(Reference Translation)
Nov 6, 2019OSAKA SODA CO., LTD.
CONSOLIDATED FINANCIAL RESULTS
For the quarterly period ended September 30, 2019
(Prepared under Japan GAAP, unaudited)

Company name:OSAKA SODA CO., LTD.

Stock Exchange Listing:

Securities code:

4046

URL: http://www.osaka-soda.co.jp

Tokyo

Representative:

Kenshi Terada, Representative Director, President & Chief Operating Officer

For inquiry:

Yoshihiro Ueda, Senior Executive Officer, General Manager, Administration Division(Telephone: +81-6-6110-1560)

Scheduled date of filing of quarterly securities report:

November 7, 2019

Scheduled date of commencement of dividend payment:

December 5, 2019

Supplementary materials prepared for the financial results:

Yes

Quarterly financial results briefings:

Yes (for institutional investors and investment analysts)

1. Consolidated Financial Results(Amounts are rounded down to the nearest million yen)

(1)Results of Operations
Six Months Ended
September 30, 2019

September 30, 2018

Change *Change *Net sales

Millions of yen

53,026

0.7%

52,674

9.8%

Operating income

Millions of yen

4,952

14.7%

4,316

25.0%

Ordinary income

Millions of yen

5,190

5.8%

4,90728.8%

Net income

Millions of yen

3,191(4.9)%

3,355

34.5%

Comprehensive income

Millions of yen

2,660(34.9)%

4,089(1.3)%

Net income per shareYen

136.24-147.77-

Diluted net income per share

Yen

119.83-125.19-Note: Percent changes for six months are year-on-year comparisons.

(2)Financial Condition
September 30, 2019

March 31, 2019

Total assets

Millions of yen

111,046

112,661

Net assets

Millions of yen

67,83964,548EquityMillions of yen

67,83964,548

%

61.1

57.3

Equity ratio

12. Dividends
Year ending Mar. 31, 2020(Forecast)Year ending Mar. 31, 2020

Year ended Mar. 31, 2019

－－

32.50

30.00

End of first quarterEnd of second quarterEnd of third quarter－－End of fourth quarter

32.50

35.00

Full year

65.00

65.00

Note: Changes from the most recently published forecast of dividends: No

3. Earnings Forecast for the fiscal year ending March 31, 2020
Full-year
Change*Net sales

Millions of yen

105,000(2.7)%

Operating income

Millions of yen

9,600

1.2%

Ordinary income

Millions of yen

10,2001.5%

Net income

Millions of yen

6,800

0.1%

Yen

294.51-Earnings per shareNote: Changes from the most recently published forecast of financial results: No* Notes(1)

Changes in significant subsidiaries during the current quarterly period(Changes in specified subsidiaries resulting in the change in scope of consolidation):

(2)

(3)

(4)

None

Application of accounting methods used specifically for the preparation of quarterly
consolidated financial statements:

None

Changes in accounting policies, accounting estimates and restatements of revisions

None1) Changes in accounting policies due to revisions of accounting standards, etc.:

None2) Changes in accounting policies other than 1):

None3) Changes in accounting estimates:

None4) Restatement of revisions:

None

Number of outstanding shares (common stock)1) Number of shares outstanding at the end of the period (including treasury shares)
As of September 30, 2019:

26,731,415

shares

As of March 31, 2019:

26,090,580

shares

As of September 30, 2019:3,002,442

shares

As of March 31, 2019:

3,001,554

sharesSix months ended September 30, 201923,421,818

sharesSix months ended September 30, 2018

22,708,098

shares2) Number of treasury shares at the end of period3) Average number of shares outstanding in each period2* Review proceduresThis financial results are not subject to the review procedures performed by certified public
accountants or an audit firm.

* Earnings forecasts and other notes
This material contains forward-looking statements such as earnings forecast about OSAKA SODA CO.,LTD. and its group companies (“Osaka Soda Group”). These forward-looking statements are based on
the current assumptions and beliefs of Osaka Soda Group in light of the information currently available
to it, and contain known and unknown risks, uncertainties and other factors. Osaka Soda Group
therefore wishes to caution readers that actual results could be materially different from any futureresults.

