Chiyoda Corporation (6366)
Consolidated Financial Results for the nine months Ended December 31, 2018

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 Nine Months Ended December 31, 2018
February 13, 2019
Company name:
Listing:
Stock code:
URL:
Representative:
Inquiries:TEL:

CHIYODA CORPORATIONFirst Section of the Tokyo Stock Exchange
6366
http://www.chiyodacorp.com/
Masaji Santo, President & CEO
Masaru Akiyama, GM, Accounting Department+81-45-225-7745

Scheduled date to file Quarterly Report: February 14, 2019
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 nine months ended December 31, 2018
(Percentages indicate year-on-year changes)(1) Consolidated operating results
Profit attributable to
Revenue
Operating income
Ordinary income
owners of parent
Millions of yen% Millions of yen % Millions of yen % Millions of yen%
For the Nine months
ended December 31,
306,101 (20.7)(107,790) －(107,045) －(128,151) －2018
For the Nine months
ended December 31,
385,934 (11.3)(8,843) －(8,421) －5,198 －
2017
Note: Comprehensive Income: the nine months ended December 31, 2018: (126,441) million yen / (－)%
the nine months ended December 31, 2017: 5,336 million yen / (－)%
Net income per
share
Yen
For the Nine months ended
December 31, 2018
For the Nine months ended
December 31, 2017

Fully diluted net
income per shareYen(494.86)

－

20.07

－

(2) Consolidated financial position
Total assets
Net assets
Equity ratio
Millions of yen
Millions of yen%
As of December 31, 2018376,601
30,893
7.7
As of March 31, 2018
420,337
159,418
37.5
Reference: Equity As of December, 2018: 28,990 million yen/ As of March 31, 2018: 157,557 million yen
2. Cash dividends
Record dateCash dividends per shareFirst quarter Second quarter Third quarter Fiscal year-end
Yen
Yen
Yen
Yen

Fiscal year ended
March 31, 2018
Fiscal year ending
March 31, 2019
Fiscal year ending
March 31, 2019(Forecast)
Note: Revision to the latest forecast announcement 2018: None-

Annual
Yen

7.50

7.50

0.00

0.00

-

Chiyoda Corporation (6366)
Consolidated Financial Results for the nine months Ended December 31, 2018

3. Consolidated earnings forecasts for the fiscal year ending March 31, 2019 (from April 1, 2018 toMarch 31, 2019)(Percentages indicate year-on-year changes)
attributable to Net income
Revenue
Operating income Ordinary income Profit
owners of parent per share
Millions of yen% Millions of yen % Millions of yen % Millions of yen %YenFiscal year ending
400,000(21.7)(86,500)－(86,500)－(105,000)－(405.46)
March 31, 2019
Note: Revision to the latest forecast announcement 2018: 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 December 31, 2018260,324,529 shares
As of March 31, 2018260,324,529 sharesb. Number of treasury stock at the end of the period
As of December 31, 2018
1,357,148 shares
As of March 31, 2018
1,356,873 sharesc. Average number of shares during the period
For the Nine months ended December 31, 2018258,967,536 shares
For the Nine months ended December 31, 2017258,969,252 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.

Chiyoda Corporation (6366)
Consolidated Financial Results for the nine months Ended December 31, 2018

Table of Contents for the appendices1.

2.

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

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

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

Outlook for the Next Fiscal Year .......................................................................................... 4(4)

Business Risk...................................................................................................................... 4(5)

Business Policy, Business Environment and Issues to Address .......................................... 4

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

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

Consolidated statement of income and comprehensive income .......................................... 8

3.

Production, Contracts and Revenue ........................................................................................ 11

4.

