PACIFIC METALS CO., LTD
Financial Results Briefing Session for Fiscal Year
Ended March 31, 2022
May 17, 2022

PACIFIC METALS Website:
https://www.pacific-metals.co.jp/en/
Inquiries:
General Administration Dept. (IR Group) TEL: +81-3-3201-6681

2

Table of Contents
1. Financial Results for Fiscal Year Ended March 31, 2022
(1) Financial results(2) Sales results by country(3) Consolidated ordinary profit and loss analysis

45
6

2. Review of Previous Medium-term Business Plan PAMCO-2021(1) Achievement of basic policies(2) ESG initiatives(3) 3-year plan vs. results (consolidated)

8
10
12

3. Overview of New Medium-term Business Plan PAMCO-2024(1) Positioning of the medium-term business(7) Priority measuresplan
14 (8) Outlook for sales by country(2) Business environment surrounding PAMCO: (9) Ore procurement plan
Emerging risks and opportunities
15 (10) Investment plan(3) Material issues (materiality)
16 (11) Capital policy(4) Trends in LME nickel prices and nickel(12) Indicators for each fiscal year
inventory volumes
17(earnings plan)(5) Outlook for stainless steel production(13) Consolidated ordinary profit and loss
and nickel supply and demand
18
analysis(6) Outlook for stainless steel production
and nickel supply and demand by region 19(Reference) Medium-term Business Plan Numerical Data

20
22
23
24
25
26
27

28

3

1. Financial Results for Fiscal Year Ended
March 31, 2022

4

1. Financial Results for Fiscal Year Ended March 31, 2022
(1) Financial results
Results for the
fiscal year ended
March 31, 2021

Forecast for the
fiscal year ended
March 31, 2022
(Announced on Jan. 31)

Results for the
fiscal year ended
March 31, 2022

AmountProfit rate

AmountProfit rate

AmountProfit rate

(million yen)(%)(million yen)(%)(million yen)(%)

Year-onyear (%)

Vs
Forecast
Announced
on Jan. 31(%)

Net sales

32,217―54,713―57,129

―

77.3

4.4

Operating profit

−493

−1.5

2,722

5.0

4,806

8.4

―

76.6

Ordinary profit

3,344

10.4

9,913

18.1

12,999

22.8

288.6

31.1

Profit attributable toowner of parent

1,162

3.6

8,455

15.5

11,368

19.9

877.8

34.5

(Investment)

1,249

―

―

―

686

―

−45.1

―

(Depreciation)

378

―

―

―

256

―

−32.3

―

Results for the
fiscal year ended
March 31, 2022

Year-onyear (%)

Vs Forecast
announced
on Jan. 31

Results for the
fiscal year ended
March 31, 2021

Forecast for the
fiscal year ended
March 31, 2022
(Announced on Jan. 31)

Topics Net sales and earnings
The LME nickel price rose
year-on-year. The yen
become weaker year-on-year
in the FX market.
Net sales increased partly
due to higher sales volumes.
Affiliated companies
accounted for by the equity
method too performed firmly,
and profit increased.

Topics(%)

Production volume(Ni t)

18,414

26,526

26,24942.6−1.0

Sales volume (Ni t)

20,79327,00027,06030.1

0.2

Applicable LME nickel
price (US$/t)

14,41818,717

19,290[Applicable LME nickel
price (US$/lb.) ]

33.8

3.1

[ 6.54 ][ 8.49 ][ 8.75 ]Applicable exchange
rate (¥/US$)

105.21110.43111.67

6.1

1.1

 Production volume andsales volume
Production and sales
remained firm as demand
recovered.
 LME nickel price
Demand picked up, andprices were on an upward
trend due to the reopening of
economic activities.

5

1. Financial Results for Fiscal Year Ended March 31, 2022
(2) Sales results by country(Unit: Ni tons)

Results of previous year

Results of current year

With the economy reopening gradually
after the impact of COVID-19, etc.
demand recovered. Sales volumes
increased year-on-year.

