Mitsui : Consolidated Financial Results for the Three-Month Period Ended June 30, 2020

Consolidated Financial Results for the Three-Month Period Ended June 30, 2020 [IFRS]

Tokyo, July 31, 2020 - Mitsui & Co., Ltd. announced its consolidated financial results for the three-month period ended June 30, 2020, based on International Financial Reporting Standards ("IFRS").

Mitsui & Co., Ltd. and subsidiaries

(Web Site : https://www.mitsui.com/jp/en/)

President and Chief Executive Officer : Tatsuo Yasunaga

Investor Relations Contacts : Masaya Inamuro, Investor Relations Division TEL [phone]

1. Consolidated financial results

1. Consolidated operating results information for the three-month period ended June 30, 2020 (from April 1, 2020 to June 30, 2020)

		Three-month period ended June 30,
		2020		%	2019		%
Revenue	Millions of yen	1,521,768		△6.8	1,633,120	4.9
Profit before income taxes	Millions of yen	101,990		△40.8	172,403	3.2
Profit for the period	Millions of yen	66,663		△50.6	134,884	7.0
Profit for the period attributable to owners of the parent	Millions of yen	62,557		△50.0	125,036	5.6
Comprehensive income for the period	Millions of yen	172,237	447.1	31,479		△80.3
Earnings per share attributable to owners of the parent, basic	Yen	36.92			71.94
Earnings per share attributable to owners of the parent, diluted	Yen	36.90			71.88

Note:

Percentage figures for Revenue, Profit before income taxes, Profit for the period, Profit for the period attributable to owners of the parent, and Comprehensive income for the period represent changes from the previous year.

(2) Consolidated financial position information
					June 30, 2020		March 31, 2020
	Total assets		Millions of yen	11,486,047		11,806,292
	Total equity		Millions of yen	4,124,189		4,060,932
	Total equity attributable to owners of the parent		Millions of yen	3,870,727		3,817,677
	Equity attributable to owners of the parent ratio	%	33.7		32.3
2. Dividend information
				Year ended March 31,				Year ending March
			2021	2020				31, 2021 (Forecast)
	Interim dividend per share	Yen				40		40
	Year-end dividend per share	Yen				40		40
	Annual dividend per share	Yen				80		80
Note :

Change from the latest released dividend forecast: None

3. Forecast of consolidated operating results for the year ending March 31, 2021 (from April 1, 2020 to March 31, 2021)

			Year ending
			March 31, 2021
	Profit attributable to owners of the parent	Millions of yen	180,000
	Earnings per share attributable to owners of the parent, basic	Yen	106.74
Note :
Change from the latest released earnings forecast: None

4. Others

1. Increase/decrease of important subsidiaries during the period : None
2. Changes in accounting policies and accounting estimate :

(i)	Changes in accounting policies required by IFRS	Yes
(ii)	Other changes	None
(iii)	Changes in accounting estimates	None

Note :

For further details please refer to page 17 "3. Condensed Consolidated Financial Statements (6) Changes in Accounting Policies".

(3) Number of shares :
		June 30, 2020	March 31, 2020
	Number of shares of common stock issued, including treasury stock	1,716,720,206	1,742,684,906
	Number of shares of treasury stock	33,975,077	35,184,567
		Three-month period ended Three-month period ended
		June 30, 2020	June 30, 2019
	Average number of shares of common stock outstanding	1,694,434,804	1,738,073,023

This quarterly earnings report is not subject to quarterly review.

A Cautionary Note on Forward-Looking Statements:

This report contains forward-looking statements including those concerning future performance of Mitsui & Co., Ltd. ("Mitsui"), and those statements are based on Mitsui's current assumptions, expectations and beliefs in light of the information currently possessed by it. Various factors may cause Mitsui's actual results to be materially different from any future performance expressed or implied by these forward-looking statements.

Therefore, these statements do not constitute a guarantee by Mitsui that such future performance will be realized. For cautionary notes with respect to forward-looking statements, please refer to the "Notice" section on page 11.

Supplementary materials and IR meetings on financial results:

Supplementary materials on financial results can be found on our web site.

We will hold an IR meeting on financial results for analysts and institutional investors on July 31, 2020. Contents of the meeting (English and Japanese) will be posted on our web site immediately after the meeting.

Table of Contents
1. Qualitative Information
(1)	Operating Environment……………………………………………………………………...………….….	2
(2)	Results of Operations………………………………………………………………………………………	3
(3)	Financial Condition and Cash Flows………………………………………………………………………	8

1. Information Concerning Profit Forecast for the Year Ending March 31, 2021…………………………… 11 2. Other Information……………………………………………………………………………………………. 11

3. Condensed Consolidated Financial Statements

1. Condensed Consolidated Statements of Financial Position........................................................….............. 12
2. Condensed Consolidated Statements of Income and Comprehensive Income...............................….......... 14
3. Condensed Consolidated Statements of Changes in Equity...............................................................…...... 15
4. Condensed Consolidated Statements of Cash Flows..............................................................................….. 16

(5)	Assumption for Going Concern....................................................................................................................	17
(6)	Changes in Accounting Policies...................................................................................................................	17
(7)	Changes in Presentation................................................................................................................................	17
(8)	Segment Information.................................................................................................…...............................	18
(9)	The Fire Incident of Intercontinental Terminals Company LLC..................................................................	19
(10)	Taxation on Capital Gain in India.................................................................................................................	19

- 1 -

1. Qualitative Information

As of the date of disclosure of this quarterly earnings report, the review procedures for quarterly financial statements in accordance with the Financial Instruments and Exchange Act are in progress.

