Hanwa Co., Ltd. · TSE:8078
Hanwa — H1 FY2022 Earnings Presentation
31 slides from Hanwa's earnings presentation, Dec 2, 2022
Slide 1: Financial Results for the First Half of FY2022
Financial Results for the First Half of FY2022 November 2022 HANWA CO., LTD. Copyright© 2022 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 also contributed to these results. Ordinary income and net i
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 the first half. Full-year results are also expected to reach record income. (billions of yen) Net sales Net income attributable to owners of the Company H2 2,600.0 H
Slide 4: Effect of Profit/Loss from Market value Accounting and Temporary factors
Effect of Profit/Loss from Market value Accounting and Temporary factors Reported ordinary income was 52.9 billion yen, but can be translated into about 41.1 billion yen after excluding one-time factors such as period-end valuation gains and losses. (billions of yen) Inventory valuation Derivative
Slide 5: Segment Information (consolidated)
Segment Information (consolidated) Information by each segment Profits expanded in all business segments except for Steel and Foods business. Primary metals business ︓+9.0 billion yen (YoY) Energy & Living Materials business ︓+3.5 billion yen (YoY) Overseas sales subsidiaries ︓+2.9 billion yen (Yo
Slide 6: Financial Position (consolidated)
Financial Position (consolidated) Shareholder’s equity 257.1billion yen（From the end of FY2021,+35 billion yen） because of accumulation of retained earnings. Net Interest-bearing debt 473.5billion yen（From the end of FY2021, (83.9)billion yen）because of decreases in long-term guarantee deposits
Slide 7: Cash Flow Situation (consolidated)
Cash Flow Situation (consolidated) Cash flow from operating activities was 110.1 billion yen Due mainly to decrease in long-term guarantee deposits (187.3 billion yen) and accounts receivable- other（127.5 billion yen）. Cash flow from investing activities was (8.6) billion yen Due mainly to purch
Slide 8: Business Forecast FY2022
Business Forecast FY2022 Amendments to Forecasts Based on recent business performance, we have amended the forecast of consolidated financial results for FY2022. FY2021 FY2022 FY2022 Y on Y (billions of yen) Actual H1 Revised forecast rate 2,600.0 Net sales 2,164.0 1,338.9 51% (Compared to 1Q fore
Slide 9: Forecast of Segment Information
Forecast of Segment Information Progress rate of segment income (ordinary income) against full-year forecast Steel 58% Energy & Living Materials 65% Primary metals 91% Overseas sales subsidiaries 60% Metal recycling 77% Others 71% Foods － (billions of yen) Net sales Segment income 2,600.0 73.0 147
Slide 10: Dividend Policy
Dividend Policy We will strive to improve our financial position and cash flow in order to achieve stable and continuous dividends and growth investments. We plan to present a new dividend policy at the time of announcing the full-year financial results for this fiscal year. 150 Year-end dividen
Slide 11: Steel Business Segment
Steel Business Segment Profit margin shrank due to a rise in purchase prices, despite transaction volume remaining strong. Segment income also decreased due to a decrease in equity in earnings of affiliates from overseas investments. H2 Net sales (billions of yen) H1 1,224.5 Transaction Volume(Con
Slide 12: Primary Metal Business Segment
Primary Metal Business Segment Prices of some commodities such as nickel and silicon-based ferroalloy remained at relatively high levels. Segment income increased, because dividend income from strategic investments and equity in earnings of affiliates from SAMANCOR boosted profits. H2 Net sales (b
Slide 13: Metal Recycling Business Segment
Metal Recycling Business Segment Segment income increased, because reflection of raw material prices in products progressed amid strong transaction volume, and because revenue was boosted due to valuation gains from forward commodity transactions for hedging driven by the recent plunge in non-ferr
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 proc
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 transaction volume and unit price increased for PKS and wood pellets
Slide 16: Overseas Sales Subsidiaries Segment
Overseas Sales Subsidiaries Segment Segment income increased, because transaction volume of steel increased mainly in Indonesia and Singapore, and because improved profitability at sales subsidiaries in the United States contributed to profit growth. H2 Net sales (billions of yen) H1 490.4 Sales r
Slide 17: Other Segment
