Japan Airport Terminal : Financial Report for the Second Quarter of the Fiscal Year Ending March 31, 2021 (FY2020)

Financial Report for the Second Quarter of the Fiscal Year Ending March 31, 2021 (FY2020) [J-GAAP]

(Consolidated)

November 5, 2020

This document has been translated from the Japanese original, for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

Company name:	Japan Airport Terminal Co., Ltd. ("the Company")	Listed stock exchange: Tokyo, 1st Section
Code number:	9706	URL:https://www.tokyo-airport-bldg.co.jp/company/en/
Representative:	Nobuaki Yokota, President and COO
Contact:	Kazuhito Tanaka, Managing Director
	TEL [phone]

Scheduled date of filing securities report:	November 12, 2020
Scheduled date of commencing dividend payment:	－
Supplementary materials on financial results (yes/no)	Yes
Holding of quarterly earnings announcement (yes/no)	Yes (for institutional investors and financial analysts)
	(Figures are rounded down to the nearest million yen.)

1. Consolidated Financial Results for the First Six Months of FY2020 (April 1, 2020 to September 30, 2020)

(1) Consolidated Business Results (Cumulative)						%: Change from the same period of the previous year
																						Net income/(loss)
	Operating revenues	Operating income/(loss)	Ordinary income/(loss)		attributable to owners of
																							the parent
First Six Months	Millions of yen		%	Millions of yen			%	Millions of yen	%		Millions of yen	%
of
FY2020		22,293		-83.5	(32,266)			-	(30,506)	-				(22,879)	-
FY2019		135,270		-1.6	11,156			-13.9	10,728	-8.8				5,945	-78.9
(Note) Comprehensive income: First six months of FY2020 ¥-39,482 million (-%) First six months of FY2019 ¥7,434 million (-76.5%)
	Net income/(loss)		Diluted net income
		per share			per share
First Six					Yen					Yen
Months of
FY2020		(281.67)					-
FY2019		73.20					69.82
(2) Consolidated Financial Position
					Total assets			Net assets			Equity capital to				Net assets per share
										total assets
							Millions of yen					Millions of yen				%					Yen
As of September 30, 2020				481,061					161,574				28.3					1,676.62
As of March 31, 2020							521,363					201,899				31.2					2,001.83
(Reference) Equity capital:			As of September 30, 2020	¥136,188 million	As of March 31, 2020 ¥162,605 million
2. Dividends
													Dividends per share
				Q1-End	Q2-End	Q3-End		Year-End				Annual
							Yen			Yen			Yen		Yen			Yen
FY2019						-			22.00		-			10.00			32.00
FY2020						-			0.00
FY2020 (Forecast)													-					-			-

(Note) 1. Revisions to the most recently announced dividends forecast for FY2020: None

2. We have decided to postpone the announcement of the outlook for dividend payment for the fiscal year ending March 31, 2021

3. Forecast of Consolidated Financial Results for FY 2020 (April 1, 2020 to March 31, 2021)

%: Change from the same period of the previous year

			Operating		Ordinary		Net income/(loss)		Net income
	Operating revenues			attributable to owners	/ (loss) per
	income/(loss)		income/(loss)
					of the parent		share
	Millions of yen	%	Millions of yen		%	Millions of yen		%	Millions of yen		%	Yen
Full-year	61,000	-75.6	(58,000)		-	(55,500)		-	(35,000)		-	(430.89)

(Note) Revisions to the most recently announced forecast of consolidated financial results for FY2020: Yes

* Notes

1. Significant changes in subsidiaries during the period under review (changes in specified subsidiaries involving changes in scope of consolidation): No

New: NoneExcluded: None

(2) Adoption of special accounting methods for preparation of quarterly consolidated financial statements: Yes

(Note) For details, please refer to page 13 of the appendix materials "2. Quarterly Consolidated Financial Statements and Notes

