This document is an English translation of quarterly financial results report released on October 31, 2018 and written initiallyin Japanese.
The Japanese original should be considered as the primary version.

October 31, 2018

Consolidated Financial Results for the First Six Months of
the Fiscal Year Ending March 31, 2019
<under IFRSs>
Company name:
Listing:
Stock code:
URL:
Representative:
Contact:

Itochu Enex Co., Ltd.
Tokyo Stock Exchange, 1st Section
8133
https://www.itcenex.com/english/
Kenji Okada, Representative Director, President and CEO
Keisuke Hioki, General Manager, Finance & General Accounting Department
Tel: +81-3-6327-8010

Scheduled date to file quarterly securities report: November 13, 2018
Scheduled date to commence dividend payments: December 4, 2018
Preparation of supplementary results briefing material on quarterly financial results: Yes
Holding of quarterly financial results presentation meeting: Yes (for institutional investors and analysts)(Millions of yen with fractional amounts rounded, unless otherwise noted)

1. Consolidated financial results for the first six months of the fiscal year ending March 31, 2019(from April 1, 2018 to September 30, 2018)(1) Consolidated operating results(Percentages indicate year-on-year changes.)

Six months ended
September 30, 2018
September 30, 2017

Comprehensive
income%Millionsof yen%Millionsof yen

6,562

26.7

5,447

37.2

7,080

28.8

5,180

10.6

3,969

7.1

5,496

30.9

Profit fromoperatingactivities

Millionsof yen%Millionsof yen%Millionsof yen%Millionsof yen606,834

19.5

8,884

(5.7)

9,392

13.4

507,990

8.9

9,421

21.5

8,282

14.4

Basic earnings per
share attributable
to Itochu Enex’s
shareholders
Six months ended
September 30, 2018
September 30, 2017

Net profit
attributable to
Itochu Enex’s
shareholders

Total tradingtransactions

Yen

48.25
35.14

Profit before tax

Net profit

Diluted earnings
per share
attributable to
Itochu Enex’s
shareholders
Yen

–
–

Note: “Total trading transactions” are presented in accordance with the Japanese accounting practices.

%(2) Consolidated financial position
Total assets

As of
September 30, 2018
March 31, 2018

Total shareholders’equityTotal equity

Millions of yen

Millions of yen

377,608
382,621

Ratio of shareholders’equity to total assets

Millions of yen

140,978
137,066%

119,360
116,104

31.6
30.3

2. Cash dividends
Annual cash dividends per share
Second quarterend

First quarter-end
Fiscal year ended
March 31, 2018
Fiscal year ending
March 31, 2019

Third quarter-end

Fiscal year-end

Total

Yen

Yen

Yen

Yen

Yen

–

16.00

–

24.00

40.00

–

20.00
–

20.00

40.00

Fiscal year ending
March 31, 2019
(Forecast)

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

3. Consolidated earnings forecasts for the fiscal year ending March 31, 2019(from April 1, 2018 to March 31, 2019)

Total tradingtransactions
Millions of yen

Fiscal year ending
March 31, 2019

1,250,000

Profit from operating
activities% Millions of yen

8.1

18,700(Percentages indicate year-on-year changes.)
Basic earnings
Net profit
per share
Profit before tax attributable to Itochu attributable toEnex’s shareholders Itochu Enex’s
shareholders% Millions of yen

9.0

18,500% Millions of yen(3.5)

Note: Revisions to the consolidated earnings forecasts most recently announced: None

11,300

%

2.5

Yen

100.11

* 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 estimatesa. Changes in accounting policies required by IFRSs:
Yes
b. Changes in accounting policies other than the above:Nonec. Changes in accounting estimates:
None(Note) For details, please refer to “2. Condensed Quarterly Consolidated Financial Statements andSignificant Notes Thereto, (6) Changes in Accounting Policies” on page 13 of the attachedmaterials.
(3) Number of issued shares (common stock)a. Total number of issued shares at end of period (including treasury stock)
As of September 30, 2018

116,881,106 shares

As of March 31, 2018

116,881,106 sharesb. Number of treasury stock at end of period
As of September 30, 2018

4,002,255 shares

As of March 31, 2018

4,002,135 sharesc. Average number of outstanding shares during period (cumulative from the beginning of the fiscal year)
For the six months ended September 30, 2018

