Consolidated Financial Results for the Six Months Ended September 30, 2023

(Japanese Accounting Standards)

November 9, 2023

Name of Listed Company: Mitsubishi Materials Corporation

Listing:

Tokyo Stock Exchange

Stock Code:

5711

URL:

https://www.mmc.co.jp/

Representative:

Naoki Ono, Chief Executive Officer

Contact:

Chiaki Kubota, General Manager, Corporate Communications Dept.

Tel: +81-3-5252-5206

Scheduled date of Quarterly Report:

November 9, 2023

Scheduled date of start of dividend payment:

December 8, 2023

Supplementary materials for the financial results:

Yes

Investor conference for the financial results:

Yes (For Institutional Investors)

(Amounts of less than one million yen are omitted)

1. Results of the Six Months Ended September 30, 2023 (From April 1, 2023 to September 30, 2023)

(1) Consolidated Results of Operations (Figuresin percentages denote the year-on-year change)

Net sales

Operating profit

Ordinary profit

Profit attributable to

owners of parent

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

The six months ended

716,199

-13.9

11,950

-59.6

18,418

-20.0

11,120

-52.9

September 30, 2023

The six months ended

831,981

-3.3

29,560

1.8

23,025

-39.8

23,624

-38.1

September 30, 2022

(Note) Comprehensive income: The six months ended September 30, 2023: 40,220 million yen (-33.6%) The six months ended September 30, 2022: 60,608 million yen (76.3%)

Profit

Diluted profit per

per share

share

Yen

Yen

The six months ended September 30, 2023

85.12

-

The six months ended September 30, 2022

180.80

-

(2) Consolidated Financial Position

Total assets

Total net assets

Shareholders'

equity ratio

Millions of yen

Millions of yen

%

As of September 30, 2023

1,985,027

658,656

31.5

As of March 31, 2023

1,891,795

628,875

31.4

(Reference) Shareholders' equity: As of September 30, 2023: 626,146 million yen

As of March 31, 2023: 593,324 million yen

2. Dividend Payments

Dividend per share

(Record date)

First quarter

Second quarter

Third quarter

Year-end

Annual

Yen

Yen

Yen

Yen

Yen

Year ended March 31, 2023

-

25.00

-

25.00

50.00

Year ending March 31, 2024

-

47.00

Year ending March 31, 2024 (Forecast)

-

47.00

94.00

(Note) Revision of dividend forecast published most recently: None

3. Consolidated Earnings Forecast (From April 1, 2023 to March 31, 2024)

Net sales

Operating profit

Ordinary profit

Profit attributable to

Profit per

owners of parent

share

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Yen

Year ending March 31,

1,660,000

2.1

40,000

-20.1

56,000

121.3

38,000

86.9

290.89

2024

(Note) Revision to forecast published most recently: Yes

- 1 -

Notes:

  1. Significant changes of subsidiaries during the period (changes in specific subsidiaries accompanying a change in the scope of consolidation): None
  2. Application of special accounting treatment in the preparation of the quarterly consolidated financial statements: Yes (Note) For details, please see "(4) Key notes to consolidated quarterly financial statements, Application of special accounting treatment in the preparation of quarterly consolidated financial statements" under "2. Consolidated Financial Statements and Key Notes" on page 14.
  3. Changes in accounting policies, changes of accounting estimates and restatement

(i)

Changes in accounting policies due to amendments to accounting standards:

None

(ii)

Other changes in accounting policies:

None

(iii)

Changes in accounting estimates:

None

(iv)

Restatements:

None

  1. Numbers of outstanding shares (common stock)
    1. Numbers of outstanding shares at the end of period (including treasury shares):

Six months ended September 30, 2023:

131,489,535 shares

Year ended March 31, 2023:

131,489,535 shares

  1. Numbers of treasury shares at the end of period:

Six months ended September 30, 2023:

852,995 shares

Year ended March 31, 2023:

857,856 shares

  1. Average number of outstanding shares during period (quarterly cumulative period):

Six months ended September 30, 2023:

130,634,098 shares

Six months ended September 30, 2022:

130,661,264 shares

  • This financial results is not subject to an audit by certified public accountants or audit firms.
  • Explanation about the proper use of financial forecasts and other special notes.

(Notes concerning forward-looking statements, etc.)

The operating results forecasts and other forward-looking statements contained in this report are based on information currently available to Mitsubishi Materials Corporation ("the Company"), as well as certain assumptions that the Company has judged to be reasonable. As such, they do not constitute an assurance that the Company promises to achieve these projected results. Therefore, readers are advised to note that the actual results may vary materially from the forecasts due to a variety of factors.

Please see "(3) Information on the consolidated earnings forecast and other future forecast" under "1. Qualitative Information on Financial Results" on page 6 for the assumptions about consolidated earnings forecasts.

