Consolidated Quarterly Financial Results
for the Three Months Ended June 30, 2021 [Japanese GAAP]
August 10, 2021
Company:
Stock Exchange Listing: Tokyo
Hokuetsu Corporation
Stock Code:3865
URL: http://www.hokuetsucorp.com
Representative: Sekio Kishimoto, President & CEO
Contact:
Tomonari Maruyama, General Manager, Corporate Management Department TEL: +81-3-3245-4500
Scheduled date of filing quarterly report:
August 11, 2021
Scheduled date of commencement of dividend payments:–
Supplementary documents for quarterly results:
None
Quarterly results briefing:
None(Figures rounded down to the nearest million yen)

1. Consolidated Business Results for the Three Months Ended June 30, 2021
(April 1, 2021 through June 30, 2021)(1) Consolidated results of operations
Net sales
Three months ended
June 30, 2021
Three months ended
June 30, 2020
(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%

62,286

21.1

4,715

–

6,963

693.6

7,499

201.1

51,438(28.1)(1,277)–877(87.2)

2,490(49.1)

Three months ended June 30, 2021: 9,808 million yen (530.9%)
Three months ended June 30, 2020: 1,554 million yen (-62.1%)
Diluted earnings
Basic earnings per shareper share
Yen
Yen

Three months ended
June 30, 2021
Three months ended
June 30, 2020

44.65

44.60

14.83

13.99

(2) Consolidated financial position

As of June 30, 2021
As of March 31, 2021
(Reference) Equity:

Total assets
Net assets
Equity ratio
Million yen
Million yen%
357,223
203,93656.9
363,075
195,419
53.6
As of June 30, 2021:
203,207 million yen
As of March 31, 2021:
194,702 million yen

2. Dividends
End of 1Q
Yen

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

Fiscal year ended–
7.00
March 31, 2021
Fiscal year ending–
March 31, 2022
Fiscal year ending
7.00
March 31, 2022 (forecast)(Note) Revisions to dividend forecasts published most recently: None

Year-end

Total
Yen

Yen

–

7.00

14.00

–

7.00

14.00

3. Forecast of Consolidated Financial Results for the Year Ending March 31, 2022
(April 1, 2021 through March 31, 2022)(% change from the previous corresponding period)
Net sales

Operating profit

Million yen% Million yen%
2Q (Accumulated)
125,000
21.0
7,500
–
Full year
255,000
14.6
15,000781.4(Note) Revisions to business forecasts published most recently: None
-1-

Ordinary profit
Million yen
10,00020,000

%
–
105.0

Basic
earnings per
share
%
Yen
491.5
65.51
19.9
101.24

Profit attributable toowners of parent
Million yen
11,00017,000Notes(1) Changes in significant subsidiaries during the three months ended June 30, 2021 (changes in specified subsidiaries accompanying changes
in the scope of consolidation): 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 (treasury stock included):
As of June 30, 2021
188,053,114 shares(ii) Number of treasury stock:
As of June 30, 2021
20,067,866 shares(iii) Average number of shares during period:
Three months ended June 30, 2021 167,956,529 shares

As of March 31, 2021

188,053,114 shares

As of March 31, 2021

20,131,789 shares

Three months ended June 30, 2020

167,912,371 shares* Consolidated Quarterly Financial Results are exempted from quarterly review performed by a certified public
accountant or an audit corporation.
* 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 ofany discrepancy between this document 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
Demand declined significantly across the industry in the previous fiscal year under the effects of COVID-19. However, signs of a recovery
appeared in the first quarter of the current year. Sales volumes increased for paper and white paperboard in particular. As a result, net sales
for the first quarter of the current year amounted to 62,286 million yen (up 21.1% year on year). Operating profit came to 4,715 million
yen (compared to an operating loss of 1,277 million yen), ordinary profit totaled 6,963 million yen (up 693.6% year on year), and profit
attributable to owners of parent was 7,499 million yen (up 201.1% year on year).
The Company began applying the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29 issued on March 31, 2020) andrelated implementation guidance at the beginning of the current first quarter. The application of the Standard affected its financial
conditions and operating results. More information is provided in (3) Notes to Quarterly Consolidated Financial Statements (Changes in
Accounting Policies) under 2. Quarterly Consolidated Financial Statements and Key Notes.

(2) Qualitative Information Concerning Consolidated Financial Position
Total assets decreased 5,851 million yen from the end of the previous fiscal year, to 357,223 million yen. Significant factors included a
decrease in cash and deposits of 13,688 million yen, which more than offset increases in merchandise and finished goods of 1,372 million
yen and raw materials and supplies of 4,336 million yen.
Total liabilities decreased 14,369 million yen from the end of the previous year, to 153,286 million yen. This was primarily due to adecrease in interest-bearing debt of 15,378 million yen.
Net assets rose 8,517 million yen from the end of the previous fiscal year, to 203,936 million yen. This mainly reflected increases inretained earnings of 6,200 million yen due to profit attributable to owners of parent and foreign currency translation adjustment of 2,938
million yen.

(3) Qualitative Information Concerning Consolidated Earnings Forecasts
No change has been made to the full-year financial forecasts announced on May 14, 2021.