Others...................................................................................................................................... 12

1

Chiyoda Corporation (6366)
Consolidated Financial Results for the nine months Ended December 31, 2018

1. Qualitative Information Related to Consolidated Performance(1) Qualitative Information on Business Performance
The Group’s third quarter results report additional costs required to comply with the schedule of the Tangguh
LNG project (Indonesia), in addition to the costs increase for the Cameron LNG project (Louisiana, U.S.).
For these two projects, negotiations with the clients requesting reimbursement for the additional costs arein progress. Amid these circumstances, the Group is continuously executing large-scale LNG Projects
worldwide; completed 2nd Train of Ichthys LNG Project (Australia) and the 3rd Train of Yamal LNG (Russia).
Further the Company has been actively involved in front-end engineering and design work (FEED) for the
Qatar expansion project, and FEED and Engineering, Procurement and Construction (EPC) proposal
preparation work for Nigeria Train 7 LNG.
In addition, in November 2018 the Company has reviewed some of its structural reforms and growth strategyof the medium-term management plan “Mirai Engineering - A Grand Opportunity for the Future”. This plan
includes future business model and expansion into new markets covering renewable energy and life
sciences, and a digitalization strategy leveraging Big Data and Artificial Intelligence (AI) technology.
On consolidated basis, for the fiscal year ending March 31, 2019, New Orders amounted to 390,425 million
yen (up 86.7% YoY), Backlog to 728,094 million yen (up 11.4% YoY) and Revenues to 306,101 million yen(down 20.7% YoY). Operating loss came to 107,790 million yen (compared with previous quarter’s
consolidated operating loss of 8,843 million yen), Ordinary loss amounted to 107,045 million yen (comparedwith previous quarter’s consolidated ordinary loss of 8,421 million yen) and Loss attributable to owners ofparent came down to 128,151 million yen (compared with previous quarter’s consolidated profit attribute toowners of parent of 5,198 million yen). Losses are mainly due to increase in incremental construction costs
for Cameron LNG project and Tangguh LNG project, and reversal of deferred tax assets.
The summary of activities in the engineering business; reportable segments below:
EnergyLNG Plants / Other Gas Related Work
【Overseas】
Chiyoda is executing EPC work for projects in Australia, the U.S., Russia and Indonesia. The Ichthys
LNG plant (Australia) started production of both trains. The Yamal LNG 3rd train (Russia) was successfullycompleted a year ahead of the contract delivery schedule and accounts for a total production capacity of
16.5 mtpa. For the future EPC works, the Group is engaged in bidding for a new LNG plant project in the
United States. In addition, the Group is currently executing FEED work for a 4-Train LNG expansion
project in Qatar, FEED plus EPC proposal preparation work in Nigeria.
In “Other Gas Related Work”, the Group Company in Qatar is engaged in the EPC work of the helium
production facility as well as being engaged in the EPCm (design, procurement and construction
management) work of the modification and revamping projects of the LNG / gas processing plant
constructed by the Company.
【Japan】
In Japan renovation and modification projects are underway for previously built LNG-receiving terminals,
and for seismic upgrades of facilities under the Basic Act for National Resilience.
Offshore and Upstream: A group company has completed a conceptual design contract for sub-sea gas
field for gas field exploration in Indonesia. The Group will stay focused on floating LNG/gas processing
facilities as one of its business areas.
Refinery/Petrochemical/Metal【Overseas】
Overseas, EPC work started for a large-scale ethylene production plant in the Gulf Coast Area, US. A
group company is executing Engineering, Procurement, Construction and Commissioning (EPCC)
activities for a Residue Fluid Catalytic Cracking (RFCC) project in Malaysia. Also in Malaysia, EPC

