Chiyoda Corporation (6366)
Consolidated Financial Results for the six months Ended September 30, 2020

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 Six Months Ended September 30, 2020
November 5, 2020
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: November 13, 2020
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 the six months ended September 30, 2020
(Percentages indicate year-on-year changes)(1) Consolidated operating results
Profit attributable to
Revenue
Operating income
Ordinary income
owners of parent
MillionsofMillionsofMillions ofMillions of yen
%
%
%
%
yen
yen
yen
For the Six months
ended September 30,
161,545 (7.6)
5,174 (63.2)
4,770 (30.7)
5,795 21.0
2020
For the Six months
ended September 30,
174,903 19.5
14,051
6,883
4,788 －
2019
Note: Comprehensive Income: the six months ended September 30, 2020: 6,363 million yen /(28.8%)
the six months ended September 30, 2019: 8,930 million yen / (- %)For the Six months ended
September 30, 2020
For the Six months ended
September 30, 2019

Net income per
share
Yen

Fully diluted net
income per share
Yen

18.32

5.95

16.45

7.84

(2) Consolidated financial position
Total assets
Net assets
Equity ratio
Millions of yen
Millions of yen%
As of September 30, 2020
325,224
31,301
9.5
As of March 31, 2020
385,051
24,943
6.3
Reference: Equity
As of Sep. 30, 2020:
30,932 million yen
As of March 31, 2020:
24,443 million yen
2. Cash dividends
Record date
FY ended March 31, 2020
FY ending March 31, 2021
FY ending March 31, 2021

Cash dividends per shareFirst quarter Second quarter Third quarter Fiscal year-end
Yen
Yen
Yen
Yen
0.00
-

(Forecast)
Note: Revision to the latest forecast announcement 2020: None--

AnnualYen
0.00-

Chiyoda Corporation (6366)
Consolidated Financial Results for the six months Ended September 30, 2020

3. Consolidated earnings forecasts for the fiscal year ending March 31, 2021
(from April 1, 2020 to March 31, 2021)(Percentages indicate year-on-year changes)
attributable to Net income
Revenue
Operating income Ordinary income Profit
owners of parent per share
Millions ofMillions ofMillions ofMillions of
Yen
yen
yen
yen
yen
%
%
%
%
Fiscal year ending
280,000 (27.4)
11,000 (58.9)
9,000 (51.7)
7,000 (42.5)
18.92
March 31, 2021
Note: Revision to the latest forecast announcement 2021: None
4. Others(1) Changes in Significant Subsidiaries during the Periodchanges 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.: Noneb. Changes in accounting policies other than a. above: Nonec. Changes in accounting estimates: None
d. Restatements: 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 September 30, 2020
260,324,529 shares
As of March 31, 2020
260,324,529 sharesb. Number of treasury stock at the end of the period
As of September 30, 2020
1,357,593 shares
As of March 31, 2020
1,357,497 sharesc. Average number of shares during the period
For the Six months ended September 30, 2020
258,966,955 shares
For the Six months ended September 30, 2019258,967,257 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
Record dateFiscal year ended
March 31, 2020
Fiscal year ending
March 31, 2021
Fiscal year ending
March 31, 2021 (Forecast)First quarter
Yen

Cash dividends per share

Second quarter
Yen

-

-

-

-

Third quarter
Yen

Fiscal year-end
Yen

-

-

Note: There will be no dividend for the Fiscal Year Ending March 2021.

Annual

0.0

-

Yen

0.0

-

Chiyoda Corporation (6366)
Consolidated Financial Results for the six months Ended September 30, 2020

Table of Contents for the appendices1.

2.

Qualitative Information Related to Consolidated Performance2(1)

Qualitative Information on Business Performance2(2)

Financial Information on Business Performance4(3)

Outlook for the Next Fiscal Year

4

Consolidated quarterly financial statements

5(1)

Consolidated balance sheets

5(2)

Consolidated statement of income and comprehensive income

7(3)

Consolidated quarterly statements of cash flow

9(4)

Notes on Consolidated Quarterly Financial Statements

113.

