MODEC : 2021 Full-Year Financial Results

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.

February 10, 2022

Consolidated Financial Results

for the Fiscal Year Ended December 31, 2021

(Under IFRS)

Company name:	MODEC, INC.
Listing:	Tokyo Stock Exchange
Securities code:	6269
URL:	http://www.modec.com
Representative:	Takeshi Kanamori, President & CEO
Inquiries:	Yasuhiro Takano, Executive Managing Officer
Telephone:	[phone]

Scheduled date of annual general meeting of shareholders:	March 29, 2022
Scheduled date to commence dividend payments:	－
Scheduled date to file annual securities report:	March 29, 2022
Preparation of supplementary material on financial results:	Yes
Holding of financial results briefing:	Yes (for institutional investor・analyst)

(Yen amounts are rounded down to millions, unless otherwise noted.)

1. Consolidated financial results for the fiscal year ended December 31, 2021 (from January 1, 2021 to December 31, 2021)

(1) Consolidated operating results				(Percentages indicate year-on-year changes.)
	Revenue		Operating profit	Profit before tax	Profit
Fiscal year ended	Millions of yen		%	Millions of yen	%	Millions of yen	%	Millions of yen	%
December 31, 2021	448,510		42.5	(36,521)	-	(39,597)	-	(41,394)	-
December 31, 2020	314,734		-	(15,908)	-	(13,314)	-	(15,378)	-
	Profit attributable to	Total comprehensive	Basic earnings	Diluted earnings
	owners of parent	income		per share	per share
Fiscal year ended	Millions of yen		%	Millions of yen	%		Yen		Yen
December 31, 2021	(41,860)		-	(33,780)	-		(742.75)		(742.44)
December 31, 2020	(15,170)		-	(22,888)	-		(269.22)		(269.12)
	Return on equity	Ratio of profit before tax	Ratio of operating profit
	attributable to owners of
	to total assets	to revenue
	parent
Fiscal year ended			%		%		%
December 31, 2021			(52.7)		(10.4)		(8.1)
December 31, 2020			(13.7)		(3.6)		(5.1)

Reference: Share of profit (loss) of investments accounted for using equity method

For the fiscal year ended December 31, 2021:	¥3,370 million
For the fiscal year ended December 31, 2020:	¥6,531 million

(2) Consolidated financial position

				Ratio of equity	Equity attributable
			Equity attributable	attributable to
	Total assets	Total equity	to owners of parent
	to owners of parent	owners of parent to
			per share
				total assets
As of	Millions of yen	Millions of yen	Millions of yen	%	Yen
December 31, 2021	393,971	63,802	61,247	15.5	1,086.67
December 31, 2020	365,378	99,811	97,636	26.7	1,732.57

(3) Consolidated cash flows

	Cash flows from	Cash flows from	Cash flows from	Cash and cash
	equivalents at end of
	operating activities	investing activities	financing activities
	period
Fiscal year ended	Millions of yen	Millions of yen	Millions of yen	Millions of yen
December 31, 2021	17,509	(25,364)	30,588	93,173
December 31, 2020	34,755	(715)	(14,962)	70,978

Note: The original consolidated financial statements of MODEC, INC. (hereinafter "the Company") for the year ended December 31, 2021 and 2020 is presented in US dollars. For easy reference, the amount presented for consolidated operating results, consolidated financial position, and consolidated cash flow are converted into Japanese yen at 115.01 yen, which is from the TTM rate of Sumitomo Mitsui Banking Corporation as of December 30, 2021.

2. Cash dividends

		Annual dividends per share				Ratio of
						Total cash		dividends to
						Payout ratio	equity
	First	Second	Third	Fiscal		dividends	attributable to
	Total	(Consolidated)
	quarter-end	quarter-end	quarter-end	year-end	(Total)	owners of
								parent
								(Consolidated)
	Yen	Yen	Yen	Yen	Yen	Millions of yen	%	%
Fiscal year ended	-	23.75	-	21.25	45.00	2,538	-	2.3
December 31, 2020
Fiscal year ended	-	15.00	-	0.00	15.00	846	-	1.1
December 31, 2021
Fiscal year ending	-	-	-	-	-		-
December 31, 2022
(Forecast)

3. Earnings forecast for FY2022 (January 1, 2022 - December 31, 2022)

	Revenue		Operating profit	Profit before tax		Profit		Profit attributable to		Basic earnings
				owners of parent		(loss) per share
	Millions	%	Millions	%	Millions of	%	Millions of	%	Millions of	%	Yen
	of yen	of yen	yen	yen	yen
Full Year	276,024	-38.5	-	-	3,450	-	2,530	-	2,530	-	44.89

Note: The consolidated earnings forecast of the Company is presented in US dollars. For easy reference, the amount presented for the consolidated earnings forecast for the fiscal year ended December 31, 2022 is converted into Japanese yen at 115.01 yen, which is from the TTM rate of Sumitomo Mitsui Banking Corporation as of December 30, 2021.