India
China
TaiwanSouth Korea
Japan

27,00027,060

2,152

1,854

7,189

7,162

14,103
1,218

6,119

6,236

3,228

1,504

1,509

10,037

10,300

Forecast for
the fiscal year ended
March 31, 2022
(Announced on Jan. 31)

Results forthe fiscal year ended
March 31, 2022

20,793
800
5,819

9,674
151
2,056

11,120
649
3,764

4,316

1,610
1,209

604
2,547

3,888

Results for 1H ofthe fiscal year ended
March 31, 2021

Results for 2H ofthe fiscal year ended
March 31, 2021

12,957
636
5,926
1,813
6,435
Results forthe fiscal year ended
March 31, 2021

3,934
2,756
604

3,480
905

5,028

5,273

Results for 1H ofthe fiscal year ended
March 31, 2022

Results for 2H ofthe fiscal year ended
March 31, 2022

6

1. Financial Results for Fiscal Year Ended March 31, 2022
(3) Consolidated ordinary profit and loss analysis(Unit: Billion yen)

+9.7 billion yen

30.0

+3.4
25.0

Net sales increased mainly due to higher sales volumes
and a rise in LME prices. Moreover, ordinary profit rose
year-on-year partly because affiliated companies accounted
for by the equity method performed steadily, which led to
the recording of equity gains.

−9.3

20.0

+13.4
Results forthe fiscal year
ended
March 31, 2022
13.0 billion yen

−7.6
15.0

+0.9
−2.8
10.0

+3.3

+0.1

−0.8

Ferronickel
depreciation

Ferronickel selling
General andadministrative
expenses

+9.1
5.0

0.0

Results forthe fiscal year
ended
March 31, 2021
3.3 billion yen

Results forthe fiscal year
ended
March 31, 2021

Sales volume

LME price, etc.

Exchange rates

Factors in ferronickel sales+25.9 billion yen

Sales volume

Raw material
prices, etc.

Evaluation of
inventory

Factors in ferronickel cost of sales−19.6-19.6 billion
billion yen
yen

Equity gains

Other+3.4 billion yen

Other

Results forthe fiscal year
ended
March 31, 2022

7

2. Review of Previous Medium-term
Business Plan PAMCO-2021

2. Review of Previous Medium-term Business Plan PAMCO-2021(1) Achievement of basic policies• PAMCO-2021 was the second stage for achievement of
the long-term vision and focused on“Strengthening the platform and refinement of strategies
toward continuous growth”

82. Review of Previous Medium-term Business Plan PAMCO-2021(1) Achievement of basic policies
Basic policies
1) Strengthening of facilities and stable procurement of ore
to develop the optimal production system

Achievement status ( : Achievement made: Issues remain)

Systematic investment in facilities that contribute to an optimal production system
Stable procurement of ore necessary for production during the period
No new ore procurement from third countries other than the Philippines and New Caledonia

2) Initiatives with view to expanding overseas business

Shortlisting overseas smelting projects in cooperation with resource-rich countries

3) Diversification of business in Japan

Sowing seeds for domestic business candidates and shortlisting with a view to rebuilding therecycling business

4) Strengthen profitability

Cost reduction through various rationalization measures (total of 2.2 billion yen improvement over 3
years)
Cost competitiveness was not achieved due to soaring prices of raw materials and fuels, etc.
Minimized the impact of market fluctuations by utilizing hedging to secure stable income5) Strengthening of organization and human resources in
anticipation of changes in the business environment

New organizational structure strengthened the responsiveness of the organization
Secured necessary personnel based on future-oriented human resource development andrecruitment plans

6) Management focused on cash flow

Reduce the risk of shortfall of funds through appropriate cash flow management

7) Contribution toward achieving a sustainable society

Reduced CO2 emissions by promoting energy-saving activities
No major occupational accidents, although we did not achieve zero accidents
Strengthened compliance and responded to the principles of the Corporate Governance Code

Although certain results were achieved in accordance with the basic policies, it is necessary to"further strengthen the platform and promote the sustainability strategy" in light of the businessenvironment surrounding the Company and social needs.

