Mitsubishi Steel Mfg : Summary of Financial Statements for the First Quarter of the Fiscal Year Ending March 31,2023(Consolidated)

Summary of Financial Statements for the First Quarter of the Fiscal Year

Ending March 31, 2023

[Japanese GAAP] (Consolidated)

August 4, 2022

Shares listed on: Tokyo Stock Exchange

Name of listed company:	MITSUBISHI STEEL MFG. CO., LTD.
Code No.:	5632	URL: https://www.mitsubishisteel.co.jp/
Representative:	Jun Yamaguchi, Representative Director and President/Executive Officer
Contact:	Koichi Yaginuma, Executive Officer/Manager, Accounting Department Tel.: [phone]

Scheduled date for filing quarterly report:		August 10, 2022
Scheduled start date of dividend payments:		-
Supplementary briefing materials on quarterly results available: Yes
Briefing on quarterly results held:				None
							(All figures are rounded down to the nearest million yen.)
1. Financial results for the first quarter of the fiscal year ending March 31, 2023 (April 1, 2022- June 30, 2022)
(1) Consolidated operating results							(Percentages represent year-on-year changes.)
		Net sales		Operating income	Ordinary income	Net income attributable
			to owners of parent
	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
First quarter of the fiscal year	39,889		25.5	832		(47.8)	863	(37.4)	422	(87.3)
ending March 31, 2023
First quarter of the fiscal year		31,786		48.7	1,596		-	1,380	-	3,333	-
ended March 31, 2022

Note: Comprehensive income: First quarter of the fiscal year ending March 31, 2023: (392) million yen (--%); First quarter of the fiscal

year ended March 31, 2022: 1,375 million yen (--%)
	Net income	Diluted net income per
	per share	share
	Yen	Yen
First quarter of the fiscal year	27.51	-
ending March 31, 2023
First quarter of the fiscal year	216.66	-
ended March 31, 2022

(2) Consolidated financial position

			Total assets		Net assets	Shareholders'
				equity ratio
			Millions of yen		Millions of yen	%
	First quarter of the fiscal year ending March 31, 2023	141,894	47,399		29.6
	Fiscal year ended March 31, 2022		142,962		48,647		29.8

Reference: Shareholders' equity: First quarter of the fiscal year ending March 31, 2023: 42,046 million yen; Fiscal year ended March 31, 2022: 42,600 million yen

2. Dividends

			Annual dividends per share
	End Q1		End Q2		End Q3		Year-end		Total
		Yen	Yen		Yen		Yen		Yen
Fiscal year ended March 31, 2022	-	10.00		-	40.00	50.00
Fiscal year ending March 31, 2023	-
Fiscal year ending March 31, 2023 (forecast)			10.00		-		40.00		50.00

Note: Revisions of projected dividends announced most recently: None

3. Forecast of consolidated financial results for fiscal year ending March 31, 2023 (April 1, 2022 - March 31, 2023)

(Percentages represent changes from the previous year for the full year and changes from the same quarter of the previous year for the quarter.)

								Net income	Net income per
	Net sales		Operating income	Ordinary income	attributable to
		share
								owners of parent
	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Second quarter	80,000		21.4	500	(81.7)	(200)	-	200	(91.3)	13.01
(cumulative)
Full year	170,000		16.2	4,500	(28.2)	3,100	(46.4)	2,700	(33.6)	175.70

Note: Revisions of forecasts of consolidated financial results announced most recently: None

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Notes
(1) Changes in significant subsidiaries during the cumulative period through the period under review:	None
(Changes in specific subsidiaries accompanied by changes in the scope of consolidation)
Newly added: - companies (name: -)
Removed:	- companies (name: -)

1. Application of specific account processing in preparation of the quarterly consolidated financial statements: None
2. Changes in accounting policies, changes in accounting estimates, and retrospective restatements

 Changes in accounting policies due to the revisions of accounting standards, etc.:	None
 Any changes in accounting policies other than those under  above:	None
 Changes in accounting estimates:	None
 Retrospective restatements:	None

Note: For more information, see "2. Consolidated Financial Statements and Major Notes: (3) Notes on Consolidated Financial Statements (Changes to Accounting Policies)" on page 10 of the Attached Materials.

1. Number of shares outstanding (common shares)
2. • Number of shares outstanding at the end of the period (including treasury stock)

• Number of treasury shares at the end of the period

• Average number of shares during the period (cumulative through the period under review)

1Q of fiscal year ending	15,709,968 shares	Fiscal year ended	15,709,968 shares
March 31, 2023	March 31, 2022
1Q of fiscal year ending	353,923 shares	Fiscal year ended	353,774 shares
March 31, 2023	March 31, 2022
1Q of fiscal year ending	15,356,147 shares	1Q of fiscal year ended	15,384,430 shares
March 31, 2023		March 31, 2022

• Quarterly summaries of financial results are not subject to quarterly review by a certified public accountant or audit firm.
• Explanation of the proper use of financial results forecast and other notes.
  The forecasts of financial results were prepared based on information available at this time. Actual results may differ from forecasts depending on various future factors.
  For detailed information on financial forecasts, refer to "1. Qualitative Information on Quarterly Financial Results: (3) Explanation of Forward-looking Statements Including Forecasts of Consolidated Financial Results" on page 5 of the Attached Materials.

