November 2, 2017

Summary of the Consolidated Financial Results for the Second Quarterof the Fiscal Year Ending March 31, 2018 (FY3/18)(Six Months Ended September 30, 2017)[Japanese GAAP]
Company name:

Yodogawa Steel Works, Ltd.
Stock exchange listed: Tokyo, 1st Section
Stock code:
5451
URL: http://www.yodoko.co.jp/
Representative:
Takaaki Kawamoto, President and Representative Director
Inquiries:
Yasunori Osumi, Executive Officer, General Manager of IR Department
Tel: +(81)6-6245-1113
Scheduled date of filing of Quarterly Report:
November 10, 2017
Scheduled date of payment of dividend:
December 1, 2017
Preparation of supplementary materials for quarterly financial results:
Yes
Holding of quarterly financial results meeting:Yes (for analysts and institutional investors)(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Second Quarter (April 1, 2017 to September 30, 2017) of FY3/18(1) Consolidated results of operations
Net sales(Percentages represent year-on-year changes)
Profit attributable toOrdinary profit
owners of parent

Operating profit

Millions of yen% Millions of yen% Millions of yen

Six months ended Sep. 30, 201784,826
15.7
6,750
7.9
Six months ended Sep. 30, 2016
73,330 (14.2)
6,254 100.5
Note: Comprehensive income (millions of yen): Six months ended Sep. 30, 2017:
Six months ended Sep. 30, 2016:

4,449
3,232

%

37.7
-

Diluted net income
per share

Net income per share
Six months ended Sep. 30, 2017
Six months ended Sep. 30, 2016

% Millions of yen

7,529
23.6
6,090
68.4
8,228 (-%)
(886) (-%)

Yen

Yen

149.80107.25149.17106.83(2) Consolidated financial position
Total assets

Net assets

Millions of yen

Shareholders’ equity ratio

Millions of yen%

As of Sep. 30, 2017
214,202
166,540
As of Mar. 31, 2017
209,977
161,374
Reference: Shareholders’ equity (millions of yen): As of Sep. 30, 2017:
148,482

69.3
68.2
As of Mar. 31, 2017:

143,241

2. Dividends
1Q-endDividend per share
3Q-end2Q-endYen

Year-end

Total

Yen

Yen

Yen

Yen

Fiscal year ended Mar. 31, 2017
30.00
Fiscal year ending Mar. 31, 2018
35.00
Fiscal year ending Mar. 31, 2018
(Forecast)
Note: Revisions to the most recently announced dividend forecast: None

-

40.00

70.00

-

35.00

70.00

3. Consolidated Forecasts for FY3/18 (April 1, 2017 to March 31, 2018)
Net sales
Millions of yen(Percentages represent year-on-year changes)
Profit attributable to
Net income
Ordinary profit
owners of parent
per share

Operating profit%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

Full year
173,000
12.2
9,600 (27.1)
10,900 (20.8)
6,500
(3.5)
219.00Note: Revisions to the most recently announced consolidated earnings forecast: Yes
For further details, please refer to “1. Qualitative Information on Quarterly Consolidated Financial Performance, (3) Explanationof Consolidated Forecast and Other Forward-looking Statements” on page 4.

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in chang es inscope of consolidation): None
(2) Application of special accounting methods for presenting quarterly consolidated financial statements: None
(3) Changes in accounting policies and accounting-based estimates, and restatements
1) Changes in accounting policies due to revisions in accounting standards, others: None
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting-based estimates: None
4) Restatements: None

(4) Number of outstanding shares (common shares)
1) Number of shares outstanding at the end of the period (including treasury shares)
As of Sep. 30, 2017:35,837,230 shares

As of Mar. 31, 2017:35,837,230 shares

As of Mar. 31, 2017:

6,028,845 shares

Six months ended Sep. 30, 2016:

30,139,193 shares

2) Number of treasury shares at the end of the period
As of Sep. 30, 2017:

6,186,406 shares

3) Average number of shares outstanding during the period
Six months ended Sep. 30, 2017:

29,706,498 shares* The current quarterly financial report is not subject to quarterly review procedures.
* Cautionary statement with respect to forward-looking statements and other special items
Forecasts of future performance in these materials are based on assumptions judged to be valid and information available to t heCompany’s management at the time the materials were prepared. These materials are not promises by the Company regarding
future performance. Actual results may differ significantly from these forecasts for a number of reasons. For a discussion of theassumptions for forecasts, precautions concerning usage and other information, please refer to “1. Qualitative Information on
Quarterly Consolidated Financial Performance, (3) Explanation of Consolidated Forecast and Other Forward-looking
Statements” on page 4.

