Note: This document has been translated from the Japanese original for reference purposes only. In the event of any
discrepancy between this translated document and the Japanese original, the original shall prevail.

May 11, 2023

Consolidated Financial Results
for the Three Months Ended March 31, 2023
(IFRS)
Company name: MODEC, INC.
Listing:
Tokyo Stock Exchange
Securities code: 6269
URL:
https://www.modec.com
Representative: Takeshi Kanamori, Representative Director, President
Inquiries:
Yasuhiro Takano, Director, Senior Executive Managing Officer
Telephone:+81-3-5290-1200
Scheduled date to file quarterly securities report:
May 12, 2023
Scheduled date to commence dividend payments:－
Preparation of supplementary material on quarterly financial results: None
Holding of quarterly financial results briefing: None

(Yen amounts are rounded down to millions.)

1. Consolidated financial results for the three months ended March 31, 2023 (from January 1, 2023 toMarch 31, 2023)(1) Consolidated operating results(Percentages indicate year-on-year changes.)

RevenueThree months ended

Operating profit

Profit before tax

Profitmillion yen%

million yen%

million yen%

million yen%

March 31, 2023

99,472

22.3

2,759

－

2,755

－

1,255

－

March 31, 2022

81,310(34.8)(1,557)－(2,488)－(2,042)－

Profit attributable toowners of parent
Three months ended

Total comprehensive
incomeBasic earnings
per share

Diluted earnings
per share

million yen%

million yen

%

yen

yen

March 31, 2023

413－

(3,536)

－

7.34

7.33

March 31, 2022

(2,039)－8,955 (34.3)(36.18)(36.18)Equity attributable toowners of parent

Ratio of equity
attributable to ownersof parent to total
assets(2) Consolidated financial position
Total assets
As ofTotal equity

million yen

million yen

million yen%

March 31, 2023

401,163

108,790103,999

25.9

December 31, 2022

416,206

111,625

107,71225.9

Note: The original condensed consolidated financial statements of MODEC, INC. and its subsidiaries (hereinafter “theCompany”) for the three months ended March 31, 2023 and 2022 and for the year ended December 31, 2022 arepresented in US dollars on page 4 of this material. The amount presented for consolidated operating results andconsolidated financial position are converted to Japanese yen, respectively, as follows:

March 31, 2023 1 US dollar =133.54 Japanese yen at the TTM rate of Sumitomo Mitsui Banking Corporation as of March 31, 2023
March 31, 2022 1 US dollar =122.41 Japanese yen at the TTM rate of Sumitomo Mitsui Banking Corporation as of March 31, 2022
December 31, 2022 1 US dollar =132.71 Japanese yen at the TTM rate of Sumitomo Mitsui Banking Corporation as of December 30,
2022

The percentage indicating year-on-year changes is calculated on Japanese yen basis presented above.

2. Cash dividends
Annual dividends per shareFirst quarter-end

Second quarter-end

Third quarter-end

yen

yen

yen

yen

yen

Year ended
December 31, 2022

－

0.00

－

0.00

0.00

Year ending
December 31, 2023

－

－

－

－

－

Year ending
December 31, 2023
(Forecast)Year-end

Total

Note: Revisions to the forecast of cash dividends most recently announced: None

3. Earnings forecast for 2023 (from January 1, 2023 to December 31, 2023)

Revenue

Full Year

Operating profit(Percentages indicate year-on-year changes.)
Profit attributable
Basic earnings
Profit before tax
to owners ofper share
parentmillion yen%

million yen%

million yen%

million yen%

yen

398,130

9.5

7,962

(20.4)

9,289

27.7

5,971

20.4

105.94

Note: Revisions to the forecast most recently announced: None
The original consolidated earnings forecast of the Company is presented in US dollars on page 4 of this material.
The amount presented for the earnings forecast for 2023 is converted to Japanese yen at 132.71 yen at the TTM rate of
Sumitomo Mitsui Banking Corporation as of December 30, 2022.

