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

August 10, 2022

Consolidated Financial Results
for the Six Months Ended June 30, 2022
(IFRS)
Company name: MODEC, INC.
Listing:
Tokyo Stock Exchange
Securities code: 6269
URL:
http://www.modec.com
Representative: Takeshi Kanamori, Representative Director, President
Inquiries:
Yasuhiro Takano, Director, Executive Managing Officer
Telephone:+81-3-5290-1200
Scheduled date to file quarterly securities report:
August 12, 2022
Scheduled date to commence dividend payments:－
Preparation of supplementary material on quarterly financial results:
Yes “2Q 2022 Results Presentation”
Holding of quarterly financial results briefing:
Yes (to institutional investors and analysts)(Yen amounts are rounded down to millions unless otherwise noted.)

1. Consolidated financial results for the six months ended June 30, 2022 (from January 1, 2022 toJune 30, 2022)(1) Consolidated operating results(Percentages indicate year-on-year changes.)

RevenueSix months ended

Operating profit

Profit before tax

Profitmillion yen%

million yen%

million yen%

million yen%

June 30, 2022

187,951(19.5)

5,326

76.8

3,393

47.1

2,078

(66.5)

June 30, 2021

233,515

-

3,012

-

6,413

-

6,206

-

Profit attributable toowners of parent
Six months ended

Total comprehensive
incomeBasic earnings
per share

Diluted earnings
per share

million yen%

million yen

%

yen

yen

June 30, 2022

2,069

(66.1)

23,311

86.4

36.71

36.69

June 30, 2021

6,101

-

12,506-108.27108.22Equity 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%

June 30, 2022

451,447

99,08096,095

21.3

December 31, 2021

393,971

63,802

61,24715.5

Note: The original condensed consolidated financial statements of MODEC, INC. and its subsidiaries (hereinafter “the Company”)
for the six months ended June 30, 2022 and 2021 and for the year ended December 31, 2021 are presented in US dollars
on page 4 of this material. The amount presented for consolidated operating results and consolidated financial position
are converted to Japanese yen, respectively, as follows:
June 30, 2022
1 US dollar =136.64 Japanese yen at the TTM rate of Sumitomo Mitsui Banking Corporation as of June 30, 2022.
June 30, 2021
1 US dollar =110.61 Japanese yen at the TTM rate of Sumitomo Mitsui Banking Corporation as of June 30, 2021.
December 31, 2021 1 US dollar =115.01 Japanese yen at the TTM rate of Sumitomo Mitsui Banking Corporation as of December 30, 2021.

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

Year-end

Total

yen

yen

yen

yen

yen

Year ended
December 31, 2021

－

15.00

－

0.00

15.00

Year ending
December 31, 2022

－

0.00
－

0.00

0.00

Year ending
December 31, 2022
(Forecast)

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

3. Earnings forecast for 2022 (from January 1, 2022 to December 31, 2022)(Percentages indicate year-on-year changes.)
Revenuemillion yen%

Operating profit

Profit before tax

million yen

million yen%%

Profit attributableto owners ofparentProfitmillion yen%

million yen%

Basic earnings
per shareyen

Full
276,024 (38.5)
3,450
2,530
2,530
44.89
Year
Note 1: Revisions to the forecast most recently announced: None
Note 2: 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 2022 is converted to Japanese yen at 115.01 yen at the TTM rate of
Sumitomo Mitsui Banking Corporation as of December 30, 2021.

* 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 June 30, 2022

56,408,000 shares

As of December 31, 2021

56,408,000 shares

Number of treasury shares at the end of the period
As of June 30, 2022

38,196 shares

As of December 31, 2021

45,100 shares(iii) Average number of shares outstanding during the period
Six months ended June 30, 2022

56,365,663 shares

Six months ended June 30, 2021

56,356,166 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 adopted International Financial Reporting Standards (hereinafter “IFRS”) from the year ended
December 31, 2021 for the consolidated financial statements. Therefore, the financial results for the six
months ended June 30, 2021 are presented in accordance with IFRS.
・Accompanying condensed quarterly consolidated financial statements and selected notes are presented infunctional currency of the Company, US dollars.
・While 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 a guarantee of future performance or outcomes. Actual results may differ materially subject to various
factors.

