Consolidated Financial Results
for the Six Months Ended September 30, 2020
[Japanese GAAP]
October 27, 2020
Company name: SHIKOKU CHEMICALS CORPORATION
Stock exchange listing: Tokyo Stock Exchange
Code number: 4099
URL: https://www.shikoku.co.jp/
Representative: Naoto Tanaka, President and C.E.O.
Contact: Kazuhiko Katayama, Executive Officer, General Manager of Finance, Accounting & Information Systems
Department
Phone: +81-877-22-4111
Scheduled date of filing quarterly securities report: November 11, 2020
Scheduled date of commencing dividend payments: December 4, 2020
Availability of supplementary briefing material on quarterly financial results: Available
Schedule of quarterly financial results briefing session: Scheduled(Amounts less than one million yen are rounded down)
1. Consolidated Financial Results for the Six Months Ended September 30, 2020 (from April 1, 2020 to
September 30, 2020)(1) Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Profit attributable to
Net sales
Operating profit
Ordinary profit
owners of parent
Six months ended
Million yen%
Million yen%
Million yen%
Million yen%
September 30, 2020
23,408(8.9)
2,609(26.9)
2,822(22.2)
1,924(24.1)
September 30, 201925,693
2.2
3,567
3.7
3,626
(3.2)
2,534
(0.3)
(Note) Comprehensive income: Six months ended September 30, 2020: ¥3,133 million [70.2 %]Six months ended September 30, 2019: ¥1,840 million [(31.8) %]Basic earnings
per share

Six months ended
September 30, 2020
September 30, 2019

Diluted earnings
per share
Yen

Yen

34.39
43.38

–
–

(2) Consolidated Financial Position
Total assets

Net assets

Million yen

Equity ratio

Million yen%

72,489As of September 30, 2020
97,86871,647
As of March 31, 2020
100,896(Reference) Equity: As of September 30, 2020: ¥71,694 million
As of March 31, 2020: ¥70,839 million

73.3
70.2

2. Dividends
1stquarter-end
Yen

Annual dividends
2nd
3rd
Fiscal yearquarter-end
quarter-end
end
Yen

Total

Yen

Yen

Yen

12.00
Year ended March 31, 2020
12.00
Year ending March 31, 2021
Year ending March 31, 2021
(Forecast)(Note) Revisions to the cash dividends forecasts most recently announced: None

12.00

24.00

12.00

24.00

3. Forecast of Consolidated Financial Results for the Year Ending March 31, 2021 (from April 1, 2020 to March
31, 2021)(% indicates changes from the previous corresponding period.)
Net sales

Operating profit

Ordinary profit

Profit attributable Basic earnings
to owners of parent
per share

Year ending
Million yen% Million yen% Million yen% Million yen%
Yen
March 31, 2021
49,000 (5.0)
6,800 (13.4)
7,000 (12.7)
4,800 (14.4)
86.42(Note) 1. Revisions to the financial results forecast most recently announced: Yes
2. Please also see “Notice regarding the Financial Results Forecast” announced today (October 27, 2020) forthe consolidated financial results forecast.
* 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, 2020: 55,877,263 shares
March 31, 2020: 58,948,063 shares2) Total number of treasury shares at the end of the period:
September 30, 2020: 335,700 shares
March 31, 2020: 1,900,015 shares
3) Average number of shares during the period:
Six months ended September 30, 2020: 55,971,000 shares
Six months ended September 30, 2019: 58,420,268 shares* These quarterly financial results are outside the scope of quarterly review by certified public accountants or audit
firms* Explanation regarding the appropriate use of operating 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
the operating results forecasts and cautionary notes concerning the use thereof, 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 4 of the attached documents tothe 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 .............................................................................................................. 4(3) Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information .......... 4
2. Quarterly Consolidated Financial Statements and Primary Notes ................................................................. 5(1) Quarterly Consolidated Balance Sheets ..................................................................................................... 5(2) Quarterly Consolidated Statements of Income and Comprehensive Income ............................................. 7(3) Quarterly Consolidated Statements of Cash Flows .................................................................................... 9(4) Notes to Quarterly Consolidated Financial Statements ............................................................................ 10(Notes on going concern assumption) ...................................................................................................... 10(Notes in the case of significant changes in shareholders’ equity) ........................................................... 10(Accounting policies adopted specially for the preparation of quarterly consolidated financial statements) .. 10(Segment information, etc.) ...................................................................................................................... 111

