Nippon Steel Trading : Summary of Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2022

This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for this translation, nor for direct, indirect, or any other form of damages that may arise from use of this translation.

Summary of Consolidated Financial Results

for the Third Quarter of the Fiscal Year Ending March 31, 2022

(Japanese GAAP)

		February 3, 2022
		Stock Exchange: Tokyo
Listed company name:	NIPPON STEEL TRADING CORPORATION
Code No.:	9810
URL:	https://www.nst.nipponsteel.com/en/
Representative name:	Yasumitsu Saeki, President and Representative Director
Tel:	[phone]
Quarterly securities report to be submitted:	February 14, 2022
Start of cash dividend payments:	-
Supplementary materials:		Yes (Japanese only)
IR conference:		None

(Figures rounded down to nearest million yen)

1. Consolidated Earnings through the Third Quarter of the Fiscal Year Ending March 31, 2022 (April 1, 2021 to December 31, 2021)

(1) Consolidated Operating Results (Cumulative)

(%: change from the same period of the previous year)

Net sales

Operating profit

Ordinary profit

Profit attributable to

owners of parent

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

3Q FYE March 31, 2022

1,359,554

47.3

33,325

119.4

37,020

113.1

25,565

149.2

3Q FYE March 31, 2021

923,247

−

15,189

−

17,370

−

10,258

−

Note: Comprehensive income

3Q FYE March 31, 2022:

¥27,182 million (155.2%)

3Q FYE March 31, 2021:

¥10,652 million (−%)

Earnings per share

Diluted earnings per share

Yen

Yen

3Q FYE March 31, 2022

792.59

−

3Q FYE March 31, 2021

318.03

−

• As we have applied the changes in the accounting policies retrospectively, the financial figures shown for the third quarter of the fiscal year ended March 2021 are the figures after the retrospective application. The percentage change from the same period of the previous year is not shown.

(2) Consolidated Financial Position

			Total assets	Net assets	Equity ratio
			Millions of yen	Millions of yen	%
	As of December 31, 2021		1,103,122	295,707	24.6
	As of March 31, 2021		883,285	278,090	28.9
Reference: Equity capital
	As of December 31, 2021:	¥270,933 million
	As of March 31, 2021:	¥255,389 million

• As we have applied the changes in the accounting policies retrospectively, the financial figures shown for the fiscal year ended March 2021 are the figures after the retrospective application.

2.	Dividends
				Annual dividends per share
			1Q	2Q		3Q		Fiscal year end	Total
			Yen	Yen		Yen		Yen	Yen
	FYE March 31, 2021	−	50.00		−		110.00	160.00
	FYE March 31, 2022	−	160.00		−
	FYE March 31, 2022						160.00	320.00
	(Est.)
Note:	Revisions of dividends projections since most recent announcement: Yes

3. Projected Consolidated Results for Fiscal Year Ending March 31, 2022 (April 1, 2021 to March 31, 2022)

(%: change from the previous year)

	Operating profit		Ordinary profit		Profit attributable to	Earnings per share
			owners of parent
	Millions of yen		%	Millions of yen		%	Millions of yen	%	Yen
Full fiscal year	41,500		85.6	45,000		74.6	32,000	100.1	992.07

Note: Revisions of earnings projections since most recent announcement: Yes

• As we have applied the changes in the accounting policies retrospectively, the percentage change from the previous year is calculated using the figures after the retrospective application.

* Notes

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes in scope of consolidation): None
2. Use of special accounting methods for creating quarterly consolidated financial statements: None
3. Changes of accounting policies, changes of accounting estimates and retrospective restatements
4. 1. Changes in accounting policies resulting from changes in accounting standards, etc.: Yes
   2. Other accounting policy changes: None
   3. Changes in accounting estimates: None
   4. Restatements: None
5. Number of issued shares (common shares)
6. 1. Number of issued shares at the end of the period (including treasury shares)

As of December 31, 2021	32,307,800 shares
As of March 31, 2021	32,307,800 shares
ii. Number of treasury shares at the end of the period
As of December 31, 2021	52,432 shares
As of March 31, 2021	51,577 shares

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

3Q FYE March 31, 2022	32,255,787 shares
3Q FYE March 31, 2021	32,257,404 shares

• Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants or an audit corporation.
• Explanation for the proper use of earnings projections, and other special matters

(Caution on description of future events, etc.)

The preceding projections are based on information available at the time of the publication of these materials, and are not intended as pledges on the part of the Company that the said projections will be achieved. Actual results may differ materially from projections due to various factors that may occur in the future. For the assumptions on which these earnings projections were based, see "1. Qualitative Information on Quarterly Settlement of Accounts, (3) Explanation of Consolidated Earnings Projections and Other Forecasts" on page 3 of the attachment.

