Japan Airport Terminal : Financial Report for the Second Quarter of the Fiscal Year Ending March 31, 2023 (FY2022) (Consolidated)

Note: 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.

Financial Report for the Second Quarter of the Fiscal Year Ending March 31, 2023 (FY2022) [J-GAAP]

(Consolidated)

		November 9, 2022
Company name:	Japan Airport Terminal Co., Ltd. ("the Company") Listed stock exchange: Tokyo, Prime Market
Code number:	9706	URL:https://www.tokyo-airport-bldg.co.jp/company/en/
Representative:	Nobuaki Yokota, President and COO
Contact:	Kazuhito Tanaka, Senior Managing Director
	TEL [phone]
Scheduled date of filing securities report:	November 11, 2022
Scheduled date of commencing dividend payment:	－
Supplementary materials on financial results (yes/no)	Yes
Holding of quarterly investors' meeting (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 FY2022 (April 1, 2022 to September 30, 2022)

(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
FY2022	43,613		68.4		(9,273)		-		(9,759)	-	(3,341)		-
FY2021	25,896		-		(21,825)		-		(24,305)	-	(14,478)		-
(Note) Comprehensive income/(loss): First six months of FY2022 ¥-10,708 million (-%)	First six months of FY2021 ¥-21,611 million (-%)
	Net income/(loss)		Diluted net income
	per share				per share
First Six Months		Yen				Yen
of
FY2022	(35.88)				-
FY2021	(155.45)				-

(Note) Although potential shares exist, diluted net income per share for the first six months of FY2021 is not shown due to net loss per share. In addition, diluted net income per share for the first six months of FY2022 is not shown since potential shares do not exist.

(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, 2022	450,381	145,300	33.4	1,614.19
As of March 31, 2022	463,878	156,009	33.2	1,655.32

(Reference) Equity capital:As of September 30, 2022 ¥150,340 million As of March 31, 2022 ¥154,170 million

2. Dividends

			Dividends per share
	Q1-End	Q2-End	Q3-End		Year-End	Annual
	Yen	Yen	Yen		Yen	Yen
FY2021	-	0.00	-		0.00	0.00
FY2022	-	0.00
FY2022 (Forecast)			-		-	-

(Note) 1. Revisions to the most recently announced dividends forecast for FY2022: None

2. We have decided to postpone the announcement of the outlook for dividend payment for the fiscal year ending March 31, 2023.

3. Forecast of Consolidated Financial Results for FY 2022 (April 1, 2022 to March 31, 2023)

(%: Change from the same period of the previous year)

			Operating		Ordinary		Net income/(loss)		Net
	Operating revenues			attributable to owners	income/(loss)
	income/(loss)		income/(loss)
					of the parent		per share
	Millions of yen	%	Millions of yen		%	Millions of yen		%	Millions of yen		%	Yen
Full-year	105,900	85.6	(14,300)		-	(15,600)		-	(4,600)		-	(49.39)
Note:	Revisions to the most recently announced forecast of consolidated financial results for FY2022: 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 12 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.: Yes
   2. Changes in accounting policies other than 1) above: None
   3. Changes in accounting estimates: None
   4. Restatement of revisions: None

(Note) For details, please refer to page 12 of the appendix materials "2. Quarterly Consolidated Financial Statements and Notes

1. 1. Notes on Quarterly Consolidated Financial Statements: Changes in Accounting Policies".
2. Number of shares outstanding (common stock)
3. 1. Number of shares outstanding at the period-end (including treasury stock):

	As of September 30, 2022	93,145,400 shares	As of March 31, 2022	93,145,400 shares
2)	Number of treasury stock at the period-end:
	As of September 30, 2022	8,808 shares	As of March 31, 2022	8,737 shares
3)	Average number of shares outstanding (quarterly consolidated cumulative period):
	Second quarter of FY2022	93,136,640 shares	Second quarter of FY2021	93,136,749 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. For the assumptions used in financial forecasts and precautionary statements regarding the use of the forecasts, please refer to page 6 of the appendix materials "1. Qualitative Information on Consolidated Financial Results for the First Six Months of FY2022 (3) Explanation of Consolidated Financial Forecasts and Other Forward-looking Statements".
  Supplementary materials on financial results and details of presentation at quarterly investors' meeting
  Quarterly investors' meeting is planned to be held on November 18, 2022 for financial analysts. Presentation materials used in the meeting will be promptly posted on the Company's website following the meeting.

