This document is an English translation of quarterly financial results report released on July 31, 2019 and written initially inJapanese.
The Japanese original should be considered as the primary version.

July 31, 2019

Consolidated Financial Results for the First Three Months of
the Fiscal Year Ending March 31, 2020
<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: +81-3-4233-8008

Scheduled date to file quarterly securities report: August 13, 2019
Scheduled date to commence dividend payments: –Preparation of supplementary results briefing material on quarterly financial results: Yes
Holding of quarterly financial results presentation meeting: None
(Millions of yen with fractional amounts rounded, unless otherwise noted)

1. Consolidated financial results for the first three months of the fiscal year ending March 31, 2020
(from April 1, 2019 to June 30, 2019)(1) Consolidated operating results(Percentages indicate year-on-year changes.)
Profit fromoperatingactivities

RevenueThree months ended
June 30, 2019
June 30, 2018

Millionsof yen220,216
226,301(2.7)

Millionsof yen
4,312

31.2

3,938

%

Basic earnings per
share attributable
to Itochu Enex’s
shareholders

Profit before tax

9.5

Millionsof yen4,787(15.6)

4,494%

Net profit

Net profit
attributable to
Itochu Enex’s
shareholders

Comprehensive
income

6.2

Millionsof yen
3,009

(6.7)

0.8

3,225

(0.6)

6.5

Millionsof yen3,234

0.8

Millionsof yen
2,701

(2.1)

3,209

5.0

2,544

%

%

Diluted earnings
per share
attributable to
Itochu Enex’s
shareholders

Yen
Yen
Three months ended
June 30, 2019
23.93–
June 30, 2018
22.54–
Reference: Total trading transactions
For the three months ended June 30, 2019: 274,365 million yen
For the three months ended June 30, 2018: 288,762 million yen
Note: “Total trading transactions” are presented in accordance with the Japanese accounting practices.

%%(2) Consolidated financial position
Total assets

As ofJune 30, 2019
March 31, 2019

Total shareholders’equityTotal equity

Millions of yen

Millions of yen

400,018
374,373

Ratio of shareholders’equity to total assets

Millions of yen

143,105
144,566%

121,134
122,290

30.3
32.7

2. Cash dividends
Annual cash dividends per share
Second quarterend

First quarter-end
Fiscal year ended
March 31, 2019
Fiscal year ending
March 31, 2020

Third quarter-end

Fiscal year-end

Total

Yen

Yen

Yen

Yen

Yen

–

20.00

–

22.00

42.00

21.00

–

21.00

42.00

–

Fiscal year ending
March 31, 2020
(Forecast)

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

3. Consolidated earnings forecasts for the fiscal year ending March 31, 2020
(from April 1, 2019 to March 31, 2020)

Profit from operating
activities

Revenue

Millions of yen

Six months ending
September 30, 2019
Fiscal year ending
March 31, 2020

(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% Millions of yen% Millions of yen

%

Yen

–

–

–

–

–

–

–

–

–

1,000,000(0.7)

16,500(7.6)

19,200(1.1)

11,8002.1

104.54

Note: Revisions to the consolidated earnings forecasts most recently announced: None
The Company’s performance is evaluated on a fiscal year basis. Accordingly, consolidated earnings forecasts for the first six monthsof fiscal year are not prepared.

* 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 14 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 June 30, 2019

116,881,106 shares

As of March 31, 2019

116,881,106 sharesb. Number of treasury stock at end of period
As of June 30, 2019

4,002,462 shares

As of March 31, 2019

4,002,462 sharesc. Average number of outstanding shares during period (cumulative from the beginning of the fiscal year)
For the three months ended June 30, 2019112,878,644 shares

For the three months ended June 30, 2018

112,878,971 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 Three Months, (3) Explanationof Consolidated Earnings Forecasts and Other Forward-Looking Statements” on page 6 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 Three 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 ........ 6
2. Condensed Quarterly Consolidated Financial Statements and Significant Notes Thereto .................. 7(1) Condensed Quarterly Consolidated Statement of Financial Position .............................................. 7(2) Condensed Quarterly Consolidated Statement of Comprehensive Income .................................... 9(3) Condensed Quarterly Consolidated Statement of Changes in Equity ........................................... 11(4) Condensed Quarterly Consolidated Statement of Cash Flows ....................................................... 12(5) Notes on Uncertainties of Entity’s Ability to Continue as Going Concern .................................... 14(6) Changes in Accounting Policies ......................................................................................................... 14(7) Segment Information .......................................................................................................................... 15

-1-

1.