-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
Notes and accounts receivable - trade, and contract assets
Electronically 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, 2021

As of June 30, 2021

29,84649,653–
5,701
22,374
2,378
22,7127,355(3)16,157–50,347
5,833
23,7472,052
27,0497,561(3)140,020

132,745

85,263(53,994)

84,106(53,094)

31,26831,012

438,380(374,249)

438,459(373,912)

64,13064,546

Other, net

31,04931,603

Total property, plant and equipment

126,448

127,162

Intangible assets
Investments and other assets
Investment securities
Other
Allowance for doubtful accounts

2,668

2,581

86,8299,528(2,420)87,7409,408(2,414)

Total investments and other assets

93,937

94,734

223,055
363,075

224,478
357,223

Total non-current assets
Total assets-4-

(Million yen)
(Liabilities)
Current liabilities
Notes and accounts payable - trade
Electronically recorded obligations - operating
Short-term loans
Current portion of bonds payable
Income taxes payable
Provision
Other

As of March 31, 2021

As of June 30, 2021

17,571
5,898
22,92820,000720
3,375
14,522

18,421
6,990
20,536
10,000767
2,084
14,819Total current liabilities

85,016

73,618Non-current liabilities
Bonds payable
Long-term loans
Provision
Retirement benefit liability
Asset retirement obligations
Other

10,00059,142
1,096
6,940
2,256
3,202

10,00056,043
1,169
6,238
2,250
3,965

Total non-current liabilities

82,63979,667

Total liabilities

167,656

153,286

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

42,02045,341
112,891(9,702)42,02045,344
119,091(9,671)

190,550

196,786

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

4,343
(18)
(949)
775

3,663
1
1,989
766

Total accumulated other comprehensive income

4,151

6,420

102
614

75
654

195,419

203,936

363,075

357,223

Total shareholders’ equity

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, 2020

For the three months
ended June 30, 2021

Net sales
Cost of sales

51,43843,75762,28647,743Gross profit

7,680

14,542

Selling, general and administrative expenses

8,957

9,826

Operating profit (loss)(1,277)

4,715

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

12
471
1,462
695
2,642

5
404
1,630
603
2,643

Non-operating expenses
Interest expenses
Foreign exchange losses
Leave allowance
Other
Total non-operating expenses

113
–
151
222
487

110
140
1
142
394

Ordinary profit

877

6,963

Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Insurance claim income
Gain on reversal of retirement benefit obligations
Total extraordinary income

5
100
12
–
118

2,805
0
31
77
2,914

Extraordinary losses
Loss on sales and retirement of non-current assets
Loss on tax purpose reduction entry of non-current assets
Loss on sales of investment securities
Loss on valuation of investment securities

343
12
3
1,111

255
31
–
–

Total extraordinary losses

1,471

286

Profit (loss) before income taxes

(474)

9,591

Income taxes - current
Income taxes - deferred320(3,303)

1,111
967

Total income taxes(2,983)

2,078

Profit

2,508

7,512

17

13

2,490

7,499

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)

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, 2020

For the three months
ended June 30, 2021

2,508

7,512

1,164
3
(2,443)
49

(446)
22
2,965
0

271

(246)

(953)

2,295

Comprehensive income

1,554

9,808

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

1,548
5

9,769
39

-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 Accounting Standard for Revenue Recognition, etc.)
The Company began applying the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29 issued on March 31, 2020,
hereinafter the “Revenue Recognition Standard”) and related implementation guidance at the beginning of the current first quarter.
Accordingly, the Company recognizes the amount expected to be received in exchange for promised goods or services as revenues atpoints where control over such goods and services moves to customers.
Previously, the Company had recognized the gross amount as revenues with regard to certain revenues from transactions. With theapplication of the Revenue Recognition Standard, the Company adopted the method of recognizing the net amount as revenues fromtransactions judged to be made as an agent based on the assessment of the roles of the Company in the provision of goods to customers.
The Company had previously presented a portion of compensation paid to customers as selling, general and administrative expenses.
With the application of the Revenue Recognition Standard, the Company adopted the presentation method of transaction prices with thecompensation portion deducted.
The Company applies the Revenue Recognition Standard in accordance with transitional treatment set forth in the proviso in Paragraph
84 of the Revenue Recognition Standard. The Company began applying the new accounting policies to the balance of retained earnings
at the beginning of the current first quarter, adding the amount of cumulative effect of retrospective application to the beginning balanceof the current first quarter or subtracting such amount from the same balance. However, adopting the method stipulated in Paragraph 86of the Revenue Recognition Accounting Standard, the Company does not apply the new accounting policies retroactively to contracts
prior to the beginning of the current first quarter wherein almost all revenues are recognized in accordance with the previous treatment.
Further, applying the method prescribed in Subparagraph (1), Paragraph 86 of the Revenue Recognition Accounting Standard, theCompany performs account processing for contract changes made prior to the beginning of the current first quarter based on contract
terms after the reflection of all contract changes, adding the amount of the cumulative effects of such changes to retained earnings at the
beginning of the current first quarter or subtracting the amount from the same retained earnings.
As a result, the changes stated above produced an immaterial impact on profits and losses in the current first quarter. They also had animmaterial impact on the balance of retained earnings at the beginning of the current first quarter.
The Company decided to present notes and accounts receivable - trade, which had been stated under current assets in the consolidatedbalance sheet for the previous fiscal year, by including them in notes and accounts receivable - trade, and contract assets from the current
first quarter because it began applying the Revenue Recognition Accounting Standard and related implementation guidance. The
Company did not revise its results for the previous fiscal year using a new presentation method in accordance with transitional treatment
stipulated in Paragraph 89-2 of the same Accounting Standard.
(Application of Accounting Standard for Fair Value Measurement, etc.)
The Company began applying the Accounting Standard for Fair Value Measurement (ASBJ Statement No. 30 issued on July 4, 2019,
hereinafter the “Fair Value Measurement Standard”) and related implementation guidance at the beginning of the current first quarter. In
accordance with the transitional treatment set forth in Section 19 of the Fair Value Measurement Standard and Section 44-2 of the
Accounting Standard for Financial Instruments (ASBJ Statement No. 10 issued on July 4, 2019), the Company applies new accounting
policies prescribed in the Fair Value Measurement Standard and related implementation guidance prospectively. Their application
produces no impact on quarterly consolidated financial statements.

-8-