1. Operating Environment

In the three-month period ended June 30, 2020, despite signs of improvement in China, the global economy experienced a rapid drop in internal and external demand and the growth rate decreased significantly due to the spread of infections of COVID-19 in major developed countries, such as the U.S., and emerging and developing countries excluding China. However, the global economy appears to have made it out of its worst period and be moving toward recovery as the economy has bottomed out with the resumption of economic activities.

In the U.S., consumer spending, which took a major hit due to the lockdown at the start of the period, showed signs of bottoming out due to the subsequent resumption of economic activities, economic measures, etc., and employment is gradually improving. On the other hand, there appears to be a second wave of infections and there are concerns over its impact. In Europe, although economic activities have resumed due to the easing of restrictions against going outside and the effects of economic measures are gradually appearing, the situation seems to be improving at a sluggish pace. In Japan, consumer spending has bottomed out due to the lifting of the state of emergency and economic measures and the economy is expected to improve in the future. However, the pace of improvement is likely to be gradual. In emerging countries, manufacturing activities in China continue to resume, and the economy is recovering with signs of a pickup in consumption and investments. On the other hand, there are concerns regarding the economic outlook of Russia and Brazil as they are suffering from a fall in the price of crude oil, and Brazil in particular is experiencing a serious outbreak of infections.

Considering that COVID-19 continues to spread depending on the country and region, careful attention should be given to the possibility that the global economy may deteriorate again.

- 2 -

1. Results of Operations

1) Analysis of Consolidated Income Statements

			(Billions of Yen)	Current Period	Previous Period	Change
	Revenue		1,521.8	1,633.1	(111.3)
	Gross profit		189.7	209.2	(19.5)
	Selling, general and administrative expenses		(141.2)	+6.5
	(134.7)
			Gain (Loss) on Securities and Other	8.4	6.3	+2.1
			Investments-Net
	Other Income		Impairment Reversal (Loss) of Fixed	(0.3)	(1.7)	+1.4
		Assets-Net
	(Expenses)
		Gain (Loss) on Disposal or Sales of
			(0.1)	1.4	(1.5)
			Fixed Assets-Net
			Other Income (Expense)-Net	0.3	7.8	(7.5)
			Interest Income	6.2	11.2	(5.0)
	Finance Income
		Dividend Income	13.9	24.8	(10.9)
	(Costs)
		Interest Expense	(15.4)	(23.8)	+8.4
	Share of Profit (Loss) of Investments Accounted for Using	34.0	78.5	(44.5)
	the Equity Method
	Income Taxes		(35.3)	(37.5)	+2.2
	Profit for the Period	66.7	134.9	(68.2)
	Profit for the Period Attributable to Owners of the Parent	62.6	125.0	(62.4)

* May not match with the total of items due to rounding off. The same shall apply hereafter.

Revenue

Revenue for the three-month period ended June 30, 2020 ("current period") was ¥1,521.8 billion, a decline of ¥111.3 billion from the corresponding three-month period of the previous year ("previous period").

Gross Profit

Mainly the Mineral & Metal Resources Segment, the Lifestyle Segment and the Energy Segment recorded a decline in gross profit, while the Innovation & Corporate Development Segment recorded an increase.

Selling, general and administrative expenses

The Mineral & Metal Resources Segment recorded an increase while overall, selling, general and administrative expenses decreased ¥6.5 billion from previous period.

Other Income (Expenses)

Gain (Loss) on Securities and Other Investments-Net

For the current period, a gain on sale of securities was recorded in the Machinery & Infrastructure Segment.

Other Income (Expense)-Net

For the current period, the Energy segment recorded derivative related profits and foreign exchange related profits. Also, the Chemicals Segment recorded insurance proceeds in the business in North America. For the previous period, the Innovation & Corporate Development Segment recorded a valuation profit on a derivative in relation to a put option of an investment.

- 3 -

Finance Income (Costs)

Dividend Income

Mainly the Energy Segment recorded a decrease.

Share of Profit (Loss) of Investments Accounted for Using the Equity Method

Mainly the Energy Segment, the Machinery & Infrastructure Segment, the Lifestyle Segment and the Iron and Steel Products Segment recorded a decline.

Income Taxes

Income taxes for the current period were ¥35.3 billion, a decline of ¥2.2 billion from ¥37.5 billion for the previous period. The effective tax rate for the current period was 34.6%, an increase of 12.8 points from 21.8% for the previous period. The major factors for the increase were an increase of a valuation allowance against a deferred tax asset and an increase in the tax burden due to resource-related high rate taxes in the Energy segment.

Profit for the Period Attributable to Owners of the Parent

Impacts caused by a decrease in demand and a fluctuation in commodity price due to the spread of COVID-19 were included. As a result, profit for the period attributable to owners of the parent was ¥62.6 billion, a decline of ¥62.4 billion from the previous period.

- 4 -

2) Operating Results by Operating Segment

The business of the infrastructure of next-generation electric power, which was a part of the Machinery & Infrastructure Segment was transferred to the Energy Segment, effective April 1, 2020. In accordance with the aforementioned changes, the operating segment information for the previous period has been restated to conform to the current period presentation.

Iron & Steel Products Segment
		(Billions of Yen)	Current Period	Previous Period	Change
	Profit for the period attributable to owners of the parent		1.5	(2.8)
	(1.3)
		Gross profit	5.4	6.4	(1.0)
		Profit (loss) of equity method investments	(1.9)	2.9	(4.8)
		Dividend income	0.7	1.0	(0.3)
		Selling, general and administrative expenses	(5.6)	(6.7)	+1.1
		Others	0.1	(2.1)	+2.2

• Profit (loss) of equity method investments decreased mainly due to the following factor:
• • For the current period, associated companies, which process and sell automotive steel products, reported a decrease of profit mainly due to the lower operating time and slow sales caused by a decline in demand for steel product,and the impact of foreign exchange fluctuations.