Production, Contracts and Revenue

13

4.

Others14

Chiyoda Corporation (6366)
Consolidated Financial Results for the six months Ended September 30, 2020

1. Qualitative Information Related to Consolidated Performance(1) Qualitative Information on Business Performance
Although business activity is gradually increasing, the stagnant global economy due to COVID-19 remains fundamentally
unchanged and the future is impossible to predict.
Under these exceptional circumstances, the Group continues to execute ongoing projects in the worldwide energy andglobal environment fields, prioritizing the health and safety of our employees and stakeholders. We also continue to assess
the influence of COVID-19 on ongoing projects in cooperation with our clients, whilst evaluating their investment plansconsidering the suppressed economy and subdued oil and gas prices.
Chiyoda applies comprehensive risk management during all project phases in line with its Medium-term Management Plan:“Chiyoda’s Revitalization Plan – Initiatives for Revitalization and the Future.”
The Construction Division commenced operating under its Energy Business Operations in April 2020 and we are increasing
resources for construction and commissioning to further strengthen Engineering, Procurement and Construction (EPC)
operations.
Reduction of Capital and Capital Reserves and the Appropriation of Surplus to improve our financial position by offsetting
the loss of 135,494 million yen in retained surplus carried forward at the of end of March 2020, resolved at the June 2020
Ordinary General Meeting of Shareholders, became effective on 7 August 2020.
We released our ‘Principles for Human Resources Development’ as integrated guidelines to assess our human resources,
cultivate organizational management capability and fully capture employee abilities.
Chiyoda ratified its ‘Declaration of Health and Productivity Management’ in April 2020 to promote employee healthmanagement. Chiyoda also promotes telework to enhance productivity.
In accordance with the Medium-term Management Plan, Chiyoda recognizes the increasing drive towards a low
carbon/carbon-cycle society as a countermeasure against climate change and the social/business changes towards digitaltransformation, pharmaceuticals and life sciences. Consequently, Chiyoda aims to transform its business portfolio andearnings structure towards sustainable development by expanding its business in the environment area and accelerating
digital transformation.
On consolidated basis, for the 2nd Quarter of the fiscal year ending March 31, 2021, New Orders amounted to 60,115 million
yen (down 24.8% YoY), Revenues to 161, 545 million yen (down 7.6% YoY) and Backlog to 674,510million yen (down
25.4% from last FY). As a response towards the COVID-19 pandemic onoign projects and its cost were reassessed andresulted in Operating Income of 5,174 million yen (down 63.2% YoY), Ordinary income decreased to 4,770 million yen (down
30.7% YoY). In addition, due to a refund of corporate taxes for some overseas consolidated subsidiaries, profit attributableto owners of parent amounted to 5,795 million yen (up 21.0% YoY).
The majority of ongoing projects impacted by COVID-19 (not all projects have been affected) are being executed within cost
parameters, with some realizing cost reductions and increased profits. The figures provided have been estimated following
current and reasonable assessments of the influence of COVID-19. The full effects of the pandemic are impossible toanalyze accurately however and its timing cannot be predicted, and this could affect the information supplied.

•

Energy

LNG / Gas
【Overseas】
Chiyoda is in the EPC phase on projects in the USA, Indonesia, Mozambique and Nigeria. The third (final) train on Cameron
LNG commenced commercial operation in August 2020 and all three trains are now in commercial operation. The EPC
phase of Golden Pass LNG is also progressing as planned. Chiyoda is currently supporting its JV partner’s engineering
reviews on LNG projects in Nigeria and Mozambique. Chiyoda is also revamping its previously constructed LNG/gas
processing plants in Qatar and is bidding for the EPC stage of the North Field Expansion project, comprising 4 x 7.8 million
ton/annum trains.
【Japan】
Renovations and modifications are underway on Chiyoda’s previously constructed LNG receiving terminals and seismic
upgrades of facilities are progressing.
Refinery/Petrochemical/Metal

