Consolidated Quarterly Financial Results
for the Three Months Ended June 30, 2024 [Japanese GAAP]
August 9, 2024
Company:
Stock Exchange Listing: Tokyo
Hokuetsu Corporation
Stock Code:3865
URL: https://www.hokuetsucorp.com
Representative: Sekio Kishimoto, President & CEOContact:
Tomonari Maruyama, General Manager, Corporate Management Department TEL: +81-3-3245-4500
Scheduled date of commencement of dividend payments:–Supplementary documents for financial results:
None
Results briefing:
None(Figures rounded down to the nearest million yen)

1. Consolidated Business Results for the Three Months Ended June 30, 2024
(April 1, 2024 through June 30, 2024)(1) Consolidated results of operations
Net sales
Three months ended
June 30, 2024
Three months ended
June 30, 2023
(Note) Comprehensive income:(% change from the previous corresponding period)
Profit attributable toOperating profit
Ordinary profit
owners of parent
Million yen%
Million yen%
Million yen%

Million yen%

74,242

(1.4)

3,055

(57.4)

3,939(55.2)

2,363(62.6)

75,273

14.3

7,168

96.0

8,787

48.2

6,323

71.4

Three months ended June 30, 2024:
6,641 million yen
Three months ended June 30, 2023:
9,225 million yen
Diluted earnings
Basic earnings per shareper share
Yen
Yen

Three months ended
June 30, 2024
Three months ended
June 30, 2023

14.05

14.04

37.62

37.58

(-28.0%)(53.7%)(2) Consolidated financial position
Total assets
Net assets
Equity ratio
Million yen
Million yen%
As of June 30, 2024
423,896257,318
60.5
As of March 31, 2024
415,692
252,464
60.6(Reference) Equity:
As of June 30, 2024:
256,508 million yen
As of March 31, 2024:
251,709 million yen(Note) The figures pertaining to the fiscal year ended March 31, 2024 have been revised to retroactively reflect changes in the accounting
policy implemented in the first quarter of the fiscal year ending March 31, 2025.

2. Dividends
End of 1Q
Yen––

Annual dividend per share
End of 2Q
End of 3Q
Yen
Yen
9.00
–

Year ended March 31, 2024
Year ending March 31, 2025
Year ending March 31, 2025
11.00
(forecast)(Note) Revisions to dividend forecasts published most recently: None–

Year-end

Total
Yen
9.00

Yen
18.00

11.00

22.00

3. Forecast of Consolidated Financial Results for the Year Ending March 31, 2025
(April 1, 2024 through March 31, 2025)(% change from the previous corresponding period)
Net sales

Operating profit

Ordinary profit

Basicearnings pershare%Yen(36.2)
35.68
66.9
83.26

Profit attributable toowners of parent

Million yen% Million yen% Million yen% Million yen
2Q (Accumulated)
150,000(0.1)
8,000(33.9)
8,000(41.9)
6,000
Full year
310,000
4.4
17,00011.3
19,0007.0
14,000(Note) 1. Revisions to business forecasts published most recently: None(Note) 2. The year-on-year changes have been calculated based on the comparison with the figures for the previous fiscal year, whichhave been revised to retroactively reflect changes in the accounting policy.
-1-* Notes(1) Significant changes in the scope of consolidation during the period under review.: None
(2) Application of accounting procedures specific to preparation of the consolidated quarterly financial statements: None
(3) Changes in accounting policies, accounting estimates and restatement of prior period financial statements(i) Changes in accounting policies due to amendment to accounting standards: Yes(ii) Changes in accounting policies other than (i): None(iii) Changes in accounting estimates: None(iv) Restatement of prior period financial statements: None
(4) Shares outstanding (common stock)(i) Number of shares outstanding at the end of the period (treasury stock included):
As of June 30, 2024
188,053,114 shares
As of March 31, 2024(ii) Number of treasury stock at the end of the period:
As of June 30, 2024
19,902,426 shares
As of March 31, 2024(iii) Average number of shares during period:
Three months ended June 30, 2024 168,150,884 shares
Three months ended June 30, 2023

188,053,114 shares
19,902,054 shares
168,085,841 shares* Review of the accompanying quarterly consolidated financial statements by a certified public accountant or anauditing corporation.: Yes (optional)* Explanation regarding appropriate use of business forecasts and other special instructions(Caution regarding forward-looking statements)
The forward-looking statements such as forecasts of financial results contained in this material are based on information available to theCompany at the time of the publication of this document and certain assumptions that the Company considers to be reasonable, and may differ
materially from the actual results due to various factors. Refer to “1. Qualitative Information on Consolidated Operating Results for the First
Quarter; (3) Qualitative Information Concerning Consolidated Earnings Forecasts” on page 3 of the accompanying materials for matters related
to results forecasts.
* This document is an excerpt translation of the original in Japanese and is for reference purposes only. In case of any discrepancy between thisdocument and the original in Japanese, the latter shall take precedence.