Mineral & Metal Resources Segment
		(Billions of Yen)	Current Period	Previous Period	Change
	Profit for the period attributable to owners of the parent		49.0	(16.8)
	32.2
		Gross profit	50.3	61.8	(11.5)
		Profit (loss) of equity method investments	13.4	16.3	(2.9)
		Dividend income	2.5	2.2	+0.3
		Selling, general and administrative expenses	(10.4)	(8.1)	(2.3)
		Others	(23.6)	(23.2)	(0.4)

• Gross profit declined mainly due to the following factor:
• • Coal mining operations in Australia reported a decline of ¥13.9 billion mainly due to lower coal sales prices.
• Selling, general and administrative expenses increased mainly due to the following factor:
• • For the current period, an impairment loss of ¥4.1 billion for doubtful debt was posted, reflecting the revisions to our various assumptions regarding the Moatize mine business in Mozambique.

- 5 -

Energy Segment
		(Billions of Yen)	Current Period	Previous Period	Change
	Profit for the period attributable to owners of the parent		40.4	(36.9)
	3.5
		Gross profit	25.6	34.3	(8.7)
		Profit (loss) of equity method investments	5.7	22.1	(16.4)
		Dividend income	2.1	12.9	(10.8)
		Selling, general and administrative expenses	(11.1)	(11.0)	(0.1)
		Others	(18.8)	(17.9)	(0.9)

• Gross profit declined mainly due to the following factors:
• • Mitsui Oil Exploration Co., Ltd. reported a decrease of ¥16.0 billion mainly due to lower oil and gas prices and decrease in production.
  • Mitsui E&P USA LLC reported a decrease of ¥3.4 billion mainly due to lower gas prices.
  • Business division at the Headquarters reported an increase due to good performance in the LNG trading business.
• Profit (loss) of equity method investment declined mainly due to the following factors:
• • Mitsui E&P Mozambique Area 1 Limited reported a decrease of ¥11.9 billion due to the recognition of deferred tax assets, in accordance with the Final Investment Decision for the project for the previous period.
  • Japan Australia LNG (MIMI) Pty. Ltd. reported a decrease mainly due to lower oil and gas prices.
• Dividends from six LNG projects (Qatargas 1, Oman, Qatargas 3, Sakhalin II, Abu Dhabi and Equatorial Guinea) were ¥2.1 billion in total, a decrease of ¥10.3 billion from the previous period.
• In addition to the above, the following factor also affected results:
• • Mitsui Oil Exploration Co., Ltd. reported an increase of ¥5.1 billion due to derivative related profits at its overseas subsidiary and foreign exchange related profits.

Machinery & Infrastructure Segment
		(Billions of Yen)	Current Period	Previous Period	Change
	Profit for the period attributable to owners of the parent		17.3	+1.2
	18.5
		Gross profit	26.7	30.1	(3.4)
		Profit (loss) of equity method investments	17.3	25.8	(8.5)
		Dividend income	1.6	1.7	(0.1)
		Selling, general and administrative expenses	(29.2)	(31.7)	+2.5
		Others	2.1	(8.6)	+10.7

• Profit (loss) of equity method investments declined mainly due to the following factor:
• • For the previous period, investments in gas distribution companies in Brazil recorded a profit reflecting the refund of service tax payments through arbitrations.
• In addition to the above, the following factor also affected results:
• • For the current period, a gain on sale of IPP business in North America was recorded.

- 6 -

Chemicals Segment
		(Billions of Yen)	Current Period	Previous Period	Change
	Profit for the period attributable to owners of the parent		4.1	+2.2
	6.3
		Gross profit	29.9	31.8	(1.9)
		Profit (loss) of equity method investments	0.9	3.5	(2.6)
		Dividend income	1.1	1.4	(0.3)
		Selling, general and administrative expenses	(23.4)	(25.8)	+2.4
		Others	(2.2)	(6.8)	+4.6

• Others include the following factor:
• • For the current period, insurance proceeds were recorded in the business in North America.

Lifestyle Segment
		(Billions of Yen)	Current Period	Previous Period	Change
	Profit for the period attributable to owners of the parent		7.6	(13.2)
	(5.6)
		Gross profit	27.8	36.6	(8.8)
		Profit (loss) of equity method investments	(3.8)	4.5	(8.3)
		Dividend income	2.2	2.3	(0.1)
		Selling, general and administrative expenses	(31.7)	(36.4)	+4.7
		Others	(0.1)	0.6	(0.7)

・Gross profit declined mainly due to the following factor:

• • For the current period, subsidiaries, whose businesses are fashion, food and distribution, reported a decrease of profit due to the closure of stores and decrease in demand for commercial ingredients for the food service industry caused by the state of emergency and curfew.
• Profit (loss) of equity method investment declined mainly due to the following factor:
• • For the current period, associated companies, whose businesses are food, fashion and services, reported a decrease of profit due to curfew and self-restraint.