(Procedure for obtaining supplementary information on annual financial results and annual financial briefing)

The Company plans to hold an annual financial briefing for institutional investors on Thursday, November 9, 2023. The materials used at this briefing are disclosed on the TDnet and the Company's website at the time that the annual financial results are announced.

- 2 -

Contents

  1. Qualitative Information on Financial Results…………………………………………………...................................
    1. Details of operating results ...................................................................................................................................
    2. Details of financial position ..................................................................................................................................
    3. Information on the consolidated earnings forecast and other future forecast ………………………….…...…
  3. Consolidated Financial Statements and Key Notes .....................................................................................................
    1. Consolidated balance sheet ...................................................................................................................................
    2. Consolidated statement of profit or loss and consolidated statement of comprehensive income........................

Consolidated statement of profit or loss.............................................................................................................

Consolidated statement of comprehensive income ............................................................................................

  1. Consolidated statement of cash flows……………………………………………………………………...……
  2. Key notes to consolidated quarterly financial statements………….....................................................................

Notes ongoing concern assumption ......................................................................................................................

Segment information, etc. …................................................................................................................ ................

Notes on the significant changes in the amount of shareholders' equity, if any….……………………………...

Application of special accounting treatment in the preparation of quarterly consolidated financial statements

Additional information..........................................................................................................................................

Contingent liabilities ………………………………………………………………………………………….…

4

4

5

6

7

7

9

9

10

11

13

13

13

14

14

14

14

- 3 -

1. Qualitative Information on Financial Results

(1) Details of operating results

  1. Summary of business performance for the current quarter

In the first half of the current fiscal year, the momentum of economic recovery slowed down mainly in China and Europe as monetary tightening continued in each country to suppress the inflation, while the global economy generally showed a moderate recovery trend.

The Japanese economy recovered moderately amid a recovery in inbound demand and a pick-up in personal consumption and corporate capital investment.

As for the business environment surrounding Mitsubishi Materials Group ("the Group"), the recovery trend in automobile production continued, however, demand for our automotive-related products did not recover. Also, demand for our semiconductors-related products also continued weak due to the sluggish semiconductor market. In addition, there were impacts such as a decline in palladium price, an increase in energy costs, and the yen's depreciation.

Under these circumstances, net sales and operating profit decreased in the Metals business, the Advanced Products business, and the Metalworking Solutions business in the first half of the current fiscal year. As a result, consolidated financial results for the period were net sales of ¥716.199 billion (down 13.9% year-on-year) and operating profit of ¥11.950 billion (down 59.6% year-on-year). Ordinary profit was ¥18.418 billion (down 20.0% year-on-year), despite a decrease in dividends received, mainly due to the recording of equity-method investment income. As a result, profit attributable to owners of parent was ¥11.120 billion (down 52.9% year-on-year).

2) Segment Overview

From the first quarter of the current fiscal year, the Company has changed its reporting segment. For more information, see "2. Consolidated Financial Statements and Key Notes, (4) Key notes to quarterly consolidated quarterly financial statements (Segment information, etc.)." For the following year-on-year comparisons, figures for the same period of the previous fiscal year have been reclassified into the revised segmentation.

Metals Business

(Billions of yen)

FY March 2023 H1

FY March 2024 H1

Change (%)

Net sales

567.3

476.8

-90.4

(-15.9%)

Operating profit

16.4

7.1

-9.2

(-56.5%)

Ordinary profit

21.2

8.4

-12.7

(-60.0%)

In the Metals business, net sales and operating profit decreased year-on-year, mainly due to a decline in palladium price and an increase in energy cost and foreign exchange hedging cost, as well as the impact of PT. Smelting's shift to contract smelting from January 2023. Ordinary profit decreased due to a decrease in operating profit and a decrease in dividends.

Advanced Products Business

(Billions of yen)

FY March 2023 H1

FY March 2024 H1

Change (%)

Net sales

260.3

242.9

-17.3

(-6.7%)

Operating profit

6.1

0.8

-5.3

(-86.7%)

Ordinary profit

6.1

0.1

-5.9

(-97.5%)

In the Copper & Copper Alloy business, sales decreased mainly for automotive products, but there were effects such as price revisions and the yen's depreciation. In the Electronic Materials & Components business, sales of semiconductor-related products decreased due to worsening semiconductor market conditions. As a result, net sales and operating profit decreased year-on-year. In addition, there was also an impact on the transfer of polycrystalline silicon business in March 2023. Ordinary profit decreased due to a decline in operating profit and a decrease in equity-method investment gains.

