JXTG : Consolidated Financial Results for the Second Quarter of Fiscal Year 2019 （181KB）

This document contains a financial summary and financial statements translated from the original

Japanese version, for convenience only.

Consolidated Financial Results for the Second Quarter of Fiscal Year 2019 [IFRS]

		November 8, 2019
Company name:	JXTG Holdings, Inc.	Stock Exchange Listings: Tokyo and Nagoya
Code number:	5020	URL: https://www.hd.jxtg-group.co.jp/
Representative:	Tsutomu Sugimori	Representative Director, President
Contact person:	Ryo Inoue	Group Manager, Investor Relations Group, Finance & Investor Relations Department

Telephone: [phone]
Scheduled date of filing of Quarterly Securities Report:	November 13, 2019
Scheduled date of commencement of dividend payments:	December 4, 2019
Supplemental materials for the quarterly financial results:	Yes

Quarterly financial results presentation:	Yes (for institutional investors and analysts)
	(Amounts of less than 1 million yen are rounded off.)

1. Consolidated Results for the Second Quarter of FY2019 (From April 1, 2019 to September 30, 2019)

(1) Operating Results							(Percentage figures represent changes from same period in the previous fiscal year.)
	Revenue				Operating profit	Profit before tax	Profit attributable to		Total comprehensive
				owners of the parent		income
	Millions of yen		%	Millions of yen		%	Millions of yen	%	Millions of yen	%		Millions of yen		%
2Q of FY2019	5,063,069		(6.8)	130,865		(70.3)	117,878	(72.2)	71,038	(75.1)		33,296		(90.2)
2Q of FY2018	5,429,567		15.9		441,201		125.8	424,140	133.3	285,053	131.1		338,062		117.2
	Basic profit per share		Diluted profit per share
			Yen				Yen
2Q of FY2019			21.68				21.67
2Q of FY2018			84.03				84.00
(2) Financial Position
										Total equity attributable	Equity ratio
	Total assets		Total equity	attributable to owners
		to owners of the parent
										of the parent
	Millions of yen	Millions of yen	Millions of yen			%
2Q of FY2019	8,493,117		3,043,065	2,650,441			31.2
FY2018	8,477,811		3,119,816	2,717,840			32.1
2. Dividends
						Annual cash dividends per share
	End of 1st quarter		End of 2nd quarter		End of 3rd quarter	Year-End		Total
			Yen			Yen		Yen		Yen				Yen
FY2018	-					10.00			-		11.00				21.00
FY2019	-					11.00
FY2019										-		11.00				22.00
(Forecast)

Note: Revision to the most recent dividend forecast: No

3. Forecasts of Consolidated Results for Fiscal Year 2019 (From April 1, 2019 to March 31, 2020)

(Percentage figures are changes from the amount for the corresponding period in the previous fiscal year.)

	Revenue		Operating profit	Profit before tax	Profit attributable to	Basic profit per share
		owners of the parent
	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
FY2019	10,400,000		(6.6)	280,000	(47.9)	250,000	(50.8)	155,000	(51.9)	48.15

Note: Revision to the most recent consolidated earnings forecast: Yes

Regarding the revisions to the forecasts of consolidated results, please refer to "Notification of the Difference between the Forecasts and the Actual of Consolidated Results for the First Half of the Fiscal Year 2019 and Revisions to the Annual Forecasts" announced today.

Average number of shares issued during the period that forms the basis for the calculation of basic profit per share specified above is calculated with the number of issued shares (excluding treasury stock) as of September 30, 2019.

As for the forecasts of operating profit excluding inventory valuation factors*, please see the following.

Operating profit excluding inventory valuation factors:

Forecasts for FY2019:350,000 million yen (percentage change from the previous fiscal year: (32.1)%)

(Reference) Actual results for FY2018: 515,700 million yen

(*) The impact of inventory valuation on the cost of sales by using the weighted-average method and by writing down the book value.

