FY March 2024 Q2 Financial Results

November 9, 2023

Mitsubishi Materials Corporation

1

１．

Executive Summary

P.3

２．

Quarterly Performance

P.4

３．

Year-on-Year Comparison

P.5

４．

Consolidated Balance Sheet

P.7

５．

Forecast for the Fiscal Year Ending March 2024

P.8

６．

Segment Overview

P.10

７．

Overview of Mitsubishi UBE Cement Corporation

P.14

８．

Strengthening Cost Competitiveness

P.15

９．

Cash Flow Forecast

P.16

10．

Reference

P.17

I N D E X

2

Executive Summary

• In the automotive market, demand from auto manufacturers and Tier1 companies continued to recoveras the

Business

semiconductor shortage moved toward an end, but demand from materials manufacturers did not recover.

Environment

• The semiconductor market was stagnant, as device makers experienced sluggish sales.

in the Q2

• The yen remained weak. Metal prices for copper and palladium continued to decline. Domestic electricity prices and raw

material costs remained high since the last fiscal year.

In the H1, sales and profits declined. The Company was more affected than expected by sluggish demand in the automotive

and semiconductor markets, however the H1 result was largely in line with our expectationdue to foreign exchange gains

and equity-method investment incomes.

The H1 Result

• Net sales decreased (￥831.9 bn to ￥716.1 bn, -14% YoY) due to a change in the PTS scheme to contract smelting and a

decrease in sales.

(YoY change)

• Operating profit declined (￥29.5 bn to ￥ 11.9 bn, -60%YoY)due to a decrease in sales, despite the effects of the yen's

depreciation and sales price increases.

• Ordinary profit fell (￥23.0 bn to ￥18.4 bn, -20%YoY)due to a delay in the timing of dividends from mines, despite an increase of equity-method investment profit at Mitsubishi UBE Cement Corporation.

Full Year

Performance

Forecast

3

Full-yearforecast have been revised downward slightly, taking into account the latest business environment.

Operating profit ￥40.0 bn (-10.0), ordinary profit ￥56.0 bn (-2.0), profit attributable to owners of parent ￥3.8 bn(-3.0)

Figures in ( ) are the changes from the previous forecast as of May 12. (billions of yen)

The dividend forecast remains unchanged from the previously announced figure of ￥94(Interim:￥47, year-end:￥47), as profit attributable to owners of parent is not expected to fall far below the previous forecast.

  • Regarding foreign exchange, the yen remained weak. While metal prices show no signs of recovery, domestic electricity prices are expected to be lower than anticipated.
  • Demand in the semiconductor market remains stagnant and recovery is expected to be delayed from the FY2024 H2 to the FY2025 H1.
  • Profits in the Copper & Copper Alloy and the Electronic Materials & Components businesses will decline significantly, but the Company plans to return to the growth trajectory described in the FY2031 Strategy from FY2025 by strengthening cost competitiveness in addition to the recovery of the automobile market, etc. (Orders for automotive terminal materials in the Copper & Copper Alloy business are currently recovering).

Quarterly Performance

  • Net sales of the Q2 were ￥353.5 bn, down ￥9.1 bn from the Q1, mainly due to a decline in sales volume in the Metals business.
  • Compared to the Q1, operating profit increased ￥4.4 bn to ￥8.1 bn, and ordinary profit increased ￥4.5 bn to ￥11.4 bn.This was because operating profit recorded a profit due to an improvement in metal recoveries at the Metals business, and ordinary profit posted an increase in equity-methodinvestment gain of Mitsubishi UBE Cement Corporation.
  • Profit attributable to owners of parent was ￥6.2 bn, up ￥1.2 bn from the Q1, mainly due to an increase in ordinary profit, etc.

