Chiyoda Corporation (6366)
Consolidated Financial Results for the three months Ended June 30, 2021

Abridged Translation:
The report is not audited and this translation is an abridged version prepared based on the statutory format in Japan for reference
purpose only. If there is any discrepancy between this translation and the original Japanese version, the Japanese shall prevail.

Consolidated Financial Results
for the Three Months Ended June 30, 2021
August 2, 2021
Company name:
Listing:
Stock code:
URL:
Representative:
Inquiries:TEL:

CHIYODA CORPORATION
Second Section of the Tokyo Stock Exchange
6366
http://www.chiyodacorp.com/
Masaji Santo, President& COO
Masaru Akiyama, GM, Accounting Department+81-45-225-7281

Scheduled date to file Quarterly Report: August 13, 2021
Preparation of Quarterly Supplementary Explanation Material: Yes
Quarterly Financial Results Presentation Held: Yes (for Analysts and Institutional Investors)(Millions of yen with fractional amounts discarded, unless otherwise noted)

1. Consolidated performance for three months ended June 30, 2021
(1) Consolidated operating results(Percentages indicate year-on-year changes)

Net sales

Operating income

Millions of yen

For the three months
ended June 30, 2021
For the three months
ended June 30, 2020
Note: Comprehensive Income:%80,479Millions of yen%

Profit attributable toowners of parent

Ordinary income
Millions of yen%

Millions of yen(17,211)

-

4,475

96.8

22.8

3,506 (33.8)

3,537 (27.0)

65,537 (24.2)

5,294 (41.7)

4,843

the three months ended June 30, 2021:
the three months ended June 30, 2020:

31.0

%

(20,324) million yen / (－)%
4,689 million yen / 5.0%

Net income Fully diluted net
per share income per share
For the three months
ended June 30, 2021
For the three months
ended June 30, 2020

Yen

Yen

(68.49)

-

15.26

4.59

(2) Consolidated financial position
Total assets

Net assets

Millions of yen

As of June 30, 2021
As of March 31, 2021
Reference: Equity

Equity ratio

Millions of yen

315,388329,583
as of June 30, 2021:
as of March 31, 2021:%

12,78736,747
12,445 million yen
36,399 million yen

3.9
11.0

2. Cash dividends
Cash dividends per share
Record date

First quarter

Second quarter

Third quarter

Fiscal year-end

Annual

Yen

Yen

Yen

Yen

Yen

Fiscal year ended
March 31, 2021

－

－

－

0.00

0.00

Fiscal year ending
March 31, 2022

－
－

－

－

－

Fiscal year ending
March 31, 2022 (Forecast)Chiyoda Corporation (6366)
Consolidated Financial Results for the three months Ended June 30, 2021

3. Consolidated earnings forecasts for the fiscal year ending March 31, 2022
(from April 1, 2021 to March 31, 2022)(Percentages indicate year-on-year changes)

Net sales
Millions of yen

Operating income%

Millions of yen%

Profit attributable toowners of parent

Ordinary income

Net income
per share

Millions of yen%

Millions of yen

%

Yen

9,000

6.4

(14,000)-(62.17)

Fiscal year ending
300,000 (4.9)
11,000 56.8
March 31, 2022
Note: Revision to the latest forecast announcement 2021: None

4. Others(1) Changes in Significant Subsidiaries during the Period(Changes in specified subsidiaries accompanying changes in the scope of consolidation): None(2)

Adoption of Specified Accounting Methods for the Preparationof Quarterly Consolidated Financial Statements: None

(3) Changes in Accounting Policies and Accounting Estimates / Restatements
a. Changes in accounting policies due to revisions of accounting standards, etc.:
b. Changes in accounting policies other than a. above:c. Changes in accounting estimates:
d. Restatements:

Yes
None
None
None

(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, 2021
260,324,529 shares
As of March 31, 2021
260,324,529 sharesb. Number of treasury stock at the end of the period
As of June 30, 2021
1,357,746 shares
As of March 31, 2021
1,357,723 sharesc. Average number of shares during the period
For the three months ended June 30, 2021
258,966,783 shares
For the three months ended June 30, 2020
258,966,972 shares*Presentation of Implementation Status of Quarterly Review Procedure
The review procedure of quarterly financial statements based on the Financial Instruments and Exchange Law has not been
completed at the time of the disclosure of these Consolidated Financial Statements.

