Latest Financial Results and Full Year Forecast

Consolidated Financial Results for the First Quarter Ended June 30, 2020

In the three-month period ended June 30, 2020, the movement of people and commodities was greatly restricted by the global COVID-19 pandemic. Although economic activities are gradually being resumed, the speed of recovery is unclear and there is concern regarding the possibility of further stagnation due to a potential second wave of infections.

The Company’s revenue for the three-month period ended June 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 falling methanol prices and lower synthetic resin transactions; and in the Metals & Mineral Resources Division, a result of declines in prices and transactions volumes for coal and other resources.
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 counteracted by benefits of reductions in non-personnel expenses and other selling, general and administration 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 1Q Results	FY2020 1Q Results	Difference
Revenue	437.4	349.3	(88.1)
Gross Profit	54.9	39.0	(15.9)
Profit for the Year attributable to owners of the Company	14.3	2.4	(11.9)

Changes of Yearly Financial Results (Cumulative)

Gross Profit

Profit attributable to owners of the Company

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 1Q	FY2020 1Q	Difference
Automotive	1.5	(1.8)	(3.3)
Aerospace & Transportation Project	0.2	(0.5)	(0.7)
Machinery & Medical Infrastructure	0.3	1.1	+0.8
Energy & Social Infrastructure	0.3	1.8	+1.5
Metals & Mineral Resources	7.1	(2.0)	(9.1)
Chemicals	2.3	0.0	(2.3)
Foods & Agriculture Business	0.7	2.0	+1.3
Retail & Lifestyle Business	1.1	0.6	(0.5)
Industrial Infrastructure & Urban Development	(0.9)	(0.6)	+0.3
Other	1.7	1.8	+0.1

Factor behind year on year change in earnings

■Automotive ￥(1.8) billion（down ￥(3.3) billion YoY）: Decreased due to reduced automobile sales as a result of the global COVID-19 pandemic
■Aerospace & Transportation Project ￥(0.5) billion（down ￥(0.7) billion YoY）: Decreased due to reduced aircraft related transactions
■Machinery & Medical Infrastructure ￥1.1 billion（up ￥0.8 billon YoY）: Increased due to higher returns from medical infrastructure business and industrial machinery transactions
■Energy & Social Infrastructure ￥1.8 billion（up ￥1.5 billion YoY）: Increased due to gains on asset replacement in power generation businesses
■Metals & Mineral Resources ￥(2.0) billion（down ￥(9.1) billion YoY）: Decreased due to reduced steel demand declines and coal market stagnated as a result of the global COVID-19 pandemic
■Chemicals ￥0 billion（down ￥(2.3) billion YoY）: Decreased due to impacts of the drop in methanol price as a result of the global COVID-19 pandemic
■Foods & Agriculture Business ￥2.0 billion（up ￥1.3 billion YoY）: Increased due to improved profitability stemming from lower production costs as well as higher sales volumes in overseas fertilizer businesses
■Retail & Lifestyle Business ￥0.6 billion（down ￥(0.5) billion YoY）: Decreased due to halted operation of commercial facilities as a result of the global COVID-19 pandemic
■Industrial Infrastructure & Urban Development ￥(0.6) billion（up ￥ 0.3 billion YoY）: Relatively unchanged year on year
■Other ￥1.7 billion (up ￥0 billion YoY)

Commodity Prices and Exchange Rates

	FY2019　Results (Apr.-Jun.'19 Avg.)	FY2020 Assumption (Annual Avg.) ⇒ Revised Forecast	FY2020　Results (Apr.-Jun.'20 Avg.)
Crude oil (Brent)	US$68.4 / bbl	US$25.0 / bbl (1H) US$35.0 / bbl (2H)	US$33.4 / bbl
Thermal Coal *	US$80.2 / t	US$63.8 / t ⇒ US$58.0 / t	US$54.4 / t
Coking Coal *	US$203.7 / t	US$135.0 / t ⇒ US$125.0 / t	US$119.0 / t
Exchange rate	¥109.7 / US$	¥108.0 / US$	¥107.4 / 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.