Latest Financial Results and Full Year Forecast

Consolidated Financial Results for the Third Quarter Ended December 31, 2020

In the nine-month period ended December 31, 2020, COVID-19 cases once again began to increase centered on the United States and Europe, prompting countries to place restrictions on economic activities and thereby stunting the recovery of the global economy. There is hope that future rollouts of COVID-19 vaccines and treatments could spark economic recovery, but the ongoing rise in case numbers in the United States and Europe coupled with the emergence of new strains of the COVID-19 virus has resulted in an ongoing sense of uncertainty with regard to the economy.

The Company’s revenue for the nine-month period ended December 31, 2020, was down year on year. Despite the recent recovery in the price of methanol, the lingering impacts of the sluggish prices for this commodity seen in the first quarter continued to depress the revenue. Other factors behind the decrease in revenue include reduced revenue in the Chemicals Division, a result of lower plastic resin transactions in the Chemicals Division, in the Automotive Division, a result of decreases in sales volumes in overseas automobile operations; and in the Retail & Lifestyle Business Division, a result of lower lumber transactions.
Profit for the period (attributable to owners of the Company) decreased year on year as a result of declines in gross profit and share of profit of investments accounted for using the equity method.
The impact of these declines could not be offset by the benefits of reductions in non-personnel expenses and other selling, general and administrative expenses and an improved balance of other income and expenses due to the sale of a shopping mall, the acquisition of an additional stake in a solar power generation business company and partial sale of a natural gas-fired power project company.

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(Billions of Yen)

	FY2019 3Q Results	FY2020 3Q Results	Difference
Revenue	1,318.6	1,159.7	(158.9)
Gross Profit	159.4	132.5	(26.9)
Profit for the Year attributable to owners of the Company	37.5	16.7	(20.8)

Changes of Yearly Financial Results (Cumulative)

Gross Profit

Profit attributable to owners of the Company

Trends in Financial Data（EXCEL）

Segment Performance [Profit for the period attributable to owners of the Company]

Graph
Table

Segment Performance [Profit for the Period (Attributable to owners of the Company)]

(Billions of Yen)

	FY2019 3Q	FY2020 3Q	Difference
Automotive	1.3	(0.4)	(1.7)
Aerospace & Transportation Project	1.1	(0.1)	(1.2)
Machinery & Medical Infrastructure	2.6	3.4	＋ 0.8
Energy & Social Infrastructure	3.8	2.2	(1.6)
Metals & Mineral Resources	12.0	(2.4)	(14.4)
Chemicals	6.1	3.7	(2.4)
Foods & Agriculture Business	1.4	4.3	+2.9
Retail & Lifestyle Business	4.7	4.2	(0.5)
Industrial Infrastructure & Urban Development	0.2	(0.6)	(0.8)
Other	4.3	2.4	(1.9)

Factor behind year on year change in earnings

■Automotive \(0.4)billion (down \(1.7)billion YoY): Decreased due to reduced automobile sales as a result of the global COVID-19 pandemic
■Aerospace & Transportation Project \(0.1)billion (down \(1.2)billion YoY): Decreased due to reduced aircraft-related transactions as a result of the global COVID-19 pandemic
■Machinery & Medical Infrastructure \3.4billion (up \0.8billion YoY): Increased due to higher returns from medical infrastructure business
■Energy & Social Infrastructure \2.2billion (down \(1.6)billion YoY): Decreased, despite the asset replacement in power generation businesses, due to deterioration of crude oil market conditions and the absence of gains on sales of power generation businesses and oil interests recorded in the previous equivalent period
■Metals & Mineral Resources \(2.4)billion (down \(14.4)billion YoY): Decreased due to steel demand declines and coal market stagnated as a result of the global COVID-19 pandemic
■Chemicals \3.7billion (down \(2.4)billion YoY): Decreased due to impacts from the drop in methanol prices as a result of the global COVID-19 pandemic
■Foods & Agriculture Business \4.3billion (up \2.9billion YoY): Increased due to higher profitability in overseas fertilizer businesses from lower production costs and higher sales volumes
■Retail & Lifestyle Business \4.2billion (down \(0.5)billion YoY): Decreased, despite gains on sale of a shopping mall, due to sluggish domestic consumption as a result of the global COVID-19 pandemic
■Industrial Infrastructure & Urban Development \(0.6)billion (down \(0.8)billion YoY): Decreased due to lower number of overseas industrial parks delivered
■Other \2.4billion (down \(1.9)billion YoY)

Segment Information（PDF）

Commodity Prices and Exchange Rates

	FY2019　Results (Apr.-Dec.'19 Avg.)	FY2020　Results (Apr.-Dec.'20 Avg.)	FY2020 Assumption (Aug.4,20) ⇒FY2020 4Q Assumption (Feb.3,21)
Crude oil (Brent)	US$64.3 / bbl	US$41.3 /bbl	US$35.0 / bbl (2H) US$51.0 / bbl (4Q)
Thermal Coal *	US$71.7 / t	US$60.1 / t	US$58.0 / t (FY20) ⇒US$89.0 / t (4Q)
Coking Coal *	US$167.4 / t	US$113.3/t	US$125.0 / t (FY20) ⇒US$126.5 / t (4Q)
Exchange rate	\108.9 / US$	\105.5/US$	108.0 / US$ (FY20) (Initial assumption)

* Coal prices are based on standard market prices and therefore differ from the Company’s selling prices.

Full Year Forecast of Fiscal Year Ending March 31, 2021

(Billions of Yen)

	FY2019 Results	FY2020 Revised Forecast (Feb.3,21)	Difference
Gross Profit	220.5	200.0	(20.5)
Profit for the year attributable to owners of the Company	60.8	30.0	(30.8)

FY2020 Profit for the Year Forecast by Segment

Caution regarding Forward-looking Statements
This document contains forward-looking statements based on information available to the company at the time of disclosure and certain assumptions that management believes to be reasonable. Actual results may differ materially based on various factors including the timing at which the COVID-19 pandemic ends; changes in economic conditions in key markets, both in and outside of Japan; and exchange rate movements. The Company will provide timely disclosure of any material changes, events, or other relevant issues.