JFE Holdings’ Financial Results for First Halfof Fiscal Year 2019 Ending March 31, 2020
— All financial information has been prepared in accordance with International Financial Reporting Standards (IFRS) —(Note: The following is an English translation of an original Japanese document)

November 12, 2019
Official name:
Listings:
Code:
English URL:
Representative:
Contact:

JFE Holdings, Inc.
Tokyo and Nagoya stock exchanges
5411
www.jfe-holdings.co.jp/en
Koji Kakigi, President and CEO
Hidetsugu Tawara, Manager, Public Relations Section,
Investor Relations and Corporate Communications
Department+81-3-3597-3842
November 13, 2019
December 6, 2019
Yes
Yes

Phone:
Scheduled date to submit Quarterly Securities Report:
Scheduled date to start paying dividends:
Preparation of supplementary materials for quarterly results:
Quarterly results briefing:(Figures are rounded down to the nearest million yen.)

1. Consolidated Results in First Half of Fiscal 2019 (April 1 to September 30, 2019)(1) Consolidated Operating Results (cumulative total)(Percentages indicate year on year change)
Revenue(million yen)

Business
profit%Profit
Beforetax%(million yen)

1H
1,871,292 (1.1)
FY 20191H
1,892,366
FY 2018

Profit%(million yen)

Profitattributableto ownersof parent%(million yen)

49,063 (68.3)
154,689

Comprehensive
income%(million yen)(million yen)

42,782 (71.2)- 148,410

34,181 (69.4)- 111,604

Basic earnings per
share

Diluted earnings per
share

(yen)

(yen)

-

%

31,934(70.7)

18,530(83.9)

108,835-

114,807-

End 1H FY 2019
55.46
55.44
End 1H FY 2018
188.84188.83
Note: Business profit is profit before tax excluding financial income and one-time items of a materially significant value.
(2) Consolidated Financial Position
Total assets

Total equity(million yen)(million yen)

Equity attributableto owners ofparent(million yen)

Total equity
attributable toowners of parent(%)

End 1H FY 2019

4,830,328

1,995,514

1,918,353

39.7

End FY 2018

4,709,201

1,991,759

1,926,337

40.9

2. Dividends
Dividend per share (yen)InterimYear-end

FY 2018

95.00

45.00

50.00

FY 2019

-

20.00

-

Note:

Revisions to dividend forecast announced most recently: No
The year-end dividend and the total dividend are not yet determined.

3. Forecasts of Consolidated Financial Results in Fiscal 2019 (April 1, 2019 to March 31, 2020)
Revenue(million yen)%

Business
profit%million yen

Profit before
tax%(million yen)

Profitattributableto ownersof parent

%

(yen)

(million yen)

FY 2019

3,730,000(3.7)

60,000(74.1)

47,000(77.5)

33,000Note: Revisions to consolidated financial results forecasts announced most recently: Yes

Basicearnings
per share(79.8)

57.31

Notes1. Changes in significant subsidiaries during the term (changes in designated subsidiaries resulting in changes in
consolidated structure): No
2. Changes in accounting policies and accounting estimates
1) Changes in the accounting policies required by IFRS: Yes
2) Changes in the accounting policies other than 1) above: No
3) Changes in accounting estimates: No
3. Number of outstanding shares (common stock)
1) Outstanding shares at the end of the term (including treasury stock)
As of September 30, 2019: 614,438,399 shares
As of March 31, 2019: 614,438,399 shares
2) Treasury stock at the end of the term
As of September 30, 2019: 38,567,615 shares
As of March 31, 2019: 38,590,471 shares
3) Average number of shares during the term
1H FY 2019: 575,856,583 shares
1H FY 2018: 576,334,490 sharesThis report is not subject to auditing by a certified public accountant or an audit corporation.
Explanation of Appropriate Use of Results Forecasts, and Other Matters of Note
1. As of the Fiscal 2018 under review, the Company adopted International Financial Reporting Standards (“IFRS”) in place ofJapanese generally accepted accounting principles (J-GAAP). Consolidated figures for First Half and Second Quarter of
Fiscal 2018 are therefore also presented on an IFRS basis.
2. Forecasts and other forward-looking statements herein are based on information available on the date of publication of thisdocument as well as rational assumptions that we have made regarding certain factors. Actual results may vary significantly
from these forecasts due to a wide range of circumstances.
3. The supplementary financial data will be published on our website.

