Kawasaki Heavy Industries : Report of Earnings and Financial Statements for the Three Months Ended June 30, 2019 (Consolidated) ...

Report of Earnings and Financial Statements for the

Three Months Ended June 30, 2019 (Consolidated)

(Prepared pursuant to Japanese GAAP)

July 30, 2019

Listed company's name:	Kawasaki Heavy Industries, Ltd.
Listed on:	1st sections of the TSE, and NSE
Stock code:	7012
URL:	https://www.khi.co.jp/
Representative:	Yoshinori Kanehana, President
Contact:	Tatsuo Hoshino, Senior Manager, Accounting Department
Tel:	[phone]

Scheduled dates:

Submission of quarterly securities filing: Commencement of dividend payments:

Supplementary materials to quarterly earnings:

Quarterly earnings presentation:

August 6, 2019

-

Available

Conducted (for institutional investors, analysts and the press)

1. Consolidated Financial Results for the Three Months ended June 30, 2019

(April 1, 2019 - June 30, 2019)

(Amounts in millions of yen rounded down to the nearest million yen)

(1) Operating Results

(Percentage figures represent changes versus the year-ago period)

			Net sales			Operating income	Recurring profit	Net income attributable
					to owners of parent
			million yen	%		million yen	%	million yen	%	million yen	%
	Three Months Ended	350,778	2.0		1,088 (84.6)	(4,391)	-	(8,249)	-
	June 30, 2019
	Three Months Ended	343,785	2.5		7,103	44.6	8,550	57.3	2,561	(21.8)
	June 30, 2018
Note: Comprehensive income: Three months ended June 30, 2019:	¥(6,232) million	-%
			Three months ended June 30, 2018:	¥1,672 million	(46.5)%
			Earnings per share	Earnings per share
			- diluted
			yen	yen
	Three Months Ended	(49.38)			-
	June 30, 2019
	Three Months Ended	15.33			-
	June 30, 2018
(2) Financial Condition
			Total assets			Net assets		Equity ratio
			million yen			million yen	%
	June 30, 2019		1,911,544			474,712		24.0
	March 31, 2019		1,838,855			492,261		25.9
Note: Shareholders' equity: June 30, 2019:	¥459,144 million
			March 31, 2019:	¥ 476,387 million

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2. Dividends

Dividend per share

End of first

End of second

End of third

End of fiscal

Record date or term

quarter

quarter

quarter

year

Full year

yen

yen

yen

yen

yen

Year ended

-

35.00

-

35.00

70.00

March 31, 2019

Year ending

-

March 31, 2020

Year ending March

35.00

-

35.00

70.00

31, 2020 (forecast)

Note: Revisions to the most recently announced dividend forecast: None

3. Forecast of Consolidated Earnings for the Year Ending March 31, 2020

					(April 1, 2019 - March 31, 2020)
				(Percentage figures represent changes versus the year-ago period)
							Net income		Earnings per
	Net sales		Operating income	Recurring profit	attributable to owners
							of parent		share
	million yen	%	million yen	%	million yen	%	million yen	%	yen
Full year	1,700,000	6.6	72,000	12.4	61,000	61.1	38,000	38.4	227.48

Note: Revisions to the most recently announced earnings forecast: None

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Notes

1. Changes affecting the status of material subsidiaries (scope of consolidation): None
2. Accounting procedures specific to preparation of quarterly consolidated financial statements: Yes

*For further details, see "2.Consolidated Financial Statements (3)Notes on financial statements" on page 14 in the Accompanying Materials.