1. 1. Notes on Quarterly Consolidated Financial Statements: Adoption of Special Accounting Methods for Preparation of Quarterly Consolidated Financial Statements".
2. Changes in accounting policies, accounting estimates, and restatement of revisions
3. 1. Changes in accounting policies due to revisions of accounting standards, etc.: None
   2. Changes in accounting policies other than 1) above: None
   3. Changes in accounting estimates: None
   4. Restatement of revisions: None
4. Number of shares outstanding (common stock)
5. 1. Number of shares outstanding at the period-end (including treasury stock):

	As of September 30, 2020	84,476,500 shares	As of March 31, 2020	84,476,500 shares
2)	Number of treasury stock at the period-end:
	As of September 30, 2020	3,248,445 shares	As of March 31, 2020	3,248,324 shares
3)	Average number of shares outstanding (quarterly consolidated cumulative period):
	Second quarter of FY2020	81,228,117 shares	Second quarter of FY2019	81,228,476 shares

• This quarterly financial report is not subject to the quarterly review by certified public accountants or auditing firms.
• Statements regarding the proper use of financial forecast and other special remarks Notes on the use of forward-looking statements
  The forecast of the business results reported herein was prepared based on information the Company had in its possession as of the time this report was prepared and on certain assumptions judged to be reasonable. The Company makes no guarantee that these figures will be achieved. Actual results may differ significantly from forecasts due to various factors.
  Supplementary materials on quarterly financial results and details of presentation at earnings announcement
  Earnings announcement is planned to be held on November 13, 2020 for financial analysts. Materials on financial results used in the presentation will be promptly posted on the Company's website following the presentation on the same day.

Japan Airport Terminal Co., Ltd. (9706) Financial Report for the Second Quarter of the Fiscal Year Ending March 31, 2021 (FY2020)

Contents of the Appendix Materials

1. QUALITATIVE INFORMATION ON CONSOLIDATED FINANCIAL RESULTS FOR THE FIRST SIX
MONTHS OF FY2020 (APRIL 1, 2020 TO SEPTEMBER 30, 2020)..............................................................................	- 2 -
(1) EXPLANATION OF OPERATING RESULTS ...................................................................................................	- 2 -
(2) EXPLANATION OF FINANCIAL POSITION ...................................................................................................	- 7 -

1. EXPLANATION OF CONSOLIDATED FINANCIAL FORECASTS AND OTHER FORWARD-LOOKINGSTATEMENTS- 7

-
2. QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS AND NOTES ......................................................	- 8 -
(1) QUARTERLY CONSOLIDATED BALANCE SHEETS.......................................................................................	- 8 -

1. QUARTERLY CONSOLIDATED STATEMENTS OF INCOME AND QUARTERLY CONSOLIDATED STATEMENTS OF

COMPREHENSIVE INCOME ..................................................................................................................	- 10 -
Quarterly Consolidated Statements of Income .............................................................................................	- 10 -
Quarterly Consolidated Statements of Comprehensive Income ......................................................................	- 12 -
(3) NOTES ON QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS.........................................................	- 13 -
(NOTES ON THE PREMISE OF A GOING CONCERN) .......................................................................................	- 13 -
(NOTES ON A SIGNIFICANT CHANGE IN SHAREHOLDERS' EQUITY) ..............................................................	- 13 -
(ADOPTION OF SPECIAL ACCOUNTING METHODS FOR PREPARATION OF QUARTERLY CONSOLIDATED
FINANCIAL STATEMENTS) ...................................................................................................................	- 13 -
(ADDITIONAL INFORMATION).......................................................................................................................	- 13 -
(SEGMENT INFORMATION) ...........................................................................................................................	- 14 -

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Japan Airport Terminal Co., Ltd. (9706) Financial Report for the Second Quarter of the Fiscal Year Ending March 31, 2021 (FY2020)

1. Qualitative Information on Consolidated Financial Results for the First Six Months of FY2020 (April 1, 2020 to September 30, 2020)

(1) Explanation of Operating Results

During the first six months of the fiscal year ending March 31, 2021, the Japanese economy continued to face a difficult situation due to the impact of the new corona virus infection (COVID-19), but there have been signs of recovery. Looking ahead, it is expected that the recovery trend will continue due to the effects of various policies and improving overseas economies, while taking measures to prevent the further spread of the infection and gradually raising the level of social and economic activities. However, it is important to prudently monitor the trend of the infection in Japan and overseas and the impact of volatility in capital markets.