2

Chiyoda Corporation (6366)
Consolidated Financial Results for the six months Ended September 30, 2020

【Overseas】
Chiyoda is executing a large-scale ethylene plant EPC project on the Gulf Coast in the USA and is executing EPCC (EPC
plus Commissioning) on a Residue Fluid Catalytic Cracking (RFCC) plant in Malaysia.
【Japan】
Chiyoda considers metals and mining as priority business fields and is actively involved in mining projects. The Group isrenovating existing refining facilities to reduce sulfur content in bunkering fuel in accordance with new regulations and toincrease their competitiveness, whilst conducting seismic upgrades of facilities under the Basic Act for National Resilience.
Chiyoda is also executing the EPC of the THC Catalyst (Toho High efficiency Catalyst) plant.
•

Environment

Pharmaceuticals/Biochemistry/General Chemistry
In Pharmaceuticals/Biochemistry, Chiyoda is executing the EPC of a synthetic raw materials plant for medicines and iscooperating with Shionogi Pharma Co., Ltd. to develop technology for Continuous Manufacturing (CM) of Active
Pharmaceutical Ingredients (API’s) and Intermediates.
In General Chemistry, Chiyoda is executing the EPC of functionalized chemical facilities and a hydrogenated petroleum
resin plant and is participating in an industry-academic-government project to develop technology to capture and recycle
CO2, and para-xylene production from CO2, to establish a foundation for carbon recycling. Chiyoda supports customer waste
plastic recycling with concept plant designs.
Chiyoda is collaborating with MIRAI Co. Ltd, a major production and administration company promoting the introduction ofcommercial facilities, on a vegetable growing facility and is executing a pilot vegetable factory project for Qatar University.
Environment/New Energy/Infrastructure【Overseas】
Chiyoda has implemented its thoroughbred 121 (CT-121) process to flue gas desulfurization facilities on existing coal-fired
plants in India.
【Japan】
In the environment field, Chiyoda is executing the EPC for facilities to demonstrate CO2 separation, recovery and storage
and fuel gas desulfurization on existing thermal power plants.
In the new energy field, Chiyoda is executing the world’s largest Battery Energy Storage System Project, photovoltaic (megasolar) facilities and the largest capacity biomass firing plant in Japan. Chiyoda is also considering participating in a floating
offshore wind farm, an area where we anticipate further opportunities.
To demonstrate the development of “Advanced Hydrogen Energy Global Supply and Transportation”, promoted by anorganization established jointly with Mitsubishi Corporation, Mitsui & Co., Ltd. and Nippon Yusen (NYK Line), Chiyoda has
completed a hydrogenation plant in Negara Brunei Darussalam and a dehydrogenation plant in Japan to supply hydrogenfor power generation. Chiyoda and Mitsubishi Corporation have entered into a Memorandum of Understanding (MOU) withfive (5) companies in Singapore to support its sustainable hydrogen economy using Chiyoda’s highly regarded safe
technology. Chiyoda also aims to develop its hydrogen importation and consumption business with our state-of-the-art
technology.
Chiyoda has also entered into an MOU with Hazer Group Limited in Australia to collaborate on commercial activities using
the Hazer Process to produce and supply hydrogen without the need to store carbon-dioxide, utilizing methane as afeedstock to produce hydrogen and graphite. Discussions with prospective domestic clients are ongoing.
•

Digital Technology

Chiyoda emphasizes three strategies for digital transformation: 1) Launching innovative digital products, 2) Promoting digital
EPC and, 3) Innovative work processes.
1)

Launching innovative digital products. Chiyoda offers the EFEXIS brand, delivering innovative solutions thatmaximize customer asset values by integrating digital AI technology with Chiyoda’s engineering expertise.
Solutions were implemented on the PT. Donggi-Senoro LNG (Indonesia) plant, leading to improved production
efficiency, increased LNG output and reduced greenhouse gas emissions with lower operating costs. Following on
from this success, Chiyoda is promoting EFEXIS for industrial facilities worldwide.