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• Table of Contents for Attached Materials

1.	Qualitative Information on Quarterly Financial Results...................................................................................................................	4
	(1)	Description of Operating Results............................................................................................................................................	4
	(2)	Description of Financial Position ...........................................................................................................................................	5
	(3)	Explanation of Forward-looking Statements Including Forecasts of Consolidated Financial Results....................................	5
2.	Consolidated Financial Statements and Major Notes........................................................................................................................	6
	(1)	Consolidated Balance Sheet....................................................................................................................................................	6
	(2)	Consolidated Statement of Income and Consolidated Statement of Comprehensive Income .................................................	8
	(3)	Notes on Consolidated Financial Statements........................................................................................................................	10
		(Notes on the Going Concern Assumption)..........................................................................................................................	10
		(Notes on marked changes in amounts of shareholders' equity)...........................................................................................	10
		(Segment Information, etc.)..................................................................................................................................................	10
		(Revenue Recognition) .........................................................................................................................................................	11
3.	Appendix (Consolidated)................................................................................................................................................................	12

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1. Qualitative Information on Quarterly Financial Results

1. Description of Operating Results

With respect to the Group's operating environment in the cumulative period through the first quarter of the fiscal year under review (from April 2022 through June 2022), the outlook for the automotive industry remains uncertain despite improvements in automotive production since last year (mainly in North America), when shortages of semiconductors drove significant production cuts. Current factors include the continuing impact of production cuts attributable to the Shanghai lockdown and supply chain disruptions attributable to shortages of semiconductors and other components. Demand in the construction machinery industry remains strong. However, procurement costs have been rising due to the rapid depreciation of the yen, as well as soaring raw material and energy prices. Reflecting these additional factors in selling prices has been a major challenge.

Under these circumstances, thanks to expanding sales volumes and efforts to reflect the rising cost of raw materials in selling prices, the Group posted consolidated net sales of 39,889 million yen in the cumulative period through the first quarter of the fiscal year under review, an increase of 8,103 million yen (25.5%) year-on-year. Consolidated operating income was 832 million yen, down 763 million yen (47.8%) year-on-year, owing to production disruptions at the North American Springs subsidiary and other factors; this was despite use of raw material inventories before price hikes in the Special Steel Bars Business.

Net income attributable to owners of parent was 422 million yen, down 2,910 million yen (87.3%) year-on-year. Results by business segment are reviewed below.

Net sales in the Special Steel Bars Business were 23,908 million yen, up 5,693 million yen (31.3%) year-on-year, due to efforts to reflect the price hike of raw materials in selling prices, as well as steady demand from industries associated with construction machinery. Operating income for the domestic business increased, thanks to use of raw material inventories before price hikes and other factors, and despite the lag in reflecting raw material and energy price hikes and progressive depreciation of the yen in selling prices. Profits at the overseas Indonesian business grew thanks to lower manufacturing and fixed costs. Overall, the Special Steel Bars Business posted operating income of 1,654 million yen, up 263 million yen (18.9%) year-on-year.

Net sales in the Springs Business were 13,469 million yen, up 2,642 million yen (24.4%) year-on-year, due mainly to increased automotive production in North America, and despite the Shanghai lockdown. Semiconductor shortages had significantly reduced production cuts in the previous year. Other factors leading to the results included steady demand for construction machinery and the translation effects of the weaker yen. Operating loss for the Springs Business as a whole deteriorated by 886 million yen year-on-year to 1,105 million yen (vs. an operating loss of 219 million yen in the same period of the previous fiscal year). Contributing factors included production disruptions at the North American subsidiary arising mainly from sudden changes in purchase orders by automotive manufacturers, which resulted in continuing lower productivity and emergency shipping requirements in the latter half of the previous fiscal year, which broadened the scope of the disruptions, as well as expanded losses at the North American subsidiary caused by yen depreciation.

Restructuring efforts are currently underway to address the production disruptions at the North American subsidiary. Measures implemented to date include securing stable inventories.

Net sales in the Formed & Fabricated Products Business were 2,814 million yen, up 189 million yen (7.2%) year-on-year, thanks to improvements in selling prices of special alloy powders, orders for new products, and other factors. The results incorporate the impact of shortages of semiconductors and other parts. Operating income was 183 million yen, down 115 million yen (38.6%) year-on-year, attributable to significant lag in reflecting the rising cost of raw materials, auxiliary materials, and purchased goods in selling prices.

Net sales in the Machinery Business were 1,709 million yen, down 259 million yen (13.2%) year-on-year. This was despite stronger sales of machinery related to offshore wind power and other products and reflects in part a large order of forging machinery recorded for the same period in the previous year. Due to lower net sales, operating income was 62 million yen, down 56 million yen (47.2%) year-on-year.

Orders received outpaced those in the previous year thanks to strong orders for magnetic sorting machines.

Other businesses, including distribution and service businesses, posted net sales of 859 million yen, 173 million yen (16.8%) lower year-on-year, and operating income of 32 million yen, or 1 million yen (4.8%) lower year-on-year.

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(2) Description of Financial Position

Total assets at the end of the first quarter of the consolidated fiscal year under review were 141,894 million yen, down 1,067 million yen from the end of the previous consolidated fiscal year. This was due to a decrease in cash due to payment of accounts payable-trade, income, and consumption taxes, and dividends and to increased inventories due to increased production.

Total liabilities at the end of the first quarter of the consolidated fiscal year under review were 94,495 million yen, up 180 million yen from the end of the previous consolidated fiscal year. This increase was due to an increase in loans payable; liabilities declined due to the payment of accounts payable-trade and income and consumption taxes.

Net assets at the end of the first quarter of the consolidated fiscal year under review were 47,399 million yen, down 1,248 million yen from the end of the previous consolidated fiscal year. Contributing factors included a decline in foreign currency translation adjustments resulting from dividend payments and exchange rate fluctuations and an increase in net income for the quarter.

(3) Explanation of Forward-looking Statements Including Forecasts of Consolidated Financial Results

Forecasts of consolidated financial results for the fiscal year ending March 2023 remain unchanged from forecasts announced May 13, 2022.

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