JGC Holdings Corporation

I'm Taguchi of Finance Unit. I present the outline of financial results. Please see page 4. This is a highlight of FY 2024. With a large-scale contract in Indonesia, which was announced in December, posted in Q4, New contracts in FY 2024 were ¥922.5 billion. The final loss contracted to ¥0.3 billion due to additional gross profit from the completion of several domestic projects as well as higher investment income from equity method affiliates. Annual dividend per share remained unchanged at ¥40. Update on issues following the downward revision in Q3 is described here. In Taiwan LNG Terminal, we revised the budget due to the delayed handover of part of construction sites, but the handover progressed later. In Saudi Arabia, response to a financially distressed subcontractor is ongoing. In LNG Canada, additional construction workers for completion are being mobilized in line with the plan. Expenses for the lower operating level were within the forecast and had no additional impact. Please see page 5 for Consolidated Income Statement. I'll explain in comparison with a forecast that was revised in Q3. Net sales were 858 billion yen, up 28 billion yen from the forecast. In the total engineering business, we achieved greater progress than our expectations on large project. Gross profit was 18.9 billion yen, up 1.9 billion yen from the forecast, due to the profit upon completion of domestic project in total engineering business. Operating loss improved 2.6 billion yen from 14 billion yen in the forecast to 11.4 billion yen. Ordinary profit was 11.3 billion yen, up 5.3 billion yen from the forecast due to an increase in investment income from equity method affiliate and interest income in addition to the increased operating profit. Loss attributable to owners or parent improved 3.7 billion yen from the forecast of 4 billion yen resulting in 0.3 billion yen. This slide 6 shows segment information. I will explain them in comparison to the revised forecast presented in Q3. Net sales in total engineering business were 794.9 billion yen, up 26.9 billion yen from the forecast, with a progress in large overseas project. Segment loss improved 1.5 billion yen from the forecast, ending at 14.5 billion yen. It resulted in an upside due to an unexpected build-up in profit along with the completion of domestic project. In functional materials manufacturing business, both sales and profit increased, though slightly. Net sales were 54.6 billion yen and segment profit was 8.1 billion yen. Due to recovery in demand in semiconductor-related and hard disk-related materials, fine chemicals and fine ceramics business were robust. Adjustment is as shown here. Please see page 7 for outline of contract. New contracts in FY 2024 were 832 billion yen overseas, 90.5 billion yen domestic, and 922.5 billion yen in total. Large-scale contract of EGL CCUS project in Indonesia were recorded in Q4. Additional contract for ongoing technical transfer service for refinery upgrading in Iraq were also recorded.

Please refer to slide 8. This shows outstanding contracts.

As of the end of March 2025, the outstanding contracts stood at 1 trillion and 404.6 billion yen, up approximately 160 billion yen from the beginning of the fiscal year. In the fourth quarter, we recorded the orders for the EGR CCUS project Indonesia, which resulted in the following changes by segment. Energy transition and others. Transaction now accounts for 28%. While LNG became 31%, it was 42% at the end of the previous fiscal year, and oil and gas fell from 36% to 25%. By region, Asia now represents 37%, while the Middle East, of which previously accounted for more than half, now declined to 45%. Among the major projects in the outstanding contracts, orders value over 100 billion yen, the Saudi Arabia crude oil gas separation unit, and order value in over 30 billion yen, the Saudi Arabia MGL plant expansion project. These two have been provisioned for potential losses. The version of the tool, the crude oil gas separation unit, is progressing according to the plan and is currently in its peak construction phase. Most equipment has already arrived on site and installation work is underway. For the NGL plant expansion project, the contract with a financially troubled subcontractor was terminated and we have switched to direct employment to continue the construction. In addition to these two projects, there are four other pending projects, however, each of them has an order value of less than 30 billion yen. Now please refer to slide 9. This slide shows the consolidated financial position and cash flows. Total assets remained flat at ¥784.1 billion. Total net assets increased slightly to ¥392.2 billion, mainly due to an increase in valuation gains and other marketable securities. Equity ratio was 49.8%. Our share of cash held by an unconsorted joint venture, which is not recorded on the balance sheet, decreased by ¥54.5 billion from the beginning of the fiscal year to ¥93.5 billion. Operating cash flow was positive at ¥46.7 billion, supported by progress in receivables collection from domestic overseas projects. Investing cash flow recorded an outlook of 21.1 billion yen mainly due to the acquisition of property, plant, equipment. Financing cash flow was negative at 15 billion yen, reflecting dividend payments and the repayment of the borrowings by overseas subsidiaries. As a result, cash and cash equivalents at the end of the period remained almost flat at 332.7 billion yen, roughly an unchanged from the beginning of the fiscal year. Please refer to slide 11. This is forecast for FY 2025. We forecast orders for total engineering business to reach 650 billion yen. A number of large-scale LNG projects are currently under consideration, and we expect to secure multiple field contracts. However, the award timing of EPC contract is likely to be in the second half of the fiscal year or beyond, following the final investment decisions. As a result, we anticipate a year-on-year decline in annual order volume. Considering that the in-award timing of the large EPC projects which are expected to contribute to revenue is shifting later, our earnings forecast is based on the assumption that sales and profit contributions from such projects will be limited during this fiscal year. Additionally, as several ongoing large-scale overseas projects are coming into the end, we expect revenue to decrease by approximately 20% year-on-year to 690 billion yen. Gross profit is expected to be 52 billion yen, with the gross margin being 7.5%. Approximately 20% of the total sales are still accounted for by projects with loss provisions, so profit margins still remain in the process of recovering. Open profit is forecast to return to the black at ¥21 billion, original profit ¥22 billion, and net income attributable to owners of the parent at ¥15 billion. We plan to set the annual dividend at the minimum of ¥40 per share. Finally, please refer to slide 12 for the performance support guest buy segment. In the total engineering business, taking into account the following factors, limited revenue and profit recognition from the large-scale projects, several ongoing large projects are coming into the end, and slow progress on the major projects awarded in the previous fiscal year. which are still in the early phase. We are forecasting a significant decline in the revenue to 628 billion yen, but the segment profit is expected to return to the black at 20 billion yen. In the functional materials business, revenue is expected to remain flat at about 54 billion yen. Segment profit, however, is projected to decline to 7 billion yen, mainly due to the anticipated increase in personnel and raw materials costs. This concludes the overview of financial outlook.