Ishihara Chemical : Consolidated Financial Results for the Six Months Ended September 30, 2023

Note: This document is a translation of a part of the original Japanese version and provided for reference purposes only. In the event of any discrepancy between the Japanese original and this English translation, the Japanese original shall prevail.

	Consolidated Financial Results
	for the Six Months Ended September 30, 2023
	[Japanese GAAP]
	October 31, 2023
Company name:	ISHIHARA CHEMICAL CO.,LTD.
Stock exchange listing: Tokyo
Code number:	4462
URL:	https://www.unicon.co.jp/english/

Representative:	Yasuyuki Sakai	President and Representative Director
Contact:	Yasumasa Yamaguchi	Director, General Manager of Administration Department and Administrative Manager
Phone:	[phone]

Scheduled date of filing quarterly securities report:			November 10, 2023
Scheduled date of commencing dividend payments:			December 1, 2023
Availability of supplementary briefing material on quarterly financial results: Yes
Schedule of quarterly financial results briefing session:			Yes
						(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Six Months Ended September 30, 2023 (April 1, 2023 to September 30, 2023)
(1) Consolidated Operating Results				(% indicates changes from the previous corresponding period.)
	Net sales			Operating profit	Ordinary profit	Profit attributable to
			owners of parent
Six months ended	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%
September 30, 2023	10,035		(3.2)		1,062	(15.6)	1,152	(15.5)	903	(4.3)
September 30, 2022	10,369		7.9		1,259	(5.9)	1,363	(4.1)	944	(16.9)

(Note) Comprehensive income:	Six months ended September 30, 2023:
	Six months ended September 30, 2022:

¥	911 million	[	9.9%]
¥	829 million	[	(22.2) %]

	Basic earnings	Diluted earnings
	per share		per share
Six months ended	Yen			Yen
September 30, 2023	60.36			-
September 30, 2022	61.63			-
(2) Consolidated Financial Position
	Total assets		Net assets	Capital adequacy ratio
As of	Millions of yen		Millions of yen	%
September 30, 2023	27,125			22,229	81.9
March 31, 2023	26,505			21,900	82.6
(Reference) Equity: As of	September 30, 2023:	¥	22,229 million
As of	March 31, 2023:	¥	21,900 million

2. Dividends

				Annual dividends
	1st	2nd	3rd		Year-end	Total
	quarter-end	quarter-end	quarter-end
	Yen		Yen	Yen		Yen	Yen
Fiscal year ended March 31, 2023	-		17.00	-		17.00	34.00
Fiscal year ending March 31, 2024	-		18.00
Fiscal year ending March 31, 2024				-		18.00	36.00
(Forecast)
(Note) Revision to the forecast for dividends announced most recently:	No

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2024(April 1, 2023 to March 31, 2024)

(% indicates changes from the previous corresponding period.)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Basic earnings
		owners of parent	per share
	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Full year	21,400		5.2	2,700	26.2	2,780	23.1	2,010	19.3	134.45
(Note) Revision to the financial results forecast announced most recently:	No

* Notes:

1. Changes in significant subsidiaries during the six months ended September 30, 2023: 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
4. 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: No
   4. Retrospective restatement: No
5. Total number of issued shares (common shares)
6. 1. Total number of issued shares at the end of the period (including treasury shares):

September 30, 2023:	16,308,280	shares
March 31, 2023:	16,308,280	shares
2) Number of treasury shares at the end of the period:
September 30, 2023:	1,381,818	shares
March 31, 2023:	1,174,708	shares

3) Average number of shares outstanding during the period:
Six months ended September 30, 2023:	14,973,203	shares
Six months ended September 30, 2022:	15,318,782	shares

*These quarterly consolidated financial results are outside the scope of quarterly review by certified public accountants and audit corporations.

*Explanation for the appropriate use of performance forecast and other special notes:

The statements regarding forecast of financial results in this report are based on the information that is available to the Company, as well as certain assumptions that are deemed to be reasonable by management, and they are not meant to be a commitment by the Company. Therefore, there might be cases in which actual results differ materially from forecast values due to various factors. For the suppositions that form the assumptions for earnings forecast and cautions concerning the use thereof, please refer to "1. Qualitative Information on Quarterly Financial Results (2) Explanation of Forecast of Consolidated Financial Results and Other Forward- Looking Information" on page 2 of this report.

