Metal One Corporation and Subsidiaries Consolidated Financial Results for FY2012

Income Statements(In ¥100 million)

Outline of Consolidated Results for FY2012

Performance in FY2011
Consolidated
Non-consolidated

Performance in FY2012

Variance

Variance

Consolidated

Non-consolidated

23,057

11,57924,730-1,673

13,202-1,623

1,077(4.7%)
-835
17-2

279
(2.4%)
-252
15-

1,095
(4.4%)-819-0-6-18-22-16184301(2.3%)-248-2-

Operating income

257

43270-1351-8

Interest income
Interest expense
Interest expense–net

5-37-32

7-9-27-36-29-2-1-38-11-3-2
20

Dividend income

18434

105-16-1712-180-851

121-5--16-11-281

129

252

28

164

-35

Extraordinary gain and loss

46-34

244

14-47

Income before income taxes

327

96

254

72

178

-82-93-15-6--92-18-0
2-30-

24-

219

90

144

75

148-59241

19Sales
Gross profit(Gross profit ratio)
Operating expenses
Provision for doubtful receivables

Amortization of goodwill

Other non-operating income and expenses
Equity in earnings of affiliated companies

Ordinary income

Income taxes
Minority interests

Net income

May 31, 2013
Metal One Corporation

Business environment
There had been a growing sense that the global economy was at an overall standstill this fiscal year, given the increasing severity of the European debt crisis andAmerican financial troubles, as well as the sluggish growth in emerging nations that was part of the backdrop to those problems. However, the efforts of various nations
bore fruit, and signs of a recovery were noted from the second half of the year. Japan’s economy had also been on a downward slide for the most part, but in response tocorrections to the yen’s strength and exports that rebounded in conjunction with the U.S. economy’s recovery in the latter half of the fiscal year, the Nikkei stock
average rebounded to pre-2008 financial crisis levels, and there were finally indications of rallies developing in some sectors.
With regard to the Metal One Group’s business environment, demand in some areas such as ASEAN remained robust, but when seen in global terms growth slowed
compared to the previous year in both advanced and emerging nations, and indications of a strong recovery in demand were lacking. Although manufacturing industries’
demand for steel in Japan was weak in response to the worldwide economic slump, the public works and construction sectors remained solid, particularly in connection
with reconstruction after the Great East Japan Earthquake and disaster preparedness.

-4
17-

Business performance
The Metal One Group conducted business in this business environment determined to achieve its fiscal 2012 earnings target of ¥20 billion in net income. At the sametime, the Group urgently implemented efforts to reorganize its overall corporate profit structure based on its dual corporate strategies—restructure to strengthen ourdomestic operations, and institute a strategic approach to overseas business—in the first year of its fourth Mid-term Consolidated Management Plan.
Although sales fell 6.8 percent compared to the fiscal year before, to ¥2.3057 trillion, the efforts noted above resulted in consolidated Metal One Group performance thisfiscal year that exceeded the previous year’s results in terms of ordinary income, up 11.1 percent to ¥28.1 billion, and consolidated net income, which rose 51.5 percent
to ¥21.9 billion.

Situation with main items
1. Sales and gross profit
Falling steel prices resulted in a sales decline of ¥167.3 billion compared to fiscal 2011, to ¥2.3057 trillion, and gross profit fell ¥1.8 billion, to ¥107.7 billion.

2. Operating expenses
260

Basic earnings capabilities

Despite continuing efforts to cut costs, overall operating expenses rose ¥1.6 billion, to ¥83.5 billion, due to increased shipping and storage charges, as well as fees paid
to outside experts in connection with a takeover bid, etc.

Basic earnings capabilities = Operating income (less provision for doubtful receivables) + Interest expense–net+ Dividend income + Equity in earnings of affiliated companies

3. Extraordinary gain and loss
Although losses on securities and tangible fixed assets occurred, as well as on the disposal of tangible fixed assets, the company’s extraordinary gains exceeded
extraordinary losses by ¥4.6 billion due to appropriation of profits from sales of securities and the amortization of negative goodwill.