2)

Promoting digital EPC. Chiyoda is applying Advanced Work Packaging (AWP) on ongoing and new projects tooptimize the EPC process. Chiyoda has also developed a system to improve the efficiency of 3D plant engineering

3

Chiyoda Corporation (6366)
Consolidated Financial Results for the six months Ended September 30, 2020

by complementing Chiyoda’s plant engineering expertise and experience with the CAD and optimization
technologies of Arent Inc. The system is already active within Chiyoda. The two companies established
PlantStream Inc. and introduced an innovative 3D plant engineering tool in August 2020, promoting the system toplant owners, technical consultancies and other EPC contractors.
Chiyoda is applying “Target 20” to strengthen IT infrastructure and advance company-wide digitalization to achieve 20%
work efficiency improvement.
Chiyoda’s IT business domain, owned by its subsidiary Chiyoda System Technologies (CST), was transferred to a splitting
company and TIS Chiyoda Systems Inc. was established with TIS Inc. on 1 October 2020 to reinforce the IT infrastructureof the Group.
(2)

Financial Information on Business Performance[Consolidated Balance Sheet](Assets)
Total assets decreased 59,826 million yen from the end of the last fiscal year, with decrease of cash and deposits 37,957
million yen, jointly controlled assets of joint venture 13,008 million yen, notes receivable, accounts receivable from completed
construction contracts 11,511 million yen and others, while costs on construction contracts in progress increased 5,262
million yen.
(Liabilities)
Total liabilities decreased 66,184 million yen from the end of last fiscal year, with decrease of advances received on
construction contracts in progress 41,431 million yen, notes payable, accounts payable for construction contracts 25,133
million yen and others, while provision for loss on construction contracts increased 4,083 million yen.
(Net assets)
Total Net Assets is 31,301 million yen, with an increase of retained surplus in the 2nd quarter.
Shared Capital and Capital Surplus were reduced to 63,381 million yen and 72,112 million yen respectively to offset losses
as resolved at the Ordinary General Meeting of Shareholders on June 25, 2020.
[Consolidated statement of cash flows]
Cash and cash equivalents (capital) in the consolidated cumulative 2nd quarter is 78,479 million yen, a decrease of 37,453
million yen from the end of the last fiscal year, as detailed below(Cash flows from operating activities)
Cash flows from operating activities in the consolidated cumulative 2nd quarter decreased by 36,001 million yen (a YoY
decrease of 23,383 million yen). Operating cash flows (sum of increases/decreases in accounts receivable, costs on
construction contracts in progress, trade payables and advances received on construction contracts in progress) decreased
by 58,022 million yen. Quarterly profit before income taxes is 5,156 million yen. Jointly controlled assets of joint ventures
decreased by 12,524 million yen. Provision for loss on construction contracts increased by 4,512 million yen.
(Cash flows from investing activities)
Cash flows from investing activities in the consolidated cumulative 2nd quarter decreased by 156 million yen (a YoY
decrease of 8,103 million yen). with 654 million yen of purchase of investment securities. Time Deposits increased by 269
million yen.
(Cash flows from financing activities)
Cash flows from financing activities in the consolidated cumulative 2nd quarter decreased by 252 million yen (a YoY increaseof 89,501 million yen) with 190 million yen repayment of lease obligations.
(3)
Consolidated Financial Forecasts of the Fiscal Year
There is no change from the consolidated financial forecasts for the fiscal year announced on August 6, 2020.
The assumed exchange rate of 107 yen per US dollar remains unchanged.

