Consolidated Financial Results for the Six-Month Period Ended September 30, 2020 (Japanese GAAP)

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Consolidated Financial Results for the Six-Month Period Ended September 30, 2020 (Japanese GAAP) (Translation) Consolidated Financial Results for the Six-Month Period Ended September 30, 2020 (Japanese GAAP) November 4, 2020 Company name: Kyushu Railway Company Stock exchange listings: Tokyo and Fukuoka Securities code: 9142 URL: https://www.jrkyushu.co.jp/ Representative: Toshihiko Aoyagi, President and CEO Contact: Keiichi Takano, General Manager, Public Relations Department Tel.: +81-92-474-2541 Scheduled date for filing of quarterly report: November 6, 2020 Date of dividend payment commencement: - Preparation of supplementary explanations for financial results: Yes Holding of a briefing on quarterly financial results: Yes (Amounts less than one million yen, except for per share amounts, are omitted.) 1. Consolidated Financial Results for the Six-Month Period Ended September 30, 2020 (From April 1, 2020 to September 30, 2020) (1) Consolidated operating results (Percentages show year-on-year changes.) Net income attributable to Operating revenue Operating income Ordinary income owners of the parent Six months ended Millions of yen % Millions of yen % Millions of yen % Millions of yen % September 30, 2020 124,552 (41.5) (20,571) - (19,520) - (10,248) - September 30, 2019 212,861 1.3 30,217 (9.1) 31,026 (11.5) 23,025 (12.2) (Note) Comprehensive income: Six months ended September 30, 2020: ¥(13,666) million (-%) Six months ended September 30, 2019: ¥25,244 million [(9.9%)] Net income per share Net income per share — basic — diluted Six months ended Yen Yen September 30, 2020 (65.23) - September 30, 2019 143.96 - (2) Consolidated financial position Total assets Net assets Equity ratio Millions of yen Millions of yen % As of September 896,915 397,279 43.8 30, 2020 As of March 31, 828,590 418,298 49.9 2020 (Reference) Shareholders’ equity: As of September 30, 2020: ¥392,421 million As of March 31, 2020: ¥413,293 million 2. Dividends Annual dividends First Second Third Fiscal Total quarter-end quarter-end quarter-end year-end Yen Yen Yen Yen Yen Year ended March 31, 2020 - 46.50 - 46.50 93.00 Year ending March 31, 2021 - 0.00 Year ending March 31, 2021 - 93.00 93.00 (Forecast) (Note) Revisions to the most recently disclosed dividend forecasts: No 3. Consolidated Forecasts for the Fiscal Year Ending March 31, 2021 (April 1, 2020 to March 31, 2021) (Percentages for the full year show year-on-year changes.) Net income Net income per Operating revenue Operating income Ordinary income attributable to owners share of the parent Millions of Millions of Millions of Millions of % % % % Yen yen yen yen yen Full year 291,700 (23.6) (32,300) - (31,400) - (28,400) - (180.76) (Note) Revisions to the most recently disclosed financial forecasts: No Notes (1) Changes in significant subsidiaries during the six months ended September 30, 2020 (changes in specified subsidiaries affecting the scope of consolidation): No (2) Application of special accounting treatment in preparing the quarterly consolidated financial statements: No (3) Changes in accounting policies, changes in accounting estimates and restatement of revisions i Changes in accounting policies with revision of accounting standards: No ii Changes in accounting policies other than the above: No iii Changes in accounting estimates: No iv Restatement of revisions: No (4) Number of shares outstanding (common stock) i Number of shares issued and As of September 157,301,600 As of March 31, 157,301,600 outstanding at end of period 30, 2020 shares 2020 shares (including treasury stock) ii Number of shares of treasury As of September 184,600 As of March 31, 186,100 stock at end of period 30, 2020 shares 2020 shares iii Average number of shares during As of September 157,116,250 As of September 159,937,967 the period 30, 2020 shares 30, 2019 shares Note: The number of shares of treasury stock at the end of the period includes the number of shares of the Company’s stock held by the Board Benefit Trust (BBT) (Second quarter of FY2021/3, 184,600 shares; FY2020/3, 186,100 shares). In addition, the number of shares of the Company’s stock held by the Board Benefit Trust (BBT) is included in the treasury stock that is subtracted in the calculation of the average number of shares during the period (Second quarter of FY2021/3, 185,350 shares; Second quarter of FY2020/3, 62,033 shares). * This summary of consolidated financial results is not subject to quarterly reviews by certified public accountants or corporate auditors. Explanation of Appropriate Uses of Performance Forecasts and Other Important Items Performance forecasts and other forward-looking statements appearing in this document are based on currently available information and specific assumptions deemed rational, and are not assurances