Qualitative Information Regarding Results for the First Three Months(1) Explanation of Operating Results
The Group has adopted IFRS 16 “Leases” from the first quarter ended June 30, 2019. For the detailsof the impact of the adoption of IFRS 16, please refer to “2. Condensed Quarterly Consolidated
Financial Statements and Significant Notes Thereto, (6) Changes in Accounting Policies.”
1)

Results of operations
During the three months ended June 30, 2019, the tone of the Japanese economy was one of moderate
recovery. However, the outlook for the economy remained uncertain due to risks of a slowdown in the
global economy, stemming from such issues as the impact on the global economy of the UnitedStates-China trade issue trend and uncertainties in overseas economies.
In addition, Japan’s energy industry has been encountering drastically changing circumstances,
particularly with respect to consolidation of major oil companies, market entry by companies fromother industries as a result of Japan having fully liberalized retail power and city gas sales, alliances
forged across industry lines, and mounting worldwide awareness of climate change.
In this environment, the Itochu Enex Group established its two-year medium-term business plan
“Moving 2020 Horizons.” Through its medium-term business plan the Group is aiming to enter its
next stage, which will involve marshaling Group strengths, and is accordingly positioning the next
two years as a period for achieving further rapid progress by leveraging the foundations it hasdeveloped thus far.
Overview of medium-term business plan
1.

Name of the plan: Moving 2020 Horizons

2.

Period:Two years (FY2019 to FY2020)

3.

Basic policy:

Promotion of Growth Strategies(1) Maintaining and deepening the revenue base: Pursue Group synergy
and further cultivate customer base.
(2) Making inroads overseas and in peripheral fields: Proactively invest inoverseas businesses and promote M&A of peripheral businesses.
(3) Creating new businesses: Promote environmental businesses and so on.
Evolution of the Organizational Base
(1) Strengthening Group management: Advance consolidated management
and construct effective governance management structures.
(2) Human resource strategies for growth: Promote diversity and nurture
global human resources.
(3) Promoting innovation: Pursue more efficient operations in existing
business and promote digital solutions.

4. Quantitative plan (FY2020):(1) Net profit attributable to Itochu Enex’s shareholders: ¥12.5 billion(2) ROE: 9.0% or above(3) Dividend payout ratio: 40% or above(4) Planned investment (2-year total): ¥60.0 billion-2-The operating results for the three months ended June 30, 2019 are as follows.
Revenue was ¥220,216 million (down 2.7% year on year), due mainly to the impact resulting from thedecrease in sales volumes of domestic petroleum products in the Life & Industrial Energy Division.
Profit from operating activities was ¥4,312 million (up 9.5% year on year), due mainly to the Life &Industrial Energy Division having encountered robust sales in the retail market for petroleum products
and the increased profit in the car dealer business.
Net profit attributable to Itochu Enex’s shareholders was ¥2,701 million (up 6.2% year on year).
2)