1. Qualitative Information on Quarterly Financial Results for the Period under Review(1) Explanation of Operating Results
The Japanese economy during the six months ended September 30, 2020 deteriorated sharply against the
backdrop of the spread of the novel coronavirus disease (COVID-19) and the issuing of the state of emergency
declaration. After the lifting of the declaration, signs of recovery have been seen mainly in individual
consumption amid gradual resumption of economic activities. However, the pace of such recovery is expected
to be slow for the time being, amid concerns over a resurgence of the spread of infections, the escalating U.S.China conflict in the lead up to the U.S. presidential election, and downward risks for the global economy.
Under these circumstances, for the six months ended September 30, 2020 (from April 1, 2020 to September
30, 2020), the Group posted net sales of ¥23,408 million (down 8.9% year-on-year), operating profit of ¥2,609
million (down 26.9% year-on-year), ordinary profit of ¥2,822 million (down 22.2% year-on-year) and profit
attributable to owners of parent of ¥1,924 million (down 24.1% year-on-year), all of which fell below theprevious year’s results.
Operating results by segment are as follows.
1) Chemicals operations(Inorganic chemicals)
Sales of insoluble sulfur, a material for radial tires, remained sluggish both in Japan and abroad, affected by
the global production adjustments for automobiles and tires amid the spread of COVID-19. However, sales areon a recovery track as production activities bottomed out in the first quarter and are returning to normal
gradually. Sales of carbon disulfide for rayon and cellophane, and sodium sulfate for bath agents and detergents
remained sluggish.
(Organic chemicals)
Regarding cyanuric acid derivatives for disinfectants, sales of agents for swimming pools were stagnant in
the domestic market, affected by the cancellation of swimming lessons at schools due to the spread of COVID19, while sales of agents for plumbing systems (sanitary devices) were strong with increased demand fordisinfection and sterilization as a result of rising awareness of hygiene at home. Sales remained strong in the
U.S. market with increased demand for agents for home swimming pools, supported by favorable weather
conditions from spring and restrictions on outings.
(Fine chemicals)
Regarding Glicoat-SMD, a heat-resistant soluble OSP (Organic Solderability Preservative) for printed wiringboards, sales of products for use in PWBs for the automotive industry fell below the previous year’s result,affected by the production adjustments for automobiles. Sales of advanced & specialty chemicals such as
epoxy resin curing agent (imidazoles) were affected by deterioration in market conditions in products forautomobile-related use, while sales grew in newly developed products.
As a result, net sales for the chemicals operations segment were ¥14,297 million (down 9.2% year-on-year),and segment profit was ¥2,131 million (down 27.9% year-on-year), both falling below the previous year’s
results.
2) Housing Materials operations
With the spread of COVID-19, there has been a strong sense of uncertainty over the prospects of domestic
and foreign economies, causing a wait-and-see attitude to continue as seen in a growing trend of investments
being deferred. Given the weakness in housing starts and capital investment, sales of interior, exterior finishes
and paving materials and exterior products remained sluggish.
As a result, net sales for the housing materials operations segment were ¥8,711 million (down 9.2% year-onyear), and segment profit was ¥1,337 million (down 12.4% year-on-year), both falling below the previous
year’s results.
2

Reference information[Sales results](Million yen)Six months ended
September 30, 2019(from April 1, 2019
to September 30, 2019)

Segment nameSix months ended
September 30, 2020
(from April 1, 2020
to September 30, 2020)

YoY change (%)

Chemicals operations
Inorganic chemicals

6,227

4,669

75.0

Organic chemicals

5,519

5,744

104.1

Fine chemicals

3,993

3,882

97.2

Subtotal

15,74014,297

90.8

836

710

84.9

Exterior products

8,756

8,001

91.4

Subtotal

9,593

8,711

90.8

25,33323,009

90.8

360

399

111.0

25,693

23,408

91.1

Housing Materials operations
Interior, exterior finishes andpaving materials

Total of reportable segments
Other
Total
(Note) Figures above are exclusive of consumption taxes.

[Overseas net sales]
Six months ended September 30, 2019(from April 1, 2019 to September 30, 2019)

Six months ended September 30, 2020
(from April 1, 2020 to September 30, 2020)

Net sales(Million yen)

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

Overseas net sales toconsolidated net sales (%)

