
（thousand tons）(billions of yen)

Net Sales

FY2022

FY2023

Y on Y Change

Q1-3

Q1-3

（Y on Y Rate）

941.4

939.9

Ordinary income

25.5

22.9

Parent only

20.9

21.2

3.5

4.4

2.7

0.2

Domestic consolidated
subsidiaries
Overseas consolidated
subsidiaries
Equity in earnings ofaffiliates
Adjustment

0.2-0.3-1.8-2.7-1.5(-0%)

Transaction Volume（Consolidated）
LongFlat

Ferrous raw materials

Others

The consolidated steel transaction volume in the steel business segment is thesum of the company’s volume and that of its consolidated subsidiaries. Pleaserefer to page 2 for the total volume of steel handled in all business segments.

8,306

8,286(-10%)888764

+0.3

1,336

1,4833,221

3,179

2,861

2,860

FY2022
Q1-3

FY2023Q1-3-2.6(+2%)+0.9(+26%)-2.4(-90%)-0.5－-0.8(+46%)

Transaction volume indicates the volume of products handled by each businesssegment as per the management approach.

Copyright© 2024 Hanwa Co., Ltd. All Rights Reserved

9Primary Metal Business Segment
Segment income decreased due to falls in dividend income from strategic investments and equity in earnings of affiliates fromSAMANCOR CHROME HOLDINGS PROPRIETARY LTD.

(billions of yen)

Net Sales（thousand tons）

FY2022

FY2023

Y on Y Change

Q1-3

Q1-3（Y on Y Rate）

201.9

159.8

Ordinary income

16.1

6.5

Parent only

11.0

5.0

Domestic consolidated
subsidiaries
Overseas consolidated
subsidiaries
Equity in earnings ofaffiliates
Adjustment-0.0-0.0－－5.0

1.4

-0.1

-0.1

Transaction Volume（Unconsolidated）
NickelChromeManganeseOthers-42.1(-21%)

Stainless base metal
Sillicone
E-scrap

1,307

1,118

-9.6452(-60%)
390-6.0(-55%)－3699
48－302－64265
46367－-3.5207(-71%)

3666
47+0.1

FY2022
Q1-3

FY2023
Q1-3(-55%)

Transaction volume indicates the volume of products handled by each businesssegment as per the management approach.

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10Metal Recycling Business Segment
International prices of base metals have declined year-on-year. The demand and transaction volume, especially for stainless scrap,
has also decreased.
Additionally, a decrease in appraisal gain from commodity forward contracts in hedge transactions has depressed segment income.
（thousand tons）(billions of yen)

Net Sales
Ordinary income
Parent only
Domestic consolidated
subsidiaries
Overseas consolidatedsubsidiaries
Equity in earnings ofaffiliates
Adjustment

FY2022

FY2023

Y on Y Change

Q1-3

Q1-3

（Y on Y Rate）

113.1
5.0
4.0
0.6

88.0
1.0
0.8
0.4

0.3

-0.1

0.0

0.0

-0.1

-0.1

Transaction Volume（Unconsolidated）-25.1

Stainless scrap

Aluminum

LeadOthers

Copper159(-22%)

148-4.026(-79%)16-3.123(-79%)-0.1(-18%)

69-0.525152370－-0.0(-6%)-0.1(+501%)

2515

FY2022
Q1-3

FY2023
Q1-3

Transaction volume indicates the volume of products handled by each businesssegment as per the management approach.

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11Foods Business Segment
Crab market prices have been on a gradual recovery trend, and the increase in the cost of salmon, prawns and chicken started to be
sufficiently reflected in the selling prices.
（thousand tons）(billions of yen)

Net Sales
Ordinary income
Parent only
Domestic consolidated
subsidiaries
Overseas consolidated
subsidiaries
Equity in earnings ofaffiliates
Adjustment

FY2022

FY2023

Y on Y Change

Q1-3

Q1-3

（Y on Y Rate）

101.0-0.8
0.30.598.1
1.0
1.0
0.4-1.8-0.2－－0.1-0.1-2.8

Transaction Volume（Unconsolidated）
Prawns & Shrimp

CrabSalmon & Trout

Mackerel & Horse mackerel

Capelin

Octopus

Bottom fish

Chicken

Others

(-3%)

87

+1.9

11－

17+0.7(+201%)

16-0.1

3 1(-21%)80
518113113

11(-86%)1518－3838

FY2022
Q1-3

FY2023Q1-3+1.6－-0.2－

Transaction volume indicates the volume of products handled by each businesssegment as per the management approach.

