Consolidated Financial Results for the Six Months Ended September 30, 2016
(JPGAAP)
November 4, 2016
Stock Exchange: Tokyo
Name of listed company: NISSAN CHEMICAL INDUSTRIES, LTD.
URL: http://www.nissanchem.co.jp/
Code Number: 4021
Representative: Kojiro Kinoshita, President
Inquiry to: Hironori Yoshida, Executive Officer and Director of Finance and Accounting Department Tel. +81 3 3296 8356
Scheduled submission date of quarterly report: November 11, 2016
Scheduled dividend payment date: December 5, 2016
Supplemental information: Yes
Financial results meeting : Yes(Amounts rounded down to the nearest million yen)

1. Consolidated Financial Results for the Six M onths Ended September 30, 2016 (From April 1, 2016 to September 30, 2016)(% indicates the rate of increase/decrease against the same period of the previous year)(1) Consolidated Operating Results

Operating
IncomeNet Sales% Millions of Yen

Millions of Yen

Six Months Ended September 30, 2016
Six Months Ended September 30, 2015
(Note) Comprehensive Income:Ordinary
IncomeNet Income Attributableto Owners of Parent% Millions of Yen%

Millions of Yen%

14,213(6.1)

10,596(4.9)

15,131

18.9

11,14726.0

84,5131.0

14,736

3.3

83,6704.7

14,26514.1

Six Months Ended September 30, 2016

: 7,448 million yen , (22.0)%

Six Months Ended September 30, 2015

: 9,554 million yen , (6.2)%

Diluted Profit
Attributable to
Owners of Parent
per Share

Net Income
per Share
Yen

Yen

Six Months Ended September 30, 2016

69.00

－

Six Months Ended September 30, 2015

71.21

－

(2) Consolidated Financial Position
Total Assets

Equity Ratio

Millions of Yen

Millions of Yen%

204,725

155,05375.0

156,924

68.1

As of September 30, 2016

228,169

As of March 31, 2016
(Reference) Shareholders' equity:

Net Assets

As of September 30, 2016

: 153,561 million yen

As of March 31, 2016

: 155,392 million yen

2. Cash Dividends
Cash Dividends per Share
First
Quarter

SecondQuarterYen

Third
Quarter

Yen

Year Ended March 31, 2016

－

18.00

Year Ending March 31, 2017

－

24.00

Year Ending March 31, 2017
(Forecast)Year-end

Yen

Annual

Yen

Yen

－

26.00

44.00

－

26.00

50.00

(Note) Revision of the latest released dividend forecast: None

3. Forecast of Consolidated Financial Results for the Fiscal Year Ending M arch 31, 2017 (From April 1, 2016 to M arch 31, 2017)(% indicates the rate of increase/decrease against the same period of the previous year)
Operating
IncomeNet Sales
Millions of Yen

Year Ending March 31, 2017180,500% Millions of Yen

2.0(Note) Revision of the latest released forecast of financial results: Yes

29,900Ordinary
IncomeNet Income Attributableto Owners of Parent

Net Income
per share% Millions of Yen%

Millions of Yen%

Yen

29,7000.6

22,5000.7

146.884.5

4. Notes(1) Changes in significant consolidated subsidiaries(Changes in specified subsidiaries involving changes in scope of consolidation)(2) Application of special accounting treatment to preparation of quarterly financial statements: None: None(3) Changes of accounting policies and accounting estimates, and restatement
1. Changes of accounting policies due to revisions of accounting standards: Yes

2. Changes of accounting policies other than the above: None3. Changes in accounting estimates: None4. Restatements: None(Note) Please refer to "Items concerning Summary Information" on page 5 for details.
(4) Number of shares outstanding (common shares)
1. Number of shares outstanding (including treasury shares)
as of September 30, 2016

: 154,000,000 shares

as of March 31, 2016

: 156,000,000 shares

2. Number of shares of treasury shares
as of September 30, 2016

: 1,204,626 shares

as of March 31, 2016

: 1,620,587 shares

3. Average number of shares outstanding
as of September 30, 2016

: 153,577,606 shares

as of September 30, 2015

: 156,554,994 shares* Presentation regarding implementation status of quarterly review proceduresThis financial release is not subject to quarterly review procedures based on Financial Instruments and Exchange Law in Japan.
Quarterly review procedures of financial statements based on Financial Instruments and Exchange have not been completed
at the time of disclosure.
* Explanations regarding appropriate use of business forecasts and other special notes
The business forecast contained in this report is based on information available at the time of disclosure.
Actual operating results may differ materially from the forecast due to various factors.
For supplemental information, please refer to our website.

