Disclaimer: This document is an English translation of the original Japanese document and has been preparedfor reference purposes only. In the event of any discrepancy between the English translation andthe original Japanese document, the latter shall prevail.

Consolidated Financial Results
for the Six Months Ended September 30, 2022
[Japanese GAAP]
November 9, 2022
Company name: PACIFIC METALS CO., LTD.
Stock exchange listing: Tokyo Stock Exchange
Code number: 5541
URL: https://www.pacific-metals.co.jp/en/
Representative: Aoyama Masayuki, President and Representative Director
Contact: Matsuyama Terunobu, Managing Executive Officer and Director
Phone: +81-3-3201-6681
Scheduled date of filing quarterly securities report: November 9, 2022
Scheduled date of commencing dividend payments: –Availability of supplementary briefing materials on quarterly financial results: Not available
Schedule of quarterly financial results briefing session: Scheduled (for analysts)(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Six Months Ended September 30, 2022 (April 1, 2022 – September 30,
2022)(1) Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Profit attributable to
Net sales
Operating profit
Ordinary profit
owners of parent
Six months ended
Million yen% Million yen% Million yen% Million yen%
September 30, 2022
17,642 (26.8)(4,464)–605(84.8)
229(93.3)
September 30, 2021
24,098
81.7
952
–
3,995
208.8
3,405
170.2
(Note) Comprehensive income: Six months ended September 30, 2022: ¥(1,049) million [–%]
Six months ended September 30, 2021: ¥3,894 million [80.0%]

Six months ended
September 30, 2022
September 30, 2021

Basic earnings
per share

Diluted earnings
per share

Yen

Yen

11.75
174.61––(2) Consolidated Financial Position
Total assets

Net assets

Million yen

Equity ratio

Million yen%

83,622As of September 30, 2022
76,08089,852As of March 31, 2022
80,153(Reference) Equity: As of September 30, 2022: ¥75,802 million
As of March 31, 2022: ¥79,866 million

90.6
88.9

2. Dividends
Annual dividends
1st quarter-end

2nd quarter-end

3rd quarter-end

Yen

Yen

Yen

Fiscal year ended
–
20.00
–
March 31, 2022
Fiscal year ending–
0.00
March 31, 2023
Fiscal year ending
March 31, 2023–
(Forecast)(Note) Revision to the forecast for dividends announced most recently: None

Year-end

Total
Yen

Yen

155.00175.000.00

0.00

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2023 (April 1, 2022 - March 31,
2023)(% indicates changes from the previous corresponding period.)
Profit attributable
Basic earnings
Net sales
Operating profit
Ordinary profit
to owners ofper share
parentMillion yen% Million yen% Million yen%

Full year
35,548 (37.8)(9,997)–(3,493)–(Note) Revision to the financial results forecast announced most recently: None

Million yen(3,711)%–

Yen(190.28)

* Notes:(1) Changes in significant subsidiaries during the period under review: None
(Changes in specified subsidiaries resulting in changes in scope of consolidation):
Newly included: – (), Excluded: – ()(2) Accounting methods adopted particularly for 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 shares issued and outstanding (common stock)1) Total number of shares issued and outstanding at the end of the period (including treasury shares):
September 30, 2022:
19,577,071 shares
March 31, 2022:
19,577,071 shares2) Total number of treasury shares at the end of the period:
September 30, 2022:
74,741 shares
March 31, 2022:
74,341 shares
3) Average number of shares during the period:
Six months ended September 30, 2022:
Six months ended September 30, 2021:

19,502,574 shares
19,503,140 shares* These quarterly consolidated financial results are outside the scope of quarterly review by certified public accountants
or an audit firm.
* Explanation on the proper use of financial results forecast and other notes(Cautionary statement regarding forward-looking statements)
The forward-looking statements including the financial results forecast contained herein are based on information
currently available to the Company, as well as certain assumptions deemed reasonable by the Company. As such, theCompany does not intend to guarantee the achievement of these forecasts. In addition, actual results may differ
significantly from these forecasts due to various factors. For preconditions for the financial results forecast andprecautions when using the financial results forecast, please see “(3) Forward-looking Statements Including Consolidated
Financial Results Forecast” under “1. Qualitative Information on Quarterly Financial Results” on page 5.