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in thechange in scope of consolidation): None
(2) Changes in accounting policies and changes in accounting estimates(I)

Changes in accounting policies required by IFRS: None(ii)

Changes in accounting policies due to other reasons: None(iii) Changes in accounting estimates: None
(3) Number of issued shares (ordinary shares)
(i)

(ii)

Total number of issued shares at the end of the period (including treasury shares)
As of March 31, 2023

56,408,000 shares

As of December 31, 2022

56,408,000 shares

Number of treasury shares at the end of the period
As of March 31, 2023

38,217 shares

As of December 31, 2022

38,217 shares(iii) Average number of shares outstanding during the period
Three months ended March 31, 2023

56,369,783 shares

Three months ended March 31, 2022

56,362,900 shares* Quarterly financial results are exempt from quarterly review conducted by certified public accountants or an
audit corporation.
* Proper use of earnings forecasts and other special matters
・The Company voluntarily adopted International Financial Reporting Standards (IFRS) from the year ended
December 31, 2021 for the consolidated financial statements.
・Accompanying condensed quarterly consolidated financial statements and selected notes are presented infunctional currency of the Company, US dollars.
・Earnings forecast and other forward-looking statement included in this material are based on information
currently available to the Company and are based on assumptions deemed reasonable. They are not meant
to be a guarantee of future performance or outcomes. Actual results may differ materially subject to various
factors.

[Reference] Consolidated financial results for the three months ended March 31, 2023 and earnings
forecast for the year ending December 31, 2023 presented in functional currency of the Company, US
dollars(US dollar amounts are rounded down to thousands.)

1. Consolidated financial results for the three months ended March 31, 2023 (from January 1, 2023 toMarch 31, 2023)(1) Consolidated operating results(Percentages indicate year-on-year changes.)
RevenueThree months ended

Operating profit

Profit before tax

Profit

US$ thousand%

US$ thousand%

US$ thousand%

US$ thousand%

March 31, 2023

744,888

12.1

20,665－

20,634

－

9,402

－

March 31, 2022

664,247 (41.0)(12,725)－(20,328)－(16,688)－

Profit attributable toowners of parent
Three months ended

Total comprehensive
incomeBasic earnings
per share

Diluted earnings
per share

US$ thousand%

US$ thousand%

March 31, 2023

3,096

－

(26,482)

－

US$

US$

0.05

0.05

March 31, 2022

(16,657)－

73,162(34.3)(0.30)(0.30)

Equity attributable toowners of parent

Ratio of equity
attributable to ownersof parent to total
assets(2) Consolidated financial position
Total assets
As of

2.

Total equity

US$ thousand

US$ thousand

US$ thousand%

March 31, 2023

3,004,069

814,665

778,791

25.9

December 31, 2022

3,136,213

841,121811,640

25.9

Earnings forecast for 2023 (from January 1, 2023 to December 31, 2023)(Percentages indicate year-on-year changes.)
Revenue

Full Year

Operating profit

Profit before tax

Profit attributableto owners ofparentBasic earnings
per share

US$ thousand%

US$ thousand%

US$ thousand%

US$ thousand%US$

3,000,000

9.5

60,000(20.4)

70,00027.7

45,00020.4

0.80

○ Contents
1. Qualitative information on quarterly financial results ....................................................................... 2(1) Results of operations ............................................................................................................................... 2(2) Financial position....................................................................................................................................... 2
2. Condensed quarterly consolidated financial statements and selected notes.......................... 3(1) Condensed quarterly consolidated statement of financial position ..................................... 3(2) Condensed quarterly consolidated statement of profit or loss and condensed
quarterly consolidated statement of other comprehensive income.................................... 5(3) Condensed quarterly consolidated statement of change in equity ...................................... 7(4) Condensed quarterly consolidated statement of cash flows ................................................... 9(5) Selected notes to the condensed quarterly consolidated financial statements ............. 10(Note to ability to continue as a going concern) .....................................................................10(Additional information) .................................................................................................................... 10(Important subsequent event) ......................................................................................................... 101

1.