Yodogawa Steel Works, Ltd. (5451) Consolidated Financial Results for 2Q of FY3/18

Contents of Attachments
1. Qualitative Information on Quarterly Consolidated Financial Performance2(1) Explanation of Results of Operations

2(2) Explanation of Financial Position

3(3) Explanation of Consolidated Forecast and Other Forward-looking Statements

4

2. Quarterly Consolidated Financial Statements and Notes

5(1) Quarterly Consolidated Balance Sheet

5(2) Quarterly Consolidated Statements of Income and Comprehensive Income

7

Quarterly Consolidated Statement of Income
For the Six-month Period

7

Quarterly Consolidated Statement of Comprehensive Income
For the Six-month Period

8(3) Notes to Quarterly Consolidated Financial Statements

9

Going-concern Assumption

9

Significant Changes in Shareholders’ Equity

9

Segment and Other Information

9

1

Yodogawa Steel Works, Ltd. (5451) Consolidated Financial Results for 2Q of FY3/18

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
In the first half of the fiscal year ending March 31, 2018, the gradual recovery of the Japanese economy continued
with the support of a further improvement in corporate earnings and a recovery in consumer spending due to astrong job market.
In the United States, the economy is healthy mainly because of a slow recovery in consumer spending and capital
expenditures as demand for workers remains firm. Economic recoveries are taking place in most European
countries, too. In China, the economy is strong in most areas as companies report a recovery in earnings backed
by the benefits of government economic policies and an improvement in the balance between supply and d emand.
In the steel industry, shipments of ordinary steel products in Japan were higher than one year earlier as production
continued to grow in the automobile, industrial machinery and other key industries.
The global steel market began to weaken in the spring of 2017, starting in China. However, prices of steel
products then began to recover because of very strong demand for steel within China and steps by the Chinese
government to eliminate low-quality steel made from ferrous scrap. Prices are continuing to move up steadily.
The Yodogawa Steel Group’s net sales in the first half increased 11,496 million yen to 84,826 million yen.
Operating profit increased 496 million yen to 6,750 million yen, ordinary profit increased 1,439 million yen to7,529 million yen, and profit attributable to owners of parent increased 1,217 million yen to 4,449 million yen.
The main reasons for the growth in sales were revisions to prices of steel sheet products and an improvement in
the performance of Yodogawa-Shengyu (Hefei) High-Tech Steel Co., Ltd. (YSS), a subsidiary in China.
Results by business segment are as follows.
1) Steel Sheet-related BusinessNet sales totaled 79,147 million yen and operating profit was 6,665 million yen.
Steel Sheet Segment
The volume of steel sold in Japan to specific high-demand customers, mainly for use in exported products,
decreased because of sales activities that placed priority on profitability. Monetary sales in this category
increased due to price increases. Monetary retail sales of steel for general distribution increased as customers
have been accepting most price revisions. The sales volume was higher in non -residential sectors as capital
expenditures increased, but total retail sales volume were unchanged from one year earlier beca use of weakness
in the overall residential market.
In Taiwan, the sales volume of subsidiary Sheng Yu Steel Co., Ltd. (SYSCO) declined because the growth of
Taiwan’s steel market stopped for a short time in the fiscal year’s second quarter. But monetary sa les increased as
prices increased and exports to North America recovered. In China, earnings at YSS improved because of
progress regarding sales. In Thailand, sales volume was lower at subsidiary PCM Processing (Thailand) Ltd.
(PPT) due to price revisions and the higher cost of raw materials caused earnings to decline.
Building Material & Exterior Products Segment
Sales of building materials decreased because of a decline in the sales volume of YODO Fine Panel insulated
siding and the policy of becoming more selective regarding orders for roofing products. But sales of the exterior
products increased. There was growth in sales of storage sheds along with a recovery in consumer spending andstrong sales of garages, warehouses and other large structures. Construction sales increased due to the completionof large projects for the installation of YODO fire-proof panel Grand Wall.
As a result, total sales in the steel sheet-related business were higher than one year earlier.

