Nippon Carbon : Summary of Consolidated Financial Results for the Nine Months Ended September 30, 2018 (Based on Japanese GAAP)

Translation

Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any discrepancy between this translated document and the original Japanese document, the latter shall prevail.

Summary of Consolidated Financial Results

for the Nine Months Ended September 30, 2018

(Based on Japanese GAAP)

Company name: Nippon Carbon Co., Ltd.

Stock exchange listing: Tokyo

Takafumi Miyashita
Koji Imai
Scheduled date to file Quarterly Securities Report:	November 7, 2018
Scheduled date to commence dividend payments:	-
Preparation of supplementary material on quarterly financial results:	No
Holding of quarterly financial results meeting:	No

Stock code: Representative:

Inquiries:

5302 URLhttp://www.carbon.co.jpPresident and Representative Director Corporate Officer and General Manager of Business Control Div.

TEL [phone]

(Amounts less than one million yen are rounded down)

1. Consolidated financial results for the nine months ended September 30, 2018 (from January 1, 2018 to September 30, 2018)

(1) Consolidated operating results (cumulative)

November 7, 2018

Percentages indicate year-on-year changes

Net sales		Operating profit		Ordinary profit		Profit attributable to owners of parent
Nine months ended September 30, 2018 Nine months ended September 30, 2017	Millions of yen 33,033 19,351	% 70.7 17.3	Millions of yen 10,285 1,373	% 648.7 -	Millions of yen 10,284 1,444	% 612.2 -	Millions of yen 6,560 995	% 559.3 -

Earnings per share	Diluted earnings per share
Nine months ended September 30, 2018 Nine months ended September 30, 2017	Yen 594.05 89.91	Yen - -

(2) Consolidated financial position

Total assets	Net assets	Equity ratio	Net assets per share
As of September 30, 2018 As of December 31, 2017	Millions of yen 67,664 57,656	Millions of yen 39,184 33,906	% 49.1 48.9	Yen 3,007.65 2,553.20

2. Cash dividends

Annual dividends per share
1st quarter-end	2nd quarter-end	3rd quarter-end	Fiscal year-end	Total
Year ended December 31, 2017 Year ending December 31, 2018	Yen - -	Yen - 50.00	Yen - -	Yen 50.00	Yen 50.00
Year ending December 31, 2018 (Forecast)	50.00	100.00

3. Forecast of consolidated financial results for the year ending December 31, 2018 (from January 1, 2018 to December 31, 2018)

Percentages indicate year-on-year changes

Net sales		Operating profit		Ordinary profit		Profit attributable to owners of parent		Earnings per share
Full year	Millions of yen 45,200	% 61.6	Millions of yen 13,000	% 406.0	Millions of yen 13,000	% 333.8	Millions of yen 8,500	% 187.1	Yen 769.66

4. Notes

• (1) Changes in significant subsidiaries during the nine months ended September 30, 2018 (changes in specified subsidiaries resulting in the change in scope of consolidation):No

• (2) Application of special accounting methods for preparing quarterly consolidated financial statements:No

• (3) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statementsChanges in accounting policies due to revisions to accounting standards and other regulations: Changes in accounting policies due to other reasons:

Changes in accounting estimates:

Restatement of prior period financial statements:

(4) Number of issued shares (common shares)

Total number of issued shares at the end of the period (including treasury shares)

No No No No

As of September 30, 2018 11,832,504 shares

As of December 31, 2017 11,832,504 shares

As of September 30, 2018

11,832,504 shares As of December 31, 2017

Number of treasury shares at the end of the period

11,832,504 shares

As of September 30, 2018 788,635 shares

As of December 31, 2017 788,847 shares

As of September 30, 2018

788,635 shares As of December 31, 2017

Average number of shares during the period (cumulative from the beginning of the fiscal year)