112,878,931 shares

For the six months ended September 30, 2017112,957,384 shares* Quarterly financial results reports are exempt from quarterly review conducted by certified public
accountants or an audit corporation.
* Proper use of earnings forecasts, and other special notes(Caution regarding forward-looking statements and others)
The forecasts and other forward-looking statements in this report are based on information currently
available to the Company and on certain assumptions deemed to be reasonable by the Company. Actual
business and other results may significantly differ from these forecasts due to various factors.
Please refer to ―1. Qualitative Information Regarding Results for the First Six Months, (3) Explanation ofConsolidated Earnings Forecasts and Other Forward-Looking Statements on page 5 of the attachedmaterials for the suppositions that form the assumptions for earnings forecasts and cautions concerning theuse thereof.

Contents of Attached Materials
1. Qualitative Information Regarding Results for the First Six Months.................................................... 2(1) Explanation of Operating Results ....................................................................................................... 2(2) Explanation of Financial Position ....................................................................................................... 5(3) Explanation of Consolidated Earnings Forecasts and Other Forward-Looking Statements......... 5
2. Condensed Quarterly Consolidated Financial Statements and Significant Notes Thereto .................. 6(1) Condensed Quarterly Consolidated Statement of Financial Position .............................................. 6(2) Condensed Quarterly Consolidated Statement of Comprehensive Income..................................... 8(3) Condensed Quarterly Consolidated Statement of Changes in Equity ........................................... 10(4) Condensed Quarterly Consolidated Statement of Cash Flows ....................................................... 11(5) Notes on Uncertainties of Entity’s Ability to Continue as Going Concern .................................... 13(6) Changes in Accounting Policies ......................................................................................................... 13(7) Segment Information .......................................................................................................................... 14

-1-

1.

Qualitative Information Regarding Results for the First Six Months(1) Explanation of Operating Results
The Group has adopted IFRS 15 “Revenue from Contracts with Customers” from the first quarter
ended June 30, 2018. For the details of the impact of the adoption of IFRS 15, please refer to “2.
Condensed Quarterly Consolidated Financial Statements and Significant Notes Thereto, (6) Changes in
Accounting Policies.”
1)

Results of operations
During the six months ended September 30, 2018, Japan’s economy maintained a recovery trend withsteady improvement in corporate earnings and the employment environment. However, the outlook forthe economy remained uncertain due to risks of a slowdown in the global economy stemming from theintensified trade friction caused by protectionist policies in the United States, currency crises inemerging countries, and other factors.
In this environment, the Itochu Enex Group announced its two-year medium-term business plan
“Moving 2018 Connecting to the future” in April 2017, and has been advancing its business based on
the following basic policies:<1> “Connecting to future growth” — Reforming the revenue base —(1) Optimizing resources(2) Improving profitability(3) Developing the customer base<2> “Connecting people and functions of the Group” — Reforming the organizational base —(1) Reinforcing organizational strength(2) Nurturing autonomous human resources(3) Promoting ENEX EARLY BIRD, a Plan to Transform Our Approach to WorkAs part of those initiatives, we reorganized the Group’s business groups and business divisions in April
2018, to develop businesses that are utilizing region-specific networks of the Group and to accelerate
the decision-making process in the electric power and mobility business in response to changes inenergy shift.
During these reorganizations, we newly established the Energy & Logistics Group, which is composedof the Home-Life Division and the Life & Industrial Energy Division, which was formed by combining
the former Life Energy & Logistics Division and the Industrial Energy & Logistics Division. In
addition, we formed the Power & Utility Group which is composed of the Power & Utility Division, togive a structure consisting of two business groups.
Moreover, the Automobile Business Office was reorganized and upgraded to become the Mobility Life
Department, and began operations in April 2018.
As a result of these activities, the operating results for the six months ended September 30, 2018 are as
follows.
Revenue was ¥475,378 million (up 34.9% year on year), due mainly to the impact on price resulting
from the increase in prices of domestic petroleum products.
Profit from operating activities was ¥8,884 million (down 5.7% year on year). This was due mainly tohigher profit in the petroleum product sales field and the petroleum product trading field of the Life &Industrial Energy Division, while profit fell in the electricity sales field of the Power & Utility Division,in addition to which the loss from tangible assets, intangible assets and goodwill, and other – net profit
both deteriorated.

