(Reference Translation)
Nov 6, 2018OSAKA SODA CO., LTD.
CONSOLIDATED FINANCIAL RESULTS
For the quarterly period ended September 30, 2018
(Prepared under Japan GAAP, unaudited)

Company name:OSAKA SODA CO., LTD.

Stock Exchange Listing:

Securities code:

4046

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

Tokyo

Representative:

Kenshi Terada, Representative Director, President & Chief Operating Officer

For inquiry:

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

Scheduled date of filing of quarterly securities report:

November 7, 2018

Scheduled date of commencement of dividend payment:

December 5, 2018

Supplementary materials prepared for the financial results:

Yes

Quarterly financial results briefings:

Yes (for institutional investors and investment analysts)

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

(1)Results of Operations
Six Months Ended
September 30, 2018

September 30, 2017

Change *Change *
4.5%
6.2%
46.5%
41.4%
251.8%-Net sales

Millions of yen

52,6749.8%

47,989Operating income

Millions of yen

4,316

25.0%

3,451

Ordinary income

Millions of yen

4,907

28.8%

3,809

Net income

Millions of yen

3,355

34.5%

2,494

Comprehensive income

Millions of yen

4,089(1.3)%

4,145

Net income per shareYen

147.77-118.00

Diluted net income per share

Yen

125.19

-

95.42

Note:
1.

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

2.

The Company implemented the Share Consolidation on the basis that every five (5) issued Existing Shares be
consolidated into one (1) Consolidated Shares on October 1, 2017. As a result, net income per share and diluted
net income per share are calculated assuming that the Share Consolidation was executed at the beginning of theprevious fiscal year.

(2)Financial Condition
September 30, 2018

March 31, 2018

Total assets

Millions of yen

114,920

115,020

Net assets

Millions of yen

64,95860,953EquityMillions of yen

64,95860,953

%

56.5

53.0

Equity ratio

12. Dividends
Year ending Mar. 31, 2019

(Forecast)Year ending Mar. 31, 2019Year ended Mar. 31, 2018

－

－

30.00

5.50

End of first quarterEnd of second quarterEnd of third quarter－－End of fourth quarter

30.00

30.00

Full year

60.00

－

Note:
The Company implemented the Share Consolidation on the basis that every five (5) issued Existing Shares be
consolidated into one (1) Consolidated Shares on October 1, 2017. For reference, considering the Share
Consolidation, the amount of annual dividend for fiscal year ended March 31, 2018 is to be ¥57.50. As a result, theamount of annual dividends for fiscal year ended March 31, 2019 will be ¥60.00, an increase of ¥2.50 substantially.

3. Earnings Forecast for the fiscal year ending March 31, 2019
Full-year
Change*Net sales

Millions of yen

107,000

5.7%

Operating income

Millions of yen

8,500

16.1%

Ordinary income

Millions of yen

9,200

22.9%

Net income

Millions of yen

6,100

27.7%

Yen

266.86-

Earnings per share

Note: Percent changes for six months are year-on-year comparisons.

* Notes(1)

Changes in significant subsidiaries during the current quarterly period(Changes in specified subsidiaries resulting in the change in scope of consolidation):

(2)

(3)

(4)

None

Application of accounting methods used specifically for the preparation of quarterly
consolidated financial statements:

None

Changes in accounting policies, accounting estimates and restatements of revisions

None1) Changes in accounting policies due to revisions of accounting standards, etc.:

None2) Changes in accounting policies other than 1):

None3) Changes in accounting estimates:

None4) Restatement of revisions:

None

Number of outstanding shares (common stock)1) Number of shares outstanding at the end of the period (including treasury shares)
As of September 30, 2018:

26,035,085

shares

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

shares

As of September 30, 2018:

3,001,168

shares

As of March 31, 2018:

2,465,710

shares2) Number of treasury shares at the end of period23) Average number of shares outstanding in each period
Six months ended September 30, 2018

22,708,098

sharesSix months ended September 30, 201721,139,395

sharesNote:
The Company implemented the Share Consolidation on the basis that every five (5) issued Existing Shares be
consolidated into one (1) Consolidated Shares on October 1, 2017. As a result, average number of shares outstanding
are calculated assuming that the Share Consolidation was executed at the beginning of the previous fiscal year.