Innovation & Corporate Development Segment
		(Billions of Yen)	Current Period	Previous Period	Change
	Profit for the period attributable to owners of the parent		2.1	+8.4
	10.5
		Gross profit	23.2	8.4	+14.8
		Profit (loss) of equity method investments	2.3	3.5	(1.2)
		Dividend income	3.1	2.5	+0.6
		Selling, general and administrative expenses	(16.1)	(16.5)	+0.4
		Others	(2.0)	4.2	(6.2)

- 7 -

• Gross profit increased mainly due to the following factors:
• • For the previous period, ¥4.6 billion loss was recorded due to the valuation of fair value on shares in Hutchison China MediTech Ltd., while for the current period ¥4.1 billion gain was recorded due to the valuation of fair value on shares.
  • For the current period, an increase of ¥4.3 billion was recorded mainly due to good results of energy trading in Mitsui Bussan Commodities Ltd.
• In addition to the above, the following factor also affected results:
• • For the previous period, a valuation profit on the derivative of ¥3.9 billion was recorded in relation to a put option of an investment.

(3) Financial Condition and Cash Flows
1) Financial Condition
		(Billions of yen)	June 30, 2020	March 31, 2020	Change
	Total Assets		11,806.3	(320.3)
	11,486.0
		Current Assets	3,768.1	4,124.4	(356.3)
		Non-current Assets	7,717.9	7,681.9	+36.0
	Current Liabilities	2,342.5	2,701.1	(358.6)
	Non-current Liabilities	5,019.4	5,044.3	(24.9)
		Net Interest-bearing Debt	3,534.9	3,486.7	+48.2
	Total Equity Attributable to Owners of the	3,870.7	3,817.7	+53.0
	Parent
	Net Debt-to-Equity Ratio (times)	0.91	0.91	0.00

Assets

Current Assets:

• Cash and cash equivalents declined by ¥17.3 billion.
• Trade and other receivables declined by ¥162.4 billion, mainly due to lower market prices and decreases in trading volume in the Energy Segment and the Chemicals Segment.
• Other financial assets declined by ¥137.7 billion, mainly due to market volatility and decreases in trading volume of derivative trading in the Energy Segment and the Innovation & Corporate Development Segment.

- 8 -

Non-current Assets:

• Investments accounted for using the equity method declined by ¥54.6 billion, mainly due to the following factors:
• • An increase of ¥34.0 billion corresponding to the profit of equity method investments for the current period, despite a decline of ¥59.0 billion due to dividends received from equity accounted investees; and
  • A decline due to a fair value valuation of shares in Arctic LNG 2 Project in Russia through Japan Arctic LNG.
• Other investments increased by ¥92.4 billion, mainly due to the following factor:
• • Mainly as a result of higher share prices, fair value on financial assets measured at FVTOCI increased by ¥97.1 billion.
• Property, plant and equipment increased by ¥30.7 billion, mainly due to the following factors:
• • An increase of ¥40.5 billion (including foreign exchange translation profit of ¥32.3 billion) at iron ore mining operations in Australia; and
  • A decline of ¥14.7 billion (including foreign exchange translation loss of ¥1.7 billion) at the oil and gas projects other than the U.S. shale gas and oil projects

Liabilities

Current Liabilities:

• Current portion of long-term debt increased by ¥36.2 billion, mainly due to a reclassification to current maturities.
• Trade and other payables declined by ¥111.4 billion, corresponding to the decline in trade and other receivables.
• Other financial liabilities declined by ¥277.4 billion, mainly due to corresponding decline in other financial assets, payments on account payable-other at the integrated development project in the 2, Otemachi 1-Chome District and decreases in the precious metal lease business in the Innovation & Corporate Development Segment.

Non-current Liabilities:

• Long-termdebt, less the current portion, declined by ¥27.6 billion.

Total Equity Attributable to Owners of the Parent

• Retained earnings decreased by ¥51.8 billion.
• Other components of equity increased by ¥97.0 billion, mainly due to the following factors:
• • Financial assets measured at FVTOCI increased by ¥70.0 billion; and
  • Foreign currency translation adjustments increased by ¥58.9 billion, mainly reflecting the appreciation of the Australian dollar against the Japanese Yen, despite the depreciation of the U.S. dollar and the Brazilian real.
• Treasury stock which is a subtraction item in shareholders' equity decreased by ¥7.7 billion, mainly due to the cancellation of the stock for ¥46.7 billion, despite share buy-back for ¥39.1 billion.

- 9 -

2) Cash Flows
	(Billions of yen)		Current Period	Previous Period	Change
	Cash flows from operating activities		164.0	127.9	+36.1
	Cash flows from investing activities		(108.5)	(110.5)	+2.0
	Free cash flow		55.5	17.4	+38.1
	Cash flows from financing activities		(88.2)	22.1	(110.3)
	Effect of exchange rate changes on cash and cash		15.4	(7.9)	+23.3
	equivalents etc.
	Change in cash and cash equivalents		(17.3)	31.6	(48.9)
Cash Flows from Operating Activities
	(Billions of Yen)		Current Period	Previous Period	Change
	Cash flows from operating activities	a	164.0	127.9	+36.1
	Cash flows from change in working capital	b	37.4	(28.0)	+65.4
	Repayments of lease liabilities	c	(15.8)	(13.5)	(2.3)
	Core operating cash flow	a-b+c	110.8	142.4	(31.6)

• Net cash from an increase or a decrease in working capital, or changes in operating assets and liabilities for the current period was ¥37.4 billion of net cash inflow. Repayments of lease liabilities for the current period was ¥15.8 billion of cash outflow. Core operating cash flow, cash flows from operating activities without both net cash from an increase or a decrease in working capital and repayments of lease liabilities, for the current period amounted to ¥110.8 billion. From current period, in order to reflect a regular cash generation output from operating activities more appropriately, repayments of lease liabilities have been deducted. In conformity with this change, Core operating cash flow for the previous period has been restated.
• • Net cash inflow from dividend income, including dividends received from equity accounted investees, for the current period totaled ¥49.3 billion, a decline of ¥26.4 billion from ¥75.7 billion for the previous period.
  • Depreciation and amortization for the current period was ¥63.0 billion, an increase of ¥2.5 billion from ¥60.5 billion for the previous period.