Explanatory Notes

(1) Changes in the number of material subsidiaries during the term under review: None

Note: This item indicates whether there were changes in specified subsidiaries involving a change in the scope of consolidation.

(2) Changes in accounting policies and in accounting estimates
(i)	Changes in accounting policies required by the IFRS:	Yes
(ii)	Changes in accounting policies other than (i) above:	None
(iii)	Changes in accounting estimates: None

Note: For details, please refer to "Summary of Quarterly Consolidated Financial Statements and Major Explanatory Notes Thereto (4) Explanatory Notes to the Summary of Quarterly Consolidated Financial Statements (Changes in accounting policies)" on page 7 of the Attached Material.

(3) Number of shares issued (Common stock)

1. Number of issued shares at the end of the period (including treasury stock) Second Quarter of FY2019 ended September 30, 2019: 3,330,282,649 shares

FY2018 ended March 31, 2019:

3,385,993,649 shares

1. Number of shares of treasury stock at the end of the period
   Second Quarter of FY2019 ended September 30, 2019: 110,873,803 shares

FY2018 ended March 31, 2019:

56,898,910 shares

1. Average number of shares issued during the period
   Second Quarter of FY2019 ended September 30, 2019: 3,277,287,951 shares
   Second Quarter of FY2018 ended September 30, 2018: 3,392,186,467 shares

This report is not subject to quarterly review procedures conducted by certified public accountants or an audit corporation.

Explanation regarding appropriate use of forward-looking statements on results, and other specific comments (Note on Statements Regarding Prospective Matters)

This material contains forward-looking statements; however, actual results may differ materially from those reflected in such forward-looking statements, due to various factors, including the following: (1) changes in macroeconomic conditions and changes in the competitive environment in the energy, resources and materials industries; (2) revisions to laws and strengthening of regulations; and (3) litigation and other similar risks.

Changes from the previous fiscal year (or corresponding period in the previous fiscal year) are not presented ("-") if either or both of the fiscal year (or period) under review and the previous fiscal year (or corresponding period) are negative, or if the percentage change is 1,000% or greater.

Summary of Quarterly Consolidated Financial Statements and Major Explanatory Notes Thereto

(1) Summary of Quarterly Consolidated Statements of Financial Position

			(Millions of yen)
		FY2018	2Q of FY2019
		(As of March 31, 2019)	(As of September 30, 2019)
ASSETS
Current assets
Cash and cash equivalents	385,434	347,469
Trade and other receivables	1,363,974	1,145,707
Inventories	1,590,207	1,538,555
Other financial assets	47,184	52,253
Other current assets		198,851	164,720
Sub total		3,585,650	3,248,704
Assets held for sale		1,737	1,737
Total current assets		3,587,387	3,250,441
Non-current assets
Property, plant and equipment	3,381,642	3,735,265
Goodwill	196,482	193,997
Intangible assets	345,800	340,540
Investments accounted for using the equity	403,241	422,242
method
Other financial assets	422,597	409,254
Other non-current assets	7,662	8,273
Deferred tax assets		133,000	133,105
Total non-current assets		4,890,424	5,242,676
TOTAL ASSETS		8,477,811	8,493,117

1

			(Millions of yen)
		FY2018	2Q of FY2019
		(As of March 31, 2019)	(As of September 30, 2019)
LIABILITIES
Current liabilities
Trade and other payables	1,852,441	1,499,308
Bonds and borrowings	644,288	853,598
Income taxes payable	28,016	31,958
Lease liabilities	-	62,561
Other financial liabilities	18,867	19,474
Provisions	40,413	15,928
Other current liabilities		348,301	319,072
Total current liabilities		2,932,326	2,801,899
Non-current liabilities
Bonds and borrowings	1,573,705	1,474,367
Liabilities for retirement benefits	274,206	266,584
Lease liabilities	-	394,300
Other financial liabilities	37,027	35,641
Provisions	152,269	149,347
Other non-current liabilities	105,518	52,111
Deferred tax liabilities		282,944	275,803
Total non-current liabilities		2,425,669	2,648,153
Total liabilities		5,357,995	5,450,052
EQUITY
Common stock	100,000	100,000
Capital surplus	1,222,193	1,193,310
Retained earnings	1,272,960	1,308,807
Treasury stock	(29,698)	(55,173)
Other components of equity		152,385	103,497
Total equity attributable to owners of the parent		2,717,840	2,650,441
Non-controlling interests		401,976	392,624
Total equity		3,119,816	3,043,065
TOTAL LIABILITIES AND EQUITY		8,477,811	8,493,117

