Mitsubishi Paper Mills : Summary of Consolidated Financial Results for the Fiscal year Ended March 31,2017(unaudited)

May 11, 2017

Summary of Consolidated Financial Results for the Fiscal year Ended March 31, 2017 (unaudited)

Company name: Mitsubishi Paper Mills Limited Stock exchange listing: Tokyo Stock Exchange Code number: 3864

URL: http://www.mpm.co.jp/

Representative: Kunio Suzuki, President and Chief Executive Officer Contact: Hironori Oikawa,General Manager, Finance & Accounting Dept.

Phone: [phone]

(Amounts of less than one million yen are rounded down.)

1. Consolidated Financial Results for the Fiscal year Ended March 31, 2017 (April 1, 2016 to March 31, 2017)

2. Consolidated Operating Results (% indicates changes from the previous corresponding period.)

   Net sales		Operating income		Ordinary income		Profit attributable to owners of parent
   Fiscal year ended	Million yen	%	Million yen	%	Million yen	%	Million yen	%
   March 31, 2017	201,955	(6.6)	4,313	11.4	2,703	22.0	1,152	(48.0)
   March 31, 2016	216,340	0.6	3,872	272.8	2,216	-	2,217	-

   (Note) Comprehensive income: Fiscal year ended March 31, 2017: ¥ 5,597 million [-%]

   Fiscal year ended March 31, 2016: ¥ (3,310) million [-%]

   Earnings per share	Diluted earnings per share
   Fiscal year ended	Yen	Yen
   March 31, 2017	33.72	-
   March 31, 2016	64.85	-

   * The Company conducted a reverse stock split to consolidate every ten shares of common stock into one share on October 1, 2016. Earnings per share has been calculated assuming that the reverse stock split was conducted at the beginning of the previous consolidated fiscal year.

3. Consolidated Financial Condition

   Total assets	Net assets	Equity ratio
   As of March 31, 2017	Million yen	Million yen	%
   	235,869	56,631	23.1
   As of March 31, 2016	241,155	51,492	20.4

   (Reference) Equity: As of March 31, 2017: ¥54,383 million

   As of March 31, 2016: ¥49,241 million

4. Consolidated Cash Flow

5. Cash flows from operating activities	Cash flows from investing activities	Cash flows from financing activities	Cash and cash equivalents at end of period
   Fiscal year ended	Million yen	Million yen	Million yen	Million yen
   March 31, 2017	19,839	(7,070)	(13,112)	10,840
   March 31, 2016	12,626	(2,145)	(5,737)	11,381

6. Dividends

   Annual dividends				Amount of total dividends (Annual)	Dividend payout (Consolidated)	Ratio of dividends to net assets (Consolidated)
   1st quarter-end	2nd quarter-end	3rd quarter-end	Year-end
   Fiscal year ended March 31, 2016	Yen	Yen	Yen	Yen	Million yen	%	%
   	-	0.00	-	0.00	-	-	-
   Fiscal year ended March 31, 2017	-	0.00	-	0.00	-	-	-
   Fiscal year ending March 31, 2018 (Forecast)	-	0.00	-	-	-

   (Note) Year-end dividend for Fiscal year ending March 31, 2018 has yet to be determined.

7. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2018 (April 1, 2017 to March 31, 2018)

8. (% indicates changes from the previous corresponding period.)

   Net sales		Operating income		Ordinary income		Profit attributable to owners of parent		Earnings per share
   Full year	Million yen	%	Million yen	%	Million yen	%	Million yen	%	Yen
   	205,000	1.5	4,000	(7.3)	2,500	(7.5)	1,500	30.1	43.88

   * Notes:

9. Changes in significant subsidiaries during the period under review (changes in specified subsidiaries resulting in changes in scope of consolidation): None

   New: - (Company name); Excluded: - (Company name)

10. Changes in accounting policies, changes in accounting estimates and retrospective restatement

11. Changes in accounting policies due to the revision of accounting standards: Yes

12. Changes in accounting policies other than 1) above: None

13. Changes in accounting estimates: Yes

14. Retrospective restatement: None

15. Total number of issued shares (common shares)

16. Total number of issued shares at the end of the period (including treasury shares):

    March 31, 2017: 34,258,433 shares

    March 31, 2016: 34,258,433 shares

17. Total number of treasury shares at the end of the period:

    March 31, 2017: 76,185 shares

    March 31, 2016: 73,388 shares

18. Average number of shares during the period:

19. Fiscal year ended March 31, 2017: 34,183,946 shares

    Fiscal year ended March 31, 2016: 34,186,107 shares

    • The Company conducted a reverse stock split to consolidate every ten shares of common stock into one share on October 1, 2016. Number of issued shares at the end of the period, number of treasury shares at the end of the period and average number of shares during the period have been calculated assuming that the reverse stock split was conducted at the beginning of the previous consolidated fiscal year.

