Translation

August 7, 2008

Consolidated Financial Results
for the First Quarter of the Fiscal Year Ending March 31, 2009
Company name: CHIYODA CORPORATION
Listing:First Section of the Tokyo Stock Exchange
Stock code:
6366
URL:
http://www.chiyoda-corp.com/
Representative: Takashi Kubota, President & CEO
Inquiries:
Shinji Kusunoki, General Manager, Accounting Department
TEL: +81-45-506-9410 (from overseas)
Scheduled date to file Quarterly Report: August 12, 2008
(Millions of yen with fractional amounts discarded, unless otherwise noted)

1.

Consolidated performance for the first quarter of the fiscal year ending March31, 2009 (from April 1, 2008 to June 30, 2008)(1) Consolidated operating results (cumulative)
Net sales

Operating income

Millions of yen
1Q ended June 30,
2008
1Q ended June 30,
2007

Ordinary income

Net income% Millions of yen% Millions of yen% Millions of yen%

114,347-

1,353-

3,274-

1,785-

140,371

54.0

7,266

9.2

10,685

38.4

5,341

21.4

Net income per share

1Q ended June 30,
2008
1Q ended June 30,
2007(Percentages indicate year-on-year changes.)

Fully diluted net
income per share

YenYen7.50

7.5027.78

27.77(2) Consolidated financial position
Total assets

Net assets

Equity ratio

Net assets per share

Millions of yen

Millions of yen%

Yen

As of June 30, 2008

422,196

145,03534.3

557.72As of March 31, 2008

378,819

81,63721.4

422.44

Reference: Equity

As of June 30, 2008: 144,643 million yen–1–

As of March 31, 2008: 81,226 million yen

2. Cash dividends
Cash dividends per share
Record date

First quarter

Second quarter

Third quarter

Fiscal year-endYenYenYenYen
Fiscal year ended
10.00
March 31, 2008
Fiscal year ending–––
March 31, 2009
Fiscal year ending
March 31, 2009–
11.00
(Forecast)
Note: Revision of the forecast in the first quarter of the fiscal year ending March 31, 2009: None

3.

AnnualYen
10.00–11.00Consolidated earnings forecasts for the fiscal year ending March 31, 2009
(from April 1, 2008 to March 31, 2009)(Percentages indicate year-on-year changes.)
Net sales

Operating income Ordinary income

Net income pershare

Net income

Millions ofyen%Millions ofyen%Millions ofyen%Millions ofyen%

Yen

2Q ending
September 30, 2008
(cumulative)

230,000-

5,000-7,000-

4,000-

16.08

Fiscal year ending
March 31, 2009

460,000 (23.8)

16,000 (16.3)

9,500(1.5)

37.40

12,500 41.4

Note: Revision of the forecasts in the first quarter of the fiscal year ending March 31, 2009: None

4.

Others(1) Significant changes in subsidiaries during the period (changes in specified subsidiaries
resulting in the change in scope of consolidation): None
(2) Application of simplified accounting as well as specific accounting for preparing thequarterly consolidated financial statements: None
(3) Changes in accounting policies, procedures, and methods of presentation for preparing thequarterly consolidated financial statements (changes described in the section of “Changes
in significant matters forming the basis of preparing the quarterly consolidated financialstatements”)
a. Changes due to revisions to accounting standards: Yes
b. Changes due to other reasons: None–2–