Results of operations by segment
Results of operations by segment are as follows. Following the reorganization of the Group carriedout on April 1, 2019, the reportable segments have changed. As part of the reorganization, theMobility Life Department was included in the Life & Industrial Energy Division.
In line with this, the classification of reportable segments has been changed from the previous HomeLife Division, Life & Industrial Energy Division, Power & Utility Division and Mobility Life
Department to the Home-Life Division, Life & Industrial Energy Division and Power & Utility
Division from the first quarter ended June 30, 2019.
For that reason, the year-on-year comparisons have been recalculated based on the reportablesegments as they exist after the reorganization.
Home-Life Division
In the Home-Life Division during the three months ended June 30, 2019, the number of customers
under direct LP gas supply contracts increased by around 3,000 to approximately 553,000. Althoughvolume of direct sales remained largely unchanged in comparison with the previous year, sales volumeof LP gas fell year on year mainly due to lower sales volume brought about by decreasing demand withrespect to auto gas.
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 5,000 for a total of approximately 86,000.
In peripheral areas other than LP gas, volume and revenue decreased year on year, having recoiled fromthe higher results achieved in the corresponding period of the previous fiscal year due to special factors
in the industrial gas sales business and the container inspection business.
As a result of these activities, the operating results for the three months ended June 30, 2019 are as
follows.
Revenue was ¥19,819 million (down 10.4% year on year), due mainly to the decrease in the sales
volume of LP gas.
Profit from operating activities was ¥555 million (down 28.4% year on year), due mainly to a reduced
sales volume for LP gas and additional expenses associated with restructuring by subsidiaries.
Net profit attributable to Itochu Enex’s shareholders was ¥501 million (down 8.1% year on year), due
mainly to the same reasons as the impacts on profit from operating activities described above.
Life & Industrial Energy DivisionDuring the three months ended June 30, 2019, the Life & Industrial Energy Division adopted a neworganizational framework, which has involved establishing the Environmental Business Department in
operation from this fiscal year, and transferring the automotive business out of the Mobility Life
Department.
In the Group’s Car-Life Stations (CS)*1 business, which has a high level of engagement with people inlocal communities, we need to address changes in the business environment brought about by structural
downturn in demand for oil. As such, we will provide various services with the aim of making full use-3-

of our existing CS network encompassing dealerships and Group companies drawing on a strategy ofmarket dominance. The total number of the Group’s CS in the three months ended June 30, 2019 was
1,755 (net decrease of 11 from the end of the previous fiscal period). Meanwhile, whereas sales volume
of gasoline and diesel oil decreased year on year, that of kerosene increased in comparison with thecorresponding period of the previous fiscal year.
In the Environmental Business Department, we aim to expand our domestic share of the market for
AdBlue*2 and achieve overseas expansion. In addition, we have been proposing various applications forfly ash derived from recycled coal ash in an effort to expand sales channels in that regard.
In the automotive business, our car dealer business subsidiary OSAKA CAR LIFE GROUP CO., LTD.
drove results amid strong sales of new cars such as a new DAYZ model that went on sale at the end of
March 2019, along with sales of Note, Serena and other popular car models. We also achieved firm
results with respect to the “Nissan Osaka Sales e-Denki” initiative implemented as part of our efforts tostrengthen our involvement with our customer base.
As a result of these activities, the operating results for the three months ended June 30, 2019 are as
follows.
Revenue was ¥176,089 million (down 5.5% year on year), due mainly to a decrease in sales volume ofdomestic petroleum products.
Profit from operating activities was ¥2,184 million (up 54.7% year on year), due mainly to an increasein profit in the retail market for petroleum products and the car dealer business.
Net profit attributable to Itochu Enex’s shareholders was ¥1,233 million (up 47.1% year on year), due
mainly to the same reasons as the impacts on profit from operating activities described above.
*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 Division
Looking at the Power & Utility Division during the three months ended June 30, 2019, in the electric
power business, retail electricity sales volumes decreased year on year due to a downturn in large, highvoltage power contracts for business users in the areas of sales and supply/demand management, anddespite an increase in volume of low-voltage power sales to households. On the other hand, electricity
sales volumes for the wholesale electricity market increased in comparison with the previous fiscal year.
In this field, we will develop a sales strategy that addresses the shift to the realm of low-voltage powerby actively making system investment while partnering with companies that have strong customer
bases in certain geographic areas and entities from other industries. For instance, we will sell electricity
to customers who have purchased cars from Nissan affiliated dealerships, working in conjunction with
Nissan Motor Co., Ltd.
In the power generation field, our goal is to ensure stable supplies of electricity and reduce
environmental impacts, enhancing our portfolio of power sources. An example of this is a program of
improvements we are carrying out one by one at deteriorating power generation facilities to raise theirefficiency.
In the heat supply business*3, demand for heat decreased from the previous fiscal year partially due to alack of temperature gains, leading to a decrease in profit year on year. The division will continue its
efforts to develop as a comprehensive energy services business*4, so as to be able to respond to theincreasingly diverse needs of customers in this field.
In the financial services field, in February 2019, Enex Infrastructure Investment Corporation, to which
the Company’s subsidiary Enex Asset Management Co., Ltd. provides asset management services on
consignment, listed on the Tokyo Stock Exchange Infrastructure Fund Exchange. Enex Infrastructure
Investment Corporation aims to invest in and manage properties such as renewable energy power
generation facilities, concentrating on solar power generation facilities and related infrastructure, andsteadily expand the scale of its portfolio and generate stable cash flow.