    • Financial results reports are not required to be audited.

    • Explanation of the proper use of financial results forecast and other notes

    The earnings forecasts and other forward-looking statements herein are based on information currently acquired by the Company and certain assumptions assessed to be reasonable. Actual results may differ significantly from these forecasts due to a wide range of factors.

    Consolidated Financial Statements

20. Consolidated Balance Sheets

    (Million yen)

    As of March 31, 2016	As of March 31, 2017
    Assets
    Current assets
    Cash and deposits	11,381	10,840
    Notes and accounts receivable - trade	48,338	46,291
    Merchandise and finished goods	27,458	24,756
    Work in process	7,646	6,541
    Raw materials and supplies	10,399	10,108
    Deferred tax assets	945	1,027
    Other	3,925	4,447
    Allowance for doubtful accounts	(188)	(216)
    Total current assets	109,907	103,797
    Non-current assets
    Property, plant and equipment
    Buildings and structures, net	28,350	27,089
    Machinery, equipment and vehicles, net	55,571	51,642
    Land	22,518	22,068
    Leased assets, net	1,428	1,194
    Construction in progress	535	676
    Other, net	1,471	1,391
    Total property, plant and equipment	109,875	104,064
    Intangible assets
    Other	225	291
    Total intangible assets	225	291
    Investments and other assets
    Investment securities	18,554	23,001
    Long-term loans receivable	82	599
    Net defined benefit asset	8	2,005
    Deferred tax assets	198	184
    Other	2,642	2,024
    Allowance for doubtful accounts	(338)	(99)
    Total investments and other assets	21,147	27,716
    Total non-current assets	131,248	132,071
    Total assets	241,155	235,869

    (Million yen)

    As of March 31, 2016	As of March 31, 2017
    Liabilities
    Current liabilities
    Notes and accounts payable - trade	23,245	24,556
    Short-term loans payable	81,176	68,264
    Lease obligations	363	346
    Accrued expenses	7,081	7,135
    Income taxes payable	345	399
    Other	6,465	6,673
    Total current liabilities	118,677	107,376
    Non-current liabilities
    Long-term loans payable	57,443	57,570
    Lease obligations	1,240	907
    Deferred tax liabilities	1,213	2,442
    Provision for directors' retirement benefits	48	66
    Reserve for loss on dissolution of employee's fund	121	143
    Net defined benefit liability	9,165	8,949
    Asset retirement obligations	884	888
    Other	866	893
    Total non-current liabilities	70,985	71,862
    Total liabilities	189,663	179,238
    Net assets
    Shareholders' equity
    Capital stock	32,756	32,756
    Capital surplus	7,456	7,438
    Retained earnings	7,447	8,599
    Treasury shares	(145)	(147)
    Total shareholders' equity	47,514	48,647
    Accumulated other comprehensive income
    Valuation difference on available-for-sale securities	3,014	5,506
    Foreign currency translation adjustment	1,577	1,245
    Remeasurements of defined benefit plans	(2,864)	(1,015)
    Total accumulated other comprehensive income	1,727	5,736
    Non-controlling interests	2,250	2,247
    Total net assets	51,492	56,631
    Total liabilities and net assets	241,155	235,869

21. Consolidated Statements of Income and Comprehensive Income

    Consolidated Statements of Income

    (Million yen)