(4)Number of issued shares (common stock)a. Total number of issued shares at the end of the period (including treasury stock)
As of June 30, 2008
260,262,529 shares
As of March 31, 2008
193,182,529 sharesb. Number of treasury stock at the end of the period
As of June 30, 2008
913,287 shares
As of March 31, 2008
903,520 sharesc. Average number of shares during the period (cumulative from the beginning of thefiscal year)
For the first quarter of the fiscal year ending March 31, 2009 237,976,425 shares
For the first quarter of the fiscal year ended March 31, 2008 192,269,960 shares* Proper use of earnings forecasts, and other special directions
1. The forward-looking statements, including earnings forecasts, contained in thesematerials are based on information currently available to the Company and on certain
assumptions deemed to be reasonable. Actual business and other results may differ
substantially due to a number of factors.
2. Commencing with the current fiscal year, the “Accounting Standard for Quarterly
Financial Reporting” (ASBJ [Accounting Standards Board of Japan] Statement No. 12)
and the “Guidance on Accounting Standard for Quarterly Financial Reporting” (ASBJ
Guidance No. 14) are applied. Also, quarterly consolidated financial statements areprepared in accordance with the “Regulation for Quarterly Consolidated Financial–3–Qualitative Information and Financial Statements(1) Qualitative Information on Consolidated Results of Operations
In overseas markets, plans for the construction of new plants around the world are being driven
by growth in global energy demand. Capital investment by oil, power and gas companies in thedomestic market has also been lively.
Meanwhile, amid a serious worldwide shortage of skilled construction workers, Chiyoda
continues to implement a high level of risk management including measures to counter risingcosts and is making concerted efforts to execute ongoing projects properly including threelarge-scale liquefied natural gas (LNG) plants in Qatar.
New contracts on a consolidated basis were 46,273 million yen, a 28.4% decrease comparedwith the same period of the previous year, and the backlog of contracts decreased 38.1% to620,382 million yen. Net sales decreased 18.5% to 114,347 million yen. Operating income
decreased 81.4% to 1,353 million yen, ordinary income decreased 69.4% to 3,274 million yen
and net income decreased 66.6% to 1,785 million yen.

Results by Business Segment
The following is a summary of the consolidated operating results in the business segment.
Natural Gas and Electric Power
Overseas, national companies in natural gas producing countries and energy majors continued
to plan investments in the gas value chain against a backdrop of growth in global demand fornatural gas. Amid these conditions, Chiyoda has been focusing on acquiring contracts fortechnical study and Front-End Engineering and Design (FEED) in order to secure the future
EPC contracts for large-scale projects. In the first quarter, Chiyoda was awarded the FEED andexecution planning work for Barzan onshore gas project in Qatar. Chiyoda continued to use
every effort to ensure steady execution of ongoing projects, mainly in Qatar.
In domestic energy industries, gas related businesses are growing as the clean energy sources
are looking to the substitute higher price crude oil. As a result, new and/or expansion of largescale LNG-receiving terminals are being planned, some of which involve Chiyoda as the mostexperienced contractor in Japan.
Petroleum, Petrochemicals and Gas Chemicals
Investment planning in the petroleum sector for chemical-refinery integration is aiming forhigher value-added investments and, to increase supply capacity, plans for new large-scalerefineries that utilize heavier crude oil are very active. Due to the hike in the price of oil products
as a feedstock, investment in petrochemical complexes seems to be losing its attraction andinvestors are strategically shifting to more value-added product fields such as functional
chemicals, electronics materials and life-science related products. Chiyoda has, in addition,
been seeking business opportunities to service the requirements for energy saving solutions,soundness checks for aging facilities and strategic maintenance programs.
General Chemicals and Industrial Machinery
In the general chemicals and industrial machinery sectors, in addition to the existing LCD
television materials, capital investment increased in solar battery components, reflecting
national environmental policies. Investment relating to the recovery of rare metals alsocontinued.
In the pharmaceuticals sector, group companies steadily acquired contracts due to anincreasing drive to invest in new and/or expansion of plants and laboratories in order to adapt
to recent changes in the business environment.

–4–Environment and Others
Chiyoda continued to conduct marketing and licensing activities in Japan and overseas for theChiyoda-developed and owned CT-121 flue gas desulfurization process technology. In Europe,
where environmental regulations are most stringent, Chiyoda succeeded in licensing its
technology for use in a major power station in Denmark.

