Latest Financial Results and Full Year Forecast

Consolidated Financial Results for the First Half Ended September 30, 2020

In the six-month period ended September 30, 2020, some of the restrictions placed on the movement of people and commodities in response to the global COVID-19 pandemic were lifted, resulting in the resumption of economic activities. However, conditions have not recovered to the level seen before the pandemic, and there are moves to tighten restrictions in certain regions following resurgences of infections while concern regarding the possibility of further stagnation due to a potential second wave of infections remains constant.

The Company’s revenue for the six-month period ended September 30, 2020, was down due to reduced revenue in the Automotive Division, a result of decreases in sales volumes in overseas automobile operations; in the Chemicals Division, a result of lower plastic resin transactions and falling methanol prices; and in the Metals & Mineral Resources Division, a result of declines in coal prices and sold a part of coal interests recorded at the end of the previous equivalent period.
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 in part to a gain on the partial sale of a natural gas-fired power project company.

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(Billions of Yen)

	FY2019 2Q Results	FY2020 2Q Results	Difference
Revenue	893.8	744.6	(149.2)
Gross Profit	109.7	84.5	(25.2)
Profit for the Year attributable to owners of the Company	29.5	9.1	(20.4)

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 2Q	FY2020 2Q	Difference
Automotive	1.5	(1.6)	(3.1)
Aerospace & Transportation Project	0.6	(0.3)	(0.9)
Machinery & Medical Infrastructure	1.5	2.2	＋ 0.7
Energy & Social Infrastructure	3.4	1.7	(1.7)
Metals & Mineral Resources	9.8	(2.0)	(11.8)
Chemicals	4.8	1.3	(3.5)
Foods & Agriculture Business	1.2	4.3	+3.1
Retail & Lifestyle Business	2.8	2.6	(0.2)
Industrial Infrastructure & Urban Development	0.6	(0.6)	(1.2)
Other	3.3	1.5	(1.8)

Factor behind year on year change in earnings

■Automotive\(1.6)billion（down\(3.1)billion YoY）: Decreased due to reduced automobile sales as a result of the global COVID-19 pandemic
■Aerospace & Transportation Project\(0.3)billion(down\(0.9)billion YoY）: Decreased due to reduced aircraft and marine vessels related transactions
■Machinery & Medical Infrastructure\2.2 billion(up\0.7 billion YoY）: Increased due to higher returns from medical infrastructure business
■Energy & Social Infrastructure\1.7 billion（down\(1.7)billion YoY）: Decreased, despite the assets 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\(2.0)billion（down\(11.8)billion YoY）: Decreased due to steel demand declines and coal market stagnated as a result of the global COVID-19 pandemic
■Chemicals\1.3 billion（down\(3.5)billion YoY）: Decreased due to impacts from the drop in methanol prices as a result of the global COVID-19 pandemic
■Foods & Agriculture Business\4.3 billion(up\3.1 billion YoY）: Increased due to higher profitability in overseas fertilizer businesses from lower production costs and higher sales volumes and the absence of losses on domestic marine products business recorded in the previous equivalent period
■Retail & Lifestyle Business\2.6 billion（down\(0.2)billion YoY）: Decreased, despite gains on sales of shopping mall, due to sluggish domestic consumption as a result of the global COVID-19 pandemic
■Industrial Infrastructure & Urban Development \(0.6)billion（down\(1.2)billion YoY）: Decreased due to lower number of overseas industrial parks delivered
■Other\1.5 billion（down\(1.8)billion YoY）

Segment Information（PDF）

Commodity Prices and Exchange Rates

	FY2019　Results (Apr.-Sep.'19 Avg.)	FY2020 Initial Assumption Assumption ⇒ Revised Forecast (Aug.4,20)	FY2020　Results (Apr.-Sep.'20 Avg.)
Crude oil (Brent)	US$65.2 / bbl	US$25.0 / bbl (1H) US$35.0 / bbl (2H)	US$36.7 / bbl
Thermal Coal *	US$73.9 / t	US$63.8 / t ⇒ US$58.0 / t	US$53.1 / t
Coking Coal *	US$180.8 / t	US$135.0 / t ⇒ US$125.0 / t	US$117.4 / t
Exchange rate	¥108.7 / US$	¥108.0 / US$	¥106.3 / US$

* 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 (Aug.4, 2020)	Difference
Gross Profit	220.5	203.0	(17.5)
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.