Hanwa Co., Ltd. · TSE:8078
Hanwa — FY2022 Earnings Presentation
31 slides from Hanwa's earnings presentation, May 23, 2023
Slide 1: Financial Results for the Fiscal Year ended March 31, 2023
Financial Results for the Fiscal Year ended March 31, 2023 May 2023 HANWA CO., LTD. Copyright© 2023 Hanwa Co., Ltd. All Rights Reserved
Slide 2: Operating Results (Consolidated)
Operating Results (Consolidated) Net Sales In addition to commodity prices such as steel materials, non-ferrous metals, and crude oil remaining at high levels due to high resource prices, growing business at overseas sales subsidiaries contributed to these results that reached record highs. Ordi
Slide 3: Changes in Business Results (Consolidated)
Changes in Business Results (Consolidated) Semi-annual Changes in Business Results Both net sales and income reached record highs in two consecutive years. (billions of yen) Net Sales Net Income Attributable H2 to Owners of the Company 2,668.2 H1 2,164.0 51.5 1,907.4 1,329.3 43.6 1,745.5 14.4 1,18
Slide 4: Impacts of Profits/Losses from Market Value Accounting and Temporary Factors
Impacts of Profits/Losses from Market Value Accounting and Temporary Factors The reported ordinary income was 64.2 billion yen but can be translated into about 61.3 billion yen after excluding one-time factors such as period-end valuation gains and losses. (billions of yen) Inventory Valuation Der
Slide 5: Segment Information (Consolidated)
Segment Information (Consolidated) Steel : - 7.5 billion yen (YoY, -21%) Primary metals : +6.7 billion yen (YoY, +92%) Metal Recycling : +3.3 billion yen (YoY, +113%) Foods :－ Energy & Living Materials : +4.8 billion yen (YoY, +71%) Overseas sales subsidiaries : +0.5 billion yen (YoY, +8%) Others
Slide 6: Financial Position (Consolidated)
Financial Position (Consolidated) Shareholder’s Equity 270.8 billion yen (From the end of FY2021, +48.7 billion yen) because of accumulation of retained earnings. Net Interest-bearing Debt 296.7 billion yen (From the end of FY2021, -260.6 billion yen) because of decreases in long-term guarantee
Slide 7: Cash Flows (Consolidated)
Cash Flows (Consolidated) Cash flows from operating activities was +284.2 billion yen. Due mainly to decrease in long-term guarantee deposits (483.5 billion yen) and accounts receivables-other (415.0 billion yen). Cash flows from investing activities was -6.5 billion yen. Due mainly to acquisiti
Slide 8: Forecasts for FY2023
Forecasts for FY2023 Consolidated Full-year Forecast Profit is expected to decline due to hitting the ceiling in estimated steel prices, reflecting concerns about a slowdown in the economy caused by worldwide inflation and monetary tightening. Net Sales : 2,700.0 billion yen Operating Income : 60.
Slide 9: Forecasts by Segment
Forecasts by Segment Ordinary Income Forecast by Segment for FY2023 Steel: Expected to increase due to improvement in one-time factors, etc. Primary Metal: Expected to decrease because of decrease in dividend income from strategic investments and in equity in earnings of affiliates. Metal Recyclin
Slide 10: Shareholder Returns Policy
Shareholder Returns Policy We have always made consistent distribution of stable dividends to shareholders our primary policy. Our New Shareholder Returns Policy We dedicate to sustainable growth of our corporate value, aiming increase dividend amount over the medium to long term. During the perio
Slide 11: Steel Business Segment
Steel Business Segment Profit margin shrank due to a rise in purchase prices, despite the trading volume remaining strong. Segment income also decreased due to a decrease in equity in the earnings of affiliates from overseas investments. H2 (billions of yen) Trading Volume (Consolidated) H1 Net Sa
Slide 12: Primary Metal Business Segment
Primary Metal Business Segment Prices of some commodities such as nickel remained at relatively high levels. Segment income increased because dividend income from strategic investments and equity in the earnings of affiliates from SAMANCOR boosted profits. (billions of yen) H2 Net Sales Trading Vo
Slide 13: Metal Recycling Business Segment
Metal Recycling Business Segment Segment income increased, because the reflection of raw material prices in products progressed amid the strong trading volume and because revenue was boosted due to valuation gains from forward commodity trades for hedging driven by the recent plunge in non-ferrous
Slide 14: Foods Business Segment
Foods Business Segment Segment income decreased because an appraisal loss on the products was posted due to the decline in crab market prices due to import measures and reduced demand for crabs from Russia and the inability to fully reflect raw material prices in products for the increase in procu
Slide 15: Energy & Living Materials Business Segment
Energy & Living Materials Business Segment Segment income increased because revenue increased mainly for bunker oil as a result of the further rise in crude oil and petroleum product prices due to the Ukraine crisis, and because the trading volume and unit price increased for PKS and wood pellets.