Attachments
1. Condensed Quarterly Consolidated Financial Statements and Notes ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 2(1) Condensed Quarterly Consolidated Statement of Financial Position ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 2(2) Condensed Quarterly Consolidated Statement of Profit or Loss and Condensed Quarterly
Consolidated Statement of Comprehensive Income ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 4(3) Condensed Quarterly Consolidated Statement of Changes in Equity ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 8(4) Condensed Quarterly Consolidated Statement of Cash Flowꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ10(5) Notes to Condensed Quarterly Consolidated Financial Statements ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ12
Notes Pertaining to the Presumption of a Going Concern ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ12
Change in Accounting Policies ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ12
2. Supplementary Information ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ141

1. Condensed Quarterly Consolidated Financial Statements and Notes(1) Condensed Quarterly Consolidated Statement of Financial Position(million yen)
As of
As of
March 31, 2019 September 30, 2019
AssetsCurrent assets:
Cash and cash equivalents
Trade and other receivables
Contract assets
Inventories
Income taxes receivable
Other financial assets
Other current assets
Total current assets

82,28885,347754,679
124,039
917,812
19,076
4,471
86,2901,988,658

656,044
157,811927,795
13,135
4,842
113,113
1,958,090

Non-current assets:
Property, plant and equipment:
Goodwill
Intangible assets
Right-of-use assets
Investment property
Investments accounted for using equity method
Retirement benefit asset
Deferred tax assets
Other financial assets
Other non-current assets
Total non-current assets

1,835,229
4,445
82,56759,425315,064
16,38036,609360,133
10,6862,720,543

1,855,875
7,996
86,116
105,949
59,331
315,789
16,18634,219375,913
14,8612,872,238

Total assets

4,709,201

4,830,3282

As ofMarch 31, 2019(million yen)
As of
September 30, 2019

Liabilities and equity
Liabilities
Current liabilities:
Trade and other payables
Bonds payable, borrowings, and lease liabilities
Contract liabilities
Income taxes payable, etc.
Provisions
Other financial liabilities
Other current liabilities
Total current liabilities

584,939
329,400
59,06016,39914,33699,097
222,705
1,325,938

523,301
349,889
70,06012,374
11,00087,273
189,620
1,243,519

Non-current labilities
Bonds payable, borrowings, and lease liabilities
Retirement benefit liability
Provisions
Deferred tax liabilities
Other financial liabilities
Other non-current liabilities
Total non-current labilities

1,194,478
133,999
30,4383,550
17,14011,895
1,391,503

1,392,645
136,168
28,773
3,960
18,787
10,9601,591,294

Total liabilities

2,717,442

2,834,814

EquityShare capital
Capital surplus
Retained earnings
Treasury shares
Other components of equity
Equity attributable to owners of parent
Non-controlling interests
Total equity

147,143646,793
1,241,420(180,670)
71,6501,926,337
65,422
1,991,759

147,143652,728
1,243,259(180,600)
55,823
1,918,353
77,1601,995,514

Total liabilities and equity

4,709,201

4,830,328

3

(2) Condensed Quarterly Consolidated Statement of Profit or Loss and Condensed Quarterly
Consolidated Statement of Comprehensive Income
Condensed Quarterly Consolidated Statements of Income (First Half)First Half of
Fiscal 2018
(April 1, 2018 –September 30, 2018)(million yen)First Half of
Fiscal 2019
(April 1, 2019 –September 30, 2019)