*Proper use of earnings forecasts, and other special directions
The forward-looking statements, including earnings forecasts, contained in these materials 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.

Dividend Status of Class A SharesClass A Share
Cash dividends per share
Record date
First quarter Second quarter Third quarter Fiscal year-end
Yen
Yen
Yen
Yen
Fiscal year ended
March 31, 2021
Fiscal year ending
March 31, 2022
Fiscal year ending
March 31, 2022 (Forecast)

-

-

-

-

-

Annual
Yen

20.78

20.78

-

-

Chiyoda Corporation (6366)
Consolidated Financial Results for the three months Ended June 30, 2021

Table of Contents for the appendices

1.

2.

3.

Qualitative Information Related to Consolidated Performance ................................................... 2(1)

Qualitative Information on Business Performance .............................................................. 2(2)

Financial Information on Business Performance ................................................................. 4(3)

Outlook ............................................................................................................................... 4

Consolidated quarterly financial statements............................................................................... 5(1)

Consolidated balance sheets.............................................................................................. 5(2)

Consolidated statement of income and comprehensive income........................................... 7

Production, Contracts and Sales ................................................................................................ 9

4. Others ...................................................................................................................................... 10

1

Chiyoda Corporation (6366)
Consolidated Financial Results for the three months Ended June 30, 2021

1. Qualitative Information Related to Consolidated Performance(1) Qualitative Information on Business Performance
Although there were signs in the first quarter of the fiscal year that the global economy is beginning torecover from the COVID-19 pandemic, the outlook for the future remains uncertain.
Under such circumstances, the Group has prioritized the health and safety of our employees and otherstakeholders, and we are executing ongoing projects while promptly taking necessary actions in cooperation
with our clients.
The business environment in which we operate is undergoing significant changes. These include theaccelerating transition to decarbonization/hydrogen energy, the increasingly widespread adoption of lowcarbon and renewable energy, and the innovative evolution of digital technologies. In anticipation of thesechanges, the Group has made developing areas that will pave the way to our future a high business priority.
In May 2021 we updated our Medium-term Management Plan (MTMP): “Chiyoda’s Revitalization Plan –Initiatives for Revitalization and the Future”. Under this plan we will reinvigorate the existing businesses thatare bolstering our earnings for now, while we also explore and unearth new businesses.
While securing a steady stream of earnings from our existing businesses, the Group aims to strengthen new
business areas such as renewable energy, hydrogen, carbon cycling, energy optimization, andpharmaceutical and life sciences. By leveraging digital transformation to enhance the business model added
value, our aim is to proceed with the transformation of our business portfolio, ensure a stable income base,achieve sustainable growth, and further enhance enterprise value.
Information about the engineering businesses which are reportable segments is presented below.
 Energy
LNG / Gas
【Overseas】
Chiyoda is executing the engineering, procurement and construction (EPC) phase of LNG plants in Qatar,
the USA, Indonesia and Nigeria. In Qatar, Chiyoda has begun work on the EPC phase of the North Field
Expansion (NFE) Project, which is the expansion of four LNG trains with capacity of 8 million metric tons
per annum. In the United States, the Golden Pass LNG project is in the EPC phase. In Nigeria, we areproviding review and other technical support to our partner which is performing the engineering for an LNG
project. Otherwise in gas businesses, a group company in Qatar is engaged in a number of renovation andrepair projects at LNG/gas processing plants.
【Japan】
EPC phase work is currently underway to reinforce, modify, and repair existing LNG terminals that werebuilt by Chiyoda, and to newly install and add earthquake and tsunami reinforcement to gas supply facilities
for thermal power plants.

