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 Three Months Ended June 30, 2022
[Japanese GAAP]
August 10, 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: August 10, 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: Not scheduled(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Three Months Ended June 30, 2022 (April 1, 2022–June 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
Three months ended Million yen% Million yen% Million yen% Million yen%
June 30, 2022
10,857(3.7)
1,509 936.2
3,676 176.9
3,283 190.0
June 30, 2021
11,280
97.6
145
–
1,327
–
1,132
–
(Note) Comprehensive income: Three months ended June 30, 2022: ¥2,650 million [41.7%]
Three months ended June 30, 2021: ¥1,870 million [–%]

Three months ended
June 30, 2022
June 30, 2021

Basic earnings
per share

Diluted earnings
per share

Yen

Yen

168.3658.05––(2) Consolidated Financial Position
Total assets

Net assets

Million yen

87,156
As of June 30, 2022
89,852As of March 31, 2022
(Reference) Equity: As of June 30, 2022: ¥79,505 million
As of March 31, 2022: ¥79,866 million

Equity ratio

Million yen%

79,78180,15391.2
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–
March 31, 2023
Fiscal year ending
March 31, 2023
0.00–
(Forecast)(Note) Revision to the forecast for dividends announced most recently: None

Year-end

Total
Yen

Yen

155.00175.00

35.00

35.00

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%

First half
25,0684.0(78)–2,705 (32.3)
Full year
60,744
6.3(1,516)–2,508 (80.7)(Note) Revision to the financial results forecast announced most recently: None

Million yen

2,294
2,167

%

(32.6)(80.9)

Yen

117.62111.11

* 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):
June 30, 2022:
19,577,071 shares
March 31, 2022:
19,577,071 shares2) Total number of treasury shares at the end of the period:
June 30, 2022:
74,421 shares
March 31, 2022:
74,341 shares
3) Average number of shares during the period:
Three months ended June 30, 2022:
Three months ended June 30, 2021:

19,502,679 shares
19,503,244 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,
the Company 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” onpage 4.

Table of Contents – Attachments
1. Qualitative Information on Quarterly Financial Results ...........................................................................2(1) Explanation on Operating Results .........................................................................................................2(2) Explanation on Financial Position.........................................................................................................3(3) Forward-looking Statements Including Consolidated Financial Results Forecast ................................4
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 three months ended June 30, 2022 (the “period under review”), the Japanese economy saw apickup in corporate earnings and other factors, while the number of COVID-19 cases showed a trend towards
bottoming out. There was a recovery trend with some weakness seen in the Japanese economy, as the impact of
the situation in Ukraine, among other factors, cast increasing uncertainty.
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 situation in Ukraine, and concerns
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 caused by the resurgence of COVID-19
in China, 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 in some part.
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. In addition, nickel ore
prices have remained high against the backdrop primarily of the impact of the Indonesia’s unprocessed ore
export ban and a robust demand for nickel ore, which resulted in higher production costs.
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 economic slowdown due to accelerating inflation, and theprices remained weak.
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 43.7% 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. The restoration of the affected unit of the production facilities is scheduled for thethird quarter of this fiscal year in view of the lengthy delivery period for parts and materials due to recent
supply chain disruptions and other factors.
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 44.9% year on
year and the average exchange rate of Japanese yen applicable to the Company was 16.9% weaker year on
year.
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.
2

As a result, consolidated net sales for the period under review decreased by 3.7% year on year to ¥10,857
million. On the profit front, operating profit increased by 936.2% year on year to ¥1,509 million, and ordinary
profit reflecting the recording of ¥1,197 million in share of profit of entities accounted for using equity method
under non-operating income increased by 176.9% year on year to ¥3,676 million. Profit attributable to ownersof parent increased by 190.0% year on year to ¥3,283 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 3.3% year on year to ¥10,700 million with operating
profit of ¥1,624 million (compared with operating profit of ¥142 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 10.3% year on year to ¥164 million with operating lossof ¥31 million (compared with operating profit of ¥25 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 81.3% year on year to ¥16 million with operating lossof ¥86 million (compared with operating loss of ¥25 million for the same period of the previous fiscal year).

(2) Explanation on Financial Position
Assets, liabilities, and net assets of the Group as of June 30, 2022 are as follows.
Total assets decreased by ¥2,696 million from the end of the previous fiscal year to ¥87,156 million.
Current assets decreased by ¥3,109 million from the end of the previous fiscal year mainly due to adecrease in cash and deposits resulting from the settlement of raw materials and supplies and other factors,
partially offset by an increase in the raw materials and supplies impacted by the maintenance of planned
inventory quantity and an increase in raw material and other prices.
Non-current assets increased by ¥413 million from the end of the previous fiscal year mainly due to anincrease in investment securities associated with an increase in share of profit of entities accounted for using
equity method and other factors. Investment securities held by the Company amounting to ¥24,341 million
consisted mainly of ¥14,973 million in the amount reflected in the consolidated balance sheet of shares ofentities accounted for using equity method, ¥2,378 million in shares of subsidiaries and associates, and ¥5,974
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 ¥2,323 million from the end of the previous fiscal year to ¥7,375 million.
Current liabilities decreased by ¥2,089 million from the end of the previous fiscal year due to a decrease
in income taxes payable in line with the payment of income taxes and other factors, in addition to a decrease innotes and accounts payable - trade caused by the effect of the settlement timing.
Non-current liabilities decreased by ¥234 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 ¥372 million from the end of the previous fiscal year to ¥79,781 million.
Shareholders’ equity increased by ¥260 million resulting from the recording of profit, partially offset by
the payment of dividends. Accumulated other comprehensive income decreased by ¥620 million resulting froma decrease in valuation difference on available-for-sale securities. Non-controlling interests decreased by ¥12
million.
3

