(Reference Translation)
Nov 6, 2020

OSAKA SODA CO., LTD.
CONSOLIDATED FINANCIAL RESULTS
For the quarterly period ended September 30, 2020
(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 Executive Officer

For inquiry:

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

Scheduled date of filing of quarterly securities report:

November 9, 2020

Scheduled date of commencement of dividend payment:

December 4, 2020

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, 2020

September 30, 2019

Change *Change *Net sales

Millions of yen

45,178(14.8)%

53,026

0.7%

Operating income

Millions of yen

3,497(29.4)%

4,952

14.7%

Ordinary income

Millions of yen

3,698(28.7)%

5,190

5.8%

Net income

Millions of yen

2,474(22.5)%

3,191(4.9)%

Comprehensive income

Millions of yen

4,023

51.2%

2,660(34.9)%

Net income per shareYen

104.60-136.24-

Diluted net income per share

Yen

93.09

-

119.83-

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

(2)Financial Condition
September 30, 2020

March 31, 2020

Total assets

Millions of yen

110,658

110,851

Net assets

Millions of yen

71,715

69,121EquityMillions of yen

71,712

69,121

%

64.8

62.4

Equity ratio

12. Dividends
Year ending Mar. 31, 2021(Forecast)Year ending Mar. 31, 2021

Year ended Mar. 31, 2020

－－

32.50

32.50

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

32.50

32.50

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, 2021
Full-year
Change*Net sales

Millions of yen

96,000(9.0)%

Operating income

Millions of yen

8,000(17.5)%

Ordinary income

Millions of yen

8,400(18.6)%

Net income

Millions of yen

5,700(12.4)%

Yen

240.22-Earnings per share

Note: 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, 2020:

26,731,415

shares

As of March 31, 2020:

26,731,415

shares

As of September 30, 2020:

3,277,764

shares

As of March 31, 2020:

3,002,722

sharesSix months ended September 30, 2020

23,655,604

sharesSix months ended September 30, 201923,421,818

shares2) Number of treasury shares at the end of period

3) 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, 2020, severe economic situation continued in Japan, due torestrictions on economic activities by the Novel Coronavirus. The economic outlook remains uncertain,
although the economy is expected to move toward picking up, supported by the resumption of economicactivities.
Under the circumstances, in the last year of the Medium-Term Management Plan “BRIGHT - 2020”, OsakaSoda Group continued to take specific measures based on three basic policies, “Creating new growth engines”,“Establishing a profitable global business”, and “Completing business structural reforms”.
As a result, net sales were ¥45,178 million, a decrease of 14.8% compared to the same period of fiscal 2019.
Operating income was ¥3,497 million, a decrease of 29.4% compared to the same period of fiscal 2019.
Ordinary income was ¥3,698 million, a decrease of 28.7% compared to the same period of fiscal 2019. Net
income attributable to owners of parent was ¥2,474 million, a decrease of 22.5% compared to the same periodof fiscal 2019.
The following is a summary of reporting segments.
Basic Chemical Products
In Chlor-Alkali, net sales decreased due to downturn in domestic demand affected by Novel Coronavirus.
In Epichlorohydrin, net sales decreased due to downturn in demand as a whole, though steady growth inelectronics materials.
As a result, Basic Chemical Products reported net sales of ¥19,925 million, down 19.1% compared to the same
period of fiscal 2019.
Functional Chemical Products
In Diallyl Phthalate Resin, net sales decreased due to decline in demand for commercial ink particularly inJapan, Europe, and the United States.
In Allyl Ethers, net sales increased due to continued volume growth in overseas market despite a downturnin demand in some areas.
In Synthetic Rubber related products, Epichlorohydrin Rubber was affected by a sharp drop in production
volume due to the temporary shutdown of automobile production facilities worldwide. Acrylic Rubber wasadopted by customers particularly in China and Europe.
In Separation Media in Pharmaceutical Industry (Silica Gel for Liquid Chromatography), demand fordiabetes treatment drugs grew in Eastern Europe and India.
In Active Pharmaceutical Ingredients (API) and their Intermediates, net sales expanded due to sales inintermediate for anti-tuberculosis, insomnia treatment intermediate and dementia therapeutics intermediate.
As a result, Functional Chemical Products reported net sales of ¥18,634 million, down 9.6% compared to thesame period of fiscal 2019.
Housing Facilities and Others
Net sales were ¥6,618 million, down 14.8% compared to the same period of fiscal 2019, due to continued
sluggish sales in construction materials.
(2) Financial Condition
AssetsCurrent assets were ¥68,578 million, a decrease of 1.9% since March 31, 2020. The decrease was due
primarily to a decrease of ¥4,073 million in notes and accounts receivable-trade, an increase of ¥2,117 million
in cash and deposits.
Noncurrent assets were ¥42,079 million, an increase of 2.7% since March 31, 2020. The increase was due

