Semi-Annual Report 2020 For the Six-Month Period Ended 30th September 2020
PROFILE
Since its establishment in 1958, MARUDAI FOOD CO., LTD. has been dedicated to offering delicious, high-quality meat products. In order to understand the latest consumer trends and to meet the needs of modern lifestyles, we have continuously strengthened our r esearch, sales and production operations. Intending to become Japan's leading food company, we successfully listed our stock on the First Section of the Tokyo Stock Exchange in 1972. Starting as a ham and sausage producer, Marudai Food has steadily expanded its range of products to include heat-processed, vacuum-packed food, dessert and beverage products and fresh meats. Ham and sausage, however, remain an integral part of our product line and continue to account for almost a third of our sales. While pursuing a leading position in the ham and sausage market, Marudai Food was eager to explore new avenues by developing precooked and processed foods, which went on sale in 1973. This long shelf-life food was developed to meet the specific need for fast meal preparation. Containing absolutely no preservatives and requiring only several minutes to prepare, Marudai precooked and processed foods have established a strong foothold in the market. Building on this success, we will make even greater efforts to create new products that satisfy the increasingly discriminating tastes of consumers.
CONTENTS

First of all, we would like to express our profound gratitude for the continued support of our shareholders. We hereby would like to announce the business results for the first six-month period of the company’s 73th fiscal year. During the first six-month period ended 30th September 2020, the Japanese economy has shown signs of improvement as economic activity gradually resumes. However, it is important to monitor risks concerning further economic downturns in Japan and overseas due to COVID-19, and impacts of volatility in the financial and capital markets. The overall outlook remains challenging. In the industry in which the Marudai Food Group operates, demand for eat-in and ready-to-eat meals has increased as consumers refrain from going out due to the pandemic. On the other hand, demand for eating out and for convenience stores, particularly in urban areas, remains under pressure. This, coupled with intensifying price competition as consumers look to maintain their current standards of living and the impact of rising logistics costs, means that the business environment continues to be extremely harsh. Regarding the meat market, domestic beef prices fell below the previous year's levels due to weak demand for eating out, while domestic pork prices were higher, reflecting increased demand for eat-in meals. In addition, although prices for U.S. beef were up, owing mainly to unstable supplies from overseas suppliers and sluggish demand for eating out, they have recently fallen below the levels of the previous year. Imported pork prices were generally weak and the outlook for the meat market is uncertain. In these difficult circumstances, the Marudai Food Group advanced its corporate activities with the aim of gaining recognition as an enterprise with a social mission, namely, a comprehensive food products company offering merchandise that satisfies the highest standards of safety and reliability. As a result, consolidated net sales for the first six-month period decreased by 5.1% year on year to ¥118,287 million. Operating loss was ¥862 million (compared to operating income of ¥2,063 million in the same period of the previous year) and profit attributable to owners of parent decreased by 82.6% to ¥250 million. Once again, we would like to express our gratitude to our shareholders and to ask for your continued support of our business in the future. December 2020.
Toshiharu Inoue
President and Representative Director

Processed Food Products
The Ham & Sausage Products operations conducted sales promotion activities on the theme of “enriching time at home,” in response to rising demand for eat-at-home meals with a focus on mainstay products such as "Kunseiya-Ripened Pork Sausage" and “Itsumo shinsen - Always Fresh Loin Ham.” In addition, we looked to expand sales through the launch of new products such as “Vienna Sausage for the Corner of the Lunchbox” with a design featuring popular characters. On the other hand, sales of some commercial food products suffered due to the impact of the pandemic, and midyear gift products were adversely affected by consumers refraining from going out. As a result, sales in the Ham & Sausage Products operations decreased by 1.7% year on year. In our Precooked & Processed Foods operations, sales of the " Bistro Club Beef Curry " series increased as households stockpiled food. Sales of mainstay products such as “Sundubu” and “Salad Chicken” also performed well. On the other hand, stay-at-home requests and increased working from home adversely affected sales of products for convenience stores, mainly in urban areas. In addition, sales of beverages containing black tapioca decreased significantly due to the entry of new competitors. As a result, sales in the Precooked & Processed Foods operations decreased by 9.9% year on year. As a result, sales in the Processed Food Products segment amounted to ¥81,536 million, a decrease of 6.3% year on year. Segment income was ssignificantly below the previous year with a loss of ¥1,196 million (compared to segment income of ¥1,426 million in the same period of the previous year) owing mainly to lower sales, lower prices due to intensified competitive pressure and higher raw material prices.
Meat Products
With regard to beef, sales of Japanese beef were on a par with the previous year's level, but sales of imported beef were sluggish due to weak demand for eating out and lower unit prices. Therefore, overall beef sales were below the previous year's level. Regarding pork, sales of pre-pack products increased, but sales of imported pork fell slightly below the previous year’s level due to lower supplies from overseas operators and weak demand for eating out. Sales of chicken were lower due to an increase in domestic inventories of imported products and a consequent decline in unit prices. As a result, sales in the Meat Products segment decreased by 2.5% year on year to ¥36,666 million. Segment income decreased by 50.6% year on year to ¥297 million, mainly because of a decline in demand for eating out.
Other
Sales in the Other business increased by 5.8% year on year to ¥85 million and Segment income increased by 4.3% to ¥37 million. CONSOLIDATED BALANCE SHEETS 30th September 2020 and 2019 (Unaudited)
See the accompanying note.
CONSOLIDATED STATEMENTS OF INCOME Six months ended 30th September 2020 and 2019 (Unaudited)
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Six months ended 30th September 2020 and 2019 (Unaudited)
See the accompanying note. CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS Six months ended 30th September 2020 and 2019 (Unaudited)
Six months ended 30th September 2020 and 2019 (Unaudited)
NOTE TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Basis of financial statements MARUDAI FOOD CO., LTD. (the "Company") and its consolidated domestic subsidiaries maintain their official accounting records in Japanese yen and in accordance with the provisions set forth in the Japanese Company Law and accounting principles and practices generally accepted in Japan ("Japanese GAAP"). The accounts of overseas affiliated companies are based on their accounting records maintained in conformity with generally accepted accounting principles and practices prevailing in the respective countries of domicile. Certain accounting principles and practices generally accepted in Japan are different from International Accounting Standards and standards in other countries in certain respects as to application and disclosure requirements. Accordingly, the accompanying financial statements are intended for use by those who are informed about Japanese accounting principles and practices. These financial statements should be read along with the Annual Report to Shareholders for the year ended 31st March 2020. The translation of the Japanese yen amounts into U.S. dollar amounts is included solely for the convenience of readers outside Japan, using the prevailing exchange rate at 30th September 2020, which was ¥105.78 to U.S. $1.00. These translations should not be construed as representations that the Japanese yen amounts have been, could have been, or could in the future be converted into U.S. dollars at this or any other rate of exchange. Significant changes in the scope of consolidation From the second quarter ended 30th September 2020, Toraku Foods Co., Ltd., whose shares are newly acquired, and one other company have been included in the scope of consolidation. Reclassification Certain prior year amounts have been reclassified to conform to the current year's presentation.
(As of 30th September 2020)
(As of 30th September 2020)
MARUDAI FOOD CO., LTD. Head Office: 21-3 Midori-cho, Takatsuki-shi, Osaka, Japan Telephone: 81-726-61-2518  Fax: 81-726-61-5006