-2-

Net profit attributable to Itochu Enex’s shareholders was ¥5,447 million (up 37.2% year on year), due
mainly to an increase in earnings of associates accounted for by the equity method in the Home-Life
Business and the Power & Utility Business.
2)

Results of operations by segment
Results of operations by segment are as follows. Following the reorganization of the Group carried out
in April 2018, the reportable segments have changed. For that reason, the year-on-year comparisons
have been recalculated based on the reportable segments as they exist after the reorganization.
<Energy & Logistics Group>
Home-Life Division
In the Home-Life Division during the six months ended September 30, 2018, the number of customers
under direct LP gas supply contracts increased by around 2,000 to approximately 548,000. The effectof inventory valuation changes improved year on year as the LP gas import prices have proceeded at ahigher level year on year.
Regarding sales of electricity for households, the division promoted the expansion of the customer baseby focusing mainly on sales of combined LP gas and electricity supply packages. As a result, thenumber of supply contracts increased by around 16,000 for a total of approximately 70,000.
With regard to profitability, gross profit decreased year on year due to the transition of threesubsidiaries in the Tokyo, Nagoya and Osaka areas to associates accounted for by the equity method in
conjunction with the reorganization and integration with the Osaka Gas Group in October 2017.
However, because some of the losses related to the reorganization and integration that took place in thecorresponding period of the previous fiscal year were given accelerated recognition, this resulted in an
improvement in the share of profit (loss) of investments accounted for by the equity method, leading to
net profit attributable to Itochu Enex’s shareholders posting a year-on-year increase.
In overseas businesses, we are continuing to use the know-how developed in Japan at our industrial gas
sales business in Indonesia (PT. ITC ENEX INDONESIA) and at our LP gas sales business in thePhilippines (Isla Petroleum & Gas Corporation) and going forward, we will continue to expand thesebusinesses.
As a result of these activities, revenue was ¥40,248 million (down 4.0% year on year), profit fromoperating activities was ¥1,151 million (up 39.7% year on year), and net profit attributable to Itochu
Enex’s shareholders was ¥779 million (compared with net loss attributable to Itochu Enex’s
shareholders of ¥633 million in the corresponding period of the previous fiscal year).
Life & Industrial Energy DivisionDuring the six months ended September 30, 2018, the Life & Industrial Energy Division worked tomaintain and expand its sales base in each business and geographical area, and succeeded in recording
a year-on-year increase in revenue despite an environment characterized by structural downturn indemand for oil, and by industry reorganizations, such as polarization among wholesalers.
The division is developing its business with the goal of even closer involvement in the lives of local
communities and local industries, and is striving to further enhance the functionality and to create valueof each of its businesses.
In the Group’s Car-Life Stations (CS)*1 business, which has a high level of engagement with people inlocal communities, we will use dealerships and group companies’ CS outlets not only for our original
energy supply services, but also to provide other services required by local communities, working withthe operators to fulfill our goal of creating locations that provide lifestyle infrastructure to such
communities. At subsidiary ENEX FLEET CO., LTD., initiatives to differentiate the CS business using
customer-oriented services have been successful, and sales volumes have increased year on year.
During the six months ended September 30, 2018, the total number of Group’s CS was 1,783. This net
decrease of 29 from the end of the previous fiscal period was largely caused by withdrawals from
unprofitable CS. In addition, the number of dealerships that have introduced the Carlife Stadium car-3-

rentals system being deployed by the Group has now reached 398, a net increase of 28 over the end of
the previous fiscal period.
In the business related to local industries, in the tank leasing business we have installed a new chemical
products storage tank on the Fukuoka site where our internal-use tank once stood, and are moving
ahead with initiatives to implement appropriate expansion and management of assets in order to moveup the value chain. In each geographical area, we have taken a comprehensive approach to promoting
AdBlue*2, the business user electricity supply business, and other diverse products and services, inaddition to existing businesses.
In terms of initiatives in the environmental-related business, we are moving forward with activities thatlead to reductions in the burden on the environment, such as a slop and oil recycling business in whichwaste oil recovered from ships is recycled and sold, and the fly ash business, which recycles and sells
coal ash discharged from the Company’s thermal power plants.
As a result of these activities, revenue was ¥335,708 million (up 48.2% year on year), profit fromoperating activities was ¥4,032 million (up 18.8% year on year), and net profit attributable to Itochu
Enex’s shareholders was ¥2,769 million (up 21.8% year on year).
*1 Car-Life Stations: Car-Life Stations are service stations offering multiple services provided by the Company.
*2 AdBlue is a high-grade urea solution used in SCR systems, which detoxifies nitrogen compounds (NOx) containedin exhaust gases of diesel vehicles.

