Consolidated Financial Results
for the Nine Months Ended September 30, 2023
[Japanese GAAP]
October 26, 2023
Company name: SHIKOKU KASEI HOLDINGS CORPORATION
Stock exchange listing: Tokyo Stock Exchange
Code number: 4099
URL: https://www.shikoku.co.jp/eng/
Representative: Mitsunori Watanabe, President
Contact: Yoshiaki Ando, Director in charge of Corporate Management
Phone: +81-877-22-4111
Scheduled date of filing quarterly securities report: November 10, 2023
Scheduled date of commencing dividend payments: –Availability of supplementary briefing material on quarterly financial results: Available
Schedule of quarterly financial results briefing session: Not scheduled(Amounts less than one million yen are rounded down)
1. Consolidated Financial Results for the Nine Months Ended September 30, 2023 (from January 1, 2023 to
September 30, 2023)(1) Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Profit attributable to
Net sales
Operating profit
Ordinary profit
owners of parent
Nine months ended
Million yen%
Million yen%
Million yen%
Million yen%
September 30, 2023
46,789
–
6,129
–
7,413
–
6,520
–
December 30, 2022
–
–
–
–
–
–
–
–
(Note) Comprehensive income: Nine months ended September 30, 2023: ¥7,584 million [– %]Nine months ended December 30, 2022: ¥– million [–%]
Basic earnings
per share
Nine months ended
September 30, 2023
December 30, 2022

Diluted earnings
per share

Yen

Yen

125.54–––The Company has changed the account closing date from March 31 to December 31 beginning with the fiscal year
ended December 31, 2022. Accordingly, in the previous consolidated fiscal year, which is a transitional period, thequarterly consolidated financial statements for the third quarter were not prepared. Therefore, the consolidated operating
results and the percentage changes from the previous corresponding period for the third quarter in the fiscal year ended
December 31, 2022 are not presented.

(2) Consolidated Financial Position
Total assets
Million yen

Net assets

Equity ratio

Million yen%

As of September 30, 2023
127,419
85,18381,806
As of December 31, 2022
117,176(Reference) Equity: As of September 30, 2023: ¥84,499 million
As of December 31, 2022: ¥81,323 million

66.3
69.4

2. Dividends
1stquarter-end

2ndquarter-end

Yen

Yen

Annual dividends
3rdYear-endquarter-end

Fiscal year ended December 31,
–
13.00
2022
Fiscal year ending December 31,
–
14.00
2023
Fiscal year ending December 31,
2023 (Forecast)(Note) Revisions to the cash dividends forecast most recently announced: None

Total

Yen

Yen

Yen

–

13.00

26.00

14.00

28.00

–

3. Forecast of Consolidated Financial Results for the Fiscal Year Ending December 31, 2023 (from January 1,
2023 to December 31, 2023)(% indicates changes from the previous corresponding period.)
Profit attributable
Basic earnings
Net sales
Operating profit
Ordinary profit
to owners ofper share
parentMillion yen% Million yen% Million yen% Million yen%

Yen

Full year
63,000
–
7,500
–
8,300
–
6,800
–
131.64(Notes) 1. Revisions to the financial results forecast most recently announced: None
2. The Company has changed the account closing date from March 31 to December 31 beginning with thefiscal year ended December 31, 2022, which is therefore a transitional period comprising the nine months
from April 1, 2022 to December 31, 2022 for the Company and all consolidated subsidiaries. Therefore, thepercentage changes from the previous corresponding period are not presented.
* Notes:(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes inscope of consolidation): No(2) Accounting policies adopted specially for the preparation of quarterly consolidated financial statements: Yes(3) Changes in accounting policies, changes in accounting estimates and retrospective restatement
1) Changes in accounting policies due to the revision of accounting standards: No
2) Changes in accounting policies other than 1) above: No
3) Changes in accounting estimates: No4) Retrospective restatement: No(4) Total number of issued shares (ordinary shares)
1) Total number of issued shares at the end of the period (including treasury shares):
September 30, 2023: 50,870,663 shares
December 31, 2022: 52,973,563 shares2) Total number of treasury shares at the end of the period:
September 30, 2023: 176,110 shares
December 31, 2022: 206,031 shares
3) Average number of shares during the period:
Nine months ended September 30, 2023: 51,942,228 shares
Nine months ended December 30, 2022: – shares(Note) The Company has changed the account closing date from March 31 to December 31 beginning with the fiscal
year ended December 31, 2022. Accordingly, in the previous consolidated fiscal year, which is a transitional period,
the quarterly consolidated financial statements for the third quarter were not prepared. Therefore, the average numberof shares during the period for the nine months in the fiscal year ended December 31, 2022 is not presented.