2

Yodogawa Steel Works, Ltd. (5451) Consolidated Financial Results for 2Q of FY3/18

2) Roll Business
Sales decreased mainly because of a decline in the volume of iron and steel industry roll sales. As a result, net
sales totaled 1,731 million yen and operating profit was 90 million yen.
3) Grating Business
There were sales activities to capture more private-sector orders, but sales in this business were lower because of
decline in public-sector sales. As a result, net sales totaled 1,612 million yen and operating profit was 49 million
yen.
4) Real Estate Business
Sales increased because of the acquisition of a tenant-occupied building and a higher occupancy rate at theproperties in this business. As a result, net sales totaled 512 million yen and operating profit was 349 million yen.
5) Other Businesses
Higher sales in material sales operations raised sales in other businesses. As a result, net sales totaled 1,822
million yen and operating profit was 206 million yen.
(2) Explanation of Financial Position
AssetsCurrent assets increased by 1,712 million yen from the end of the previous fiscal year to 115,900 million yen.
This was attributable mainly to a decrease of 4,903 million yen in cash and deposits and increases of 3,523
million yen in merchandise and finished goods, 1,571 million yen in work in process, and 1,316 million yen insecurities.
Non-current assets increased by 2,512 million yen from the end of the previous fiscal year to 98,302 million yen.
This was mainly attributable to an increase of 3,400 million yen in investment securities and a decrease of 802
million yen in property, plant and equipment.
Total assets increased by 4,224 million yen from the end of the previous fiscal year to 214,202 million yen.
Liabilities
Current liabilities decreased by 278 million yen from the end of the previous fiscal year to 30,170 million yen.
This was attributable mainly to an increase of 779 million yen in notes and accounts payable-trade and decreasesof 669 million yen in short-term loans payable, and 357 million yen in income taxes payable.
Non-current liabilities decreased by 662 million yen from the end of the previous fiscal year to 17,492 million
yen. This was attributable mainly to a decrease of 545 million yen in net defined benefit liability.
Total liabilities decreased by 940 million yen from the end of the previous fiscal year to 47,662 million yen.
Net assets
Net assets increased by 5,165 million yen from the end of the previous fiscal year to 166,540 million yen. This
was attributable mainly to increases of 3,257 million yen in retained earnings and 2,103 million yen in valuationdifference on available-for-sale securities.

3

Yodogawa Steel Works, Ltd. (5451) Consolidated Financial Results for 2Q of FY3/18(3) Explanation of Consolidated Forecast and Other Forward-looking Statements
There are many risk factors involving the global economic outlook. Notable risk factors are uncertainty about thepolicies of the U.S. government, concerns about a possible economic slowdown in China following economic
measures prior to the October Communist Party Congress, and tension involving North Korea. But there are
expectations for more growth in the United States as stock prices remained firm even after the Federal Open
Market Committee announced the asset sales starting in October. In Europe, the slow economic recovery is
expected to continue. As a result, the overall outlook for the global economy is positive.
In Japan, the outlook is for a continuation of a slow economic recovery. Growth is expected to be backed
primarily by increasing exports resulting from the global recovery of capital expenditures and by increasing
internal demand, which is mainly the result of rising consumer spending due to Japan’s i mproving labor market
and of increasing capital expenditures.
The overseas steel market will probably remain healthy for a short time because of increasing output at the key
industries in China and the strength of the U.S. and European economies. In Japan, there are expectations for
growth in steel consumption associated with the recovery in industrial output and the start of many construction
projects for the Tokyo Olympics in 2020. But the Yodogawa Steel Group anticipates pressure on earnings fromthe increase in operating expenses, particularly the cost of hot-rolled steel sheets and zinc, the main raw materials
for the Group’s steel products.
The Yodogawa Steel Group will continue to focus on increasing sales of strategic products, such as YODO Hyper
GL Color and YODO Hyper Panel Series, in accordance with the medium-term management plan.
The forecast for consolidated performance in the current fiscal year is based on this outlook for the economy andsteel market.