<Power & Utility Group>
Power & Utility Division
In the Power & Utility Division during the six months ended September 30, 2018, the electricity sales
field of the electric power business, recorded growth in sales to both business users and households,
resulting in year-on-year growth in retail electricity sales volumes. However, volatility in the wholesale
trading market and intensified price competition led to a decline in profit over the corresponding periodof the previous fiscal year. In this field, ENEX LIFE SERVICE CO., LTD., a subsidiary, will leadefforts to form alliances with companies that have strong customer bases in certain areas andcompanies in other industries, and investigate new value proposals by developing electricity sales, withsome additional value-added component, to households and small companies.
In the power generation field, the new thermal power plant that began operations in October 2017 led
to a year-on-year increase both in total power generation and profit. In this field, our goal is to ensurestable supplies of electricity, while reducing environmental impacts, enhancing our portfolio of powersources and investing in renewable energy power generation facilities. An example of this is the major
program of improvements being carried out at a deteriorating hydroelectric facilities in Niigata
Prefecture’s Joetsu City, and to raise the efficiency of these facilities.
Moreover, in the heat supply business*3, the average temperature rose due to the effects of fierce heatover the period, leading to increased demand for heat, and resulting in profit increasing over thecorresponding period of the previous fiscal year. The division will continue its efforts to develop as acomprehensive energy services business*4, so as to be able to respond to the increasingly diverse needsof customers in this field.
As a result of these activities, revenue was ¥46,437 million (up 43.7% year on year), profit fromoperating activities was ¥2,614 million (down 32.5% year on year), and net profit attributable to Itochu
Enex’s shareholders was ¥1,411 million (down 25.0% year on year).
*3 Heat supply business: The heat supply business supplies cold and hot water for air conditioning to multiple officebuildings and other buildings from a heat source plant using pipes.
*4 Energy services business: The energy services business owns electric and heat source facilities, etc. and supplies
cold and hot air-conditioning water, hot water for hot-water supply, steam and others on behalf of customers in theuse of energy.

-4-

<Mobility Life Department>
In the Mobility Life Department during the six months ended September 30, 2018, the car dealer
business was brisk.
In the car dealer business, OSAKA CAR LIFE GROUP CO., LTD., a subsidiary, enjoyed strong unit
sales of new cars, such as Note and Serena because of its sales efforts, despite damage caused bytyphoons. The “Nissan Osaka Sales e-Denki” initiative, implemented as part of our efforts to strengthen
the customer base, has also been successful.
The biodiesel production business in the US has begun full-scale operation, and the local plant has
succeeded in improving the pretreatment of raw materials, leading to improved operating rates. Goingforward, we will continue our efforts to maintain stable operating levels.
As a result of these activities, revenue was ¥52,985 million (up 2.5% year on year), profit fromoperating activities was ¥561 million (down 21.8% year on year), and net profit attributable to Itochu
Enex’s shareholders was ¥112 million (up 18.1% year on year).
(2) Explanation of Financial Position
Assets, liabilities and equity
Total assets amounted to ¥377,608 million as of September 30, 2018, a decrease of ¥5,013 million fromMarch 31, 2018. This decrease mainly reflected a decrease in trade receivables of ¥5,145 million due toseasonal factors. Total liabilities amounted to ¥236,630 million, a decrease of ¥8,925 million from March
31, 2018, mainly due to repayments of borrowings of ¥1,777 million and a decrease in income taxes
payable of ¥1,710 million. Total equity totaled ¥140,978 million, an increase of ¥3,912 million fromMarch 31, 2018, due to factors including an increase of ¥5,447 million from net profit attributable to
Itochu Enex’s shareholders and a decrease of ¥3,171 million by payment of cash dividends.
Cash flows
Cash and cash equivalents (net cash) totaled ¥24,850 million as of September 30, 2018, up ¥2,277 million
from March 31, 2018.
Cash flows from operating activities
Operating activities provided net cash of ¥9,745 million. Major items included profit before tax of ¥9,392
million, depreciation and amortization of ¥5,018 million, an increase in inventories of ¥2,002 million andincome taxes paid of ¥3,797 million. Net cash provided decreased ¥212 million year on year.
Cash flows from investing activities
Investing activities used net cash of ¥1,758 million. Major items included payments for purchase ofproperty, plant and equipment and investment property, etc. of ¥5,381 million, mainly in Power & Utility
Division, and a decrease in deposits paid of ¥4,999 million. Net cash used decreased ¥7,213 million year
on year.
Cash flows from financing activities
Financing activities used net cash of ¥5,736 million. Major items included expenditures due to a decrease
in interest-bearing debt of ¥2,564 million and expenses as payment of cash dividends of ¥3,171 million.
Net cash used decreased ¥188 million year on year.
(3) Explanation of Consolidated Earnings Forecasts and Other Forward-Looking Statements
Although operating performance could be affected by various factors, including crude oil prices, market
conditions, changes in the weather, and the Japanese government’s energy policy, we have not revised ourfull-year consolidated earnings forecasts announced on April 27, 2018.