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(2) Summary of Quarterly Consolidated Statements of Profit or Loss

and Summary of Quarterly Consolidated Statements of Comprehensive Income or Loss (Summary of Quarterly Consolidated Statements of Profit or Loss)

			(Millions of yen)
		2Q of FY2018	2Q of FY2019
		(From April 1, 2018	(From April 1, 2019
		to September 30, 2018)	to September 30, 2019)
Revenue	5,429,567	5,063,069
Cost of sales		4,724,541	4,578,724
Gross profit		705,026	484,345
Selling, general and administrative expenses		382,934	399,555
Share of profit of investments accounted for using		35,500	25,834
the equity method
Other operating income	115,934	39,741
Other operating expenses		32,325	19,500
Operating profit		441,201	130,865
Finance income	2,528	4,747
Finance costs		19,589	17,734
Profit before tax		424,140	117,878
Income tax expense		122,948	35,151
Profit	301,192	82,727
Profit attributable to:
Owners of the parent	285,053	71,038
Non-controlling interests		16,139	11,689
Profit		301,192	82,727
			(Yen)
Basic profit per share	84.03	21.68
Diluted profit per share	84.00	21.67

3

(Summary of Quarterly Consolidated Statements of Comprehensive Income or Loss)

			(Millions of yen)
		2Q of FY2018	2Q of FY2019
		(From April 1, 2018	(From April 1, 2019
		to September 30, 2018)	to September 30, 2019)
Profit	301,192	82,727
Other comprehensive income (loss), net of tax
Items that will not be reclassified to profit or loss
Changes in fair value of financial assets measured at fair		8,308	(15,526)
value through other comprehensive income
Remeasurement gains on defined benefit plans	7,818	4,418
Shares of other comprehensive income (loss) of		(222)	(262)
investments accounted for using the equity method

Total

Items that may be reclassified subsequently to profit or loss

Exchange differences on translation of foreign operations

Changes in fair value of cash flow hedges

Shares of other comprehensive income (loss) of investments accounted for using the equity method

	15,904	(11,370)
	33,216	(25,389)
		(2,858)
	(8,362)
	(3,888)	(9,814)

Total		20,966	(38,061)
Other comprehensive income (loss), net of tax		36,870	(49,431)
Total comprehensive income	338,062	33,296
Comprehensive income attributable to:
Owners of the parent	319,930	26,081
Non-controlling interests		18,132	7,215
Total comprehensive income		338,062	33,296

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1. Summary of Quarterly Consolidated Statements of Changes in Equity
   Second Quarter of FY2018 (April 1, 2018 - September 30, 2018)

				(Millions of Yen)
			Other components of equity
			Changes in fair
	Retained	Treasury	value of financial
Common stock Capital surplus	assets measured	Changes in fair
earnings	stock	at fair value	value of cash
			through other	flow hedges
			comprehensive
			income (loss)

Balance as of April 1, 2018

Profit

Other comprehensive income (loss)

Total comprehensive income (loss)

Purchase of treasury stock Disposal of treasury stock Cash dividends Share-based payment transactions

Equity transactions with non-controlling interests, etc. Transfer from other components of equity to retained earnings Transfer from other components of equity to non-financial assets Other