Table of Contents – Attachments
1. Qualitative Information on Quarterly Financial Results ...........................................................................2(1) Explanation on Operating Results .........................................................................................................2(2) Explanation on Financial Position .........................................................................................................4(3) Forward-looking Statements Including Consolidated Financial Results Forecast ................................5
2. Quarterly Consolidated Financial Statements and Key Notes ...................................................................7(1) Quarterly Consolidated Balance Sheets ................................................................................................7(2) Quarterly Consolidated Statements of Income and Comprehensive Income ........................................9(3) Notes to Quarterly Consolidated Financial Statements ....................................................................... 11(Notes on going concern assumption) ............................................................................................ 11(Notes on significant changes in the amount of shareholders’ equity) ...........................................11

1

1. Qualitative Information on Quarterly Financial Results(1) Explanation on Operating Results
During the six months ended September 30, 2022 (the “period under review”), the Japanese economy saw
a pickup in corporate earnings, personal consumption, and other factors, though it was influenced by the trend
in COVID-19. There was a recovery trend with weakness seen in the Japanese economy, as the simultaneous
occurrence of the high resource prices and the appreciation of the U.S. dollar weighed on the recovery ofdomestic demand.
As for overseas economies, although there was steady performance in the employment and income
environment in general, a high level of uncertainty continued due primarily to the impact of concerns about theresurgence of COVID-19, financial and capital market fluctuations, the prolonged situation in Ukraine, andconcerns about economic slowdown driven by accelerating inflation.
Under these circumstances, in the stainless steel industry, the primary source of demand for the nickel
business that accounts for the majority of the Group’s sales and profit and loss, demand trended to recover inline with trends towards the normalization of economic activities, while there was increasing uncertainty in themarket condition due to the impact of restriction of economic activities and the sluggish real estate market in
China attributable to the resurgence of COVID-19 in that country, concerns about the prolonged situation in
Ukraine, and other factors, with capacity utilization rates of production facilities starting to vary.
As a result, the demand for ferronickel showed slowdown.
On the procurement front, as for the procurement of nickel ore, the primary raw material for ferronickel
products, the Company maintained the procurement of the volume sufficient to meet our production and sales.
On the price front, nickel ore prices have remained high against the backdrop primarily of the impact ofIndonesia’s unprocessed ore export ban and a robust demand for nickel ore. Moreover, the rate of the increasein production costs was accelerating because of sharp rises in prices of raw materials and fuel used in the
manufacturing process and the cost of electricity and other factors. These factors had a significant impact.
Nickel prices on the London Metal Exchange (LME) were continuously affected by financial and capital
market fluctuations, complex factors related to the situation in Ukraine, and unstable prices of crude oil andother commodities. There were also concerns about an economic slowdown due to accelerating inflation, andprices remained directionless while remaining at a relatively high level.
In this situation, the Company’s ferronickel sales volume was planned modestly due to the impact of
production decrease caused by the electric furnace molten material leakage incident that occurred in one of thethree furnaces in the ferronickel manufacturing facilities just before the end of the previous fiscal year, and thesales volume decreased by 56.3% year on year as a whole due to a decrease in both domestic and overseas
sales against the backdrop of a continuous partial shift in raw material procurement by overseas stainless steel
producers to nickel pig iron and other materials that are more price competitive and variation in capacity
utilization rates of production facilities in the stainless steel industry.
The ferronickel production volume decreased year on year due to the impact of the electric furnace moltenmaterial leakage incident. Regarding the restoration of the affected unit of the production facilities, resumptionof operation, which was expected to be in the third quarter of this fiscal year, has been postponed until the next
fiscal year. This is because the Company changed its policy with the objective of strategically controllingvolume to a certain level so as not to impair profitability. This decision reflects easing of the nickel supplydemand balance. It was also taken because producers of stainless steel are shifting some of their procurement
to nickel pig iron, which has a price advantage, even including with respect to production costs, and the priceof nickel pig iron is also affecting the selling price of the Company’s products. While closely monitoring thebusiness environment, the Company will resume operation of the said electric furnace once the volume control
policy is lifted. During the third quarter of this fiscal year, production facilities are expected to be repaired to astate such that resumption of their operation will be possible.
Amid continued responses to the increasingly uncertain business environment, the selling price offerronickel products increased as the LME nickel price applicable to the Company increased by 49.2% year on
year and the average exchange rate of Japanese yen applicable to the Company was 20.5% weaker year on
year. On the other hand, the price of nickel pig iron, which has a price advantage, is affecting the selling price2