2

Chiyoda Corporation (6366)
Consolidated Financial Results for the nine months Ended December 31, 2018activities on a petrochemical tank terminal are ongoing, further a group company based in Southeast Asia
is engaged in project management for downstream projects including refinery and petrochemical in Asia.
Further, FEED work for the Copper Smelter Plant in Indonesia is underway.
【Japan】
Domestically, the Group is executing EPC work for renovation of existing refining facilities aiming to
reduce sulphur content in bunkering fuel as per the new regulation which will become effective in 2020
as well as other various revamping / modification work. Further, the Group has completed EPC work
related to high-function chemical products plant, and is executing EPC work for other chemical facilities
and production plant for hydrogenated petroleum resin.
Environment
Pharmaceutical/Biochemistry/General Chemistry【Japan】
The Group has completed EPC work for pharmaceutical production plant and developed cutting edge,
injection production facilities for high-potency pharmacologically active agents and related
pharmaceutical facilities. EPC work in progress for production facilities of middle molecule, Active
Pharmaceutical Ingredients (APIs).
Environment/New Energy/Infrastructure【Overseas】
A Group company has completed new international airports in Bohol, Philippines and Mongolia. Further,
Chiyoda introduced the Chiyoda Thoroughbred 121 (CT - 121) Process to flue gas desulfurization
facilities at four existing coal-fired plants in India; In Dubai, UAE, a demonstration project of a vegetable
growing facility using artificial light was completed last year and will be introduced at commercial facilities
elsewhere in the Middle East and Russia.
【Japan】
Chiyoda is executing EPC work for the world's largest Battery Energy Storage System Project in Hokkaido,
flue gas desulfurization facilities at existing coal-fired plants, demonstration facilities for CO2 separation
units, photovoltaic (mega solar) facilities and factories complying with the latest food hygiene standards,
and research facility for food plant has been completed. In the New Energy business field a demonstration
plant for producing bio-jet and diesel fuels was completed, and EPC work for the largest capacity biomass
firing plant in Japan is ongoing.
Work is underway on a demonstration project commercializing a hydrogen supply chain, through theAdvanced Hydrogen Energy Chain Association for Technology Development, an organization establishedjointly established with Mitsubishi Corporation, Mitsui & Co., Ltd. and Nippon Yusen (NYK Line).



Digital Technology
The Company is implementing projects using AI technologies to improve plant productivity in a tie-up
agreement with GRID Inc. Under these initiatives, Chiyoda has signed a memorandum of understanding
with Abu Dhabi Gas Liquefaction Co. (UAE) to provide state-of-the-art digital technologies for its LNG
Plant. Further the company has agreed with PT. Donggi-Senoro LNG (Indonesia) on the development ofAI technology to improve the productivity of the LNG plant facilities.
Meanwhile, Chiyoda has launched the internal "Target 20" campaign aiming for further utilization of digitaltechnology. Along that target, the Group strives to strengthen competitiveness based on enhanced
operations through digitization in each area of EPC business as well as corporate management practices.

3

Chiyoda Corporation (6366)
Consolidated Financial Results for the nine months Ended December 31, 2018

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

(3) Outlook for the Next Fiscal Year
Please refer to the company’s release ‘Notice of Revisions to the Forecast of Consolidated Results andDividend” published on October 31, 2018.
In addition, expected foreign exchange of JPY 115/USD remains unchanged.

(4) Business Risk
Risks newly recognized in the third quarter of the fiscal year ending March, 2019 are as follows;
The Company has recognized Operating loss, Ordinary loss and Loss attributable to owners of parent due
to significantly increased construction cost for ongoing LNG projects, notably the Cameron LNG Project inLouisiana in the U.S.
Due to the above, the Company expects deterioration of cash flow and new financing is required.

(5) Business Policy, Business Environment and Issues to Address
In response to the newly recognized risks stated above, the Company has changed a part of its business
policy.
The contents of the business policy which the Company has changed and the countermeasures to solve thebusiness risks are stated in Notes on Assumptions for a Going Concern.

4Chiyoda Corporation (6366)
Consolidated Financial Results for the nine months Ended December 31, 2018

2. Consolidated quarterly financial statements(1) Consolidated balance sheets(Millions of yen)
As of March 31, 2018

As of December 31, 2018

AssetsCurrent assets
Cash and deposits
Notes receivable, accounts receivable fromcompleted construction contracts
Securities
Costs on uncompleted construction
contracts
Accounts receivable - other

96,00858,052

76,884

93,867

7,999－

15,916

11,23841,96759,732

Jointly controlled assets of joint venture
Other131,374
5,563

115,473
6,331

Allowance for doubtful accounts(1,245)(1,245)

Total current assets

374,470

343,449

Non-current assets
Property, plant and equipment
Buildings and structures, net

6,010

5,620

Land
Other, net

4,952
1,108

4,952
1,024

Total property, plant and equipment

12,071

11,597

Intangible assets
Investments and other assets

5,718

5,048

Investment securities
Deferred tax assets

7,681
11,908

7,690
639

Other
Allowance for doubtful accounts

8,672
(185)

8,362
(185)

Total investments and other assets

28,077

16,506

Total non-current assets
Total assets

545,86733,151

420,337

376,601

Chiyoda Corporation (6366)
Consolidated Financial Results for the nine months Ended December 31, 2018