Qualitative information on quarterly financial results(1) Results of operations
In the first quarter of this year, the personal consumption and corporate profits recovery
were observable in Japanese economy. However, it still faces the growing uncertainties dueto the soaring energy and raw material prices. On the other hand, the global economy was
generally on a moderate recovery trend.
Oil price temporarily fell to the upper US$60s a barrel due to the financial instability causedby the bankruptcy of US reginal banks. Since then, it rose to the mid US$70s a barrel at theend of this quarter due to the ease of concern over the financial system as the result ofsubsequent actions taken by the financial authorities and the tightened supply and demandof oil caused by the suspension of oil pipeline operations in the Middle East. Coexisting withthe decarbonization trend and maintaining stable energy supply remains an important issue.
In that context the Group expects the oil companies to maintain the deep-sea oilfielddevelopment projects. In addition, the Group expects steady demand for the Group's main
business of floating, production, storage and offloading systems for oil and gas productions
especially in the ultra-deep water large-scale projects in which the Group has a competitive
advantage.
Under these circumstances, for the three months ended as of March 31, 2023, the totalorders on a consolidated basis resulted in US$239,641 thousand (US$127,149 thousand in
YTD 1Q 2022) due to the variation orders of FPSO construction projects. The consolidated
revenue was US$744,888 thousand (US$664,247 thousand in YTD 1Q 2022) due to progressin the construction of FPSOs.
In terms of profit, the operating profit was US$20,665 thousand (operating loss of US$12,725
thousand in YTD 1Q 2022). This is due to the revenue recognized from the progress ofconstruction projects and share of profit of investments accounted for using equity method
despite the lowering effect of profit from the improvement costs of asset integrity incurred
for the FPSOs and FSO operating in Brazil.
In addition, the amount of finance income and finance costs were approximately the same
despite exchange loss incurred from asset denominated in foreign currency due to the effectof higher US dollars, and therefore the profit before tax for the three months ended as ofMarch 31, 2023 was US$20,634 thousand (loss before tax of US$20,328 thousand in YTD 1Q
2022). As a result, the profit attributable to owners of parent for the three months was
US$3,096 thousand (loss attributable to owners of parent of US$16,657 thousand in YTD 1Q
2022).
(2) Financial position
The total assets at the end of first quarter of this year decreased by US$132,144 thousand
to US$3,004,069 thousand from the end of previous year primarily due to decrease in cash
and cash equivalents and trade and other receivables.
The total liabilities decreased by US$105,688 thousand to US$2,189,404 thousand from theend of previous year primarily due to decrease in trade and other payables and contract
liabilities.
The total equity decreased by US$26,456 thousand to US$814,665 thousand from the endof previous year primarily due to decrease in other components of equity.

22. Condensed quarterly consolidated financial statements and selected notes(1) Condensed quarterly consolidated statement of financial positionin thousands of US dollars
December 31, 2022

March 31, 2023

AssetsCurrent assets
Cash and cash equivalents

492,625

466,122

Trade and other receivables

478,083

373,371

Contract assets

257,328

262,712

Other financial assets

37,28839,480

Other current assets

141,820

158,310

Total current assets

1,407,147

1,299,997

Property, plant and equipment

64,314

61,882Intangible assets

70,21367,724

1,114,066

1,097,019

Loans receivable

365,032

366,747

Other financial assets

13,603

13,954

Deferred tax assets

65,016

62,100

Other non-current assets

36,81934,641

Total non-current assets

1,729,066

1,704,071

3,136,213

3,004,069

Non-current assets

Investments accounted for using equity method

Total assets

3

in thousands of US dollars
December 31, 2022

March 31, 2023

Liabilities and equity
Liabilities
Current liabilities
Trade and other payables

921,708887,201

Contract liabilities

499,383

443,862

Borrowings

19,084

31,155

Income taxes payable

38,38945,703

Provisions

109,704

110,791

Other financial liabilities

99,219107,337

Other current liabilities

76,95463,654

Total current liabilities

1,764,443

1,689,707

Bonds and borrowings

374,293

360,075

Deferred tax liabilities

1,283

678

Defined benefit liability

43,95942,648Provisions

56,67555,899Other financial liabilities

37,127

33,836

Other non-current liabilities

17,310

6,558

Total non-current liabilities

530,649

499,696

2,295,092

2,189,404

Share capital

282,292

282,292

Capital surplus

280,686

280,713Retained earnings

131,004

134,073

Treasury shares(1,092)(1,092)Other components of equity

118,748

82,804

811,640

778,791

Non-controlling interests

29,48135,873

Total equity

841,121814,665

3,136,213

3,004,069

Non-current liabilities

Total liabilities
EquityEquity attributable to owners of parent

Total liabilities and equity4(2) Condensed quarterly consolidated statement of profit or loss and condensed quarterly consolidated
statement of other comprehensive income
Condensed quarterly consolidated statement of profit or loss
For the three months ended March 31
in thousands of US dollars
2022

2023

Revenue

664,247

744,888

Cost of sales(657,272)(715,939)