Refinery/Petrochemical/Metal
Overseas, Chiyoda is executing the EPC phase of an ethylene plant in the USA on the Gulf of Mexico andthe EPC + commissioning (EPCC) phase for a residue fluid catalytic cracking (RFCC) plant in Malaysia.
In Japan, for oil companies, Chiyoda is retrofitting existing facilities to improve the competitiveness ofrefineries, upgrade equipment, and meet restrictions on the sulfur content of bunker fuel for ships. We arealso examining ways to comply with the Basic Act for National Resilience, including seismic reinforcement.
In metal resources, we are executing the EPC phase of a polypropylene polymerization catalyst
manufacturing plant. In Indonesia, we are seeking to win the order for EPC work for a copper smelter project.

2

Chiyoda Corporation (6366)
Consolidated Financial Results for the three months Ended June 30, 2021

We will continue to work to grow orders in the field of metal resources, where demand is strong.
 Environment
Pharmaceutical/Biochemistry/General Chemistry
In the area of pharmaceuticals and biochemistry, EPC phase work is currently underway for an expansion
to a recombinant protein vaccine production facility for SHIONOGI & CO., Ltd. and the addition of ancillaryfacilities. We have completed the basic engineering work for a biopharmaceutical substance manufacturing
plant. Aside from EPC work, with our partner Shionogi Pharma Co., Ltd. we are examining the commercial
potential of a contract manufacturing and development business using continuous production technologies
for drug APIs and intermediates.
In the general chemistry area, to make carbon recycling technology a reality, as part of a collaboration
among industry, government, and academia, we are working on the research and development to capture
CO2 and turn it into a raw material, and to produce para-Xylene (PX) by using CO2 as a raw material. We
are also conducting the basic engineering work for a client’s waste plastic recycling business.
We aim to strengthen our capabilities in the field of indoor vertical farming through a business alliance withMIRAI Co., Ltd., a leading manufacturer and operator in this area, and we are working to promote thedevelopment of commercial facilities.
Environment/New Energy/Infrastructure
In the environmental protection field, as India tightens its environmental regulations, flue gas desulfurization(FGD) equipment is being deployed at coal-fired power plants, and Chiyoda’s Thoroughbred 121 (CT-121)
FGD process has been used in a number of plants.
In Japan, we are providing operational support for a demonstration project to separate, recover, and store
CO2 (carbon capture and storage, or CCS) from thermal power plant fuel gas and carrying out a partial
remodeling. We are also executing the EPC phase for flue gas desulfurization equipment at a coal-fired
power plant.
In the field of carbon capture and utilization (CCU), under an agreement with Mitsubishi Corp. and theAmerican company Blue Planet Systems Corp., we are pursuing the development and commercialization oftechnology to manufacture the aggregate that serves as the raw material for concrete using the CO2 inexhaust gas.
In our energy optimization business, in June 2021 we signed a memorandum of understanding with the
Belgian company Qpinch, which has chemical heat pump technology that allows waste heat to be usedeffectively. Through this partnership we will develop a business that will deploy this technology to further
improve energy conservation and reduce CO2 emissions at industrial facilities.
In the new energy area, Chiyoda is executing the EPC phase for the construction of one of the world’s
largest storage battery systems, a number of photovoltaic (mega solar) facilities, and one of Japan’s largest
biomass power plants that use wood pellets as fuel. We are also considering entering the field of offshore
wind farms, which is expected to become a sizeable market in the future.
With respect to our efforts in the area of achieving carbon neutrality, as far as hydrogen business isconcerned, since completing an international hydrogen supply chain demonstration project in December
2020, we have been advancing our hydrogen chain solution business by participating in a cross-industry
regional hydrogen deployment project with the aim of achieving semi or full commercialization in the latter
half of the decade. As part of this effort, we are participating in the Hydrogen Utilization Study Group in
Chubu, which is studying the feasibility of large-scale hydrogen utilization, with the aim of expanding demandfor hydrogen in the region and building a consistent supply chain. Our technology is highly regarded in
Singapore for its safety, and along with five local companies, Chiyoda and Mitsubishi Corp. are promoting
the continued study of the use and commercialization of hydrogen imports using our technology.
 Digital Technology