Table of Contents for Attached Materials
1. Qualitative Information on Quarterly Results(1) Business Performance........................................................................................................ 2.............................................................................................................................. 2(2) Financial Position ..................................................................................................................................... 3(3) Forecast of Consolidated Business Results and Other Forward-looking Information.................................................. 3(4) Basic Policy on Distribution of Earnings .......................................................................................................... 4
2. Items concerning Summary Information (Notes) ............................................................................................................ 5(1) Changes of Accounting Policies and Accounting Estimates, Restatement ............................................................... 5
3. Consolidated Financial Statements................................................................................................................... 6(1) Consolidated Balance Sheets ...................................................................................................................... 6(2) Consolidated Statements of Income and Statements of Comprehensive Income(3) Consolidated Statements of Cash Flows...................................................... 8.......................................................................................................10(4) Notes to Consolidated Financial Statements..................................................................................................11(Notes on Assumption of Going Concern).................................................................................................11(Notes on Significant Changes in Shareholders' Equity) ................................................................................11(Segment Information).........................................................................................................................11-1-

1. Qualitative Information on Quarterly Results(1) Business Performance
During the year ended September 30, 2016 (from April 1, 2016 to September 30, 2016), the domestic
economy remained at the same level due to positive and negative factors. Positive factors were improvement of
employment situation and lower crude oil price, while negative factors were progress of stronger yen and asense of uncertainty over world economy.
In our group business, the sales of Chemicals Segment decreased due to the currency exchange rates. In the
Performance Materials Segment, the sales of display materials increased but semiconductor materials andinorganic materials had weak sales. In the Agricultural Chemicals Segment, Fluralaner (an active ingredient ofveterinary pharmaceutical) had healthy sales. In the Pharmaceutical Segment, “LIVALO” (anti-cholesterol drug)
faced with a tough situation in Japan.
As a result of previously mentioned factors, the sales for this period were 84,513 million yen (an increase of
843 million yen from the same period of the previous year). Operating income was 14,736 million yen (anincrease of 470 million yen). Ordinary income was 14,213 million yen (a decrease of 917 million yen). Income
attributable to owners of parent was 10,596 million yen (a decrease of 550 million yen).
Explanations by segments are as below.
Chemicals
The profitability of ammonia product increased due to the price decline of feedstock such as naphtha. In the
Basic Chemicals, the export sales of MELAMINE (adhesive agent for particle board) and the sales of “AdBlue”(high-grade urea solution) increased. Conversely, in the Fine Chemicals, the sales of “TEPIC” (special epoxy
compound for sealant) decreased due to stronger yen.
As a result of these factors, the sales of this segment were 16,538 million yen (a decrease of 203 million yen
from the same period of the previous year). Operating income was 1,324 million yen (a decrease of 81 million
yen).
Performance Materials
In the display materials, “SUNEVER” (polyimide for LCD / flat panel displays) for smartphone had healthy
sales. In the semiconductor materials, bottom anti-reflective coating for semiconductors (“ARC®”) and multi-layer
process materials (“OptiStack®”) were adversely affected by the lower capacity utilization ratio of somecustomers. In the inorganic materials, “SNOWTEX” (semiconductor polishing, hard coating, etc.) for polishing
agents for electronic substrate materials decreased the sales.
As a result of these factors, the sales of this segment were 25,508 million yen (a decrease of 531million yen).
Operating income was 6,166 million yen (a decrease of 172 million yen).
*ARC® and OptiStack® are registered trade mark of Brewer Science, Inc.

Agricultural Chemicals“ROUNDUP MAXLOAD AL”, herbicide for general household, expanded in Japan but our product had weaksales as a whole. Conversely, Fluralaner had healthy sales.
As a result of these factors, the sales of this segment were 23,983 million yen (an increase of 2,843 millionyen). Operating income was 6,852 million yen (an increase of 630 million yen).
Pharmaceuticals
The sales of “LIVALO” decreased in Japan due to expansion of generic products but increased in overseas
especially for Asia. Also, “Finetech” (custom manufacturing and process researching services for pharmaceuticalcompanies) had healthy sales.
As a result of these factors, the sales of this segment were 3,690 million yen (a decrease of 51 million yen).
Operating income was 617 million yen (an increase of 0 million yen).