[Reference] Consolidated financial results for the six months ended 2022 and earnings forecast for
the year ending December 2022 presented in functional currency of the Company, US dollars(US dollar amounts are rounded down to thousands unless otherwise noted.)

1. Consolidated financial results for the six months ended June 30, 2022 (from January 1, 2022 toJune 30, 2022)(1) Consolidated operating results(Percentages indicate year-on-year changes.)
RevenueSix months ended

Operating profit

Profit before tax

Profit

US$ thousand%

US$ thousand%

US$ thousand%

US$ thousand%

June 30, 2022

1,375,521(34.8)

38,98043.1

24,834(57.2)

15,213△72.9

June 30, 2021

2,111,159-

27,232-

57,980-56,114-

Profit attributable toowners of parent
Six months ended

Total comprehensive
incomeBasic earnings
per share

Diluted earnings
per share

US$ thousand%

US$ thousand

%

US$

US$

June 30, 2022

15,142(72.5)

170,606

50.9

0.27

0.27

June 30, 2021

55,164-

113,064

-

0.98

0.98

(2) Consolidated financial position
Total assets
As of

2.

Total equity

Equity attributableto owners ofparentRatio of equity
attributable toowners of parent
to total assets%

US$ thousand

US$ thousand

US$ thousand

June 30, 2022

3,303,919

725,123

703,275

21.3

December 31, 2021

3,425,542

554,759

532,541

15.5

Earnings forecast for 2022 (from January 1, 2022 to December 31, 2022)(Percentages indicate year-on-year changes.)
Revenue

Full Year

Operating profit

Profit before tax

Profit attributable toowners of parent

ProfitBasicearnings per
share

US$ thousand%

US$ thousand%

US$ thousand%

US$ thousand%

US$ thousand%US$2,400,000(38.5)--

30,000-22,000-22,000-0.39

○ Contents
1. Qualitative information on quarterly financial results(1) Results of operations ..................................................................................................................................2(2) Financial position .........................................................................................................................................2
2. Condensed quarterly consolidated financial statements and selected notes(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 .........................................9(4) Condensed quarterly consolidated statement of cash flows ......................................................11(5) Selected notes to the condensed quarterly consolidated financial statements..................12(Note to ability to continue as a going concern) ..........................................................................12(Additional information) .........................................................................................................................121

1.

Qualitative information on quarterly financial results(1) Results of operations

During the second quarter of this year under the Japanese economy, the recovery of personal consumptions
and corporate profits were observable as strict COVID-19 restrictions were eased and economic and social
activities become normalized. The recovery of global economy was also observable. On the other hand,
prolonging the war in Ukraine and the effect of restrained economic activities in China affected the price ofmaterials and energy to surge. In addition, the volatility of capital markets puts downward risks to the global
economy. Therefore, uncertainty of global economy persists.
Oil price rose to US$120 a barrel when EU imposed a trade embargo of Russian oil, which was expected toresult in significant oil shortage. However, oil prices were lower at around US$110 a barrel when COVID-19
infections resurged in part of China and concerns arose that the slow down of world economy will decrease thedemand of energy. In this environment, the trend toward decarbonization is unavoidable. However, from theperspective of maintaining a stable energy supply, oil companies are expected to maintain certain level of deepsea oil development projects. The business related to floating offshore oil and gas production facilities, whichis the main business of the Company, is expected to grow steadily in the future in ultra-deep water large-scale
projects, where the Company has strengths.
The business environment surrounding the Company is undergoing significant changes, which include thefurther promotion of renewable energy and the evolution of digital technologies among others. The Company
will grasp these changes in the business environment. While securing profits from existing businesses, theCompany will also develop future sources of profits such as floating offshore wind turbines, underwater resource
development and digital solution businesses.
Under these circumstances, for the second quarter of this year, the total orders on a consolidated basis resulted
in US$555,855 thousand (US$2,340,446 thousand in 2Q 2021) due to the variation orders of FPSO construction
projects. The consolidated revenue was US$1,375,521 thousand (US$2,111,159 thousand in 2Q 2021) due toprogress in the construction of FPSOs.
In terms of profit, the operating profit was US$38,980 thousand (operating profit of US$27,232 thousand in
2Q 2021) due to the low profitability of FPSO construction project caused by COVID-19 pandemic from previous
year continued to affect current period and the increased repair costs of FPSOs operating in Brazil.
In addition, foreign currency exchange loss due to higher US dollars and the recognition of loss allowance for
expected credit loss for the additional loan to the related company which owns an FPSO resulted in the profit
before tax for the current quarter of US$24,834 thousand (income before tax of US$57,980 thousand in 2Q2021). As a result, the profit attributable to owners of the parent for the current quarter was US$15,142 thousand(profit of US$55,164 thousand in 2Q 2021).
(2) Financial position
The total assets at the end of second quarter of this year decreased by US$121,622 thousand to US$3,303,919
thousand from the end of previous year primarily due to decrease in cash and cash equivalents.
The total liabilities decreased by US$291,986 thousand to US$2,578,796 thousand from the end of previous
year primarily due to decrease in trade and other payables. While at the end of previous year and at the end of
the first quarter of this year bonds and borrowings were classified as current liabilities due to breaches offinancial covenants, they are reclassified to non-current liabilities at the end of the second quarter of this year
since the status of breaches were subsequently remedied.
The total equity increased by US$170,363 thousand to US$725,123 thousand from the end of previous year
primarily due to increase 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, 2021