92. Review of Previous Medium-term Business Plan PAMCO-2021

10(2) ESG initiatives
1) Environment•

Eco-friendly production process•

Effective utilization of byproducts and zero emissions from waste

The Company conducted efficient
production with some of the world’s
largest electric furnaces by deploying theCompany’s world top-level smelting
technology.
The Company reduced energy
consumption by applying hightemperature exhaust gas, emitted fromelectric furnaces, to the ore drying
process.
The Company contrived to reduce
environment footprint through measures,such as the recycling of smelting nickelcontained recycled raw materials together
with nickel ore.

The Company turns all ferronickel slag obtained as a byproduct from theferronickel production process into usable resources and sells them as attractive
products that can be employed for a wide range of applications.



Of waste generated from the ferronickel production process, etc., oil waste isrecycled internally, and all waste that cannot be dealt with internally is recycled byoutside waste disposal companies, and in this way the Company has achieved
zero emission from waste.

•

Issue of Environmental and Social Report (FY2021 version)For details, please refer to the URL below.
https://www.pacific-metals.co.jp/environment/report.php

2) Social•

Together with local communities•

Together with ore-sourcing regions

The Company donated alcohol sanitizer to Hachinohe City.

The Company cosponsors local football club Vanraure
Hachinohe.

The Company made donations to the Philippines, which
had been damaged by Typhoon Rai (Odette) in 2021.

2. Review of Previous Medium-term Business Plan PAMCO-2021(2) ESG initiatives3) Governance•

Cross-shareholdings•

Composition of the Board of Directors



7,939 million yen as of the end of March 2022Independent Outside Directors: 3 people(Out of 9 Directors. Ratio of Independent Outside
Directors: 33.3%)(Female Directors: 1 person)* Of which, 7,047 million yen (88.8%) is a stake in Nickel Asia
Corporation of the Philippines.
Net assets: 80,153 million yenRatio of cross-shareholdings to net assets: 9.9%

The amount of one cross-shareholding was reduced in amountduring the fiscal year ended March 2022.

•

Nomination and Compensation Committee(Voluntary)

The Company will consider reducing the remaining crossshareholdings in due course.



Established in May 2021. The meeting was held fivetimes by the end of March 2022.

The Committee, under the chairperson who was an
Independent Outside Director, discussed nomination
policy and the ideal state of future director
compensation.

•

Upcoming initiatives

Consideration of disclosure in line with TCFD



Initiative concerning ensuring diversity•

Evaluation of the effectiveness of the Board of Directors

A questionnaire survey was conducted by a third-party agency inMarch 2022.

The Company will continue deepening the efforts to further improve
the quality of discussions at Board of Directors meetings (including
ESG and SDGs issues) and ensure the transparency of the director
compensation system and others.

The Company continues pushing forward with ESG initiative as one of priority management issues.

112. Review of Previous Medium-term Business Plan PAMCO-2021

12(3) 3-year plan vs. results (consolidated)
FY2019–FY2021 (3-year total)
Reason for increases/decreases
Plan

Results

Comparison

Production volume (Ni t)

94,50075,548−18,952

Sales volume (Ni t)

95,50076,386−19,114

6.48

7.23

0.75

Temporary slump due to COVID-19, etc., but steady
growth due to resumption of economic activities invarious countries, etc.
Resumption of economic activities amid the
pandemic and the impact of financial and capital
markets, etc., caused the yen to appreciate against
the U.S. dollar.

Applicable LME nickel price(US$/lb.)

Volume adjustment due to changes in stainlesssteel market conditions and demand due to COVID19, etc.

