Sojitz : Consolidated Financial Results for the First Quarter Ended June 30, 2021, Supplementary Materials

Highlights of Consolidated Financial Results for the First Quarter Ended June 30, 2021 (IFRS)

August 3, 2021

Sojitz Corporation

Results Highlights

• In the three-month period ended June 30, 2021, economic recovery was witnessed in certain regions as a result of efforts for responding to the COVID-19 pandemic, including vaccine rollouts and substantial financial easing and government finance measures taken in developed countries. At the same time, there is a need for ongoing caution with regard to growing credit costs and the deterioration of performance at companies in tourism, service, and other industries.
  The Company's revenue for the three-month period ended June 30, 2021, was up year on year due to higher revenue in the Metals, Mineral Resources & Recycling Division, a result of higher prices for coal and precious metals; in the Chemicals Division, a result of higher methanol prices and growth in plastic resin transactions; and in the Automotive Division, a result of increased sales volumes in overseas automotive businesses.
  Despite the increase in selling, general and administrative expenses along with a rise in non- personnel expenses, profit for the period (attributable to owners of the Company) increased year on year following higher gross profit and a rise in share of profit of investments accounted for using the equity method attributable to earnings growth at steel operating company.

(Figures in parentheses are year-on-year changes)

Revenue

492.8 billion yen (+143.5 billion yen / +41.1%)

• Increase in revenue in the Metals, Mineral Resources & Recycling Division due to higher prices and transaction volumes for precious metals and higher prices for coal
• Increase in revenue in the Chemicals Division due to the higher transaction volumes of plastic resins and the rise in the methanol prices
• Increase in revenue in the Automotive Division due to higher sales units in overseas automobile operations

Gross profit

56.4 billion yen (+17.4 billion yen / +44.9%)

• Increase in gross profit in the Automotive Division due to higher sales volumes in overseas automobile transactions
• Increase in gross profit in the Chemicals Division due to the rise in methanol prices and higher transaction volumes for plastic resin businesses
• Increase in gross profit in the Metals, Mineral Resources & Recycling Division due to higher coal prices

Profit for the period (attributable to owners of the Company)

16.9 billion yen (+14.5 billion yen / +610.1%)

• • Increase in gross profit
  • Increase in share of profit (loss) of investments accounted for using the equity method
• Earnings forecast for the fiscal year ending March 31, 2022

Profit for the year (attributable to owners of the Company)	53.0 billion yen
(Assumptions)
Exchange rate (annual average: /US$)	:	108

• Cash dividends per share for the fiscal year ending March 31, 2022 (forecast)

Interim	:	7.00 yen per share
Year-end	:	7.00 yen per share

At the General Shareholders' Meeting held on June 18, 2021, it was resolved that the Company will perform a one-for-five share consolidation with an effective date of October 1, 2021. When calculated on a post-share consolidation basis, the year-end dividend forecast comes to 35 yen per share.

*1	Core earnings = Gross profit + Selling, general and administrative expenses (before
	provision of allowance for doubtful accounts and write-offs) + Net interest expenses +
	Dividends received + Share of profit (loss) of investments accounted for using the equity
	method
	Core operating cash flow = Net cash provided by (used in) operating activities - Changes in

Consolidated Statements of Profit or Loss

(Billions of yen)

			FY2021 1Q	FY2020 1Q				FY2021	Percentage
						Factors Affecting Circled Figures
			Results	Results	Difference		Forecast	Achieved
			a	b	a-b			c	a/c
						Revenue: change in segment
						Metals, Mineral Resources & Recycling	+45.0
Revenue	492.8	349.3	143.5	Chemicals	+42.1
						Automotive	+33.7
						Gross profit: change in segment
						Automotive	+5.6
Gross profit	56.4	39.0	17.4	Chemicals	+5.4	220.0	26%
						Metals, Mineral Resources & Recycling	+2.6
Selling, general and administrative expenses
	Personnel expenses		(23.4)	(0.3)
	(23.7)
	Non-personnel expenses	(13.1)	(11.2)	(1.9)
	Depreciation	(4.5)	(4.3)	(0.2)
	Provision of allowance for	(0.5)	0.1	(0.6)
	doubtful accounts
	(Total selling, general and	(41.8)	(38.8)	(3.0)			(178.0)
	administrative expenses)
Other income/expenses
	Gain/loss on sale and disposal	0.0	0.0	0.0
	of fixed assets, net
	Impairment loss on fixed assets	0.0	0.0	0.0
	Gain on reorganization of	0.1	2.2	(2.1)	Partial sale of a natural gas-fired
	subsidiaries/associates
				power project company
	Loss on reorganization of	(0.1)	0.0	(0.1)
	subsidiaries/associates
	Other operating income/expenses	1.1	(0.6)	1.7
	(Total other income/expenses)	1.1	1.6	(0.5)			4.0
Financial income/costs
	Interest earned	1.4	1.2	0.2
	Interest expenses	(2.6)	(3.2)	0.6
	(Interest expenses, net)	(1.2)	(2.0)	0.8
	Dividends received	1.2	1.1	0.1
	Other financial income/costs	0.0	0.0	0.0
	(Financial income/costs, net)	0.0	(0.9)	0.9			(2.0)
Share of profit (loss) of				Higher profit from steel operating
investments accounted for using	7.5	1.7	5.8		26.0
company
the equity method
Profit before tax	23.2	2.6	20.6			70.0	33%
Income tax expenses	(5.2)	0.1	(5.3)			(14.0)
Profit for the period	18.0	2.7	15.3			56.0	32%
(Profit attributable to)
	Owners of the Company		16.9	2.4	14.5			53.0	32%
	Non-controlling interests	1.1	0.3	0.8			3.0
	Core earnings*1	22.6	0.9	21.7			66.0