June 30, 2022

AssetsCurrent assets
Cash and cash equivalents

810,131573,808

Trade and other receivables

379,394435,534

Contract assets

704,730

601,198

Loans receivable

14,176－

Other financial assets

14,171

28,177

Other current assets

138,134

164,788

Total current assets

2,060,740

1,803,506

Property, plant and equipment

51,366

46,614

Intangible assets

80,84575,650Investments accounted for using equity method

739,046874,330

Loans receivable

398,562

398,562

Other financial assets

13,278

13,964

Deferred tax assets

54,94160,305

Other non-current assets

26,76030,986

Total non-current assets

1,364,801

1,500,413

3,425,542

3,303,919

Non-current assets

Total assets

3

in thousands of US dollars
December 31, 2021

June 30, 2022

Liabilities and equity
Liabilities
Current liabilities
1,356,472

1,204,219

Contract liabilities

405,807407,758

Bonds and borrowings

426,867

8,735

Income taxes payable

40,56451,964

Provisions

237,013208,718

Other financial liabilities

94,54992,690

Other current liabilities

103,483

57,293

Total current liabilities

2,664,758

2,031,380

Bonds and borrowings

55

391,890

Deferred tax liabilities

830

Defined benefit liability

54,69352,279Provisions

80,597

66,354

Other financial liabilities

23,58422,922Other non-current liabilities

47,084

13,939Total non-current liabilities

206,024

547,416

2,870,782

2,578,796

Share capital

282,292

282,292

Capital surplus

280,711

280,634

Retained earnings

85,957101,103

Treasury shares(1,291)(1,092)(115,129)

40,337532,541

703,275

Non-controlling interests

22,21821,847

Total equity

554,759

725,123

3,425,542

3,303,919

Trade and other payables

Non-current liabilities

Total liabilities
EquityOther components of equity
Equity 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 six months ended June 30
in thousands of US dollars
2021

2022

Revenue

2,111,159

1,375,521

Cost of sales(2,068,111)(1,320,477)

Gross profit

43,04855,043

Selling, general and administrative expenses(64,048)(74,256)

Share of profit of investments accounted for using
equity method

33,90548,456

Other income

14,392

9,762

Other expenses

(64)

(25)

Operating profit

27,232

38,980Finance income

35,20037,218Finance costs(4,452)(51,364)

Profit before tax

57,98024,834

Income tax expense(1,865)(9,621)

Profit for the period

56,114

15,21355,164

15,142

950

70

56,114

15,213

Profit attributable to
Owners of parent
Non-controlling interests
Profitin US dollars
Earnings per share
Basic earnings per share