-4-As a result of these activities, the operating results for the three months ended June 30, 2019 are as
follows.
Revenue was ¥24,308 million (up 36.5% year on year), due mainly to an increase in electricity sales
volume for the wholesale electricity market in the areas of sales and supply/demand management.
Profit from operating activities was ¥1,351 million (down 7.4% year on year), due mainly to a decreasein demand for heat in the heat supply business.
Net profit attributable to Itochu Enex’s shareholders was ¥895 million (up 7.7% year on year), due
mainly to an increase in earnings of associates accounted for by the equity method.
*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.

(2) Explanation of Financial Position
Assets, liabilities and equity
Total assets amounted to ¥400,018 million as of June 30, 2019, an increase of ¥25,645 million fromMarch 31, 2019. This increase mainly reflected an increase in property, plant and equipment of ¥52,264
million with the application of IFRS 16. Total liabilities amounted to ¥256,913 million, an increase of¥27,106 million from March 31, 2019, mainly due to an increase in lease liabilities of ¥52,243 million
with the application of IFRS 16. Total equity totaled ¥143,105 million, a decrease of ¥1,461 million fromMarch 31, 2019, due to factors including an increase of ¥2,701 million from net profit attributable to
Itochu Enex’s shareholders, a decrease of ¥2,905 million by payment of cash dividends and a decrease of¥1,535 million with the application of IFRS 16.
Cash flows
Cash and cash equivalents (net cash) totaled ¥18,862 million as of June 30, 2019, up ¥137 million fromMarch 31, 2019.
Cash flows from operating activities
Operating activities used net cash of ¥4,129 million. Major items included profit before tax of ¥4,787
million, depreciation and amortization of ¥4,778 million, an increase in funds required for trading of¥7,977 million and income taxes paid of ¥3,404 million. Net cash provided increaed ¥7,276 million year
on year.
Cash flows from investing activities
Investing activities used net cash of ¥196 million. Major items included purchase of investments
accounted for by the equity method of ¥2,750 million, mainly in the Power & Utility Division, acquisitionof subsidiaries of ¥5,566 million and decrease in deposits paid of ¥10,000 million. Net cash used
increased ¥1,750 million year on year.
Cash flows from financing activities
Financing activities provided net cash of ¥4,460 million. Major items included net increase in short-termborrowings of ¥15,350 million, repayments of bonds and borrowings of ¥5,433 million and expenses as
payment of cash dividends of ¥2,905 million. Net cash used increased ¥10,648 million year on year.

-5-(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 26, 2019.

-6-

2.

