(Reference Translation)
February 8, 2019

Osaka Soda Co., Ltd.
CONSOLIDATED FINANCIAL RESULTS
For the quarterly period ended December 31, 2018
(Prepared under Japan GAAP, unaudited)

Company name:

Osaka Soda Co., Ltd.

Stock Exchange Listing:Tokyo

Securities code:

4046

URL:

http://www.osaka-soda.co.jp

Representative:

Kenshi Terada, Representative Director, President & Chief Operating Officer

For inquiry:

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

Filing date for quarterly report:

February 12, 2019

Date for commencement of dividends payment:－Supplementary materials for the quarterly financial results:

None

Quarterly financial results briefings:

None

1. Consolidated Financial Results(Amounts are rounded down to the nearest million yen)

(1) Results of Operations
Nine Months Ended
December 31, 2018

December 31, 2017

Millions of yen

Change *Millions of yen

Change *Net sales

81,8509.9%74,487

7.8%

Operating income

7,650

36.0%

5,623

8.1%

Ordinary income

8,255

34.4%

6,143

16.6%

Net income attributable to owners of parent

5,618

40.9%

3,987

15.0%

Comprehensive income

3,141-52.2%6,574

47.2%

Note:

Percent changes for nine months are year-on-year comparisons.

Net income per share(Yen)

Diluted net income per share
Note:

(Yen)

246.35

187.61210.07150.07OSAKA SODA CO., LTD. (the “Company”) has completed common shares consolidation at the rate of 5 to 1, effective
October 1, 2017. As a result, quarterly net income per share and quarterly diluted net income per share are calculated
assuming that the common shares consolidation was executed at the beginning of the previous fiscal year.

(2)Financial Condition
December 31, 2018

March 31, 2018

Millions of yen

Ratio

Millions of yen

Ratio

Total assets

110,860－

115,020－

Net assets

63,332－

60,953－Equity *63,332－

60,953

－

－

57.1%

－

53.0%

Equity ratio

Note: Equity = “Total net assets” minus “Subscription rights to shares”

12. Dividends
Year ending Mar. 31, 2019Year ending Mar. 31, 2019Year ended Mar. 31, 2018－－

30.00 yen*

5.50 yen－－(Forecast)End of first quarterEnd of second quarterEnd of third quarterEnd of fourth quarter

30.0 yen－

30.00 yen

Full year

60.0 yen－－

Note:1.

Revisions of dividend forecast from the latest announcement: None

2.

The Company has completed common shares consolidation at the rate of 5 to 1, effective October 1, 2017.
The amount of full year dividend for the fiscal year ended March 31, 2018 is displayed as “－” because aproper computation is deemed to be impossible. Considering common shares consolidation, the amount offull year dividend for the fiscal year ended March 31, 2018 should be ¥57.50 and the forecasted amount ofannual dividend for the fiscal year ending March 31, 2019 will be $60.00, that is, an increased dividend by¥2.50.

3. Earnings Forecast for the fiscal year ending March 31, 2019
Full-year
Millions of yen

Change*107,000

5.7%

Operating income

8,500

16.1%

Ordinary income

9,200

22.9%

Net income attributable to owners of parent

6,100

27.7%

Net sales

Note: Percent changes are year-on-year comparisons.

Earnings per share(Yen)

266.86* Notes(1) Changes in significant subsidiaries during the period (Changes in specified subsidiaries resulting in thechange in scope of consolidation): None
(2) Application of accounting methods used specifically for the preparation of quarterly consolidated financialstatements: None
(3) Changes in accounting policies, accounting estimates and restatements of revisions
1) Changes in accounting policies due to revisions of accounting standards, etc.: None
2) Changes in accounting policies other than 1: None
3) Changes in accounting estimates: None
4) Restatement of revisions: None2

(4) Number of outstanding shares (common stock)1) Number of shares outstanding at the end of the period (including treasury shares)
As of December 31, 2018:26,040,808

shares

As of March 31, 2018:25,052,432

shares2) Number of treasury shares at the end of the period
As of December 31, 2018:

3,001,338

shares

As of March 31, 2018:

2,465,710

shares3) Average number of shares outstanding in each period
Nine months ended December 31, 2018:

22,806,918

sharesNine months ended December 31, 2017:21,253,052

sharesNote:

The Company has completed common shares consolidation at the rate of 5 to 1, effective October 1,
2017. As a result, the number of outstanding shares (common stock), the number of treasury shares atthe end of period, and the average number of shares outstanding are calculated assuming that thecommon shares consolidation was executed at the beginning of the previous fiscal year.

