Annual Report 2018

Financial Highlights

Consolidated Financial Statements

Consolidated Balance Sheets

(¥ million)

Item As of March 31, 2018 As of March 31, 2017
Assets
Current assets 65,399 55,662
Cash and deposits 5,788 6,045
Notes and accounts receivable 22,818 20,477
Merchandise and finished products 8,194 6,951
Work in progress 17,667 14,133
Raw materials and purchased supplies 9,297 7,755
Deferred tax assets 1,044 68
Other current assets 1,086 713
Allowance for doubtful receivables ▲ 495 ▲ 481
Fixed assets 83,213 79,948
Tangible fixed assets 76,218 73,965
Buildings and structures 10,703 11,016
Machinery, equipment and vehicles 24,188 21,951
Land 38,711 38,698
Construction in progress 975 710
Other tangible fixed assets 1,641 1,592
Intangible fixed assets 1,034 1,296
Software 372 433
Other intangible fixed assets 663 862
Investments and other assets 5,960 4,687
Investment securities 4,947 3,978
Deferred tax assets 83 96
Other investments and other assets 952 635
Allowance for doubtful receivables ▲ 22 ▲ 22
Deferred assets 40 57
Bond issuance cost 40 57
Total assets 148,651 135,666
 
(Note) As of March 31, 2018 As of March 31, 2017
Assets pledged as collateral 69,402 69,896

(¥ million)

Item As of March 31, 2018 As of March 31, 2017
Liabilities
Current liabilities 68,901 61,065
Notes and accounts payable 22,972 17,024
Short-term debt 27,428 26,071
Current portion of bonds 754 754
Current portion of long-term debt 7,822 10,839
Accrued income taxes 635 589
Accrued consumption taxes 69 549
Reserve for employees' bonuses 1,132 962
Provision for directors' bonuses 4
Other current liabilities 8,085 4,277
Long-term liabilities 37,921 37,713
Bonds payable 985 1,739
Long-term debt 16,857 15,796
Deferred tax liabilities 7,464 7,418
Deferred tax liabilities on land revaluation 918 918
Net defined benefit liabilities 9,921 9,674
Reserve for environmental measures 13 2
Reserve for prevention of metal mine pollution 5 5
Other long-term liabilities 1,759 2,162
Total liabilities 106,822 98,777
Net assets
Equity 38,147 33,959
Common stock 24,301 24,301
Capital surplus 9,542 9,542
Retained earnings 4,443 255
Treasury stock ▲ 140 ▲ 139
Accumulated other comprehensive income 3,678 2,925
Unrealized gain on available-forsale securities 1,805 1,107
Net deferred losses on hedges 2 1
Land revaluation reserve 1,744 1,744
Foreign currency translation adjustments 127 74
Non-controlling interests 5 5
Total net assets 41,829 36,889
Total liabilities and net assets 148,651 135,666
 
(Note) As of March 31, 2018 As of March 31, 2017
Guarantee liabilities 1 1
Notes discounted 3,027 1,570
Notes endorsed 620 484

POINT:

  • Current assets
    Inventories (the total of merchandise and finished products, work in progress, and raw materials and purchased supplies) have increased by approximately ¥6,300 million in comparison with the level on March 31, 2017, due to higher production, resulting from an increase in sales volume against a backdrop of firm demand.
  • Interest-bearing debt
    The total amount of combined short-term debt, long-term debt and bonds payable decreased by approximately ¥1,400 million year on year.
  • Net assets
    The shareholders' equity ratio was 28.1% as of March 31, 2018.

Consolidated Statements of Operations

(¥ million)

Item Term ended March 31, 2018 Term ended March 31, 2017
Net sales 119,091 112,962
Cost of sales 104,535 98,679
Selling, general and administrative expenses 10,388 9,930
Operating profit 4,168 4,352
Non-operating income 562 263
Interest and dividends received 94 71
Other non-operating income 467 192
Non-operating expenses 1,344 1,766
Interest paid 854 1,016
Other non-operating expenses 489 750
Ordinary profit 3,386 2,849
Extraordinary profits 1,498 4
Extraordinary losses 796 87
Profit before income taxes 4,088 2,765
Income taxes (corporate tax, residential tax and enterprise tax) 670 403
Income tax adjustment ▲ 1,158 13
Profit attributable to noncontrolling interests 0 0
Profit attributable to owners of parent 4,575 2,349
 
(Note) Term ended March 31, 2018 Term ended March 31, 2017
Earnings per share 29.58 15.19

Consolidated Statements of Cash Flows

(¥ million)

