Hanwa: Notification regarding the decrease in total consolidated assets



Date: July 1, 2022


Accounting Officer

Hisashi Honda

Tel: +81-3-3544-2000

Notification regarding the decrease in total consolidated assets

Due to declining commodity futures prices on the London Metal Exchange (LME), the assets and liabilities of Hanwa Co., Ltd. (“the Company”) decreased on June 30, 2022. As a result, the total consolidated assets of the Company decreased. Here is an overview of this decrease:

  1. Event date June 30, 2022
  2. Reason for the event

The Company engages in commodity hedging transactions, some of which involve valuation gains or losses attributable to counterparties. The fair value of the balance of these valuation gains or losses is calculated at the end of each fiscal quarter, using the prices quoted by members of the exchange in the quarterly accounts. The amounts of these capital gains or losses are allocated to assets and liabilities.

As reported on April 4, 2022, the Russian military invasion of Ukraine caused LME futures prices to rise, leading to a loss in value for the company on said hedging trades. Assets and liabilities related to said impairment increased, resulting in an increase in total consolidated assets of 183.6 billion yen at the end of fiscal 2021 (March 31, 2022).

However, due to the recent decline in commodity futures prices, assets and liabilities at the end of the first quarter of FY2022 (June 30, 2022) were approximately 70.9 billion yen and the total consolidated assets decreased by approximately 112.7 billion yen compared to the end. of the 2021 financial year (March 31, 2022).

3. Future forecasts

The capital losses triggered are attributable to the counterparties. The impact of these circumstances is limited to the allocation of assets and liabilities related to the impairment of the same amount as the impairment. At this stage, the Company considers that the impact on its earnings is negligible.

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Hanwa Co.Ltd. published this content on July 01, 2022 and is solely responsible for the information contained therein. Distributed by Audienceunedited and unmodified, on Jul 01, 2022 07:52:04 UTC.


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