Japan Airport Terminal Co., Ltd. (9706) Financial Report for the Second Quarter of the Fiscal Year Ending March 31, 2023 (FY2022)

Contents of the Appendix Materials

1. QUALITATIVE INFORMATION ON CONSOLIDATED FINANCIAL RESULTS FOR THE FIRST SIX
MONTHS OF FY2022 (APRIL 1, 2022 TO SEPTEMBER 30, 2022)..............................................................................	- 2 -
(1) EXPLANATION OF OPERATING RESULTS ...................................................................................................	- 2 -
(2) EXPLANATION OF FINANCIAL POSITION ...................................................................................................	- 6 -
(3) EXPLANATION OF CONSOLIDATED FINANCIAL FORECASTS AND
OTHER FORWARD-LOOKING STATEMENTS ............................................................................................	- 6 -

2. QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS AND NOTES ......................................................	- 7 -
(1) QUARTERLY CONSOLIDATED BALANCE SHEETS.......................................................................................	- 7 -

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

COMPREHENSIVE INCOME ....................................................................................................................	- 9 -
Quarterly Consolidated Statements of Income ...............................................................................................	- 9 -
Quarterly Consolidated Statements of Comprehensive Income ......................................................................	- 11 -
(3) NOTES ON QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS.........................................................	- 12 -
(NOTES ON THE PREMISE OF A GOING CONCERN)..................................................................................	- 12 -
(NOTES ON A SIGNIFICANT CHANGE IN SHAREHOLDERS' EQUITY) ........................................................	- 12 -
(ADOPTION OF SPECIAL ACCOUNTING METHODS FOR PREPARATION OF QUARTERLY CONSOLIDATED
FINANCIAL STATEMENTS)...................................................................................................................	- 12 -
(CHANGES IN ACCOUNTING POLICIES) ..................................................................................................	- 12 -
(ADDITIONAL INFORMATION) .................................................................................................................	- 12 -
(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, 2023 (FY2022)

1. Qualitative Information on Consolidated Financial Results for the First Six Months of FY2022 (April 1, 2022 to September 30, 2022)

(1) Explanation of Operating Results

During the first six months of the fiscal year ending March 31, 2023, the Japanese economy showed a gradual recovery. Looking ahead, it is expected that the recovery trend will continue, resulting from the effects of various policies, while moving on to a new stage of coexisting with the new Coronavirus ("COVID-19") infection. However, the downturn in overseas economies is becoming downside risks to the Japanese economy amid the tightening of monetary policy around the globe. It is also necessary to pay close attention to price increases, restrictions on supply chain networks, and volatility in the financial and capital markets among other factors.

Under these economic conditions, in the airline industry, flight demand continued to recover as it was the first summer vacation in three years that did not involve behavioral restrictions. The number of passengers on domestic flights at Haneda Airport for the first six months of FY2022 was just over twice the number of passengers during the same period of last year, and was approximately 70% of the same period of FY2019, which was before the impact of COVID-19 hit. As for international flights, as border control measures are being eased in Japan, the number of passengers on international flights at Haneda Airport increased by about four times year-on-year. However, it remains at the level of approximately 20% of the same period of FY2019. The Japan Airport Terminal Group ("JAT Group") continues to take measures at various locations within the terminal buildings to prevent the spread of COVID-19 and ensure the safety and security of airport users and employees.

Under these circumstances, the JAT Group has put together the new Medium-Term Business Plan (FY22-FY25) "To Be a World-Best Airport 2025 -towards becoming one of the most advanced, human-and-eco-friendly airports by 2030-". Setting the years of 2030 and 2025 as milestones, the plan is a backcast by 2025 that reflects our goals for 2030. 2030 is when the government targets 60 million foreign visitors to Japan and a 46% reduction in CO2 emissions compared to 2013 and 2025 is when the number of passengers is expected to recover to the level of before COVID-19.

During the first six months of FY2022, in terms of facilities, in addition to carrying out renovation work in preparation for major disasters, we are taking measures to improve passenger convenience in response to changing times including the installation of private work boxes suitable for working outside the office and expansion of mobile battery sharing service, "ChargeSPOT". We have also cooperated with the request from the Ministry of Economy, Trade and Industry to save power, by turning off some of the lights and controlling air conditioning operation in the terminal buildings in response to the tight supply and demand of electricity during the summer season. Moreover, we are steadily pushing forward investment plans for the future, such as selecting the contractor for the construction of connection between the satellite building on the north side of Terminal 2 and the main terminal building.

On the sales front, we opened Seven-Eleven Haneda Airport T1 Departure Gate Store in the security area for those who wish to buy goods just before boarding. In addition, we actively held events such as "Haneda Airport Selection" featuring various products including those exclusive to Haneda Airport and product and tourism fairs of various regions of Japan in an effort to capture demand driven by the recovery in the number of passengers. We added new menus to the "in-flight meals from around the world" which are popular on our official e-commerce website "HANEDA Shopping" and we are also promoting efforts to link e-commerce and brick-and-mortar stores by launching "HANEDA PICK UP", which allows customers to pick up items ordered through our e-commerce website at our Haneda Airport stores. In addition to the existing duty-freepre-order service for duty-free items that can be picked up at TIAT DUTY FREE CENTRAL, we will start a pre-orderpick-up service at the dedicated gate for business jets to provide a service that allows passengers more time to relax at the airport.