Item Term ended March 31, 2018 Term ended March 31, 2017
Cash flows from operating activities 5,031 8,361
Cash flows from investing activities ▲ 2,852 ▲ 3,048
Cash flows from financing activities ▲ 2,475 ▲ 4,228
Foreign currency translation adjustment of cash and cash equivalents 41 20
Net increase (decrease) in cash and cash equivalents ▲ 254 1,105
Cash and cash equivalents at the beginning of the term 5,935 4,830
Balance of cash and cash equivalents at the end of the term 5,680 5,935

POINT:

  • Net sales

    In the stainless and specialty steel industry, the trend of gentle expansion in the domestic economy led to strong demand, and a continuation of the stable balance between supply and demand. In the Company's strategic field of high-performance alloys, in addition to firm demand in regions such as the US and China in areas such as consumer durables, there was continued expansion of applications in environmental and energy fields, while overseas-related demand was strong, as could be seen by recoveries in such applications as chemicals and fertilizers. As a result, net sales for the fiscal year under review increased by around ¥6,100 million year on year.

  • Ordinary profit
    In addition to the above-mentioned increase in net sales, as a result of further reductions in production costs, despite the increase in costs caused by the fire, profit rose by around ¥500 million year on year.

Consolidated Statements of Changes in Equity (Term ended March 31, 2017)

(¥ million)

  Equity
Common stock Capital surplus Retained earnings Treasury stock Total shareholders' equity
Balance as of April 1, 2017 24,301 9,542 255 ▲ 139 33,959
Changes of items during the period:          
Dividends of surplus ▲ 387 ▲ 387
Profit attributable to owners of parent 4,575 4,575
Purchase of treasury stock ▲ 1 ▲ 1
Changes outside scope of equity – net
Total changes of items during the period 4,189 ▲ 1 4,188
Balance as of March 31, 2018 24,301 9,542 4,443 ▲ 140 38,147
  Accumulated other comprehensive income Non-controlling interests Total net assets
Net unrealized gain on available-for-sale securities Net deferred loss on hedges Land revaluation reserve Foreign currency translation adjustments Total accumulated other comprehensive income
Balance as of April 1, 2017 1,107 1 1,744 74 2,925 5 36,889
Changes of items during the period:              
Dividends of surplus ▲ 387
Profit attributable to owners of parent 4,575
Purchase of treasury stock ▲ 1
Changes outside scope of equity – net 698 1 53 752 0 752
Total changes of items during the period 698 1 53 752 0 4,940
Balance as of March 31, 2018 1,805 2 1,744 127 3,678 5 41,829

Non-consolidated Financial Statements

Non-consolidated Balance Sheets

(¥ million)

Item As of March 31, 2018 As of March 31, 2017
Assets
Current assets 52,773 43,445
Cash and deposits 2,552 3,201
Notes receivable 9,644 6,451
Accounts receivable 10,426 9,527
Merchandise and finished products 3,599 3,021
Work in progress 17,185 13,593
Raw materials and purchased supplies 8,131 6,878
Prepaid expenses 210 162
Short-term loans receivable 167
Deferred tax assets 468
Other current assets 558 444
Fixed assets 82,137 79,094
Tangible fixed assets 68,221 65,996
Buildings 7,216 7,325
Structures 2,412 2,537
Machinery and equipment 22,426 20,240
Vessels 0 0
Vehicles and other land delivery equipment 12 17
Tools, furniture and fixtures 175 136
Land 34,416 34,416
Lease assets 698 724
Construction in progress 865 601
Intangible fixed assets 966 1,204
Software 351 402
Other intangible fixed assets 615 802
Investments and other assets 12,950 11,894
Investment securities 3,914 3,166
Shares of subsidiaries and affiliates 4,822 4,822
Long-term loans receivable 3,430 3,430
Long-term prepaid expenses 298 117
Other investments and other assets 488 362
Allowance for doubtful receivables ▲ 2 ▲ 2
Deferred assets 40 57
Bond issuance cost 40 57
Total assets 134,950 122,596
 
(Note) As of March 31, 2018 As of March 31, 2017
Monetary claims against subsidiaries (short-term) 10,648 8,498
Monetary claims against subsidiaries (long-term) 3,466 3,442

(¥ million)