-5-

2.

Condensed Quarterly Consolidated Financial Statements and Significant Notes
Thereto(1) Condensed Quarterly Consolidated Statement of Financial Position
As ofMarch 31, 2018ASSETS
Current assets
Cash and cash equivalents
Trade receivables
Other current financial assets
Inventories
Trade advances paid
Other current assets
Total current assets
Non-current assets
Investments accounted for by the equity method
Other investments
Non-current financial assets other than investments
Property, plant and equipment
Investment property
Goodwill
Intangible assets
Deferred tax assets
Other non-current assets
Total non-current assets
Total assets-6-(Millions of yen)
As of
September 30, 2018

22,573
119,541
38,86028,3801,690
1,725

24,850114,396
34,50530,382155
2,235

212,769

206,523

26,145
3,406
11,40085,326
10,166692
20,79810,502
1,417

28,551
3,766
11,39885,562
9,736
692
20,476
9,425
1,479

169,852

171,085

382,621377,608

As ofMarch 31, 2018
LIABILITIES AND EQUITYCurrent liabilities
Short-term bonds and borrowings
Trade payables
Other current financial liabilities
Income taxes payable
Advances from customers
Other current liabilities
Total current liabilities
Non-current liabilities
Non-current bonds and borrowings
Other non-current financial liabilities
Non-current liabilities for employee benefits
Deferred tax liabilities
Provisions
Other non-current liabilities(Millions of yen)
As of
September 30, 201812,432
127,4458,539
3,650
10,583
12,28016,793
127,251
6,819
1,940
9,739
9,880

174,929

172,422

30,27323,335
9,820
2,185
4,757
256

24,13522,911
9,991
2,345
4,666
160

Total non-current liabilities

70,62664,208

Total liabilities

245,555

236,630

EquityCommon stock
Capital surplus
Retained earnings
Other components of equity
Treasury stock

19,87818,89280,352(1,145)(1,873)

19,87818,89583,086(626)(1,873)

Total shareholders’ equity

116,104

119,360

Non-controlling interests
Total equity
Total liabilities and equity-7-

20,962

21,618137,066

140,978

382,621377,608

(2) Condensed Quarterly Consolidated Statement of Comprehensive Income
Six months ended
September 30, 2017

(Millions of yen)Six months ended
September 30, 2018

Revenue
Cost of sales

352,395(308,202)

475,378(434,045)

Gross profit

44,193

41,333

Other income and expense
Selling, general and administrative expenses
Loss from tangible assets, intangible assets and goodwill
Other – net(35,385)(86)699(32,524)(186)
261(34,772)(32,449)

Profit from operating activities

Total other income and expense

9,421

8,884

Financial income and costs
Interest income
Dividends received
Interest expense
Other financial income and costs – net

23
270
(472)
(117)

42
53
(438)
(5)

Total financial income and costs

(296)

(348)

(843)

856

Share of profit (loss) of investments accounted for by the equity
methodProfit before tax

8,282

9,392

Income tax expense(3,102)(2,830)Net profit

5,180

6,562

Net profit attributable to:
Net profit attributable to Itochu Enex’s shareholders
Net profit attributable to non-controlling interests