*Status of quarterly review procedure:This quarterly financial results are not subject to the quarterly review procedure in accordance with the
Financial Instruments and Exchange Act. The quarterly review procedure of consolidated financial
statements has not been completed at the time of disclosure.

*Appropriate use of financial forecasts, other special 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
future results.

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.

34. Qualitative Information(1)Results of Operations
During the six months ended September 30, 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 sluggish business activities affected by heavy rain and earthquake disaster, pressure
on corporate profits caused by higher raw material & fuel prices and trade issues on global economy.
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
The business achieved sales price revision in response to rising cost of raw materials and fuels. Cost down
has been ongoing like that the improved electrolyzer, which is developed in-house, was introduced.
Functional Chemical Products
The market share of major products, such as Synthetic Rubber, Synthetic Resin, and Allyl Ethers, continued
to expand for establishing a profitable global business. In addition, new growth engines were creating thanks
to business expansion of Column Instruments, entry into the field of High Pharmacological Active
Pharmaceutical, Acrylic Rubber launched in 2017, and “Radper” which is non phthalate type allyl resin,launched in April 2018. New Business Promotion Division has established to accelerate the launch of new
products by integrating the function such as research of new themes, planning, management, scale-up, andmarket development in July 2018. Also, we have started to work on the improvement of productivity throughintroduction of Internet of Things and Artificial Intelligence as business structural reforms.
As a result, net sales were ¥52,674 million, an increase of 9.8% compared to the same period of fiscal 2017.
Operating income was ¥4,316 million, an increase of 25.0% compared to the same period of fiscal 2017.
Ordinary income was ¥4,907 million, an increase of 28.8% compared to the same period of fiscal 2017. Net
income attributable to owners of parent was ¥3,355 million, an increase of 34.5% compared to the same periodof fiscal 2017. Net sales and all three levels of profit posted record high.
The following is a summary of reporting segments.
Basic Chemical Products
In Chlor-Alkali, net sales increased due to continued steady demand as well as the sale price revision in
caustic soda.
In Epichlorohydrin, net sales increased due to tight supply-demand balance in domestic and overseas aswell as the sales price revision in response to rising cost of raw materials and fuels.
As a result, Basic Chemical Products reported net sales of ¥24,314 million, up 13.7% compared to the same
period of fiscal 2017.
Functional Chemical Products
In Allyl Ethers, net sales increased due to continued solid volume growth in domestic and export sales forsilane coupling agent.
In Diallyl Phthalate Resin, net sales increased due to growth in domestic sales of UV Inks, though slowdown
in export sales.
In Epichlorohydrin Rubber, domestic sales for automobile parts maintained solid growth. Acrylic Rubber
was adopted for automotive parts in domestic and overseas market.
In Separation Media in Pharmaceutical Industry (Silica Gel for Liquid Chromatography), sales to India forbiopharmaceutical purification continued favorable growth. Colum Chromatography and Analytical Instruments