-2-

Trading
The sales of this segment were 27,614 million yen (an increase of 93 million yen). Operating income was 842
million yen (a decrease of 13 million yen).
Others
The sales of this segment were 8,591 million yen (a decrease of 296 million yen). Operating income was 12
million yen (an increase of 41 million yen).
(2) Financial Position(Position of Assets, Liabilities and Net Assets)
Total assets as of September 30, 2016 were 204,725 million yen (a decrease of 23,443 million yen from March
31, 2016). It is mainly due to the decrease of notes and accounts receivable - trade.
Also, total liabilities as of September 30, 2016 were 49,672 million yen (a decrease of 21,572 million yen). It ismainly due to the decrease of short - term loans payable.
Net assets as of September 30, 2016 were 155,053 million yen (a decrease of 1,871 million yen).
As a result of these factors, equity ratio was 75.0% (an increase of 6.9% from March 31, 2016).
(Position of Cash Flow)
Deducting income taxes paid from income before income taxes and non-controlling interests, depreciation andgain and loss on working capital, net cash provided by operating activities for the six months ended September
30, 2016 were 29,426 million yen (27,642 million yen for the same period of the previous year).
Due to the proceeds from sales of investment securities and the investment on research and development
department, net cash used in investing activities for the six months ended September 30, 2016 were 4,509
million yen (4,654 million yen).
Due to the decrease in short-term loans payable, payment for dividends, and share repurchase, net cash usedin financing activities for the six months ended September 30, 2016 were 26,565 million yen (27,287 million yen).
As a result of these factors, cash and cash equivalents at the end of this period were 33,266 million yen(26,931 million yen), reflecting 395 million yen effect of exchange rate changes and 25 million yen decrease in
cash and cash equivalents resulting from exclusion of subsidiaries from consolidation. It decreased by 2,069
million yen from March 31, 2016.
(3) Forecast of Consolidated Business Results and Other Forward-looking Information
Nissan Chemical Industries Ltd. (“the Company”) announces the revision of its forecast for the fiscal year ending
March 31, 2017 (from April 1, 2016 to March 31, 2017) based on the financial results for the second quarter of thisfiscal year and demand forecast. The following forecast is calculated on the assumption that naphtha price will be
34,400 yen per kiloliter and the exchange rate will be 105 yen per dollar.
(Millions of Yen)
Net Sales

Operating

Ordinary

Profit Attributable to

Net Income

IncomeIncomeOwners of Parent

per Share (Yen)Previous Forecast (A)187,500

29,70030,40023,000150.18

Revised Forecast (B)180,500

29,90029,70022,500146.88Change (B-A)(7,000)

200

(700)

(500)

－

Rate of Change (%)(3.7)%

0.7%(2.3)%(2.2)%－

176,894

28,60629,531

22,350143.37(Ref.) Results for the Year
Ended March 31, 2016

-3-

(Billions of yen)

Net Sales

Operating

Previous

Revised

Forecast

Forecast

ChangeChemicals

35.4

34.1

(1.3)

Performance Materials

55.3

52.5

(2.8)

Agricultural Chemicals

52.1

52.2

0.1

Pharmaceuticals

7.4

7.6

0.2

Trading

60.0

58.2

(1.8)

Others

23.2

23.4

0.2

Adjustment(45.9)(47.5)

(1.6)

Total

187.5

180.5

(7.0)

Chemicals

4.9

3.7

(1.2)

Performance Materials

11.7

11.7

－

Agricultural Chemicals

11.3

12.8

1.5

Pharmaceuticals

1.4

1.4

－

Trading

1.9

1.9

－

Others

0.8

0.7

(0.1)

Adjustment

(2.3)

(2.3)

－

Total

29.7

29.9

0.2

Income(4) Basic policy on distribution of earnings
The Company’s basic policy of profit allocation is returning to shareholders by improving company value
through increasing revenue in the medium and long terms.
We aim to realize dividend payout ratio to be 40% in FY2018 and maintain total payout ratio to be 70% in
medium-term business plan “Vista2021” launched from April 2016.

-4-

2. Items concerning Summary Information (Notes)(1) Changes of Accounting Policies and Accounting Estimates, Restatement(Changes in Accounting Policies)

Effective from the beginning of the first quarter of current consolidated fiscal year, the Company
adopted the “Practical Solution on a change in depreciation method due to Tax Reform 2016” (Practical
Issue Task Force (PITF) No.32, issued on June 17, 2016) in accordance with the revision of the
Corporation Tax Law of Japan. Accordingly, the Company changed the depreciation method for facilities
attached to buildings and structures acquired on and after April 1, 2016 from the declining-balance method
to the straight-line method.
The impact of this change on operating income, ordinary income, and income before income taxes andnon-controlling interests for the second quarter of current consolidated fiscal year was immaterial.