1,892,366(1,603,971)
288,394

1,871,292(1,661,198)
210,094

Selling, general and administrative expenses
Share of profit of entities accounted for using equity
methodOther income
Other expenses
Business profit(167,791)(174,661)

28,674
17,850(12,438)
154,689

11,83718,004(16,211)49,063Operating profit

154,689

49,063Finance income
Finance costs
Profit before tax

951(7,230)148,410

1,429(7,710)42,782

Income tax expense
Profit(36,806)
111,604(8,600)34,181

Profit attributable to
Owners of parent
Non-controlling interests
Profit108,835
2,769
111,604

31,934
2,247
34,181

Earnings per share
Basic earnings per share (yen)Diluted earnings per share (yen)188.84188.83

55.46
55.44

Revenue
Cost of sales
Gross profit

4Condensed Quarterly Consolidated Statements of Income (Second Quarter)
Second Quarter of
Fiscal 2018
(July 1, 2018 –September 30, 2018)(million yen)
Second Quarter of
Fiscal 2019
(July 1, 2019 –September 30, 2019)

Revenue
Cost of sales
Gross profit

964,490(820,101)
144,389

943,882(841,092)
102,790

Selling, general and administrative expenses
Share of profit of entities accounted for using equity
methodOther income
Other expenses
Business profit(83,922)(88,141)

12,142
5,596(6,862)
71,343

5,234
6,743(8,345)18,281

Operating profit

71,343

18,281

Finance income
Finance costs
Profit before tax

613(3,684)
68,271814(3,828)15,268

Income tax expense
Profit(14,689)
53,581(1,788)13,479Profit attributable to
Owners of parent
Non-controlling interests
Profit52,045
1,536
53,581

12,193
1,285
13,479Earnings per share
Basic earnings per share (yen)Diluted earnings per share (yen)

90.32
90.32

21.17
21.17

5

Condensed Quarterly Consolidated Statements of Comprehensive Income (First Half)

ProfitFirst Half of
Fiscal 2018
(April 1, 2018 –September 30, 2018)
111,604(million yen)First Half of
Fiscal 2019
(April 1, 2019 –September 30, 2019)34,181

2,717

384

7,464

(8,036)776

89

10,958(7,561)Other comprehensive income:Items that will not be reclassified to profit or loss
Remeasurements of defined benefit plans
Net change in fair value of equity instruments
designated as measured at fair value through othercomprehensive income
Share of other comprehensive income of investments
accounted for using equity method
Total of items that will not be reclassified to profit orloss
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign
operations
Effective portion of cash flow hedges
Share of other comprehensive income of investments
accounted for using equity method
Total of items that may be reclassified to profit or loss
Total other comprehensive income
Comprehensive income(2,438)1,480(2,816)192(6,797)(7,755)
3,202
114,807(5,466)(8,089)(15,651)
18,530Comprehensive income attributable to
Owners of parent
Non-controlling interests
Comprehensive income

112,270
2,536
114,807

16,5172,013
18,5306

Condensed Quarterly Consolidated Statements of Comprehensive Income (Second Quarter)

ProfitSecond Quarter of
Fiscal 2018
(July 1, 2018 –September 30, 2018)
53,581(million yen)
Second Quarter of
Fiscal 2019
(July 1, 2019 –September 30, 2019)13,479

993

964

9,767

(1,329)

199

(120)

10,960(485)

Other comprehensive income:Items that will not be reclassified to profit or loss
Remeasurements of defined benefit plans
Net change in fair value of equity instruments
designated as measured at fair value through othercomprehensive income
Share of other comprehensive income of investments
accounted for using equity method
Total of items that will not be reclassified to profit orloss
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign
operations
Effective portion of cash flow hedges
Share of other comprehensive income of investments
accounted for using equity method
Total of items that may be reclassified to profit or loss
Total other comprehensive income
Comprehensive income