Slide 16: Overseas Sales Subsidiaries Segment
Oversees Sales Subsidiaries Segment Segment income increased because the trading volume of steel increased mainly in Indonesia and Singapore. H2 (billions of yen) Net Sales Sales Ratio by Region H1 449.2 ASEAN China/Taiwan North America 333.8 194.3 10% 241.0 11% 20% 18% 181.4 172.1 109.4 11% 15% 9
Slide 17: Other Segments
Other Segments In Lumber business segment, income decreased mainly for the inability to fully reflect raw lumber prices in products for the increase in procurement costs caused by factors such as the weakening yen. In Machinery business segment, income increased due to more large-scale completed p
Slide 18: Quantitative Targets
Quantitative Targets Expect net sales of 2,700 billion yen and ordinary income of 50.0 billion yen for full FY2023. The Trading volume of steel reached 14.6 million tons in FY2022 as trading increases due to the expansion of “locally produced and locally consumed” business overseas, especially i
Slide 19: Profits of Group Companies
Profits of Group Companies The ratio of consolidated profits to the parent company’s profit in ordinary income was 126% because Both domestic and overseas group companies’ earnings fell compared to FY2021. Steel: Profit margin shrank due to a rise in purchase prices and segment income decrease bec
Slide 20: Investments in Business
Investments in Business Move forward the investments totaling about 26.4 billion yen to build a base for an earnings increase in the future. FY2022 Major Investments (billions of yen) Enhancement and reinforcement of processing facilities Steel 17.2 in both domestic and overseas subsidiaries Acqui
Slide 21: HANWA CO., LTD.
HANWA CO., LTD. 本資料で記述されている業績予想並びに将来予測は、現時点で⼊⼿可能な情報に基づき当社が判断した予想であり、潜在的 なリスクや不確実性が含まれています。そのため、様々な要因の変化により実際の業績は記述されている将来⾒通しとは⼤き く異なる結果となる可能性があることをご承知おき下さい。 Copyright© 2023 Hanwa Co., Ltd. All Rights Reserved
Slide 22: Appendix
Appendix Copyright© 2023 Hanwa Co., Ltd. All Rights Reserved 21
Slide 23: Market trend of Steel Raw Materials
Market trend of Steel Raw Materials Iron ore: Following the easing of the zero-COVID policy, blast-furnace manufacturers in China ramped up production, supporting firm demand for raw materials. However, weakness persisted in the market for steel products, putting downward pressure on demand. As a re
Slide 24: Steel Market Trend in China
Steel Market Trend in China Steel demands: Demand in China continued to struggle as worries about an economic slowdown persisted and the real-estate market softened. Prices rise temporarily as China eased its zero-COVIID policy, however prices trended downward in the face of demand weakness. Market
Slide 25: Market Trend of Steel Scrap
Market Trend of Steel Scrap Supply/Demand: Volume of steel scrap generated shrank in tandem with a decrease in demolition projects in Japan and a decline in scrapped vehicles. On the demand side, inquiries ebbed as demand for steel softened in Southeast Asia and demand from earthquake recovery in Tu
Slide 26: Market Trend of Long Products
Market Trend of Long Products Supply/Demand: Demand for long products for construction trended firm amid the rebound in demand from the COVID-19 pandemic. Factors such as redevelopment projects in urban areas fed a gradual increase in starts of major construction projects, creating a sense that cons
Slide 27: Market Trend of Flat Products
Market Trend of Flat Products Supply/Demand: In Japan, demand for automobiles, construction and fabrication machinery, among others, declined. In Asia, demand continued to lack buoyancy. Market trend: Production costs for flat products continued to rise amid high prices for raw materials and energy,
Slide 28: Market Trend of Metals & Alloys
Market Trend of Metals & Alloys Nickle: The price of nickel leapt temporarily to over US$30,000 a metric ton when the government of the Philippines announced a plan to ban ore exports. The price soon retreated to below US$25,000, however, amid concerns about weak demand for stainless steel worldwide
Slide 29: Market Trend of Non-ferrous Metals
Market Trend of Non-ferrous Metals Aluminum: As dollar appreciation paused and China eased its zero-COVIID policy, prices began turning upward around October 2022. Later, however, prices fell, amid worries about a worldwide economic slowdown and instability in the financial sector due to financial i
Slide 30: Market Trend of Frozen Marine Products
Market Trend of Frozen Marine Products Salmon: After hitting an all-time high in July 2022, prices trended downward in the face of demand weakness. In March 2023 supply vulnerabilities surfaced, causing prices to bottom out and strengthen. Shrimp: Shrimp prices followed a slackened trend after a pri
Slide 31: Market Trend of Crude Oil & Petroleum Products
Market Trend of Crude Oil & Petroleum Products Crude oil: As 2023 opened, crude-oil prices firmed amid a recovering trend in the Chinese economy and improvement in various economic indicators. They dropped again later, however, against a background of uncertainty about the financial space in North A