Chiyoda Global Headquarters
Minato Mirai Grand Central Tower
4-6-2, Minatomirai, Nishi-ku,
Yokohama 220-8765, Japanwww.chiyodacorp.com/en

The presentation was conducted inJapanese.

Thisdocument

isFebruary 15, 2023

aIR, PR & Sustainability Advanced Section

translation/summary for reference only.

Corporate Services Department
Chiyoda Corporation

Summary of a Q&A session following the Presentation of theThird Quarter Financial Results for Fiscal Year Ending March 31, 2023
The following is a summary of a Q&A session following the presentation (telephoneconference) of Chiyoda Corporation’s (Chiyoda) financial results for the third quarter of fiscal
year ending March 31, 2023, released on February 2, 2023.

Question
1

AnswerRevenue
Lowering of the full year revenue •Accounting progress is below the full year

forecast

byforecast at the beginning of the term from

optimized material procurement

adjusting shipping arrangements within the

reducing construction progresscontract schedule on some projects.

below forecast on some projects. •Revenue will be below the full year forecast

Please give an update of current

at the beginning of the term and will beand prospective project status.

recorded in the next fiscal year.

wasexplained•Optimizing

materials

procurement

isa

countermeasure against global inflation,including shipping costs, minimizing theinfluence of inflation by cooperating withclients and partners. Large size equipment
procurement is nearing completion.
2Gross profit margin
Please explain how gross profit •Energy

margin shifted from 2Q for Energy

In 2Q, contingencies increased on someandprojects with ongoing client discussions totheGlobal

respectively.

Environment

share additional costs caused by globalinflation. Profit improved from sharing risks
with clients in 3Q.

1

Chiyoda Global Headquarters
Minato Mirai Grand Central Tower
4-6-2, Minatomirai, Nishi-ku,
Yokohama 220-8765, Japanwww.chiyodacorp.com/en

Question

Answer•Global Environment
Discussions with clients are ongoing tominimize supply chain disruption influence insome domestic projects, awarded before therevitalization plan took effect. Profit isaccumulating in new business fields such as
life science.

•The full year profit/loss statement illustrates a
better perspective than the quarterly one.

3

Global inflation
Material procurement costs, other •There is no crucial procurement cost overrun

than large size equipment, isrisk.

anticipated to increase due toprocured within project budgets and shipping

globalcosts are decreasing.

inflation.

Howdoes

Largesizeequipment

has

been

Chiyoda counteract the risk by •Cost overrun risk is dispersed by separating

adjusting shipping arrangementspurchasing and shipping.

within contract schedules?

•Chiyoda minimizes the influence of cost
inflation on ongoing projects by cooperatingwith clients and partners and monitoringmaterial and shipping cost trends.

4

Ordinary profit & Profit
Whatfactors

increased

the •Operating profit forecast was unchanged.

ordinary profit and profit full year

Ongoing projects are progressing steadily,

forecast?

profit is accumulating in new business fields
and risk is being shared with clients, althoughrevenue has fallen behind the full year
forecast at the beginning of the term.
•The ordinary profit and profit full year forecast
was revised upward, considering project
related extraordinary income and investment
income.

5Foreigncurrencytranslation

adjustment

2Chiyoda Global Headquarters
Minato Mirai Grand Central Tower
4-6-2, Minatomirai, Nishi-ku,
Yokohama 220-8765, Japanwww.chiyodacorp.com/en

Question
Why istranslation

theforeign

adjustment

Answercurrency •Thein

fluctuations in exchange rates for overseas

thebalance sheet a large negative
amount in 3Q?

figurecomes

mainlyfromlarge

subsidiaries.
•The current exchange rate has returned toprevious levels, making the negative figuresmall.

6NFS LNG, Qatar
How does Chiyoda forecast new •The NFS LNG bid process is not asorders?

anticipated. Chiyoda will achieve the neworder forecast by including the full scope ofthe order. In executing NFE LNG, Chiyoda
recognized unanticipated risks, such as
COVID-19 and the geopolitical crisis inUkraine. We will make a final decision byevaluating all risks.

7USA projects
What is the status of projects in •The construction phase has the greatest

the USA? What is Chiyoda’s

exposure to risks on EPC projects in thestrategy for new projects there?

USA. Lump sum contracts hold increased
risk because of excessive labor costs andrisk and lawsuit risks. Chiyoda stringently
assesses and controls construction risks.
Joint venture partners are responsible for theconstruction phase of ongoing LNG projects
in the USA. This also applied to a recently
completedethylene

project

there,

with

Chiyoda being responsible for engineeringand procurement.
In the middle east, we appoint suitably
qualified and competent subcontractors.
•Although there are prospective expansion
projects

intheUSA,

finalinvestment

decisions (FID) are unlikely on all projects. A
2050 ‘Net Zero’ society is edging closer and3

Chiyoda Global Headquarters
Minato Mirai Grand Central Tower
4-6-2, Minatomirai, Nishi-ku,
Yokohama 220-8765, Japanwww.chiyodacorp.com/en

Question

Answerthe importance of LNG as a transition energy
is increasing. Chiyoda will focus on projects
with a high possibility of FID and low
construction risks.

-EndPlease submit inquiries to:
IR, PR & Sustainability Advanced Section, Corporate Services Department
Tel. +81-45-225-7734

Note: Some additions and corrections have been made to simplify the content for readers.
Any projections included in these materials are based solely on information available at thetime this presentation was prepared. It is possible that actual results may vary significantly
from the projections due to a number of risk factors such as economic conditions. The results
projected here should not be construed in any way as being guaranteed by the Company.
Investors are recommended not to depend solely on these projections for making investment
decisions.

4