* Quarterly Review ProceduresThis quarterly financial results are not subject to the quarterly review procedures in accordance with
the Financial Instruments and Exchange Act. The quarterly review procedures of consolidated financial
statements has not been completed at the time of disclosure.

*Financial 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.
This translation is subject to change without notice. Osaka Soda Co., Ltd. and/or its group companies
shall individually oy jointly accept no responsibility 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 nine months ended December 31, 2018, Japan’s economy has continued its moderate recovery
trend, with improvements in the employment situation and corporate profits, though the economic outlook
remains uncertain due to concerns about the effects on corporate earnings caused by China’s sluggish
economy and trade tensions between the United States and China.
Under the circumstances, Osaka Soda Group has been shifting to profit oriented management in line with thethree basic policies “Creating new growth engines”, “Establishing a profitable global business”, and“Completing business structural reforms” set forth in the mid-term management plan “BRIGHT - 2020”. Basic
Chemical Products segment revised the sales price in response to fluctuating cost of raw materials and fuels,
and reduced cost through installation of the improved electrolyzer which is developed in-house. Functional
Chemical Products segment focused on “Creating new growth engines”, continuing to expand market shareof major products, such as Synthetic Rubber, Synthetic Resin, and Allyl Ethers, expanding column instrumentbusiness, entering into the field of Highly Potent Active Pharmaceutical Ingredient, and launching “Radper”
which is non phthalate type allyl resin following Acrylic Rubber launched last year. Osaka Soda Group began
new efforts to improve productivity as a part of business structure reforms, collaborating R&D department withproduction engineering department to take advantage of our fundamental technology and IoT & AI.
As a result, net sales were ¥81,850 million, an increase of 9.9% compared to the same period of fiscal 2017.
Operating income was ¥7,650 million, an increase of 36.0% compared to the same period of fiscal 2017.
Ordinary income was ¥8,255 million, an increase of 34.4% compared to the same period of fiscal 2017. Net
income attributable to owners of parent was ¥5,618 million, an increase of 40.9% compared to the same periodof fiscal 2017. Net sales and all three levels of profit posted record high.
Basic Chemical Products
In Chlor-Alkali, net sales increased due to continued steady domestic demand as well as a price increase inCaustic Soda. In Epichlorohydrin, net sales increased due to continued steady sales to domestic market.
As a result, Basic Chemical Products reported net sales of ¥36,893 million, up 12.3% compared to the same
period of fiscal 2017.
Functional Chemical Products
In Allyl Ether, net sales increased due to volume growth in domestic market, Europe, and the United States,driven by an increase in demand for Silane Coupling Agents. In Diallyl Phthalates Resins, net sales increased
due to continued steady increase in domestic and China market for UV curable inks. In Epichlorohydrin Rubber
and its related business, net sales increased due to continued steady increase in Asia market led by improved
product adoption for automobile. In Acrylic Rubber, net sales increased due to volume growth driven by
improved new product adoption.
Separation Media in Pharmaceutical Industry (Silica Gel for Liquid Chromatography) remained favorable,driven by the sales to China for use in biopharmaceutical purification and the sales to China and Korea incolumn/analytical instrument business.
Active Pharmaceutical Ingredients (API) and their Intermediates business remained robust, led by new contract
manufacturing from pharmaceutical companies, contract manufacturing of veterinary drugs, and imported
sales in generic API. In addition, the business started to develop generic API utilizing the equipment for HighlyPotent Active Pharmaceutical Ingredient.
As a result, Functional Chemical Products reported net sales of ¥32,278 million, up 10.0% compared to thesame period of fiscal 2017.
Housing Facilities and Others
Net sales were ¥12,678 million, an increase of 3.3% compared to the same period of fiscal 2017.

4

(2) Financial Condition
AssetsCurrent assets were ¥66,340 million, an increase of 0.4% since March 31, 2018.
Noncurrent assets were ¥44,519 million, a decrease of 9.1% since March 31, 2018. The decrease was due
primarily to a decrease of ¥3,026 million in investment securities.
As a result, Total assets were ¥110,860 million as of December 31, 2018, a decrease of 3.6% since March31, 2018.
Liabilities
Current liabilities were ¥31,583 million, a decrease of 4.9% since March 31, 2018. The decrease was due
primarily to a decrease of ¥1,113 million in short term loans payable and a decrease of ¥800 million in current
portion of long term loans payable respectively.
Noncurrent liabilities were ¥15,944 million, a decrease of 23.6% since March 31, 2018. The decrease wasdue primarily to an increase of ¥3,824 million in bonds with subscription rights to shares.
As a result, Total liabilities were ¥47,528 million as of December 31, 2018, a decrease of 12.1% since March31, 2018.
Net assets
Net assets were ¥63,332 million as of December 31, 2018, an increase of 3.9% since March 31, 2018.
(3) Earnings Forecast
There are no revisions to the earnings forecast from the previous forecast announced in the "Consolidated
financial results for the quarterly period ended September 30, 2018, unaudited" on November 11, 2018.