The following table shows core operating cash flow by operating segment.
	(Billions of Yen)	Current Period	Previous Period	Change
	Iron & Steel Products	1.6	0.2	+1.4
	Mineral & Metal Resources	41.9	57.7	(15.8)
	Energy	36.4	58.7	(22.3)
	Machinery & Infrastructure	12.9	18.2	(5.3)
	Chemicals	15.7	6.5	+9.2
	Lifestyle	3.6	7.4	(3.8)
	Innovation & Corporate Development	12.7	(2.1)	+14.8
	All Other and Adjustments and Eliminations	(14.0)	(4.2)	(9.8)
	Consolidated Total	110.8	142.4	(31.6)

- 10 -

Cash Flows from Investing Activities

• Net cash outflows that corresponded to investments in equity accounted investees (net of sales of investments in equity accounted investees) were ¥2.2 billion, though there was a sale of IPP business in North America as a main cash inflow factor.
• Net cash outflows that corresponded to purchases of property, plant, and equipment (net of sales of those assets) were ¥78.8 billion, mainly due to the following factors:
• • An expenditure for the integrated development project in the 2, Otemachi 1-Chome District for ¥36.6 billion; and
  • An expenditure for iron ore mining operations in Australia for ¥11.1 billion.
• Net cash outflows that corresponded to purchases of investment property (net of sales of those assets) were
  ¥34.6 billion, mainly due to an expenditure for the integrated development project in the 2, Otemachi 1-Chome District for ¥30.6 billion.

Cash Flows from Financing Activities

• Net cash inflows from net change in short-term debt were ¥2.6 billion, net cash inflows from net change in long-term debt were ¥32.6 billion, and cash outflow from repayments of lease liabilities were ¥15.8 billion.
• The cash outflow from the purchases of treasury stock was ¥39.1 billion.
• The cash outflow from payments of cash dividends was ¥68.3 billion.

1. Information Concerning Profit Forecast for the Year Ending March 31, 2021

We maintain our profit forecast attributable to owners of the parent of ¥180.0 billion and core operating cash flow forecast of ¥400.0 billion for the year ending March 31, 2021, as announced together with the results of the year ended March 31, 2020. No updates have been made to these forecasts.

2. Other Information

Notice:

This flash report contains forward-looking statements about Mitsui and its consolidated subsidiaries. These forward -looking statements are based on Mitsui's current assumptions, expectations and beliefs in light of the information currently possessed by it and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause Mitsui's actual consolidated financial position, consolidated operating results or consolidated cash flows to be materially different from any future consolidated financial position, consolidated operating results or consolidated cash flows expressed or implied by these forward-looking statements.

These important risks, uncertainties and other factors include, among others, (1)risk of COVID-19, (2)business investment risks, (3)country risks, (4)risks regarding climate changes, (5)commodity market risks, (6)foreign currency risks, (7)stock price risks of listed stock Mitsui and its subsidiaries hold, (8)credit risks, (9)risks regarding fund procurement, (10)operational risks, (11)risks regarding employee's compliance with laws, regulations, and internal policies, (12)risks regarding information systems and information securities, (13)risks relating to natural disasters, terrorists and violent groups. For further information on the above, please refer to Mitsui's Annual Securities Report.

Forward-looking statements may be included in Mitsui's Annual Securities Report and Quarterly Securities Reports or in its other disclosure documents, press releases or website disclosures. Mitsui undertakes no obligation to publicly update or revise any forward-looking statements.

- 11 -

3. Condensed Consolidated Financial Statements

1. Condensed Consolidated Statements of Financial Position

						(Millions of Yen)
	Assets
			June 30,		March 31,
			2020			2020
	Current Assets:
	Cash and cash equivalents	¥	1,041,388		¥	1,058,733
	Trade and other receivables		1,460,096			1,622,501
	Other financial assets		425,171			562,899
	Inventories		533,957			553,861
	Advance payments to suppliers		156,385			167,250
	Other current assets		151,129			159,175
	Total current assets		3,768,126			4,124,419
	Non-current Assets:
	Investments accounted for using the equity method		2,826,363			2,880,958
	Other investments		1,576,752			1,484,422
	Trade and other receivables		411,076			422,423
	Other financial assets		169,255			186,010
	Property, plant and equipment		2,152,059			2,121,371
	Investment property		259,849			251,838
	Intangible assets		192,732			195,289
	Deferred tax assets		51,538			58,908
	Other non-current assets		78,297			80,654
	Total non-current assets		7,717,921			7,681,873
	Total
	¥	11,486,047		¥	11,806,292