* These quarterly financial results are outside the scope of quarterly review by certified public accountants or audit
firms* Explanation regarding the appropriate use of financial results forecasts and other special items
Forward-looking statements such as operating results forecasts and other projections contained in this report are
based on information currently available to the Company and certain assumptions deemed reasonable. Actual results
may differ significantly from these forecasts due to a wide range of factors. For the assumptions underlying theoperating results forecasts and cautionary notes concerning their use, please refer to “(3) Explanation ofConsolidated Financial Results Forecast and Other Forward-looking Information” under “1. Qualitative Information
on Quarterly Financial Results for the Period under Review” on page 3 of the attached documents to the quarterly
financial statements.

Table of Contents
1. Qualitative Information on Quarterly Financial Results for the Period under Review ................................ 2(1) Explanation of Operating Results ............................................................................................................. 2(2) Explanation of Financial Position ............................................................................................................ 3(3) Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information ........ 3
2. Quarterly Consolidated Financial Statements and Primary Notes ............................................................... 4(1) Quarterly Consolidated Balance Sheets ................................................................................................... 4(2) Quarterly Consolidated Statements of Income and Comprehensive Income ........................................... 6(3) Notes to Quarterly Consolidated Financial Statements ............................................................................ 8(Notes on going concern assumption) ...................................................................................................... 8(Notes in the case of significant changes in shareholders’ equity) ........................................................... 8(Accounting policies adopted specially for the preparation of quarterly consolidated financial statements) .. 8
(Regarding the quarterly consolidated statement of income) ....................................................................... 8(Matter related to the change of fiscal year-end) ......................................................................................... 8(Segment information, etc.) ...................................................................................................................... 9