ISHIHARA CHEMICAL CO.,LTD.(4462) Consolidated Financial Results for the Six Months Ended September 30, 2023

○Table of Contents for Attached Materials
1. Qualitative Information on Quarterly Financial Results	2
(1)	Explanation of Results of Operations	2
(2)	Explanation of Forecast of Consolidated Financial Results and Other Forward-Looking Information	2
2. Quarterly Consolidated Financial Statements	3
(1)	Quarterly Consolidated Balance Sheets	3
(2)	Quarterly Consolidated Statements of Income and Comprehensive Income	5
(3)	Notes to Quarterly Consolidated Financial Statements	7
	(Notes to Going Concern Assumptions)	7
	(Notes to Significant Changes in the Amount of Shareholders' Equity)	7

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ISHIHARA CHEMICAL CO.,LTD.(4462) Consolidated Financial Results for the Six Months Ended September 30, 2023

1. Qualitative Information on Quarterly Financial Results

(1) Explanation of Results of Operations

For the six months ended September 30, 2023, Japanese economy continues to recover moderately. However, the outlook is uncertain due to price hikes and the sluggishness of the global economy.

Under such circumstances, the group has been working on the development of high value-added products, conducting sales activities in Japan and abroad, and striving to expand the market. However, the group has been affected by production adjustments on the semiconductor market.

As a result, net sales for the six months ended September 30, 2023 were 10,035 million yen (down 3.2% year on year), operating profit was 1,062 million yen (down 15.6% year on year) due to an increase in selling, general and administrative expenses, including travel, depreciation and freight costs, ordinary profit was 1,152 million yen (down 15.5% year on year), and profit attributable to owners of parent was 903 million yen (down 4.3% year on year).

Overview of financial results by segment are as follows.

From the 3rd quarter of the previous consolidated fiscal year, the electronic components industry entered a phase of production cutbacks and adjustments as negative factors in personal consumption, such as the prolonged situation in Ukraine, the global inflation, and ending the demand for stay-at-home, affected end products such as personal computers, smartphones, and LCD TVs.

In addition, sales of Automated chemical analyzer were affected by the production adjustment due to the decrease of demand for the semiconductor, especially for the smartphone and personal computers related products.

As a result, net sales in this segment were 4,868 million yen (down 10.6% year on year).

As for processed functional materials, the semiconductor market was stagnant, and sales of ceramics and engineering plastics for semiconductor manufacturing equipment and semiconductor inspection equipment decreased.

As a result, net sales in this segment were 328 million yen (down 24.9% year on year).

Sales of air conditioner cleaners and coating agents increased from the previous year due to expanding the number of car dealers that deal with our products. In addition, we raised the prices of products for car dealers and repair products such as compounds in response to soaring raw material prices. Meanwhile, sales of products to Japanese car dealers in China were significantly lower than in the previous year.

As a result, net sales in this segment were 1,895 million yen (down 0.2% year on year).

Sales of Industrial chemicals increased significantly from the previous year due to raising the prices of existing products, the expansion of market share, and expanding sales of new products while the recovery of steel demand has been delayed.

As a result, net sales in this segment were 2,942 million yen (up 13.8% year on year).

(2) Explanation of Forecast of Consolidated Financial Results and Other Forward-Looking Information

There is no change to the consolidated earnings forecast for the full-year earnings of the fiscal year ending March 31, 2024, which were announced on May 15, 2023.

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ISHIHARA CHEMICAL CO.,LTD.(4462) Consolidated Financial Results for the Six Months Ended September 30, 2023

2. Quarterly Consolidated Financial Statements

(1) Quarterly Consolidated Balance Sheets

				(Thousands of yen)
			As of March 31, 2023	As of September 30, 2023
Assets
	Current assets
		Cash and deposits	5,927,981	5,736,695
		Notes and accounts receivable - trade	4,433,512	4,787,777
		Electronically recorded monetary claims -	647,016	880,295
		operating
		Securities	-	100,220
		Merchandise and finished goods	1,046,653	1,051,688
		Work in process	225,338	258,370
		Raw materials and supplies	1,139,127	1,276,442
		Other	183,401	100,500
		Total current assets	13,603,030	14,191,991
	Non-current assets
		Property, plant and equipment
		Buildings and structures, net	3,126,265	3,046,372
		Other, net	2,373,531	2,693,836
		Total property, plant and equipment	5,499,797	5,740,209
		Intangible assets	70,993	64,944
		Investments and other assets
		Investment securities	6,273,988	6,061,065
		Other	1,062,522	1,072,965
		Allowance for doubtful accounts	(5,250)	(5,250)
		Total investments and other assets	7,331,260	7,128,780
		Total non-current assets	12,902,051	12,933,934
	Total assets	26,505,082	27,125,926
Liabilities
	Current liabilities
		Notes and accounts payable - trade	1,951,955	1,980,425
		Electronically recorded obligations - operating	907,889	938,843
		Income taxes payable	387,643	407,206
		Provision for bonuses	223,286	233,745
		Provision for bonuses for directors (and other	18,600	19,800
		officers)
		Other	436,502	639,605
		Total current liabilities	3,925,876	4,219,624
	Non-current liabilities
		Retirement benefit liability	50,737	51,451
		Asset retirement obligations	68,143	68,445
		Other	560,321	557,053
		Total non-current liabilities	679,202	676,950
	Total liabilities	4,605,079	4,896,575