3

Chiyoda Corporation (6366)
Consolidated Financial Results for the three months Ended June 30, 2021

Chiyoda is pursuing three strategies for our digital transformation:1) Launching innovative digital products, 2) Promoting digital EPC, and 3) Innovative work processes.
1) Launching innovative digital products: We have combined our engineering expertise with digital AI
technology to develop advanced digital products that maximize the value of our clients’ plant assets.
These products are offered under the EFEXISTM brand name and are being deployed at plants in Japanand overseas. We have also signed a memorandum of understanding with Cognite and Mitsubishi
Corporation to provide and collaborate on a digital platform solution for industrial facilities and plants
and we have begun a proof of concept (PoC) project for an oil refinery in Japan. Going forward, we plan
to offer this solution to industrial facilities and plants inside and outside of Japan.
2) Promoting digital EPC: To evolve our EPC execution management capabilities, we are sequentially
implementing the systems needed to apply Advanced Work Packaging (AWP) at projects that areunderway. Additionally, we are marketing a revolutionary system which has cut the space design
processes that are part of basic plant engineering work by 80%, making it possible to create 3D models
five times faster than before, to plant owners and EPC contractors around the world throughPlantStream Inc., a joint venture between Chiyoda and Arent Inc.
3) Innovative work processes: Through TIS Chiyoda Systems, Inc., a joint venture formed with IT giant TIS
Inc., we are strengthening the Group’s IT operations. We are also leveraging digital technologies tofurther develop the remote work environment, deploying robotic process automation to improveadministrative efficiency, and implementing electronic authentication and electronic contracts.

(2) Financial Information on Business PerformanceThis section is not translated.

(3) Outlook
For the consolidated financial forecasts for the fiscal year ending March 31, 2022, please refer to ‘Notice ofExtraordinary Losses Resulting in Revisions of the Forecast of Consolidated Results’ dated July 30, 2021.

4

Chiyoda Corporation (6366)
Consolidated Financial Results for the three months Ended June 30, 2021

2. Consolidated quarterly financial statements(1) Consolidated balance sheets(Millions of yen)
As of March 31, 2021
AssetsCurrent assets
Cash and deposits
Notes receivable, accounts
receivable from completed
construction contracts
Notes receivable, accounts
receivable from completed
construction contracts, and contract
assetsCosts on construction contracts inprogress
Accounts receivable - other
Jointly controlled assets of joint
ventureOther
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Land
Other, net
Total property, plant andequipment
Intangible assets
Investments and other assets
Investment securities
Retirement benefit asset
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and otherassetsTotal non-current assets
Total assets

5

As of June 30, 2021

106,988

78,07648,527－－41,358

8,767

13,036

77,261

76,87556,84573,396

8,906(1,405)
305,891

10,797(1,414)292,127

5,255
4,853
1,317

5,106
4,853
1,149

11,426

11,109

4,371

4,149

5,701
566
394
1,395
(164)

5,935
441
421
1,228
(24)

7,894

8,002

23,692
329,583

23,261
315,388

Chiyoda Corporation (6366)
Consolidated Financial Results for the three months Ended June 30, 2021

(Millions of yen)
As of March 31, 2021
Liabilities
Current liabilities
Notes payable, accounts payable forconstruction contracts
Current portion of long-termborrowings
Accounts payable - other
Income taxes payable
Advances received on construction
contracts in progress
Contract liabilities
Provision for warranties forcompleted construction
Provision for loss on construction
contracts
Provision for bonuses
Provision for business restructuring
Other
Total current liabilities
Non-current liabilities
Long-term borrowings
Provisions
Retirement benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive
incomeValuation difference on available-forsale securities
Deferred gains or losses on hedges
Foreign currency translation
adjustment
Remeasurements of defined benefit
plans
Total accumulated othercomprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

6

As of June 30, 2021

115,187

91,797

747

716

4,200
638

29,965
170

74,784－－86,808823

2,893

34,44336,087

3,834
17
9,978
244,657

1,446
18
4,484
254,388

45,000
239
761
2,178
48,178292,836

45,000
239
791
2,181
48,212
302,601

15,014142
15,708(1,435)29,43015,014142(5,138)(1,435)
8,583

203

172

30

(20)