1

1. Qualitative Information on Quarterly Financial Results for the Period under Review(1) Explanation of Operating Results
The Company has changed the last day of the fiscal year from March 31 to December 31, beginning with theprevious fiscal year. All consolidated subsidiaries of the Company have also changed their fiscal year-end datefrom March to December. Therefore, for the comparison with the previous period, the nine-month period fromJanuary 2022 to September 2022 is compared with the reference figure calculated for the “same period of theprevious year.”In addition, as described in “(3) Notes to Quarterly Consolidated Financial Statements (Segment information,etc.),” the Company has changed the measurement method of segment profit starting from the three months ended
March 31, 2023. The following comparison with the same period of the previous year is calculated by restating
the figures for the same period of the previous year after the change.
The Japanese economy during the nine months ended September 30, 2023 continued to pick up moderately
led by domestic demand, with personal consumption maintaining an upward trend against the backdrop of theincrease in employment and wages. In overseas economies, although consumer spending remained unexpectedly
stable in the U.S., the country faces the prospect of economic slowdown due to the delayed effects of cumulativeinterest rate increases. It is still uncertain whether the U.S. will be able to avoid economic recession.
Under these circumstances, for the nine months ended September 30, 2023 (from January 1, 2023 to
September 30, 2023), the Group posted net sales of ¥46,789 million (up 1.3% year-on-year), operating profit of¥6,129 million (down 7.3% year-on-year), ordinary profit of ¥7,413 million (down 7.9% year-on-year) and profit
attributable to owners of parent of ¥6,520 million (up 12.6% year-on-year).
The Chemicals and Housing Materials operations secured an increase in revenue due to factors including therevision of selling prices and yen depreciation, while operating profit and ordinary profit decreased due to factors
such as increased production costs including raw material costs and the amortization load of new capital
expenditure. On the other hand, profit attributable to owners of parent increased, due to significant gain on saleof investment securities in extraordinary income.
Operating results by segment are as follows.
1) Chemicals operations(Inorganic chemicals)
Sales of insoluble sulfur, a material for radial tires, showed some signs of slightly bottoming out and saw aslight recovery despite a continuous slack in supply and demand in the Chinese and other markets. Sales of carbon
disulfide for rayon and cellophane remained stagnant due to sluggish operation in rayon factories of overseas
customers. As for sales of sodium sulfate for bath agents and detergents, the Company strove to improve
profitability by the price pass-through of the impact of hiking purchase price due to yen depreciation in exchange
rates in domestic sales.
(Organic chemicals)
Regarding chlorinated isocyanurates for disinfectants, sales exceeded those of the previous year in thedomestic market due to stable demand for pools in the post-pandemic economy and extreme heat. In the U.S.
market, despite slightly declining demand due to customers’ inventory adjustments and restrained purchasing
under inflation, sales exceeded those of the previous year due to factors including the impact of the depreciating
yen and diversification of selling outlets.
(Fine chemicals)Electronic chemicals, particularly Glicoat-SMD, a heat-resistant soluble OSP (Organic Solderability
Preservative) for printed wiring boards, saw recovery in recent demand due to bottoming out of the semiconductor
and electronics markets and progress of customers’ inventory adjustment. For advanced & specialty chemicals,
sales of epoxy resin curing agent (imidazoles) exceeded those of the previous year while those of resin modifier(glycoluril derivatives, etc.) were sluggish due to factors including a decrease in demand for finished products, andsales of semiconductor process materials largely surpassed that of the previous year due to evaluation demands
2and project wins.
As a result, net sales for the chemicals operations segment were ¥32,103 million (up 0.9% year-on-year).
However, segment profit was ¥4,792 million (down 10.5% year-on-year) due to soaring raw material costs, theamortization load of the Company’s new plant of chlorinated isocyanurates (NEO2022), which began operation,
and a decrease in sales of highly profitable fine chemicals products, despite the favorable impact of yen
depreciation in exchange rates and lower export logistics costs.
2) Housing Materials operations
The number of new housing starts remained weak for owned houses, and demand for interior, exterior finishes,and paving materials and exterior products remained sluggish. Despite the price revision implemented in January2023 of the current fiscal year and efforts to pass on high raw material costs, sales volume was lower than theprevious year due to a decrease in demand, while selling expenses increased as a result of factors including
soaring raw material costs and resumption of sales activities after COVID-19, which led to decreased profit.
As a result, net sales for the housing materials operations segment were ¥13,918 million (up 2.2% year-onyear), and segment profit was ¥1,066 million (down 7.8% year-on-year).
Reference information[Overseas net sales]
Nine months ended September 30, 2022
(from January 1, 2022 to September 30, 2022)

Nine months ended September 30, 2023
(from January 1, 2023 to September 30, 2023)

Net sales(Million yen)

Net sales(Million yen)Overseas net sales toconsolidated net sales (%)

Overseas net sales toconsolidated net sales (%)