Total transactions with owners

Balance as of September 30, 2018

100,000	1,250,667	1,017,402	(4,730)	143,296	(6,125)
-	-	285,053	-	-	-
-	-	-	-	7,638	(7,257)
-	-	285,053	-	7,638	(7,257)
-	-	-	(30,019)	-	-
-	0	-	0	-	-
-	-	(34,198)	-	-	-
-	60	-	33	-	-
-	-	-	-	-	-
-	-	3,824	-	3,972	-
-	-	-	-	-	1,707
-	(1,732)	-	-	-	-
-	(1,672)	(30,374)	(29,986)	3,972	1,707
100,000	1,248,995	1,272,081	(34,716)	154,906	(11,675)

	Other components of equity		Total equity
	Exchange	Remeasurement
	differences on		attributable to	Non-controlling	Total equity
	losses (gains) on
	translation of	Total	owners of the	interests
	defined benefit
	foreign		parent
	plans
	operations

Balance as of April 1, 2018 Profit

Other comprehensive income (loss)

Total comprehensive income (loss)

Purchase of treasury stock Disposal of treasury stock Cash dividends

Share-based payment transactions

Equity transactions with non-controlling interests, etc.

Transfer from other components of equity to retained earnings

Transfer from other components of equity to non-financial assets Other

Total transactions with owners

Balance as of September 30, 2018

39,031	-	176,202	2,539,541	380,434	2,919,975
-	-	-	285,053	16,139	301,192
26,700	7,796	34,877	34,877	1,993	36,870
26,700	7,796	34,877	319,930	18,132	338,062
-	-	-	(30,019)	-	(30,019)
-	-	-	0	-	0
-	-	-	(34,198)	(8,564)	(42,762)
-	-	-	93	-	93
(197)	-	(197)	(197)	11,125	10,928
-	(7,796)	(3,824)	-	-	-
-	-	1,707	1,707	837	2,544
-	-	-	(1,732)	(10,948)	(12,680)
(197)	(7,796)	(2,314)	(64,346)	(7,550)	(71,896)
65,534	-	208,765	2,795,125	391,016	3,186,141

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Second Quarter of FY2019 (April 1, 2019 - September 30, 2019)

						(Millions of Yen)
					Other components of equity
					Changes in fair
			Retained	Treasury	value of financial
	Common stock	Capital surplus	assets measured	Changes in fair
	earnings	stock	at fair value	value of cash
					through other	flow hedges
					comprehensive
					income (loss)
Balance as of April 1, 2019	100,000	1,222,193	1,272,960	(29,698)	111,486	(8,877)
Cumulative effect of Changes in	-	-	(2,072)	-	-	-
accounting policies
Restated balance	100,000	1,222,193	1,270,888	(29,698)	111,486	(8,877)
Profit	-	-	71,038	-	-	-
Other comprehensive income	-	-	-	-	(15,803)	(2,219)
(loss)
Total comprehensive income	-	-	71,038	-	(15,803)	(2,219)
(loss)
Purchase of treasury stock	-	-	-	(53,970)	-	-
Disposal of treasury stock	-	0	-	0	-	-
Cancellation of treasury stock	-	(28,634)	-	28,634	-	-
Cash dividends	-	-	(36,660)	-	-	-
Share-based payment	-	67	-	105	-	-
transactions
Equity transactions with	-	-	-	-	-	-
non-controlling interests, etc.
Transfer from other components	-	-	3,541	-	738	-
of equity to retained earnings
Transfer from other components	-	-	-	-	-	(390)
of equity to non-financial assets
Other	-	(316)	-	(244)	-	-
Total transactions with	-	(28,883)	(33,119)	(25,475)	738	(390)
owners
Balance as of September 30, 2019	100,000	1,193,310	1,308,807	(55,173)	96,421	(11,486)
	Other components of equity		Total equity
	Exchange	Remeasurement
	differences on		attributable to	Non-controlling	Total equity
	losses (gains) on
	translation of	Total	owners of the	interests
	defined benefit
	foreign		parent
	plans
	operations
Balance as of April 1, 2019	49,776	-	152,385	2,717,840	401,976	3,119,816
Cumulative effect of Changes in	-	-	-	(2,072)	(867)	(2,939)
accounting policies
Restated balance	49,776	-	152,385	2,715,768	401,109	3,116,877
Profit	-	-	-	71,038	11,689	82,727
Other comprehensive income	(31,214)	4,279	(44,957)	(44,957)	(4,474)	(49,431)
(loss)
Total comprehensive income	(31,214)	4,279	(44,957)	26,081	7,215	33,296
(loss)
Purchase of treasury stock	-	-	-	(53,970)	-	(53,970)
Disposal of treasury stock	-	-	-	0	-	0
Cancellation of treasury stock	-	-	-	-	-	-
Cash dividends	-	-	-	(36,660)	(15,806)	(52,466)
Share-based payment	-	-	-	172	-	172
transactions
Equity transactions with	-	-	-	-	(638)	(638)
non-controlling interests, etc.
Transfer from other components	-	(4,279)	(3,541)	-	-	-
of equity to retained earnings
Transfer from other components	-	-	(390)	(390)	(10)	(400)
of equity to non-financial assets
Other	-	-	-	(560)	754	194
Total transactions with	-	(4,279)	(3,931)	(91,408)	(15,700)	(107,108)
owners
Balance as of September 30, 2019	18,562	-	103,497	2,650,441	392,624	3,043,065