Applicable exchange rate(¥/US$)

109.72108.72−1.00

Net sales (million yen)

157,785

133,480−24,305

Operating profit (million yen)

2,770

2,434

−336

Ditto

Ordinary profit (million yen)

10,853

17,316

6,463

Increase in share of profit of entities accounted forusing equity method

Profit attributable to owners ofparent (million yen)

9,768

13,156

3,388

Ditto

Investment (million yen)

10,7072,466−8,241

Postponement of overseas investment, etc. due tothe impact of COVID-19, etc.

Depreciation (million yen)

1,253

965

−288

Postponement of capital investment and impairment
loss

Affected by a decrease in sales volume

13

3. Overview of New Medium-term
Business Plan PAMCO-2024

3. Overview of New Medium-term Business Plan PAMCO-2024

14(1) Positioning of the medium-term business plan•

Revision of the long-term vision

A comprehensive materials company that co-creates a sustainable,
recycling-oriented society* We aim to be a comprehensive materials company (nickel, other metals, recycled materials, etc.) that promotes the efficient use and recycling of finite
resources and continues to work with stakeholders to create a sustainable, recycling-oriented society.

•

Theme of New Medium-term Business Plan PAMCO-2024

Further strengthen the platform and promote the sustainability strategy* Further strengthen the foundation established under PAMCO-2021 to enable flexible and rapid response to changes in the business environment.
* Promoting a sustainable strategy to solve society's issues and PAMCO’s material issues.

A comprehensive materials company that cocreates a sustainable, recycling-oriented society
FY2024

PAMCO-2024
Further strengthen theplatform and promote thesustainability strategy

2027

Promote growth strategy and expand
sustainability strategy

2030–

3. Overview of New Medium-term Business Plan PAMCO-2024

15(2) Business environment surrounding PAMCO: Emerging risks and opportunities
Segment

Risks expected in the period covered by
PAMCO-2024

LME Ni price• The growing impact of factors represented by
VUCA, such as the future of U.S.-China
confrontation, the invasion of Ukraine, andchanges in the social and economic structure
due to COVID-19

Resources• Export ban of Indonesia, a major resourcerich country, is firmly in place. The decline inore grades in the Philippines and the shift inresource policy• Gradual increase in demand for non-FeNi
and NPI due to expanding demand for EVs

Market• Intensifying market competition due tocontinuous expansion of NPI production
capacity in Indonesia• Increasing expectations for low-carbon
products

Energyenvironment• Trend toward a low-carbon society• Impact of the invasion of Ukraine onelectricity prices, etc.

Labor

• Changes in the labor market against a
backdrop of workstyle reform, diversity, etc.
triggered by COVID-19

Segment

Opportunities expected in the period covered
by PAMCO-2024

Ferronickel
business• Global demand for stainless steel is expected
to continue to grow steadily• Expanding commercial opportunities for lowcarbon products against the backdrop of the
global trend toward a low-carbon society

Growth andexpansion of
new productmarkets (EV)• As the automotive industry shifts to EVs,
demand for nickel for battery applications is
expected to grow• Expanding opportunities to address risingdemand for nickel sulfate and cobalt sulfate in
the growing market for LIBs

Recyclingbusiness• Expectations for a recycling-oriented society
and economy are growing• Greater opportunities to launch new
businesses through collaboration with othercompanies• Greater demand for special construction
materials due to the acceleration of various
measures for disaster prevention/mitigationand national land resilience

Increased momentum of initiatives to minimize “risks” and exploit “opportunities”

3. Overview of New Medium-term Business Plan PAMCO-2024

16(3) Material issues (materiality)

 Restructuring of ferronickel production and sales systems withemphasis on profitability Acceleration of consideration of expansion into overseas
smelting business Creation of new businesses that contribute to society Diversification of business in Japan to contribute to a recyclingoriented society
 Enhancement of corporate value by addressing sustainability
issues17