(2) Qualitative Information on Consolidated Financial Condition
AssetsCash and deposits and certificates of deposit (short-term investment securities) increased
63,249 million yen due to the payments received in a third-party stock allocation to Mitsubishi
Corporation. Current assets increased 43,450 million yen due to factors including a decrease of
16,643 million yen in jointly controlled assets of joint venture resulting from increased payments
to vendors and subcontractors due to progress of large-scale joint venture projects. As a result,
total assets increased 43,376 million yen compared with the end of the previous fiscal year.
Liabilities
Total liabilities decreased 20,021 million yen. This was mainly due to a 9,130 million yen
decrease in the balance of advances received on uncompleted construction contracts, a 10,175
million yen decrease in notes payable, accounts payable for construction contracts.
Nets Assets
Compared with the end of the previous fiscal year, shareholders’ equity increased 60,623 yen
million due to an increase in capital stock of 30,454 million yen and an increase in capitalsurplus of 30,387 million yen resulting from the third-party stock allocation. As a result, net
assets totaled 145,035 million yen. The shareholders’ equity ratio as of June 30, 2008 was 34.3
percent, an increase of 12.9 points compared with the end of the previous fiscal year.

(3) Qualitative Information on Forecast of Consolidated Results
Chiyoda is making no revision at this time to its interim and full-year consolidated financial
results for the fiscal year ending March 31, 2009, announced on May 14, 2008. Forecasts
continue to assume an exchange rate of 100 yen to the U.S. dollar.

–5–5.

Consolidated quarterly financial statements(1) Consolidated balance sheets (1/2)(Millions of yen)
As of June 30, 2008

As of March 31, 2008
(Summary)

Cash and deposits
Notes receivable, accounts receivablefrom completed construction contracts

45,89160,48430,296

36,368

Short-term investment securities
Costs on uncompleted construction
contracts

88,341

10,50023,653

16,801

Jointly controlled assets of joint venture

176,040

192,683

Other

17,43921,374(6)(5)

381,657

338,207

Buildings and structures, net

8,260

8,354

Land

11,92911,935

Other, net

2,752

2,782

Total property, plant and equipment

22,942

23,072

4,703

4,714

Investment securities

10,066

9,302

Other

3,316

4,012

Allowance for doubtful accounts

(491)

(490)

12,892

12,82440,53840,612

422,196

378,819

AssetsCurrent assets

Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment

Intangible assets
Investments and other assets

Total investments and other assets
Total noncurrent assets
Total assets–6–Consolidated balance sheets (2/2)(Millions of yen)
As of June 30, 2008

As of March 31, 2008
(Summary)

Notes payable, accounts payable forconstruction contracts

63,861

74,037

Current portion of long-term loans payable

10,03910,039469

1,408

175,891

185,022

2,424

2,098

Provision for loss on construction contracts

4,261

4,044

Provision for bonuses

1,966

4,196

Other

16,123

13,137

Total current liabilities

275,039

293,986

22

22

1,715

2,226

383

947

2,121

3,196

277,160

297,182

Capital stock

43,38912,934

Capital surplus

37,105

6,718

Retained earnings

65,017

65,155

Treasury stock(1,069)(1,059)144,442

83,748Valuation difference on available-for-salesecurities

50

(847)

Deferred gains or losses on hedges

919(1,667)

Foreign currency translation adjustment

(769)

(6)

Total valuation and translation adjustments

200(2,521)

Minority interests

392

410

Total net assets

145,035

81,637422,196

378,819

Liabilities
Current liabilities

Income taxes payable
Advances received on uncompleted
construction contracts
Provision for warranties for completed
construction

Noncurrent liabilities
Long-term loans payable
Provision
Other
Total noncurrent liabilities
Total liabilities
Net assets
Shareholders' equity

Total shareholders' equity
Valuation and translation adjustments

Total liabilities and net assets–7–

(2) Consolidated statement of income(Millions of yen)First quarter ended June 30, 2008
(From April 1, 2008to June 30, 2008)
Net sales of completed construction
contracts
Cost of sales of completed construction
contracts
Gross profit on completed construction
contracts
Selling, general and administrative
expenses

114,347
110,221
4,126
2,773

Operating income

1,353

Non-operating income
Interest income

1,894

Dividends income

57

Foreign exchange gains

271

Real estate rent

64

Other

58

Total non-operating income

2,345

Non-operating expenses
Interest expenses

85

Equity in losses of affiliates

4

Stock issuance cost

271

Rent expenses on real estates

42

Other20

Total non-operating expenses424

Ordinary income

3,274

Income before income taxes and minority
interests

3,274

Income taxes-current

497

Income taxes-deferred

988

Total income taxes

1,486

Minority interests in income

3

Net income

1,785–8–6.

