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, 2023
[Japanese GAAP]
August 9, 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 Matsuyama, Managing Executive Officer and Director
Phone: +81-3-3201-6681
Scheduled date of filing quarterly securities report: August 9, 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 Three Months Ended June 30, 2023 (April 1, 2023 – June 30, 2023)(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, 2023
4,217 (61.2)(3,292)–(1,417)–(1,566)–
June 30, 2022
10,857
(3.7)
1,509
936.2
3,676
176.9
3,283
190.0
(Note) Comprehensive income: Three months ended June 30, 2023: ¥(1,508) million [–%]
Three months ended June 30, 2022: ¥2,650 million [41.7%]

Three months ended
June 30, 2023
June 30, 2022

Basic earnings
per share

Diluted earnings
per share

Yen

Yen

(80.35)168.36––(2) Consolidated Financial Position
Total assets

Net assets

Million yen

76,697
As of June 30, 2023
78,825
As of March 31, 2023
(Reference) Equity: As of June 30, 2023: ¥70,238 million
As of March 31, 2023: ¥71,746 million

Equity ratio

Million yen%

70,52572,03491.6
91.0

2. Dividends
Annual dividends
1st quarter-end

2nd quarter-end

3rd quarter-end

Yen

Yen

Yen

Yen

Yen

–

0.00

0.00

–

0.00

0.00

Fiscal year ended–
0.00
March 31, 2023
Fiscal year ending–
March 31, 2024
Fiscal year ending
March 31, 2024
0.00
(Forecast)(Note) Revision from the latest released dividends forecast : None

Year-endTotal

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2024 (April 1, 2023 - March 31,
2024)(% 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
8,592 (51.3)(6,343)–(3,712)
Full year
20,885 (40.1)(7,089)–(2,891)(Note) Revision from the latest released financial results forecast : None%––

Million yen(3,871)(3,246)

%

–
–

Yen

(198.49)(166.44)

* 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, 2023:
19,577,071 shares
March 31, 2023:
19,577,071 shares2) Total number of treasury shares at the end of the period:
June 30, 2023:
75,090 shares
March 31, 2023:
75,035 shares
3) Average number of shares during the period:
Three months ended June 30, 2023:
Three months ended June 30, 2022:

19,502,026 shares
19,502,679 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 three months ended June 30, 2023 (the “period under review”), although the simultaneous
occurrence of the high resource prices and the appreciation of the U.S. dollar led to price hikes, and there wereconcerns about the impact on economic activities, the Japanese economy showed a gradual recovery trend as
corporate earnings and personal consumption remained steady.
As for overseas economies, while weaknesses are seen in some regions due to concerns about the effects
of global monetary tightening, the prolonged situation in Ukraine, and the accelerating inflation, theemployment and income environment remain steady, with signs of recovery.
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, while the capacity utilization
rate is recovering due to expectations of implementing economic stimulus measures in China, the expectations
precede the weak movement of actual demand. Moreover, the prolonged situation in Ukraine has added to theuncertainty in the overall market condition, and the capacity utilization rates of production facilities generally
remained varied and lacked momentum.
As a result, the demand for ferronickel continued to slow down.
On the procurement front, prices of nickel ore, the primary raw material for ferronickel products, havebeen high against the backdrop of the impact of Indonesia’s unprocessed ore export ban and a robust demand
for nickel ore. Moreover, prices of various raw materials and fuel, including electricity remained high in linewith the steep rise in resource prices globally, causing increasing production costs.
Nickel prices on the London Metal Exchange (LME) remained within a specific range. However, themarket weakened slightly due to complex factors, including delayed economic recovery in China, fluctuations
in foreign exchange rates and financial and capital markets, and the situation in Ukraine.
In this situation, in addition to the environment mentioned above, the Company’s ferronickel sales
volume decreased by 57.0% year on year as a whole due to a decrease in both domestic and overseas sales. The
Company continued its policy with the objective of strategically controlling volume to a certain level so as not
to impair profitability since overseas producers of stainless steel are shifting some of their procurement tonickel pig iron, which has a price advantage, and the price of nickel pig iron is also affecting the selling priceof the Company’s products.
The ferronickel production volume decreased year on year due to the policy of controlling sales volume
mentioned above.
The selling price of ferronickel products rose year on year as the LME nickel price applicable to theCompany increased by 0.4% year on year, and the average exchange rate of Japanese yen against U.S. dollar
applicable to the Company was 7.5% weaker year on year. On the other hand, as mentioned previously, theCompany also refers to the price of nickel pig iron in addition to the applicable LME nickel price and theapplicable exchange rate in setting the selling price of the Company’s products. Therefore, the selling
environment continues to be challenging, with stagnant revenue growth due to lower selling prices compared
to before.
Despite the rapidly evolving business environment and expectations that the situation in Ukraine willcontinue on as mentioned above, 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 toimprove business performance and stabilize earnings through measures such as the early realization ofoverseas 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 61.2% year on year to ¥4,217
million. On the profit front, the Company posted operating loss of ¥3,292 million (compared with operating
profit of ¥1,509 million for the same period of the previous fiscal year), owing to an increase in cost of sales
due to an inventory write down following a downturn in profitability, on top of the decrease in net sales, andordinary loss was ¥1,417 million (compared with ordinary profit of ¥3,676 million for the same period of theprevious fiscal year), reflecting the recording of ¥1,245 million in share of profit of entities accounted for using2