3. Overview of New Medium-term Business Plan PAMCO-2024(4) Trends in LME nickel prices and nickel inventory volumes
LME nickel price(Unit:$/t)

LME nickel inventory

SHFE nickel inventory* Surveyed by Pacific Metals
LME/SHFE nickel inventory(Unit: 1,000 Ni tons)

LME nickel price

40,000600

Due to the situation
related to Russia andUkraineIndonesia announced thebringing forward of thereintroduction of a nickel ore
export ban

30,000Indonesia banned nickel ore
exports, and the Ukraine situation
destabilized

500

400

Moves of reopening economic
activities in countries
expanded in some areas

20,000300
Indonesia relaxed thenickel ore export ban withconditions

200
10,000

Steady demand forstainless steel in China0

Trend in operating
results

2013

2014

Fiscal year ended
March 31, 2013

Fiscal year ended
March 31, 2014

2015

2016

Fiscal year ended
March 31, 20152017

Fiscal year ended
March 31, 2016

Mainly due to USChina trade tensions

2018

Fiscal year ended
March 31, 20172019

Fiscal year ended
March 31, 20182020

Fiscal year ended
March 31, 2019100

Widespread
COVID-19 infections

2021

Fiscal year ended
March 31, 2020

2022

Fiscal year ended
March 31, 2021

0

Fiscal year ended
March 31, 2022

Net sales(million yen)

58,48856,40861,22547,64938,697

41,21049,062

44,13332,217

57,129Operating profit(million yen)

2,168

−4,079−7,787−15,357−3,070−3,239176−1,879

−493

4,806

Ordinary profit(million yen)

4,920

−1,838−91−12,283

−515

−203

3,451

972

3,344

12,999

18

3. Overview of New Medium-term Business Plan PAMCO-2024(5) Outlook for stainless steel production and nickel supply and demand* Surveyed by Pacific Metals

Nickel supply and demand(Unit: 1,000 Ni tons)

Stainless steel production(Unit: 1,000 tons)

3,800

70,000For
nonSUS
33%

3,600
3,400

65,000
Ni user(2022)

For
SUS
67%

60,0003,200

55,0003,000

50,0002,800

45,0002,600

40,0002,400

35,0002,200

30,0002,000

25,0001,800

20,000

1,600
2012

2013

2014

2015

Nickel supply

2016

2017

2018

Nickel demand

2019

2020

2021

Stainless steel production

2022

2023

15,0002024

19

3. Overview of New Medium-term Business Plan PAMCO-2024(6) Outlook for stainless steel production and nickel supply and demand by region* Survey by Pacific Metals

Outlook for stainless steel
Other
Indonesia
China
TaiwanSouth Korea
US
India
EuropeJapan 61,900

1,100(Unit: 1,000 tons)

67,3001,100
6,500

Outlook for nickel demand
Other
Indonesia
China
TaiwanSouth Korea
US
India
Europe
Japan

3,010

5,600

(Unit: 1,000 Ni tons)

3,580
110
530

Outlook for nickel supply
Others(Unit: 1,000 Ni tons)
AfricaEuropeNorth America and Latin America
Russia and the Middle East
Oceania
Indonesia (NPI)
3,600
China (NPI)
China
80
Asia (excluding China)

3,020
80
270

100
430

310
290
140
210

290
130
180

38,30034,700
2,060

1,370

1,670
1,140
1,000
2,400
2,600

1,000
2,400
2,800

4,100

4,800

30
110
130
70
340

310

7,500

7,500

30
90
120
60
320

2,900

2,900

190

200

260

330

2022

2024

2022

2024

2022

2024

300
560
370

3. Overview of New Medium-term Business Plan PAMCO-2024

20(7) Priority measures
Contribute to the achievement of the SDGs through the resolution of material issues
Restructuring of ferronickel
production and sales systems withemphasis on profitability

1) Establishment of optimal production system by reviewing production strategy• Establish optimal production system to further strengthen the platform.