4primarily to an increase of ¥2,237 million in investment securities, a decrease of ¥930 million in property, plant,and equipment and a decrease of ¥103 million in goodwill respectively.
As a result, Total assets were ¥110,658 million as of September 30, 2020, a decrease of 0.2% since March31, 2020.
Liabilities
Current liabilities were ¥24,454 million, a decrease of 8.3% since March 31, 2020. The decrease was due
primarily to a decrease of ¥1,799 million in notes and accounts payable-trade and a decrease of ¥595 million
in short term loans payable respectively.
Noncurrent liabilities were ¥14,488 million, a decrease of 3.9% since March 31, 2020. The decrease wasdue primarily to a decrease of ¥1,263 million in bonds with subscription rights to shares, an increase of ¥747
million in deferred tax liabilities.
As a result, Total liabilities were ¥38,942 million as of September 30, 2020, a decrease of 6.7% since March31, 2020.
Net assets
Net assets were ¥71,715 million as of September 30, 2020, an increase of 3.8% since March 31, 2020.
(3) Cash Flows
As of September 30, 2020, cash and cash equivalents were ¥32,015 million, an increase of ¥3,116 million
since March 31, 2020.
Cash flows from operating activities
Net cash provided by operating activities totaled ¥6,638 million, due primarily to ¥3,606 million in income
before income taxes, ¥1,849 million in depreciation, and a decrease of ¥1,122 million in income tax paid.
Cash flows from investing activities
Net cash used in investing activities totaled ¥136 million, due primarily to purchase of ¥491 million forpurchase of property, plant, and equipment.
Cash flows from financing activities
Net cash used in financing activities amounted to ¥3,341 million, due primarily to redemption of ¥1,263 inbonds with subscription rights to shares, payment of ¥771 million in cash dividends, purchase of ¥677 million
in treasury shares, and repayment of ¥595 million in short term loans payable.
(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, 2021” dated on May 11, 2020.

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
OtherTotal 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 31,2020

September 30,2020

15,09925,641
3,096
14,299
6,901
1,368
2,268
1,296
(100)
69,871

17,216
21,567
3,171
14,798
7,409
1,543
2,144
825
(100)
68,578

10,11011,743
21,853

9,498
11,42320,922

681
346
1,027

589
334
924

16,803368
933(6)18,09940,980110,851

19,040310
888(6)20,23342,079110,658

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
Non-controlling interests
Total net assets
Total net assets and liabilities

7

March 31,2020

September 30,
2020

13,159
7,767
1,278
911
3,543
26,66011,359
7,172
1,162
895
3,864
24,45410,000
436
281
3,265
1,085
15,06941,730

8,737
1,183
15
3,252
1,299
14,48838,942

15,87014,387
41,870(6,682)65,446

15,87014,38843,573(7,345)66,4874,177
8
7(518)
3,674
69,121
110,851

5,741
0(18)
(498)
5,224
3
71,715
110,658

CONSOLIDATED STATEMENTS OF INCOME(Millions of yen)
Six Months Ended
September 30,
September 30,
2019
2020
53,02645,17841,58335,483
11,443
9,695

Net sales
Cost of sales
Gross profit
Selling, general, and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity
methodOther
Total non-operating income
Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equity
methodForeign exchange loss
Other
Total non-operating expenses
Ordinary income

6,490
4,952

6,197
3,497

2258
20

7275
-

120402

49333

48-

43
1595
21
164
5,190

63
10132
3,698

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

0178
179-

83
375
251
3713
4,655

92
92
3,606Income taxes - current
Income taxes - deferred
Total income taxes
Net income
Net income attributable to non-controlling interests

1,302
162
1,464
3,191－

1,025
107
1,132
2,474(0)Net income attributable to owners of parent

3,191

2,474

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,
2019
2020
3,191
2,474(551)
18(15)
17(0)

1,563
(8)
(22)
19(3)

(530)
2,660

1,549
4,023

2,660
－

4,023
(0)

CONSOLIDATED STATEMENTS OF CHASH FLOWS(Millions of yen)

Six Months Ended
September 30,
September 30,
2019
2020
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
Loss on valuation of shares of subsidiaries and associates
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
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

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

3,606
1,849
91
(0)
(15)
(266)

(28)

(13)

(261)
48
43
83
2(178)(283)
43
18
92-251
3,328(595)(1,387)375

3,969(562)(1,763)-(20)

15(382)
7,385
273
(54)
(2,141)
5,463

731
7,511
293
(43)
(1,122)
6,638

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)(Millions of yen)

Six Months Ended
September 30,
September 30,
2019
2020
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Proceeds from redemption of securities
Purchase of investment securities
Proceeds from sales and redemption 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
Redemption of bonds
Purchase of treasury shares

Cash dividends paid
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cashequivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

11(1,821)17(3)(10)
299(491)
(51)
500
(8)
-(73)
(1,592)

(85)
(136)

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

(595)
(1,263)
(677)
(771)
(34)
(3,341)(44)

2,940
24,37627,316

3,116
28,89932,015

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, 2019

(Millions of yen)

Basic

Functional

Housing

Consolidated

ChemicalChemicalFacilities

Products

Products

and Others

Total

Adjustments *1

operatingincome *2

Net sales
External sales

24,643

20,6107,772

53,026－53,0261233

401

446(446)－

24,656

20,643

8,173

53,473(446)53,026

2,621

2,702

215

5,539(586)4,952Intersegment sales
or reclassifications
Total
Segment income

Notes 1:

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 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, 2020

(Millions of yen)

Basic

Functional

Housing

Consolidated

ChemicalChemicalFacilities

ProductsProductsand Others

Total

Adjustments *1

operatingincome *2

Net sales
External sales
Intersegment sales
or reclassifications
Total
Segment income

Notes 1:

19,925

18,634

6,618

45,178－45,1781472

155

242(242)－

19,94018,706

6,774

45,420(242)45,178

1,683

2,317

110

4,111(613)

3,497

Adjustments of segment income of ¥(613) 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.

12