Translation

November 10, 2016

Consolidated Financial Results
for the Six Months Ended September 30, 2016
Company name: CHIYODA CORPORATION
Listing:First Section of the Tokyo Stock Exchange
Stock code:
6366
URL:
http://www.chiyoda-corp.com/
Representative: Shogo Shibuya, President & CEO
Inquiries:
Nobuo Sekita, SL, Accounting Section
TEL: +81-45-225-7745 (from overseas)
Scheduled date to file Quarterly Report: November 14, 2016
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, 2016
(1) Consolidated operating results(Percentages indicate year-on-year changes)
Net income
attributable toOperating income
Ordinary income
owners of
the Parentofof% Millions of yen% Millions% Millions
%
yen
yen

Net sales
Millions ofyen

For the Six months
ended September 30,
276,928 (1.9)
4,558 (54.4)
10,273(3.7)
2016
For the Six months
ended September 30,
282,217 36.2
9,993
1.8
10,6634.8
2015
Note: Comprehensive Income: the six months ended September 30, 2016: (3,772)million yen
the six months ended September 30, 2015: 3,153million yen / (57.9 %)For the Six months
ended September 30,
2016
For the Six months
ended September 30,
2015

Net income per share

Fully diluted net
income per share

Yen

Yen

21.66

-

21.50

-

5,610

0.8

5,568

(5.6)

(2) Consolidated financial position
Total assets

Net assets

Equity ratio

Millions of yen

Millions of yen%

As of September 30,
2016474,430

195,750

40.9

As of March 31, 2016

528,219

202,128

37.9

Reference: Equity As of September 30, 2016: 193,935million yen

1

As of March 31, 2016: 200,166million yen

2. Cash dividends
Cash dividends per share
Record date

First quarter

Second quarter

Third quarter

Fiscal year-end

Yen

Yen

Yen

Yen

Yen

-

-

-

10.00

10.00

-

-

6.00

6.00

Fiscal year ended
March 31, 2016
Fiscal year ending
March 31, 2017
Fiscal year ending
March 31, 2017
(Forecast)

AnnualNote: Revision to the latest forecast announcement : None

3. Consolidated earnings forecasts for the fiscal year ending March 31, 2017 (from
April 1, 2016 to March 31, 2017)(Percentages indicate year-on-year changes.)
Net income
attributable to
Net income per
Net sales
Operating income Ordinary income
shareowners of
the Parent
Millions ofMillions ofMillions ofMillions of
yen
yen
yen
yen
%
%
%
%
Yen
Fiscal year ending
March 31, 2017

550,000 (10.1)

18,00012.4

14,000 (13.6)

5,000

48.1

19.31

Note: Revision to the latest forecast announcement : 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 Preparation of 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.: Yes
b. 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, 2016
260,324,529 shares
As of March 31, 2016
260,324,529 sharesb. Number of treasury stock at the end of the period
As of September 30, 2016
1,343,556 shares
As of March 31, 2016
1,340,062 sharesc. Average number of shares during the period
For the Six months ended September 30, 2016
258,982,071 shares
For the Six months ended September 30, 2015
258,995,554 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.

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5.

Qualitative Information related to Consolidated Performance(1) Qualitative Information on Business Performance