-5-3. Consolidated Financial Statements(1) Consolidated Balance Sheets
Millions of Yen
As ofMarch 31, 2016

As of
September 30, 2016

AssetsCurrent assets
Cash and deposits

35,33533,266

Notes and accounts receivable - trade57,60643,550

Merchandise and finished goods

30,19828,40743676

Raw materials and supplies

8,266

7,740

Other

10,765

6,826

(34)

(31)

142,181

120,436

Buildings and structures, net

22,63522,343

Other, net

24,826

26,242

Total Property, plant and equipment

47,461

48,586

W ork in process

Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment

Intangible assets
Goodwill

2

1

Other

901

1,489

Total Intangible assets

903

1,490

Investment securities

33,251

28,742

Other

4,539

5,638

Allowance for doubtful accounts

(167)

(168)

Total Investments and other assets

37,62334,21385,98884,289228,169

204,725

Investments and other assets

Total non-current assets
Total assets-6-Millions of Yen
As ofMarch 31, 2016

As of
September 30, 2016

Liabilities
Current liabilities
Notes and accounts payable - trade

15,35013,081

Short-term loans payable

25,998

9,872

Income taxes payable

4,576

3,131

Provision for bonuses

1,874

1,882

Provision for directors' bonuses

21

15

Provision for environmental measures

350

94

Other

9,765

10,850Total current liabilities

57,93738,927

7,100

5,620

Provision for business structure improvement

680

669

Provision for loss on business of subsidiaries and associates

309

309

Net defined benefit liability

102

94

Other

5,115

4,051

Total non-current liabilities

13,307

10,744

71,244

49,672

Capital stock

18,942

18,942

Capital surplus

13,611

13,611Retained earnings

115,878

116,608

Non-current liabilities
Long-term loans payable

Total liabilities
Net assets
Shareholders' equity

Treasury shares(4,281)(3,585)

Total Shareholders' equity

144,151

145,576

10,515

8,198

Foreign currency translation adjustment

171

(731)

Remeasurements of defined benefit plans

554

517

11,241

7,984

1,531

1,491

156,924

155,053

228,169

204,725

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

Total Accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets-7-

(2) Consolidated Statements of Income / Consolidated Statements of Comprehensive Income- Consolidated Statements of Income
Millions of Yen
Six Months Ended
September 30, 2015

Six Months Ended
September 30, 2016

Net sales

83,67084,513

Cost of sales

49,004

48,644Gross profit

34,66535,869Selling, general and administrative expenses

20,40021,133Operating income

14,265

14,736

Non-operating income
Interest income

68Dividend income

245

289

Gain on sales of investment securities

62

220

Other

1,259

372

Total non-operationg income

1,574

890

110

87

Non-operating expenses
Interest expenses
Foreign exchange losses-

634

Product compensation expenses

150

-

Other

447

690

Total non- operating expenses

708

1,413

15,131

14,213Extraordinary income--

Extraordinary losses--

Income before income taxes and non-controlling interests

15,131

14,213

Income taxes - current

3,981

3,484

Income taxes - deferred

(94)

55

Ordinary income

Total income taxes

3,886

3,540

Net income

11,244

10,67397

76

11,147

10,596

Net income attributable to non-controlling interests
Net income attributable to owners of parent-8-

- Consolidated Statements of Comprehensive Income
Millions of Yen
Six Months Ended
September 30, 2015
Net income

Six Months Ended
September 30, 2016

11,244

10,673

Other comprehensive income
Valuation difference on available-for-sale securities(1,234)(2,317)

Foreign currency translation adjustment

(413)

(870)

Remeasurements of defined benefit plans, net of tax

(42)

(37)

Share of other comprehensive income of entities accounted
for using equity method(0)0(1,690)(3,224)

9,554

7,448

9,518

7,436

35

12

Total other comprehensive income
Comprehensive income(Comprehensive income attributable to)
Owners of parent
Non-controlling interests-9-(3) Consolidated Statements of Cash Flows

Millions of Yen
Six Months Ended
September 30, 2015

Six Months Ended
September 30, 2016

Cash flows from operating activities
Income before income taxes and non-controlling interests

15,131

14,213

Depreciation

4,446

4,085

Interest and dividend income

(251)

(297)

Interest expenses

110

87

Loss (gain) on disposal of non-current assets

130

261

Decrease (increase) in notes and accounts receivable - trade

14,49013,567

Decrease (increase) in inventories(2,231)

1,397

Increase (decrease) in notes and accounts payable - trade(1,542)(2,055)