4maintained favorable export sales to China for Colum Chromatography and Korea for Analytical Instruments
respectively.
In Active Pharmaceutical Ingredients (API) and their Intermediates, net sales were increased due tocontinued steady sales in veterinary API to domestic market, manufacturing contract ordered frompharmaceutical company, and imported sales in generic API. In addition, we started to manufacturing contract
utilizing for equipment responding to high pharmacology activity.
In Electrodes, net sales were increased due to growing overseas demand in copper foil for electrodes
applying for electrical parts and batteries.
As a result, Functional Chemical Products reported net sales of ¥21,092 million, up 8.5% compared to thesame period of fiscal 2017.
Housing Facilities and Others
Net sales were ¥7,267 million, down 1.5% compared to the same period of fiscal 2017.
(2) Financial Condition
AssetsCurrent assets were ¥65,991 million, a decrease of 0.1% since March 31, 2018.
Noncurrent assets were ¥48,928 million, a decrease of 0.1% since March 31, 2018.
As a result, Total assets were ¥114,920 million as of September 30, 2018, a decrease of 0.1% since March
31, 2018.
Liabilities
Current liabilities were ¥32,842 million, a decrease of 1.1% 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.
Noncurrent liabilities were ¥17,118million, a decrease of 17.9% since March 31, 2018. The decrease wasdue primarily to a decrease of ¥3,824 million in bonds with subscription rights to shares.
As a result, Total liabilities were ¥49,961 million as of September 30, 2018, a decrease of 7.6% since March
31, 2018.
Net assets
Net assets were ¥64,958 million as of September 30, 2018, an increase of 6.6% since March 31, 2018.
(3) Cash Flows
As of September 30, 2018, cash and cash equivalents were ¥22,034 million, a decrease of ¥1,959 million
compared with those as of March 31, 2018.
Cash flows from operating activities
Net cash provided by operating activities totaled ¥4,657 million, due primarily to ¥4,835 million in income
before income taxes and ¥1,778 million in depreciation, an increase of ¥1,326 million in income tax paid.
Cash flows from investing activities
Net cash used in investing activities totaled ¥2,521 million, due primarily to purchase of ¥2,465 million forpurchase of property, plant, and equipment.
Cash flows from financing activities
Net cash used in financing activities amounted to ¥4,280 million, due primarily to repayments of ¥1,113
million in short term debt repayment, payments of ¥1,659 million in treasury shares, and repayments of ¥800
million in long term debt.

5

(4) Annual Earnings Forecasts
The annual earnings forecast was revised from the previous forecast announced in the “Consolidated financial
results for the year ended March 31, 2019” dated on May 8, 2018, due to continued favorable growth in Basic
Chemical Products.
Annual earnings forecast revision for the fiscal ended March 31, 2019
Previous

Revised

Forecast

Forecast(A)(B)(Reference)(B)-(A)

ChangeMar 31, 2018(%)

Net sales

Millions of yen

105,000

107,000

2,000

1.9%

101,231

Operating income

Millions of yen

8,000

8,500

500

6.3%

7,318

Ordinary income

Millions of yen

8,200

9,200

1,000

12.2%

7,485

Net income

Millions of yen

5,400

6,100

700

13.0%

4,778

Yen

239.07266.86--223.24

Earnings per share
Note:

The Company implemented the Share Consolidation on the basis that every five (5) issued Existing Shares be
consolidated into one (1) Consolidated Shares on October 1, 2017. As a result, net income per share is calculated
assuming that the Share Consolidation was executed at the beginning of the previous fiscal year.

6

5.

CONSOLIDATED FINANCIAL STATEMENTSCONSOLIDATED BALANCE SHEETS(Millions of yen)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Electrically recorded monetary claims
Short 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
Property, plant, and equipment – Net
Other – Net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Deferred tax liability
Other
Less: Allowance for doubtful accounts
Total investment and other assets
Total noncurrent assets
Total assets

7

March 31,2018

September 30,
2018

13,49327,7103,845
10,499
6,155
1,608
1,938
811
(2)
66,06011,53429,444
3,023
10,499
7,017
1,943
1,653
876
(2)
65,991

10,716
12,87823,595

11,087
11,67322,761

975
623
1,599

890
552
1,443

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

23,673306750(6)24,72448,928114,920

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 liability
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 adjustments
Re-measurements of defined benefit plans
Total accumulated other comprehensive income
Total net assets
Total net assets and liabilities

8

March 31,2018

September 30,
2018

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

16,642
7,767
－
1,797
856
1,590
4,189
32,842

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

10,000
2,346
608
2,969
1,193
17,11849,961

13,97012,48731,517(5,037)52,93815,087
13,60434,195(6,678)56,209

8,332
(40)
41
(317)
8,015
60,953
115,020

9,005
28
16
(301)
8,749
64,958114,920

CONSOLIDATED STATEMENTS OF INCOME(Millions of yen)