Copyright© 2024 Hanwa Co., Ltd. All Rights Reserved12Energy & Living Materials Business Segment
Although the transaction volume of the products such as palm kernel shells (PKS) and wood pellets has increased, the impact oflower petroleum product prices was significant, pushing down the segment income.
（thousand tons）(billions of yen)

Net Sales
Ordinary income
Parent only
Domestic consolidated
subsidiaries
Overseas consolidated
subsidiaries
Equity in earnings ofaffiliates
Adjustment

FY2022

FY2023

Y on Y Change

Q1-3

Q1-3

（Y on Y Rate）

274.5
10.4
8.6
2.1－0.1
-0.4

247.4
5.1
5.7
0.1－0.1
-0.9

-27.1

Transaction Volume（Unconsolidated）
Banker oil

Heavy oilLight oil

Kerosene

PKS

Wood pelet

Chemicals

Others(-10%)

3,613

-5.3

2,948(-51%)

329
228

266
155
415

707-2.8(-33%)
-2.0

1,018

954(-93%)78287－－-0.0764

1613

Gasoline

251

47
186

1,009(-3%)
FY2022Q1-3-0.4(+98%)

FY2023
Q1-3

Transaction volume indicates the volume of products handled by each businesssegment as per the management approach.

Copyright© 2024 Hanwa Co., Ltd. All Rights Reserved13Overseas Sales Subsidiaries Segment
Transaction volumes of sales subsidiaries, mainly in Indonesia and the U.S. decreased due to sluggish demand for steels in overseas
markets. In addition, the decreases in market prices of steel products and non-ferrous metal products put pressure on the profit
margins of the overseas sales subsidiaries as a whole.
（billions of yen）

(billions of yen)

Net Sales
Ordinary income
Overseas consolidated
subsidiaries
Equity in earnings ofaffiliates
Adjustment

FY2022

FY2023

Y on Y Change

Q1-3

Q1-3

（Y on Y Rate）

352.9

258.8

7.36.5

6.4

5.9

0.8

0.6

0.1

0.1

-94.0

Ordinary Income by Region
ASEAN(-27%)-0.7(-11%)

East Asia

7.3
0.1 0.0

0.5
1.1

-0.5

The U.S.

Europe/Africa

6.5
0.1

0.9
0.3

Adjustment

0.1

(-8%)
-0.2
(-30%)

5.5+0.1

4.9(+11%)

FY2022
Q1-3

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FY2023Q1-3

14

Other Segments
Wood：Product prices remain sluggish due to the rebound from the wood shock.
Machinery ：Several large-scale projects have been completed.
（billions of yen）

(billions of yen)

Net Sales
Ordinary income
Parent only
Domestic consolidated
subsidiaries
Overseas consolidated
subsidiaries
Equity in earnings ofaffiliates
Adjustment

FY2022

FY2023

Y on Y Change

Q1-3

Q1-3

（Y on Y Rate）

113.9

90.6

2.6

2.3

2.0

2.0

0.5

0.3

－－－－

0.1

0.0

-23.3

Breakdown of Other Segment Income
Wood

2.6(-21%)
-0.2
(-9%)
-0.0

0.7
0.1

Machinery

Others

2.3

0.4
0.5(-2%)-0.1(-33%)－

1.6

1.4－－－-0.1－

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FY2022
Q1-3FY2023
Q1-315

Actual Ordinary Income by Segment(billions of yen)
Valuation and Temporary Items

Net Sales

Accounting
Ordinary
IncomeSteel

939.9

22.9

0.0

ー

1.6

0.4

20.8

Primary Metal

159.8

6.5

0.0

-0.0

-0.7

ー

7.2

Metal Recycling

88.0

1.0

-0.3

0.2

0.0

ー

1.1

Foods

98.1

1.0

0.4

ー

0.1

ー

0.5

Energy & Living Materials

247.4

5.1

0.0

0.4

-0.0ー

4.5

Overseas Sales
Subsidiaries

258.8

6.5

0.2

0.1

-0.1

0.7

5.6

Others

90.6

2.3

0.1

ー

-0.1

ー

2.4Adjustment

-56.3

-2.7

ーー-7.5ー

4.7

1,826.6

42.9

0.6

0.8

-6.7

1.1

47.0

Segments

TotalInventory
Valuation

Foreign
Exchange
Valuation

Derivetive
Valuation

Copyright© 2024 Hanwa Co., Ltd. All Rights Reserved

Other One-time
Factors

ActualOrdinary
Income16

HANWA CO., LTD.

This presentation contains forward-looking statements concerning future results, performance and achievementsthat are subject to risk and uncertainties and reflect management’s views and assumptions formed by available
information. Consequently, due to a range of possible factors, actual results may materially differ from theforecasts.
Copyright© 2024 Hanwa Co., Ltd. All Rights Reserved