3,969
1,211

5,447
1,115

5,180

6,562

Total

-8-

Six months ended
September 30, 2017
Other comprehensive income, net of tax effectItems that will not be reclassified to profit or loss
FVTOCI financial assets
Other comprehensive income of investments accounted for by theequity method
Items that may be reclassified to profit or loss
Exchange differences on translating foreign operations
Cash flow hedges
Other comprehensive income of investments accounted for by theequity method(Millions of yen)Six months ended
September 30, 2018

577

244

1

(1)

(15)
33

(11)
64

(280)

222

316

518

Comprehensive income

5,496

7,080

Comprehensive income attributable to:Comprehensive income attributable to Itochu Enex’s shareholders
Comprehensive income attributable to non-controlling interests

4,285
1,211

5,965
1,115

5,496

7,080

Total other comprehensive income, net of tax effect

Total

(Yen)
Earnings per share attributable to Itochu Enex’s shareholders
Basic
Diluted35.14–

Total trading transactions(Note)

507,990

48.25–(Millions of yen)
606,834

Total trading transactions are presented in accordance with the Japanese accounting practices. This item is voluntarily
disclosed by the Company for investors’ convenience and is not required to be disclosed under International Financial
Reporting Standards (“IFRSs”).

-9-(3) Condensed Quarterly Consolidated Statement of Changes in Equity
Six months ended
September 30, 2017

(Millions of yen)Six months ended
September 30, 2018

EquityCommon stock
Balance at the beginning of the period

19,87819,878

Balance at the end of the period

19,87819,878

Capital surplus
Balance at the beginning of the period
Share-based payments

18,740–18,892
3

Balance at the end of the period

18,74018,89573,3003,969
1(2,090)80,3525,447(1)(2,712)75,18083,086(1,655)(1,145)317

518

Retained earnings
Balance at the beginning of the period
Net profit attributable to Itochu Enex’s shareholders
Transfer from other components of equity
Cash dividends paid to Itochu Enex’s shareholders
Balance at the end of the period
Other components of equity
Balance at the beginning of the period
Other comprehensive income attributable to Itochu Enex’s
shareholders
Transfer to retained earnings
Balance at the end of the period
Treasury stock
Balance at the beginning of the period
Purchase and disposal of treasury stock
Balance at the end of the period
Total shareholders’ equity
Non-controlling interests
Balance at the beginning of the period
Net profit attributable to non-controlling interests
Other comprehensive income attributable to non-controllinginterests
Cash dividends paid to non-controlling interests
Changes due to additional acquisitions and sales of interests in
subsidiaries
Balance at the end of the period
Total equity- 10 -(1)

1(1,339)(626)(1,752)(121)(1,873)(0)(1,873)(1,873)

110,586

119,360

18,966
1,211

20,962
1,115

0

0

(615)

(459)

–

(0)

19,562

21,618130,148

140,978

(4) Condensed Quarterly Consolidated Statement of Cash Flows(Millions of yen)Six months ended
September 30, 2017
Cash flows from operating activities
Profit before tax
Depreciation and amortization
Loss from tangible assets, intangible assets and goodwill
Financial income and costs
Share of loss (profit) of investments accounted for by the equity
methodDecrease in trade receivables
Decrease (increase) in inventories
Decrease in trade payables
Other – net
Dividends received
Interest received
Interest expense
Income taxes paid
Net cash flows provided by operating activities

Six months ended
September 30, 2018

8,282
5,537
86
296

9,392
5,018
186
348

843

(856)

7,485
1,416
(1,915)(6,936)
498
13
(452)
(5,196)

5,306(2,002)(194)(3,539)
268
28
(413)
(3,797)

9,957

9,745

(651)
(246)
14
(1,288)(156)
219(1,486)
(51)
35
–
(447)
311

(7,007)(5,381)

Cash flows from investing activities
Purchase of investments accounted for by the equity method
Purchase of investments
Proceeds from sales of investments
Acquisition of subsidiaries, net of cash acquired
Payment for loans receivableCollection of loans receivable
Payments for purchase of property, plant and equipment andinvestment property
Proceeds from sales of property, plant and equipment andinvestment property
Purchase of intangible assets
Proceeds from sales of intangible assets
Decrease in deposits paid – net
Other – net

