February 2, 2018

Summary of the Consolidated Financial Results for the Third Quarterof the Fiscal Year Ending March 31, 2018 (FY3/18)(Nine Months Ended December 31, 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:
February 9, 2018
Scheduled date of payment of dividend:
Preparation of supplementary materials for quarterly financial results:
None
Holding of quarterly financial results meeting:None(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Third Quarter (April 1, 2017 to December 31, 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% Millions of yen

Nine months ended Dec. 31, 2017
129,690
16.0
8,795
(9.4)
10,057(0.5)
Nine months ended Dec. 31, 2016
111,840
(9.8)
9,705
99.1
10,10970.4
Note: Comprehensive income (millions of yen): Nine months ended Dec. 31, 2017: 12,377 (up 204.4%)
Nine months ended Dec. 31, 2016: 4,065 (-%)

%

26.3
-

Diluted net income
per share

Net income per share
Nine months ended Dec. 31, 2017
Nine months ended Dec. 31, 2016

6,052
4,792

Yen

Yen

203.87159.33203.02158.70(2) Consolidated financial position
Total assets

Net assets

Millions of yen

Shareholders’ equity ratio

Millions of yen%

As of Dec. 31, 2017
216,741
169,640
As of Mar. 31, 2017
209,977
161,374
Reference: Shareholders’ equity (millions of yen): As of Dec. 31, 2017:
151,318

69.8
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: None
For further details, please refer to “1. Qualitative Information on Quarterly Consolidated Financial Performa nce, (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 changes 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 Dec. 31, 2017:35,837,230 shares

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

As of Mar. 31, 2017:

6,028,845 shares

Nine months ended Dec. 31, 2016:

30,081,001 shares

2) Number of treasury shares at the end of the period
As of Dec. 31, 2017:

6,187,067 shares

3) Average number of shares outstanding during the period
Nine months ended Dec. 31, 2017:

29,689,665 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 3Q 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 Nine-month Period

7

Quarterly Consolidated Statement of Comprehensive Income
For the Nine-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 3Q of FY3/18

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
In the first nine months of the fiscal year ending March 31, 2018, the gradual recovery of the Japanese economy
continued as consumer spending remained strong because of the support of a further improvement in corporate
earnings, labor market and personal income.
In the United States, the Federal Open Market Committee implemented another interest rate hike in December
2017 as consumer spending remains strong and capital expenditures recover slowly. Economic recoveries aretaking place in most European countries, too. In China, there were concerns that measures to stop real estate
speculation and tighten financial control may cause economic growth to slow. However, the economic growth rate
decreased only slightly due to strong exports and consumer spending.
In the steel industry, shipments of ordinary steel products in Japan were strong 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 nine months increased 17,850 million yen to 129,690 million
yen. Operating profit decreased 909 million yen to 8,795 million yen, ordinary profit decreased 51 million yen to
10,057 million yen, and profit attributable to owners of parent increased 1,260 million yen to 6,052 million yen.
The main reasons for the growth in sales were revisions to prices of steel sheet products and progress regarding
sales of Yodogawa-Shengyu (Hefei) High-Tech Steel Co., Ltd. (YSS), a subsidiary in China. The main reason forthe decline in earnings was lower earnings at Sheng Yu Steel Co., Ltd. (SYSCO), a subsidiary in Taiwan, and at
subsidiary PCM Processing (Thailand) Ltd. (PPT).
Results by business segment are as follows.
1) Steel Sheet-related BusinessNet sales totaled 120,848 million yen and operating profit was 8,684 million yen.
Steel Sheet Segment
In Japan, the volume of steel sold to specific high-demand customers decreased for use in exported products but
the sales volume increased for both galvanized and pre-painted sheets used for the manufacture of products soldin Japan. Higher volume along with price revisions resulted in an increase in total sales to high -demandcustomers. Monetary retail sales of steel for general distribution increased as customers have been accepting mostprice revisions. The sales volume was higher in non-residential sectors as capital expenditures increased, but total
retail sales volume decreased because of weakness in the overall residential market.
In Taiwan, SYSCO’s exports to North America declined in the third quarter in response to increasing concerns
about the possibility of U.S. steel import restrictions. But the total sales volume was about the same as one year
earlier because of orders from buyers in Europe and other locations. However, SYSCO’s earnings decreased. One
reason was that the growth of Taiwan’s steel market stopped for a short time. In China, earnings at YSS improved
along with growth in sales volume. In Thailand, sales volume was lower at subsidiary 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 as intense price competition brought down the sales volume in all productcategories except YODO fire-proof panel Grand Wall (Grand Wall). There was an improvement in sales ofstorage sheds along with a recovery in consumer spending and strong sales of garages, warehouses and otherlarge structures. Construction sales increased due to the completion of large projects for the installation of GrandWall.
As a result, total sales in the steel sheet-related business were higher than one year earlier.
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Yodogawa Steel Works, Ltd. (5451) Consolidated Financial Results for 3Q 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 2,645 million yen and operating profit was 110 million yen.
3) Grating Business
There were sales activities to capture more private-sector orders, but sales in this business were lower because ofsluggish public-sector sales. As a result, net sales totaled 2,593 million yen and operating profit was 84 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 787 million yen and operating profit was 545 million yen.
5) Other Businesses
Higher sales in material sales operations raised sales in other businesses. As a result, net sales totaled 2,816
million yen and operating profit was 256 million yen.
(2) Explanation of Financial Position
AssetsCurrent assets increased by 833 million yen from the end of the previous fiscal year to 115,022 million yen. This
was attributable mainly to a decrease of 10,988 million yen in cash and deposits and increases of 4,588 million
yen in merchandise and finished goods, 2,962 million yen in notes and accounts receivable-trade, and 2,527
million yen in securities.
Non-current assets increased by 5,930 million yen from the end of the previous fiscal year to 101,719 million yen.
This was mainly attributable to an increase of 6,864 million yen in investment securities and a decrease of 835
million yen in property, plant and equipment.
Total assets increased by 6,763 million yen from the end of the previous fiscal year to 216,741 million yen.
Liabilities
Current liabilities decreased by 1,615 million yen from the end of the previous fiscal year to 28,833 million yen.
This was attributable mainly to a decrease of 1,793 million yen in income taxes payable and an increase of 1,838
million yen in notes and accounts payable-trade and a decrease of 669 million yen in short-term loans payable.
Non-current liabilities increased by 113 million yen from the end of the previous fiscal year to 18,268 million yen.
This was attributable mainly to an increase of 1,360 million yen in long-term deferred tax liabilities and adecrease of 718 million yen in long-term lease obligations, both of which are included in other under non-current
liabilities.
Total liabilities decreased by 1,502 million yen from the end of the previous fiscal year to 47,101 million yen.
Net assets
Net assets increased by 8,266 million yen from the end of the previous fiscal year to 169,640 million yen. This
was attributable mainly to increases of 3,869 million yen in valuation difference on available-for-sale securitiesand 3,824 million yen in retained earnings.