- 12 -

						(Millions of Yen)
	Liabilities and Equity
			June 30,		March 31,
			2020			2020
	Current Liabilities:
	Short-term debt	¥	303,173		¥	297,458
	Current portion of long-term debt		436,097			399,904
	Trade and other payables		1,025,096			1,136,504
	Other financial liabilities		349,604			626,963
	Income tax payables		48,760			46,206
	Advances from customers		109,435			133,247
	Provisions		26,420			25,844
	Other current liabilities		43,909			34,984
	Total current liabilities		2,342,494			2,701,110
	Non-current Liabilities:
	Long-term debt, less current portion		4,201,551			4,229,218
	Other financial liabilities		96,995			105,279
	Retirement benefit liabilities		41,186			39,956
	Provisions		230,189			228,173
	Deferred tax liabilities		421,113			412,971
	Other non-current liabilities		28,330			28,653
	Total non-current liabilities		5,019,364			5,044,250
	Total liabilities		7,361,858			7,745,360
	Equity:
	Common stock		341,776			341,776
	Capital surplus		402,742			402,652
	Retained earnings		3,310,530			3,362,297
	Other components of equity		(126,877)			(223,910)
	Treasury stock		(57,444)			(65,138)
	Total equity attributable to owners of the parent		3,870,727			3,817,677
	Non-controlling interests		253,462			243,255
	Total equity		4,124,189			4,060,932
	Total
	¥	11,486,047		¥	11,806,292

- 13 -

1. Condensed Consolidated Statements of Income and Comprehensive IncomeCondensed Consolidated Statements of Income

			(Millions of Yen)
	Three-month	Three-month
	period ended	period ended
	June 30, 2020	June 30, 2019
Revenue
¥	1,521,768	¥	1,633,120
Cost		(1,332,061)		(1,423,889)
Gross Profit		189,707		209,231
Other Income (Expenses):
Selling, general and administrative expenses		(134,708)		(141,243)
Gain (loss) on securities and other investments－net		8,427		6,310
Impairment reversal (loss) of fixed assets－net		(305)		(1,695)
Gain (loss) on disposal or sales of fixed assets－net		(97)		1,366
Other income (expense) －net		282		7,772
Total other income (expenses)		(126,401)		(127,490)
Finance Income (Costs):
Interest income		6,218		11,183
Dividend income		13,896		24,766
Interest expense		(15,433)		(23,760)
Total finance income (costs)		4,681		12,189
Share of Profit (Loss) of Investments Accounted for Using the Equity Method		34,003		78,473
Profit before Income Taxes		101,990		172,403
Income Taxes		(35,327)		(37,519)
Profit for the Period	¥	66,663	¥	134,884
Profit for the Period Attributable to:
Owners of the parent	¥	62,557	¥	125,036
Non-controlling interests		4,106		9,848

Condensed Consolidated Statements of Comprehensive Income

			(Millions of Yen)
	Three-month	Three-month
	period ended	period ended
	June 30, 2020	June 30, 2019
Profit for the Period
¥	66,663	¥	134,884
Other Comprehensive Income:
Items that will not be reclassified to profit or loss:
Financial assets measured at FVTOCI		97,758		21,468
Remeasurements of defined benefit plans		(1,374)		(131)
Share of other comprehensive income of investments accounted for using the equity method		(16,031)		(503)
Income tax relating to items not reclassified		(9,247)		(4,393)
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation adjustments		72,176		(33,923)
Cash flow hedges		3,275		(7,103)
Share of other comprehensive income of investments accounted for using the equity method		(40,096)		(80,370)
Income tax relating to items that may be reclassified		(887)		1,550
Total other comprehensive income		105,574		(103,405)
Comprehensive Income for the Period	¥	172,237	¥	31,479
Comprehensive Income for the Period Attributable to:
Owners of the parent	¥	160,312	¥	30,648
Non-controlling interests		11,925		831

- 14 -

1. Condensed Consolidated Statements of Changes in Equity

															(Millions of Yen)
					Attributable to owners of the parent					Non-
								Other							Total
		Common		Capital		Retained			Treasury				controlling
										Equity
				Components of			Total		Interests
		Stock		Surplus		Earnings		Stock
					Equity
Balance as at April 1, 2019	¥	341,482	¥	387,335	¥	3,078,655	¥	463,270	¥	(7,576)	¥	4,263,166	¥	267,142	¥	4,530,308

Cumulative effect of changes in accounting					(5,306)						(5,306)				(5,306)
policies
Balance as at April 1, 2019 after changes in		341,482		387,335	3,073,349		463,270		(7,576)		4,257,860		267,142		4,525,002
accounting policies
Profit for the period					125,036						125,036		9,848		134,884
Other comprehensive income for the period								(94,388)				(94,388)		(9,017)		(103,405)
Comprehensive income for the period					125,036		(94,388)				30,648		831		31,479
Transaction with owners:
Dividends paid to the owners of the parent					(69,524)						(69,524)				(69,524)
Dividends paid to non-controlling interest														(4,482)		(4,482)
shareholders
Acquisition of treasury stock										(3)		(3)				(3)
Equity transactions with non-controlling				15,499				(538)				14,961		1,567		16,528
interest shareholders
Transfer to retained earnings						844		(844)				-				-
Balance as at June 30, 2019	¥	341,482 ¥	402,834	¥ 3,129,705 ¥	367,500 ¥	(7,579) ¥	4,233,942 ¥	265,058 ¥	4,499,000

															(Millions of Yen)
				Attributable to owners of the parent					Non-
								Other							Total
		Common		Capital		Retained			Treasury				controlling
										Equity
				Components of			Total		Interests
		Stock		Surplus		Earnings		Stock
					Equity
Balance as at April 1, 2020	¥	341,776	¥	402,652	¥	3,362,297	¥	(223,910)	¥	(65,138)	¥	3,817,677	¥	243,255	¥	4,060,932
Profit for the period						62,557						62,557		4,106		66,663
Other comprehensive income for the period								97,755				97,755		7,819		105,574
Comprehensive income for the period						62,557		97,755				160,312		11,925		172,237
Transaction with owners:
Dividends paid to the owners of the parent						(68,301)						(68,301)				(68,301)
Dividends paid to non-controlling interest														(1,129)		(1,129)
shareholders
Acquisition of treasury stock										(39,067)		(39,067)				(39,067)
Sales of treasury stock				(16)		(23)				39		0				0
Cancellation of treasury stock						(46,722)				46,722		-				-
Equity transactions with non-controlling				106				0				106		(589)		(483)
interest shareholders
Transfer to retained earnings						722		(722)				-				-
Balance as at June 30, 2020	¥	341,776	¥	402,742	¥	3,310,530	¥	(126,877)	¥	(57,444)	¥	3,870,727	¥	253,462	¥	4,124,189