equity method under non-operating income. Loss attributable to owners of parent was ¥1,566 million(compared with profit attributable to owners of parent of ¥3,283 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 62.2% year on year to ¥4,042 million with operating
loss of ¥3,292 million (compared with operating profit of ¥1,624 million for the same period of the previous
fiscal year).
(ii) Gas businessIn the gas business, despite the recording of costs associated with facility repair, the Company maintained
a stable operation, recording a profit.
As a result, net sales in this segment increased by 19.1% year on year to ¥196 million with operating
profit of ¥2 million (compared with operating loss of ¥31 million for the same period of the previous fiscal
year).
(iii) Other
The segment of other businesses recorded a loss because the real estate business had no sales contracts.
As a result, net sales in this segment were nil (compared with net sales of ¥16 million for the same periodof the previous fiscal year) with operating loss of ¥5 million (compared with operating loss of ¥86 million forthe same period of the previous fiscal year).

3(2) Explanation on Financial Position
Assets, liabilities, and net assets of the Group as of June 30, 2023 are as follows.
Total assets decreased by ¥2,128 million from the end of the previous fiscal year to ¥76,697 million.
Current assets decreased by ¥3,298 million from the end of the previous fiscal year mainly due toreceipt of a bonus incentive reward for reducing power consumption through participation in a wintertime power-saving campaign of our power supplier and a decrease in accounts receivable - other, in line with
consumption taxes refund receivable, and other factors, despite an increase in merchandise and finished goods
impacted by the adjustment of planned inventory quantity.
Non-current assets increased by ¥1,169 million from the end of the previous fiscal year mainly due to anincrease in investment securities resulting from an increase in share of profit of entities accounted for using
equity method, and other factors, despite a decrease in property, plant and equipment due to increased
depreciation resulting from investment in maintenance/replacement. Investment securities held by theCompany amounting to ¥26,694 million consisted mainly of ¥17,767 million in the amount reflected in the
consolidated balance sheet of shares of entities accounted for using equity method, ¥2,378 million in shares ofsubsidiaries and associates, and ¥5,988 million in shares of Nickel Asia Corporation, a holding company of theCompany’s equity-method affiliates listed on the Philippine Stock Exchange.
Total liabilities decreased by ¥620 million from the end of the previous fiscal year to ¥6,171 million.
Current liabilities decreased by ¥643 million from the end of the previous fiscal year primarily owing to adecrease in the settlement of notes and accounts payable - trade, and other factors.
Non-current liabilities increased by ¥23 million from the end of the previous fiscal year mainly due to anincrease in deferred tax liabilities resulting from an increase in share of profit of entities accounted for using
equity method and other factors, despite a decrease in provision for restoration costs resulting from acceptanceinspection of construction costs.
Total net assets decreased by ¥1,508 million from the end of the previous fiscal year to ¥70,525 million.
Shareholders’ equity decreased by ¥1,567 million resulting from the recording of loss, and other factors.
Accumulated other comprehensive income increased by ¥58 million resulting from an increase in foreign
currency translation adjustment. Non-controlling interests decreased by ¥0 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 theprolonged situation in Ukraine continues to affect the domestic and overseas economies, in addition toeconomic slowdown against the background of sharp interest hikes in the U.S. and Europe and a delayed
economic recovery in China.
On the volume front, the Company expects the environment to remain unchanged and at the same level as
the announced plan.
In terms of profit and loss, on the selling price front, the Company refers to the price of nickel pig iron,which has a price advantage over ferronickel products, in addition to the applicable LME nickel price and theapplicable exchange rate. On the procurement front, prices of nickel ore, the primary raw material for
ferronickel products, and the prices of raw materials, fuel, and electricity remain at high levels and are
expected to impact prices significantly.
In addition, regarding the impact of the write-down of inventories, while an additional amount will berecorded in the first half, the reversal amount will be recorded in the second half due to an inventory writedown. As a result, the profit and loss trend is expected to differ between the first and the second half of the
fiscal year.
Although these challenging conditions persist, 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-termManagement Plan, and the Company will continue 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,” dated August 2, 2023.