(How to acquire supplementary materials)

Supplementary materials were published on TDnet as of February 3, 2022, and they were published on the Company's website on the same date.

NIPPON STEEL TRADING CORPORATION (9810)

Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2022

Index of attached documents
1. Qualitative Information on Quarterly Settlement of Accounts.............................................................................................	2
(1)	Explanation of Operating Results ..................................................................................................................................	2
(2)	Explanation of Financial Position ..................................................................................................................................	2
(3)	Explanation of Consolidated Earnings Projections and Other Forecasts .......................................................................	3
2. Quarterly Consolidated Financial Statements and Significant Notes Thereto ......................................................................	4
(1)	Quarterly Consolidated Balance Sheets .........................................................................................................................	4
(2)	Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income .....	6
	(Quarterly Consolidated Statements of Income) ............................................................................................................	6
	(Quarterly Consolidated Statements of Comprehensive Income) ..................................................................................	7
(3)	Notes on Quarterly Consolidated Financial Statements .................................................................................................	8
	(Notes on Going Concern Assumption) .........................................................................................................................	8
	(Notes in Case of Significant Changes to Shareholders' Equity) ...................................................................................	8
	(Changes in Accounting Policies)..................................................................................................................................	8
	(Additional Information)................................................................................................................................................	8
	(Segment Information, etc.) ...........................................................................................................................................	9
	(Subsequent Events) ....................................................................................................................................................	11

- 1 -

NIPPON STEEL TRADING CORPORATION (9810)

Consolidated Financial Statements for the Third Quarter of the Fiscal Year Ending March 31, 2022

1. Qualitative Information on Quarterly Settlement of Accounts

Forward-looking statements in this document are based on the Group's views as of the end of the quarter under review. The "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and relevant ASBJ regulations have been applied from the beginning of the first quarter. The Company has compared with the same period of the previous fiscal year and with the previous fiscal year, and analyzed the data using the figures after retrospectively applying the accounting standard and relevant ASBJ regulations.

1. Explanation of Operating Results
   During the first nine months of the fiscal year ending March 31, 2022, there was a recovery trend continuing in the world economy overall, as in the United States, recovery signs continued against a backdrop of strong domestic demand. Meanwhile, due to the renewed spread of COVID-19, as well as inflation due to supply constraints, the recovery momentum weakened in some countries and regions.
   In the Japanese economy, with the progress of vaccinations, at one time the number of new cases of COVID-19 had declined and there were signs of recovery. Recently, however, the number of new infections again increased, and the outlook continued to be uncertain.
   In this business environment, the Group has been working hard to implement the medium- to long-term management plan, and the Company's consolidated earnings for the first nine months under review, as compared with the same period of the previous fiscal year, were as follows: Net sales were ¥1,359.5 billion, up ¥436.3 billion (47.3%). Operating profit was ¥33.3 billion, up ¥18.1 billion (119.4%) and ordinary profit was ¥37.0 billion, up ¥19.6 billion (113.1%). Profit attributable to owners of parent was ¥25.5 billion, up ¥15.3 billion (149.2%).
   Earnings for reportable segments are as below.
   (Steel)
   In the Steel business, net sales increased by 55.0%, or ¥405.2 billion year on year, to ¥1,142.2 billion, and ordinary profit increased by 141.6%, or ¥18.9 billion, to ¥32.3 billion, thanks to gradually improved domestic steel demand in general in addition to implementation of measures under the medium- to long-term management plan, and also to higher steel prices in and outside Japan.
   (Industrial Supply and Infrastructure)
   In the Industrial Supply and Infrastructure business, mainly due to an earnings improvement at subsidiaries and associates in and outside Japan, net sales increased by 44.6%, or ¥19.8 billion year on year, to ¥64.3 billion, and ordinary profit rose by 94.6%, or ¥1,300 million, to ¥2,700 million.
   (Textiles)
   In the Textiles business, the management environment remained harsh due to impact of COVID-19, with intermittent reinstatement of the state of emergency. Moreover, there was a significant decline in the operating rates at production plants due to lockdown measures in ASEAN countries, and there was also the impact of cost increases due to the transfer of production to other regions with shorter delivery periods, resulting in an ordinary loss of ¥700 million.
   (Foodstuffs)
   In the Foodstuffs business, due to solid performance of our mainstay meat sales business, etc., net sales increased by 15.4%, or ¥10.7 billion year on year, to ¥80.6 billion, and ordinary profit increased by 37.4%, or ¥600 million, to ¥2,500 million.
2. Explanation of Financial Position
   Total assets at the end of the third quarter under review increased by ¥219.8 billion from the end of the previous fiscal year to ¥1,103.1 billion, due to an increase in notes and accounts receivable - trade and inventories, despite a decrease in cash and deposits.

- 2 -