Osaka Organic Chemical Industry : Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending November 30, 2023 (FY11/23)

Translation

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

	Consolidated Financial Results for the Third Quarter of the
	Fiscal Year Ending November 30, 2023 (FY11/23)
	(Nine Months Ended August 31, 2023)
		[Japanese GAAP]
		October 6, 2023
Company name: OSAKA ORGANIC CHEMICAL INDUSTRY LTD.
Listing:	Tokyo Stock Exchange, Prime Market
Stock code:	4187	URL: https://www.ooc.co.jp/
Representative:	Masayuki Ando, Representative Director, and CEO
Contact:	Soichi Honda, Director, Corporate Officer, General Manager of Administration Division
TEL: [phone]
Scheduled date of filing of Quarterly Report:	October 6, 2023
Scheduled date of dividend payment:	-
Preparation of supplementary materials for quarterly financial results:Yes
Holding of quarterly financial results meeting:	None

(All amounts are rounded down to the nearest million yen)

1.Consolidated Financial Results for the Third Quarter of FY11/23 (December 1, 2022 to August 31, 2023)

(1) Consolidated results of operations				(Percentages represent year-on-year changes)
	Net sales		Operating profit	Ordinary profit	Profit attributable to
		owners of parent
	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%
Nine months ended Aug. 31, 2023	21,754		(10.5)	3,056	(32.5)	3,298	(33.0)	2,682	(21.5)
Nine months ended Aug. 31, 2022	24,317		-	4,531	7.4	4,921	8.2	3,417	(0.9)

Note: Comprehensive income (millions of yen)

Nine months ended Aug. 31, 2023: 3,387 (up 0.1%)

Nine months ended Aug. 31, 2022: 3,384 (down 14.5%)

	Net income per share	Diluted net income per share
	Yen	Yen
Nine months ended Aug. 31, 2023	125.22	-
Nine months ended Aug. 31, 2022	156.34	-

NOTE: The Company has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020), etc. from the beginning of the previous first quarter of the consolidated fiscal year. The figures for the third quarter of the fiscal year ending November 2022 are those after the application of this accounting standard, and the rate of increase or decrease in net sales from the same quarter of the previous fiscal year is not stated.

(2)Consolidated financial position

	Total assets	Net assets	Equity ratio
	Millions of yen	Millions of yen	%
As of Aug. 31, 2023		54,274	42,996	78.1
As of Nov. 30, 2022		52,836	41,394	77.3
Reference: Shareholders' equity	(millions of yen)	As	of Aug. 31, 2023: 42,368	As of Nov. 30, 2022:	40,826

2.Dividends

			Dividend per share
	1Q-end	2Q-end	3Q-end		Year-end	Total
	Yen	Yen	Yen		Yen	Yen
Fiscal year ending Nov. 30, 2022	-	27.00	-		27.00	54.00
Fiscal year ending Nov. 30, 2023	-	28.00	-
Fiscal year ending Nov. 30, 2023					28.00	56.00
(Forecast)
Note: Revisions to the most recently announced dividend forecast: None

3.Consolidated Forecasts for FY11/23 (December 1, 2022 to November 30, 2023)

(Percentages represent year-on-year changes)

		Net sales		Operating profit	Ordinary profit	Profit attributable to	Net income per
			owners of parent	share
		Millions of yen		%	Millions of yen	%	Millions of yen		%	Millions of yen	%	Yen
	Full year	29,000		(10.0)	3,800	(36.0)	4,000		(37.2)	2,800	(40.8)	129.85
	Note: Revisions to the most recently announced consolidated forecast: None

※ Notes
(1) Changes of important subsidiaries during the period	:	None
(Changes in specified subsidiaries resulting in changes in the scope of consolidation)
Newly added: -	Excluded: -

1. Application of special accounting methods for presenting quarterly consolidated financial statements: None
2. Changes in accounting policies and accounting-based estimates, and restatements

1)Changes in accounting policies due to revisions in accounting standards, others: Yes

1. Changes in accounting policies other than 1) above: None
2. Changes in accounting-based estimates: None
3. Restatements: None

Note: For details, please refer to "(3) Notes to Quarterly Consolidated Financial Statements (Changes in Accounting Policies)" of "2. Quarterly Consolidated Financial Statements and Major Notes" on page 8 of the quarterly financial results (attached materials).

(4) Number of shares issued (common shares)

1) Number of shares issued at the end of the period (including treasury shares)

As of Aug. 31, 2023:	22,410,038 shares	As of Nov. 30, 2022:	22,410,038 shares
2) Number of treasury shares at the end of the period
As of Aug. 31, 2023:	1,142,527 shares	As of Nov. 30, 2022:	847,478 shares
3) Average number of shares during the period
Nine months ended Aug. 31, 2023:	21,422,861 shares	Nine months ended Aug. 31, 2022:	21,859,606 shares

• The current quarterly financial report is not subject to quarterly review by certified public accountants or auditing firms.
• Cautionary statement with respect to forward-looking statements and other special items

The above forecasts are based on information available to the Company's management at the time the materials were prepared and include a variety of uncertainties. Actual results may differ from the forecasts due to changes in the business environment and other factors. Please refer to "Explanation of Consolidated Forecast and Other Forward-looking Statements" on page 3 for items pertaining to the forecasts stated above.