(Millions of yen)
As of March 31, 2018

As of December 31, 2018

Liabilities
Current liabilities
Notes payable, accounts payable forconstruction contracts

147,654

178,594

－
894

98
859

Advances received on uncompleted
construction contracts

76,29482,721

Provision for warranties for completed
construction

419

392

3,288
3,887

43,377
1,551

Current portion of long-term loans payable
Income taxes payable

Provision for loss on construction contracts
Provision for bonuses
Other

15,40819,415

Total current liabilities

247,847

327,012Long-term loans payable
Provision

10,000344

15,931285

Net defined benefit liability
Other

1,176
1,550

1,321
1,157

Total non-current liabilities

13,071

18,695

260,918

345,707

Shareholders' equity
Capital stock

43,39643,396

Capital surplus
Retained earnings

37,11277,024

37,112(53,159)

Treasury shares(1,434)(1,435)

Total shareholders' equity

156,099

25,914

Valuation difference on available-for-salesecurities

64

(32)

Deferred gains or losses on hedges
Foreign currency translation adjustment(1,778)
2,159

(4)
1,742

Remeasurements of defined benefit plans

1,013

1,371

Total accumulated other comprehensive
income

1,458

3,075

Non-current liabilities

Total liabilities
Net assets

Accumulated other comprehensive income

Non-controlling interests
Total net assets
Total liabilities and net assets

6

1,861

1,903

159,418

30,893

420,337

376,601

Chiyoda Corporation (6366)
Consolidated Financial Results for the nine months Ended December 31, 2018

(Millions of yen)
Nine months ended
December 31, 2017
Net sales of completed construction contracts
Cost of sales of completed construction contracts
Gross profit (loss) on completed construction
contracts

Nine months ended
December 31, 2018

385,934
379,672

306,101
400,282

6,262(94,180)

Selling, general and administrative expenses

15,105

13,610Operating loss

(8,843)(107,790)

1,706

2,106

338

409

697

162

Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using
equity method
Other
Total non-operating income

184

169

2,927

2,848

159

173

2,062
284

1,797
132

Non-operating expenses
Interest expenses
Foreign exchange losses
Other

2,506

2,102

(8,421)(107,045)

Gain on sales of shares of subsidiaries andassociates－

112

Reversal of provision for loss on business of
subsidiaries and associates

12,127

－

203
589

－
－

12,920

112

－

382

Total non-operating expenses
Ordinary loss
Extraordinary income

Gain on sales of investment securities
Other
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Total extraordinary losses
Profit (loss) before income taxes
Income taxes - current
Income taxes - deferred

－

382

4,499

(107,315)(5,402)

10,306

4,581

10,494

Total income taxes(821)

20,801

Profit (loss)
Profit attributable to non-controlling interests

5,320(128,116)

122

34

Profit (loss) attributable to owners of parent

5,198(128,151)

7

Chiyoda Corporation (6366)
Consolidated Financial Results for the nine months Ended December 31, 2018(2)

Consolidated statement of income and comprehensive income(Consolidated statement of income)(Millions of yen)
Nine months ended
December 31, 2017
Profit (loss)
Other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, netof taxShare of other comprehensive income ofentities accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to ownersof parent
Comprehensive income attributable to noncontrolling interests

8

Nine months ended
December 31, 2018

5,320

(128,116)

(282)

(97)

614

1,764

(844)

(183)

125

358

403

(166)

16

1,675

5,336

(126,441)

5,197(126,534)

139

93

Chiyoda Corporation (6366)
Consolidated Financial Results for the nine months Ended December 31, 2018