4

Yodogawa Steel Works, Ltd. (5451) Consolidated Financial Results for 2Q of FY3/18

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheet(Millions of yen)
Second quarter of FY3/18(as of Sep. 30, 2017)

FY3/17(as of Mar. 31, 2017)
AssetsCurrent assets
Cash and deposits

40,76135,858Notes and accounts receivable-trade41,103

41,636

Securities
Merchandise and finished goods

-

1,316

11,404

14,927Work in process

3,457

5,028

Raw materials and supplies

10,646

11,719

Other

6,928

5,526

Allowance for doubtful accounts

(113)

(114)

114,188

115,900

50,88850,086

10

8

Other

1,416

1,427

Total intangible assets

1,427

1,436

42,57445,975899

803

Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Goodwill

Investments and other assets
Investment securities
Other
Allowance for doubtful accounts(0)-

Total investments and other assets

43,474

46,77995,78998,302

209,977

214,20217,80018,579669-

Income taxes payable

2,770

2,413

Provision for bonuses

1,052

1,399

Total non-current assets
Total assets
Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable

Other

8,155

7,777

Total current liabilities

30,44830,170Non-current liabilities
Provision for directors’ retirement benefits
Net defined benefit liability

94

66

8,278

7,733

Other

9,781

9,692

Total non-current liabilities

18,154

17,492

48,60347,662

Total liabilities

5

Yodogawa Steel Works, Ltd. (5451) Consolidated Financial Results for 2Q of FY3/18(Millions of yen)
Second quarter of FY3/18(as of Sep. 30, 2017)

FY3/17(as of Mar. 31, 2017)
Net assets
Shareholders’ equity
Capital stock

23,22023,220Capital surplus

20,38820,384Retained earnings

95,664

98,922

Treasury shares(12,199)(12,681)

Total shareholders’ equity

127,074

129,847

14,477

16,580-(0)Revaluation reserve for land

1,626

1,626

Foreign currency translation adjustment

1,580

1,744

Remeasurements of defined benefit plans(1,516)(1,315)

Total accumulated other comprehensive income

16,167

18,635

205

226

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

Subscription rights to shares
Non-controlling interests

17,927

17,830Total net assets

161,374

166,540

209,977

214,202

Total liabilities and net assets

6

Yodogawa Steel Works, Ltd. (5451) Consolidated Financial Results for 2Q of FY3/18(2) Quarterly Consolidated Statements of Income and Comprehensive Income(Quarterly Consolidated Statement of Income)(For the Six-month Period)First six months of FY3/17(Apr. 1, 2016 to Sep. 30, 2016)(Millions of yen)First six months of FY3/18(Apr. 1, 2017 to Sep. 30, 2017)

Net sales

73,33084,826

Cost of sales

58,63868,974Gross profit

14,69215,851

Selling, general and administrative expenses

8,437

9,101

Operating profit

6,254

6,750

Interest income

140

182

Dividend income
Share of profit of entities accounted for using
equity method
Other

345

430

119

180

244

271

Total non-operating income

848

1,064

Interest expenses

96

58

Foreign exchange losses
Cost for employees transferred temporarily tooverseas subsidiaries
Loss on disposal of PCB

480

72

128

123

231

-

Other

75

31

1,013

285

6,090

7,529

0

1

Gain on sales of investment securities-

23

Total extraordinary income

0

24

41

69

134

86

23

3

-

33

Non-operating income

Non-operating expenses

Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of non-current assets

Extraordinary losses
Loss on sales and retirement of non-current
assetsLoss on valuation of investment securities
Impairment loss
Loss on liquidation of subsidiaries andassociates

199

192

Profit before income taxes

Total extraordinary losses

5,891

7,362

Income taxes-current

1,742

2,006

Income taxes-deferred

63

(134)