1,409
1,594

(3,344)
466

(343)
2,660
13,62067,202(5,351)(8,229)(8,714)
4,764

Comprehensive income attributable to
Owners of parent
Non-controlling interests
Comprehensive income

65,8201,382
67,202

3,955
809
4,764

7

(3) Condensed Quarterly Consolidated Statement of Changes in Equity
First Half of Fiscal 2018 (April 1, 2018 – September 30, 2018)(million yen)
Equity attributable to owners of parent
Other components of equity
Net change infair value ofequityinstruments
Remeasurements
designated asof defined benefit
measured at
plans
fair value
through othercomprehensive
incomeCapitalsurplusRetainedearnings

Treasuryshares147,143646,634

1,138,091(179,070)－

Profit－－108,835－－

Other comprehensive income

－

－

－

－

2,819

8,064

Share capital

Balance as of April 1, 2018

113,073

Comprehensive income－－

108,835

－

2,819

8,064

Purchase of treasury shares

－

－

－

(1,544)－－

Disposal of treasury shares

－

(1)

－

2

－

－

Dividends－－(28,834)－－－

Share-based payment transactions

－

112

－

－

－

－

－

(0)

－

－

－

－

－

－

3,237

－

(2,819)(418)

Transfer to non-financial assets

－

－

－

－

－

－

Other

－

－

－

－

－

－

Changes in ownership interest in
subsidiaries
Transfer from other components ofequity to retained earnings

Total transactions with owners－

110(25,596)(1,541)(2,819)(418)

Balance as of September 30, 2018

147,143646,745

1,221,330(180,612)－

120,719

Equity attributable to owners of parent
Other components of equity
Exchangedifferences on
Effective
translation of portion of cash
foreignflow hedges
operations
Balance as of April 1, 2018
Profit(1,805)(1,359)Noncontrollinginterests

Total

Total

Total equity

109,907

1,862,707

59,357

1,922,065－－－

108,835

2,769

111,604

Other comprehensive income(8,780)

1,331

3,435

3,435

(232)

(3,202)Comprehensive income(8,780)

1,331

3,435

112,270

2,536

114,807

Purchase of treasury shares

－

－

－

(1,544)－(1,544)

Disposal of treasury shares

－

－

－

1

－

1

Dividends－－－(28,834)(1,578)(30,412)

Share-based payment transactions

－

－

－

112

－

112

－

－

－

(0)

0

－

－

－

(3,237)－－－

Transfer to non-financial assets

－

(923)

(923)

(923)

－

(923)

Other

－

－

－

－

406

406

Total transactions with owners

－

(923)

(4,160)(31,189)(1,171)(32,360)

Balance as of September 30, 2018(10,586)(951)

109,182

1,943,788

60,7222,004,511

Changes in ownership interest in
subsidiaries
Transfer from other components of equity
to retained earnings

8First Half of Fiscal 2019 (April 1, 2019 – September 30, 2019)

Share capital

Balance as of April 1, 2019
Cumulative effects
accounting policies

ofchangesinRetroactively adjusted balance(million yen)
Equity attributable to owners of parent
Other components of equity
Net change infair value ofequityinstruments
Retained
Treasury
Remeasurements
designated as
earnings
sharesof defined benefit
measured at
plans
fair value
through othercomprehensive
incomeCapitalsurplus147,143646,793

1,241,420(180,670)－

90,730－－(1,302)－－－

147,143646,793

1,240,117(180,670)－

90,730

Profit－－31,934－－－

Other comprehensive income

－

－

－

－

360

(8,017)

Comprehensive income－－

31,934－360(8,017)Purchase of treasury shares

－

－

－

(22)

－

－

Disposal of treasury shares

－

(3)

－

5

－

－

Dividends－－(28,831)－－－

Share-based payment transactions

－

(42)