Notes on Consolidated Quarterly Financial Statements(Notes on Assumptions for a Going Concern)
In the third quarter of the consolidated financial results, the Chiyoda Group has an Operating loss of 107,790
million yen, Ordinary loss of 107,045 million yen and Loss attributable to owners of parent of 128,151 million
yen due to significantly increased construction cost for ongoing LNG projects, notably the Cameron LNG
Project in Louisiana in the U.S.
Due to the above, the Company expects deterioration of cash flow and new financing is required in earlynext fiscal year. Under this circumstance, the Company recognizes events and conditions which may cause
substantial doubts about the Company’s ability to continue as a going concern.
In response to these events and situations, the Group recognizes that the top priority is to prevent further
cost increase of Cameron LNG project, and takes every necessary countermeasures under the special task
team newly established.
In addition, the Group is implementing countermeasures to reduce costs, obtaining change orders,reviewing settlement conditions from ongoing projects including the Cameron LNG project, as well as
making efforts to improve the cash flow by reducing SG&A cost and sales of non-core assets.
And the Group has decided to partly revise its medium-term management plan "Mirai Engineering - A Grand
Opportunity for the Future” issued in August 2017.
1. Ongoing Project (including Cameron LNG): Resource Allocation and Management Priority
2. Enhancement of risk management capabilities and highlight on not overstraining order capacity
3. Extensive cost reduction
4. Strengthening financial performance
Along the above outline, in order to secure necessary fund for its operation, the Company has consistentcommunications with its major shareholder Mitsubishi Corporation and other stakeholders.
However, as the countermeasures are still in progress, and discussions, including financial support, with
Mitsubishi Corporation as well as other stakeholders are still ongoing, no consensus has been reached asof today.
The consolidated financial statements are prepared with an assumption of a going concern and do notreflect the impact of material uncertainty concerning the assumption of a going concern in the consolidated
financial statements

9Chiyoda Corporation (6366)
Consolidated Financial Results for the nine months Ended December 31, 2018

(Notes on Significant Changes in the Amount of Shareholders’ Equity, if Applicable)
None(Changes in accounting policies)
The Company has applied IFRS 9, “Financial Instruments” and 15, “Revenue from Contracts with
Customers”, from the first quarter of the fiscal year ending March 31, 2019. The effects this change will
have on business performance are minor.

10Chiyoda Corporation (6366)
Consolidated Financial Results for the nine months Ended December 31, 2018

3. Production, Contracts and Revenue(Millions of yen)
Apr. 1, 2017－Dec. 31, 2017

Engineering
LNG PlantNew
contracts(ratio)New
contracts(ratio)206,598(98.8%)

Apr. 1, 2018－Dec. 31, 2018

New
contracts(ratio)New
contracts(ratio)Revenue(ratio)383,452

695,028

387,922

303,598

728,094(99.4%)(100.0%)(99.4%)

99.2%(100.0%)75,562281,988389,71343,814

198,061

193,336(36.1%)(73.1%)(56.1%)(11.2%)(64.7%)(26.6%)

Backlog ofcontracts(ratio)Gas Development/
Processing/Receiving

1,841

8,701

5,143

12,237

1,464

14,553(0.9%)(2.3%)(0.7%)(3.1%)(0.5%)(2.0%)

Refinery/Petrochemical/
Metal

33,34741,367

149,645

205,999

44,215

312,482(15.9%)(10.7%)(21.5%)(52.8%)(14.4%)(42.9%)

30,46022,98942,78318,14725,782

28,410(14.6%)(6.0%)(6.2%)(4.7%)(8.4%)(3.9%)

54,521

21,421

96,626

102,019

28,390170,191(26.1%)(5.5%)(13.9%)(26.1%)(9.3%)(23.4%)

10,865

6,984

11,116

5,704

5,684

9,119

(5.2%)(1.8%)(1.6%)(1.5%)(1.9%)(1.2%)

2,481

2,481

2,502

2,502

－)

(1.2%)(0.6%)－)(－)(0.6%)(0.8%)(－)

Pharmaceutical/Biochemistry/
ChemicalEnvironment/New Energy/
Infrastructure
OthersOther Business
Total
Domestic
Overseas

209,079

385,934

695,028

390,425

306,101

728,094(100.0%)(100.0%)(100.0%)(100.0%)(100.0%)(100.0%)113,205

76,984

158,132

179,800

74,640268,086(54.1%)(19.9%)(22.8%)(46.0%)(24.4%)(36.8%)

95,874308,949

536,895

210,624

231,461

460,008(45.9%)(80.1%)(77.2%)(54.0%)(75.6%)(63.2%)

Note1: The backlog of contracts for the nine months ended December 31, 2018 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.

11

Chiyoda Corporation (6366)
Consolidated Financial Results for the nine months Ended December 31, 2018

4. Others
Please refer to Notes on Assumptions for a Going Concern.

12