CONSOLIDATED FINANCIAL REPORT FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2021 IFRS

Toyosu IHI Bldg.

1-1, Toyosu 3-chome,Koto-ku

Tokyo 135-8710, Japan

November 9, 2021

CONSOLIDATED FINANCIAL REPORT

FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2021

IHI Corporation (IHI) is listed on the First Section of the Tokyo Stock Exchange, Nagoya Stock Exchange, Sapporo Securities Exchange and Fukuoka Stock Exchange with the securities code number 7013.

Representative:	President and Chief Executive Officer, Hiroshi Ide
For further information contact:	Finance & Accounting Division, General Manager, Yasuaki Fukumoto
	Tel: [phone]
	URL: https://www.ihi.co.jp

Submission date of Quarterly Securities Report: November 11, 2021 (planned)

Commencement of Dividend Payments: December 10, 2021 (planned)

Preparing supplementary material on financial results: Yes

Holding financial results presentation meeting: Yes (for institutional investors, analysts and the media)

This consolidated financial report has been prepared in accordance with International Financial Reporting Standards (hereinafter, "IFRS").

Figures are in Japanese yen rounded to the nearest millions.

1. CONSOLIDATED PERFORMANCE FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2021 (APRIL 1, 2021 to SEPTEMBER 30, 2021)

1. Consolidated Business Results

(Millions of yen, except per share figures; percentage changes show the rate of increase or decrease from the previous corresponding period)

	Revenue	Percentage	Operating	Percentage	Profit before	Percentage	Profit	Percentage
	Change	Profit	Change	Tax	Change	Change
Six months
ended September 30,	516,548	7.2%	26,376	－	26,613	－	17,145	－
2021
Six months
ended September 30,	481,706	－	(6,101)	－	(8,802)	－	(8,007)	－
2020
	Profit		Compre-		Basic	Diluted
	Attributable	Percentage	Percentage	Earnings	Earnings
	hensive
	to Owners of	Change	Change	per Share	per Share
	Income
	Parent			(Yen)	(Yen)
Six months
ended September 30,	15,171	－	17,709	－	101.68	101.67
2021
Six months
ended September 30,	(9,779)	－	(6,626)	－	(65.80)	(65.80)
2020

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(2) Consolidated Financial Position

				(Millions of yen)
			Equity Attributable	Ratio of Equity
	Total Assets	Equity	Attributable to
	to Owners of Parent
			Owners of Parent
As of September 30, 2021	1,774,304	341,504	318,221	17.9%
As of March 31, 2021	1,832,891	327,727	300,769	16.4%

2. DIVIDENDS

(Yen)

			Dividends per Share
(Record Date)	End of 1st Quarter	End of 2nd	End of 3rd Quarter	Year-end	Annual
Quarter
Fiscal year ended	－	0.00	－	0.00	0.00
March 31, 2021
Fiscal year ending	－	30.00	──	──	──
March 31, 2022
Fiscal year ending	──	──	－	30.00	60.00
March 31, 2022 (Forecast)

(Note) Revisions to the dividend forecasts most recently announced: No

3. CONSOLIDATED FORECASTS OF RESULTS FOR THE FISCAL YEAR ENDING MARCH 31, 2022 (APRIL 1, 2021 to MARCH 31, 2022)

(Millions of yen, except per share figures; percentages show the rate of changes from the previous fiscal year)

				Profit before	Profit Attributable	Basic Earnings
Revenue		Operating Profit	per Share
	Tax		to Owners of Parent
					(Yen)
Full-year 1,180,000	6.0%	70,000	150.3%	60,000	117.3%	35,000	167.3%	234.59

(Note)Revisions to the forecasts of results most recently announced: No

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• NOTES

1. Changes in significant subsidiaries during the six months
   (Changes in specified subsidiaries accompanying changes in scope of consolidation): Not applicable
2. Changes in accounting policies and changes in accounting estimates
3. 1. Changes in accounting policies required by IFRS: Not applicable
   2. Changes in accounting policies due to other reasons: Not applicable
   3. Changes in accounting estimates: Not applicable
4. Number of shares issued (Ordinary shares):
5. 1. Number of shares issued at the end of the period (including treasury shares)

	As of September 30, 2021	154,679,954 shares
	As of March 31, 2021	154,679,954 shares
(ii)	Number of treasury shares owned at the end of the period
	As of September 30, 2021	3,431,688 shares
	As of March 31, 2021	6,165,348 shares
(iii)	Average number of shares outstanding during the period
	Six months ended September 30, 2021	149,198,798 shares
	Six months ended September 30, 2020	148,616,040 shares

• This consolidated financial report is not subjected to quarterly reviews by certified public accountant or accounting auditor.
• Proper use of forecast of results, and other special matters

(Cautionary statements on forward-looking statements)

Earnings estimates made in this report and other statements that are not historical facts are forward-looking statements about the future performance of the IHI Group. These statements are based on management's assumptions and beliefs in light of the information currently available to it and therefore readers should not place undue reliance on them. IHI cautions that a number of important factors such as political and general economic conditions and currency exchange rates could cause actual results to differ materially from those discussed in the forward-looking statements, etc.