of the Company’s products. Therefore, the Company also refers to the price of nickel pig iron in addition to theapplicable LME nickel price and the applicable exchange rate in setting the selling price of the Company’s
products, and thus the selling environment is rapidly changing into a difficult one with stagnant revenue
growth.
Although the COVID-19 pandemic and the situation in Ukraine are expected to continue as mentioned
above, the Company continues to implement measures in response to the highly uncertain businessenvironment. To further strengthen its earnings base, the Company is striving to reduce total cost throughenergy conservation and low-cost production, strengthen facilities to build an optimal production system, work
toward long-term and stable procurement of ore, and thoroughly focus on the profitability of orders, therebybuilding a flexible production and sales system. Furthermore, the Company continues its efforts to improvebusiness performance and stabilize earnings through measures such as the early realization of overseas
business development and new mine development as well as reinforcement of operational efficiency
improvement measures to pursue cost minimization.
As a result, consolidated net sales for the period under review decreased by 26.8% year on year to¥17,642 million. On the profit front, the Company posted operating loss of ¥4,464 million (compared with
operating profit of ¥952 million for the same period of the previous fiscal year), owing to an increase in cost of
sales as there was an inventory write down following a downturn in profitability, on top of the decrease in net
sales, and ordinary profit reflecting the recording of ¥3,699 million in share of profit of entities accounted forusing equity method under non-operating income of ¥605 million, down by 84.8% year on year. Profit
attributable to owners of parent decreased by 93.3% year on year to ¥229 million.
Operating results by business segment are as follows.
(i) Nickel business
The operating results of the nickel business are described in “(1) Explanation on Operating Results.”
As a result, net sales in this segment decreased by 27.0% year on year to ¥17,319 million with operating
loss of ¥4,328 million (compared with operating profit of ¥996 million for the same period of the previous
fiscal year).
(ii) Gas businessIn the gas business, the Company maintained a stable operation, but this segment recorded a loss due
partly to the recording of costs associated with facility repair.
As a result, net sales in this segment increased by 13.3% year on year to ¥343 million with operating lossof ¥25 million (compared with operating profit of ¥16 million for the same period of the previous fiscal year).
(iii) Other
The segment of other businesses recorded a loss. The real estate business had no new sales contracts
concluded, and the waste recycling business’s order-taking was sluggish.
As a result, net sales in this segment decreased by 75.4% year on year to ¥28 million with operating lossof ¥114 million (compared with operating loss of ¥65 million for the same period of the previous fiscal year).

3(2) Explanation on Financial Position
Assets, liabilities, and net assets of the Group as of September 30, 2022 are as follows.
Total assets decreased by ¥6,230 million from the end of the previous fiscal year to ¥83,622 million.
Current assets decreased by ¥6,058 million from the end of the previous fiscal year mainly due to adecrease in cash and deposits resulting from the settlement of merchandise and finished goods and the decline
in sales quantity, partially offset by an increase in merchandise and finished goods and other items impacted by
the maintenance of planned inventory quantity and an increase in raw material and fuel prices.
Non-current assets decreased by ¥172 million from the end of the previous fiscal year mainly due to adecrease in investment securities resulting from a drop in the market price of some stocks held, despite anincrease in property, plant and equipment resulting from investment in maintenance/replacement. Investment
securities held by the Company amounting to ¥23,440 million consisted mainly of ¥15,757 million in theamount reflected in the consolidated balance sheet of shares of entities accounted for using equity method,¥2,378 million in shares of subsidiaries and associates, and ¥4,750 million in shares of Nickel Asia
Corporation, a holding company of the Company’s equity-method affiliates listed on the Philippine Stock
Exchange.
Total liabilities decreased by ¥2,157 million from the end of the previous fiscal year to ¥7,542 million.
Current liabilities decreased by ¥1,427 million from the end of the previous fiscal year primarily owing to
a decrease in income taxes payable in line with the payment of income taxes and other factors.
Non-current liabilities decreased by ¥729 million from the end of the previous fiscal year mainly due to adecrease in deferred tax liabilities resulting from a drop in the market price of some stocks held.
Total net assets decreased by ¥4,073 million from the end of the previous fiscal year to ¥76,080 million.
Shareholders’ equity decreased by ¥2,794 million resulting from the recording of profit, partially offset by
the payment of dividends. Accumulated other comprehensive income decreased by ¥1,269 million resulting
from a decrease in valuation difference on available-for-sale securities. Non-controlling interests decreased by¥9 million.