30

20

10

0

-10

-20

-30

(Billions of yen)

422.6

Net sales

409.3

411.5

382.3

362.6

353.5

24.1

17.0

15.6

19.2

13.9

12.1

11.4

5.9

8.4

6.9

8.1

3.7

6.2

4.9

1.9

0.3

-0.5

Operating Profit

Ordinary Profit

Profit (loss) attributable to owners of parent

-22.5

500

400

300

FY23 Q1

FY23 Q2

FY23 Q3

FY23 Q4

FY24 Q1

FY24 Q2

4

Year-on-Year Comparison (Consolidated PL, Foreign Exchange and Copper Price)

(Billions of yen)

FY March 2023

FY March 2024

H1 Results (a)

Change (b-a)

H1 Results (b)

Net Sales

831.9

716.1

-115.7

Operating profit

29.5

11.9

-17.6

Dividend income

6.7

1.1

-5.5

Other financial income and expenses

-2.3

-1.6

+0.7

Share of profit (loss) of entities accounted for

-9.7

4.5

+14.3

using equity method

Non-operating income (loss)

-1.1

2.4

+3.5

Ordinary profit

23.0

18.4

-4.6

Extraordinary income (loss)

11.6

-0.0

-11.7

Income taxes

-8.0

-6.2

+1.7

Profit (loss) attributable to non-controlling interests

-3.0

-0.9

+2.1

Profit attributable to owners of parent

23.6

11.1

-12.5

Dollar exchange rate (yen/$)

134

141

+7

Euro exchange rate (yen/€)

139

153

+15

Copper Price (LME) (cents/lb)

392

382

-10

5

Year-on-Year Comparison (Breakdown of Ordinary Profit Factors)

Both operating profit and ordinary profit decreased

  • Operating profit was ￥11.9 bn (down ￥17.6 bn YoY). There were negative factors such as increased energy costs, sluggish demand from the automotive market, and reduced sales in the Advanced Products and the Metalworking
    Solutions businesses due to deteriorating semiconductor market conditions, despite the yen's depreciation and price increases in the Copper & Copper Alloy and the Metalworking Solutions businesses.
  • Ordinary profit was ￥18.4 bn (down ￥4.6 bn YoY). There were a decrease of operating profit and no dividend from Los Pelambres Mine, despite an improvement in equity method investment profit at Mitsubishi UBE Cement Corporation.

(Billions of yen)

Operating profit -17.6

+3.3 -2.2

-9.3

Price increase +8.3

Energy cost -3.1

Raw materials -7.4

-9.4

23.0

Metals -4.9 (PTS scheme change, hedge costs etc.)

Advanced Products -3.1 （Polycrystalline silicon business, hedge costs etc.）

Metalworking Solutions -1.2 （Increased SG&A expenses ）

Non-operating profit +13.0

+4.2

+14.3

Dividend from mines

-4.8

18.4

-5.5

Mitsubishi UBE

Cement Corp.

+20.1

FY23 H1

Foreign Exchange

Prices

Quantity

Other

Dividend

Equity method

Other

FY24 H1

Ordinary Profit

Ordinary Profit

investment

6

Consolidated Balance Sheet

End of March

End of

September

Change

Item

2023

2023

(b-a)

(a)

(b)

Cash and deposits

142.1

95.2

-46.9

Notes and accounts

188.4

200.0

+11.5

Receivable - trade

Inventories

377.6

444.2

+66.6

Other

407.7

400.5

-7.1

Total current assets

1,116.0

1,140.0

+24.0

Property, plant and

equipment and

454.9

487.3

+32.3

intangible assets

Investments and

320.7

357.5

+36.8

other assets

Total non - current

775.7

844.9

+69.2

assets

Total assets

1,891.7

1,985.0

+93.2

Shareholders'

31

%

32

%

equity ratio

Net D/E ratio

0.7

times

0.8

times

7

(Billions of yen)

End of March

End of

September

Change

Item

2023

2023

(b-a)

(a)

(b)

Notes and accounts

85.2

85.3

+0.1

playable - trade

Borrowings, bonds

payable and commercial

533.5

575.9

+42.4

papers

Other liabilities

644.1

664.9

+20.8

Total liabilities

1,262.9

1,326.3

+63.4

Share capital

119.4

119.4

－

Capital surplus and

79.0

79.0

+0.0

treasury shares

Retained earnings

338.8

346.7

+7.8

Accumulated other

comprehensive

55.9

80.9

+24.9

income

Non-Controlling

35.5

32.5

-3.0

interests

Total net assets

628.8

658.6

+29.7

Total liabilities and

1,891.7

1,985.0

+93.2

net assets

Full Year Forecasts for FY March 2024

  • While the semiconductor market remains weak, orders in the Copper & Copper Alloy business are currently recovering in the automotive market.
  • The yen continues to depreciate and metal prices show no signs of recovery, while domestic electricity prices are expected to be lower than anticipated.
  • The full-year forecast has been revised downward slightly, taking into account the latest business environment.
  • The dividend forecast remains unchanged from the previous announcement at ￥94 (interim ￥47, year-end ￥47).

