Mitsui Mining and Smelting : Record of Telephone Conference Concerning FY2022 Results

Record of Telephone Conference Concerning FY2022 Results

Reference: FY2022 Results & FY2023 Forecast

https://www.mitsui- kinzoku.com/LinkClick.aspx?fileticket=nMlFGVOH2Bw%3d&tabid=204&mid=1027&Ta bModule903=0

Note:

PKG = Package substrate

HDI = High density interconnect

real profit = ordinary income excluding the inventory factors and the PGM price difference in Catalysts

■Explanation

Please refer to page 2 about Sales and Earnings.

Net sales for the fiscal year ended March 2023 are ¥652.0 billion. Operating income was ¥12.5 billion. Ordinary income was ¥19.9 billion. Net income attributable to parent company shareholders was ¥8.5 billion.

Compared to the previous year, net sales increased by ¥18.6 billion, mainly due to the weaker yen and high zinc prices. Due to higher energy costs and lower sales volume in the Engineered Materials segment, operating income decreased by ¥48.2 billion, ordinary income by ¥46.1 billion, and net income attributable to owners of the parent by ¥43.6 billion.

Regarding ordinary income, please refer to page 4 for a comparison with the full-year forecast for FY2022 announced on February 7.

The result is ¥19.9 billion, down ¥2.1 billion from the ¥22.0 billion forecast. Non-operating income increased due to the weaker-than-expected yen exchange rate and a favorable turnaround in equity in earnings of affiliates. On the other hand, the price of palladium and rhodium fell, which affected the price of precious metals in catalysts, resulting in a ¥2.2 billion decrease in profit. Inventory factors resulted in a ¥1.1 billion decrease due to weak metal prices. Profit decreased by ¥1.3 billion in the Engineered Materials segment due to the impact of lower electro-deposited copper foil sales volume in the copper foil business, etc. As a result, ordinary income was lower than the previous forecast.

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Next, we will explain our forecast for FY2023. Again, please see page 2 of the document.

For the fiscal year ending March 2024, we forecast net sales of ¥645.0 billion, operating income and ordinary income of ¥20.0 billion, and net income attributable to owners of the parent of ¥10.0 billion.

Compared to the results of the previous year, operating income is expected to increase by ¥7.5 billion, mainly due to the impact of recovering demand in the Engineered Materials and Mobility segments. Ordinary income is projected to be ¥20.0 billion, almost the same level as the previous year, due to the projected ¥7.4 billion decrease in non-operating income, caused by the deterioration of equity in earnings of affiliates, the absence of foreign exchange gains, and other factors.

Lastly, the proposal for dividend of ¥140 per share, as previously forecasted, will be submitted to the general shareholders' meeting on June 29. The dividend forecast for FY2023 is also ¥140 per share. Beginning this fiscal year, the Company plans to pay an interim dividend of ¥70 and a year-end dividend of ¥70.

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I will explain other items. Please turn to page 8 of the material.

Again, ordinary income for FY2022 was ¥19.9 billion, a significant decrease of ¥46.1 billion from the previous year.

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We will explain the situation in each segment.

First, Engineered Materials segment. Please see page 13.

As for the YoY comparison for FY2022, we were strongly affected by inventory adjustments in the market, especially from H2. Sales volume declined in the copper foil business and many other businesses in the Engineered Materials segment. Given these circumstances, net sales decreased ¥23.6 billion from the previous year to ¥112.5 billion.

As for ordinary income, the copper foil business saw a decrease of ¥13.1 billion, mainly due to an approximately 30% decrease in sales volume of MicroThin™ and a 35% decrease in electro- deposited copper foil sales volume by inventory adjustments. In the PVD materials business, inventory factors due to the decline in indium prices were deteriorating factors of ¥2.3 billion. In addition, inventory adjustments in the market and weak demand for displays resulted in lower sales volumes. Given these, due to a combined deterioration of ¥3.5 billion, ordinary income decreased by ¥19.3 billion from the previous year to ¥10.7 billion.

Net sales for FY2023 are projected to increase by ¥23.5 billion from the previous year to ¥136.0 billion. Although we expect sales to increase in most businesses due to market recovery, the main factor would be the improvement in the copper foil business, which is a business with a large scale of profit.

Ordinary income is expected to increase by ¥2.8 billion to ¥13.5 billion. The main reason for this is that we expect sales volumes of both electro-deposited copper foil and MicroThin™ to recover, which will lead to a ¥3.6 billion increase in profit in the copper foil business.

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