Asia

3,828

14.9

3,094

13.2

North America

2,846

11.1

3,279

14.0

Other regions

1,092

4.3

907

3.9

Total

7,767

30.2

7,281

31.1

Consolidated net sales

25,693

23,4083

(2) Explanation of Financial Position(Status of assets, liabilities and net assets)
Total assets decreased by ¥3,027 million from the end of the previous fiscal year to ¥97,868 million. Major
increases were ¥2,511 million in investment securities and ¥1,318 million in construction in progress, andmajor decreases were ¥3,779 million in cash and deposits and ¥1,997 million in notes and accounts receivable trade.
Liabilities decreased by ¥3,868 million from the end of the previous fiscal year to ¥25,379 million. A major
decrease was ¥1,548 million in notes and accounts payable - trade.
Net assets increased by ¥841 million from the end of the previous fiscal year to ¥72,489 million. Major
increases were ¥1,810 million in treasury shares and ¥1,224 million in valuation difference on available-forsale securities, and a major decrease was ¥2,100 million in retained earnings.
As a result, equity ratio rose to 73.3%, from 70.2% at the end of the previous fiscal year.
(Status of Cash Flows)
Cash flows provided by operating activities totaled ¥3,093 million (a decrease of ¥1,308 million year-onyear). Major cash inflows were profit before income taxes of ¥2,845 million, decrease in trade receivables of¥2,007 million and depreciation of ¥892 million, while major cash outflows were decrease in trade payables of¥1,597 million and income taxes paid of ¥1,333 million.
Cash flows used in investing activities totaled ¥1,043 million (a decrease of ¥1,178 million year-on-year). A
major cash inflow was proceeds from redemption of securities of ¥3,500 million, while major cash outflows
were purchase of investment securities of ¥2,247 million and purchase of securities of ¥2,000 million.
Cash flows used in financing activities totaled ¥2,289 million (an increase of ¥1,257 million year-on-year).
The major component was purchase of treasury shares of ¥1,605 million.
As a result, cash and cash equivalents totaled ¥32,327 million (a decrease of ¥279 million from 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 been changed from the most recent plan (announced on July 28,2020). Assumptions for the exchange rates of major currencies are ¥105 to U.S. dollar and ¥120 to Euro.
For details, please see the “Notice regarding the Financial Results Forecast” announced today (October 27,2020).

4

2. Quarterly Consolidated Financial Statements and Primary Notes(1) Quarterly Consolidated Balance Sheets(Million yen)
As of March 31, 2020
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable – trade
Electronically recorded monetary claims - operating
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
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

5

As of September 30, 2020

26,607
13,0572,095
11,000
6,912
47
3,100
283
(0)
63,103

22,827
11,0602,042
11,997
6,214
62
2,952
273
(0)
57,429

5,148
3,929
8,849
736
651
19,315
143

5,117
3,489
8,849
2,054
574
20,086112

16,607
1,159
570
(3)
18,33337,792
100,896

19,119587
536(3)20,24040,43997,868(Million yen)
As of March 31, 2020
Liabilities
Current liabilities
Notes and accounts payable – trade
Electronically recorded obligations - operating
Short-term borrowings
Current portion of long-term borrowings
Income taxes payable
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-based remuneration
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
Deferred gains or losses on hedges
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

6

As of September 30, 2020

6,530
415
2,730
693
1,356
6,022
17,747

4,982
348
2,530
91
911
4,365
13,229

7,157
1
1,111

7,991
1
1,111

88

69

2,201
379
23
537
11,50029,248

2,164
379
24
407
12,15025,3796,867
5,815
56,063(2,183)66,5636,867
5,740
53,963(373)
66,198

1,972
(4)
2,533
(109)
(115)
4,276
808
71,647
100,896

3,197
–
2,533
(134)
(101)
5,495
794
72,48997,868

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income
Six 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
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expenses
Sales discounts
Foreign exchange losses
Loss on abandonment of inventories
Miscellaneous loss
Total non-operating expenses
Ordinary profit
Extraordinary income
Subsidy income
Gain on sales of non-current assets
Gain on sales of investment securities
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Total extraordinary losses
Profit before income taxes
Income taxes
ProfitProfit (loss) attributable to non-controlling interests
Profit attributable to owners of parent

Six months
ended September 30, 201925,693
15,545
10,148Six months
ended September 30, 2020
23,408
14,575
8,833

2,195
385
1,118
89

2,204
179
1,101
102

10

9

635
2,146
6,580
3,567

588
2,037
6,224
2,609

11
271
27
310

19
250
48
318

8
66
142
25
8
251
3,626

11
62
27
–
3
105
2,822

44
1
–
45

35
0
4
39

7
7
3,663
1,113
2,550
16
2,534

16
16
2,845
930
1,915
(9)
1,924

7

Quarterly Consolidated Statements of Comprehensive Income
Six Months Ended September 30(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
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

Six months
ended September 30, 2019
2,550

Six months
ended September 30, 2020
1,915

(695)
(2)
(22)
11
(709)
1,840

1,224
4
(24)
13
1,218
3,133

1,829

3,143

11

(10)