(How to obtain supplementary material on financial results)

The supplementary material on financial results shall be posted on IHI's website.

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1. QUALITATIVE INFORMATION REGARDING CONSOLIDATED RESULTS

(1) EXPLANATION REGARDING BUSINESS RESULTS

During the six months ended September 30, 2021 the Japanese economy showed a steady recovery especially in the export from manufacturing industry, but the business sentiment has been stagnant in some industries such as the service industry, and the recovery was delayed, especially in personal consumption, due to the issuance of a state of emergency. Furthermore, recovery of export from manufacturing industry which has supported the economic recovery until now are slowing down since August, especially in the automobile industry, due to global shortage of semiconductors and supply chain disruption. The world economy, centered on the U.S. and China, was showing signs of recovery due to the progress of vaccination programs and economic policies, but there is delay in recovery in Southeast Asia region. In addition, shortage of semiconductors, and soaring prices of raw materials and transportation costs are beginning to affect corporate performance.

In the IHI Group's main business, the Civil aero engines Business which is greatly affected by COVID-19, the demand for aero transportation on domestic routes and short-distance international routes is recovering especially in North America and Europe where vaccination programs are progressing. On the other hand, on long-distance international routes, immigration restrictions in each country have not been loosened due to the worldwide spread of the highly contagious variant of COVID-19, and the demand for aero transportation remains stagnant. Although the sales of spare parts are gradually recovering since it bottomed out in the first quarter of the previous fiscal year, the recovery trend is different for each model, and it is expected to take some time for the demand for aero transportation to recover to the level before the spread of COVID-19. Furthermore, in the Vehicular turbochargers Business the number of delivery has been steadily recovering, however, the number of delivery is sluggish because of the shortage of semiconductors in the automobile industry and the production adjustment due to supply chain disruption caused by the restrictions on economic activities with the spread of COVID-19.

Under this business environment, orders received of the IHI Group during the six months ended September 30, 2021 increased 19.3% from the previous corresponding period to ¥508.3 billion. Revenue increased 7.2% from the previous corresponding period to ¥516.5 billion.

In terms of profitability, all the profit items turned profitable. Operating profit increased ¥32.4 billion to ¥26.3 billion due mainly to sale of Property, plant and equipment in addition to the convergence of unprofitable projects in the Carbon solutions Business, increased revenue and strengthening of the cost structure in the Vehicular turbochargers Business and the Heat treatment and surface engineering Business, and increased sales of spare parts in the Civil aero engine Business. Profit before tax increased ¥35.4 billion to ¥26.6 billion, an increase in profit margin due to factors such as improvements in foreign exchange gain / loss. Profit attributable to owners of parent increased ¥24.9 billion to ¥15.1 billion.

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Results by reportable segment for the six months ended September 30, 2021 are as follows:

								(Billions of yen)
		Orders received		six months	six months	Changes from
			the previous
				ended September	ended September
			Changes
	six	six	corresponding period
Reportable	from the	30, 2020	30, 2021
months	months	(%)
corre-
segments	ended	ended
	Operating		Operating		Operating
	sponding
	September	September	Revenue	Revenue	Revenue
	period	profit	profit	profit
	30, 2020	30, 2021	(%)		(loss)		(loss)		(loss)
Resources, Energy and	100.5	147.1	46.3	142.4	4.1	159.7	8.0	12.1	93.8
Environment
Social Infrastructure and	65.6	87.7	33.7	65.4	5.6	69.9	4.0	6.9	(28.4)
Offshore Facilities
Industrial Systems and
General-Purpose	159.3	179.5	12.6	172.4	0.1	175.9	5.5	2.0	－
Machinery
Aero Engine, Space and	90.6	86.8	(4.2)	99.2	(16.8)	108.2	(12.3)	9.1	－
Defense
Reportable Segments	416.2	501.2	20.4	479.6	(6.9)	513.8	5.2	7.1	－
total
Others	33.2	24.8	(25.3)	22.0	0.8	24.5	1.4	11.5	79.3
Adjustment	(23.4)	(17.6)	－	(19.9)	0.0	(21.9)	19.6	－	－
Total	426.0	508.3	19.3	481.7	(6.1)	516.5	26.3	7.2	－

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