During the first six-month period of the current fiscal year, the business environment surrounding the
Chiyoda Group remained severe. Although the price of natural resources showed signs of bottoming
out, uncertainties persisted because of recurrent terrorist attacks in various parts of the world andlingering concerns about Brexit’s impact on the European economy. Some overseas investment
projects including those related to natural gas facilities were under consideration, while project owners
remain prudent to make a Final Investment Decision (FID) in the face of low crude oil prices and thestagnation of the world economy. Meanwhile, in Japan, although expectations were high for thegovernment’s economic stimulus measures, the domestic market as well is cautious about the timingof their investment.
Under such circumstances, the Group entered the final year of the medium-term management planand strived to improve business performance for the current fiscal year by accelerating theimplementation of our strategies for growth and enhancing operational capabilities, with the aim offurther increasing the value of the group. In the core business area of LNG, the Group maintained its
competitive advantage by proceeding with large-scale projects in various parts of the world. Further,
the Group is pursuing new projects in particularly feasible expansion projects of existing facilities, suchas newly awarded contract in Indonesia. In the field of Offshore and Upstream, EMAS CHIYODA
Subsea Limited, a newly established company specialized in undertaking EPCI for subsea projects,
began to make its presence felt, for instance, by winning a large contract in Saudi Arabia.
For the first six-month period, consolidated new contracts amounted to 133,249 million yen, (down by
34.2% YoY), revenue to 276,928 million yen, (down by 1.9% YoY), and backlog to 905,509 million yen(down by 22.3 % from the end of the previous fiscal year). Operating income amounted to 4,558
million yen (down by 54.4% YoY), ordinary income and net income attributable to the shareholders of
the parent company amounted to 10,273 million yen (down by 3.7% YoY) and 5,610 million yen(increased by 0.8% YoY) respectively which is due to a decrease in revenue, foreign currency
exchange gains and sale of investment securities.
Outline of operations of the engineering business for each segment are mentioned below:
LNG /Gas
The Group won a contract for the engineering, procurement, and construction (EPC) of LNG in
Indonesia, and proceeded with its ongoing EPC work for LNG plants in Australia, the United States,
and Russia, as well as a front-end engineering and design (FEED) contract for an LNG plant in the
United States. Furthermore, in Mozambique, where we were selected as an EPC contractor for an
LNG plant last year, we carried out some of the pre-EPC work. Meanwhile, in Qatar, the local groupcompany continued with the execution of long-term contracts, i.e., EPC work for helium recovery
facilities and the engineering, procurement, and construction management (EPCM) work for themodification and revamping of LNG and gas processing plants previously built by Chiyoda Corporation.
Refinery/ Petrochemical/ Metal
The Group continued with the execution of engineering, procurement, construction, andcommissioning (EPCC) work for a residue fluid catalytic cracking (RFCC) project in Malaysia and EPC
work for an oil refinery and petrochemical complex in Vietnam. In addition EPC work for an oil refinery
in Qatar is planned to be completed this October. Meanwhile, the Group Company in Singapore
continued to provide project management services under an Enterprise Framework Agreement for
downstream projects in Asia, such as the construction of refinery and chemical facilities.
In the area of metal-related business, the Group is executing EPC work for a titanium sponge plant in
Saudi Arabia.
In Japan, the Group is continuing to perform EPC work for our clients in the petroleum industry tofacilitate inter-refinery cooperation and optimize the configuration of refineries and other facilities.
Further, the Group is continuing to work on renovation and revamp projects in compliance withJapanese laws and regulations for safety, as well as the maintenance and upgrading of
petrochemicals plants and other existing facilities to improve energy efficiency and repair or replaceaging equipment.
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Pharmaceuticals/Biochemistry/General Chemistry/Environment/Infrastructure
In the area of transportation infrastructure, the Group is continuing to perform EPC work for theconstruction of a new international airport in Mongolia and the New Bohol Airport in the Philippines.
Meanwhile, in the area of non-hydrocarbon projects, the Group is eager to respond to Japaneseclients planning to expand into overseas markets.
In Japan, the Group won a contract for EPC work for flue gas desulfurization systems for a coal-fired
power plant. Further, the Group continues to perform EPC work for large-scale photovoltaic (megasolar) power plants in the domestic Japanese market under existing and newly awarded contracts.
The Group continues to enhance its group-wide operations to succeed in winning new contracts. The
Group also continues to perform EPC work for a food factory to support food safety and hygiene
control under the latest regulations. In the pharmaceuticals-related business, the Group continues tocarry out EPC work for an advanced pharmaceutical plant for injections, drug substancemanufacturing facilities and bio-medicine manufacturing facilities, all of which can include highpotency pharmacologically active agents and therapeutic antibodies.
New business Fields
In the field of offshore and upstream, Chiyoda Corporation and Singapore-based Ezra Holdings
Limited established EMAS Chiyoda Subsea Limited (ECS), a joint venture on March 31, 2016 toundertake engineering, procurement, construction, and installation (EPCI) work for subsea projects. In
July 2016, a consortium formed by Larsen & Toubro of India and ECS won a contract for EPCI workfor the development of an offshore gas field in Saudi Arabia. In September 2016 Nippon Yusen (NYK)completed its purchase of shares in ECS. ECS is seeking to expand its operations globally.
At the same time, with the strategic capital alliance Xodus Group Ltd. (U.K.) the Group can provide
engineering, consulting, and other relevant services to natural resources development companies
engaging in offshore development projects.
In the new energy-related business, the Group plans a demonstration project toward 2020 to realize ahydrogen energy based society, which can establish a hydrogen supply chain by starting hydrogendelivery from Asian countries.
Note: See page 10 for more information on New Contracts, Net Sales, and Backlog of Contracts bysegment.
(2) Financial Status
AssetsCurrent assets decreased by 33,609 million yen due to a decline in cash and deposits by 18,108
million yen, and jointly controlled assets of joint venture by 12,083 million yen. Noncurrent assets
decreased by 20,179 million yen with a decline in investment securities by 20,369 million yen.
Accordingly, total assets decreased by 53,789 million yen from the end of the previous fiscal year.
Liabilities
Total Liabilities decreased by 47,411 million yen due to a decline in advances received on
uncompleted construction contracts by 29,872 million yen and notes payable, accounts payable forconstruction contracts by 10,602 million yen from the end of the previous fiscal year.
Net Assets
While retained earnings increased by 3,020 million yen with dividends paid and net income attributableto owners of parent, total net assets were 195, 750 million yen with a 6,127 million yen foreign
currency translation adjustment decrease.
(3) Consolidated Full Year Forecast
No change from fiscal year forecast as announced on May 12, 2016.
Forecasted Exchange Rate based on JPY105/1 USD, as of August 9, 2016.