－

88

－

－

－

5,980

－

－

－

－

－

－

38

－

(360)

322

Transfer to non-financial assets

－

－

－

－

－

－

Other

－

－

－

－

－

－

Total transactions with owners

－

5,934

(28,792)

70

(360)

322

Balance as of September 30, 2019

147,143652,728

1,243,259(180,600)－

83,035

Changes in ownership interest in
subsidiaries
Transfer from other components ofequity to retained earnings

Equity attributable to owners of parent
Other components of equity
Exchangedifferences on
Effective
translation of portion of cash
Totalforeignflow hedges
operations
Balance as of April 1, 2019

Noncontrollinginterests

Total

Total equity(16,547)(2,532)

71,6501,926,337

65,422

1,991,759－－－(1,302)－(1,302)(16,547)(2,532)

71,6501,925,034

65,422

1,990,456－－－

31,934

2,247

34,181Other comprehensive income(8,146)385(15,417)(15,417)(234)(15,651)

Comprehensive income(8,146)385(15,417)

16,5172,013

18,530

Cumulative effects
accounting policies

ofchangesinRetroactively adjusted balance
ProfitPurchase of treasury shares

－

－

－

(22)

－

(22)

Disposal of treasury shares

－

－

－

1

－

1

Dividends－－－(28,831)(2,151)(30,982)

Share-based payment transactions

－

－

－

46

－

46

－

－

－

5,980

11,46917,449

－

－

(38)

－

－

－

Transfer to non-financial assets

－

(370)

(370)

(370)

－

(370)

Other

－

－

－

－

406

406

Total transactions with owners

－

(370)

(409)

(23,197)

9,725(13,472)

Balance as of September 30, 2019(24,694)(2,517)55,823

1,918,353

77,1601,995,514

Changes in ownership interest in
subsidiaries
Transfer from other components of equity
to retained earnings9(4) Condensed Quarterly Consolidated Statement of Cash Flow (First Half)(million yen)First Half of
Fiscal 2019
(April 1, 2019 –September 30, 2019)

First Half of
Fiscal 2018
(April 1, 2018 –September 30, 2018)
Cash flows from operating activities
Profit before tax

148,41042,782

Depreciation and amortization

96,620109,973

Changes in allowance(2,231)(5,003)

Interest and dividend income(6,242)(7,358)Interest expenses

6,793

7,228

Decrease (increase) in trade and otherreceivables

120,857

103,214

Decrease (increase) in inventories(53,308)(13,159)

Increase (decrease) in trade and other payables(18,835)(58,914)

Other(96,434)(86,377)

Subtotal

195,630

92,385Interest and dividends received

10,35715,026

Interest paid

(6,263)(6,629)

Income taxes paid

(36,527)

480

Cash flows from operating activities

163,196

101,263(139,824)(164,618)

71

1,105

(7,037)(4,660)

5,804

713

685

2,475

(140,301)(164,983)

Cash flows from investing activities
Purchase of property, plant and equipment,
intangible assets, and investment property
Proceeds from sale of property, plant andequipment, intangible assets, and investment
property
Purchase of investments
Proceeds from sale of investments
Other
Cash flows from investing activities

10First Half of
Fiscal 2018
(April 1, 2018 –September 30, 2018)(million yen)First Half of
Fiscal 2019
(April 1, 2019 –September 30, 2019)

Cash flows from financing activities
Net increase (decrease) in short-term borrowings

14,406

1,794

Increase (decrease) in commercial papers

27,999(60,000)

Proceeds from long-term borrowings

117,151

83,046

Repayments of long-term borrowings(128,905)(23,207)

Proceeds from issuance of bonds

20,000120,000

Redemption of bonds(15,000)-

Payments for purchase of treasury shares(1,544)(20)

Dividends paid to owners of parent(28,746)(28,831)

Other(7,783)(22,780)

Cash flows from financing activities(2,421)70,000Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash
equivalents
Cash and cash equivalents at beginning of period

215(3,221)

20,6893,059

75,11782,288Cash and cash equivalents at end of period

95,807

85,347

11

(5) Notes to the Condensed Quarterly Consolidated Financial Statements
Notes Pertaining to the Presumption of a Going Concern
There is no item for this period.

