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

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

(Consolidated)

February 3, 2021

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
Representative:	Nobuaki Yokota, President and COO
Contact:	Kazuhito Tanaka, Managing Director
TEL [phone]

URL:https://www.tokyo-airport-bldg.co.jp/company/en/

Scheduled date of filing securities report:	February 12, 2021
Scheduled date of commencing dividend payment:	－
Supplementary materials on financial results (yes/no)	No
Holding of quarterly earnings announcement (yes/no)	No

(Figures are rounded down to the nearest million yen.)

1. Consolidated Financial Results for the First Nine Months of FY2020 (April 1, 2020 to December 31, 2020)

(1) Consolidated Business Results (Cumulative)

%: Change from the same period of the previous year

Operating income/(loss)

Ordinary income/(loss)

(Note) Comprehensive income / (loss): First nine months of FY2020 (¥49,923 million) (-%)

First Nine	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
Months of
FY2020	39,720	-80.5	(44,025)	-	(41,377)	-	(26,478)	-
FY2019	203,451	-1.9	15,764	-18.8	14,907	-15.8	8,162	-74.1

First nine months of FY2019 ¥10,703 million (-68.9%)

Net income/(loss) per share	Diluted net income per share
First Nine Months of FY2020 FY2019	Yen (325.97) 100.49	Yen - 95.84

(2) Consolidated Financial Position

Total assets	Net assets	Equity capital to total assets	Net assets per share
As of December 31, 2020 As of March 31, 2020	Millions of yen 470,914 521,363	Millions of yen 151,133 201,899	% 27.6 31.2	Yen 1,601.12 2,001.83

As of March 31, 2020

(Reference) Equity capital:

As of December 31, 2020

¥130,055 million

¥162,605 million

2. Dividends

Dividends per share
Q1-End	Q2-End	Q3-End	Year-End	Annual
FY2019 FY2020	Yen - -	Yen 22.00 0.00	Yen - -	Yen 10.00	Yen 32.00
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 revenuesOperating income/(loss)Ordinary income/(loss)

Net income/(loss) attributable to owners of the parentNet income / (loss) per share

Full-year

Millions of yen 61,000

% -75.6

Millions of yen

(58,000)

% -

Millions of yen

(55,500)

%	Millions of yen	%	Yen
-	(35,000)	-	(430.89)

(Note) Revisions to the most recently announced forecast of consolidated financial results for FY2020: None

* Notes

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

New: None Excluded: None

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

  (Note) For details, please refer to page 14 of the appendix materials "2. Quarterly Consolidated Financial Statements and Notes

  (3) Notes on Quarterly Consolidated Financial Statements: Adoption of Special Accounting Methods for Preparation of Quarterly Consolidated Financial Statements".

• (3) Changes in accounting policies, accounting estimates, and restatement of revisions

  • 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)

  • 1) Number of shares outstanding at the period-end (including treasury stock):

    As of December 31, 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 December 31, 2020 3,248,529 shares As of March 31, 2020

• 3) Average number of shares outstanding (quarterly consolidated cumulative period):

Third quarter of FY2020 81,228,083 shares Third quarter of FY2019

3,248,324 shares 81,228,443 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.

Contents of the Appendix Materials

1. QUALITATIVE INFORMATION ON CONSOLIDATED FINANCIAL RESULTS FOR THE FIRST NINEMONTHS OF FY2020 (APRIL 1, 2020 TO DECEMBER 31, 2020) ............................................................................... - 2 -

• (1) EXPLANATION OFOPERATINGRESULTS................................................................................................... - 2 -

• (2) EXPLANATION OF FINANCIAL POSITION ................................................................................................... - 8 -

• (3) EXPLANATION OF CONSOLIDATED FINANCIAL FORECASTS AND OTHER FORWARD-LOOKING STATEMENTS- 8 -

2. QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS AND NOTES ...................................................... - 9 -

• (1) QUARTERLY CONSOLIDATED BALANCE SHEETS ....................................................................................... - 9 -

• (2) QUARTERLY CONSOLIDATED STATEMENTS OF INCOME AND QUARTERLY CONSOLIDATED STATEMENTS OF

  COMPREHENSIVE INCOME ................................................................................................................... - 11 - Quarterly Consolidated Statements of Income ............................................................................................. - 11 - Quarterly Consolidated Statements of Comprehensive Income ...................................................................... - 13 -