5

5.

CONSOLIDATED FINANCIAL STATEMENTSCONSOLIDATED BALANCE SHEETS(Millions of yen)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Electrically recorded monetary claimsShort 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
Machinery, equipment, and vehicles - 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 31,2018

December 31,
2018

13,49327,7103,845
10,499
6,155
1,608
1,938
811
(2)
66,0608,260
29,951
4,838
11,499
7,359
2,007
1,800
626
(2)
66,34010,716
12,87823,595

10,69011,692
22,383

975
623
1,599

847
513
1,361

22,684305781(6)23,764
48,959115,020

19,658392
730(5)20,77544,519110,860

CONSOLIDATED BALANCE SHEETS (Continued)(Millions of yen)

Liabilities
Current liabilities
Notes and accounts payable- trade
Short term loans payable
Current portion of long 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 liabilities
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 adjustment
Re-measurements of defined benefit plans
Total accumulated other comprehensive income
Total net assets
Total net assets and liabilities

7

March 31,2018

December 31,
2018

15,522
8,880
800
1,444
792
－
5,767
33,206

16,173
7,767
－
1,579
428
1,577
4,058
31,583

13,824
2,192
611
3,004
1,226
20,85954,066

10,000
1,186
632
2,948
1,117
15,94447,528

13,97012,48731,517(5,037)52,93815,093
13,61035,767(6,678)57,7938,332(40)
41(317)
8,015
60,953
115,020

5,802(0)30(293)
5,538
63,332
110,860

CONSOLIDATED STATEMENTS OF INCOME(Millions of yen)

Nine Months Ended
December 31,December 31,
2017
2018
74,487
81,85059,95864,145
14,52817,704

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 method

Foreign exchange income
OtherTotal non-operating income
Non-operating expenses
Interest expensesBond issuance cost
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of noncurrent assets
Total extraordinary income
Extraordinary loss
Loss on retirement of noncurrent assets
Total extraordinary loss
Income before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of parent

88,905
5,623

10,053
7,650

8354
277
46687

19389
29
234
87760

98
32
35
167
6,143

79
76
155
8,255

106
106

139
139

448448
5,801

288
288
8,106

1,411
402
1,813
3,987
3,987

2,492
(4)
2,487
5,618
5,618

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

Nine Months Ended
December 31,
December 31,
2017
2018
3,987
5,618
2,528
19
6
33－(2,528)
39(11)
24(0)

2,587
6,574

(2,476)
3,141

6,574
－

3,141
－

for using equity method

Total
Comprehensive income
Comprehensive income attributable to:
Owners of parent
Non-controlling interests

96. Notes to the Consolidated Financial Statements(1) Going concern assumption: None
(2) Significant changes in the amount of shareholders’ equity: None
(3) Additional Information
Adoption of “Partial Amendments to Accounting Standard for Tax Effect Accounting”“Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No.28,February 16, 2018) is adopted from the first quarter of this fiscal year. Accordingly, deferred tax
assets are presented under investments and other assets, and deferred tax liabilities are presented
under noncurrent liabilities.
(4) Segment Information
Nine months ended December 31, 2017

(Millions of yen)
Net sales

Basic Chemical Products
Functional Chemical Products
Housing Facilities and Others
Subtotal
Adjustments *1
TotalNotes 1:

Externalsales
32,86529,34912,271
74,487

Intersegment sales
or reclassifications
713
849
869
(869)
－－
74,487

Total
32,87329,362
13,12075,356(869)
74,487

Segment
income *2
1,8644,403
77
6,344(721)
5,623

Adjustments of segment income of ¥(721) 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 administrativedepartments.

Notes 2:

Segment Income is reconciled with consolidated operating income.

Nine months ended December 31, 2018

Basic Chemical Products
Functional Chemical Products
Housing Facilities and Others
Subtotal
Adjustments *1
TotalNotes 1:(Millions of yen)
Net salesIntersegment sales
or reclassifications
1750413481(481)External
sales
36,89332,27812,67881,850－81,850－Total
36,91132,32913,091
82,331(481)
81,850

Segment
income *2
4,257
4,065
239
8,561(911)
7,650

Adjustments of segment income of ¥(911) 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 administrativedepartments.

Notes 2:

Segment Income is reconciled with consolidated operating income.

10