Changes in accounting policies
Application of IFRS 16 Leases
Effective from the first quarter of the fiscal year ending March 31, 2020, we have adopted IFRS 16 Leases(issued January 2016).
(i) Leases as a lessee
IFRS 16 introduces a single accounting model for a lessee’s leases, rather than classifying them into
finance leases and operating leases. In general under IFRS 16, a lessee is required to recognize aright-of-use asset representing its right to use the underlying leased asset and a lease liability
representing its obligation to make lease payments. However, we use the exemption for short-termleases and leases of low-value assets; instead of recognizing right-of-use assets and lease liabilities
for such leases, it expenses the lease payments on a straight-line basis over the lease term. After
recognizing a right-of-use asset and a lease liability, we subsequently recognize depreciation of theright-of-use asset and interest on the lease liability.
In applying IFRS 16, we use the transition method described in paragraph C5(b) of IFRS 16 and thus
recognize the cumulative effects of initially applying the standard at the date of initial application (April
1, 2019). We have not restated comparative information for the fiscal second quarter under review.
In applying IFRS 16, we selected the practical expedient detailed in paragraph C3 of IFRS 16 for the
purpose of assessing whether a contract is, or contains, a lease and thus continue to use theassessments previously made under IAS 17 Leases and IFRIC 4 Determining Whether an
Arrangement Contains a Lease. For such assessments made on or after the date of initial application,
we apply the provisions of IFRS 16.
(ii) Leases as a lessor
Leases entered into as a lessor are classified as either finance leases or operating leases according
to the substance of the transaction rather than the form of the contract. Assets held under financeleases are presented as receivables in an amount equal to the net investment in the lease.
In the case of subleases, the intermediate lessor classifies the sublease with reference to the right-ofuse asset arising from the head lease.
In the case of operating leases, we record the leased assets on the condensed quarterly consolidated
statement of financial position and recognize lease payments as income on a straight-line basis overthe lease term.
The adoption of IFRS 16 resulted in a 104,408-million-yen increase in total assets, a 105,711-million-yen increase in total
liabilities and a 1,302-million-yen decrease in retained earnings as of the beginning of the fiscal year ending March 31,
2020.
The weighted average of the lessee’s incremental borrowing rate applied to lease liabilities at the date of initial
application (April 1, 2019) is 0.6%.
The following shows the adjustments between total future minimum lease payments under non-cancellable operatinglease agreements as of the end of the fiscal year ended March 31, 2019 disclosed in accordance with IAS 17 and leaseliabilities recognized on the condensed quarterly consolidated statement of financial position at the date of initial
application.

12

Future minimum lease payments under non-cancellable operating lease agreements as of March
31, 2019 (after discount at the incremental borrowing rate)

32,974

Finance lease liabilities recognized as of March 31, 2019

51,375

Operating lease agreements, etc. that are not non-cancellable, recognized as of the dateof initial application

72,738

Lease liabilities recognized on the condensed quarterly consolidated statement of financial
position as of the date of initial application

157,087

We use the following practical expedients in applying IFRS 16.
• We adopt a single discount rate for portfolios of leases that have reasonably similar characteristics• We exclude initial direct costs from the measurement of the right-of-use asset at the date of initial application• We use hindsight when, for example, calculating the lease term for contracts that include an extension or cancellation
optionWith the adoption of IFRS 16, we have renamed “Bonds payable, borrowings, and lease obligations” on the consolidated
statement of financial position for the previous fiscal year as “Bonds payable, borrowings, and lease liabilities”.