DISCLAIMER:

This is an English translation of the original Japanese document and is prepared for reference. Should there
be any inconsistency between the translation and the Japanese original, the latter shall prevail. Thistranslation is subject to change without notice. Osaka Soda Group shall individually or jointly accept noresponsibility or liability for damage or loss caused by any error, inaccuracy, misunderstanding, or changes
with regard to this translation.

34. Qualitative Information(1)Results of Operations
During the six months ended September 30, 2019, Japan’s economy has continued its moderate recovery
trend, with improvements in the employment and income situation, though the economic outlook remains
uncertain due to prolonging of United States and China trade friction and China’s economic slowdown.
Under the circumstances, in the second year of the Medium-Term Management Plan “BRIGHT - 2020”, which
was launched from the previous fiscal year, Osaka Soda Group continued to take specific measures based onthree basic policies, “Creating new growth engines”, “Establishing a profitable global business”, and“Completing business structural reforms”.
As a result, net sales were ¥53,026 million, an increase of 0.7% compared to the same period of fiscal 2018.
Operating income was ¥4,952 million, an increase of 14.7% compared to the same period of fiscal 2018.
Ordinary income was ¥5,190 million, an increase of 5.8% compared to the same period of fiscal 2018. Net
income attributable to owners of parent was ¥3,191 million, a decrease of 4.9% compared to the same periodof fiscal 2018, due to the loss on valuation of investment securities.
The following is a summary of reporting segments.
Basic Chemical Products
In Chlor-Alkali, net sales increased due to continued steady demand though a demand decrease in
semiconductor and electronic materials.
In Epichlorohydrin, net sales increased due to continued steady domestic demand as well as volume
increase of overseas sales caused by China’s environmental and safety regulations.
As a result, Basic Chemical Products reported net sales of ¥24,643 million, up 1.4% compared to the sameperiod of fiscal 2018.
Functional Chemical Products
In Allyl Ethers, net sales increased due to continued volume growth in China and European market for silane
coupling agent.
In Diallyl Phthalate Resin, net sales increased due to continued steady growth in domestic and European
market for UV Inks as well as volume growth for hot stamping.
In Synthetic Rubber related products, Epichlorohydrin Rubber was affected by a decline in automobile
production in China and India. Acrylic Rubber was adopted by customers in domestic and overseas marketby focusing on developing new customers and developing new applications.
In Separation Media in Pharmaceutical Industry (Silica Gel for Liquid Chromatography), demand in peptide
drug purification sold to Europe and United States grew significantly and Colum Chromatography andAnalytical Instruments maintained favorable export sales to Korea.
In Active Pharmaceutical Ingredients (API) and their Intermediates, net sales expanded due to sales inintermediate for treatment of infectious disease and anti-tuberculosis intermediate, export sales in vasodilator
intermediate and imported sales in generic API. In addition, the supply of generic drug API utilizing highpharmacology activity facility made good progress.
In LCD-related products such as color resist, net sales declined due to volume decrease in LCD panels. Inglass fiber, net sales declined due to volume decrease in domestic market for electronic materials.
As a result, Functional Chemical Products reported net sales of ¥20,610 million, down 2.3% compared to thesame period of fiscal 2018.
Housing Facilities and Others
Net sales were ¥7,772 million, up 6.9% compared to the same period of fiscal 2018, due to continued favorable
sales in life materials products.

4

(2) Financial Condition
AssetsCurrent assets were ¥68,333 million, an increase of 0.2% since March 31, 2019. The increase was due
primarily to an increase of ¥2,640 million in cash and deposits, an increase of ¥370 million in merchandise andfinished goods, an increase of ¥299 million in short term investment securities, and a decrease of ¥3,096
million in notes and accounts receivable-trade.
Noncurrent assets were ¥42,713 million, a decrease of 3.9% since March 31, 2019. The decrease was due
primarily to a decrease of ¥1,527 million in investment securities.
As a result, Total assets were ¥111,046 million as of September 30, 2019, a decrease of 1.4% since March31, 2019.
Liabilities
Current liabilities were ¥27,899 million, a decrease of 13.3% since March 31, 2019. The decrease was due
primarily to a decrease of ¥1,417 million in notes and accounts payable- trade and a decrease of ¥1,464 million
in current portion of bonds with subscription rights to shares respectively.
Noncurrent liabilities were ¥15,307million, a decrease of 3.9% since March 31, 2018. The decrease was due
primarily to a decrease of ¥412 million in provision for director’s retirement benefits.
As a result, Total liabilities were ¥43,207 million as of September 30, 2019, a decrease of 10.2% since March31, 2019.
Net assets
Net assets were ¥67,839 million as of September 30, 2019, an increase of 5.1% since March 31, 2019.