- 15 -

(4) Condensed Consolidated Statements of Cash Flows

					(Millions of Yen)
			Three-month period		Three-month period
			ended		ended
			June 30, 2020		June 30, 2019
Operating Activities:
Profit for the period	¥	66,663	¥	134,884
Adjustments to reconcile profit for the period to cash flows
from operating activities:
Depreciation and amortization		63,018		60,537
Change in retirement benefit liabilities		(398)		367
Loss allowance		7,953		3,625
(Gain) loss on securities and other investments-net		(8,427)		(6,310)
Impairment (reversal) loss of fixed assets-net		305		1,695
(Gain) loss on disposal or sales of fixed assets-net		97		(1,366)
Interest Income, dividend income and interest expense		(12,835)		(10,860)
Income taxes		35,327		37,519
Share of (profit) loss of investments accounted for using the equity method		(34,003)		(78,473)
Valuation (gain) loss related to contingent considerations and others		(3,656)		(2,809)
Changes in operating assets and liabilities:
Change in trade and other receivables		225,662		50,966
Change in inventories		24,209		(49,495)
Change in trade and other payables		(123,169)		(76,767)
Other-net		(89,302)		47,279
Interest received		14,923		11,064
Interest paid		(17,451)		(25,385)
Dividends received		49,339		75,747
Income taxes paid			(34,215)		(44,339)
Cash flows from operating activities		164,040		127,879
Investing Activities:
Net change in time deposits		(677)		(5,701)
Net change in investments in equity accounted investees		(2,211)		(23,353)
Net change in other investments		(148)		(6,282)
Net change in loan receivables		7,966		(10,446)
Net change in property, plant and equipment		(78,831)		(60,826)
Net change in investment property			(34,637)		(3,895)
Cash flows from investing activities		(108,538)		(110,503)
Financing Activities:
Net change in short-term debt		2,601		131,543
Net change in long-term debt		32,572		(31,626)
Repayments of lease liabilities		(15,796)		(13,541)
Purchases and sales of treasury stock		(39,067)		(3)
Dividends paid		(68,301)		(69,524)
Transactions with non-controlling interest shareholders			(250)		5,262
Cash flows from financing activities		(88,241)		22,111
Effect of Exchange Rate Changes on Cash and Cash Equivalents		15,394		(7,932)
Change in Cash and Cash Equivalents		(17,345)		31,555
Cash and Cash Equivalents at Beginning of Period			1,058,733		956,107
Cash and Cash Equivalents at End of Period		¥	1,041,388	¥	987,662

"Interest income, dividend income and interest expense", "Interest received", "Interest paid" and "Dividends received" of Condensed Consolidated Statements of Cash Flows include not only interest income, dividend income and interest expense that are included in "Finance Income (Costs)" of Condensed Consolidated Statements of Income, but also interest income, dividend income, interest expense that are included in Revenue and Cost respectively and cash flows related with them.

- 16 -

1. Assumption for Going Concern:None
2. Changes in Accounting Policies

Significant accounting policies applied in the Condensed Consolidated Financial Statements for the period ended June 30, 2020 are the same as those applied in the Consolidated Financial Statements of the previous fiscal year except for the following.

The companies applied the following new standards for Condensed Consolidated Financial Statements from April 1, 2020.

	IFRS	Title	Summaries
	IFRS 3	Business Combinations	Amendment of definition of a business
	(amended in October 2018)

Impacts from the application of IFRS 3 "Business Combinations" amended in October 2018 on the Condensed Consolidated Financial Statements are immaterial.

1. Changes in Presentation

（Condensed Consolidated Statements of Cash Flows）

"Repayments of lease liabilities", which was included in "Net change in long-term debt" for the three-month period ended June 2019 is separately presented from the three-month period ended June 2020 in order to indicate the calculation of Core Operating Cash Flow whose formula has been altered from April 1,2020. Condensed Consolidated Statements of Cash Flows for the three-month period ended June 2019 is reclassified to conform to this change in presentation.

As a result, the amount of ￥(45,167) million for the three-month period ended June 2019, which was presented in "Net change in long-term debt" within "Cash Flows from Financing Activities" in the Condensed Consolidated Statements of Cash Flows for the three-month period ended June 2019 has been reclassified and presented as

￥(31,626) million for "Net change in long-term debt" and as ￥(13,541) million for "Repayments of lease liabilities".

