KH Neochem : Notice regarding the revisions of Financial Forecasts and Dividend Forecasts

For immediate release

August 5, 2021

Notice regarding the revisions of Financial Forecasts and Dividend Forecasts

Tokyo, August 5, 2021 - KH Neochem Co., Ltd (TSE: 4189, President and CEO: Michio Takahashi, "KH Neochem") announced regarding the revisions of full year consolidated financial forecasts and dividend forecasts for the fiscal year ending December 31, 2021 ("FY2021").

1. Revision of the full year consolidated financial forecasts for FY2021 (January 1, 2021 through December 31, 2021)

													(Millions of yen)
											Net income
		Net sales			Operating			Ordinary			attributable			Earnings per
				income			income			to owners of			share (Yen)
											parent
Previous forecasts (A)	104,000	11,800	12,100	8,400	226.28
(May 11, 2021)
Revised forecasts (B)		112,000			15,500			15,900			11,000			296.43
Change (B-A)	8,000	3,700	3,800	2,600	-
Change (%)	7.7%	31.4%	31.4%	31.0%	-
(Reference) Results of
the previous full year	77,332	5,642	5,627	4,046	109.12
(FY2020)

Reasons for the revision

In the first half of FY2021 (January to June), the sales volume increased thanks to a recovery in demand. In addition, in the business environment, there was a soaring of the overseas markets for some products due to an increase in naphtha prices and a tightening of the supply- demand balance. KH Neochem group continuously reviewed the sales prices as we continued our business activities and the result was that the earnings exceeded the forecasts announced on May 11, 2021.

Although there are uncertainties such as the situation of the spread of COVID-19 from now on, the demand for the products of KH Neochem group is expected to remain strong in the second half of the year (July to December). For the full fiscal year, earnings are expected to exceed the forecasts that were announced previously.

For the full fiscal year ending December 2021, the foreign exchange rate is assumed to be 109 yen per US dollar, and the domestic naphtha price is assumed to be 48,600 yen/kl.

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2. Revision of the dividend forecasts for FY2021 (January 1, 2021 through December 31, 2021)

			(Yen)
		Dividend per share
	Interim	Year-end	Total annual
Previous forecasts	30.00	30.00	60.00
(February 10, 2021)
Revised forecasts		35.00	65.00
Results for the current	30.00
period
Results of the previous	30.00	30.00	30.00
year (FY2020)

Reasons for the revision

KH Neochem recognizes that the returning of profits to shareholders and the continuous growth of the company are the most important issues for the management of the company. Our basic policy is to maintain continuous and stable dividends while taking into account the balance between retained earnings and investments in growth domains.

In light of the above revision to the earnings forecasts, we have revised our forecast for the year-end dividend to 35.00 yen per share (a dividend increase of 5.00 yen from the previous forecast of 30.00 yen). As a result, the forecast for the annual dividend for the fiscal year ending December 2021 is now 65.00 yen per share.

Financial forecasts and other forward-looking statements included in this document are based on the information currently available to KH Neochem and certain assumptions deems reasonable, and KH Neochem makes no commitments regarding their achievability. Actual business results may differ materially from the forecast due to variety of factors.

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