Item As of March 31, 2018 As of March 31, 2017
Liabilities
Current liabilities 60,328 51,224
Notes payable (including electronically recorded payables) 10,923 6,774
Accounts payable 8,581 7,206
Short-term debt 23,145 19,907
Current portion of bonds 754 754
Current portion of long-term debt 7,243 10,189
Lease obligations 405 449
Accounts payable - other 3,491 912
Accrued expenses 2,661 1,926
Deposits received 991 1,287
Reserve for employees' bonuses 657 569
Notes payable - equipment 973 339
Other current liabilities 503 911
Long-term liabilities 34,478 34,156
Bonds payable 985 1,739
Long-term debt 16,006 14,796
Lease obligations 866 1,046
Deferred tax liabilities 7,785 7,785
Deferred tax liabilities on land revaluation 404 404
Reserve for employees' retirement benefits 7,631 7,452
Reserve for environmental measures 13 2
Reserve for prevention of metal mine pollution 5 5
Asset retirement obligations 220 220
Long-term accounts payable - other 560 703
Other long-term liabilities 5 5
Total liabilities 94,807 85,380
Net assets
Equity 37,980 35,619
Common stock 24,301 24,301
Capital surplus 9,542 9,542
Statutory reserve 9,542 9,542
Retained earnings 4,271 1,909
Other retained earnings 4,271 1,909
Retained earnings brought forward 4,271 1,909
Treasury stock ▲ 134 ▲ 134
Valuation and translation adjustments 2,163 1,598
Unrealized gain on available-for-sale securities 1,491 926
Land revaluation reserve 672 672
Total net assets 40,143 37,216
Total liabilities and net assets 134,950 122,596
 
(Note) As of March 31, 2018 As of March 31, 2017
Monetary debt against subsidiaries (short-term) 5,000 4,482
Guarantee liabilities 1 1

POINT:

  • Current assets
    Inventories (the total of merchandise and finished products, work in progress, and raw materials and purchased supplies) have increased by approximately ¥5,400 million in comparison with the level on March 31, 2017, due to higher production, resulting from an increase in sales volume against a backdrop of firm demand.
  • Fixed assets
    As a result of the recovery work etc. after the fire at the Kawasaki Plant, tangible fixed assets increased by approximately ¥2,200 million year on year.
  • Net assets
    The shareholders' equity ratio was 29.7% as of March 31, 2018.

Non-consolidated Statements of Operations

(¥ million)

Item Term ended March 31, 2018 Term ended March 31, 2017
Net sales 93,570 88,355
Cost of sales 85,883 80,409
Selling, general and administrative expenses 5,960 5,617
Operating profit 1,727 2,329
Non-operating income 922 763
Interest and dividends received 357 384
Other non-operating income 565 380
Non-operating expenses 1,141 1,541
Interest paid 754 892
Other non-operating expenses 387 649
Ordinary profit 1,508 1,552
Extraordinary profits 1,486
Extraordinary losses 796 88
Profit before income taxes 2,198 1,464
Income taxes (corporate tax, residential tax and enterprise tax) 95 ▲ 5
Income tax adjustment ▲ 646 ▲ 0
Profit 2,748 1,469
 
(Note) Term ended March 31, 2018 Term ended March 31, 2017
Earnings per share 17.77 9.49

POINT:

  • Net sales
    The fire at the Kawasaki Plant resulted in an unavoidable reduction in production volumes, and sales volumes fell around 7% year on year, but as a result of our continuing efforts to achieve more appropriate selling prices, net sales for the fiscal year under review rose by approximately ¥5,200 million year on year.
  • Extraordinary profits
    An extraordinary profit was posted, equivalent to the amount of the insurance money received from the insurance company in relation to the fire, less the book value of the fire-damaged assets.
  • Extraordinary losses
    An extraordinary loss related to losses stemming from the fire was posted.

Non-consolidated Statements of Changes in Equity (Term ended March 31, 2017)

(¥ million)

  Equity
Common stock Capital surplus Retained earnings Treasury stock Total shareholders' equity
Statutory reserve Total capital surplus Other retained earnings Total retained earnings
Retained earnings brought forward
Balance as of April 1, 2017 24,301 9,542 9,542 1,909 1,909 ▲ 134 35,619
Changes of items during the period:              
Dividends of surplus ▲ 387 ▲ 387 ▲ 387
Profit 2,748 2,748 2,748
Purchase of treasury stock ▲ 0 ▲ 0
Changes outside scope of equity – net
Total changes of items during the period 2,362 2,362 ▲ 0 2,361
Balance as of March 31, 2018 24,301 9,542 9,542 4,271 4,271 ▲ 134 37,980
  Valuation and translation adjustments Total net assets
Net unrealized gain on available-for-sale securities Land revaluation reserve Total valuation and translation adjustments
Balance as of April 1, 2017 926 672 1,598 37,216
Changes of items during the period:        
Dividends of surplus ▲ 387
Profit 2,748
Purchase of treasury stock ▲ 0
Changes outside scope of equity – net 565 565 565
Total changes of items during the period 565 565 2,927
Balance as of March 31, 2018 1,491 672 2,163 40,143

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