5

<Reference>[Revisions to financial results forecast]
Revisions to consolidated financial results forecast for the six months ending September 30, 2023 (April 1, 2023
through September 30, 2023)
Operating profit

Ordinary profit

Million yen

Million yen

Million yen

Profitattributable toowners ofparentMillion yen

8,910(4,198)(2,937)(2,961)(151.83)

Revised forecast (B)8,592(6,343)(3,712)(3,871)(198.49)

Change (B–A)(318)(2,145)

(775)

(910)

Change (%)

(3.6)

─

─

─

17,642(4,464)605

229

Net sales

Previously announced forecast (A)(Announced on May 9, 2023)(Reference) Actual results for thesix months ended September 30,
2022

Basic earnings
per share
Yen

11.75

Revisions to consolidated financial results forecast for the fiscal year ending March 31, 2024 (April 1, 2023
through March 31, 2024)
Operating profit

Ordinary profit

Million yen

Million yen

Million yen

Profitattributable toowners ofparentMillion yen

20,899(7,299)(4,569)(4,778)(245.00)

20,885(7,089)(2,891)(3,246)(166.44)

Change (B–A)

(14)

210

1,678

1,532

Change (%)

(0.1)

─

─

─

34,852(12,588)(4,960)(5,026)

Net sales

Previously announced forecast (A)(Announced on May 9, 2023)
Revised forecast (B)(Reference) Actual results for theprevious fiscal year ended March
31, 2023

Basic earnings
per share
Yen(257.75)[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 9, 2023)

3,450

4,750

8,200

3,543

3,540

7,083

Revised forecast

3,330

4,870

8,200

3,428

3,540

6,968

(Reference) Actual results for theprevious fiscal year ended March
31, 2023

5,668

6,725

12,393

8,079

5,301

13,380Applicable 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 9, 2023)

10.68

10.00

10.29

134.06134.10134.08

Revised forecast

10.82

10.00

10.33

135.34134.10134.60(Reference) Actual results for theprevious fiscal year ended March
31, 2023

12.12

11.11

11.57

131.49138.44135.266

2. Quarterly Consolidated Financial Statements and Key Notes(1) Quarterly Consolidated Balance Sheets(Million yen)
As of March 31, 2023
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
Retirement benefit asset
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

7

As of June 30, 2023

16,848
6,593
1,500
8,204
361
5,836
4,904
(1)
44,247

17,544
5,520
1,500
8,428
306
5,548
2,100
(1)
40,949

8,383
239

8,335
270

25,518198
243(5)25,95434,57778,825

26,694232219(5)27,14135,747
76,697

(Million yen)
As of March 31, 2023
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 contract
Provision of restoration cost
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 June 30, 2023

760
1,018
7
95
657
2,539

354
883
26
185
447
1,896

50
2,087
631
11
1,273
187
10
4,252
6,791

53
2,143
631
5
1,273
142
25
4,275
6,171

13,922
3,481
50,540(452)
67,491

13,922
3,481
48,973(452)
65,924

3,831
593
(510)
340
4,254
287
72,03478,825

3,630
593
(243)
333
4,313
287
70,52576,697

(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, 2022

For the Three months ended
June 30, 2023

10,857
8,653
2,204

4,217
7,023
(2,806)

292
402
695
1,509

89
396
485
(3,292)

3
237
25

7
165
25

1,197

1,245

731
25
2,221

479
19
1,941

0
–
30
23
54
3,676

0
30
23
12
67
(1,417)

0
0

–
–

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

0
0
(1,417)4
144
149(1,567)(0)(1,566)

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
Loss on disposal of inventories
Foreign withholding tax
Other
Total non-operating expenses
Ordinary profit (loss)
Extraordinary income
Gain on sale of non-current assets
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Total extraordinary losses
Profit (loss) before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Profit (loss)
Loss attributable to non-controlling interests
Profit (loss) 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, 2022

For the Three months ended
June 30, 2023

3,271

(1,567)

(809)
(157)
4

(231)
–
(10)

340

300

(620)
2,650

58
(1,508)2,662(1,507)(12)(0)

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