Nine months ended September 30, 2018 11,043,869 shares

Nine months ended September 30, 2017 11,067,416 shares

Nine months ended September 30, 2018

11,043,869 shares Nine months ended September 30, 2017

788,847 shares

11,067,416 shares

Quarterly consolidated financial statements Consolidated balance sheets

(Millions of yen)
As of December 31, 2017	As of September 30, 2018
Assets Current assets Cash and deposits Notes and accounts receivable - trade Merchandise and finished goods Work in process Raw materials and supplies Deferred tax assets Other Allowance for doubtful accounts	11,586 10,262 5,508 3,804 1,569 642 492 (25)	15,173 15,136 6,616 4,078 2,336 498 400 (23)
Total current assets	33,840	44,217
Non-current assets Property, plant and equipment Buildings and structures Accumulated depreciation and impairment loss	15,572 (9,306)	15,746 (9,546)
Buildings and structures, net	6,265	6,199
Machinery and equipment Accumulated depreciation and impairment loss	41,673 (36,576)	42,009 (36,989)
Machinery and equipment, net	5,097	5,020
Vehicles, tools, furniture and fixtures Accumulated depreciation and impairment loss	2,917 (2,625)	3,082 (2,709)
Vehicles, tools, furniture and fixtures, net	291	372
Land Construction in progress	3,522 113	3,520 308
Total property, plant and equipment	15,290	15,421
Intangible assets Investments and other assets Investment securities Deferred tax assets Other Allowance for doubtful accounts	198 6,695 146 1,500 (16)	214 6,159 124 1,535 (9)
Total investments and other assets	8,326	7,810
Total non-current assets	23,815	23,447
Total assets	57,656	67,664
(Millions of yen)
As of December 31, 2017	As of September 30, 2018
Liabilities Current liabilities Notes and accounts payable - trade Short-term loans payable Income taxes payable Provision for bonuses Provision for directors' bonuses Other	4,349 8,417 358 135 69 1,843	6,500 8,465 2,751 330 78 2,486
Total current liabilities	15,173	20,613
Non-current liabilities Long-term loans payable Deferred tax liabilities Net defined benefit liability Provision for directors' retirement benefits Provision For Management Board Incentive Plan Trust Provision for environmental measures Asset retirement obligations Other	5,977 853 1,059 74 23 65 73 450	5,417 951 887 37 42 63 73 393
Total non-current liabilities	8,576	7,866
Total liabilities	23,750	28,479
Net assets Shareholders' equity Capital stock Capital surplus Retained earnings Treasury shares	7,402 7,800 12,638 (1,967)	7,402 7,800 17,911 (1,969)
Total shareholders' equity	25,874	31,146
Accumulated other comprehensive income Valuation difference on available-for-sale securities Foreign currency translation adjustment Deferred gains or losses on hedges Remeasurements of defined benefit plans	2,424 4 - (106)	2,093 63 (2) (84)
Total accumulated other comprehensive income	2,322	2,070
Non-controlling interests	5,709	5,968
Total net assets	33,906	39,184
Total liabilities and net assets	57,656	67,664

Consolidated statements of income (cumulative) and consolidated statements of comprehensive income

(cumulative)

Consolidated statements of income (cumulative)

(Millions of yen)
Nine months ended September 30, 2017	Nine months ended September 30, 2018
Net sales Cost of sales	19,351 15,256	33,033 18,992
Gross profit	4,094	14,041
Selling, general and administrative expenses	2,720	3,755
Operating profit	1,373	10,285
Non-operating income Dividend income Share of profit of entities accounted for using equity method Foreign exchange gains Gain on insurance adjustment Other	73 - 82 6 112	68 17 56 0 121
Total non-operating income	275	264
Non-operating expenses Interest expenses Share of loss of entities accounted for using equity method Loss on retirement of non-current assets Other	67 98 12 26	66 - 114 84
Total non-operating expenses	204	265
Ordinary profit	1,444	10,284
Extraordinary losses Fire loss	-	275
Total extraordinary losses	-	275
Profit before income taxes	1,444	10,008
Income taxes - current Income taxes - deferred	219 (36)	2,755 402
Total income taxes	183	3,157
Profit	1,260	6,851
Profit attributable to non-controlling interests	265	290
Profit attributable to owners of parent	995	6,560