5,300

2,315

1,434

1,394

6,969

3,861

348
36,747
329,583341
12,787315,388

Chiyoda Corporation (6366)
Consolidated Financial Results for the three months Ended June 30, 2021

(2) Consolidated statement of income and comprehensive income(Consolidated statement of income)(Millions of yen)Three months ended
June 30, 2020Three months ended
June 30, 2021

65,53780,47957,25774,289

8,280

6,189

2,985

2,682

5,294

3,506

424
14

139
47

91

－

－
60
591

109
43
339

205

215

－

17

779
56
1,041
4,843

－
76
309
3,537

－

20,374

－
4,843
314
57
372
4,471

20,374(16,836)354
25
380(17,217)

(3)

(6)

4,475

(17,211)Net sales of completed construction
contracts
Cost of sales of completed construction
contracts
Gross profit on completed construction
contracts
Selling, general and administrative
expenses
Operating profit
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted forusing equity method
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Share of loss of entities accounted forusing equity method
Foreign exchange losses
Other
Total non-operating expenses
Ordinary profit
Extraordinary losses
Project related loss based onnegotiations with customers
Total extraordinary losses
Profit (loss) before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Profit (loss)
Loss attributable to non-controllinginterests
Profit (loss) attributable to owners of parent

7

Chiyoda Corporation (6366)
Consolidated Financial Results for the three months Ended June 30, 2021

(Consolidated statement of comprehensive
income)(Millions of yen)Three months ended
June 30, 2020Three months ended
June 30, 2021

4,471

(17,217)

53

(30)

(0)
293

(51)
(2,985)

(49)

(40)

(79)

0

217
4,689

(3,107)(20,324)

4,704(20,318)

(15)

(6)

Profit (loss)
Other comprehensive income
Valuation difference on available-forsale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit
plans, net of tax
Share of other comprehensive incomeof entities accounted for using equity
methodTotal other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable toowners of parent
Comprehensive income attributable tonon-controlling interests

8

Chiyoda Corporation (6366)
Consolidated Financial Results for the three months Ended June 30, 2021

3.

Production, Contracts and Sales(Millions of yen)

Apr. 1, 2020－Jun. 30, 2020

Apr. 1, 2021－Jun. 30, 2021

New
contracts(ratio)Net sales(ratio)Backlog ofcontracts(ratio)New
contracts(ratio)Net sales(ratio)Backlog ofcontracts(ratio)Engineering

22,918(99.2%)

65,361(99.7%)

776,004(100.0%)21,192(99.2%)

80,315(99.8%)

1,072,981(100.0%)LNG Plant

6,055(26.2%)

19,045(29.0%)

434,630(56.0%)

4,962(23.2%)

47,504(59.0%)

919,635(85.7%)

Gas
Development/Processing/Receiving

1,490(6.4%)

3,004(4.6%)

12,633(1.6%)

205(1.0%)

1,068(1.3%)

4,972(0.4%)

Refinery/Petrochemical/Metal

9,853(42.7%)

30,739(46.9%)

217,265(28.0%)

10,597(49.6%)

17,644(21.9%)

53,490(5.0%)

Pharmaceutical/Biochemistry/
Chemical

3,182(13.8%)

4,826(7.4%)

18,379(2.4%)

3,400(15.9%)

7,358(9.2%)

39,303
(3.7%)

Environment/New
Energy/Infrastructure

1,257(5.4%)

7,008(10.7%)

90,725(11.7%)

1,326(6.2%)

5,952(7.4%)

53,460(5.0%)

Others

1,079(4.7%)

737(1.1%)

2,370(0.3%)

698(3.3%)

786(1.0%)

2,118(0.2%)

176(0.8%)

176(0.3%)-)

163(0.2%)-(

163(0.8%)(

Total

23,095(100.0%)65,537(100.0%)776,004(100.0%)21,356(100.0%)80,479(100.0%)1,072,981(100.0%)

Domestic

16,258(70.4%)

28,412(43.4%)