Under these economic conditions, the airline industry has been in a particularly challenging situation, but there are signs of gradual recovery. On July 22nd, "Go To Travel" campaign was launched to stimulate demand for domestic travel. Travel to and from Tokyo was initially excluded from the scope of the campaign, but since the announcement in mid-September that travel to and from Tokyo would be added to the scope from October, domestic travel sentiment has been on the rise. Passenger volume on domestic flights at Haneda Airport was at a standstill in July and August resulting in a year-on-year decline of approximately 70% as the number of new COVID-19 cases in Tokyo increased again after the first quarter's year-on-year decline of approximately 90%. However, demand continued to recover in September, albeit slowly, as some routes were fully booked during the long stretch of holidays. For international flights, discussions between governments are underway with countries and regions where the situation regarding COVID-19 is relatively calm, with the aim of easing travel restrictions for travelers including long-term business travelers. Despite international flights at Haneda being resumed, the fall in the number of passengers continued to drop by more than 95% compared to the same period of the previous year. In addition, although the number of operating flights is increasing gradually, international passenger volume at international hub airports that we operate such as Narita Airport, continued to decline year-on-year significantly.

Under these circumstances, the Japan Airport Terminal Group ("JAT Group") is taking measures to ensure the safety and security of airport users, based on the "Guidelines for Preventing the Spread of COVID-19 in the Aviation Field" (jointly prepared by the Scheduled Airlines Association and the All Japan Airport Terminal Association). With respect to facilities, in addition to improving the terminal's ventilation capacity, we have installed hand sanitizer and plastic sheets to prevent droplet infection throughout the terminal building, and introduced thermographic device for measuring body temperature at the security checkpoint. In addition, we have installed mask vending machines so that airport users can purchase masks outside of store hours. Furthermore, for international flights, amidst the government's effort to expand the PCR testing system upon entry to Japan, the JAT Group is providing part of Terminal 3 as a PCR testing area and a waiting area for testing. Since October 9th, the Toho University Haneda Airport Terminal 3 Clinic has been conducting PCR testing and issuing certificates for international travelers. We will continue to work with the government and other relevant organizations to push forward such efforts.

With respect to our commercial efforts, for domestic flights, many stores were temporarily closed during the declaration of a state of emergency period, but operations have now resumed with the exception of a few stores. We will continue to take thorough measures to prevent the spread of COVID-19 and make every effort to secure revenue opportunities including the introduction of "Go To Travel" regional coupons in October at approximately 100 stores within Haneda Airport. On the other hand, for international flights most stores remain temporarily closed. The rent reductions and exemptions for tenants that have been in place since April 2020 are being reviewed in light of passenger trends, and appropriate measures are implemented according to the situation.

In addition, we are implementing extensive cost-reduction measures to minimize the impact of the sharp decline in operating revenues on profits. During the first quarter, we temporarily closed part of the terminal and reduced management and administrative costs including utilities costs. In the second quarter, we continued to reduce fixed costs by cutting down non-urgent costs, partially reducing executive compensation and employee bonuses, to review facility maintenance costs to the extent that they do not affect passenger convenience, and to lower outsourcing costs. In particular, we are promoting to bring in-house tasks that require qualified personnel, such as inspection and maintenance of firefighting and electrical equipment, by encouraging our Group employees to obtain necessary license to perform such tasks. In addition, we will continue our efforts to reform our cost structure by reviewing operations and efficiently allocating personnel throughout the company.

From a financial perspective, we have raised ¥5.0 billion in long-term loans and secured a short-term borrowing facility of ¥20.0 billion by June 2020, in addition to an existing commitment line of ¥9.0 billion. We will continue to consider other measures to secure additional funds in preparation for the prolonged effect of our revenue decline.

The JAT Group has aspired to best satisfy the needs of all stakeholders. To create business and revenue

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