	OSAKA ORGANIC CHEMICAL INDUSTRY LTD. (4187) Financial Results for the Third Quarter of FY11/23
Contents of Attachments
1.Qualitative Information on Quarterly Consolidated Financial Performance	2
(1)	Explanation of Results of Operations	2
(2)	Explanation of Financial Position	2
(3)	Explanation of Consolidated Forecast and Other Forward-looking Statements	3
2.Quarterly Consolidated Financial Statements and Notes	4
(1)	Quarterly Consolidated Balance Sheet	4
(2)	Quarterly Consolidated Statements of Income and Comprehensive Income	6
(3)	Notes to Quarterly Consolidated Financial Statements	8
	Going Concern Assumption	8
	Significant Changes in Shareholders' Equity	8
	Changes in Accounting Policies	8
	Segment and Other Information	8
	Significant Subsequent Events	9

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OSAKA ORGANIC CHEMICAL INDUSTRY LTD. (4187) Financial Results for the Third Quarter of FY11/23

1.Qualitative Information on Quarterly Consolidated Financial Performance

(1) Explanation of Results of Operations

During the third quarter of the current consolidated cumulative period, the Japanese economy showed signs of improvement, with signs of improvement in personal consumption and capital investment due to the normalization of economic activities, as the COVID-19 moved to Category 5. However, the outlook remains uncertain due to the possibility of an economic downturn in overseas countries such as Europe, the United States, and China, as well as the persistently high prices of raw materials and energy.

The Osaka Organic Chemical Industry Group started its Second Five-yearMedium-term Business Plan in the fiscal year that ended in November 2020. This plan is the second half of Next Stage 10, a long-term business plan covering the 10-year period that began with the fiscal year that ended in November 2015. Many activities are under way to accomplish the goals of this plan. In the chemical products business, we are focusing on improving profitability by concentrating investments on carefully selected categories in order to revitalize the product lineup. We also focused on expanding sales of special ink raw materials for UV inkjet printers, whose markets are expanding worldwide, and of environmentally friendly products derived from biomass. In the electronics materials business, we are strengthening activities for developing next-generation semiconductor materials to be the market leader in targeted categories and for increasing sales of new display materials. In the specialty chemicals business, there are measures to develop functional polymers and increase sales of raw materials for cosmetics and of high-purity specialty solvents. However, it is affected by sluggish demand for electronic materials such as displays and semiconductors.

As a result, for the first three quarters under review, net sales were 21,754 million yen (down 10.5% year on year), operating profit was 3,056 million yen (down 32.5% year on year), ordinary profit was 3,298 million yen (down 33.0% year on year), and profit attributable to owners of parent was 2,682 million yen (down 21.5% year on year).

Business results by segment are explained below (excluding inter-segment transactions)

1)Chemical products

Regarding acrylic acid ester, while sales of esters used in automotive coatings remained firm, sales of esters used in display adhesives and chemical products used in UV inkjet printers were sluggish. Sales of methacrylic acid esters decreased significantly. As a result, net sales were 7,287 million yen (down 14.3% year on year) and segment profit was 641 million yen (up 0.4% year on year).

2)Electronics materials

In the electronic materials business, sales of raw materials for cutting-edge EUV resists remained strong in the semiconductor materials group, but sales of raw materials for ArF resists, the mainstay, were weak in the end-market, resulting in a decrease in sales for the group as a whole. As for display materials, sales remained weak due to sluggish demand for displays. As a result, net sales were 9,987 million yen (down 11.9% year on year) and segment profit was 1,633 million yen (down 42.7% year on year).

3)Specialty chemicals

Raw materials for cosmetics recorded strong sales abroad. As for functional materials, sales of products made for other companies remained weak. Sales of high-purity special solvents manufactured by our subsidiary were strong. As a result, net sales were 4,479 million yen (up 0.1% year on year) and segment profit was 777 million yen (down 24.1% year on year).

(2) Explanation of Financial Position

Total assets at the end of the third quarter of the current fiscal year increased by 1,438 million yen from the end of the previous fiscal year to 54,274 million yen. This was mainly attributable to a decrease of 1,733 million yen in cash and deposits, a decrease of 875 million yen in notes, accounts receivable-trade and contract assets, an increase of 647 million yen in other current assets, an increase of 2,545 million in property, plant and equipment, and an increase of 868 million yen in investment securities.

Liabilities at the end of the third quarter of the current fiscal year decreased by 164 million yen from the end of the previous fiscal year to 11,278 million yen. This was mainly due to a decrease of 1,122 million yen in notes and accounts payable-trade, an increase of 244 million yen in current portion of long-term borrowings, a decrease of 905 million yen in income taxes payable, an increase of 252 million yen in provision for bonuses, and an increase of 1,464 million yen in long-term borrowings.

Net assets at the end of the third quarter of the current fiscal year increased by 1,602 million yen from the end of the previous fiscal year to 42,996 million yen. This was mainly due to an increase of 1,504 million yen in retained earnings, an increase of 586

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OSAKA ORGANIC CHEMICAL INDUSTRY LTD. (4187) Financial Results for the Third Quarter of FY11/23

million yen in treasury shares, and an increase of 585 million yen in valuation difference on available-for-sale securities.

1. Explanation of Consolidated Forecast and Other Forward-looking Statements The consolidated forecasts announced on April 7, 2023, remain unchanged.

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