4Chiyoda Corporation (6366)
Consolidated Financial Results for the six months Ended September 30, 2020

(Millions of yen)
As of March 31,
2020
AssetsCurrent assets
Cash and deposits
Notes receivable, accounts receivablefrom completed construction contracts
Costs on construction contracts inprogress
Accounts receivable - other
Jointly controlled assets of joint venture
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Land
Other, net
Total property, plant and equipment
Intangible assets
Investments and other assets
Investment securities
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

5

As of September 30,
2020

124,404

86,446

61,182

49,6705,261

10,52468,712
96,0286,041(1,243)360,387

67,821
83,0196,323(1,247)
302,559

6,177
5,085
1,190
12,454
4,912

5,113
4,853
1,015
10,982
4,087

5,598
599
1,271
(172)
7,296
24,663385,051

6,015
472
1,277
(170)
7,594
22,665325,224

Chiyoda Corporation (6366)
Consolidated Financial Results for the six months Ended September 30, 2020

(Millions of yen)
As of March 31,
2020
Liabilities
Current liabilities
Notes payable, accounts payable forconstruction contracts
Current portion of long-term borrowings
Income taxes payable
Advances received on construction
contracts in progress
Provision for warranties for completed
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 September 30,
2020

137,546

112,413

122
1,212

124
451

119,91178,480860

815

34,871

38,9554,150
401
20,802319,878

3,186
17
19,671
254,116

35,747
239
1,986
2,255
40,229360,107

35,684
239
2,008
1,874
39,806
293,923

78,396
72,128(127,778)(1,435)21,31015,014142
13,510(1,435)27,232

58

135

6
3,033

1
3,622

13

(59)

3,112

3,699

519
24,943385,051368
31,301
325,224

Chiyoda Corporation (6366)
Consolidated Financial Results for the six months Ended September 30, 2020

(Millions of yen)Six months ended
September 30, 2019
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
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of shares of subsidiaries
and associates
Total extraordinary income
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitLoss attributable to non-controlling interests
Profit attributable to owners of parent

7

Six months ended
September 30, 2020

174,903

161,545

152,855

150,406

22,047

11,1397,996
14,051

5,964
5,174

1,336
17

634
16

301

54

123
1,778

156
861

315
7,948
681
8,945
6,883

420
766
77
1,264
4,770

355

385

355
7,239
2,739
(119)
2,619
4,619
(168)
4,788

385
5,156
(774)
138
(636)
5,792
(2)
5,795

Chiyoda Corporation (6366)
Consolidated Financial Results for the six months Ended September 30, 2020

(Millions of yen)Six months ended
September 30, 2019
ProfitOther comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans,
net of tax
Share of other comprehensive income ofentities accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable toowners of parent
Comprehensive income attributable tonon-controlling interests

8

Six months ended
September 30, 2020

4,619

5,792

42

76

(28)
4,497

(4)
648

(132)

(73)

(67)

(76)

4,311
8,930

570
6,363

9,110

6,382

(179)

(19)

Chiyoda Corporation (6366)
Consolidated Financial Results for the six months Ended September 30, 2020

(Millions of yen)

Cash flows from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Increase (decrease) in provision for loss on
construction contracts
Increase (decrease) in provision for businessrestructuring
Interest and dividend income
Share of loss (profit) of entities accounted forusing equity method
Loss (gain) on sales of shares of subsidiaries
and associates
Decrease (increase) in trade receivables
Decrease (increase) in costs on construction
contracts in progress
Increase (decrease) in trade payables
Increase (decrease) in advances received on
construction contracts in progress
Decrease (increase) in accounts receivable other
Decrease (increase) in jointly controlled assetof joint venture
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes (paid) refund
Net cash provided by (used in) operating
activities
Cash flows from investing activities
Net decrease (increase) in time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant andequipment
Purchase of intangible assets
Proceeds from sales of intangible assets
Purchase of investment securities
Proceeds from sales of shares of subsidiaries
and associates
Payments for sales of shares of subsidiaries
resulting in change in scope of consolidation
Collection of loans receivable
Other, net
Net cash provided by (used in) investing
activities
Cash flows from financing activities
Proceeds from long-term borrowings

Six months ended
September 30, 2019

Six months ended
September 30, 2020

7,239
1,593
20

5,156
1,434
16

(20,627)

4,512

－

(383)

(1,353)
(301)

(650)

(355)

12,467(385)

11,333(1,233)(5,271)(37,547)