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1. Explanatory Notes to the Summary of Quarterly Consolidated Financial Statements
   (Notes on the Assumption of a Going Concern) None
   (Changes in Accounting Policies) (Adoption of IFRS 16 "Leases") IFRS 16 "Leases" (as lessee)
   The JXTG Group has adopted IFRS 16 "Leases" (issued in January 2016) (hereinafter, referred to as "IFRS 16") from the first quarter of FY2019. In applying IFRS 16, the JXTG Group has adopted the transitional method in which the cumulative effect of initially applying this standard is recognized as an adjustment to the balance of retained earnings at the beginning of the first quarter of FY2019.
   In transition to IFRS 16, the JXTG Group has elected to apply the practical expedient provided in paragraph C3 of IFRS 16 to grandfather the assessment of whether a contract contains a lease under IAS 17 "Leases" (hereinafter, referred to as "IAS 17") and IFRIC 4 "Determining whether an Arrangement contains a Lease."
   For leases previously classified as operating leases under IAS 17, right-of-use assets and lease liabilities were recognized on the date of initial application of IFRS 16 except for short-term leases and leases of low-value assets.
   Lease liabilities are initially recognized at the present value of the lease payments outstanding as of the commencement date of the lease by discounting them at the interest rate implicit in the lease. However, unless the interest rate implicit in the lease is practicably readily determinable, the JXTG Group uses its own incremental borrowing rates. The weighted average of such incremental borrowing rates applied to the lease liabilities recognized in the summary of quarterly consolidated statements of financial position as of April 1, 2019 is 1.3%.
   Right-of-use assets are initially measured at the amount of the initial measurement of the lease liabilities plus any estimated costs incurred to fulfill restoration arising from the lease contract. Right-of-use assets are depreciated systematically over the lease term.
   Lease payments are allocated to finance costs and the repayment portion of the outstanding lease liabilities in a way that the constant rate of interest is applied to the outstanding lease liability. Finance costs are presented separately from depreciation associated with the right-of-use assets in the summary of quarterly consolidated statements of profit or loss.
   Lease payments for short-term leases and leases of low-value assets are recognized as expenses on a straight-line basis over the lease term unless another systematic basis is more representative of the pattern of the lessee's benefit.

For leases as lessee previously classified as finance leases under IAS 17, the right-of-use assets and lease liabilities at the date of initial application were recorded at the carrying amounts of the leased assets and the lease obligations at the date immediately before the date of initial application.