0.98

0.27

Diluted earnings per share

0.98

0.27

5

For the three months ended June 30
in thousands of US dollars
2021

2022

Revenue

985,104

711,273

Cost of sales(991,661)(663,204)

Gross profit (loss)(6,557)48,068Selling, general and administrative expenses(28,450)(30,085)

Share of profit of investments accounted for using
equity method

19,262

23,705

Other income

11,7009,647

Other expenses

(58)

370

Operating profit (loss)(4,102)51,706

Finance income

14,293

20,955

Finance costs(2,701)(27,498)

Profit before tax

7,489

45,163

Income tax expense807(13,262)

Profit for the period

8,297

31,901

8,002

31,800

294

101

8,297

31,901

Profit attributable to
Owners of parent
Non-controlling interests
Profitin US dollars
Earnings per share
Basic earnings per share

0.14

0.56

Diluted earnings per share

0.14

0.56

6

Condensed quarterly consolidated statement of other comprehensive income
For the six months ended June 30
in thousands of US dollars
2021
Profit for the period

2022
56,114

15,213

100

3

100

3

(18,929)(1,356)

9,495

(722)

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 method
Total items that may be reclassified subsequently
to profit or loss

66,281

157,468

56,848155,389

Total other comprehensive income, net of tax

56,949155,393

Total comprehensive income for the period

113,064

170,606

112,325

170,612739(5)113,064

170,606

Total comprehensive income attributable to
Owners of parent
Non-controlling interests
Total comprehensive income7For the three months ended June 30
in thousands of US dollars
2021
Profit for the period

2022
8,297

31,901

50

1

50

1

2,593

(2,181)

12,423

2,554

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 method
Total items that may be reclassified subsequently
to profit or loss

(33,485)

65,167(18,468)

65,540Total other comprehensive income, net of tax(18,417)65,542

Total comprehensive income for the period(10,119)

97,443(10,478)

97,425358

18(10,119)

97,443

Total comprehensive income attributable to
Owners of parent
Non-controlling interests
Total comprehensive income8(3) Condensed quarterly consolidated statement of changes in equity
For the six months ended June 30, 2021
in thousands of US dollars
Equity attributable to owners of parent
Other components of equity
Retainedearnings

Share capital

Capital surplus

282,292

280,742463,852(1,553)－(161,648)

Profit for the period－－

55,164－－－

Other comprehensive income

－

－

－

－

100

47,563－－55,164－100

47,563

Dividends to owners of parent－－(11,281)－－－

Dividends to non-controlling interests

－

－

－

－

－

－

Share-based payment transactions

－

(138)

－

262

－

－

Transfer from other components of equity
to retained earnings

－

－

100

－

(100)

－

－

(138)

(11,180)

262

(100)

－

282,292

280,603507,836(1,291)－(114,084)

At January 1, 2021

Total comprehensive income for the period

Total transactions with owners
At June 30, 2021

Treasury shares

Remeasurements
Effective portion ofof defined benefit
cash flow hedges
liability

Equity attributable to owners of parent
Other components of equity
Total othercomponents ofequityTotal equity
attributable toowners ofparentNon-controllinginterests(14,745)(176,394)

848,940

18,908867,849－－

55,164

950

56,114

9,495

57,16057,160(211)

56,9499,495

57,160112,325739

113,064

Dividends to owners of parent－－(11,281)－(11,281)

Dividends to non-controlling interests

－

－

－

(620)

(620)

Share-based payment transactions

－

－

124

－

124

Transfer from other components of equity
to retained earnings

－

(100)

－

－

－

－

(100)

(11,157)(620)(11,777)(5,249)(119,334)

950,108

19,027969,135

At January 1, 2021
Profit for the period
Other comprehensive income
Total comprehensive income for the period

Total transactions with owners
At June 30, 2021

Exchangedifferences ontranslation offoreign
operations

9

Total equity

For the six months ended June 30, 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)

Profit for the period－－

15,142－－－Other comprehensive income

－

－

－

－

3

156,182

Total comprehensive income for the period－－

15,142－

3

156,182

Dividends to non-controlling interests

－

－

－

－

－

－

Share-based payment transactions

－

(77)