1,515

654

(1,217)78
3,000(3,232)

(448)
32
4,999
24

Net cash flows used in investing activities(8,971)(1,758)- 11 -

(Millions of yen)Six months ended
September 30, 2017

Six months ended
September 30, 2018

Cash flows from financing activities
Repayments of bonds and borrowings
Net increase (decrease) in short-term borrowings
Cash dividends paid to Itochu Enex’s shareholders
Cash dividends paid to non-controlling interests
Purchase of treasury stock
Other – net(6,886)
3,787(2,090)
(615)
(120)
–

(1,858)(706)(2,712)
(459)
(0)
(1)

Net cash flows used in financing activities(5,924)(5,736)

Net increase (decrease) in cash and cash equivalents(4,939)2,251

Cash and cash equivalents at the beginning of the period

22,727

22,573

Effect of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the period- 12 -

926

17,797

24,850(5) Notes on Uncertainties of Entity’s Ability to Continue as Going Concern
No items to report.
(6) Changes in Accounting Policies
From the first quarter ended June 30, 2018, the following standards have been applied in accordance withtransitional provision.
Standard

Title

IFRS 9 (revised in July 2014)

Financial Instruments

IFRS 15

Revenue from Contracts with
Customers

Description of new/amended
standards or interpretations
Limited amendments to theclassification and measurement
method for financial assets, andintroduction of the expected credit
loss impairment model
Establishment of accounting anddisclosure on revenue arising fromcontracts with customers(IFRS 9 “Financial Instruments” (revised in July 2014))
The Group has adopted IFRS 9 “Financial Instruments” (revised in July 2014) effective from the firstquarter ended June 30, 2018. The effect of adoption of this standard on the Group’s condensed quarterly
consolidated financial statements is insignificant.
(IFRS 15 “Revenue from Contracts with Customers”)
The Group has adopted IFRS 15 “Revenue from Contracts with Customers” (issued in May 2014) and“Clarifications to IFRS 15” (issued in April 2016) (hereinafter, “IFRS 15” collectively), from the firstquarter ended June 30, 2018. In the adoption of IFRS 15, the Group has applied the method in which the
cumulative effect of adopting this standard is recognized at the commencement date of adoption, which isallowed as the transitional provision.
In line with the adoption of IFRS 15, the Group has recognized revenue based on the following five-step
approach.
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation
The Group is engaged in the sale of LP gas, gasoline, kerosene, diesel oil, fuel oil, asphalt, electricity,
automobiles, and other goods. For the sale of these products, the Group considers that a performanceobligation is satisfied when the customer is deemed to obtain control of the product in light of contractual
terms and conditions. Specifically, the Group recognizes revenue on the date when the goods are shipped
or delivered to the customer or when the customer performs an inspection of the delivered goods. In
addition, revenue is recognized at the amount of consideration promised in the contract with the customer
less discounts, rebates, returned goods, etc.
When identifying the performance obligations, and determining whether the Group is involved intransactions as a party to the transaction, or whether the Group is involved as an agent, the Groupconsiders factors such as whether or not the Group has the primary responsibility for providing the
product or service to the customer, whether or not the Group bears the inventory risk, and whether or not- 13 -

the Group has discretion in establishing selling price. For a transaction in which the Group is involved asa party to the transaction, the Group presents revenue at the gross amount of consideration received fromthe customer. For a transaction in which the Group is involved as an agent, the Group presents revenue at
a net amount calculated by deducting the cost of sales from the gross amount of consideration received
from the customer.
As a result of the adoption of IFRS 15, revenue of certain transactions, which had previously beenpresented on a net basis, is presented on a gross basis. Consequently, revenue and cost of sales eachincreased by ¥84,013 million in the condensed quarterly consolidated statement of comprehensive income
for the six months ended September 30, 2018, compared with these items in the case where the previous
accounting standard had been applied.
Other than the above, the adoption of this standard has no significant impact on the Group.
(7) Segment Information
For the six months ended September 30, 2017
(Millions of yen)
Reportable segment
Home-Life
DivisionLife &
Industrial
EnergyDivision

