Translation

November 12, 2008

Consolidated Financial Results
for the Second 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: November 14, 2008
(Millions of yen with fractional amounts discarded, unless otherwise noted)

1. Consolidated performance for the Second quarter of the fiscal year ending
March 31, 2009 (from April 1, 2008 to September 30, 2008)(Percentages indicate year-on-yearchanges.)(1) Consolidated operating results (cumulative)
Net sales

Operating income

Millions of yen
2Q ended September
30, 2008
2Q ended September
30, 2007% Millions of yen%

240,760--

312,547

48.1

11,420 (15.4)

Net income per share

2Q ended September
30, 2008
2Q ended September
30, 2007

Ordinary income

6,904

Millions ofyen

Net income% Millions of yen

%

9,755

-

-

17,303

3.6

6,059

10,641 (4.8)

Fully diluted net
income per share

Yen

Yen

24.36

24.36

55.35

55.32

(2) Consolidated financial position
Total assets
Millions of yen

Net assets

Equity ratio

Net assets per share

Millions of yen%

Yen

As of September 30,
379,513
146,4092008
As of March 31,
378,819
81,6372008
Reference: Equity As of September 30, 2008: 146,014 million yen

38.5

563.0521.4

422.44–1–

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-end

Annual

Yen
Yen
Yen
Yen
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 Second quarter of the fiscal year ending March 31, 2009: None

3.

Yen
10.00
–
11.00

Consolidated 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
Millions ofyen

Fiscal year ending
March 31, 2009

Operating income Ordinary income%

460,000 (23.8)

Millions ofyen%Millions ofyen

12,500 41.4

Net income pershare

Net income%

Millions of
yen

%

Yen

16,000 (16.3)

9,500

(1.5)

37.40

Note: Revision of the forecasts in the second 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 the quarterly
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 insignificant matters forming the basis of preparing the quarterly consolidated financial
statements”)
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 September 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 September 30, 2008
935,339 shares
As of March 31, 2008
903,520 sharesc. Average number of shares during the period (cumulative from the beginning of the fiscal
year)
For the Second quarter of the fiscal year ending March 31, 2009 248,713,605 shares
For the Second quarter of the fiscal year ended March 31, 2008 192,259,193 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–

5. Qualitative Information and Financial Statements
Qualitative Information on Consolidated Results of Operations

During the cumulative second quarter (the six months from April 1, 2008 to September 30, 2008) inoverseas markets, plans for the construction of new plants around the world continued to be driven
by growth in energy demand. In the domestic market, capital investment by oil, power and gas
companies remained lively. In the third quarter, however, the effects of the global financial crisis
have begun to spread to the real economy. In Chiyoda’s operating environment, there is concern
over declining investment due to the shrinking financial market, and the substantial drop in the priceof crude oil has had some effect. Chiyoda will continue to scrutinize economic conditions and theirimpact.

The operating environment remains harsh owing to a serious worldwide shortage of skilledconstruction workers, but Chiyoda continues to implement a high level of risk management
including measures to counter rising costs, and is making concerted efforts to properly executeongoing projects, including liquefied natural gas (LNG) plants in Qatar. As a result, large-scaleongoing projects successively approached completion. Chiyoda handed over the large-scale LNG
plant in Sakhalin to the customer and a trial run of the first train completed for the ultra-large-scale(7.8 million tones per annum) LNG plant project in Qatar was conducted.

On a consolidated basis, new contracts were ¥116,810 million, a 35.2% decrease compared withthe same period of the previous year, and the backlog of contracts was ¥555,699 million, adecrease of 39.5%. Revenues decreased 23.0% to ¥240,760 million, operating income decreased
39.5% to ¥6,904 million, ordinary income decreased 43.6% to ¥9,755 million and net income
decreased 43.1% to ¥6,059 million.

Results by Business Segment
The following is a summary of operating results by business segment.