－

198

－

－

Transfer from other components of equity
to retained earnings

－

－

3

－

(3)

－

－

(77)

3

198

(3)

－

282,292

280,634

101,103(1,092)－65,316

At January 1, 2022

Total transactions with owners
At June 30, 2022

Treasury shares

Remeasurements
Effective portion ofof defined benefit
cash flow hedges
liability

Equity attributable to owners of parent
Other components of equity
Exchangedifferences ontranslation offoreign
operations

Total othercomponents ofequityTotal equity
attributable toowners ofparentNon-controllinginterests(24,262)(115,129)532,541

22,218554,759－－

15,142

70

15,213(716)

155,469

155,469(76)

155,393

Total comprehensive income for the period(716)

155,469

170,612(5)

170,606

Dividends to non-controlling interests

－

－

－

(364)

(364)

Share-based payment transactions

－

－

121

－

121

Transfer from other components of equity
to retained earnings

－

(3)

－

－

－

－

(3)

121

(364)

(243)

(24,979)

40,337703,275

21,847725,123

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

Total transactions with owners
At June 30, 2022

10

Total equity

(4) Condensed quarterly consolidated statement of cash flows
For the six months ended June 30
in thousands of US dollars
2022

2021
Cash flows from operating activities
Profit before tax

57,98024,834

Depreciation and amortization

17,49019,595

Increase (decrease) in provisions(13,998)(43,828)

Increase (decrease) in defined benefit liability359(2,414)(30,747)

14,145(33,905)(48,456)

Decrease (increase) in contract assets(435,437)(29,954)(63,754)
103,526

Decrease (increase) in other current assets

157,082(18,344)

Increase (decrease) in trade and other payables

145,577(153,769)

Increase (decrease) in contract liabilities

99,006(4,238)(1,924)(48,531)

Finance income and finance costs
Share of profit of investments accounted for using equity
methodDecrease (increase) in trade and other receivables

Increase (decrease) in other current liabilities
Other

14,325(22,005)

Subtotal(56,458)(240,927)

Interest received

21,45020,633

Dividends received

51,38940,349Interest paid

(2,802)(6,987)

Income taxes paid

(15,688)(5,752)

Net cash used in operating activities(2,109)(192,684)

Net decrease (increase) in short-term loans receivable(60,090)(8,295)

Payments for long-term loans receivable
Purchase of property, plant and equipment andintangible assets
Proceeds from capital reduction of investments
accounted for using equity method
Purchase of investments accounted for using
equity method(21,000)－(6,222)(4,409)－9,749(15,330)－

Net cash used in investing activities(102,644)(2,955)31,000－Cash flows from investing activities

Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Repayments of long-term borrowings(27,858)(26,396)

Payments of lease liabilities(11,264)(10,301)

Net decrease (increase) in treasury shares

262

198

(11,288)(13)

Dividends paid to non-controlling interests

(620)

(364)

Receipt of government grants

1,911

552

Dividends paid

Proceeds from settlement of derivative contracts

1,733

568

(16,125)(35,756)

2,182(4,927)

Net decrease in cash and cash equivalents(118,696)(236,323)

Cash and cash equivalents at beginning of period

617,149

810,131

Cash and cash equivalents at end of period

498,453

573,808

Net cash used in financing activities
Effect of changes in exchange rates on cash and cash
equivalents11(5) Selected notes to the condensed quarterly consolidated financial statements(Note to ability to continue as a going concern)
There were no significant events noted.
(Additional information)
Update of material uncertainties related to the Company's ability to continue as a going concern:
At the end of previous year and at the end of the first quarter of this year there were breaches of thefinancial covenants with regard to the Company as the borrower of loans and bonds. At the end of thesecond quarter of this year there are no breaches of financial covenants due to the agreement reachedwith financial institutions to revise the financial covenants.
Accordingly, the Company has determined that there are no material uncertainties related to events orconditions that may cast significant doubt on the Companyʼs ability to continue as a going concern.
Therefore, there are no disclosures about material uncertainties related to the Company's ability tocontinue as a going concern in 1. Qualitative information on quarterly financial results.

12