Krosaki Harima : Summary of Consolidated Financial Statements for 2Q FY2022

Note: This document has been translated from part of the original Japanese version into English for reference purpose only. If there are conflicts between this translated document and the original Japanese version, the original Japanese version shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from this translation.

Summary of Consolidated Financial Statements

for the Second Quarter of the Fiscal Year Ending March 2023

[Japanese Standards]

			October 31, 2022
Listed Company Name:	KROSAKI HARIMA CORPORATION
	Listed on the Tokyo Stock Exchange and the Fukuoka Stock Exchange
Securities Code:	5352	URL: https://www.krosaki.co.jp/
Representative:	Kazuhiro Egawa, President
Date to submit quarterly financial statements:	November 11, 2022
Date to start distributing dividends:		November 25, 2022

Supplementary documents for this summary of financial statements: Yes

Explanation meeting for institutional investors and analysts on this summary of financial statements: Yes

(Figures shown are rounded down to the nearest million yen)

1. Consolidated Financial Results for the First Half of the Fiscal Year Ending March 31, 2023 (April 1, 2022, to September 30, 2022)

(1) Consolidated Business Results

(Percentages indicate changes from the same period of the previous fiscal year.)

	Net sales		Operating profit		Ordinary profit
	Millions of yen	%	Millions of yen	%	Millions of yen	%
First 2Qs, Fiscal Year Ending	80,591	23.8	4,914	16.7	5,685	24.7
March 2023
First 2Qs, Fiscal Year Ended	65,112	17.0	4,209	188.4	4,557	104.6
March 2022
	Profit attributable to owners	Profit per share		Diluted profit per share
	of parent
	Millions of yen	%		Yen		Yen
First 2Qs, Fiscal Year Ending	3,576	18.5		424.74		-
March 2023
First 2Qs, Fiscal Year Ended	3,017	78.7		358.28		-
March 2022

Note: Comprehensive income was ¥8,750 million (120.7%) for the first two quarters of the fiscal year ending March 2023 and ¥3,965 million (136.9%) for the first two quarters of the fiscal year ended March 2022.

(2) Consolidated Financial Position

	Total assets	Net assets	Equity ratio
	Millions of yen	Millions of yen	%
September 30, 2022	157,590	75,369	45.0
March 31, 2022	142,694	69,084	45.8

Reference: Equity capital was ¥70,985 million as of September 30, 2022, and ¥65,344 million as of March 31, 2022.

2. Dividends

			Dividend
	1Q End	2Q End	3Q End	Year-End	Annual
	Yen	Yen	Yen	Yen	Yen
Fiscal Year Ended March 2022	-	100.00	-	100.00	200.00
Fiscal Year Ending March 2023	-	110.00
Fiscal Year Ending March 2023 (Forecast)			-	-	-

Note: Revision to the most recent dividend forecasts previously released: No

*The forecast of year-end dividends for the fiscal year ending March 2023 has not yet been determined because a decision will be made by closely observing the trends of business results. These dividend forecasts will be disclosed when it becomes possible to do so.

3. Forecast of Consolidated Business Results for the Fiscal Year Ending March 31, 2023 (April 1, 2022 to March 31, 2023)

(The percentages indicate the rates of increase or decrease compared with the preceding fiscal year.)

	Net sales		Operating profit		Ordinary profit
	Millions of yen	%	Millions of yen	%	Millions of yen	%
Full Year	163,000	21.8	11,000	45.4	11,500	32.5
	Profit attributable to owners	Profit per share
	of parent
	Millions of yen	%		Yen
Full Year	7,300	33.0		866.82

Note: Revision to the most recent performance forecasts previously released: Yes

Notes:

1. Changes in important subsidiaries involving a change in the scope of consolidation during the period: None
2. Adoption of accounting methods specific to preparation of quarterly consolidated financial statements: None
3. Changes in accounting policies or estimates and retrospective restatements
4. 1. Changes in accounting policies in accordance with revision of accounting standards: None
   2. Changes in accounting policies other than above: None
   3. Changes in accounting estimates: None
   4. Retrospective restatements: None
5. Number of shares issued and outstanding (common stock)
6. 1. Number of shares issued and outstanding as of the period-end (including treasury shares):

2Q, Fiscal Year ending March 2023:	9,114,528	Fiscal Year ended March 2022:	9,114,528
2. Number of treasury shares as of the period-end:
2Q, Fiscal Year ending March 2023:	693,113	Fiscal Year ended March 2022:	692,845
3. Average number of shares outstanding:
2Q, Fiscal Year ending March 2023:	8,421,545	2Q, Fiscal Year ended March 2022:	8,422,559

The Summary of Quarterly Consolidated Financial Statements is exempt from the quarterly review by Certified Public Accountants or an Audit Corporation.