Condensed Quarterly Consolidated Financial Statements and Significant Notes
Thereto(1) Condensed Quarterly Consolidated Statement of Financial Position
As ofMarch 31, 2019ASSETS
Current assets
Cash and cash equivalents
Trade receivables
Other current financial assets
Inventories
Income taxes receivable
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-7-(Millions of yen)
As ofJune 30, 201918,725
106,165
36,03433,053
2,533
111
3,154

18,862
90,191
26,60026,868
3,004
125
1,921

199,775

167,571

29,441
4,186
11,29287,5999,819
521
20,0919,913
1,736

32,057
4,227
11,873
139,863
13,090521
20,126
9,029
1,661

174,598

232,447

374,373

400,018

As ofMarch 31, 2019
LIABILITIES AND EQUITYCurrent liabilities
Short-term bonds and borrowings
Trade payables
Lease liabilities
Other current financial liabilities
Income taxes payable
Advances from customers
Other current liabilities(Millions of yen)
As ofJune 30, 201911,217
121,677
–
7,905
3,193
9,651
11,82021,517
91,462
9,728
7,387
1,205
8,810
9,859

165,463

149,968

22,893–23,531
9,936
2,287
5,462
235

22,53553,656
13,865
9,968
1,389
5,304
228

Total non-current liabilities

64,344

106,945

Total liabilities

Total current liabilities
Non-current liabilities
Non-current bonds and borrowings
Lease liabilities
Other non-current financial liabilities
Non-current liabilities for employee benefits
Deferred tax liabilities
Provisions
Other non-current liabilities

229,807

256,913EquityCommon stock
Capital surplus
Retained earnings
Other components of equity
Treasury stock

19,87818,922
86,769(1,406)(1,873)

19,87818,922
85,838(1,631)(1,873)

Total shareholders’ equity

122,290

121,134

22,276

21,971

144,566

143,105

374,373

400,018

Non-controlling interests
Total equity
Total liabilities and equity-8-(2) Condensed Quarterly Consolidated Statement of Comprehensive Income
Three months ended
June 30, 2018

(Millions of yen)Three months ended
June 30, 2019

Revenue
Cost of sales

226,301(206,203)

220,216(199,545)

Gross profit

20,09820,671Other income and expense
Selling, general and administrative expenses
Loss from tangible assets, intangible assets and goodwill
Other – net(16,238)(246)
324(16,476)(61)
178(16,160)(16,359)

Profit from operating activities

Total other income and expense

3,938

4,312

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

23
53
(212)
73

16
58
(297)
(36)

Total financial income and costs

(63)

(259)

Share of profit of investments accounted for by the equity method

619

734

4,494

4,787

(1,285)(1,553)

Net profit

3,209

3,234

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

2,544
665

2,701
533

3,209

3,234

Profit before tax
Income tax expense

Total

-9-

Three months ended
June 30, 2018
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)Three months ended
June 30, 2019

59

44

(24)

9

(22)
5

(1)
(15)

(2)

(262)

16

(225)

Comprehensive income

3,225

3,009

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

2,560
665

2,476
533

3,225

3,009

Total other comprehensive income, net of tax effect

Total

(Yen)
Earnings per share attributable to Itochu Enex’s shareholders
Basic
DilutedTotal trading transactions(Note)

22.54–

288,762

23.93–(Millions of yen)
274,365

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”).

- 10 -

(3) Condensed Quarterly Consolidated Statement of Changes in Equity
Three months ended June 30, 2018
(Millions of yen)
Shareholders’ equity

Balance at April 1, 2018

Commonstock

CapitalsurplusRetainedearnings

Other
componentsof equity

Treasury
stock

Total
shareholders’equityNoncontrollinginterests

Total equity

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

116,104

20,962137,065

2,544

665

3,209

17

17

0

16

17

2,561

665

3,225

(2,712)(459)(3,171)

Net profit

2,544

Other comprehensive
incomeComprehensive income

2,544Transactions with owners
Cash dividends(2,712)

Changes due to additional
acquisitions and sales ofinterests in subsidiaries
Transfer from othercomponents of equity toretained earnings
Share-based payments
Balance at June 30, 2018

0(0)80,184(1,128)3
19,87818,895

–

–

–

–

3
(1,873)

115,956

3
21,167137,123

Three months ended June 30, 2019
(Millions of yen)
Shareholders’ equity

Balance at April 1, 2019

Commonstock

CapitalsurplusRetainedearnings

Other
componentsof equity

Treasury
stock

Total
shareholders’equityNoncontrollinginterests

Total equity

19,87818,922

86,769(1,406)(1,873)

