Chiyoda Global Headquarters
Minato Mirai Grand Central Tower
4-6-2, Minatomirai, Nishi-ku,
Yokohama 220-8765, Japanwww.chiyodacorp.com/en

The presentation was held in Japanese.

November 12, 2021

This document is a translation/summary

IR, PR & CSR Section

for reference only.

Corporate Services Department
Chiyoda Corporation

Summary of a Q&A session following the Presentation of theSecond Quarter Financial Results for Fiscal Year Ending March 31, 2022
The following is a summary of a Q&A session following the presentation (telephone conference) ofChiyoda Corporation’s (Chiyoda) financial results for the second quarter of fiscal year ending March
31, 2022, released on November 5, 2021.
Question
1Answer

Revenue
What caused the improved gross The fluctuation in revenue was primarily caused by theprofitmarginwhenrevenue NFE LNG project which increased revenue in 1Q

decreased in 2Q compared to 1Q?

through the procurement of large equipment and its
natural progression on a ‘percent complete’ basis. Withno special events, progress in 2Q returned to normal.
Gross profit margin improved in 2Q compared to 1Q.
Some Chiyoda projects progressed less well in 1Q due
to COVID-19 but their progress improved in 2Q,improving gross profit margin to the full year forecast
level.

2Gross profit
Are there any special factors which There are no special factors which affected gross profit
affected gross profit margin in 2Q?

3

margin in 2Q.

Price escalation of raw materials
How does the escalation in costs of Cost escalation of raw materials, such as copper andraw materials and transportation nickel, and increased ocean freight costs are impacting
affect projects? Is there a possibility projects, on a project-by-project magnitude.
of a downturn in profitability? Do A fundamental cause of cost escalation is COVID-19.
contracts stipulate the avoidance of Chiyoda
price escalation risk?

iscontinuing‘ForceMajeure’ contract

provision discussions with clients on projects with1

Chiyoda Global Headquarters
Minato Mirai Grand Central Tower
4-6-2, Minatomirai, Nishi-ku,
Yokohama 220-8765, Japanwww.chiyodacorp.com/en

Question

Answer
COVID-19 cost and schedule impacts. However, noserious impacts on project profit-and-loss resulting
from increased raw material and ocean freight costs arecurrently foreseen.

4Foreign exchange
How does a weak yen affect full Chiyoda comprehensively hedges its risk throughyear financial results?

exchange reservation such that foreign exchange
fluctuations do not affect financial results.

5Tangguh LNG, Indonesia
What is the current status of the Currently there are no special issues for Tangguh LNG.
COVID-19 impacts on the Tangguh Construction recommenced with minimal COVID-19
LNG project as explained in the 1Q influence due to widespread vaccination.
financial results conference call?

6New orders
1.

What is the new orders forecast 1. Chiyoda receives many inquiries in Japan, primarily
for the second half of this fiscal

in the pharmaceutical sector. We have alsoyear and next fiscal year?

received overseas LNG project inquiries.
Chiyoda selects only prime projects and has abacklog of over 1,300 billion JPY.

2.

Is the full year forecast revised? 2. There is no revision of the full year forecast for neworders.

7Growth strategy
Whatisbusinessstrategy?

thetarget

fieldsoffigure
thefor Chiyoda is aiming to strengthen our capabilities in thegrowth new energy field towards a carbon-free society, such ashydrogen, renewable energy and energy storage
systems. Chiyoda is also aiming for new orders in thepharmaceutical/lifesciencebusiness.

InJapan,Chiyoda has negotiated high value business inmedicinal

chemicalmanufacturing

andbio-pharmaceuticals.
In the Medium-Term Management Plan (updated May2

Chiyoda Global Headquarters
Minato Mirai Grand Central Tower
4-6-2, Minatomirai, Nishi-ku,
Yokohama 220-8765, Japanwww.chiyodacorp.com/enQuestion

Answer2021), Chiyoda has targeted a 50/50 EPC earnings
ratio for existing fields and new businesses.

8Ichthys LNG, Australia
Arbitration with subcontractors is In 1Q, Chiyoda recognized appropriate costs andstill ongoing. Does Chiyoda expect lossesbyre-evaluating

disputes,

includingtheprocess

andthe same losses if the outcome arbitration with subcontractors.
goes against Chiyoda?

Chiyodaassesses

thearbitration

evaluates the risks. Arbitration progress will be
disclosed and reflected in the financial results ifrequired.
9Risk sharing with clients
Some overseas contractors revise Chiyoda welcomes discussions with clients regarding
their contracts from lump-sum to the sharing of risk and endeavors to agree risk-sharing
reimbursable.
conduct

Doesinternal

Chiyoda with clients according to the status of each project anddiscussions the client’s stand point.

regarding this?

-EndPlease address inquiries to:
IR, PR & CSR Section, Corporate Services Department: Tel. +81-45-225-7734

Note: Some additions and corrections have been made to simplify the content for readers. Any
projections included in these materials are based solely on information available at the time thispresentation was prepared. It is possible that actual results may vary significantly from the projections
due to a number of risk factors such as economic conditions. The results projected here should not
be construed in any way as being guaranteed by the Company. Investors are recommended not todepend solely on these projections for making investment decisions.

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