165,473(21.3%)

15,647(73.3%)

23,129(28.7%)

126,753(11.8%)

Other Business

-)

6,836
5,708
57,349946,228
37,124
610,531(56.6%)(78.7%)(29.6%)(26.7%)(71.3%)(88.2%)
Note1: The backlog of contracts for the three months include an increase / decrease due to changes inconstruction contracts acquired in prior fiscal years, and an increase / decrease due to foreignexchange translation adjustments.
Note2: The total amount of the above table does not include consumption tax.
Overseas9Chiyoda Corporation (6366)
Consolidated Financial Results for the three months Ended June 30, 2021

4. Others
Ichthys LNG ProjectIn 2012, JKC, a joint venture of the Group, JGC Holdings Corp. (JGC), and an American company,
KBR, Inc., was awarded the contract from Ichthys LNG Pty Ltd (the Customer) to perform theengineering, procurement, and construction work for LNG facilities (the Project). This plant has been
already in commercial operation and shipment of LNG started in October, 2018.
However, as described below, there are matters between the Customer and some subcontractors thatare currently subject to discussion and arbitration, and if an outcome or ruling is unfavorable to JKC, it
could affect the Group’s business results by making some of the construction receivables or advancedmonies uncollectible.
① Disputes with client
Some of the matters concerning the adjustment to the contract amount for costs arising from anincrease in the scope of work and the cost-reimbursable scope are the subject of ongoing discussion
with the Client, and others are the subject of arbitration.
With respect to the abovementioned reimbursable amounts, as a provisional measure until anagreement could be reached, in December 2016 the Client signed a Funding Deed stating that in
exchange for providing funding to JKC, JKC would not halt work on the project, and it provided thefunding. JKC subsequently filed for arbitration seeking a ruling that the additional expenses were
reimbursable expenses that under the terms of the contract were the responsibility of the Client, andrecognizing that the monies paid under the Funding Deed represented formal payment of the expenses.
However, in December 2020 the arbitrator made a partial ruling to the effect that separate hearings
would be needed to determine whether the additional expenses were reimbursable expenses under
the contract, and that at the present time it was not possible to certify that they were reimbursable
expenses. After this partial ruling, the Client demanded that JKC refund the entire amount of fundingthat had been provided under the Funding Deed, and in mid-January 2021 it submitted a payment
request to JKC's parent companies, Chiyoda, KBR, and JGC Holdings, based on the parent company
guarantees that had been made by the companies. JKC has asked the Client to follow the
reimbursement procedure that is specified in the Funding Deed for the funding provided. In April 2021,
the Customer filed a lawsuit against JGC seeking subrogation by way of performance of the parent
company guarantee deed. In response, JGC gave notice of their request for Chiyoda to act as assisting
intervener regarding the lawsuit. Chiyoda may jointly bear the consequences resulting from the lawsuitin accordance with the Joint Venture Agreement with JGC and KBR Inc. However, under thecircumstances of the COVID-19 pandemic where the arbitration is anticipated to be further prolonged,
Chiyoda has re-evaluated the prospective dispute expenses as well as the risk of uncertainty of theresult from the arbitration and litigation. Chiyoda reflects the influenced amount to the results for the
1st quarter of this fiscal year, while JKC is continuing to negotiate with the Client.
② Dispute with subcontractor
JKC placed the order for the engineering and construction of the Combined Cycle Power Plant (CCPP)
that is part of the Project through a fixed-price contract with a consortium of four companies, General
Electric Company and General Electric International, Inc., and UGL Infrastructure Pty Limited andCH2M Hill Australia Pty. Limited (collectively, the “Consortium”).
However, the Consortium unilaterally terminated the contract while executing this work and withdrew
from the construction site without the permission of JKC. The Consortium also filed for arbitration to
demand payment of additional costs related to circumstances prior to its withdrawal. In light of thissituation, JKC has appointed a subcontractor to replace the Consortium in order to fulfill its performanceobligations to the Customer, and while incurring tentatively the construction costs to proceed with theconstruction of the CCPP, JKC is countersuing the Consortium for these construction expenses.

10