3,950(24,077)(3,030)(2,028)21,741(40,008)

12,524(2,584)(20,020)689(312)(3,740)(1,743)(39,624)
371
(268)
3,520

(7,928)
(400)
36

269
(289)

(867)
17
(4)

(779)
746
(654)

－

(8)

(23,383)

375

598
70
(8,103)20,0009(54)(36,001)

557

－

8
(7)

(156)

－

Chiyoda Corporation (6366)
Consolidated Financial Results for the six months Ended September 30, 2020

Proceeds from issuance of shares
Dividends paid
Dividends paid to non-controlling interests
Repayments of lease obligations
Other, net
Net cash provided by (used in) financing
activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash
equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

70,000
(0)
(270)
(167)
(59)
89,501

－
(0)
－
(190)
(61)

(359)

(1,043)57,65468,306125,96110(252)(37,453)

115,932
78,479Chiyoda Corporation (6366)
Consolidated Financial Results for the six months Ended September 30, 2020

4.

Notes on Consolidated Quarterly Financial Statements(Notes on Assumption for a Going Concern)
None(Notes on Significant Changes in the Amount of Shareholders’ Equity, if Applicable)
Capital of 63,381 million yen and Capital Reserve of 72,112 million yen were reduced and transferred to other capital surplus,
as resolved at the Ordinary General Meeting of Shareholders on June 25, 2020 and became effective on August 7, 2020.
The other capital surplus of 135,494 million yen was transferred to retained earnings to offset the loss in retained surplus
carried forward.
As a result, capital is 15,014 million yen, capital surplus is 142 million yen and retained earnings are 13,510 million yen at
the end of the consolidated 2nd quarter.
As a result of this transaction, the amount of Net Assets remains unchanged.
(Additional Information)
Adoption of tax effect accounting for the transition from the consolidated taxation system to the group tax sharing system
As for items subject to transition to the group tax sharing system, established under the “Act on Partial Revision of the
Income Tax Act” (Act No. 8 of 2020), and items reviewed under the non-consolidated taxation system in conjunction withthe transition to the group tax sharing system, Chiyoda and domestic consolidated companies have not adopted theprovisions of Paragraph 44 of the “Implementation Guidance on Tax Effect Accounting” (ASBJ Guidance No. 28, issued on
February 16, 2018) in accordance with the treatment under Paragraph 3 of the “Practical Solution on the Treatment of Tax
Effect Accounting for the Transition from the Consolidated Taxation System to the Group Tax Sharing System” (PITF No.
39, issued on March 31, 2020). The amounts of deferred tax assets and deferred tax liabilities are calculated based on theprovisions of the Income Tax Act before the revision.

11

Chiyoda Corporation (6366)
Consolidated Financial Results for the six months Ended September 30, 2020

(Significant event subsequent to the balance sheet date)(Business Separation)
At the Board of Directors meeting on January 28, 2020, it was decided that Chiyoda’s IT business domain,
owned by its subsidiary Chiyoda System Technologies (CST), to be transferred to a splitting company (Splitting Company),
established through an incorporation-type company split of CST, and part of the Splitting Company shares to be transferred
to TIS Inc. On February 28, 2020, Chiyoda entered into a stock purchase agreement with TIS Inc.
1. Summary of Company Split(1) Name of the new Splitting Company and the Transferee①Name of the new Splitting Company
TIS Chiyoda Systems Inc.
②Name of the Transferee
TIS Inc.
(2) Business/Service of the new Splitting Company①Business
IT business②Service
TIS Chiyoda Systems Inc. provides clients with IT solutions covering project management, project control and operational
control of industrial plants to resolve business challenges.
(3) Main reasons of Company Split
With Chiyoda Group’s philosophy “Energy and Environment in Harmony”, CST has engaged in electrical, instrumentation
and IT businesses.
To promote value creation by digitalization of inside and outside the company, Chiyoda agreed with TIS Inc., a leading
Japanese IT company, to cooperate in developing of business strategies and improving productivity, efficiency andprofitability.
(4) Date of Company Split and Transfer of Shares
October 1, 2020
(5) Other information①Company Split
The company split is an incorporation-type of CST.
②Transfer of Shares
Consideration receivable is limited to property of cash
2. Name of split business segment
Engineering business