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6.

Consolidated quarterly financial statements(1) Consolidated quarterly balance sheets(Millions of yen)

As of March 31, 2016

AssetsCurrent assets
Cash and deposits
Notes receivable, accounts receivable fromcompleted construction contracts
Securities
Costs on uncompleted construction contracts
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
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

5

As of September 30, 2016

137,715

119,606

69,29660,494

6,999
35,053
179,360
28,889(2,285)455,030

7,999
33,709167,277
33,784(1,450)421,421

7,137
5,266
1,538
13,942
11,068

6,680
5,266
1,252
13,1999,590

43,071
5,487(379)
48,17873,189528,219

22,701
7,833(315)
30,21953,009474,430

(Millions of yen)

Liabilities
Current liabilities
Notes payable, accounts payable forconstruction contracts
Short-term loans payable
Current portion of long-term loans payable
Income taxes payable
Advances received on uncompleted
construction contracts
Provision for warranties for completed
construction
Provision for loss on construction contracts
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Provision
Net defined benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive
incomeNon-controlling interests
Total net assets
Total liabilities and net assets

As of March 31, 2016

As of September 30, 2016

150,078

139,475

333
5
2,841

226
3
522

135,667

105,795

337

241

3,160
3,527
15,155311,106

4,153
2,981
10,992
264,392

10,009
340
2,134
2,500
14,985
326,091

10,005
340
1,732
2,208
14,287
278,680

43,396
37,112
115,839(1,422)
194,926

43,396
37,112
118,860(1,424)
197,944

2,386

77(1,618)4,171
300(2,503)(1,955)
373

5,240
1,961
202,128
528,219

6(4,008)

1,814
195,750
474,430

(2) Consolidated quarterly statements of (comprehensive) income(Millions of yen)

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 income
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equity
methodOther
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of investment securities
Total extraordinary income
Extraordinary losses
Loss on sales of shares of subsidiaries andassociates
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

7

Six months ended
September 30, 2015

Six months ended
September 30, 2016

282,217
260,41421,802
11,8089,993

276,928
261,853
15,075
10,516
4,558

783
766
62
139
1,751

674
626
4,605
156
6,063

114

105

920

184

46
1,081
10,66358
348
10,273

2,112
2,112

1,965
1,965

－

1,146

－
12,775
5,808
1,396
7,204
5,571
3
5,568

1,146
11,092
6,605(1,154)
5,451
5,641
30
5,610

Consolidated quarterly statements of comprehensive income(Millions of yen)Six months ended
Six months ended
September 30, 2015 September 30, 2016