13

2. Supplementary Information(1) Consolidated Results in First Half and Earnings Forecasts for Fiscal 2019(billion yen)
FY 2018

Steel Business

FY 2019

Full year

FY219
Forecast(August 9)
Fully year
2,900.0

Change1H 3

Full year

1H

Full year

1H

1,402.5

2,830.6

1,353.1

2,690.0(49.4)(140.6)Engineering Business

202.1

485.8

238.9

520.0

36.8

34.2

520.0

Trading Business

570.6

1,125.8

557.5

1,120.0(13.1)(5.8)

1,200.0

Adjustments(282.9)(568.6)(278.3)(600.0)

4.6(31.4)(660.0)

Revenue
Business profit 1

1,892.3

3,873.6

1,871.2

3,730.0(21.1)(143.6)

3,960.0

A

154.6

232.0

49.0

60.0

(105.6)(172.0)

140.0

B

(6.2)

(12.5)(6.3)(13.0)

(0.1)

(0.5)

(15.0)

Finance income / costs
Segment Profit
Steel Business

117.3

161.3

17.7

0.0

(99.6)(161.3)70.0

Engineering Business

7.7

20.1

11.9

23.0

4.2

2.9

23.0

Trading Business

19.3

35.7

14.6

32.0

(4.7)

(3.7)

36.0

Adjustments

3.9

2.3

(1.5)

(8.0)

(5.4)

(10.3)

(4.0)

148.4

219.5

42.7

47.0

(105.7)(172.5)125.0-(10.2)

-

-

-

10.2

-

(105.7)(162.3)

125.0

Total

A+B

Exceptional Items 2
Profit before tax
Tax Expense and Profit (Loss)
Attributable to Non-controlling
Interests

148.4

209.3

42.7

47.0

(39.6)(45.8)(10.8)(14.0)

28.8

31.8(35.0)

Profit Attributable to Owners of Parent

108.8

163.5

31.9

33.0

(76.9)(130.5)90.0

1Business profit: Profit that excludes financial income and exceptional items from profit before tax. It is a benchmark indicator of thecompany’s consolidated earnings.
2
Exceptional Items: One-time items of a materially significant value.
3
As of Fiscal 2018, the Company adopted IFRS. Consolidated figures of the First Half of Fiscal 2018 are therefore also presented on an
IFRS basis. Actual results of IFRS for the First Half of Fiscal 2018 may change depending on the results of future quarterly reviews.

(2) Consolidated Financial IndicesFiscal 2018

Fiscal 2019

1

Return on Sales (ROS)

6.0%

1.6%

(4.4%)

Return on Assets (ROA)2

5.0%

1.2%

(3.8%)

Return on Equity (ROE)3

Change8.6%

1.7%(6.9%)EBITDA4

428.2 billion yen

290.0 billion yen(138.2 billion yen)Interest-bearing debt outstanding

1,523.8 billion yen

1,860.0 billion yen

336.2 billion yen**

Debt / EBITDA multiple5
Equity attributable to owners of parent
D/E Ratio6

3.6x

6.4x

2.8x

1,926.3 billion yen

1,910.0 billion yen(16.3 billion yen)

68.2%

85.3%

17.1%

1

ROS = Business profit / Revenue
ROA = Business profit / Total assets
3
ROE = Profit attributable to owners of parent / Equity attributable to owners of parent
4
EBITDA = Business profit + Depreciation and amortization
5
Debt / EBITDA multiple = Interest-bearing debt outstanding / EBITDA
6
D/E ratio = Debt outstanding / Equity attributable to owners of parent. For debt having a capital component*, a portion of its issue priceis deemed to be capital, as assessed by rating agencies.
2* For debt having a capital component, a portion of its issue price is deemed to be capital, as assessed by rating agencies.
Borrowing Execution Date
Amount Borrowed
Assessment of Equity Content
June 30, 2016
200.0 billion yen
25%
March 19, 2018
300.0 billion yen
25%** Impact of application of IFRS 16 Lease
Amount increased at beginning of FY2019
Lease liabilities
105.7 billion yen