Production, Contracts and Sales (Consolidated)
Millions of Yen
1Q FY2008
Apr. 1, 2008 —Jun. 30, 2008
Net salesAmt%

New contracts
Amt%

Backlog of contracts
Amt%

Business Segment
Engineering
LNG plants..................................
Gas and power utilities ...............
Gas chemicals ............................
Petroleum and petrochemicals ...
General chemicals........................
Industrial machinery .....................
Environment and other ...............
Total Engineering

10,685
5,446
66
10,591
16,016567
1,314
44,686

23.1
11.8
0.2
22.9
34.6
1.2
2.8
96.6

63,941
31,297
12
10,714
4,147
1,134
1,540
112,788

55.9
27.4
0.0
9.4
3.6
1.0
1.3
98.6

249,085
206,010
1,126
106,927
32,0136,284
18,608620,057

40.1
33.2
0.2
17.2
5.2
1.0
3.0
99.9

Other...........................................

1,586

3.4

1,558

1.4

324

0.1

Domestic.....................................
Overseas ....................................
Total ...........................................

29,95916,313
46,273

64.7
35.3
100.0

16,813
97,534
114,347

14.7
85.3
100.0

203,253
417,129
620,382

32.8
67.2
100.0

Millions of Yen
1Q FY2007
Apr. 1, 2007 —Jun. 30, 2007
RevenuesAmt%

New contracts
Amt%

Backlog of contracts
Amt%

Business Segment
Engineering
LNG plants..................................
Gas and power utilities ...............
Gas chemicals ............................
Petroleum and petrochemicals ...
General chemicals........................
Industrial machinery .....................
Environment and other ...............
Total Engineering

10,774
16,79316
22,513
9,163
1,325
2,671
63,259

16.7
26.0
0.0
34.8
14.2
2.0
4.1
97.8

101,966
12,821
148
15,963
4,393
2,454
1,231
138,980

72.6
9.1
0.1
11.4
3.1
1.8
0.9
99.0

576,776
308,779
1,583
79,68022,5394,284
8,736
1,002,381

57.5
30.8
0.2
8.0
2.2
0.4
0.9
100.0

Other...........................................

1,390

2.2

1,390

1.0

—

—

Domestic.....................................
Overseas ....................................
Total ...........................................

33,86330,78764,65052.4
47.6
100.0

25,066
115,304
140,371

17.9
82.1
100.0

165,139
964,604
1,129,744

15.4
84.6
100.0

Note: The backlog of contracts for the three months ended June 30, 2008 includes a decrease due tochanges in construction contracts acquired in prior fiscal years, an increase due to adjustments in
new contract amounts, and an increase due to foreign exchange translation adjustments.

–9–Reference

Summary Consolidated Statement of Incomefor the First Quarter of the Previous Fiscal Year
(Millions of yen)First quarter ended June 30, 2007
(From April 1, 2007
to June 30, 2007)
Net sales of completed construction
contracts
Cost of sales of completed construction
contracts
Gross profit on completed construction
contracts
Selling, general and administrative
expenses

140,371
130,311
10,0592,793

Operating income

7,266

Non-operating income
Interest income

3,212

Dividends income
Equity in earnings of associatedCompanies
Other

44
53
291

Total non-operating income

3,601

Non-operating expenses
Interest expenses

94

Other

88

Total non-operating expenses

182

Ordinary income

10,685

Income before income taxes and minority
interests

10,685

Total tax

5,340

Minority interests in income2

Net income

5,341– 10 –