Consolidated Balance Sheets
March 31, 2013

8,311
294
5,578
2,095
345

Current assets
Cash and deposits
Accounts receivable
Inventories
Other current assets-413 Current liabilities
payable-49 Accounts
取引債務
debt-709 Short-term
短期借入金
current liabilities
297 Otherその他の流動負債
48 Non-current liabilities
Other

2,540
1,287
1,254

Tangible and intangible non-current
assetsInvestments and other assets

Total liabilities
174
Common stock and additional paid-in
182 capital-8 Retained earnings, etc.
Assets and liabilities valuation andtranslation adjustments
Total net assets excluding minority
interests

Minority interests

Total net assets

Total assets

10852-239

Total liabilities andnet assets

108（-2）Affiliates
47（±0）

6,482
3,539
2,562
382
1,070
873
197
7,552
1,500
1,367
37
2,904
395
3,300

-598
-236
-312
-50
58
41
17-540
0
149
122
271
30
301

10,852-239

5. Total assets and shareholders’ equity
A decline in accounts receivable was the primary factor in total assets falling ¥23.9 billion compared to the end of the year before, to ¥1.0852 trillion. Current assets
accounted for 77 percent of these, and the company has continued to maintain a highly liquid financial structure.
Furthermore, net assets excluding minority interests rose ¥27.1 billion compared to the end of the previous fiscal year, to ¥290.4 billion, thanks to an increase invaluation and translation adjustments as a result of the rebound in share prices and the yen’s weakness. This meant that shareholder’s equity ratio rose 3.1 percent over
the year before, to 26.8 percent, which also bolstered the company’s sound financial condition.

6. Interest-bearing debt
Although the overseas steel business remained solid, primarily in the United States and Thailand, we felt the effects of slumping exports resulting from the yen’s historiclevels of strength and the economic slowdown in China. The company’s consolidated debt balance declined ¥27.1 billion compared to the previous year, to ¥343.5billion.

Status of affiliates

Consolidated Financial Indicators

Number of Group Companies

Subsidiaries

Seen by type of transaction, sales in Japan’s domestic market accounted for ¥1.4906 trillion (65 percent of the whole), exports for ¥405.4 billion (18 percent), andoverseas ventures for ¥404.6 billion (18 percent).

Variance from March31, 2012Long-term debt

Non-current assets

4. Business results by transaction type

March 31, 2013

Variance from March31, 2012(In ¥100 million)

Total (consolidated)

155（-2）

Note: Figures in parentheses ( ) show changes from the previous year.
Excluding the subsidiaries of subsidiaries, there are 80 consolidated subsidiaries.

March 31, 2013 March 31, 2012
Shareholders’equity ratio

26.8%

23.7%

D/E ratio

1.04

1.24

Shareholders’ equity ratio =Total net assets excluding minority interests ÷ Total assets
D/E ratio =(Short-term debt + Long-term debt) ÷ Total net assets

Metal One’s fourth mid-term management plan began from fiscal 2012. In Japan, as part of specific efforts to pursue one of our main strategies—restructure tostrengthen our domestic operations—the construction steel and steel scrap businesses conducted by four regional subsidiaries were transferred to Metal One Structural
Steel & Resource Corporation, with the aim of making the company’s domestic construction steel and steel scrap operations even more robust and highly functional. We
created an organization that could carry out integrated and unified strategies. We additionally turned M.O. Tec Corporation into a wholly owned subsidiary through atender offer with the goals of pursuing the synergies of nationwide sales strategies and transforming construction steel operations’ overall cost structure through organic
links between Metal One Structural Steel & Resource and M.O. Tec.
Meanwhile, with regard to another main strategy involving overseas operations—institute a strategic approach to overseas business—Metal One established steel service
center Nicometal Hidalgo, S.A. de C.V. in Mexico, where additional growth is anticipated in the automotive industry. In addition, in Australia, where stable growth isexpected in the energy and resource development sector, we launched a new company, ASM Corporation Pty. Ltd., with the goal of meeting the flourishing need forsteel—primarily for mining and construction machinery sectors—by establishing a regional base for warehousing, processing, and retailing.