4(3) Forward-looking Statements Including Consolidated Financial Results Forecast
With regard to the consolidated financial forecast, the economic outlook remains highly uncertain as
COVID-19 and the situation in Ukraine continue to affect the domestic and overseas economies.
On the volume front, the Company expects a challenging business environment with results expected tofall short of the previously announced plan. In addition to the impact of the electric furnace molten material
leakage incident that occurred in one of the three furnaces in the ferronickel manufacturing facilities just before
the end of the previous fiscal year, this is because the Company changed its policy with the objective ofstrategically controlling volume to a certain level so as not to impair profitability. This decision reflects easingof the nickel supply-demand balance due to mounting uncertainty triggered by the impact of restriction of
economic activities and the sluggish real estate market in China attributable to the resurgence of COVID-19 inthat country, concerns about the prolonged situation in Ukraine, and other factors. It was also taken because
producers of stainless steel are shifting some of their procurement to nickel pig iron, which has a priceadvantage, including with respect to production costs, and the price of nickel pig iron is also affecting theselling price of the Company’s products. Regarding restoration of the electric furnace which has suspended
operation owing to the leakage accident, resumption of operation, which was expected to be in the third quarterof this fiscal year, has been postponed until the next fiscal year, because of the shift of the Company’s policy tovolume control, as mentioned above. While closely monitoring the business environment, the Company will
resume operation of the said electric furnace once the volume control policy is lifted. During the third quarterof this fiscal year, production facilities are expected to be repaired to a state such that resumption of theiroperation will be possible.
On the selling price front, the LME nickel price applicable to the Company, which is used as an indicatorfor determining the selling prices of the Company’s ferronickel products, remains at a relatively high level. On
the other hand, the price of nickel pig iron, which has a price advantage, is affecting the selling price of theCompany’s products. Therefore, the Company also refers to the price of nickel pig iron in addition to theapplicable LME nickel price and the applicable exchange rate in setting the selling price of the Company’s
products, and thus an impact on net sales is expected.
On the procurement front, while the volume of nickel ore and other materials necessary to meetproduction needs is expected to be secured, prices of nickel ore remain high. Moreover, the rate of the increasein production costs is accelerating because of sharp rises in prices of raw materials and fuel used in the
manufacturing process and the cost of electricity and other factors. These factors are expected to have asignificant impact on profit.
Although the impacts of COVID-19 and the situation in Ukraine are expected to continue in this fiscal
year, response measures to address such business environment are consistent with activities to be undertaken
under the basic policies set forth in the Group’s Medium-term Management Plan, and the Company willcontinue to strongly push forward with these measures.
Based on the above, the Company revised its consolidated financial results forecast as follows and also
reviewed underlying assumptions, as announced in “Notice Concerning Recording of Operating Loss (Writedown of Inventories), Recording of Non-operating Income (Share of Profit of Entities Accounted for Using
Equity Method), Revisions to Financial Results Forecast, and Dividends Forecast” dated October 28, 2022.

5

<Reference>[Revisions to financial results forecast]
Revisions to consolidated financial results forecast for the fiscal year ending March 31, 2023 (April 1, 2022
through March 31, 2023)
Operating profit

Ordinary profit

Million yen

Million yen

Million yen

Profitattributable toowners ofparentMillion yen

60,744(1,516)

2,508

2,167

111.11

Revised forecast (B)34,548(9,997)(3,493)(3,711)(190.28)

Change (B–A)(25,196)(8,481)(6,001)(5,878)Change (%)(41.5)

───(Reference) Actual results for theprevious fiscal year ended March
31, 2022

57,1294,806

12,99911,368Net sales

Previously announced forecast (A)(Announced on July 29, 2022)

Basic earnings
per shareYen

582.93[Revisions to dividends forecast](Revisions cover a period from April 1, 2022 through March 31, 2023)
Annual dividends
1st quarter-end

