Daido Steel : Consolidated Financial Results for the Three Months Ended June 30,2020

Consolidated Financial Results

for the Three Months Ended June 30, 2020

[Japanese GAAP]

July 28, 2020

Company name: Daido Steel Co., Ltd.

Stock exchange listing: Tokyo Stock Exchange, Nagoya Stock Exchange

Code number: 5471

URL: https://www.daido.co.jp/

Representative: Takeshi Ishiguro, President and Representative Executive Director

Contact: Hideo Suzuki, General Manager, General Affairs Department

Phone: [phone]

Scheduled date of filing quarterly securities report: August 14, 2020

Scheduled date of commencing dividend payments: ―

Availability of supplementary briefing material on quarterly financial results: Available

Schedule of quarterly financial results briefing session: Scheduled (for securities analysts and institutional investors)

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

1. Consolidated Financial Results for the Three Months Ended June 30, 2020 (April 1, 2020 to June 30, 2020)

(1) Consolidated Operating Results		(% indicates changes from the previous corresponding period.)
	Net sales		Operating income	Ordinary income	Profit attributable to
		owners of parent
Three months ended	Million yen		%	Million yen	%	Million yen	%	Million yen	%
June 30, 2020	88,789		(30.5)	(2,431)	－	(1,667)	－	(1,553)	－
June 30, 2019	127,721		(5.7)	6,365	(25.5)	6,527	(30.8)	9,488	67.6

(Note) Comprehensive income: Three months ended June 30, 2020: ¥2,447 million [(65.5%)]

Three months ended June 30, 2019: ¥7,096 million [285.0%]

Profit attributable to

Diluted profit

attributable to owners

owners of parent

of parent

per share

per share

Three months ended

Yen

Yen

June 30, 2020

(36.45)

－

June 30, 2019

222.58

－

(2) Consolidated Financial Position

Total assets

Net assets

Shareholders'

equity ratio

Million yen

Million yen

%

As of June 30, 2020

650,765

310,462

42.3

As of March 31, 2020

625,899

309,136

43.7

(Reference) Shareholders' equity: As of June 30, 2020

: ¥275,335 million

As of March 31, 2020

: ¥273,561 million

2. Dividends

Annual dividends

1st

2nd

3rd

Year-end

Total

quarter-end

quarter-end

quarter-end

Yen

Yen

Yen

Yen

Yen

Fiscal year ended March 31, 2020

－

55.00

－

15.00

70.00

Fiscal year ending March 31, 2021

－

Fiscal year ending March 31, 2021

－

－

－

－

(Forecast)

(Note) Revision to the forecast for dividends announced most recently: No

The dividend forecasts for the Fiscal year ending March 31, 2021 are undecided.

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2021 (April 1, 2020 to March 31, 2021)

(% indicates changes from the previous corresponding period.)

	Net sales	Operating income	Ordinary income	Profit attributable to	Profit attributable to
	owners of parent	owners of parent
							per share
	Million yen	%	Million yen	%	Million yen	%	Million yen	%	Yen
First half	170,000	(32.7)	(7,000)	－	(6,000)	－	(3,000)	－	(70.38)
Full year	－	－	－	－	－	－	－	－	－

(Note) Revision to the financial results forecast announced most recently: Yes

The forecast for the Fiscal year ending March 31, 2021 will be disclosed when it is possible to make rational calculations in future.

* Notes:

1. Changes in significant subsidiaries during the period under review (changes in specified subsidiaries resulting in changes in scope of consolidation): No
2. Accounting policies adopted specially for the preparation of quarterly consolidated financial statements: No
3. Changes in accounting policies, changes in accounting estimates and retrospective restatement
4. 1. Changes in accounting policies due to the revision of accounting standards: No
   2. Changes in accounting policies other than 1) above: No
   3. Changes in accounting estimates: No
   4. Retrospective restatement: No
5. Total number of issued shares (common shares)
6. 1. Total number of issued shares at the end of the period (including treasury shares):

June 30, 2020	43,448,769 shares
March 31, 2020	43,448,769 shares
2) Total number of treasury shares at the end of the period:
June 30, 2020	820,531 shares
March 31, 2020	820,446 shares
3) Average number of shares during the period:
Three months ended June 30, 2020	42,628,254 shares
Three months ended June 30, 2019	42,629,424 shares

• These quarterly financial results are outside the scope of quarterly review procedures by a certified public accountant or an audit firm
• 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 available to the Company and certain assumptions deemed reasonable as of the date of publication of this document. Actual results may differ significantly from these forecasts due to a wide range of factors.