122,290

22,276

144,566(1,146)(389)(1,535)

121,144

21,887143,031

2,701

533

3,234

(225)

(225)

0

(225)

(225)

2,476

533

3,009

Cumulative effect ofaccounting change
Restated balance(1,146)
19,87818,922

Net profit

85,623(1,406)(1,873)

2,701

Other comprehensive
incomeComprehensive income

2,701Transactions with owners
Cash dividends(2,486)(419)(2,905)

Changes due to additional
acquisitions and sales ofinterests in subsidiaries(2,486)

–

(30)

(30)

Transfer from othercomponents of equity toretained earnings––

Share-based payments
Balance at June 30, 2019–19,87818,922

85,838- 11 -(1,631)(1,873)

121,134–
21,971

143,105

(4) Condensed Quarterly Consolidated Statement of Cash Flows(Millions of yen)Three months ended
June 30, 2018
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 profit of investments accounted for by the equity method
Decrease in trade receivables
Decrease in inventories
Decrease in trade payables
Other – net
Dividends received
Interest received
Interest expense
Income taxes paid
Net cash flows provided by (used in) operating activities
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
Net cash flows provided by (used in) investing activities- 12 -

Three months ended
June 30, 2019

4,494
2,484
246
63
(619)
10,743
3,131(11,351)(2,530)
267
16
(168)
(3,629)

4,787
4,778
61
259
(734)
16,052
6,186(30,215)(2,268)
628
10
(269)
(3,404)

3,147(4,129)

(244)
(1)
4
–
(134)
150

(2,750)(56)–(5,566)(113)
195(3,103)(2,581)

349

197

(307)
31
5,000
(191)

(146)
–
10,000
624

1,554

(196)

(Millions of yen)Three months ended
June 30, 2018
Cash flows from financing activities
Repayments of bonds and borrowings
Repayments of lease liabilities
Net increase (decrease) in short-term borrowings
Payments for additional acquisitions of interests in subsidiaries
from non-controlling interests
Cash dividends paid to Itochu Enex’s shareholders
Cash dividends paid to non-controlling interests

Three months ended
June 30, 2019(799)–
(2,218)(5,433)(2,522)
15,350–(30)(2,712)(459)(2,486)(419)

Net cash flows provided by (used in) financing activities(6,188)4,460

Net increase (decrease) in cash and cash equivalents(1,487)135

Cash and cash equivalents at the beginning of the period

22,57318,725(2)

2

21,084

18,862

Effect of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the period- 13 -

(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, 2019, the following standard has been applied.
Standard
IFRS 16

Title
LeasesDescription of new/amended
standards or interpretations
Amendments to accounting forlease contracts(IFRS 16 “Leases”)
Upon application of this standard, right-of-use assets and lease liabilities were recognized on the date ofinitial application of IFRS 16 (April 1, 2019) for leases previously classified as operating leases under
IAS 17 “Leases” (hereinafter, “IAS 17”). In addition, operating lease payments that had been expensed as
incurred under the previous accounting standard were recognized as depreciation for right-of-use assets
and interest expense on lease liabilities in the condensed quarterly consolidated statement ofcomprehensive income for the first quarter ended June 30, 2019, and reclassified from a reduction in cash
flows from operating activities to a reduction in cash flows from financing activities in the condensed
quarterly consolidated statement of cash flows for the same period.
Lease payments are allocated to finance costs and repayments of lease liabilities based on the effective
interest method with finance costs recognized in the condensed quarterly consolidated statement ofcomprehensive income.
A right-of-use asset is depreciated by using the straight-line method from the commencement date to theearlier of the end of the useful life of the right-of-use asset or the end of the lease term.
However, the Group has not recognized right-of-use assets and lease liabilities for leases of intangible
assets and short-term leases with a lease term of 12 months or less. Lease payments associated with shortterm leases are recognized as expense on either a straight-line basis over the lease term or anothersystematic basis.
In accordance with the transition under IFRS 16, the Group has retrospectively applied IFRS 16 andrecognized the cumulative effect of initially applying IFRS 16 as an adjustment to the opening balance ofretained earnings for the first quarter ended June 30, 2019. In transitioning to IFRS 16, the Group has
elected to apply the practical expedient provided in paragraph C3 of IFRS 16 to grandfather theassessment of whether a contract contains a lease under IAS 17 and IFRIC 4 “Determining whether an
Arrangement contains a Lease.”
As a result, right-of-use assets increased by ¥46,640 million as property, plant and equipment, leaseliabilities increased by ¥54,228 million, and retained earnings decreased by ¥1,146 million in thecondensed quarterly consolidated statement of financial position as of the beginning of the first quarter
ended June 30, 2019.