12Chiyoda Corporation (6366)
Consolidated Financial Results for the six months Ended September 30, 2020

3. Production, Contracts and Revenue(Millions of yen)

Apr. 1, 2019－Sept. 30, 2019

1

Engineering(1) LNG Plant
EnergyRevenue(ratio)Backlog ofcontracts(ratio)New
contracts(ratio)Revenue(ratio)Backlog ofcontracts(ratio)79,506

174,505

904,482

59,776161,207674,501(99.5%)(99.8%)(100.0%)(99.4%)(99.8%)(100.0%)29,532

89,710472,791

9,215

63,774349,351(37.0%)(51.3%)(52.3%)(15.3%)(39.5%)(51.8%)

986

1,590

12,786

1,587

5,452

10,232(1.2%)(0.9%)(1.4%)(2.6%)(3.4%)(1.5%)(3) Refinery/Petrochemical/
Metal

33,51745,427

294,019

24,366

62,836200,968(41.9%)(26.0%)(32.5%)(40.5%)(38.9%)(29.8%)

2,698

12,365

13,96819,036

8,325

30,733(3.4%)(7.1%)(1.5%)(31.7%)(5.2%)(4.6%)

Biochemistry/ Chemical(5) Environment/ New
Energy/Infrastructure(6) Others
2

New
contracts(ratio)Processing/Receiving(2) Gas Development/(4) Pharmaceutical/
GlobalEnvironment

Apr. 1, 2020－Sept. 30, 2020

Other Business
Total
Domestic
Overseas

9,028

19,933

105,754

3,455

19,11980,821(11.3%)(11.4%)(11.7%)(5.8%)(11.8%)(12.0%)

3,743

5,478

5,162

2,114

1,699

2,394

(4.7%)(3.1%)(0.6%)(3.5%)(1.0%)(0.3%)

397

397

－

338

338

－

(0.5%)(0.2%)(－)(0.6%)(0.2%)(－)

79,903

174,903

904,482

60,115

161,545674,501(100.0%)(100.0%)(100.0%)(100.0%)(100.0%)(100.0%)40,652

55,971

201,598

45,95660,931

162,795(50.9%)(32.0%)(22.3%)(76.4%)(37.7%)(24.1%)

39,251

118,931

702,884

14,158100,614

511,705(49.1%)(68.0%)(77.7%)(23.6%)(62.3%)(75.9%)

Note1: The backlog of contracts for the six months ended September 30, 2020 includes a decrease due tochanges in construction contracts acquired in prior fiscal years, and an increase due to foreignexchange translation adjustments.
Note2: The total amount of the above table does not include consumption tax.

13

Chiyoda Corporation (6366)
Consolidated Financial Results for the six months Ended September 30, 2020

4. Others(Regarding Ichthys LNG Project)
Arbitration was filed by JKC Australia LNG Pty Ltd (JGC, KBR and Chiyoda joint venture) on a plant alreadyhanded over to the client as described below. Unfavorable outcomes will result in uncollectable construction
receivables and replacement costs which may affect Group business performance.
1) Disputes with client
Outstanding issues include scope of work changes and associated additional costs and contract priceadjustment.
2) Dispute with subcontractor
Arbitration to resolve a dispute with a subcontractor consortium awarded a lump sum contract consisting ofGeneral Electric Company, General Electric International Inc., UGL Engineering Pty Ltd and CH2M Hill
Australia Pty Limited.
During ongoing arbitration in the execution phase regarding additional expenses being sought by JKC, theconsortium independently breached the contract by withdrawing from site without prior agreement. JKC
subsequently re-subcontracted the remaining scope of work to fulfill its own contractual obligations and are
currently claiming costs of completing the Combined Cycle Power Plant (CCPP) from the consortium.

14