14

Amount Deemed to be Capital
50.0 billion yen
75.0 billion yen

(3) Crude Steel Production (JFE Steel)

FY 2018

Non-consolidated
Consolidated

FY 2019

Non-consolidated
Consolidated(million tons)

1Q

2Q

1H

3Q

4Q

2H

Full year

7.10
7.51
7.00
7.36

6.94
7.33
6.79
7.13

14.04
14.84
13.79
14.50

6.39
6.79

5.88
6.25

12.27
13.04
13.20*
13.90*

26.31
27.88
27.00*
28.40**estimate(4) Shipments (JFE Steel on non-consolidated basis)(million tons)

1Q

2Q

1H

3Q

4Q

2H

Full year

FY 2018

6.13

5.93

12.06

6.24

5.48

11.72

23.78

FY 2019

5.85

5.94

11.80

(5) Export Ratio on Value Basis (JFE Steel on non-consolidated basis)

(%)

1Q

2Q

1H

3Q

4Q

2H

Full year

FY 2018

42.4

44.2

43.3

43.5

36.0

40.1

41.7

FY 2019

39.9

42.1

41.0

1Q

2Q

1H

3Q

4Q

2H

Full year

FY 2018

108.1

110.9

109.5

113.4

110.3

111.9

110.7

FY 2019

110.7

107.6

109.2

105*

107*

(6) Foreign Exchange Rate (Yen/US dollar)(JPY/USD)*estimate(7) Average Selling Price (JFE Steel on non-consolidated basis)(thousand yen/ton)

1Q

2Q

1H

3Q

4Q

2H

Full year

FY 2018

79.3

81.9

80.6

82.9

82.0

82.5

81.5

FY 2019

80.4

79.4

79.9

(8) Engineering Business Orders (including intersegment transactions, IFRS basis)(billion yen)

Field

FY2018FY2019ChangeEnvironment
EnergyInfrastructure, others

212.6
132.8
137.4

200.0*
110.0*
140.0*(12.6)(22.8)
2.6

Total

482.8

450.0*(32.8)*estimate(9) Capital Investment and Depreciation and Amortization (JFE Holdings)(billion yen)

FY 2018

FY2019

Capital Investment

329.5

410.0*

Depreciation & Amortization

196.2

230.0**estimate15(on construction basis)

(10) Breakdown of Changes in Segment Profit (IFRS)
a. First half of FY 2019, compared to same period of FY 2018(billion yen)
ChangeSteel Business-

Cost
Sales volume and mix

13.0
(7.0)

-

Sales prices and raw materials(51.0)-

Unrealized gains (losses) on inventories
OthersTotal(20.0)(34.6)(99.6)Engineering Business, Trading Business, Adjustment(6.1)

b. FY 2019 (forecast), compared to FY 2018(billion yen)
ChangeSteel Business
-

Cost

50.0

-

Sales volume and mix

0.0-

Sales prices and raw materials
Unrealized gains (losses) on inventories(96.0)(62.0)-

Materials prices etc.

(15.0)-

Others(38.3)-

Total(161.3)Engineering Business, Trading Business, Adjustment(11.2)

c. FY 2019 (forecast), compared to previous forecast(billion yen)
ChangeSteel Business-Cost(10.0)-

Sales volume and mix(30.0)-

Sales prices and raw materials

(3.0)

-

Unrealized gains (losses) on inventories(30.0)-

Others

3.0

-

Total

(70.0)Engineering Business, Trading Business, Adjustment

(8.0)

###

16

Cost reductions +28.0, No one-off
effects +22.0 in FY 2018

Increased costs of materials,
distribution, subcontracting, etc.
Increased depreciation costs related toinfrastructure maintenance, groupcompanies, etc.