• (3) NOTES ON QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS ......................................................... - 14 - (NOTES ON THE PREMISE OF A GOING CONCERN) ....................................................................................... - 14 - (NOTES ON A SIGNIFICANT CHANGE IN SHAREHOLDERS' EQUITY) .............................................................. - 14 -

(ADOPTION OF SPECIAL ACCOUNTING METHODS FOR PREPARATION OF QUARTERLY CONSOLIDATED

FINANCIAL STATEMENTS) ................................................................................................................... - 14 - (ADDITIONAL INFORMATION) ....................................................................................................................... - 14 - (SEGMENT INFORMATION) ........................................................................................................................... - 15 -

1. Qualitative Information on Consolidated Financial Results for the First Nine Months of FY2020

(April 1, 2020 to December 31, 2020)

(1) Explanation of Operating Results

During the first nine 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 spread of the infection. However, it is important to prudently monitor the increase of downside risk of the economy due to the spread of the infection in Japan and overseas.

Under these economic conditions, the airline industry has seen a recovery in domestic tourism demand with the addition of travel to and from Tokyo to the "Go To Travel" campaign since October 2020. However, the demand on air travel has again weakened since December by the rebound of COVID-19 cases and the nationwide suspension of the "Go To Travel" campaign. The number of passengers on domestic flights at Haneda Airport had steadily recovered from the approximately 70% year-on-year decline in the second quarter, to approximately 50% year-on-year decline in October and November, but in December, the number of passengers declined again from the previous month. On the other hand, for international flights, since October, South Korea, China, and other countries have been added to business and residence tracks, and the restrictions on new arrivals from all over the world were eased under certain conditions, but since December, restrictions have been tightened again due to the spread of infection caused by a variant of COVID-19 in Europe. As a result, the number of passengers on international flights at Haneda Airport continued to be down more than 95% from the previous year. The number of international passengers at Narita Airport and other international hub airports where we operate business has also remained significantly down from the previous year.

Under these circumstances, the Japan Airport Terminal Group ("JAT Group") is making efforts 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). To date, we have taken measures including the improvement of the ventilation capacity of the terminals, the installation of hand sanitizers and plastic sheets to prevent droplet infection throughout the terminal buildings, and the introduction of thermographic devices for measuring body temperature at security checkpoints. Furthermore, we are taking various initiatives including establishing a system that enables PCR testing for overseas travelers and issues a certificate of negative test result in as little as two hours at the Toho University Haneda Airport Terminal 3 Clinic, commencing a dedicated bus service for arrivals to hotels in cooperation with Airport Transport Service Company Ltd. and others, in addition to providing a part of Terminal 3 as a PCR testing area amidst the government's effort to expand the PCR testing system.

Meanwhile, in order to recover merchandise sales in the face of a significant decrease in operating revenues, we have been promoting measures to boost sales, mainly at stores for domestic flights where passenger recovery continued. We have been making efforts including enhancing the development of products exclusive to Haneda Airport by launching new original brands such as "HANEDA CHOCOLATE JOURNEY". In the e-commerce business, in addition to enhancing the product lineup on the existing e-commerce website, we launched a new cross-border e-commerce website in cooperation with an outside company, and are taking various measures to expand the scale of the business. In the midst of a sluggish demand for air travel, we have been implementing rent reduction and exemption measures since April of the previous year as a support measure for airlines and tenants, while reviewing the details of the reduction and exemption in light of passenger trends.

We are also implementing extensive cost-reduction measures to minimize the impact of the decline in revenues. In addition to cutting down non-urgent costs, we temporarily closed part of the terminal in light of passenger trends, reduced facility maintenance and management costs by reviewing operations, and reduced outsourcing costs by bringing tasks in-house. With respect to personnel costs, we reduced fixed costs by partially reducing executive compensation, employee bonuses and temporary salary payment. We will try to sustain cost reduction and review our cost structure to build a more efficient profit-generating structure by curbing the possible cost increase associated with the recovery of passenger volume in the future.

From the financial perspective, we have worked to secure liquidity on hand by reviewing our investments, and we have raised ¥5.0 billion in long-term loans and secured a short-term borrowing facility of ¥20.0 billion to date, 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 generation opportunities and achieve sustainable growth, we have developed a medium-term business plan (FY2016 - FY2020) and taken measures based on our long-term vision "To be a World Best Airport".