Supplementary briefing material

											July 28, 2020
										Daido Steel Co., Ltd.
		Consolidated Financial Results for the Three Months Ended June 30, 2020
(1) Net sales and operating income by reportable segment			(2) Condensed statement of profit and loss (cumulative)
				(Millions of yen, %)				(Millions of yen, %)
		Net sales		Operating income				1Q	YoY
						Change
										June
										[% of
			YoY
		1Q		1Q					2020
		Change		YoY				Change]
		June		June
		[% of		Change					(38,931)
		2020	2020		Net sales		88,789
		Change]				[(30.5%)]
			(21,136)
Specialty Steel	28,807	(1,875)	(3,042)		Operating income		(2,431)	(8,797)
[(42.3%)]
								[－%]
High Performance		(9,990)
32,860	1,227	(2,340)		Non-operating income		764	602
Materials and	[(23.3%)]		and expenses
Magnetic Materials
								(8,195)
								Ordinary income		(1,667)
Parts for		(7,461)
						[－%]
Automobile and	17,525	(2,431)	(2,822)
[(29.9%)]		Extraordinary income
Industrial Equipment							9	(7,431)
					and losses
			(1,314)
Engineering	4,027	156	(404)		Income before income		(1,657)	(15,626)
[(24.6%)]
							taxes
			970
Trading and	5,569	481	(200)		Income taxes		(112)	(4,415)
		Profit attributable to
Service	[21.1%]			8	(169)
					non-controlling interests
Adjustment	－	－	9	12		Profit attributable to		(1,553)	(11,042)
								owners of parent		[－%]
Total	88,789	(38,931)	(2,431)	(8,797)
[(30.5%)]

(Sales volume of Specialty Steel 174 thou. tons, decreasing 144 thou. tons vs FY2019-1Q)

(3) Reasons for change in the amount of ordinary income (YoY comparison)

(100 millions of yen)

(Reference: Market condition)

	Reasons for	Amount		Reasons for	Amount
	increase		decrease
1.	Raw material	59	1.	Sales volume	100
	and fuel cost
2.	Fixed cost	30	2.	Sales price	35
3.	Non-operating	6	3.	Sales mix	32
	income or loss		change
			4. Variable cost	10
	Total (a)	95		Total (b)	177
				Change (a) - (b)	(82)

(4) Condensed balance sheet

	1Q	1Q
	June	June
	2019	2020
H2	25.9	16.1
(Thousands of yen/t)
Nickel (LME)	5.6	5.5
(One dollar/lb)
Exchange rate (TTM)	110.9	108.6
(yen/dollar)
	(Millions of yen)

	As of	As of			As of	As of
Item	March 31,	June 30,	Change	Item	March 31,	June 30,	Change
	2020	2020			2020	2020
Current assets	310,641	327,548	16,906	Liabilities	316,763	340,302	23,538
Cash and deposits	59,558	103,247	43,688	Trade payables	66,821	52,951	(13,870)
Trade receivables	118,281	95,422	(22,858)	Interest-bearing debt	193,881	226,849	32,967
Inventories	127,174	123,526	(3,647)	Other	56,060	60,502	4,441
Other	5,627	5,352	(275)
Non-current assets	315,257	323,216	7,958	Net assets	309,136	310,462	1,326
Property, plant and	237,492	239,185	1,693	Shareholders' equity	276,101	273,797	(2,303)
equipment
				Accumulated other
Intangible assets	1,619	2,015	395	comprehensive	(2,539)	1,537	4,077
				income
Investments and	76,145	82,014	5,869	Non-controlling	35,574	35,127	(446)
other assets	interests
Total assets	625,899	650,765	24,865	Total liabilities	625,899	650,765	24,865
and net assets