Asia

6,360

13.8

4,203

9.0

North America

10,884

23.6

11,716

25.0

Other regions

1,751

3.8

1,305

2.8

Total
Consolidated net
sales

18,99741.1

17,22636.8

46,206

46,789(2) Explanation of Financial Position(Status of assets, liabilities and net assets)
Total assets increased by ¥10,243 million from the end of the previous fiscal year to ¥127,419 million. Major
increases were ¥4,945 million in cash and deposits and ¥2,225 million in construction in progress, and a major
decrease was ¥1,271 million in machinery, equipment and vehicles.
Liabilities increased by ¥6,865 million from the end of the previous fiscal year to ¥42,235 million. Major
increases were ¥2,708 million in current portion of long-term borrowings and ¥1,840 million in deferred tax
liabilities, and a major decrease was ¥1,570 million in long-term borrowings.
Net assets increased by ¥3,377 million from the end of the previous fiscal year to ¥85,183 million. Major
increases were ¥2,093 million in retained earnings and ¥821 million in valuation difference on available-for-salesecurities.
As a result, equity ratio fell to 66.3% from 69.4% at the end of the previous fiscal year.
(3) Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information
The full-year financial results forecast has not been revised from the plan recently announced (announced on July26, 2023). Assumptions for the exchange rates of major currencies are ¥135 to U.S. dollar and ¥150 to Euro.

3

2. Quarterly Consolidated Financial Statements and Primary Notes(1) Quarterly Consolidated Balance Sheets(Million yen)
As of December 31, 2022
AssetsCurrent assets
Cash and deposits
Notes receivable - trade
Electronically recorded monetary claims - operating
Accounts receivable - trade
Securities
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, net
Machinery, equipment and vehicles, net
LandConstruction in progress
Other, net
Total property, plant and equipment
Intangible assets
Investments and other assets
Investment securities
Deferred tax assets
Retirement benefit asset
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

4

As of September 30, 2023

23,283879
3,166
13,362
16,400
8,770
37
4,140
602
(0)
70,642

28,228578
2,799
14,082
17,705
8,711
40
4,294
1,024
(4)
77,461

5,780
7,969
8,509
687
685
23,632
501

6,217
6,697
8,690
2,913
669
25,188464

21,008
412
411
572
(3)
22,40046,533
117,176

21,184
1,805
426
888
(0)
24,30549,957
127,419

(Million yen)
As of December 31, 2022
Liabilities
Current liabilities
Notes and accounts payable - trade
Electronically recorded obligations - operating
Short-term borrowings
Current portion of long-term borrowings
Accrued expenses
Income taxes payable
Accrued consumption taxes
Notes payable - facilities
Electronically recorded obligations - facilities
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Deferred tax liabilities
Deferred tax liabilities for land revaluation
Provision for retirement benefits for directors (andother officers)
Retirement benefit liability
Asset retirement obligations
Provision for share awards
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

5

As of September 30, 2023

7,483
570
2,530
3,083
1,105
160
117
25
140
3,068
18,284

8,430
502
3,530
5,791
1,821
1,954
412
6
136
2,287
24,874

14,53449
1,004

12,963
1,889
1,004

67

62

656
381
64
328
17,08535,370

714
370
37
318
17,36042,2356,867
5,711
62,808(240)
75,147

6,867
5,711
64,902(217)
77,264

3,766
2,288
136
(15)
6,175
482
81,806
117,176

4,588
2,288
364
(6)
7,235
684
85,183
127,419

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income
Nine Months Ended September 30(Million yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Transportation and storage costs
Advertising expenses
Salaries
Retirement benefit expenses
Provision for retirement benefits for directors (and otherofficers)
Research and development expenses
Other
Total selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expenses
Donations
Miscellaneous losses
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of investment securities
Subsidy income
Gain on bargain purchaseTotal extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Loss on sale of investment securities
Total extraordinary losses
Profit before income taxes
Income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

Nine months
ended September 30, 2023
46,78929,063
17,726
4,138
572
1,786
113
8
1,300
3,676
11,596
6,129
170
335
769
47
1,323
25
10
4
39
7,413
2,088
73
32
2,194
53
16
69
9,537
3,013
6,524
3
6,520

6

Quarterly Consolidated Statements of Comprehensive Income
Nine Months Ended September 30(Million yen)