The following is the reconciliation of future minimum lease payments of non-cancellable operating leases disclosed under IAS 17 as of March 31, 2019 and lease liabilities recognized in the summary of quarterly consolidated statements of financial position as of the date of initial application.

	(Millions of yen)
	Amount
(a) Future minimum lease payments of non-cancellable operating leases as of March 31, 2019	189,910
Discounted present value of (a)	177,503
Finance lease obligations as of March 31, 2019	59,344
Effect of reassessment of lease term, etc.	237,314
Lease liabilities as of April 1, 2019	474,161

The following is the reconciliation of leased assets recognized in the consolidated statements of financial position as of March 31, 2019 and right-of-use assets recognized in the summary of quarterly consolidated statements of financial position as of the date of initial application.

	(Millions of yen)
	Amount
Leased assets included in property, plant and equipment as of March 31, 2019	44,606
Asset retirement obligations related to the above leased assets as of March 31, 2019	7,492
Right-of-use assets recognized in property, plant and equipment as of April 1, 2019	407,817
Right-of-use assets included in property, plant and equipment as of April 1, 2019	459,915

Due to the above application, retained earnings decreased 2,072 million yen at the date of initial application.

The impact on the summary of quarterly consolidated statements of profit or loss for the second quarter of FY2019 was immaterial.

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(Segment Information)

1. Second Quarter of FY2018 (April 1, 2018 - September 30, 2018)
   Information on Revenue, Profit or Loss and Other Items from Each Reporting Segment

									(Millions of yen)
									Recorded
			Oil and		Total			Adjustments	amount on
		Energy	natural gas	Metals	reporting		Other	consolidated
			(Note 3)
			E&P		segments			financial
									statements
Revenue
Revenue from	4,642,859	70,774	516,477	5,230,110		199,457	-	5,429,567
external customers
Inter-segment revenue	2,757	-	1,077	3,834		22,115	(25,949)	-
or transfers (Note 1)
Total		4,645,616	70,774	517,554	5,233,944		221,572	(25,949)	5,429,567
Segment	profit (loss)
(Note 2)		343,708	35,565	40,637	419,910		17,874	3,417	441,201
Finance income								2,528
Finance costs								19,589
Profit before tax								424,140
(Notes)	1. Inter-reporting segment revenue or transfers are based on actual market prices.

1. 1. Segment profit (loss) is stated as operating profit in the summary of the quarterly consolidated statements of profit or loss.
   2. The segment profit adjustment of 3,417 million yen includes the net amount of 3,516 million yen, which is the income and expenses of the entire Company not allocated to the reporting segments or the "Other" category.
2. Second Quarter of FY2019 (April 1, 2019 - September 30, 2019)
   Information on Revenue, Profit or Loss and Other Items from Each Reporting Segment

									(Millions of yen)
									Recorded
			Oil and		Total			Adjustments	amount on
		Energy	natural gas	Metals	reporting		Other	consolidated
			(Note 3)
			E&P		segments			financial
									statements
Revenue
Revenue from	4,277,916	59,085	498,153	4,835,154		227,915	-	5,063,069
external customers
Inter-segment revenue	2,507	-	927	3,434		23,151	(26,585)	-
or transfers (Note 1)
Total		4,280,423	59,085	499,080	4,838,588		251,066	(26,585)	5,063,069
Segment	profit (loss)
(Note 2)		49,175	24,826	35,225	109,226		16,934	4,705	130,865
Finance income								4,747
Finance costs								17,734
Profit before tax								117,878
(Notes)	1. Inter-reporting segment revenue or transfers are based on actual market prices.

1. Segment profit (loss) is stated as operating profit in the summary of the quarterly consolidated statements of profit or loss.
2. The segment profit adjustment of 4,705 million yen includes the net amount of 3,618 million yen, which is the income and expenses of the entire Company not allocated to the reporting segments or the "Other" category.

8