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 Nine Months Ended December 31, 2022
[Japanese GAAP]
February 8, 2023
Company name: PACIFIC METALS CO., LTD.
Stock exchange listing: Tokyo Stock Exchange
Code number: 5541
URL: https://www.pacific-metals.co.jp/en/
Representative: Masayuki Aoyama, President and Representative Director
Contact: Terunobu Matsusyama, Managing Executive Officer and Director
Phone: +81-3-3201-6681
Scheduled date of filing quarterly securities report: February 8, 2023
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 Nine Months Ended December 31, 2022 (April 1, 2022 – December 31,
2022)(1) Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Profit attributable to
Net sales
Operating profit
Ordinary profit
owners of parent
Nine months ended Million yen% Million yen% Million yen% Million yen%
December 31, 2022
27,518 (33.8)(6,718)–(580)–(1,195)–
December 31, 2021
41,554
80.6
2,506
–
8,296
288.2
7,131
270.5
(Note) Comprehensive income: Nine months ended December 31, 2022: ¥(2,113) million [–%]
Nine months ended December 31, 2021: ¥7,551 million [66.5%]

Nine months ended
December 31, 2022
December 31, 2021

Basic earnings
per share

Diluted earnings
per share

Yen

Yen

(61.32)365.68––(2) Consolidated Financial Position
Total assets

Net assets

Million yen

Equity ratio

Million yen%

82,704As of December 31, 2022
75,01689,852As of March 31, 2022
80,153(Reference) Equity: As of December 31, 2022: ¥74,729 million
As of March 31, 2022: ¥79,866 million

90.4
88.9

2. Dividends
Annual dividends
1st quarter-end

2nd quarter-end

3rd quarter-end

Yen

Yen

Yen

Yen

Yen

–

155.00175.000.00

0.00

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 from the latest released dividends forecast : None

Year-endTotal–

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
35,318 (38.2)(9,736)–(2,664)(Note) Revision from the latest released financial results forecast : Yes%–

Million yen(3,061)%–

Yen(156.96)

* 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):December 31, 2022:
19,577,071 shares
March 31, 2022:
19,577,071 shares2) Total number of treasury shares at the end of the period:
December 31, 2022:
74,906 shares
March 31, 2022:
74,341 shares
3) Average number of shares during the period:
Nine months ended December 31, 2022:
Nine months ended December 31, 2021:

19,502,471 shares
19,503,072 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) ......................................... 111

1. Qualitative Information on Quarterly Financial Results(1) Explanation on Operating Results
During the nine months ended December 31, 2022 (the “period under review”), the Japanese economy
saw a pickup in corporate earnings, personal consumption, and other factors, though it was influenced by thetrend in COVID-19. There was a recovery trend with weakness seen in the Japanese economy, as thesimultaneous occurrence of the high resource prices and the appreciation of the U.S. dollar affected businessactivities etc.
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 China’s COVID policy and the sluggish real estate market 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.
On the procurement front, prices of nickel ore, the primary raw material for ferronickel products, haveremained high against the backdrop primarily of the impact of Indonesia’s unprocessed ore export ban and arobust demand for nickel ore. Moreover, prices of raw materials and fuel as well as of electricity used in the
manufacturing process rose sharply in line with the steep rise in resource prices globally, resulting inacceleration of the rate of the increase in production costs.
Nickel prices on the London Metal Exchange (LME) were at a relatively high level. However, in addition
to the impact of financial and capital market fluctuations, complex factors related to the situation in Ukraine,and unstable prices of crude oil and other commodities, there were also concerns about an economic slowdown
due to accelerating inflation, and prices remained directionless.
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. In
addition, the Company changed its policy with the objective of strategically controlling volume to a certain
level so as not to impair profitability, in view of the easing of the nickel supply-demand balance and because
overseas producers of stainless steel are shifting some of their procurement to nickel pig iron, which has a priceadvantage, even including with respect to production costs, and the price of nickel pig iron is also affecting theselling price of the Company’s products. As a result, the ferronickel sales volume decreased by 54.6% year on
year as a whole due to a decrease in both domestic and overseas sales.
The ferronickel production volume decreased year on year due to the impact of the electric furnace moltenmaterial leakage incident. Regarding the affected unit of the production facilities, although its restoration was
expected to be in the third quarter of this fiscal year, this has been postponed until the next fiscal year. The plan
to resume its operation in the next fiscal year is unchanged. While closely monitoring the businessenvironment, the Company will resume operation of the said electric furnace once the volume control policy islifted.
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 39.0% year on
year and the average exchange rate of Japanese yen against U.S. dollar applicable to the Company was 22.8%
weaker year on year. On the other hand, the price of nickel pig iron, which has a price advantage, is affecting
the selling price of the Company’s products. Therefore, the Company also refers to the price of nickel pig ironin addition to the applicable 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.
2