-2-1. Qualitative Information on Consolidated Operating Results for the First Quarter(1) Qualitative Information Concerning Consolidated Operating Results
During the first three months of the current fiscal year, net sales, operating profit, ordinary profit and profit attributable to owners of parent
came to 74,242 million yen (down 1.4% year on year), 3,055 million yen (down 57.4% year on year), 3,939 million yen (down 55.2% year
on year) and 2,363 million yen (down 62.6% year on year), respectively, reflecting a fall in the sales prices of pulp at an overseas subsidiary.
The performance of major segments is as follows:(i) Pulp and paper businessIn the pulp and paper business, both sales and profit decreased, reflecting a fall in the sales prices of pulp at the overseas subsidiary
As a result, the results of the pulp and paper business were as follows.
Net sales

68,089 million yen(down 1.9 % year on year)

Operating profit

2,642 million yen (down 60.5 % year on year)(ii) Packaging/Paper processing businessIn the packaging/paper processing business, profit decreased due to the effects of soaring transportation costs and the weak yen, despite
an increase in sales attributable mainly to an increase in orders received for the paper container and packaging material businesses.
As a result, the results of the packaging/paper processing business were as follows.
Net sales
Operating profit

4,020 million yen(up 4.1% year on year)

43 million yen (down 50.4% year on year)(iii) Other businesses
In other businesses, including the wood material business, construction business, logistics business and used paper wholesale business,sales increased due to a rise in external orders, especially in the wood material business. However, profit declined chiefly due to cost
increases in the construction business.
As a result, the results of other businesses were as follows.
Net sales
Operating profit

2,131 million yen(up 6.9 % year on year)

233 million yen (down 15.3 % year on year)(2) Qualitative Information Concerning Consolidated Financial Position
Total assets increased 8,203 million yen from the end of the previous fiscal year, to 423,896 million yen. This chiefly reflected increases
of 2,395 million yen in cash and deposits, 2,582 million yen in raw materials and supplies, and 1,186 million yen in property, plant andequipment.
Total liabilities rose 3,349 million yen from the end of the previous fiscal year, to 166,577 million yen. This was primarily due to anincrease in interest-bearing debt of 5,045 million yen, which more than offset a decrease in allowances and provisions of 1,443 million
yen.
Net assets rose 4,853 million yen from the end of the previous fiscal year, to 257,318 million yen. This mainly reflected increases inretained earnings of 571 million yen due to profit attributable to owners of parent and foreign currency translation adjustment of 3,925
million yen.

(3) Qualitative Information Concerning Consolidated Earnings Forecasts
No change has been made to the full-year financial forecasts announced on May 15, 2024.

-3-2. Quarterly Consolidated Financial Statements and Key Notes(1) Quarterly Consolidated Balance Sheet(Million yen)
(Assets)
Current assets
Cash and deposits
Notes and accounts receivable - trade, and contract assetsElectronically recorded monetary claims - operating
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
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, vehicles, tools, furniture and fixtures
Accumulated depreciation
Machinery, vehicles, tools, furniture and fixtures, net

As of March 31, 2024

As of June 30, 2024

22,14076,984
8,844
29,881
3,252
34,0804,709(15)24,53578,0399,43529,056
2,786
36,6635,266(27)

179,879

185,755

86,500(57,231)

87,433(57,728)

29,26829,705452,874(391,813)

455,981(394,265)

61,061

61,716

Other, net

26,181

26,275

Total property, plant and equipment

116,511

117,697

Intangible assets
Investments and other assets
Investment securities
Shares of subsidiaries and associates
Other
Allowance for doubtful accounts

2,540

2,696

31,92665,99921,841(3,006)32,36366,56022,004(3,181)

Total investments and other assets

116,761

117,746

235,813238,140

415,692

423,896

Total non-current assets
Total assets-4-(Million yen)
(Liabilities)
Current liabilities
Notes and accounts payable - trade
Electronically recorded obligations - operating
Short-term loans
Commercial papers
Income taxes payable
Provision
Other