2) Strengthening of cost competitiveness by reviewing procurement strategy• Review and strengthen procurement strategies for fuels and other raw materials,
according the highest priority to cost competitiveness.
Acceleration of consideration of
expansion into overseas smelting
business

3) Promotion of overseas smelting projects and start-up of production• Establish optimal ferronickel production and sales system by combining domestic
and overseas smelting operations.

Creation of new businesses that
contribute to society4) Promotion of production and sales of raw materials for LIB materials• Create a business to manufacture and sell raw materials for LIB materials by
utilizing hydrometallurgical technologies.

Diversification of business inJapan to contribute to a recyclingoriented society5) Restructuring of recycling business• Promote restructuring of our recycling business through collaboration with othercompanies, etc.

21

3. Overview of New Medium-term Business Plan PAMCO-2024(7) Priority measures
Contribute to the achievement of the SDGs through the resolution of material issues
Enhancement of corporate value
by addressing sustainability issues6) Sustainability Promotion Council• Positioning the response to climate change and the realization of a sustainable
society as the most important management issue, promote specific measuresacross PAMCO, including discussions on medium- to long-term initiatives anddirections concerning material sustainability issues.
CO2 emissions

Over 46% reduction

7) Reduction of GHG emissions• To achieve carbon neutrality by FY2050,
implement measures with clear targets,
including use of carbon-free energy andintroduction of new technologies.
FY2013

FY2030Net zero

FY20508) Promotion of symbiosis by contributing to the development of regions andresource-rich countries• Promote symbiosis through activities that contribute to the development of theregion and resource-rich countries.
9) Promotion of constructive dialogue with stakeholders• Disclose operating and financial conditions in a timely, appropriate, and fair manner,and actively communicate and promote constructive dialogue on the market
environment and our unique strengths.

22

3. Overview of New Medium-term Business Plan PAMCO-2024(8) Outlook for sales by country
Period covered by PAMCO-2024

India

Fiscal year ending March 2023 will see sales volumes decrease following a fall in
production volumes resulting from the molten substance leak that occurred at theend of the fiscal year ended March 2022.
Aiming for a production system recovery from the second half of the fiscal year
ending March 2023, the Company expects sales volumes to return to the level ofthe fiscal year ended March 2022.

China
TaiwanSouth Korea
Japan
27,06027,50027,500

1,854

3,600

3,600

8,400

8,500

3,800

3,300

3,000

1,509

2,000

2,400

2,400

10,300

9,500

9,800

10,0007,162

20,500
950
4,250

6,236

Results for the fiscal year ended
March 31, 2022

PAMCO-2024
PAMCO-2024
PAMCO-2024
Forecast for the fiscal year ending Forecast for the fiscal year ending Forecast for the fiscal year ending
March 31, 2023
March 31, 2024
March 31, 2025

23

3. Overview of New Medium-term Business Plan PAMCO-2024(9) Ore procurement plan
1) Status of conclusion of long-term contracts
Fiscal year ended
March 31, 2021

Other party in long-term contracts

Fiscal year ended
March 31, 2022

Prior contract period Taganito Mining Corporation (33.5% stake held by Pacific Metals)

Prior contract period

 Cagdianao Mining Corporation

Prior contract period

Renewed Rio Tuba Nickel Mining Corporation (36% stake held by Pacific Metals)

Fiscal year ending
March 31, 2023

Fiscal year ending
March 31, 2024

Fiscal year ending
March 31, 2025

Contract period: Jan. 2022 to Dec. 2026 (5 years)
Contract period: Jan. 2022 to Dec. 2026 (5 years)
Contract period: Jan. 2022 to Dec. 2026 (5 years)

 MKM (1)Contract period: Jan. 2014 to Dec. 2023 (10 years)

 MKM (2)Contract period: Jan. 2016 to Dec. 2025 (10 years)