Natural Gas and Electric Power
Overseas, national companies in natural gas producing countries and energy majors continued toplan investments in the gas value chain. Amid these conditions, the Group focused on acquiringcontracts for research and Front-End Engineering and Design (FEED) in order to secure contracts
for large-scale projects. In the cumulative second quarter, Chiyoda was awarded contracts
including the FEED and executing planning work for Barzan onshore gas project in Qatar, an EPC
competition contract for participation in an EPC design competition for an LNG plant in Papua New
Guinea and an LNG plant project in Algeria. In Japan’s gas and electric power sector, Chiyoda
worked to acquire contracts for new construction and expansion of large-scale LNG receiving–4–

terminals being planned as a result of the shift in energy sources to LNG for reasons including
curbing CO2 emissions and growth in gas-related businesses.
Petroleum, Petrochemicals and Gas Chemicals
In the petroleum sector, although domestic demand for petroleum products decreased, newcontracts were firm for petrochemical production and refineries that utilize heavier crude oil. In
addition, there was strong drive to invest in effective energy use and wide-area linkages with afocus on reducing CO2 emissions. In the petrochemical sector, the shift to strategic, high-valueadded fields such as functional chemicals, electronic materials and life science-related products
became clear.

Investment in production facilities to respond to changes in the structure of demand for petroleum
products, and demand for environmental measures and initiatives to improve the efficiency offacility inspection and maintenance, remained at a high level. Chiyoda therefore continued to
implement initiatives to acquire new contracts in these areas.

General Chemicals and Industrial Machinery
In the general chemicals and industrial machinery sectors, in addition to the existing field of LCD
materials, capital investment increased in solar battery components, reflecting global policies tospread the use of solar batteries. Investment relating to the recovery of rare metals also continued.
In the pharmaceuticals sector, all Group companies steadily acquired contracts due to anincreasing drive to invest in new construction and expansion of existing plants and R&D facilities inorder to adapt to recent changes in the business environment.

Environment and Others
Chiyoda continued to conduct marketing activities in Japan and overseas for its original CT-121
flue gas desulfurization process technology. In Europe, where desulfurization technology is mostadvanced, Chiyoda licensed its technology for use at a major power station in Denmark.

–5–

6. Consolidated quarterly financial statements(1) Consolidated quarterly balance sheets (1/2)(Millions of yen)

AssetsCurrent assets
Cash and deposits
Notes receivable, accounts receivable from completed
construction contracts
Short-term investment securities
Costs on uncompleted construction contracts
Jointly controlled assets of joint venture
Other
Allowance for doubtful accounts
Total current assets
Noncurrent 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 noncurrent assets
Total assets–6–

As of September
30, 2008

As of March 31,
2008

38,95760,48436,48636,36877,841
24,141
150,314
12,530(6)
340,265

10,50016,801
192,683
21,374(5)
338,207

8,174
11,997
2,497
22,6694,649

8,354
11,935
2,782
23,072
4,714

8,919
3,375
(366)
11,92839,247
379,513

9,302
4,012
(490)
12,824
40,612378,819

Consolidated balance sheets (2/2)(Millions of yen)
As of September
30, 2008

As of March 31,
2008

66,55674,037

10,028567

10,0391,408

129,558

185,022

2,999
3,701
3,405
14,115230,932

2,098
4,044
4,196
13,137
293,986

8
1,789
373
2,171
233,103

22
2,226
947
3,196
297,182

Net assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders' equity

43,38937,10569,291(1,092)
148,694

12,934
6,718
65,155(1,059)83,748Valuation and translation adjustments
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Total valuation and translation adjustments
Minority interests
Total net assets
Total liabilities and net assets(669)(1,672)(337)(2,679)395
146,409379,513(847)(1,667)(6)(2,521)
410
81,637
378,819

Liabilities
Current liabilities
Notes payable, accounts payable for construction
contracts
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
Noncurrent liabilities
Long-term loans payable
Provision
Other
Total noncurrent liabilities
Total liabilities–7–(2) Consolidated statement of income
Second quarter ended
September 30, 2008