As of March 31, 2024

As of June 30, 2024

22,9007,578
25,889
7,000
845
3,710
14,273

21,890
8,743
21,912
17,000805
2,233
13,428

Total current liabilities

82,19786,014Non-current liabilities
Bonds payable
Long-term loans
Provision
Retirement benefit liability
Asset retirement obligations
Other

25,00044,718
1,765
3,755
2,226
3,564

25,00043,632
1,798
3,760
2,229
4,142

Total non-current liabilities

81,03080,563

Total liabilities

163,228

166,577

Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares

42,02044,953
140,480(9,593)42,02044,953141,052(9,594)

Total shareholders’ equity

217,861

218,432

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans

11,152(21)16,3906,326

11,72911
20,316
6,018

Total accumulated other comprehensive income

33,84738,076

78
676

83
726

252,464

257,318

415,692

423,896

Share acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets-5-(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income
Quarterly Consolidated Statements of Income(First three-month period)(Million yen)
For the three months ended
June 30, 2023

For the three months endedJune 30, 2024

Net sales
Cost of sales

75,27357,73574,242
59,206Gross profit

17,53815,036

Selling, general and administrative expenses

10,37011,981

Operating profit

7,168

3,055

Non-operating income
Interest income
Dividends income
Share of profit of entities accounted for using equity method
Foreign exchange gains
Other
Total non-operating income

129399
958
217
221
1,926

205
474–
488
245
1,413

Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equity method
Other
Total non-operating expenses

185–
122307177261
90
529

8,787

3,939

2748

1
173–

58

174

357

354

Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Insurance claim income
Total extraordinary income
Extraordinary losses
Loss on sales and retirement of non-current assets
Total extraordinary losses

357

354

Profit before income taxes

8,488

3,759

Income taxes - current
Income taxes - deferred

1,625
515

953
404

Total income taxes

2,140

1,358

Profit

6,347

2,400

2437

6,323

2,363

Profit attributable to non-controlling interests
Profit attributable to owners of parent-6-Quarterly Consolidated Statements of Comprehensive Income(First three-month period)(Million yen)
For the three months ended
June 30, 2023
ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities accounted forusing equity method
Total other comprehensive income

For the three months ended
June 30, 2024

6,347

2,400

1,419(8)
558
(72)

308
21
2,701(299)

981

1,507

2,877

4,240

Comprehensive income

9,225

6,641

Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

9,195
29

6,592
49-7-(3) Notes to Quarterly Consolidated Financial Statements(Notes to Going Concern Assumption)
Not applicable.
(Notes on Any Significant Change in the Value of Shareholders’ Equity)
Not applicable.
(Changes in Accounting Policies)(Application of the Accounting Standard for Current Income Taxes)
The Company has applied Accounting Standard for Current Income Taxes (Accounting Standards Board of Japan (ASBJ) Statement No.
27, October 28, 2022; hereinafter referred to as the "Revised Accounting Standard 2022") effective from beginning of the first quarter ofthe current fiscal year.
Accordingly, the amendment to categories in which current income taxes should be recorded (taxes on other comprehensive income)complies with the transitional treatment prescribed in the proviso of paragraph 20-3 of the Revised Accounting Standard 2022, and thetransitional treatment prescribed in the proviso of paragraph 65-2 (2) of the “Implementation Guidance on Tax Effect Accounting (ASBJGuidance No. 28, October 28, 2022; hereinafter called the “Revised Implementation Guidance 2022”).” When the new accounting policy
is retroactively applied before the beginning of an applicable fiscal year, the cumulative amount of impact in the first applicable fiscal year
is added to or subtracted from retained earnings at the beginning of the applicable fiscal year and the corresponding amount is added to orsubtracted from the accumulated other comprehensive income. As a result, in the first quarter of the current consolidated fiscal year, thebeginning balance of retained earnings increased by one million yen, while the beginning balance of valuation difference on available-forsale securities decreased by the same amount.
For the amendment related to the revised accounting treatment for consolidated financial statements when gains or losses on sale of sharesin subsidiaries resulting from transactions between consolidated companies were deferred for tax purposes, the Revised Implementation
Guidance 2022 has been adopted from the beginning of the first quarter of the current fiscal year. This change in accounting policies isapplied retrospectively, and quarterly consolidated financial statements and consolidated financial statements for the previous year are
after retrospective application. As result, the balances of retained earnings and shares of subsidiaries and associates in the previous
consolidated fiscal year increased 63 million yen respectively compared to the levels before the retrospective application.

-8-