Total income taxes

1,806

1,871

Profit

4,085

5,490

852

1,040

3,232

4,449

Profit attributable to non-controlling interests
Profit attributable to owners of parent

7

Yodogawa Steel Works, Ltd. (5451) Consolidated Financial Results for 2Q of FY3/18(Quarterly Consolidated Statement of Comprehensive Income)(For the Six-month Period)First six months of FY3/17(Apr. 1, 2016 to Sep. 30, 2016)
ProfitOther comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges(Millions of yen)First six months of FY3/18(Apr. 1, 2017 to Sep. 30, 2017)

4,085

5,490

47

2,070

(0)

(0)

Foreign currency translation adjustment
Remeasurements of defined benefit plans, netof taxShare of other comprehensive income ofentities accounted for using equity method(5,356)

406

340

230

(2)

30

Total other comprehensive income(4,971)

2,738

(886)

8,228

508

6,918

(1,394)

1,310

Comprehensive income
Comprehensive income attributable to:Comprehensive income attributable to ownersof parent
Comprehensive income attributable tonon-controlling interests

8Yodogawa Steel Works, Ltd. (5451) Consolidated Financial Results for 2Q of FY3/18(3) Notes to Quarterly Consolidated Financial Statements
Going-concern Assumption
Not applicable.
Significant Changes in Shareholders’ Equity
Not applicable.
Segment and Other Information
Segment information
I. First six months of FY3/17 (Apr. 1, 2016 to Sep. 30, 2016)
Information related to net sales and profit/loss for each reportable segment
Reportable segments
Steel
Roll
Sheet-related
Business
Business

Grating
BusinessReal
EstateBusiness

Total

Others(Note 1)

Total

(Millions of yen)Amounts
shown on the
Adjustment consolidated(Note 2)statement ofincome(Note 3)

Net sales
External sales
Inter-segment
sales and transfers
Total

67,684

1,857

1,665

436

71,644

1,685

73,330-73,330

-

-

-

221

221

1,294

1,515

(1,515)-67,684

1,857

1,665

658

71,8652,980

74,846(1,515)73,330

Segment profit
6,138
200
54
325
6,718
203
6,922
(668)
6,254
Notes: 1. Others represent businesses which are not included in any of the reportable segments and mainl y consist oftransportation, warehouse, golf course, machinery plant, electric power (sale of solar power) and other businesses.
2. The adjustment to segment profit includes unallocated expenses of (669) million yen and an elimination forinter-segment transactions of 1 million yen.
3. Segment profit is adjusted to be consistent with the operating profit on the quarterly consolidated statement ofincome.

II. First six months of FY3/18 (Apr. 1, 2017 to Sep. 30, 2017)
Information related to net sales and profit/loss for each reportable segment
Reportable segments
Steel
Roll
Sheet-related
Business
Business

Grating
BusinessReal
EstateBusiness

Total

Others(Note 1)

Total

(Millions of yen)Amounts
shown on the
Adjustment consolidated(Note 2)statement ofincome(Note 3)

Net sales
External sales
Inter-segment
sales and transfers
Total

79,147

1,731

1,612

512

83,004

1,822

84,826-84,826

-

-

-

221

221

1,293

1,515

(1,515)-

79,147

1,731

1,612

733

83,225

3,116

86,342(1,515)84,826

Segment profit
6,665
90
49
349
7,155
206
7,362
(611)
6,750
Notes: 1. Others represent businesses which are not included in any of the reportable segments and mainly consist oftransportation, warehouse, golf course, machinery plant, electric power (sale of solar power) and other businesses.
2. The adjustment to segment profit includes unallocated expenses of (613) million yen and an elimination forinter-segment transactions of 1 million yen.
3. Segment profit is adjusted to be consistent with the operating profit on the quarterly consolidated statement ofincome.
This summary report is solely a translation of “Kessan Tanshin” (in Japanese, including the attachments), which has been
prepared in accordance with accounting principles and practices generally accepte d in Japan, for the convenience ofreaders who prefer an English translation.

9