Statement regarding the proper use of financial forecasts and other special remarks:

Forward-looking statements, including the forecast of business results, in this Summary are based on information that has been obtained by the Company to date and certain assumptions that are deemed as reasonable, and the Company does not guarantee the realization of these statements. Please understand that actual results may differ significantly from those statements due to various factors. For details of the forecast of business results, see "(2) Explanation of Forecast of Consolidated Business Results and Other Forward-looking Information" under "1. Qualitative Information on Quarterly Financial Results" on page 3 of the attachment.

Contents of the Attachment
1. Qualitative Information on Quarterly Financial Results ................................................................	2
(1)	Explanation of Business Results ..................................................................................................	2
(2)	Explanation of Forecast of Consolidated Business Results and Other Forward-looking
	Information...................................................................................................................................	3
2. Quarterly Consolidated Financial Statements and Major Notes ....................................................	4
(1)	Quarterly Consolidated Balance Sheets .......................................................................................	4
(2)	Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of
	Comprehensive Income ................................................................................................................	6
(3)	Notes to Quarterly Consolidated Financial Statements ................................................................	8
	(Notes on Going Concern Assumption) .......................................................................................	8
	(Notes on Significant Changes in Shareholders' Equity).............................................................	8
3. Others .............................................................................................................................................	8

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1. Qualitative Information on Quarterly Financial Results

(1) Explanation of Business Results

During the first two quarters of the fiscal year ending March 31, 2023, the domestic total crude steel output in the steel industry, the Group's main customers, decreased by 7.5% year on year, to 44.8 million tons. Worldwide crude steel output from January to September 2022, as announced by the World Steel Association, decreased by 4.3% year on year to 1,405.2 million tons, despite an increase of 6.4% year on year to 93.3 million tons in India.

In this environment, the Group's consolidated net sales for the first two quarters of the fiscal year ending March 31, 2023 increased 23.8% from a year earlier to ¥80,591 million. This was mainly attributable to business expansion in the strong Indian steel market and sales expansion to non-ferrous metals fields, in addition to steady efforts to pass the rising price of raw material and other cost increases on to selling prices in the Refractories segment.

Primarily due to the increase in net sales, the Group's consolidated operating profit for the first two quarters of the fiscal year ending March 31, 2023 increased 16.7% from a year earlier to ¥4,914 million, ordinary profit increased 24.7% to ¥5,685 million, and profit attributable to owners of parent increased 18.5% to ¥3,576 million.

Operating results by business segment for the first two quarters of the fiscal year ending March 31, 2023 are as follows.

The net sales of each segment represent sales to external customers and do not include inter-segment sales or transfers. The amounts of segment profit are based on operating profit.

[Refractories]

Net sales in the Refractories segment increased by 28.0% from a year earlier to ¥68,701 million. This was mainly attributable to business expansion in the strong Indian steel market and sales expansion to non-ferrous metals fields, in addition to steady efforts to pass the rising price of raw material and other cost increases on to selling prices. Primarily due to the net sales increase and productivity improvements, segment profit increased by 23.8% from a year earlier to ¥3,643 million.

[Furnace]

Net sales in the Furnace segment increased by 8.3% from a year earlier to ¥6,999 million owing to orders received for large-scale construction projects. Primarily due to the net sales increase and cost reductions, segment profit increased by 62.1% from a year earlier to ¥411 million.

[Ceramics]

Net sales in the Ceramics segment decreased by 2.7% from a year earlier to ¥4,137 million. This was mainly because, although demand for ceramic materials for electronic components was strong, sales of thermal insulation materials for fuel cells declined owing to the impact of China's COVID-19 lockdowns. Segment profit decreased by 20.7% from a year earlier to ¥552 million.

[Real Estate]

Net sales in the Real Estate segment remained unchanged from a year earlier at ¥368 million. Segment profit increased by 0.5% from a year earlier to ¥300 million.

[Others]

Net sales in Others segment increased by 6.6% from a year earlier to ¥383 million. Segment profit

2

decreased by 95.1% from a year earlier to ¥0 million, due to the time lag in reflecting rising costs in sales prices.

1. Explanation of Forecast of Consolidated Business Results and Other Forward-looking Information
   The Group has revised the forecast of consolidated business results for the fiscal year ending March 31, 2023, released on July 29, 2022. For details, please refer to the "Notice Regarding Revisions to the Consolidated Business Results Forecast" announced today.

Business results forecasts may vary significantly due to factors such as fluctuations in demand for refractories associated with changes in crude steel output as well as market trends for refractory materials.

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