(From April 1, 2008
to September 30, 2008)

Consolidated quarterly statements of income
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
Dividends income
Equity in earnings of affiliates
Foreign exchange gains
Real estate rent
Other
Total non-operating income
Non-operating expenses
Interest expenses
Stock issuance cost
Rent expenses on real estates
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Reversal of allowance for doubtful accounts
Total extraordinary income
Extraordinary loss
Loss on valuation of investment securities
Total extraordinary losses
Income before income taxes and minority
interests
Income taxes-current
Income taxes-deferred
Total income taxes
Minority interests in income
Net income–8–

240,760
228,070
12,689
5,785
6,904
2,966
57
53
140
128
73
3,421
172
271
79
46
570
9,755
123
123
521
521
9,357
747
2,538
3,286
11
6,059

7.

Production, Contracts and Sales (Consolidated)
Millions of Yen
2Q FY2008
Apr. 1, 2008 —September. 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

38,835
11,03375
39,295
19,491
1,621
3,068
113,421

33.3
9.4
0.1
33.6
16.7
1.4
2.6
97.1

119,835
69,093
170
32,223
9,063
2,768
4,491
237,645

49.8
28.7
0.1
13.4
3.7
1.1
1.9
98.7

214,767
170,543
978115,143
30,544
5,749
17,402555,129

38.7
30.7
0.2
20.7
5.5
1.0
3.1
99.9

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

3,388

2.9

3,115

1.3

569

0.1

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

63,09053,720116,810

54.0
46.0
100.0

47,686
193,073
240,760

19.8
80.2
100.0

205,496
350,202555,699

37.0
63.0
100.0

Millions of Yen
2Q FY2007
Apr. 1, 2007 —September. 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

39,46723,927163
85,803
11,209
4,032
12,980177,585

21.9
13.3
0.1
47.6
6.2
2.2
7.2
98.5

209,559
35,239696
43,471
14,253
4,254
2,343
309,818

67.0
11.3
0.2
13.9
4.6
1.4
0.7
99.1

478,260
285,795
1,181
115,817
14,723
5,192
17,890918,861

52.1
31.1
0.1
12.6
1.6
0.6
1.9
100.0

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

2,728

1.5

2,728

0.9

—

—

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

105,163
75,149180,313

58.3
41.7
100.0

66,005
246,541
312,547

21.1
78.9
100.0

184,673
734,187
918,861

20.1
79.9
100.0

Note: The backlog of contracts for the six months ended September 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 Income
for the Second Quarter of the Previous Fiscal Year
Millions of Yen
April 1, 2007 –September. 30, 2007
Revenues ...............................................................
Cost of Revenues..................................................
Gross profit..............................................................
Selling, General and
Administrative Expenses..................................
Operating income....................................................

312,547
295,307
17,239

%
100.0
94.5
5.5
1.8

5,819
11,420

3.7

Other Income
Interest ............................................................
Dividend income .............................................
Equity in earnings of associated companies...
Rent income....................................................
Other .............................................................
Total Other Income ...............................................

5,943
44
140
121
82
6,332

2.0

Other Expenses
Interest expense .............................................
Foreign exchange loss....................................
Cost of rent income.........................................
Other ...............................................................
Total Other Expenses ...........................................

173
141
85
49
449

0.2

Ordinary income......................................................

17,303

5.5

644
31
50
726

0.3

Extraordinary Gain
Gain on sales of investment securities ...........
Reversal of allowance for doubtful accounts ..
Other ...............................................................
Total Extraordinary Gain ......................................
Income before income taxes and minority
interests ...............................................................

18,029

Income taxes current .............................................
Income taxes deferred ............................................
Total Tax ................................................................
Minority interests in net income ..............................
Net Income.............................................................

5,002
2,377
7,380
7
10,641– 10 –

5.8

2.4
0.0
3.4