* Notes

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of consolidation): None
2. Changes in accounting policies and changes in accounting estimates

1. Changes in accounting policies required by IFRS: None

1. 1. Changes in accounting policies due to other reasons: None
   2. Changes in accounting estimates: None
2. Number of issued shares (ordinary shares)
3. 1. Total number of issued shares at the end of the period (including treasury shares)

As of December 31, 2021	56,408,000 shares
As of December 31, 2020	56,408,000 shares

(ii) Number of treasury shares at the end of the period

As of December 31, 2021	45,100 shares
As of December 31, 2020	54,232 shares

(iii) Average number of shares outstanding during the period

	Fiscal year ended December 31, 2021		56,359,561 shares
	Fiscal year ended December 31, 2021		56,351,663 shares
[Reference] Overview of non-consolidated financial results

1. Non-consolidated financial results for the fiscal year ended December 31, 2021 (from January 1, 2021 to December 31, 2021)

(1) Non-consolidated operating results				(Percentages indicate year-on-year changes.)
	Net sales		Operating profit	Ordinary profit	Profit
Fiscal year ended	Millions of yen		%	Millions of yen		%	Millions of yen	%	Millions of yen	%
December 31, 2021	358,045		54.6	(5,800)		-	(4,051)	-	(66,539)	-
December 31, 2020	231,587		4.1	(616)		-	377	(90.9)	(1,954)	-
	Basic earnings		Diluted earnings
	per share		per share
Fiscal year ended			Yen			Yen
December 31, 2021	(1,180.63)	(1,180.14)
December 31, 2020	(34.68)			(34.67)
(2) Non-consolidated financial position
	Total assets		Net assets		Equity-to-asset ratio	Net assets per share
As of	Millions of yen	Millions of yen		%		Yen
December 31, 2021	265,068			17,470		6.6		309.97
December 31, 2020	272,458			87,865		32.2		1,559.17
Reference: Equity
As of December 31, 2021:		¥17,470 million
As of December 31, 2020:		¥87,865 million

Note: Non-consolidated financial results are calculated based on Japan GAAP

• Financial results reports are exempt from audit conducted by certified public accountants or an audit corporation.
• Proper use of earnings forecasts, and other special matters

The Company has adopted International Financial Reporting Standards (hereinafter "IFRS") from the year ended December 31, 2021 of the consolidated fiscal year. Therefore, the figures for the consolidated fiscal year ended December 31, 2020 are also disclosed in accordance with IFRS.

[Reference] Consolidated financial results for the fiscal year ended December 2021 and earnings forecast for the fiscal year ended December 2022 presented by the functional currency US dollar

(USD amounts are rounded down to thousands, unless otherwise noted.)

1. Consolidated financial results for the fiscal year ended December 31, 2021 (from January 1, 2021 to December 31, 2021)

(1) Consolidated operating results								(Percentages indicate year-on-year changes.)
	Revenue				Operating profit	Profit before tax			Profit
Fiscal year ended	Thousands of USD		%		Thousands of USD		%	Thousands of USD		%	Thousands of USD	%
December 31, 2021	3,899,748		42.5		(317,552)		-	(344,300)		-			(359,920)	-
December 31, 2020	2,736,586		-		(138,321)		-	(115,771)					(133,712)	-
	Profit attributable to		Total comprehensive	Basic earnings			Diluted earnings
	owners of parent		income	per share				per share
Fiscal year ended	Thousands of USD		%		Thousands of USD		%					USD				USD
December 31, 2021	(363,975)		-		(293,720)		-					(6.46)				(6.46)
December 31, 2020	(131,907)		-		(199,010)		-					(2.34)				(2.34)
	Return on equity		Ratio of profit before tax	Ratio of operating profit
	attributable to owners of
		to total assets	to revenue
	parent
Fiscal year ended			%			%					%
December 31, 2021	(52.7)			(10.4)					(8.1)
December 31, 2020	(13.7)			(3.6)					(5.1)
Reference: Share of profit (loss) of investments accounted for using equity method
For the fiscal year ended December 31, 2021:			$23,309 thousand
For the fiscal year ended December 31, 2020:			$56,790 thousand
(2) Consolidated financial position
											Ratio of equity		Equity attributable
								Equity attributable		attributable to
	Total assets			Total equity				to owners of parent
				to owners of parent		owners of parent to
									per share
											total assets
As of	Thousands of USD			Thousands of USD		Thousands of USD						%		USD
December 31, 2021	3,425,542			554,759			532,541				15.5			9.4
December 31, 2020	3,176,928			867,849			848,940				26.7			15.1
(3) Consolidated cash flows
	Cash flows from		Cash flows from	Cash flows from			Cash and cash
			equivalents at end of
	operating activities		investing activities	financing activities
				period
Fiscal year ended	Thousands of USD		Thousands of USD			Thousands of USD			Thousands of USD
December 31, 2021	152,239			(220,544)		265,965				810,131
December 31, 2020	302,195			(6,218)		(130,096)				617,149

2. Earnings forecast for FY2022 (January 1, 2022 - December 31, 2022)

	Revenue	Operating profit	Profit before tax		Profit		Profit attributable to		Basic earnings
			owners of parent		(loss) per share
	Thousands	%	Thousands	%	Thousands of		%	Thousands of	%	Thousands of		%	USD
	of USD	of USD	USD		USD	USD
Full Year	2,400,000	(38.5)	-	-	30,000		-	22,000	-	22,000		-	0.39

MODEC, INC. and Consolidated Subsidiaries

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

December 31, 2021

A S S E T S

	Thousands of USD
CURRENT ASSETS:
$810,131
Cash and cash equivalents
Trade and other receivables	379,394
Contract assets	704,730
Loans receivable	14,176
Other financial assets	14,171
Other current assets	138,134
Total current assets	2,060,740
NON-CURRENT ASSETS:	51,366
Property, plant and equipment
Intangible assets	80,845
Investments accounted for using equity method	739,046
Loans receivable	398,562
Other financial assets	13,278
Deferred tax assets	54,941
Other non-current assets	26,760
Total non-current assets	1,364,801
Total assets	$3,425,542

* The figures are rounded down to the nearest thousand US dollar.