8

(3) Quarterly Consolidated Statements of Cash Flows(Million yen)Six months
ended September 30, 2019
Cash flows from operating activities
Profit before income taxes
Depreciation
Increase (decrease) in retirement benefit liability
Decrease (increase) in retirement benefit asset
Interest and dividend income
Interest expenses
Subsidy income
Loss on retirement of property, plant and equipment
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Other, net
SubtotalInterest and dividends received
Interest paid
Subsidies received
Income taxes (paid) refund
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of securities
Proceeds from redemption of securities
Purchase of property, plant and equipment
Payments for retirement of property, plant andequipment
Purchase of investment securities
Proceeds from sales and redemption of investment
securities
Decrease (increase) in time deposits
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Purchase of treasury shares
Dividends paid
Dividends paid to non-controlling interests
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 at beginning of period
Cash and cash equivalents at end of period

9

Six months
ended September 30, 2020

3,663
1,061
12
12
(282)
8
(44)
7
2,714
210
(2,322)
(25)
5,017
282
(9)
44
(932)
4,401

2,845
892
(29)
13
(270)
11
(35)
16
2,007
818
(1,597)
(540)
4,133
270
(12)
35
(1,333)
3,093(3,500)–(732)(2,000)3,500(1,313)

(1)

(15)

(4)

(2,247)

–

5

2,000
16
(2,221)1,000
27(1,043)

(300)
800
(874)
(0)
(642)
(3)
(12)
(1,032)(108)
1,038
27,441
28,479

(200)
900
(667)
(1,605)
(686)
(3)
(26)
(2,289)(39)(279)
32,60732,327

(4) 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 at its Board of Directors’ meeting held on May 26, 2020 to purchase its treasury sharespursuant to the provisions of the articles of incorporation, as set forth in Article 459, Paragraph 1 of the Companies
Act, and purchased 1,508,700 shares of treasury shares. As a result, during the six months ended September 30,
2020, treasury shares increased by ¥1,605 million.
(Cancellation of treasury shares)
The Company resolved at its Board of Directors’ meeting held on May 26, 2020 to cancel its treasury sharespursuant to the provisions in Article 178 of the Companies Act, and cancelled 3,070,800 shares of treasury shares.
As a result, during the six months ended September 30, 2020, capital surplus, retained earnings and treasury shares
decreased by ¥75 million, ¥3,338 million and ¥3,413 million, respectively.
(Accounting policies adopted specially for the preparation of quarterly consolidated financial statements)(Calculation of tax expenses)
We make 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 second quarter under review, and multiply profit
before income taxes for the quarter by the estimated effective tax rate.
Income taxes – deferred is included in income taxes.

10

(Segment information, etc.)
I. For the six months ended September 30, 2019 (from April 1, 2019 to September 30, 2019)
Information on net sales and profit (loss) by reportable segment(Million yen)
Reportable segment

Net sales
Net sales to outside
customers
Inter-segment net sales
or transfers
Total

Other
(Note) 1

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

Chemicals
operations

Housing
Materials
operations

15,7409,593

25,333360

25,693－25,693

0

1

1

134

135

(135)

－

15,7409,594

25,335494

25,829(135)

25,693

Total

Total

Segment profit
2,955
1,527
4,482
27
4,509
(942)
3,567
(Notes) 1. The “Other” category represents business segments not included in the reportable segments, andincludes the IT systems operations and food operations.
2. The adjustment for segment profit of ¥(942) million includes inter-segment eliminations of ¥0 million
and corporate expenses in the amount of ¥(943) million not allocated to each reportable segment. The
relevant corporate expenses are mainly general and administrative expenses not allocated to thereportable segments.
3. Segment profit is adjusted with operating profit on the quarterly consolidated statement of income.

II. For the six months ended September 30, 2020 (from April 1, 2020 to September 30, 2020)
Information on net sales and profit (loss) by reportable segment(Million yen)
Reportable segment

Net sales
Net sales to outside
customers
Inter-segment net sales
or transfers
Total

Other
(Note) 1

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

Chemicals
operations

Housing
Materials
operations

14,297

8,711

23,009399

23,408－23,408

0

1

1

153

154

(154)

－

14,297

8,712

23,010552

23,563(154)

23,408

Total

Total

Segment profit
2,131
1,337
3,468
54
3,523
(913)
2,609
(Notes) 」1. The “Other” category represents business segments not included in the reportable segments, andincludes the IT systems operations and food operations.
2. The adjustment for segment profit of ¥(913) million includes inter-segment eliminations of ¥0 million
and corporate expenses in the amount of ¥(914) million not allocated to each reportable segment. The
relevant corporate expenses are mainly general and administrative expenses not allocated to thereportable segments.
3. Segment profit is adjusted with operating profit on the quarterly consolidated statement of income.

11