1. Changes in accounting policies, changes in accounting estimates, and correction of errors
2. 1. Changes in accounting policies in accord with revisions to accounting standards: Yes
   2. Changes in accounting policies other than (1): None
   3. Changes in accounting estimates: None
   4. Correction of errors: None
3. Number of shares issued and outstanding (common stock)
4. 1. Number of shares issued as of period-end (including treasury stock)

June 30, 2019:	167,080,532 shares
March 31, 2019:	167,080,532 shares

(2) Number of shares held in treasury as of period-end

June 30, 2019:	35,463 shares
March 31, 2019:	35,196 shares

(3) Average number of shares during respective periods

June 30, 2019:	167,045,137 shares
June 30, 2018:	167,047,117 shares

The quarterly report of earnings and financial statements is exempted from quarterly review procedures based on the Financial Instruments and Exchange act.

Appropriate Use of Financial Forecasts and Other Important Matters

Forward-Looking Statements

These materials contain various forward-looking statements and other forecasts regarding performance and other matters. Such statements are based on information available at the time of their preparation, and do not mean that the Company promises to achieve these figures. Actual results may differ from those expressed or implied by forward-looking statements due to a range of factors. For assumptions underlying earnings forecasts and other information regarding the use of such forecasts, refer to "1. Qualitative Information and Financial Statements (3) Consolidated earnings outlook " on page 10 in the Accompanying Materials.

How to Obtain Supplementary Briefing Material on Quarterly Financial Results and Details of the Quarterly Financial Results Briefing

The Company plans to conduct a briefing for institutional investors, analysts and the press by conference call on Tuesday July 30, 2019, and to post the briefing material on quarterly financial results to be used for the briefing on TDnet and the Company's website simultaneously with the announcement of financial results.

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Accompanying Materials - Contents

1. Qualitative Information and Financial Statements	5
(1)	Consolidated operating results	5
(2)	Consolidated financial position	10
(3)	Consolidated earnings outlook	10
2. Consolidated Financial Statements	11
(1)	Consolidated balance sheets	11
(2)	Consolidated statements of income and comprehensive income	13
(3)	Notes on financial statements	14
(Notes on the going-concern assumption)	14
(Notes on significant changes in the amount of shareholders' equity)	14
(Accounting procedures specific to preparation of quarterly consolidated financial statements)	14
(Changes in accounting policies)	14
(Related to consolidated statements of income)	14
(Segment information)	15
3. Supplementary Information	15
(1)	Consolidated cash flow statements (condensed)	15

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1. Qualitative Information about Financial Statements

(1) Consolidated operating results

The global economy continues to grow at a moderate pace overall, but concerns are increasing about an economic downturn stemming from U.S.-China trade friction. Given the possibility of an intensification of U.S.-China trade frictions if future trade talks do not go well, and the remaining possibility of a U.K. exit from the EU without an agreement, there is a continued need to closely monitor the downward risks to the global economy.

The Japanese economy has been recovering modestly, due to the modest increasing of capital investment, the improvement in corporate earnings, and other factors. Although overall modest growth is expected to continue, it is necessary to continue to closely monitor foreign exchange trends and watch out for deterioration in corporate earnings caused by the economic policies, etc. of the United States and other countries.

Amid such an operating environment, the Group's orders received in the first three months of the fiscal year ending March 31, 2020, decreased versus the previous fiscal year, mainly in the Energy System & Plant Engineering segment. Net sales increased overall, due to an increase in the Aerospace Systems and other segments, despite a decline in the Energy System & Plant Engineering segment and Motorcycle & Engine segment. Operating income decreased overall, due to the deterioration in the Precision Machinery & Robot segment and Rolling Stock segment and other factors, despite the improvement in the Energy System & Plant Engineering segment and Motorcycle & Engine segment. Recurring profit and net income attributable to owners of parent fell into the red mainly owing to an increase in loss on foreign exchange.

As a result, the Group's consolidated orders received decreased ¥31.7 billion versus the same period of the previous fiscal year to ¥328.2 billion, consolidated net sales increased ¥6.9 billion year on year to ¥350.7 billion, operating income decreased ¥6.0 billion year on year to ¥1.0 billion, recurring loss deteriorated ¥12.9 billion year on year to ¥4.3 billion, and net loss attributable to owners of parent deteriorated ¥10.8 billion year on year to ¥8.2 billion.

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