(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 the volume to be in line with the previously announced plan
while severe situation is expected in production and sales activities due to the impact of the electric furnacemolten 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 on the production front, as well as a more highly
uncertain environment triggered by the impact of restriction of economic activities attributable to theresurgence of COVID-19 in China, concerns about the prolonged situation in Ukraine, and other factors on thesales front. The restoration of the suspended electric furnace due to the leakage incident is scheduled for thethird quarter of this fiscal year.
On the selling price front, the market is attracting a great deal of attention owing to financial and capital
market fluctuations and complex factors related to the situation in Ukraine, concerns about the impact ofaccelerating inflation and other factors. The LME nickel price applicable to the Company, which is used as anindicator for determining the selling price of the Company’s ferronickel products, is expected to remain
unstable albeit being relatively at high level.
On the procurement front, production costs have significantly increased due to higher prices of nickel ore,fuels, and other raw materials, but the volume of nickel ore sufficient to meet production needs will be secured.
This is expected to have a significant impact on the profit level.
In addition, in the period under review, the Company recorded share of profit of entities accounted forusing equity method of ¥1,197 million and foreign exchange gains of ¥731 million in non-operating income.
As for profit and loss information, in the second quarter of the fiscal year ending March 31, 2023,
operating profit is expected to decrease due to soaring prices of nickel ore, fuels, and other raw materials while
non-operating income is expected to include share of profit of entities accounted for using equity method andforeign exchange gains. Accordingly, profit attributable to owners of parent is expected to increase.
In the fiscal year ending March 31, 2023, profits are expected to decrease despite the continuous soaring
prices of nickel ore, fuels, and other raw materials and the recording of share of profit of entities accounted forusing equity method.
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 Revisions to Financial Results
Forecast and Dividends Forecast” dated July 29, 2022.

4

<Reference>[Revisions to financial results forecast]
Revisions to consolidated financial results forecast for the six months ending September 30, 2022 (April 1, 2022
through September 30, 2022)
Operating profit

Ordinary profit

Million yen

Million yen

Million yen

Profitattributable toowners ofparentMillion yen

25,164

735

2,101

1,856

95.17

25,068

(78)

2,705

2,294

117.62

Change (B–A)

(96)

(813)

604

438

Change (%)

(0.4)

─

28.7

23.6

24,098

952

3,995

3,405

Net sales

Previously announced forecast (A)(Announced on May 10, 2022)
Revised forecast (B)(Reference) Results for the six
months ended September 30, 2021
(Six months ended September 30,
2021)

Basic earnings
per shareYen

174.61

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

50,210

925

3,844

3,513

180.13

Revised forecast (B)60,744(1,516)

2,508

2,167

111.11

Change (B–A)

10,534(2,441)(1,336)(1,346)

Change (%)

21.0

─

(34.8)(38.3)

57,1294,806

12,99911,368Net sales

Previously announced forecast (A)(Announced on May 10, 2022)(Reference) Actual results for theprevious fiscal year ended March
31, 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

─

50.00

50.00

Revised forecast

─

0.00

─

35.00

35.00

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

─

20.00

─

155.00175.00Previously announced forecast(Announced on May 10, 2022)

5

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 May 10, 2022)

9,850

10,65020,5009,237

11,573

20,810

Revised forecast

8,516

11,98420,500

9,008

11,573

20,581(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 May 10, 2022)

10.27

9.23

9.73

111.06111.04111.05

Revised forecast

11.92

11.00

11.38

122.46119.03120.46(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 June 30, 2022

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

17,301
11,278
2,800
8,428
524
11,8972,544(2)54,772

7,734
1

7,735
1

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

24,341310(5)24,64732,38387,156

(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
Deferred gains or losses on hedges
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 June 30, 2022

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

877
1,543
301
125
571
3,419

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

90
1,869
631
12
34
1,306
10
3,956
7,375

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

13,922
3,481
58,850(451)
75,802

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

3,794
(157)
593
(629)
100
3,702
275
79,781
87,156

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income
Three Months Ended June 30(Million yen)
For the three months ended
June 30, 2021

For the three months ended
June 30, 2022

11,28010,451828

10,857
8,653
2,204

324
358
682
145

292
402
695
1,509

1
215
25

3
237
25

949

1,197

19
51
1,263

731
25
2,221

0
30
20
30
81
1,327

0
30
–
23
54
3,676

–
–

0
0

61
6
67
1,260
16
99
115
1,144
12
1,132

–
15
15
3,661
249
141
390
3,271
(12)
3,283

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Selling expenses
General and administrative expenses
Total selling, general and administrative expenses
Operating profit
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
Settlement on contract
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
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

Quarterly Consolidated Statements of Comprehensive Income
Three Months Ended June 30(Million yen)
For the three months ended
June 30, 2021

For the three months ended
June 30, 2022

1,144

3,271

311
11
12

(809)
(157)
4

390

340

726
1,870

(620)
2,650

1,858
12

2,662
(12)

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 to:
Owners of parent
Non-controlling interests10(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