- 4 -

Metalworking Solutions Business

(Billions of yen)

FY March 2023 H1

FY March 2024 H1

Change (%)

Net sales

71.8

69.8

-2.0

(-2.9%)

Operating profit

7.8

5.2

-2.6

(-33.3%)

Ordinary profit

8.8

6.3

-2.4

(-27.7%)

In the Metalworking Solutions business, sales of cemented carbide products, our main products, decreased mainly in Japan and China, although there were effects of the yen's depreciation and price hikes. In addition, there was an increase in raw materials and energy costs. As a result, net sales and operating profit decreased year-on year. Ordinary profit decreased due to a decrease in operating profit.

Renewable Energy Business

(Billions of yen)

FY March 2023 H1

FY March 2024 H1

Change (%)

Net sales

1.7

2.2

0.5

(30.4%)

Operating profit

0.0

0.2

0.2

(380.4%)

Ordinary profit

0.3

0.3

-0.0

(-4.1%)

In the Renewable Energy business, net sales and operating profit increased year-on-year, mainly due to Komatagawa New Power Plant (hydroelectric power generation) that started commercial operation in December 2022. Ordinary profit decreased due to a decline in equity-method investment income, despite an increase in operating profit.

Other Businesses

(Billions of yen)

FY March 2023 H1

FY March 2024 H1

Change (%)

Net sales

77.0

72.5

-4.5

(-5.9%)

Operating profit

3.5

1.5

-1.9

(-55.6%)

Ordinary profit (loss)

-9.7

8.2

17.9

(-%)

In Other businesses, net sales and operating profit decreased year-on-year due to deterioration in semiconductor market conditions. Ordinary profit increased due to the recording of equity-method investment profit in Mitsubishi UBE Cement Corporation (the same loss was recorded in the same period of the previous fiscal year) that implemented price hikes.

  1. Details of financial position
    Total assets at the end of the first half were ¥1,985.0 billion, an increase of ¥93.2 billion year-on-year. This was mainly due to an increase in inventories and property, plant and equipment.
    Liabilities increased by ¥63.4 billion to ¥1,326.3 billion. This was mainly due to an increase in interest-bearing liabilities and deposited gold bullion.
    The status of cash flows and their factors for the period are as follows.

(Cash flows from operating activities)

Net cash used in operating activities for the period amounted to ¥16.9 billion (a decrease of ¥12.0 billion year-on- year) due to an increase in inventories and other factors, despite the recording of profit before income taxes.

(Cash flows from investing activities)

Net cash used in investing activities during the period amounted to ¥61.2 billion (an increase of ¥37.6 billion year-on- year), mainly due to expenditures for payment for purchase of property, plant and equipment.

- 5 -

(Cash flows from financing activities)

Net cash provided by financing activities for the period was ¥22.9 billion (a decrease of ¥37.1 billion year-on-year), mainly due to borrowings and commercial paper.

In addition to the above, taking into account the effect of exchange rate changes and other factors, the balance of cash and cash equivalents at the end of the period was ¥93.5 billion (a decrease of ¥47.5 billion year-on-year).

  1. Information on the consolidated earnings forecast and other future forecast
    With regard to the consolidated earnings forecast for the fiscal year ending March 2024, the Company has revised the figures previously announced on May 12, 2023 as follows.
    Although there is ongoing effect of the yen's depreciation, net sales are expected to be in line with the previous forecast, and operating profit is expected to decrease compared to the previous forecast due to the sluggish semiconductor market, the drop in the palladium price and a decrease in sales of our semiconductor-related products.
    Ordinary profit and profit attributable to owners of parent are expected to decrease slightly compared to the previous forecast due to lower operating profit than the previous forecast, despite an improvement in equity-method investment profit in Mitsubishi UBE Cement Corporation and an increase in foreign exchange gains.

There is no revision to the dividend forecast accompanying the revision of this earnings forecast.

Revision of Consolidated Earnings Forecast for the Fiscal Year Ending March 31, 2024 (April 1, 2023 - March 31, 2024)

(Billions of yen)

Previous Forecast

Current Forecast

Change (%)

Net sales

1,670.0

1,660.0

(-0.6％)

Operating profit

50.0

40.0

(-20.0％)

Ordinary profit

58.0

56.0

(-3.4％)

Profit attributable to

41.0

38.0

(-7.3％)

owners of parent

(Note) The above forecasts are based on economic conditions, market trends, and other factors that can be assumed as of the date of the announcement, and may differ from the forecasts due to various factors in the future.