Gross profit

6,975

28,948Selling, general and administrative expenses(44,171)(42,488)

Share of profit of investments accounted for using
equity method

24,75034,097

Other income

114

235

Other expenses

(395)

(127)

Operating profit (loss)(12,725)

20,665

Finance income

16,262

11,973Finance costs(23,865)(12,004)

Profit (loss) before tax(20,328)

20,634

Income tax expense

3,640(11,232)(16,688)

9,402(16,657)

3,096

Non-controlling interests

(30)

6,305

Profit (loss) for the period(16,688)

9,402

Profit (loss) for the period
Profit attributable to
Owners of parent

in US dollars
Earnings per share
Basic earnings per share(0.30)

0.05

Diluted earnings per share(0.30)

0.05

5

Condensed quarterly consolidated statement of other comprehensive income
For the three months ended March 31
in thousands of US dollars
2022
Profit (loss) for the period2023(16,688)

9,402

1

(27)

1

(27)

825

684

(3,276)(2,058)92,300(34,484)

89,849(35,857)

Total other comprehensive income, net of tax

89,851(35,884)

Total comprehensive income for the period

73,162(26,482)

73,187(32,874)

(24)

6,391

73,162(26,482)

Other comprehensive Income
Items that will not be reclassified subsequently to
profit or loss
Remeasurements of defined benefit liability
Total items that will not be reclassified
subsequently to profit or loss
Items that may be reclassified subsequently to
profit or loss
Effective portion of cash flow hedges
Exchange differences on translation of foreign
operations
Share of other comprehensive income ofinvestments accounted for using equity
methodTotal items that may be reclassified subsequently
to profit or loss

Total comprehensive income attributable to
Owners of parent
Non-controlling interests
Total comprehensive income6(3) Condensed quarterly consolidated statement of changes in equity
For the three months ended March 31, 2022
in thousands of US dollars
Equity attributable to owners of parent
Other components of equity
Retainedearnings

Share capital

Capital surplus

282,292

280,71185,957(1,291)－(90,866)

Loss for the period－－(16,657)－－－

Other comprehensive income

－

－

－

－

1

92,848

Total comprehensive income for the period－－(16,657)－

1

92,848Dividends to non-controlling interests

－

－

－

－

－

－

Share-based payment transactions

－

53

－

－

－

－

Transfer from other components ofequity to retained earnings

－

－

1

－

(1)

－

－

53

1

－

(1)

－

282,292

280,765

69,301(1,291)－

1,982

At January 1, 2022

Total transactions with owners
At March 31, 2022

Treasury shares

Remeasurements
Effective portion ofof defined benefit
cash flow hedges
liability

Equity attributable to owners of parent
Other components of equity
Total equity
Non-controlling
attributable tointerests
owners ofparentExchangedifferences ontranslation offoreign
operations

Total othercomponents ofequity(24,262)(115,129)532,541

22,218554,759－－(16,657)(30)(16,688)(3,005)89,844

89,844

6

89,851

Total comprehensive income for the period(3,005)89,84473,187(24)

73,162

Dividends to non-controlling interests

－

－

－

(364)

(364)

Share-based payment transactions

－

－

53

－

53

Transfer from other components ofequity to retained earnings

－

(1)

－

－

－

－

(1)

53

(364)

(310)

(27,268)(25,286)

605,782

21,829627,612

At January 1, 2022
Loss for the period
Other comprehensive income

Total transactions with owners
At March 31, 2022

7

Total equity

For the three months ended March 31, 2023
in thousands of US dollars
Equity attributable to owners of parent
Other components of equity

Retainedearnings

Share capital

Capital surplus

282,292

280,686

131,004(1,092)－

142,790

Profit for the period

－

－

3,096

－

－

－

Other comprehensive income

－

－

－

－

(27)

(33,911)

Total comprehensive income for the period

－

－

3,096

－

(27)

(33,911)

Share-based payment transactions

－

26

－

－

－

－

Transfer from other components ofequity to retained earnings

－

－

(27)

－

27

－

－

26

(27)

－

27

－

282,292

280,713134,073(1,092)－

108,878

At January 1, 2023

Total transactions with owners
At March 31, 2023

Treasury shares

Remeasurements
Effective portion ofof defined benefit
cash flow hedges
liability

Equity attributable to owners of parent
Other components of equity

Total equity
Non-controlling
attributable tointerests
owners ofparentExchangedifferences ontranslation offoreign
operations