 Montagna SARL

Contract period: Apr. 2016 to Mar. 2026 (10 years)

 The Philippines  New Caledonia

3) Status of procurement

2) Procurement ratio•
Period covered by PAMCO-2024

100%
80%



60%



40%
20%
0%

Results for the fiscal
year ended March 31,
2022

PAMCO-2024
Forecast for the fiscal
year ending March 31,
2023

New Caledonia

PAMCO-2024
Forecast for the fiscal
year ending March 31,
2024

The Philippines

PAMCO-2024
Forecast for the fiscal
year ending March 31,
2025

•


Environment surrounding nickel ore procurement
Export ban of Indonesian ore came in effect in January 2014.
The export ban was relaxed temporarily between January
2017 and December 2019.
Afterwards, the export ban was reintroduced in January
2020.
Since then, ore supply and demand has remained tight.
The Company’s ore procurement policy
As an ongoing ore procurement policy, the Company ispushing forward with the expansion of ores procurementfrom New Caledonia.

24

3. Overview of New Medium-term Business Plan PAMCO-2024(10) Investment plan
1) Capital investment• Capital investment that contributes to the maintenance, efficiency, and longevity offacilities

2) Strategic investment• i) Domestic business Business investment based on business profitability evaluation of domestic
business candidates considered in PAMCO-2021• ii) Overseas business, resources
 Business investment based on decision to participate in overseas smelting
projects
 New mining area development surveys, etc., to secure resources• iii) R&D investment
 R&D investment for sustainable nickel business(Million yen)

Period covered by
PAMCO-2021

Period covered by PAMCO-2024
FY2022

FY2023

FY2024

Total

1) Capital investment

2,466

1,495

1,351

1,004

3,850

2) i)

PAMCO-2024

—

53

500

7,472

8,025

—

5,506

18

8

5,532

—

35

0

1,000

1,035

2,466

7,089

1,869

9,484

18,442

Domestic business2) ii) Overseas business,resources2) iii) R&D investment
Total

Promoting investment to achieve the priority measures of new medium-term business plan PAMCO-2024

3. Overview of New Medium-term Business Plan PAMCO-2024

25(11) Capital policy
1) Dividends of surplus•

Positioning the return of profits to shareholders as one of the important management issues, the Company will
aim to achieve a consolidated dividend payout ratio of 30% while enhancing and strengthening its corporate
structure.

2) Internal reserve•

Use internal reserve as a fund to respond functionally to changes in the business environment and utilize thefund to secure resources, develop new technologies, make capital investments, and acquire treasury shares aspart of its capital policies.

Diagram of usage of funds

Expansion andreinforcement ofshareholders return••

Aim at a consolidated dividend
payout ratio of 30%
Acquisition of treasury shares,
etc.

Enhancementof corporate
value•

Flexibly respond tochanges in thebusiness environment

Ensuring fiscal
soundness

Growthinvestment•••

Securing natural
resources
Development of newtechnologies
Capital investments,
etc.

26

3. Overview of New Medium-term Business Plan PAMCO-2024(12) Indicators for each fiscal year (earnings plan)
Period covered by PAMCO-2024
FY2022

FY2023

FY2024

Total

Production
volumeNi t

20,81029,03728,45478,301

Sales volume

Ni t

20,50027,50027,50075,500ApplicableLME nickel
price(US$/lb.)

9.73

8.79

8.75

9.03

Applicableexchangerate(¥/US$)

111.05111.06111.07111.06

Net sales

50,21060,95860,801

171,969

Operating profit

925

225

1,809

2,959

Ordinary profit

3,844

2,822

4,549

11,215

Profit attributable toowner of parent

3,513

2,415

4,058

9,986

Total assets

89,59491,934

97,914—

Net assets

81,02682,41685,797—

Investment

7,089

1,869

9,484

18,442

Depreciation

314

402

536

1,252

Consolidated(Million yen)27

3. Overview of New Medium-term Business Plan PAMCO-2024(13) Consolidated ordinary profit and loss analysis (First year of PAMCO-2024 period)(Unit: billion yen)