3

Yodogawa Steel Works, Ltd. (5451) Consolidated Financial Results for 3Q of FY3/18(3) Explanation of Consolidated Forecast and Other Forward-looking Statements
The outlook for the global economy is generally positive despite a number of risk factors. Significant risk factors
include concerns about a possibility of an economic slowdown in China, tension involving North Korea anduncertainty about the outcome of negotiations for Britain’s departure from the European Union.
In Japan, the outlook is for a continuation of a slow economic recovery. Consumer spending is increasing as
consumer sentiment improves along with rising stock prices. In addition, the growth in capital expenditures is
expected to continue. Japan’s economy is also benefiting from higher exports backed by a global recovery incapital expenditures.
The steel market will probably remain healthy for a short time. The increase in steel prices is gaining momentum
in response to a reduction in China’s production capacity and tighter environmental regulations as well as to thestrength of the global economy. In Japan, there are expectations for growth in steel consumption. The main
reasons are the start of many construction projects for the Tokyo Olympics in 2020 and strong demand for steel
used in machinery as private-sector capital expenditures increase. But the Yodogawa Steel Group anticipatespressure on earnings due to the outlook for a further increase in the cost of hot -rolled steel sheets and zinc, theprimary raw materials for the Group’s steel products.
In this challenging business climate, group companies will continue to work on revising prices. There will also be
more activities to establish a sound foundation for YSS, which is currently the Yodogawa Steel Group’s highest
priority. One step is working jointly with Shanghai Yodoko Trading Co., Ltd., which was established in
November 2017 to strengthen activities for the sale of YSS surface-treated steel sheets to manufacturers of home
appliances and electronics.
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 3Q of FY3/18

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheet(Millions of yen)
Third quarter of FY3/18(as of Dec. 31, 2017)

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

40,761

29,773

Notes and accounts receivable-trade41,10344,066

Securities
Merchandise and finished goods

-

2,527

11,404

15,992Work in process

3,457

5,147

Raw materials and supplies

10,646

12,292

Other

6,928

5,337

Allowance for doubtful accounts

(113)

(114)