Outside of Haneda Airport, in the sales agent business for Radi-Cool, a radiant cooling material that contributes to CO2 emissions reduction, we have increased track records of installation mainly at other domestic airports, capturing the momentum towards the creation of a decarbonized society as a business opportunity. In addition, in order to promote the use of robot technologies in guidance and cleaning operations in anticipation of issues including future labor shortages, which is a common issue at airports throughout Japan, we conducted demonstration experiments jointly with other domestic airports.

In July 2022, we established the structure to accelerate our sustainability initiatives by introducing the Sustainability Committee and the Sustainability Management Office. In September, we expressed our support to the recommendations made by the Task Force on Climate-related Financial Disclosure (TCFD). In addition, we aim to reduce the use of resources and reduce environmental impact by changing the material of shopping bags and charging for them at our directly operated stores at domestic flights. We are also working on cross industry collaboration projects, as well as collaboration projects between industry and academia to foster a corporate culture of "Think by oneself and take on challenges". In terms of diversity and inclusion (D&I), we are accelerating the employment of people with disabilities and introducing baggage carts with artwork

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Japan Airport Terminal Co., Ltd. (9706) Financial Report for the Second Quarter of the Fiscal Year Ending March 31, 2023 (FY2022)

produced by people with disabilities to deepen the understanding towards D&I among passengers using Haneda Airport. Furthermore, in order to spread the appeal of Haneda Airport to a wider audience, we are strengthening our marketing efforts, including the introduction of Haneda Airport's official YouTube channel, "HANEDA Airport".

As a result of the above, with respect to the consolidated financial results for the first six months of the fiscal year ending March 31, 2023, operating revenues was ¥43,613 million (an increase of 68.4% year-on-year) due to the increase in operating revenues for all of the business segments compared to the same period of the previous year in line with the steady recovery of passenger volume. As a result of the recovery in revenue and sustained cost reduction, operating loss decreased to ¥9,273 million (compared to operating loss of ¥21,825 million during the same period of the previous year), ordinary loss was ¥9,759 million (compared to ordinary loss of ¥24,305 million during the same period of the previous year), and quarterly net loss attributable to owners of the parent was ¥3,341 million (compared to quarterly net loss attributable to owners of the parent of ¥14,478 million during the same period of the previous year).

(Millions of yen)

Operating Results

First Six Months of FY2021	First Six Months of FY2022	Year-on-Year
(ended September 30, 2021)	(ended September 30, 2022)	(%)

Operating revenues	25,896	43,613	68.4
[Facilities Management]	18,825	27,311	45.1
[Merchandise Sales]	5,546	12,871	132.1
[Food and Beverage]	1,523	3,430	125.1
Operating income/(loss)	(21,825)	(9,273)	-
Ordinary income/(loss)	(24,305)	(9,759)	-
Quarterly net income/(loss)	(14,478)	(3,341)	-
attributable to owners of the parent

Currently, passenger volume at Haneda Airport continues to show a recovery trend. From October 2022, nationwide travel support program started for domestic flights and border entry restrictions were significantly eased for international flights, including the removal of the cap on number of visitors, the exemption of short-stay visas, and allowing entry of foreign individual tourists. It will take time for the number of passengers on international flights to recover to the level before COVID-19 due to the continuation of the Chinese government's zero COVID policy while Chinese tourists were the largest group of foreign visitors before COVID-19. However, airline demand is expected to recover mainly driven by foreign visitors from other Asian countries and Western countries.

In June 2022, Haneda Airport's passenger terminals were awarded first place in the "Best Airports in Asia" for the second consecutive year by SKYTRAX, and second place globally for the fourth consecutive year in the "World's Best Airports", which comprehensively evaluated various aspects of international airports. Furthermore, we were awarded first place in the "World's Cleanest Airports" (for the seventh consecutive year), "World's Best Domestic Airports" (for the tenth consecutive year), and "World's Best PRM / Accessible Facilities" (for the fourth consecutive year). In November, we were also awarded the world's highest standard "5-star Airport" rating for the ninth consecutive year in the SKYTRAX "Global Airport Rating".

The JAT Group will continue to apply the lessons learned from the COVID-19 pandemic to its terminal operations, while capturing the recovering passenger demand and pave the way for renewed growth. And we will work to enhance the value of Haneda Airport, the gateway to Japan and the greater Tokyo area, by further improving the convenience, comfort, and functionality of the Haneda Airport Passenger Terminal as well as by ensuring the safe and smooth entry, exit, and transportation of all customers.

The following is a breakdown of earnings / (loss) by segment. Note that the figures for operating revenues of each segment include intersegment sales and the figures for operating income / (loss) are equivalent to those for segment income / (loss).

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