that the Company will achieve these forecasts. Actual performance can vary greatly depending on various factors such as fluctuations in interest rates, fluctuations in share prices, changes in exchange rates, fluctuations in the value of assets, changes in the economic and financial environment, changes in the conditions of competition, occurrences of large-scale and other disasters, and changes in regulations. Supplementary quarterly materials are attached to this summary of consolidated financial results. Kyushu Railway Company plans to hold a quarterly financial results presentation meeting for analysts on Thursday, November 5, 2020. The Company plans to publish the presentation materials distributed at this meeting on its website immediately after the meeting is concluded. Contents of Accompanying Materials 1. Qualitative Information on Quarterly Consolidated Financial Performance ....................... 2 (1) Qualitative Information on Consolidated Operating Results ................................................. 2 (2) Qualitative Information on Consolidated Financial Position ................................................. 7 (3) Qualitative Information on Consolidated Performance Outlook ............................................ 7 2. Quarterly Consolidated Financial Statements and Major Notes ........................................... 8 (1) Consolidated Balance Sheets .................................................................................................. 8 (2) Consolidated Statements of Income and Comprehensive Income ......................................... 10 Quarterly Consolidated Income Statements Consolidated Cumulative Second Quarter ....................................................................... 10 Quarterly Consolidated Comprehensive Income Statements Consolidated Cumulative Second Quarter ..................................................................... 11 (3) Consolidated Statements of Cash Flows ................................................................................ 12 (4) Notes to Quarterly Consolidated Financial Statements .......................................................... 13 (Notes on Going Concern Assumption) ................................................................................. 13 (Notes on Significant Changes in the Value of Shareholders’ Equity) ................................... 13 (Additional Information) ........................................................................................................ 13 (Segment Information) ........................................................................................................... 14 (Significant Subsequent Events) ............................................................................................ 14 ○(Financial results presentation materials) Financial Results for the Second Quarter of FY21.3 (Cumulative total for the six-month period from April to September) - 1 - 1. Qualitative Information on Quarterly Consolidated Financial Performance (1) Qualitative Information on Consolidated Operating Results In the six month period ended September 30, 2020, Japan’s economy faced downward pressure on business conditions due to the influence of the COVID-19 infection in Japan and overseas. After the government lifted the state of emergency in May 2020, economic activity gradually began to restart. In this setting, consumer spending has shown signs of improvement. However, the outlook for the resolution of the COVID-19 crisis is unclear, and in this environment the timing, extent, etc., of a recovery in economic activity remain highly uncertain. Challenging conditions are expected to continue for the time being. Looking at the Group’s results, due to spread of the COVID-19 infection, the railway and other businesses were affected by declining mobility demand, sluggish consumer spending, etc. In these conditions, we worked in accordance with our recognition that our most important mission is safety in the railway business, which is our mainstay business. We steadily invested in railway safety, and we advanced preparations for the opening of the Miyazaki and Kumamoto station buildings, which are part of our implementation of strategic city-building initiatives in the regions around our bases. On the other hand, the future course of trends in the management environment is unclear, and in preparation for changes in the management environment, we took necessary countermeasures, such as implementing aggressive, accelerated fund-raising; taking steps to reduce costs, including temporary leave for employees; and reevaluating investment plans. As a result, operating revenue were down 41.5% year on year, to ¥124,552 million; operating loss was ¥20,571 million (compared with operating income of ¥30,217 million in the same period of the previous fiscal year); negative EBITDA
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