−9.2 billion yen

20.0
18.0
16.0
14.0

Results forthe fiscal year
ended
March 31, 2022
13.0 billion yen

−9.1

12.0

+11.7

LME prices are projected to rise, but the Company expects
net sales to decrease due to lower volumes resulting fromthe accident involving a leakage of a molten substance atthe end of the fiscal year ended March 2022. A certain levelof profit is forecast to be recorded as equity gain. However,amid increasing uncertainty in the environment surrounding
natural resources, the Company forecasts for this period
are conservative. Although ordinary profit is projected todecrease year-on-year, profit is expected to be recorded.

10.0
−0.0

0.0

8.0

−4.5

−0.3

−13.6

6.0

+0.4

−0.8

4.0

Forecast for
the fiscal year
endingMarch 31, 2023
3.8 billion yen

+7.0

2.0
0.0
-2.0

Results for the
fiscal year ended
March 31, 2022

Sales volume

LME price, etc.

Exchange rates

Factors in ferronickel net sales−6.9 billion yen

Sales volume

Raw material
prices, etc.

Evaluation of
inventory

Ferronickel
deprecation

Factors in ferronickel cost of sales+2.6 billion yen

Ferronickel selling
General andadministrative
expenses

Equity gains

Other−4.9 billion yen

Others

Forecast for the
fiscal year ending
March 31, 2023

28

(Reference) Medium-term Business Plan Numerical Data
Fiscal year ended
March 31, 2020
30,885

18,414

26,249

Sales volume (Ni t)

28,533

20,79327,06013,867 [ 6.29 ]14,418 [ 6.54 ]19,290 [ 8.75 ]Applicable exchange rate (¥/US$)

108.49105.21111.67

Net sales (million yen)

44,13332,217

57,129Operating profit (million yen)

−1,879

−493

4,806

Ordinary profit (million yen)

972

3,344

12,999Profit attributable to owners of parent (million yen)

625

1,162

11,368

Total assets (million yen)

69,96075,48489,852

Net assets (million yen)

63,50667,01480,153

Investment (million yen)

530

1,249

686

Depreciation (million yen)

330

378

256

Fiscal year ending
March 31, 2023

Fiscal year ending
March 31, 2024

Fiscal year ending
March 31, 2025

Production volume (Ni t)

20,81029,03728,454

Sales volume (Ni t)

20,50027,50027,50021,451 [ 9.73 ]

19,379 [ 8.79 ]19,290 [ 8.75 ]Applicable exchange rate (¥/US$)

111.05111.06111.07

Net sales (million yen)

50,21060,95860,801

Operating profit (million yen)

925

225

1,809

Ordinary profit (million yen)

3,844

2,822

4,549

Profit attributable to owners of parent (million yen)

3,513

2,415

4,058

Total assets (million yen)

89,59491,934

97,914

Net assets (million yen)

81,02682,41685,797

Investment (million yen)

7,089

1,869

9,484

Depreciation (million yen)

314

402

536

Applicable LME nickel price (US$/t)[US$/lb.]

Planned figures for the
PAMCO-2024 period

Fiscal year ended
March 31, 2022

Production volume (Ni t)

Applicable LME nickel price (US$/t)[US$/lb.]

Results for the
PAMCO-2021 period

Fiscal year ended
March 31, 2021

This material is not disclosure material under the Financial Instruments and Exchange Act and the Company does not guarantee the accuracy orcompleteness of the information.
Any forward-looking statements in this material are based on information available at the time of preparation and may differ from actual results due
to changes in circumstances that may arise in the future. Therefore, please refrain from making investment decisions based solely on this material.
The Company assumes no responsibility whatsoever for any damage resulting from the use of this material.
All copyrights, trademarks, and other intellectual property rights related to this material are the property of the Company.