- 6 -

2. Consolidated Financial Statements and Key Notes

(1) Consolidated balance sheet

(Millions of yen)

As of March 31, 2023

As of September 30, 2023

Assets

Current assets

Cash and deposits

142,126

95,215

Notes receivable - trade

30,301

32,032

Accounts receivable - trade

158,197

167,969

Merchandise and finished goods

120,135

142,240

Work in process

127,368

125,255

Raw materials and supplies

130,171

176,803

Leased gold bullion

234,896

229,810

Other

173,420

171,357

Allowance for doubtful accounts

(578)

(613)

Total current assets

1,116,040

1,140,070

Non-current assets

Property, plant and equipment

Machinery and equipment, net

147,293

159,601

Land, net

87,904

88,273

Other, net

191,016

209,113

Total property, plant and equipment, net

426,214

456,989

Intangible assets

Goodwill

9,224

8,924

Other

19,545

21,465

Total intangible assets

28,769

30,390

Investments and other assets

Investment securities

256,544

277,269

Other

69,528

85,609

Allowance for doubtful accounts

(5,302)

(5,300)

Total investments and other assets

320,770

357,577

Total non-current assets

775,754

844,957

Total assets

1,891,795

1,985,027

- 7 -

(Millions of yen)

As of March 31, 2023

As of September 30, 2023

Liabilities

Current liabilities

Notes and accounts payable - trade

85,211

85,398

Short-term borrowings

146,972

145,816

Current portion of bonds payable

－

10,000

Commercial papers

25,000

55,000

Income taxes payable

4,638

5,175

Provisions

12,600

12,371

Deposited gold bullion

439,204

466,950

Other

104,734

98,530

Total current liabilities

818,361

879,243

Non-current liabilities

Bonds payable

70,000

60,000

Long-term borrowings

291,589

305,156

Provision for environmental measures

14,388

13,096

Other provisions

1,103

1,080

Retirement benefit liability

24,350

23,441

Other

43,127

44,353

Total non-current liabilities

444,558

447,127

Total liabilities

1,262,919

1,326,371

Net assets

Shareholders' equity

Share capital

119,457

119,457

Capital surplus

81,917

81,916

Retained earnings

338,867

346,722

Treasury shares

(2,897)

(2,882)

Total shareholders' equity

537,345

545,214

Accumulated other comprehensive income

Valuation difference on available-for-sale

4,193

7,838

securities

Deferred gains or losses on hedges

1,631

(1,303)

Revaluation reserve for land

16,702

16,696

Foreign currency translation adjustment

33,786

57,109

Remeasurements of defined benefit plans

(335)

591

Total accumulated other comprehensive

55,978

80,932

income

Non-controlling interests

35,550

32,509

Total net assets

628,875

658,656

Total liabilities and net assets

1,891,795

1,985,027

- 8 -

  1. Consolidated statement of profit or loss and consolidated statement of comprehensive income Consolidated statement of profit or loss

(Millions of yen)

Six Months Ended

Six Months Ended

September 30, 2022

September 30, 2023

(Apr. 1, 2022 - Sept. 30, 2022)(Apr. 1, 2023 - Sept. 30, 2023)

Net sales

831,981

716,199

Cost of sales

741,587

642,702

Gross profit

90,394

73,496

Selling, general and administrative expenses

60,834

61,545

Operating profit

29,560

11,950

Non-operating income

Interest income

391

1,632

Dividend income

6,754

1,168

Exchange gain

2,702

4,568

Share of profit of entities accounted for using

－

4,511

equity method

Rental income from non-current assets

2,144

2,104

Other

961

1,529

Total non-operating income

12,954

15,513

Non-operating expenses

Interest expenses

2,786

3,244

Expense for the maintenance and management

1,988

2,131

of abandoned mines

Share of loss of entities accounted for using

9,793

－

equity method

Other

4,921

3,670

Total non-operating expenses

19,489

9,045

Ordinary profit

23,025

18,418

Extraordinary income

Gain on sales of investment securities

1,331

659

Gain on change in equity

11,007

－

Other

242

22

Total extraordinary income

12,581

682

Extraordinary losses

Loss on liquidation of affiliated companies

－

382

Impairment loss

－

271

Loss on changes in equity

640

－

Other

260

128

Total extraordinary losses

901

781

Profit before income taxes

34,705

18,319

Income taxes

8,004

6,277

Profit

26,700

12,042

Profit attributable to non-controlling interests

3,076

922

Profit attributable to owners of parent

23,624

11,120

- 9 -

Consolidated statement of comprehensive income

(Millions of yen)

Six Months Ended

Six Months Ended

September 30, 2022

September 30, 2023

(Apr. 1, 2022 - Sept. 30, 2022)(Apr. 1, 2023 - Sept. 30, 2023)

Profit

Other comprehensive income Valuation difference on available-for-salesecurities

Deferred gains or losses on hedges Foreign currency translation adjustment Remeasurements of defined benefit plans Share of other comprehensive income of entities accounted for using equity method

Total other comprehensive income

Comprehensive income (Break down)

Comprehensive income attributable to owners of parent

Comprehensive income attributable to non- controlling interests

26,700

12,042

(8,667)

3,200

(2,308)

(3,151)

26,061

16,568

316

989

18,505

10,571

33,907

28,177

60,608

40,220

52,525

36,079

8,082

4,141

- 10 -

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Mitsubishi Materials Corporation published this content on 09 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 November 2023 14:58:04 UTC.