Total othercomponents ofequity(24,041)

118,748

811,640

29,481

841,121

－

－

3,096

6,305

9,402

(2,032)(35,971)(35,971)86(35,884)(2,032)(35,971)(32,874)

6,391(26,482)

Share-based payment transactions

－

－

26

－

26

Transfer from other components ofequity to retained earnings

－

27

－

－

－

－

27

26

－

26

(26,073)

82,804

778,791

35,873

814,665

At January 1, 2023
Profit for the period
Other comprehensive income
Total comprehensive income for the period

Total transactions with owners
At March 31, 2023

8

Total equity

(4) Condensed quarterly consolidated statement of cash flows
For the three months ended March 31
in thousands of US dollars
2023

2022
Cash flows from operating activities

Profit (loss) before tax(20,328)

20,634

Depreciation and amortization

9,800

10,127

Increase (decrease) in provisions(18,011)23

30(1,311)(24,750)(34,097)

Finance income and finance costs

7,603

30

Decrease (increase) in trade and other receivables
Decrease (increase) in contract assets

40,15030,420106,560(5,383)

Decrease (increase) in other current assets

Increase (decrease) in defined benefit liability
Share of profit of investments accounted for using
equity method

(342)

8,222

Increase (decrease) in trade and other payables(93,037)(52,690)

Increase (decrease) in contract liabilities(47,693)(9,067)(67,353)(11,117)

4,105(5,502)(121,120)(31,856)

Interest received

8,944

10,471Dividends received

33,34917,112

Increase (decrease) in other current liabilities
Other
SubtotalInterest paid

(3,789)(2,179)

Income taxes paid

(11,951)(11,074)

Net cash used in operating activities(94,568)(17,526)

Cash flows from investing activities

Net decrease (increase) in short-term loans receivable
Acquisition of property, plant and equipment andintangible assets
Proceeds from capital reduction of investments
accounted for using equity method

1,204

－

(2,564)(1,396)

9,749－

Net cash provided by (used in) investing activities

8,390(1,396)

Repayments of long-term borrowings(20,242)(2,379)Payments of lease liabilities(5,161)(6,315)

Cash flows from financing activities

Dividends paid

(3)

(0)

(364)

－

Receipt of government grants－

114

Proceeds from settlement of derivative contracts

582－(25,189)(8,581)

4,265

1,001

Net decrease in cash and cash equivalents(107,101)(26,503)

Cash and cash equivalents at beginning of period

810,131492,625

Cash and cash equivalents at end of period

703,030

466,122

Dividends paid to non-controlling interests

Net cash used in financing activities

Effect of changes in exchange rates on cash and cash
equivalents9(5) Selected notes to the condensed quarterly consolidated financial statements(Note to ability to continue as a going concern)
There are no material uncertainties that require disclosure.
(Additional information)
As approved in the annual shareholders' meeting on March 28, 2023 the Company plans to reclassify
19,500 million Japanese yen of share capital and 19,823 million Japanese yen of capital reserve toretained earnings on May 31, 2023. The effect of consolidated financial statements will be the Japanese
yen amounts above translated to US dollars using the exchange rate applicable on May 31, 2023.
(Important subsequent event)
The Company resolved in the board of directors' meeting on April 28, 2023 the issuance of additional
shares through third-party allotment to Mitsui & Co., Ltd. and Mitsui O.S.K. Lines, Ltd. The detail is asfollows:
1. Summary of issuance of additional shares through third-party allotment(1) Type and number of shares

Common stock 11,937,300 shares(2) Per share amount

1,264 Japanese yen per share(3) Total amount of shares issued

15,088 million Japanese yen(4) Increase of share capital and capital surplus
Share capital 7,544 million Japanese yen
Capital surplus 7,544 million Japanese yen(5) Allotted companies and allotted number of shares
Mitsui & Co., Ltd. 1,775,000 shares
Mitsui O.S.K. Lines, Ltd. 10,162,300 shares(6) Subscription due dateJune 29th, 2023

(7) Payment due dateJune 30th, 2023

The effect of consolidated financial statements will be the Japanese yen amounts stated abovetranslated to US dollars using the exchange rate applicable on payment date.
2. Usage of proceeds
The Company intends to invest or lend the entire amount to each special purpose company, which theCompany established for the purpose of engaging in the charter business of FPSOs and FSOs.

10