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ISHIHARA CHEMICAL CO.,LTD.(4462) Consolidated Financial Results for the Six Months Ended September 30, 2023

				(Thousands of yen)
			As of March 31, 2023	As of September 30, 2023
Net assets
	Shareholders' equity
		Share capital	1,980,874	1,980,874
		Capital surplus	2,294,566	2,297,678
		Retained earnings	18,356,554	19,003,024
		Treasury shares	(1,362,765)	(1,690,928)
		Total shareholders' equity	21,269,230	21,590,648
	Accumulated other comprehensive income
		Valuation difference on available-for-sale	630,153	629,386
		securities
		Foreign currency translation adjustment	619	9,316
		Total accumulated other comprehensive income	630,772	638,702
	Total net assets	21,900,003	22,229,351
Total liabilities and net assets	26,505,082	27,125,926

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ISHIHARA CHEMICAL CO.,LTD.(4462) Consolidated Financial Results for the Six Months Ended September 30, 2023

1. Quarterly Consolidated Statements of Income and Comprehensive Income
   Quarterly Consolidated Statements of Income (For the six months)

			(Thousands of yen)
		For the six months	For the six months
		ended September 30, 2022	ended September 30, 2023
	Net sales	10,369,254	10,035,614
	Cost of sales	7,041,930	6,832,761
	Gross profit	3,327,324	3,202,852
	Selling, general and administrative expenses	2,068,139	2,139,860
	Operating profit	1,259,184	1,062,991
	Non-operating income
	Interest income	7,520	3,688
	Dividend income	23,993	23,153
	Foreign exchange gains	44,319	32,495
	Insurance return	843	-
	Other	30,863	32,307
	Total non-operating income	107,540	91,645
	Non-operating expenses
	Interest expenses	707	412
	Commission for purchase of treasury shares	1,054	846
	Rental expenses	1,020	1,020
	Other	238	109
	Total non-operating expenses	3,020	2,388
	Ordinary profit	1,363,704	1,152,248
	Extraordinary income
	Gain on sale of investment securities	4,245	131,492
	Total extraordinary income	4,245	131,492
	Extraordinary losses
	Loss on retirement of non-current assets	2,727	230
	Total extraordinary losses	2,727	230
	Profit before income taxes	1,365,221	1,283,510
	Income taxes	421,186	379,769
	Profit	944,035	903,740
	Profit attributable to non-controlling interests	-	-
	Profit attributable to owners of parent	944,035	903,740

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ISHIHARA CHEMICAL CO.,LTD.(4462) Consolidated Financial Results for the Six Months Ended September 30, 2023

Quarterly Consolidated Statements of Comprehensive Income (For the six months)

			(Thousands of yen)
		For the six months	For the six months
		ended September 30, 2022	ended September 30, 2023
Profit	944,035	903,740
Other comprehensive income
	Valuation difference on available-for-sale securities	(131,104)	(766)
	Foreign currency translation adjustment	16,466	8,696
	Total other comprehensive income	(114,637)	7,929
Comprehensive income	829,397	911,670
Comprehensive income attributable to
	Comprehensive income attributable to owners of	829,397	911,670
	parent
	Comprehensive income attributable to non-controlling	-	-
	interests

6

ISHIHARA CHEMICAL CO.,LTD.(4462) Consolidated Financial Results for the Six Months Ended September 30, 2023

1. Notes to Quarterly Consolidated Financial Statements (Notes to Going Concern Assumptions)
   Not applicable.
   (Notes to Significant Changes in the Amount of Shareholders' Equity)
   Not applicable.

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