2nd quarter-end

3rd quarter-end

Yen

Yen

Yen

Yen

Yen

─

0.00

─

35.00

35.00

Revised forecast

─

─

─

0.00

0.00

Results for this fiscal year

─

0.00

(Reference) Actual results for theprevious fiscal year ended March 31,
2022

─

20.00

─

155.00175.00Previously announced forecast(Announced on July 29, 2022)

Year-end

Total[Revisions to underlying assumptions]
Sales volume (t)1st half

2nd half

Production volume (t)Full year

1st half

2nd half

Full year

Previously announced forecast(Announced on July 29, 2022)

8,516

11,98420,500

9,008

11,573

20,581

Revised forecast

5,668

7,332

13,000

8,079

5,857

13,936(Reference) Actual results for theprevious fiscal year ended March
31, 2022

12,957

14,10327,06011,874

14,37526,249Applicable LME nickel price ($/lb)
1st half

2nd half

Applicable exchange rate (¥/$)

Full year

1st half

2nd half

Full year

Previously announced forecast(Announced on July 29, 2022)

11.92

11.00

11.38

122.46119.03120.46

Revised forecast

12.12

10.03

10.94

131.49134.12132.98(Reference) Actual results for theprevious fiscal year ended March
31, 2022

8.12

9.33

8.75

109.16113.97111.676

2. Quarterly Consolidated Financial Statements and Key Notes(1) Quarterly Consolidated Balance Sheets(Million yen)
As of March 31, 2022
AssetsCurrent assets
Cash and deposits
Accounts receivable - trade
Securities
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
Intangible assets
Investments and other assets
Investment securities
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

7

As of September 30, 2022

26,332
13,994
2,999
5,649
453
5,587
2,867
(2)
57,882

13,8839,771
2,300
11,918456
10,1543,340(1)51,824

7,734
1

8,074
1

23,903336(5)24,234
31,97089,852

23,440287(5)23,722
31,79883,622

(Million yen)
As of March 31, 2022
Liabilities
Current liabilities
Notes and accounts payable - trade
Accrued expenses
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Retirement benefit liability
Deferred tax liabilities
Deferred tax liabilities for land revaluation
Provision for environmental measures
Provision for loss on litigation
Provision for loss contract
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-sale securities
Revaluation reserve for land
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

8

As of September 30, 2022

1,341
1,761
1,026
444
935
5,508

1,475
1,336
399
221
649
4,081

122
2,077
631
5
34
1,306
11
4,190
9,699

58
1,472
631
12
–
1,273
11
3,460
7,542

13,922
3,481
58,590(450)
75,542

13,922
3,481
55,796(451)
72,747

4,603
593
(969)
95
4,323
287
80,15389,852

2,662
593
(293)
92
3,054
278
76,08083,622

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income
Six Months Ended September 30(Million yen)
For the six months ended
September 30, 2021
Net sales
Cost of sales
Gross profit (loss)
Selling, general and administrative expenses
Selling expenses
General and administrative expenses
Total selling, general and administrative expenses
Operating profit (loss)
Non-operating income
Interest income
Dividend income
Rental income from real estate
Share of profit of entities accounted for using equity
methodForeign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign withholding tax
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Gain on sale of investment securities
Total extraordinary income
Extraordinary losses
Impairment losses
Loss on retirement of non-current assets
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit (loss) attributable to non-controlling interests
Profit attributable to owners of parent

9

For the six months ended
September 30, 2022

24,09821,7492,348

17,642
20,885(3,243)

659
737
1,396
952

437
783
1,220
(4,464)

4
215
51

6
237
51

2,642

3,699

133
102
3,149

1,056
86
5,137

0
30
75
106
3,995

0
31
36
67
605

–
–
–

0
386
386

221
11
232
3,762
308
35
343
3,418
13
3,405

–
76
76
915
518
177
696
219
(9)
229

Quarterly Consolidated Statements of Comprehensive Income
Six Months Ended September 30(Million yen)
For the six months ended
September 30, 2021
ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

10

For the six months ended
September 30, 2022

3,418

219

197
(4)
24

(1,937)
–
9

258

659

475
3,894

(1,269)(1,049)3,880(1,040)13(9)

(3) Notes to Quarterly Consolidated Financial Statements(Notes on going concern assumption)
Not applicable.
(Notes on significant changes in the amount of shareholders’ equity)
Not applicable.

11