114,188

115,02250,88850,052

10

8

Other

1,416

1,475

Total intangible assets

1,427

1,483

42,57449,439899

743

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

43,47450,183

95,789101,719

209,977

216,741

17,80019,638

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

669-

Income taxes payable

2,770

977

Provision for bonuses

1,052

842

Other

8,155

7,374

Total current liabilities

30,44828,8339470

Non-current liabilities
Provision for directors’ retirement benefits
Net defined benefit liability

8,278

7,799

Other

9,781

10,397

Total non-current liabilities

18,154

18,26848,603

47,101

Total liabilities

5

Yodogawa Steel Works, Ltd. (5451) Consolidated Financial Results for 3Q of FY3/18(Millions of yen)
Third quarter of FY3/18(as of Dec. 31, 2017)

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

23,22023,220Capital surplus

20,38820,396

Retained earnings

95,664

99,489Treasury shares(12,199)(12,683)

Total shareholders’ equity

127,074

130,423

14,477

18,346-(0)

Revaluation reserve for land

1,626

1,624

Foreign currency translation adjustment

1,580

2,157

Remeasurements of defined benefit plans(1,516)(1,233)

Total accumulated other comprehensive income

16,167

20,895

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

17,92718,095

Total net assets

161,374

169,640

209,977

216,741

Total liabilities and net assets

6

Yodogawa Steel Works, Ltd. (5451) Consolidated Financial Results for 3Q of FY3/18(2) Quarterly Consolidated Statements of Income and Comprehensive Income(Quarterly Consolidated Statement of Income)(For the Nine-month Period)First nine months of FY3/17(Apr. 1, 2016 to Dec. 31, 2016)(Millions of yen)First nine months of FY3/18(Apr. 1, 2017 to Dec. 31, 2017)

Net sales

111,840

129,690

Cost of sales

89,447

107,390

Gross profit

22,392

22,299Selling, general and administrative expenses

12,687

13,504

Operating profit

9,705

8,795

Interest income

221

306

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

609

746

201

280

Non-operating income

298

443

1,330

1,777

Interest expenses

129

84

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

241

69

212

199

Total non-operating income
Non-operating expenses

Arbitration settlement cost

232

-

-

120

Other

109

40

Total non-operating expenses

925

514

10,10910,0570

1

Gain on sales of investment securities-

23

Total extraordinary income

0

24

64

86

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

Extraordinary losses
Loss on sales and retirement of non-current
assetsImpairment loss

740

3

Loss on valuation of investment securities
Loss on liquidation of subsidiaries andassociates

134

86

-

33

Total extraordinary losses

939

209

Profit before income taxes

9,170

9,872

Income taxes-current

2,775

2,445

Income taxes-deferred

364

227

Total income taxes

3,140

2,673

Profit

6,030

7,199

Profit attributable to non-controlling interests

1,237

1,146

Profit attributable to owners of parent

4,792

6,052

7

Yodogawa Steel Works, Ltd. (5451) Consolidated Financial Results for 3Q of FY3/18(Quarterly Consolidated Statement of Comprehensive Income)(For the Nine-month Period)First nine months of FY3/17(Apr. 1, 2016 to Dec. 31, 2016)(Millions of yen)First nine months of FY3/18(Apr. 1, 2017 to Dec. 31, 2017)

Profit

6,030

7,199

Other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges

2,873

3,824

-

(0)

Foreign currency translation adjustment
Remeasurements of defined benefit plans, netof taxShare of other comprehensive income ofentities accounted for using equity method(5,295)

985

431

307

26

60

Total other comprehensive income(1,964)

5,178

4,065

12,377

4,957

10,782

(891)

1,595

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 3Q 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 nine months of FY3/17 (Apr. 1, 2016 to Dec. 31, 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

103,313

2,663

2,664

666

109,307

2,532

111,840-

111,840

-

-

-

332

332

1,940

2,272

(2,272)-

103,313

2,663

2,664

998

109,640

4,472

114,113(2,272)

111,840

Segment profit
9,514
255
117
494
10,382269
10,651(946)
9,705
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 (950) million yen and an elimination forinter-segment transactions of 4 million yen.
3. Segment profit is adjusted to be consistent with the operating profit on the quarterly consolidated statement ofincome.

II. First nine months of FY3/18 (Apr. 1, 2017 to Dec. 31, 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

120,848

2,645

2,593

787

126,874

-

-

-

331

331

120,848

2,645

2,593

1,118

127,206

2,816 129,690-

129,690

2,323(2,323)-

4,808 132,014(2,323)

129,690

1,992

Segment profit
8,684
110
84
545
9,425
256
9,681
(886)
8,795
Notes: 1. Others represent businesses which are not included in any of the reportable segments and mainly c onsist 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 (888) million yen and an elimination forinter-segment transactions of 2 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 accepted in Japan, for the convenience ofreaders who prefer an English translation.

9