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 thoroughly focus on the
profitability of orders, thereby building a flexible production and sales system. Furthermore, the Company
continues its efforts to improve business performance and stabilize earnings through measures such as the early
realization of overseas business development and new mine development as well as reinforcement ofoperational efficiency improvement measures to pursue cost minimization.
As a result, consolidated net sales for the period under review decreased by 33.8% year on year to¥27,518 million. On the profit front, the Company posted operating loss of ¥6,718 million (compared with
operating profit of ¥2,506 million for the same period of the previous fiscal year), owing to an increase in costof sales due to an inventory write down following a downturn in profitability, on top of the decrease in net
sales, and ordinary loss was ¥580 million (compared with ordinary profit of ¥8,296 million for the same periodof the previous fiscal year), reflecting the recording of ¥5,600 million in share of profit of entities accounted
for using equity method under non-operating income and expenses. Loss attributable to owners of parent was¥1,195 million (compared with profit attributable to owners of parent of ¥7,131 million for the same period of
the previous fiscal year).
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 34.0% year on year to ¥26,977 million with operating
loss of ¥6,559 million (compared with operating profit of ¥2,614 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 29.5% year on year to ¥579 million with operating lossof ¥8 million (compared with operating loss of ¥5 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 few sales, and the waste
recycling business’s order-taking was sluggish.
As a result, net sales in this segment decreased by 87.3% year on year to ¥38 million with operating lossof ¥157 million (compared with operating loss of ¥109 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 December 31, 2022 are as follows.
Total assets decreased by ¥7,148 million from the end of the previous fiscal year to ¥82,704 million.
Current assets decreased by ¥6,919 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, despite anincrease 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 ¥228 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 ¥23,154 million consisted mainly of ¥14,923 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 ¥5,316 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 ¥2,010 million from the end of the previous fiscal year to ¥7,688 million.
Current liabilities decreased by ¥1,639 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 ¥370 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 ¥5,137 million from the end of the previous fiscal year to ¥75,016 million.
Shareholders’ equity decreased by ¥4,220 million resulting from the recording of loss, the payment ofdividends, and other factors. Accumulated other comprehensive income decreased by ¥915 million resulting
from a decrease in valuation difference on available-for-sale securities. Non-controlling interests decreased by¥1 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 thecontinued easing of the nickel supply-demand balance from the second quarter. 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 the electric furnace whose operation has been suspended
owing to the leakage accident, although its restoration was expected to be in the third quarter of this fiscal year,
this has been postponed until the next fiscal year. The plan to resume its operation in the next fiscal year isunchanged. While closely monitoring the business environment, the Company will resume operation of thesaid electric furnace once the volume control policy is lifted.
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, prices of nickel ore, the primary raw material for ferronickel products, remainhigh. Moreover, the rate of the increase in production costs is accelerating following sharp rises in prices ofraw materials and fuel as well as of electricity used in the manufacturing process in line with the steep rise inresource prices globally. These factors are expected to have a significant 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 announced on October28, 2022 as follows and also reviewed underlying assumptions.

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

35,548(9,997)(3,493)(3,711)(190.28)

Revised forecast (B)35,318(9,736)(2,664)(3,061)(156.96)

Change (B–A)

(230)

261

829

650

Change (%)

(0.6)

─

─

─

57,1294,806

12,99911,368Net sales

Previously announced forecast (A)(Announced on October 28, 2022)(Reference) Actual results for theprevious fiscal year ended March
31, 2022

Basic earnings
per shareYen

582.93[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 October 28, 2022)

5,668

7,332

13,000

8,079

5,857

13,936

Revised forecast

5,668

6,832

12,500

8,079

5,405

13,484(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 October 28, 2022)

12.12

10.03

10.94

131.49134.12132.98

Revised forecast

12.12

10.95

11.48

131.49138.88135.53(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 December 31, 2022

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

12,091
10,918
1,499
11,425480
10,2464,300(1)50,962

7,734
1

8,330
1

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

23,154260(5)23,40931,74282,704

(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 December 31, 2022

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

1,517
1,483
1
31
834
3,869

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

27
1,839
631
36
–
1,273
10
3,819
7,688

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

13,922
3,481
54,371(452)
71,322

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

3,067
593
(357)
104
3,407
286
75,01682,704

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income
Nine Months Ended December 31(Million yen)
For the Nine months ended
December 31, 2021

For the Nine months ended
December 31, 2022

41,55436,653
4,901

27,51832,463(4,944)

1,291
1,103
2,394
2,506

663
1,110
1,773
(6,718)

6
418
77

8
459
77

4,934

5,600

391
115
5,943

28
106
6,280

0
58
–
94
153
8,296

0
63
30
47
142
(580)

–
–
–

0
386
386

317
23
–
341
7,955
547
265
812
7,142
10
7,131

–
101
34
135
(329)
494
373
868
(1,197)(1)(1,195)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
Provision for environmental measures
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
Impairment losses
Loss on retirement of non-current assets
Loss on retirement of inventories
Total extraordinary losses
Profit (loss) before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Profit (loss)
Profit (loss) attributable to non-controlling interests
Profit (loss) attributable to owners of parent

9

Quarterly Consolidated Statements of Comprehensive Income
Nine Months Ended December 31(Million yen)
For the Nine months ended
December 31, 2021

For the Nine months ended
December 31, 2022

7,142

(1,197)

292
(11)
37

(1,539)
–
13

90

609

409
7,551

(915)
(2,113)

7,540(2,111)

10(1)Profit (loss)
Other 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-controllinginterests10

(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