(Billions of yen)

P/L

Previous

Current

Change

Forecast (b)

(b-a)

Forecast (a)

Net sales

1,670.0

1,660.0

-10.0

Operating profit

50.0

40.0

-10.0

Ordinary profit

58.0

56.0

-2.0

Profit attributable

41.0

38.0

-3.0

to owners of parent

(Yen)

interim

47

47

－

Dividend

per share

year-end

47

47

－

8

Previous

Current

Change

Foreign Exchange

Forecast

Forecast

(b-a)

/Copper Price

(a)

(b)

Dollar-Yen Rate

￥/$

135

145

+10

Euro-Yen Rate

￥/€

145

154

+9

Copper price

¢/lb

390

373

-17

(LME)

(Billions of yen)

Sensitivity

Impact

on H2

Foreign

Operating profit

￥/$

+0.45

Exchange

Operating profit

￥/€

+0.09

Copper

Operating profit (a)

10¢/lb

+0.32

price

(LME)

Non-Operating profit (b)

10¢/lb

+0.10

Ordinary profit (a+b)

10¢/lb

+0.42

Full-Year Forecast for FY March 2024 (Difference from Previous Forecast )

Both operating profit and ordinary profit were revised downward due to a decrease in sales volume, despite

the depreciation of the yen and an improvement in equity-method investment gain.

  • Operating profit is expected to be ￥40.0 bn (down ￥10.0 bn from the previous forecast) due to a decline in sales driven by the deterioration of the semiconductor market, despite a decrease of energy costs and the yen's depreciation.
  • Ordinary profit is expected to be ￥56.0 bn (down ￥2.0 bn from the previous forecast) due to an increase in foreign exchange gains in addition to an improvement in equity-method investment profit in Mitsubishi UBE Cement Corporation.

Operating profit -10.0

Non-operating profit +8.0

(Billions of yen)

+7.8 +1.6 -12.8

-6.6

+7.7

-1.8

+2.1

58.0

56.0

Previous

Foreign Exchange

Prices

Quantity

Other

Dividend

Equity method

Other

Current

Ordinary Profit

investment

Ordinary Profit

Forecast

Forecast

9

Metals Business

Metals Company

  • In the H1, ordinary profit was ￥8.4 bn (down ￥12.7 bn YoY), mainly due to a decline in palladium price, an increase in energy costs and foreign exchange hedging costs, and a decrease in dividends from mines and equity-method investment gain.
  • In the full-year forecast, ordinary profit is expected to be ￥35.0 bn (up ￥0.4 bn from the previous forecast) due to the yen's depreciation and reduced energy costs, despite a decrease in dividends from mines and equity-method investment gain.

(Billions of yen)

FY March

FY March

Change

Previous Full-Year

Current Full-Year

Change

Item

2023 H1

2024 H1

(b-a)

Forecast (c)

Forecast (d)

(d-c)

Result (a)

Result (b)

Net sales

567.3

476.8

-90.4

1,071.7

1,110.6

+38.9

Operating profit

16.4

7.1

-9.2

21.9

22.3

+0.4

Ordinary profit

21.2

8.4

-12.7

34.5

35.0

+0.4

Sales volume of

162

186

+24

399

400

+1

electrolytic copper

thousand tons

thousand tons

thousand tons

thousand tons

thousand tons

thousand tons

(in-house product)

Dividend from

5.7

0.9

-4.8

15.8

14.8

-0.9

copper mine

Details of Ordinary Profit Decrease

FY March 2023 H1 Result (a)

21.2

Foreign Exchange

+1.5

Prices

-5.4

Quantity

-0.4

Dividend

-4.8

Equity method investment

-4.3

Other

+0.7

FY March 2024 H1 Result (b)

8.4

Details of Ordinary Profit Increase

Previous Full-Year Forecast (c)

34.5

Foreign Exchange

+5.3

Prices

-0.6

Quantity

-0.2

Dividend

-0.8

Equity method investment

-2.8

Other

-0.5

Current Full-Year Forecast (d)

35.0

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 14:58:00 UTC.