    Fiscal year ended March 31, 2016	Fiscal year ended March 31, 2017
    Net sales	216,340	201,955
    Cost of sales	181,117	166,817
    Gross profit	35,223	35,137
    Selling, general and administrative expenses	31,350	30,824
    Operating income	3,872	4,313
    Non-operating income
    Interest income	47	46
    Dividend income	425	438
    Royalty income	188	149
    Insurance income	365	196
    Compensation income	37	228
    Other	283	310
    Total non-operating income	1,347	1,371
    Non-operating expenses
    Interest expenses	2,320	2,075
    Foreign exchange losses	242	287
    Other	441	618
    Total non-operating expenses	3,004	2,981
    Ordinary income	2,216	2,703
    Extraordinary income
    Gain on disposal of non-current assets	1,459	17
    Gain on sales of investment securities	38	233
    Reversal of allowance for doubtful accounts for subsidiaries and affiliates	277	－
    Insurance income	－	58
    Other	67	88
    Total extraordinary income	1,843	397
    Extraordinary losses
    Loss on disposal of non-current assets	441	530
    Special retirement expenses	302	348
    Business restructuring cost	227	276
    Impairment loss	18	287
    Other	50	71
    Total extraordinary losses	1,040	1,514
    Income before income taxes and non-controlling interests	3,018	1,585
    Income taxes	995	256
    Profit	2,023	1,329
    Profit (loss) attributable to non-controlling interests	(193)	176
    Profit attributable to owners of parent	2,217	1,152

    Consolidated Statements of Comprehensive Income

    (Million yen)

    Fiscal year ended March 31, 2016	Fiscal year ended March 31, 2017
    Profit	2,023	1,329
    Other comprehensive income
    Valuation difference on available-for-sale securities	(1,918)	2,813
    Foreign currency translation adjustment	(438)	(313)
    Remeasurements of defined benefit plans, net of tax	(2,979)	1,821
    Share of other comprehensive income of entities accounted for using equity method	3	(53)
    Total other comprehensive income	(5,333)	4,268
    Comprehensive income	(3,310)	5,597
    Comprehensive income attributable to
    Comprehensive income attributable to owners of parent	(2,946)	5,161
    Comprehensive income attributable to non-controlling interests	(364)	435

22. Consolidated Statements of Cash Flow

(Million yen)

Fiscal year ended March 31, 2016	Fiscal year ended March 31, 2017
Cash flows from operating activities
Income before income taxes and non-controlling interests	3,018	1,585
Depreciation	10,662	10,454
Impairment loss	18	287
Increase (decrease) in net defined benefit liability	291	(120)
Decrease (increase) in net defined benefit asset	(669)	2
Increase (decrease) in provision for directors' retirement benefits	14	17
Interest and dividend income	(473)	(485)
Interest expense	2,320	2,075
Loss (gain) on sales of short-term and long-term investment securities	(38)	(207)
Loss (gain) on disposal of non-current assets	(1,017)	513
Business restructuring cost	227	276
Decrease (increase) in notes and accounts receivable - trade	(1,530)	2,182
Decrease (increase) in inventories	3,210	3,432
Increase (decrease) in notes and accounts payable - trade	(384)	1,547
Other, net	(117)	592
Subtotal	15,532	22,155
Payments for business restructuring cost	(227)	(144)
Interest and dividend income received	470	489
Interest expenses paid	(2,387)	(2,155)
Income taxes paid	(761)	(506)
Net cash provided by (used in) operating activities	12,626	19,839
Cash flows from investing activities
Purchase of property, plant and equipment and intangible assets	(4,196)	(6,120)
Proceeds from sales of property, plant and equipment and intangible assets	1,682	50
Purchase of investment securities	(28)	(142)
Proceeds from sales of investment securities	40	269
Purchase of shares of subsidiaries and associates	(4)	(355)
Proceeds from sales of shares of subsidiaries and associates	4	－
Payments of loans receivable	(2)	(570)
Collection of loans receivable	325	53
Other, net	34	(256)
Net cash provided by (used in) investing activities	(2,145)	(7,070)

Fiscal year ended March 31, 2016	Fiscal year ended March 31, 2017
Cash flows from financing activities
Net increase (decrease) in short-term loans payable	(2,343)	(2,112)
Proceeds from long-term loans payable	18,175	17,899
Repayments of long-term loans payable	(20,653)	(28,090)
Repayments of lease obligations	(383)	(348)
Purchase of treasury shares	(1)	(2)
Proceeds from sales of treasury shares	－	0
Dividends paid to non-controlling interests	(240)	(188)
Payments from changes in ownership interests in subsidiaries that do not result in change in scope of consolidation	(290)	(269)
Net cash provided by (used in) financing activities	(5,737)	(13,112)
Effect of exchange rate change on cash and cash equivalents	(109)	(196)
Net increase (decrease) in cash and cash equivalents	4,633	(540)
Cash and cash equivalents at beginning of period	6,505	11,381
Increase in cash and cash equivalents from newly consolidated subsidiaries	242	－
Cash and cash equivalents at end of period	11,381	10,840