Six Months Ended
September 30,
September 30,
2017
2018
47,98952,67438,682
41,644
9,306
11,029Net 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
methodForeign exchange gain
Other
Total non-operating income
Non-operating expenses
Interest expenses
Bond issuance cost
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of investment securities
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

9

5,855
3,451

6,713
3,451

7
212
－

7
244
18

220
45
485

359
52
683

68
32
25
127
3,809

54
－
37
92
4,907

106
106

137
137

295
295
3,620

209
209
4,835

1,027
98
1,125
2,494

1,670
(190)
1,479
3,355

－

－

2,494

3,355

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 for using equity method
Total
Comprehensive income
Comprehensive income attributable to:
Owners of parent
Minority interests

10

Six Months Ended
September 30,
September 30,
2017
2018
2,494
3,355
1,611
19
(3)
22
－

673
68
(24)
16
(0)

1,650
4,145

734
4,089

4,145
－

4,089
－

CONSOLIDATED STATEMENTS OF CHASH FLOWS(Millions of yen)

Six Months Ended
September 30,
September 30,
2017
2018
Cash flows from operating activities
Income (loss) before income taxes
Depreciation
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for directors' retirement
benefits
Increase (decrease) in allowance for retirement benefits for
employees
Interest and dividend income
Interest expenses
Foreign exchange losses (gains)
Loss on retirement of non-current assets
Loss (gain) on sales of non-current assets
Bond issuance cost
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable-trade
Share of loss (profit) of entities accounted for using equity
methodOther, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities

11

3,620
1,542
77
(1)
44
5

4,835
1,778
85
0
63
(2)

(10)

(35)

(219)
68
(193)
295
(106)
32
(2,390)
(282)
2,003
－

(252)
54
(217)
209
(137)
－
(971)
(918)
1,190
(18)

373
4,859
219
(63)
(1,162)
3,853

105
5,768
270
(55)
(1,326)
4,657

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)(Millions of yen)

Six Months Ended
September 30,
September 30,
2017
2018
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Repayments of long-term loans payable
Proceeds from issuance of bonds with subscription rights
to shares
Purchase of treasury shares

Cash dividends paid
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalents

12(2,161)
115
(178)
(9)
(72)
(2,306)(2,465)
140
(16)
(9)
(169)
(2,521)－(1,200)9,967(1,113)
(800)
－

(2)
(631)
(88)
8,044
196

(1,659)(677)(30)(4,280)185

9,788
20,53230,321(1,959)23,99322,034

6. Notes to the Consolidated Financial Statements(1) Notes regarding the going concern assumption:

None

(2)

None

Notes on significant changes in shareholders’ equity:(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.

(3) Segment information
Six months ended September 30, 2017

(Millions of yen)

Basic

Functional

Housing

Consolidated

ChemicalChemicalFacilities

Products

Products

and Others

Total

Adjustments*1

operatingincome *2

Net sales
External sales

21,391

19,437

7,159

47,989－47,989

4

10

606

621

(621)

－

21,396

19,448

7,766

48,611(621)

47,989

986

2,900

43

3,929

(478)

3,451

Intersegment sales
or reclassifications
Total
Segment income

Notes 1:

Adjustments of segment income of ¥(478) 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 administrative
departments.

Notes 2:

Segment income has been adjusted for the operating income appearing in the quarterly
consolidated statements of income.

Six months ended September 30, 2018

(Millions of yen)

Basic

Functional

Housing

Consolidated

ChemicalChemicalFacilities

Products

Products

and Others

Total

Adjustments *1

operatingincome *2

Net sales
External sales
Intersegment sales
or reclassifications
Total
Segment income

Notes 1:

24,31421,092

7,267

52,674－52,674

6

31

257

296

(296)

－

24,321

21,123

7,525

52,971(296)

52,674

2,450

2,390

81

4,921

(605)

4,316

Adjustments of segment income of ¥(605) 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 administrative
departments.

Notes 2:

Segment income has been adjusted for the operating income appearing in the quarterly
consolidated statements of income.

13

14