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

Nine months
ended September 30, 2023
6,524
821
228
9
1,059
7,584
7,580
3

7

(3) Notes to Quarterly Consolidated Financial Statements(Notes on going concern assumption)
There is no relevant information.
(Notes in the case of significant changes in shareholders’ equity)(Purchase of treasury shares)
The Company resolved on May 30, 2023 to purchase its treasury shares pursuant to the provisions of the articles
of incorporation, as set forth in Article 459, Paragraph 1 of the Companies Act, and purchased 2,102,900 shares oftreasury shares. As a result, during the nine months ended September 30, 2023, treasury shares increased by ¥3,038
million.
(Cancellation of treasury shares)
The Company resolved on May 30, 2023 to cancel its treasury shares pursuant to the provisions in Article 178 of
the Companies Act, and cancelled 2,102,900 shares of treasury shares on June 9, 2023. As a result, during the ninemonths ended September 30, 2023, retained earnings and treasury shares decreased by ¥3,028 million and ¥3,028
million, respectively.
(Accounting policies adopted specially for the preparation of quarterly consolidated financial statements)(Calculation of tax expenses)
The Company makes a reasonable estimate of the effective tax rate after the application of tax effect accounting
to profit before income taxes for the current fiscal year, including the third quarter under review, and multiplies
profit before income taxes for the quarter by the estimated effective tax rate.
Income taxes - deferred is included in income taxes.
(Regarding the quarterly consolidated statement of income)(Gain on bargain purchase)Gain on bargain purchase was recognized in connection with the acquisition of the shares of Masuda Chemical
Industries co., LTD. to convert it into a consolidated subsidiary.
(Matter related to the change of fiscal year-end)
The Company and all consolidated subsidiaries changed its fiscal year-end (the last day of the fiscal year) fromMarch 31 to December 31 beginning with the fiscal year ended December 31, 2022. Accordingly, in the previous
consolidated fiscal year, which is a transitional period of this change, the quarterly consolidated financial statements
for the third quarter were not prepared. Therefore, information for the previous fiscal year’s first nine months is notpresented.

8

(Segment information, etc.)
For the nine months ended September 30, 2023 (from January 1, 2023 to September 30, 2023)
1. Information on net sales and profit (loss) by reportable segment and information on composition of revenue(Million yen)

Reportable segment

Net sales
Inorganic chemicals
Organic chemicals
Fine chemicals
Interior, exterior finishes
and paving materials
Exterior products
Other
Revenue from contracts
with customers
Other revenue
Net sales to outside
customers
Inter-segment net sales ortransfers
Total

Other
(Note) 1

Amount recorded inquarterly
Adjustment
consolidated(Note) 2
statement of income(Note) 3

Chemicals
operations

Housing
Materials
operations

9,999
15,263
6,840

–
–
–

9,999
15,263
6,840

–
–
–

9,999
15,263
6,840

–
–
–

9,999
15,263
6,840

–

947

947

–

947

–

947

–
–

12,971–

12,971––
747

12,971
747––

12,971
747

32,103

13,91846,022

747

46,769–46,769

–

–

–

19

19

–

19

32,103

13,91846,022

767

46,789–46,789

5

2

8

209

217

(217)

–

32,10913,921

46,030976

47,006(217)

46,789

Total

Total

Segment profit
4,792
1,066
5,858
73
5,932
197
6,129
(Notes) 1. The “Other” category represents business segments not included in the reportable segments and includes
the IT systems operations and food operations.
2. The adjustment for segment profit of ¥197 million includes profit (loss) and others not allocated to eachreportable segment.
3. Segment profit is adjusted with operating profit on the quarterly consolidated statement of income.

2. Matters related to changes in reportable segments(Changes in measurement methods)
Beginning with the three months ended March 31, 2023, due to the change in management structure resulting
from the shift to a pure holding company, corporate expenses previously not allocated to each segment are now
allocated to each segment based on reasonable standards.

9