Other, net

1,168

1,854

Subtotal

31,453

33,114

311

1,321

(111)

(88)

Income taxes paid

(4,011)(4,921)

Net cash provided by (used in ) operating activities

27,642

29,426

Interest and dividend income received
Interest expenses paid

Cash flows from investing activities
Purchase of investment securities

(6)

(5)

Proceeds from sales of investment securities

109

2,887

(4,308)(5,322)

(96)

(183)

Purchase of intangible assets

(84)

(833)

Net decrease (increase) in short-term loans receivable

(271)

115

Purchase of long-term prepaid expenses

(481)

(612)

Purchase of property, plant and equipment
Payments for retirement of property, plant and equipment

Other, net

483

(554)

(4,654)(4,509)Net increase (decrease) in short-term loans payable(16,355)(16,009)

Repayments of long-term loans payable(1,370)(1,480)Cash dividends paid

(3,469)(4,013)

(70)

(52)

(6,000)(5,000)Net cash provided by (used in ) investing activities
Cash flows from financing activities

Dividends paid to non-controlling interests
Share repurchase
Other, net

(21)

(9)

(27,287)(26,565)

(172)

(395)

Net increase (decrease) in cash and cash equivalents(4,473)(2,044)

Cash and cash equivalents at the beginning of period

31,34335,335

Increase in cash and cash equivalents from newly consolidated
subsidiary

61-

Decrease in cash and cash equivalents resulting from exclusion ofsubsidiaries from consolidation

-

(25)

26,93133,266

Net cash provided by (used in ) financing activities
Effect of exchange rate change on cash and cash equivalents

Cash and cash equivalents at the end of period- 10 -

(4) Notes to Consolidated Financial Statements(Notes on Assumption of Going Concern)
Not applicable.
(Notes on Significant Changes in Shareholders' Equity)
The Company canceled 1,000,000 treasury shares on May 10, 2016 based on the resolution of Board of Directors' meeting held on April 25, 2016.
In addition, the Company canceled 1,000,000 treasury shares on August 31, 2016 based on the resolution of Board of Directors' meeting held on
August 23, 2016. As a result, retained earnings and treasury shares decreased by 5,695 million yen during the second quarter of current
consolidated fiscal year.
Also, the Company repurchased its own shares based on the resolution of Board of Directors' meeting held on May 12, 2016. As a result, treasury
shares increased by 4,999 million yen during the second quarter of current consolidated fiscal year.

Segment Information
1. Information Regarding Sales, Income (Loss) of Reportable Segments
1) For the Six Months Ended September 30, 2015 (From April 1, 2015 to September 30, 2015)
Chemicals

Performance Agricultural
Materials
Chemicals

Pharmaceuticals

Trading(Millions of Yen)
Others

Total

Adjustment(1)

Consolidated
total

83,670

Sales
Sales to outside customers

12,297

23,032

19,236

3,742

21,484

3,876

83,670-Intersegment Sales

4,444

3,008

1,903

-

6,036

5,011

20,404(20,404)-

Total Sales

16,742

26,04021,1403,742

27,521

8,888

104,075(20,404)

83,670

Segment income or loss
(Operating Income or Loss)

1,405

6,338

6,221

617

856

(28)

15,410(1,144)

14,265

Notes: (1) The (1,144) million yen adjustment in segment income includes (146) million yen in intersegment eliminations and (998)

million yen

corporate expenses not attributable to any reportable segment. The corporate expenses are mainly group administrative expenses
which do not belong to any segment.
2) For the Six Months Ended September 30, 2016 (From April 1, 2016 to September 30, 2016)
Chemicals

Performance Agricultural
Materials
Chemicals

Pharmaceuticals

Trading(Millions of Yen)
Others

Total

Adjustment(1)

Consolidated
total

Sales
Sales to outside customers

12,17022,47521,876

3,664

20,766

3,546

84,49914

84,513

Intersegment Sales

4,368

3,033

2,107

26

6,847

5,045

21,428(21,428)-

Total Sales

16,53825,50823,983

3,690

27,614

8,591

105,927(21,414)84,513

Segment income or loss
(Operating Income or Loss)

1,324

6,166

6,852

617

842

12

15,815(1,079)14,736

Notes: (1) The (1,079) million yen adjustment in segment income includes (31) million yen in intersegment eliminations, 14 million yen sales
not attributable to any reporting segment, and (1,061) million yen corporate expenses not attributable to any reportablesegment. The corporate expenses are mainly group administrative expenses which do not belong to any segment.

- 11 -