- 17 -

1. Segment Information

Three-month period ended June 30, 2020 (from April 1, 2020 to June 30, 2020)

	Iron & Steel	Mineral &		Machinery &			Innovation &
	Metal	Energy	Chemicals	Lifestyle	Corporate	Total
	Products	Infrastructure
	Resources				Development
Revenue	57,530	281,624	174,350	242,473	273,958	442,305	47,771	1,520,011
Gross Profit	5,447	50,266	25,647	26,736	29,933	27,797	23,203	189,029
Share of Profit (Loss) of Investments
Accounted for Using the Equity	△1,874	13,395	5,682	17,316	914	△3,769	2,321	33,985
Method
Profit （Loss）for the Period	△1,263	32,182	3,451	18,510	6,329	△5,599	10,536	64,146
Attributable to Owners of the parent
Core Operating Cash Flow	1,589	41,860	36,426	12,926	15,673	3,589	12,732	124,795
Total Assets at June 30, 2020	525,889	2,033,460	2,331,259	2,218,646	1,193,164	1,903,788	1,130,794	11,337,000

(Millions of Yen)

Others /

Adjustments Consolidated

and Total

Eliminations

1,757 1,521,768

1. 189,707

1. 34,003

△1,589 62,557

△13,951 110,844

149,047 11,486,047

Three-month period ended June 30, 2019 (from April 1, 2019 to June 30, 2019) (As restated)

										(Millions of Yen)
		Mineral &					Innovation &		Others /
	Iron & Steel		Machinery &				Adjustments	Consolidated
	Metal	Energy	Chemicals	Lifestyle	Corporate	Total
	Products	Infrastructure	and	Total
	Resources				Development
							Eliminations
Revenue	58,099	277,919	178,500	173,156	403,695	504,802	36,636	1,632,807	313	1,633,120
Gross Profit	6,413	61,792	34,280	30,109	31,834	36,602	8,400	209,430	△199	209,231
Share of Profit (Loss) of Investments
Accounted for Using the Equity	2,927	16,279	22,146	25,820	3,497	4,487	3,461	78,617	△144	78,473
Method
Profit for the Period Attributable to	1,531	48,990	40,393	17,315	4,086	7,572	2,108	121,995	3,041	125,036
Owners of the parent
Core Operating Cash Flow	171	57,679	58,719	18,243	6,501	7,401	△2,105	146,609	△4,254	142,355
Total Assets at March 31, 2020	539,599	1,921,883	2,566,282	2,360,321	1,217,737	1,907,621	1,198,286	11,711,729	94,563	11,806,292

Notes:1. "Others / Adjustments and Eliminations" includes of the Corporate Staff Unit which provides financing services and operations services to the companies and affiliated companies. Total assets of "Others / Adjustments and Eliminations" at March 31, 2020 and June 30, 2020 includes cash, cash equivalents and time deposits related to financing activities, and assets of the Corporate Staff Unit and certain subsidiaries related to the above services amounting to ¥ 7,142,647 million and ¥ 6,987,545 million, respectively.

1. Transfers between reportable segments are made at cost plus a markup.
2. Profit (Loss) for the Period Attributable to Owners of the parent of "Others /Adjustments and Eliminations" includes income and expense items that are not allocated to specific reportable segments, and eliminations of intersegment transactions.
3. Total assets of "Others / Adjustments and Eliminations" at March 31, 2020 and June 30, 2020 includes elimination of receivables and payables between segments amounting to ¥ 7,048,084 million and ¥ 6,838,498 million, respectively.

5. Formerly, Core Operating Cash Flow was calculated by eliminating the sum of the "Changes in Operating Assets and Liabilities" from "Cash Flows from Operating Activities" as presented in the Condensed Consolidated Statements of Cash Flows. From the three-month period ended June 30, 2020, it is calculated by additionally deducting the "Repayments of lease liabilities" as presented in the "Cash Flows from Financing Activities". In accordance with this change, Core Operating Cash Flow for the three-month period ended June 30, 2019 has been restated.

6. In order to accelerate our multifaceted, flexible initiatives that combine various kinds of knowledge from different business domains, the business of next-generation electric power was transferred from the "Machinery & Infrastructure" segment to the "Energy" segment, in conjunction with the creation of the Energy Solutions Business Unit in "Energy" segment, from the three-month period ended June 30, 2020.

- 18 -

In accordance with this change, the segment information for the three-month period ended June 30, 2019 has been restated to conform to the current period presentation.

(9) The Fire Incident of Intercontinental Terminals Company LLC

On March 17, 2019 (US time) a fire began at the Deer Park tank terminal of Intercontinental Terminals Company LLC ("ITC"), a wholly owned U.S. subsidiary of Mitsui & Co., Ltd. The Deer Park tank terminal is located in the outskirts of Houston, Texas. The fire partially damaged tanks owned by ITC. ITC has resumed its operation after discussions with related authorities. Harris County Fire Marshal's Office released its final report with respect to the fire incident on December 6, 2019 (US time) and the report classified the fire as accidental, while not specifying the cause of the fire. The cause of the fire is still under investigation by other relevant authorities.

The profit and loss related to this incident recognized in the three-month period ended June 30, 2020 and 2019, and the outstanding balance of related provision as of June 30, 2020 are immaterial.

There are multiple lawsuits that have been brought against ITC in relation to this incident. These lawsuits are at the early stages and the ultimate outcome of these lawsuits is not expected to have significant impact on our consolidated financial position, operating results and cash flow.

(10) Taxation on Capital Gain in India

Earlyguard Limited ("EG"), a UK subsidiary of Mitsui & Co., Ltd., received a tax payment notice dated January 21, 2020 which requested payment of 24 billion Indian Rupees (¥37 billion) from Indian tax authority.

The taxable income of this notice is the capital gain on sales of Finsider International Company Limited (a UK company that owned 51% of Sesa Goa, an Indian iron ore company) shares held by EG in April 2007. Although EG treated the capital gain properly according to the tax laws at that time, the tax payment notice has been issued.

The company does not expect a significant impact on our consolidated financial position, operating results and cash flow at this stage.

- 19 -