(3) Cash Flows
As of September 30, 2019, cash and cash equivalents were ¥27,316 million, an increase of ¥2,940 million
since March 31, 2019.
Cash flows from operating activities
Net cash provided by operating activities totaled ¥5,463 million, due primarily to ¥4,655 million in income
before income taxes, ¥1,761 million in depreciation, and a decrease of ¥2,141 million in income tax paid.
Cash flows from investing activities
Net cash used in investing activities totaled ¥1,592 million, due primarily to purchase of ¥1,821 million forpurchase of property, plant, and equipment.
Cash flows from financing activities
Net cash used in financing activities amounted to ¥871 million, due primarily to payment of ¥808 million incash dividend.

(4) Annual Earnings Forecasts
There are no revisions to the earnings forecast from the previous forecast announced in the “Consolidated
financial results for the year ended March 31, 2020” dated on May 10, 2019.

5

5.

CONSOLIDATED FINANCIAL STATEMENTSCONSOLIDATED BALANCE SHEETS(Millions of yen)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Electrically recorded monetary claims
Short term investment securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Other current assets
Less: Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant, and equipment
Property, plant, and equipment – Net
Other – Net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Deferred tax assets
OtherLess: Allowance for doubtful accounts
Total investment and other assets
Total noncurrent assets
Total assets

6March 31,
2019

September 30,
201911,87629,2683,508
12,499
7,050
1,643
1,827
685
(140)
68,21914,516
26,171
3,246
12,799
7,420
1,938
1,756
622
(140)
68,333

10,442
11,52021,962

9,758
12,26322,022

864
474
1,338

772
428
1,201

19,642
442
1,062
(6)
21,14144,442
112,661

18,115382997(6)19,48942,713111,046

CONSOLIDATED BALANCE SHEETS (Continued)(Millions of yen)

Liabilities
Current liabilities
Notes and accounts payable- trade
Short term loans payable
Income taxes payable
Provision for bonuses
Current portion of bonds with subscription rights to shares

Other current liabilities
Total current liabilities
Noncurrent liabilities
Bonds with subscription rights to shares
Deferred tax liability
Provision for directors retirement benefits
Net defined benefit liability
Other noncurrent liabilities
Total noncurrent liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Unrealized gain on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustments
Re-measurements of defined benefit plans
Total accumulated other comprehensive income
Total net assets
Total net assets and liabilities

7March 31,2019

September 30,
201915,586
7,767
2,280
889
1,464
4,211
32,197

14,168
7,767
1,418
899
3,645
27,89910,000
1,094
651
3,009
1,160
15,915
48,113

10,000
966
239
2,981
1,120
15,307
43,20715,15013,66736,942(6,679)59,08015,87014,38739,325(6,681)
62,902

5,781
111(327)
5,467
64,548112,661

5,230
20(3)
(309)
4,936
67,839111,046

CONSOLIDATED STATEMENTS OF INCOME(Millions of yen)

Six Months Ended
September 30,
September 30,
2018
2019
52,67453,026
41,644
41,583
11,02911,443

Net sales
Cost of sales
Gross profit
Selling, general, and administrative expenses

6,713
4,316

6,490
4,952

7
244
18

2
258
20

359
52
683

120
402

54
37
92
4,907

48
95
21
164
5,190

137
137

0
178
179

209
209
4,835

83
375
251
3
713
4,655

Net income
Net income attributable to non-controlling interests

1,670
(190)
1,479
3,355－

1,302
162
1,464
3,191
－

Net income attributable to owners of parent

3,355

3,191

Operating income
Non-operating income
Interest incomeDividend income
Share of profit of entities accounted for using equity
methodForeign exchange gain
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange loss
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of noncurrent assets
Gain on sales of investment securities
Total extraordinary income
Extraordinary loss
Loss on retirement of noncurrent assets
Loss on valuation of investment securities
Loss on valuation of shares of subsidiaries
Other
Total extraordinary loss
Income before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes

8CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(Millions of yen)

Net income
Other comprehensive income
Unrealized gain on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustments
Re-measurements of defined benefit plans
Share of other comprehensive income of entities
accounted for using equity method
Total
Comprehensive income
Comprehensive income attributable to:
Owners of parent
Minority interests

9Six Months Ended
September 30,
September 30,
2018
2019
3,355
3,355
673
68(24)
16(0)(551)
18(15)
17(0)734
4,089(530)2,660

4,089－

2,660－

CONSOLIDATED STATEMENTS OF CHASH FLOWS(Millions of yen)

Six Months Ended
September 30,
September 30,
2018
2019
Cash flows from operating activities
Income (loss) before income taxes
Depreciation
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for directors' retirement
benefits
Increase (decrease) in allowance for retirement benefits foremployees
Interest and dividend income
Interest expenses
Foreign exchange losses (gains)
Loss on retirement of non-current assets
Loss (gain) on sales of non-current assets
Loss (gain) on sales of short-term and long-term investment
securities
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable-trade
Loss (gain) on valuation of short-term and long term
investment securities
Loss on valuation of shares of subsidiaries and associates
Share of loss (profit) of entities accounted for using equity
methodOther, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities

10

4,835
1,778
85
063(2)

4,655
1,761
91(0)
10(412)

(35)

(28)

(252)
54(217)
209
(137)
－

(261)
48
43
83
2(178)

(971)
(918)
1,190
-

3,328(595)(1,387)
375

(18)

251
(20)

105
5,768
270
(55)
(1,326)
4,657

(382)
7,385
273
(54)
(2,141)
5,463

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)(Millions of yen)Six Months Ended
September 30,
September 30,
2018
2019
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Repayments of long-term loans payable
Redemption of bonds
Purchase of treasury shares

Cash dividends paid
Other, net
Net cash provided by (used in) financing activitiesEffect of exchange rate change on cash and cashequivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalents

11(2,465)
140
(16)
(9)
(169)
(2,521)(1,821)
17
(3)
(10)
299
(73)
(1,592)(1,113)(800)(1,659)(677)(30)(4,280)
185

(23)
(2)
(808)
(38)
(871)
(59)

(1,959)23,99322,0342,940
24,37627,316

6. Notes to the Consolidated Financial Statements(1) Notes regarding the going concern assumption:

None

(2)

None

Notes on significant changes in shareholders’ equity:(3) Segment information
Six months ended September 30, 2018

(Millions of yen)

Basic

Functional

Housing

Consolidated

ChemicalChemicalFacilities

ProductsProductsand Others

Total

Adjustments*1

operatingincome *2

Net sales
External sales

24,31421,092

7,267

52,674－52,674631257

296(296)－

24,321

21,123

7,525

52,971(296)

52,674

2,450

2,390

81

4,921

(605)

4,316

Intersegment sales
or reclassifications
TotalSegment incomeNotes 1:

Adjustments of segment income of ¥(605) million are corporate expenses not allocated toreportable segments. Corporate expenses are mainly expenses not attributable to a reporting
segment and related to fundamental research and development as well as administrative
departments.

Notes 2:

Segment income has been adjusted for the operating income appearing in the quarterly
consolidated statements of income.

Six months ended September 30, 2019

(Millions of yen)

Basic

Functional

Housing

Consolidated

ChemicalChemicalFacilities

Products

Productsand Others

TotalAdjustments *1

operatingincome *2

Net sales
External sales
Intersegment sales
or reclassifications
TotalSegment incomeNotes 1:

24,643

20,6107,772

53,026－53,026

12

33

401

446(446)－

24,656

20,643

8,173

53,473(446)53,026

2,621

2,702

215

5,539(586)

4,952

Adjustments of segment income of ¥(586) million are corporate expenses not allocated toreportable segments. Corporate expenses are mainly expenses not attributable to a reporting
segment and related to fundamental research and development as well as administrativedepartments.

Notes 2:

Segment income has been adjusted for the operating income appearing in the quarterly
consolidated statements of income.

12