- 14 -

(7) Segment Information
For the three months ended June 30, 2018
(Millions of yen)
Reportable segment
Home-Life
DivisionLife & Industrial
Energy Division

Power & Utility
Division

Total

Revenue from externalcustomers

22,112

186,382

17,807

Intersegment revenue

42

678

22,154

Adjustment

Consolidated

226,301–

226,301

1,407

2,127

(2,127)–

187,060

19,214228,428(2,127)226,301

5,595

11,983

2,520

20,098–20,098

775

1,412

1,459

3,646

292

3,938

1,130

1,411

1,608

4,149

345

4,494

545

838

831

2,214

330

2,544

Total assets

60,943

192,869

81,288335,100

29,097364,197

Total tradingtransactions

24,565

245,721

18,476

288,762–

288,762

Revenue

Total revenue
Gross profit
Profit from operating
activities
Profit before tax
Net profit attributable
to Itochu Enex’s
shareholders
Other items(Note)

Intersegment transactions have been decided by reference to the market price.
The adjustment of ¥330 million to net profit attributable to Itochu Enex’s shareholders represents corporate profit(loss) not allocated to reportable segments.
The adjustment of ¥29,097 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.

For the three months ended June 30, 2019
(Millions of yen)
Reportable segment
Home-Life
DivisionLife & Industrial
Energy Division

Power & Utility
Division

Total

Revenue from externalcustomers

19,819176,089

24,308Intersegment revenue

73

1,893

19,892Adjustment

Consolidated

220,216–

220,216

796

2,762

(2,762)-

177,982

25,104

222,978(2,762)

220,216

5,270

12,756

2,645

20,671–

20,671

Profit from operating
activities

555

2,184

1,351

4,090

222

4,312

Profit before tax

868

2,139

1,631

4,638

149

4,787

Net profit attributable
to Itochu Enex’s
shareholders

501

1,233

895

2,629

72

2,701

Total assets

63,355207,076

99,955

370,386

29,632400,018

Total tradingtransactions

22,393226,966

25,006274,365–

274,365

Revenue

Total revenue
Gross profit

Other items(Note)

Intersegment transactions have been decided by reference to the market price.

- 15 -

The adjustment of ¥72 million to net profit attributable to Itochu Enex’s shareholders represents corporate profit(loss) not allocated to reportable segments.
The adjustment of ¥29,632 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, 2019
(Millions of yen)
Reportable segment

Total assets(Note)

Home-Life
DivisionLife & Industrial
Energy Division

Power & Utility
Division

Total

Adjustment

Consolidated

65,584

189,333

82,439337,356

37,016374,373

The adjustment of ¥37,016 million to total assets represents corporate assets not allocated to reportable segments.

Change in reportable segments
In the first quarter ended June 30, 2019, the now former Mobility Life Department was included in the Life
& Industrial Energy Division.
In line with this, the classification of reportable segments has been changed from the previous Home-Life
Division, Life & Industrial Energy Division, Power & Utility Division and Mobility Life Department to
the Home-Life Division, Life & Industrial Energy Division and Power & Utility Division from the firstquarter ended June 30, 2019.
Due to the change in segments, segment information for the first three months of the previous fiscal year
and as of the end of the previous fiscal year (March 31, 2019) has been adjusted based on the classificationof reportable segments after the change.

- 16 -