Revenue fromexternal customers

41,918226,463

32,326

51,688Intersegment revenue

35

1,581

2,912

41,953228,044

12,683

Profit fromoperating activities

Power & Utility Mobility Life
Division
Department

Total

Adjustment

Consolidated

352,395–

352,395–

4,528(4,528)–35,23851,688356,923(4,528)352,395

16,998

5,932

8,580

44,193–44,193

824

3,392

3,876

718

8,810

611

9,421

Profit before tax

104

3,381

3,725

522

7,732

550

8,282

Net profit (loss)
attributable to
Itochu Enex’s
shareholders

(633)

2,273

1,882

95

3,617

352

3,969

Total assets

63,287

126,493

74,342

50,629314,751

19,414

334,165

Total tradingtransactions

44,246379,337

33,98150,426507,990–

507,990

Revenue

Total revenue
Gross profit

Other items(Note)

Intersegment transactions have been decided by reference to the market price.
The adjustment of ¥352 million to net profit attributable to Itochu Enex’s shareholders represents corporate profit(loss) not allocated to reportable segments.
The adjustment of ¥19,414 million to total assets represents corporate assets not allocated to reportable segments.
Total trading transactions are unaudited items voluntarily disclosed by the Company and represent the amount ofsales in accordance with Japanese accounting practices.

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For the six months ended September 30, 2018
(Millions of yen)
Reportable segment
Home-Life
DivisionLife &
Industrial
EnergyDivision

40,248335,708

Power & Utility Mobility Life
Division
Department

Total

Adjustment

Consolidated

475,378–475,378

Revenue
Revenue fromexternal customers
Intersegment revenue

46,43752,985

46

1,571

3,165

–

4,782

(4,782)–40,294337,279

49,602

52,985

480,160(4,782)475,378

Gross profit

10,374

17,395

4,857

8,707

41,333–

41,333

Profit fromoperating activities

1,151

4,032

2,614

561

8,358

526

8,884

Profit before tax

1,611

4,049

2,778

486

8,924

468

9,392

Net profit
attributable to
Itochu Enex’s
shareholders

779

2,769

1,411

112

5,071

376

5,447

Total assets

60,968146,027

85,81354,787

347,595

30,013

377,608

Total tradingtransactions

44,959461,968

48,262

51,645606,834–

606,834

Total revenue

Other items(Note)

Intersegment transactions have been decided by reference to the market price.
The adjustment of ¥376 million to net profit attributable to Itochu Enex’s shareholders represents corporate profit(loss) not allocated to reportable segments.
The adjustment of ¥30,013 million to total assets represents corporate assets not allocated to reportable segments.
Total trading transactions are unaudited items voluntarily disclosed by the Company and represent the amount ofsales in accordance with Japanese accounting practices.

As of March 31, 2018
(Millions of yen)
Reportable segment

Total assets(Note)

Home-Life
DivisionLife &
Industrial
EnergyDivision

66,843

145,108

Power & Utility Mobility Life
Division
Department
80,18963,896

Total

Adjustment

Consolidated

356,036

26,585

382,621

The adjustment of ¥26,585 million to total assets represents corporate assets not allocated to reportable segments.

Change in reportable segments
In the first quarter ended June 30, 2018, the now former Life Energy & Logistics Division and Industrial
Energy & Logistics Division were integrated to form the newly established Life & Industrial Energy
Division, while the Mobility Life Department was newly established.
In line with this, the classification of reportable segments has been changed from the previous Home-Life
Division, Power & Utility Division, Life Energy & Logistics Division and Industrial Energy & Logistics
Division to the Home-Life Division, Life & Industrial Energy Division, Power & Utility Division andMobility Life Department from the first quarter ended June 30, 2018.
Furthermore, in conjunction with the absorption-type merger of TOHOKU TANKU SHOUKAI CO., LTD.,
which was a subsidiary of the Company, by ITOCHU ENEX HOME-LIFE TOHOKU CO., LTD., asubsidiary of the Company, the Group reviewed the management classification and changed the method toinclude the business of TOHOKU TANKU SHOUKAI CO., LTD., which was previously included in the- 15 -

Life Energy& Logistics Division (Life & Industrial Energy Division after the above change), in the HomeLife Division.
Due to the change in segments, segment information for the first six months of the previous fiscal year andas of the end of the previous fiscal year (March 31, 2018) has been adjusted based on the new segmentclassifications in the first six months ended September 30, 2018.

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