Other Segment Lumber…Revenue increased mainly for imported lumber because of high lumber prices due to the wood shock. Machinery…Net sales and income decreased due to fewer large-scale completed projects year-on-year. H2 Net sales (billions of yen) H1 147.3 Sales ratio in lumber business 130.2 H
Slide 18: Transition of Quantitative Indicators
Transition of Quantitative Indicators It is expected that ordinary income will be 73.0 billion yen in FY2022. Transaction volume of steel in all segments reached 7.47 million tons of the end of the second quarter, because transaction volume of steel increased in some countries, mainly Indonesia
Slide 19: Profits of Group Companies
Profits of Group Companies The ratio of consolidated profit to parent company’s profit in ordinary income was 149% because the profits of group companies in both Japan and overseas countries increased. Overseas sales subsidiaries…The transaction volume of steel increased in some countries includ
Slide 20: Investments in business
Investments in business Moving forward the investments totaling about 10.0 billion yen to build a base for an earnings increase in the future FY2022 Major investments (billions of yen) H1 Enhancement of processing facilities at Steel 2.4 domestic and overseas subsidiaries Energy & Business investm
Slide 21: Monetization of Investment
Monetization of Investment Generating steady earnings from strategic investments WATERBERG JV （Platinum group metals） ― Operations from 2026 BACANORA LITHIUM（Lithium carbonate） ― Operations from 2023/production 18Kt/year QMB NEW ENERGY（JV with CATL, Tsingshan Holdings, etc.） （Ni and Co compoun
Slide 22: Appendix
Appendix Copyright© 2022 Hanwa Co., Ltd. All Rights Reserved 21
Slide 23: Market Trend of Steel Raw Materials
Market Trend of Steel Raw Materials Iron ore…Expected recovery in demand after the Chinese New Year led to a gradual rise in the market price upon entering 2022. However, it was difficult to raise prices due to suppression of crude steel production caused by the zero-COVID policy and the sluggish re
Slide 24: Steel Market Trend in China
Steel Market Trend in China Supply/Demand…Demand was sluggish due to factors including the zero-COVID policy and stagnant real estate market. In terms of production, from the summer of 2021, the Chinese government’s directive to reduce carbon dioxide emissions led to a full-scale reduction in produc
Slide 25: Market Trend of Steel Scrap
Market Trend of Steel Scrap Supply/Demand…Supply in the market decreased due to a reduction in construction/demolition work and a decrease in automobile production in Japan due to the shortage of semiconductors. Demand is weak in an environment where steel production is stagnant. Market prices…Overs
Slide 26: Market Trend of Long Products
Market Trend of Long Products Supply/Demand…Construction demand remained strong due to the recovery in demand from the COVID-19 pandemic. In addition to urban redevelopment, distribution warehouses, and data centers, demand for large-scale properties such as factory investment in the semiconductor i
Slide 27: Market Trend of Flat Products
Market Trend of Flat Products Supply/Demand…Shipment did not increase due in part to the impact of reduced production in the automobile industry as a result of shortages of semiconductors and parts. Steel manufactures reduced production and adjusted their distribution inventory. Market prices…Produc
Slide 28: Market Trend of Metals & Alloys
Market Trend of Metals & Alloys Nickel…Prices rose in early March driven by concerns about supply from Russia. LME trading was temporarily suspended. After the trade suspension, the market price fell due to the appreciation of the dollar caused by interest rate rising and concerns about economic slo
Slide 29: Market Trend of Non-ferrous Metals
Market Trend of Non-ferrous Metals Aluminum…The price continued to rise after the Ukrainian conflict, but continued to fall on expectations that the supply-demand balance would loosen driven by a strong dollar due to interest rate hikes and concerns about an economic slowdown ahead. Copper…Prices fe
Slide 30: Market Trend of Frozen Marine Products
Market Trend of Frozen Marine Products Salmon…Driven by domestic shortages and the depreciating yen, the price has expanded since April. It hit an all-time high in July. Since then, the market has regained its composure and is currently showing signs of a struggle with price revisions. Shrimp…While
Slide 31: Market Trend of Crude Oil & Petroleum Products
Market Trend of Crude Oil & Petroleum Products Crude oil…Price rising continued driven by heightened tensions between Russia and Ukraine, but OPEC showed a willingness to cooperate with pressure from the West to increase production. This caused supply and demand to relax and market conditions to sof