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

8

5,571

5,641

(3,706)
412
988
(69)

(2,309)(876)(4,069)72(2,418)
3,153
3,183

(9,413)(3,772)

(30)

(133)

(43)

(2,231)(3,638)

(3) Consolidated quarterly statements of cash flows(Millions of yen)Six months ended
Six months ended
September 30, 2015 September 30, 2016

Cash flows from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Interest and dividend income
Share of (profit) loss of entities accounted for using equity
methodLoss (gain) on sales of investment securities
Loss (gain) on sales of shares of subsidiaries andassociates
Decrease (increase) in notes and accounts receivable trade
Decrease (increase) in costs on uncompleted
construction contracts
Increase (decrease) in notes and accounts payable trade
Increase (decrease) in advances received on
uncompleted construction contracts
Decrease (increase) in jointly controlled asset of joint
ventureOther, net
SubtotalInterest and dividend income received
Interest expenses 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
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Payments of loans receivableCollection of loans receivable
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Cash dividends paid
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

912,775
1,818
761(1,549)920

11,092
1,780
251(1,301)(2,112)(1,965)(12,062)

5,751

9,627

1,163

1,407

(5,793)－

1,895
20,295(6,824)
26,955
1,103
(116)
1,657
29,600
(650)
(612)
(750)
(13)
4,215
(367)
235
6
2,063

184

1,146

(22,586)

6,018(8,475)(12,731)862(105)(5,358)(17,333)

(192)
(354)
(843)
(337)
15,460(10,231)
6,341
23
9,866

(679)
(3,359)(45)(4,084)164(32)(2,584)(26)(2,642)

27,744113,246
140,991(16,159)
136,919
120,760(6,049)

7.

Production, Contracts and Sales
Millions of yen
Apr. 1, 2015 —Sept. 30, 2015

Reporting segments

Apr. 1, 2016 —Sept. 30, 2016

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

200,486
99.0%

280,149
99.3%

1,326,692
100.0%

131,42198.6%

275,101
99.3%

905,509100.0%LNG Plant

140,638
69.5%

157,41655.8%

1,083,402
81.6%

54,23540.7%

198,295
71.6%

616,204
68.1%

4,005

11,556

23,463

6,235

4,926

18,743

2.0%

4.1%

1.8%

4.7%

1.8%

2.1%

30,98375,297

135,582

24,14643,250171,141

15.3%

26.7%

10.2%

18.1%

15.6%

18.9%

13,0706.4%

15,0705.3%

28,735
2.2%

21,512
16.1%

16,1885.8%

34,679
3.8%

8,557
4.2%

19,216
6.8%

51,974
3.9%

21,79816.4%

10,113
3.7%

60,676
6.7%

3,230

1,591

3,533

3,492

2,327

4,064

Gas Development/
Processing/Receiving
Refinery/Petrochemical/
Metal
Pharmaceutical/Biochemistry/
ChemicalEnvironment/New Energy/
Infrastructure
OthersOther Business
Total
Domestic
Overseas

1.6%

0.6%

0.8%

2,067

0.3%
－

2.6%

1,946

1,827

1,827

0.4%
－

1.0%

0.7%

－

1.4%

0.7%

－

202,432
100.0%

282,217100.0%

1,326,692
100.0%

133,249
100.0%

276,928100.0%

905,509100.0%

43,86749,757

93,96673,52945,349122,732

21.7%

17.6%

7.1%

55.2%

16.4%

13.6%

158,56578.3%

232,460
82.4%

1,232,725
92.9%

59,72044.8%

231,57983.6%

782,776
86.4%

Note1: The backlog of contracts for the six months ended September 30, 2016 includes a decrease due tochanges in construction contracts acquired in prior fiscal years, and an increase due to foreign exchangetranslation adjustments.
Note2: The total amount of the above table does not include consumption tax.

10