Krosaki Harima : Summary of Consolidated Financial Statements for 3Q FY2021

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 Third Quarter of the Fiscal Year Ending March 2022

[Japanese Standards]

January 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:	February 10, 2022
Date to start distributing dividends:	―

Supplementary documents for this summary of financial statements: None

Explanation meeting for institutional investors and analysts on this summary of financial statements: None

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

1. Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2022 (April 1, 2021, to December 31, 2021)

(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 3Qs, Fiscal Year Ending	98,910	18.6	6,273	111.5	6,812	65.3
March 2022
First 3Qs, Fiscal Year Ended	83,364	(20.8)	2,965	(57.8)	4,121	(43.5)
March 2021
	Profit attributable to owners	Profit per share	Diluted profit per share
	of parent
	Millions of yen	%		Yen		Yen
First 3Qs, Fiscal Year Ending	4,456	48.4		529.17		-
March 2022
First 3Qs, Fiscal Year Ended	3,003	(37.0)		356.51		-
March 2021

Note: Comprehensive income was ¥5,581 million (55.1%) for the first three quarters of the fiscal year ending March 2022 and ¥3,598 million (-4.5%) for the first three quarters of the fiscal year ended March 2021.

(2) Consolidated Financial Position

	Total assets	Net assets	Equity ratio
	Millions of yen	Millions of yen	%
December 31, 2021	135,959	66,850	46.6
March 31, 2021	130,354	63,288	46.1

Reference: Equity capital was ¥63,407 million as of December 31, 2021, and ¥60,087 million as of March 31, 2021.

2. Dividends

			Dividend
	1Q End	2Q End	3Q End	Year-End	Annual
	Yen	Yen	Yen	Yen	Yen
Fiscal Year Ended March 2021	-	40.00	-	110.00	150.00
Fiscal Year Ending March 2022	-	100.00	-
Fiscal Year Ending March 2022 (Forecast)				100.00	200.00

Note: Revision to the most recent dividend forecasts previously released: Yes *For details, refer to the Notice Regarding Dividend Forecasts released today.

3. Forecast of Consolidated Business Results for the Fiscal Year Ending March 31, 2022 (April 1, 2021 to March 31, 2022)

(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	130,000	14.4	8,000	61.6	8,000	25.8
	Profit attributable to owners	Profit per share
	of parent
	Millions of yen	%		Yen
Full Year	5,500	26.9		653.02

Note: Revision to the most recent performance forecasts previously released: None

Notes:

1. Changes in important subsidiaries involving a change in the scope of consolidation during the period: Yes (Changes in specified subsidiaries involving a change in the scope of consolidation)

Newly added: 0 company	Company name: --
Excluded: 1 company	Company name: KROSAKI HARIMA CERA CORPORATION

Note: KROSAKI HARIMA CERA CORPORATION, which had been a consolidated subsidiary of the Company, was dissolved as of April 1, 2021 as a result of the absorption-type merger in which the Company is the surviving company and therefore has been excluded from the scope of consolidation effective from the first quarter of the fiscal year ending March 31, 2022.

1. Adoption of accounting methods specific to preparation of quarterly consolidated financial statements: None
2. Changes in accounting policies or estimates and retrospective restatements
3. 1. Changes in accounting policies in accordance with revision of accounting standards: Yes
   2. Changes in accounting policies other than above: None
   3. Changes in accounting estimates: None
   4. Retrospective restatements: None

(Note) For details, see "(3) Notes to Quarterly Consolidated Financial Statements" under "2. Quarterly Consolidated Financial Statements and Principal Notes" on page 8 of the attachment.

1. Number of shares issued and outstanding (common stock)
   1. Number of shares issued and outstanding as of the period-end (including treasury shares):

3Q, Fiscal Year ending March 2022:	9,114,528	Fiscal Year ended March 2021:	9,114,528
2. Number of treasury shares as of the period-end:
3Q, Fiscal Year ending March 2022:	692,728	Fiscal Year ended March 2021:	691,705
3. Average number of shares outstanding:
3Q, Fiscal Year ending March 2022:	8,422,347	3Q, Fiscal Year ended March 2021:	8,423,418

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 Consolidated Financial Results Forecasts 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 Operating Results.................................................................................................	2
(2)	Explanation of Consolidated Financial Results Forecasts and Other Forward-looking
	Information ...................................................................................................................................	3
2. Quarterly Consolidated Financial Statements and Principal 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
	(Changes in accounting policies) .................................................................................................	8
3. Others .............................................................................................................................................	9

1

1. Qualitative Information on Quarterly Financial Results

(1) Explanation of Operating Results

During the first three quarters of the fiscal year ending March 31, 2022, the domestic total crude steel output in the steel industry, the Group's main customers, increased by 22.9% year on year, to 72.62 million tons. The global crude steel output from January to December 2021 also increased by 3.7% year on year, to approximately 1,950.5 million tons.

The Group's consolidated net sales for the first three quarters of the fiscal year ending March 31, 2022 increased 18.6% from a year earlier to ¥98,910 million, primarily due to a rise in demand for refractories accompanying the increased crude steel output both domestically and globally, as well as an increase in ceramic materials for semiconductor manufacturing equipment and electronic components.

Primarily due to an increase in net sales, the Group's consolidated operating profit for the first three quarters of the fiscal year ending March 31, 2022 increased 111.5% from a year earlier to ¥6,273 million, ordinary profit increased 65.3% to ¥6,812 million, and profit attributable to owners of parent increased 48.4% to ¥4,456 million.

Due to the application of accounting standards such as the Accounting Standard for Revenue Recognition

(ASBJ Statement No. 29; March 31, 2020) (the "Revenue Recognition Standard"), net sales for the first three quarters of the fiscal year ending March 31, 2022 increased by ¥220 million, and operating profit, ordinary profit, and profit before income taxes each increased by ¥34 million.

Operating results by business segment for the first three quarters of the fiscal year ending March 31, 2022 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 (loss) are based on operating profit (loss).

[Refractories]

Net sales in the Refractories segment increased 22.6% from a year earlier to ¥81,873 million, mainly due to the increased demand for refractories resulting from an increase in domestic and global crude steel output. Primarily due to the net sales increase, segment profit increased 200.6% from a year earlier to ¥4,535 million.

Due to the application of the Revenue Recognition Standard and other accounting standards, net sales increased by ¥220 million, and profit increased by ¥34 million.

[Furnace]

Net sales in the Furnace segment decreased 4.5% from a year earlier to ¥9,648 million, mainly reflecting reduced order receipts due to the timing between large-scale construction projects. Primarily due to the net sales decrease, segment profit decreased 13.1% from a year earlier to ¥409 million.

[Ceramics]

Net sales in the Ceramics segment increased 15.3% from a year earlier to ¥6,311 million, primarily owing to expanded sales of ceramic materials for semiconductor manufacturing equipment and electronic components. Primarily due to the increase in net sales, segment profit increased 60.4% from a year earlier to ¥852 million.

2

[Real Estate]

Net sales in the Real Estate segment decreased 11.3% from a year earlier to ¥553 million. Segment profit decreased 12.1% from a year earlier to ¥442 million.

[Others]

Net sales in Others segment increased 36.2% from a year earlier to ¥524 million. Segment profit was ¥36 million (compared with a segment loss of ¥34 million for the same period in the previous fiscal year).

1. Explanation of Consolidated Financial Results Forecasts and Other Forward-looking Information
   As of the time this report is prepared, there has been no change to the Group's consolidated financial results forecasts for the fiscal year ending March 31, 2022, released on May 12, 2021.
   Financial 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.

3