Consolidated Statements of Financial Position

								(Billions of yen)
			Jun. 30,		Mar. 31,
			2021		2021	Difference		Factors Affecting Circled Figures
			d		e	d-e
Current assets		1,281.0		1,195.4	85.6
	Cash and cash equivalents		282.5		287.6	(5.1)
	Time deposits		8.6		10.1	(1.5)
	Trade and other receivables		683.4		636.2	47.2		Increase in wheat and iron ore
	Inventories		238.5		187.9	50.6		Increase of aircraft and real estate held for resale
	Other current assets		68.0		73.6	(5.6)
Non-current assets		1,168.4		1,104.7	63.7
	Property, plant and equipment		192.7		191.3	1.4
	Lease assets (usage rights assets)		70.4		72.8	(2.4)
	Goodwill		67.5		67.2	0.3
	Intangible assets		61.9		61.5	0.4
	Investment property		11.6		11.6	0.0
	Investments accounted for							Increase due to new acquisition and
		625.4		590.8	34.6		accumulation of share of profit of investments
	using the equity method
							accounted for using the equity method
	Other non-current assets		138.9		109.5	29.4		Increase due to aircraft-related businesses
Total assets		2,449.4		2,300.1	149.3
Current liabilities
	809.3		734.8	74.5
	Trade and other payables		520.8		476.0	44.8		Increase in wheat and iron ore
	Lease liabilities		16.6		16.8	(0.2)
	Bonds and borrowings		185.2		158.6	26.6		Increase due to new borrowings
	Other current liabilities		86.7		83.4	3.3
Non-current liabilities		960.3		910.8	49.5
	Lease liabilities		57.8		60.5	(2.7)
	Bonds and borrowings		799.5		749.7	49.8		Increase due to new borrowings
	Retirement benefit liabilities		21.9		21.9	0.0
	Other non-current liabilities		81.1		78.7	2.4
Total liabilities		1,769.6		1,645.6	124.0
	Share capital		160.3		160.3	-
	Capital surplus		146.9		146.8	0.1
	Treasury stock		(21.5)		(15.9)	(5.6)		Acquisitions of treasury stock
	Other components of equity		96.9		77.8	19.1		Increase due to change in foreign exchange
				rates and stock prices
	Retained earnings		262.6		250.0	12.6		Profit for the period +16.9, Dividends (6.0)
	Total equity attributable to owners		645.2		619.0	26.2
	of the Company
	Non-controlling interests		34.6		35.5	(0.9)
Total equity		679.8		654.5	25.3
Total liabilities and equity		2,449.4		2,300.1	149.3
							*4 Lease liabilities (under current liabilities and non-
	Gross interest-bearing debt*4		984.7		908.3	+76.4
								current liabilities) have been excluded from the
	Net interest-bearing debt*4		693.6		610.6	+83.0
				calculations of gross interest-bearing debt and net
								interest-bearing debt.
	Net debt/equity ratio (times)*5		1.08		0.99	+0.09
	Equity ratio*5		26.3%		26.9%	(0.6%)
							*5	"Total equity attributable to owners of the Company"
	Current ratio		158.3%		162.7%	(4.4%)
			is recognized as "Total equity"
								and is also used as the denominator of "Net
	Long-term debt ratio		81.2%		82.5%	(1.3%)
				debt/equity ratio" and the numerator of "Equity
								ratio."

*2
	working capital
*3	Core cash flow = Core operating cash flow + Post-adjustment, net cash provided by (used
	in) investing activities - Dividends paid - Purchase of treasury stock

(Post-adjustment, net cash provided by (used in) investing activities is net cash provided by (used in) investing activities after adjustment for changes in long-term operating assets, etc.)

Caution regarding forward-looking statements

This document contains forward-looking statements based on information available to the Company at the time of disclosure and certain assumptions that management believes to be reasonable. Actual results may differ materially based on various factors, including the timing at which the COVID-19 pandemic ends; changes in economic conditions in key markets, both in and outside of Japan; and exchange rate movements. The Company will provide timely disclosure of any material changes, events, or other relevant issues.

Comprehensive Income

(Billions of yen)

FY2021 1Q

FY2020 1Q

	Results	Results	Difference
	a	b	a-b
Profit for the period	18.0	2.7	15.3
Other comprehensive income	19.6	1.6	18.0
Total comprehensive income for the period	37.6	4.3	33.3
Comprehensive income attributable to:
Owners of the Company	36.5	3.2	33.3
Non-controlling interests	1.1	1.1	0.0

Cash Flows

					(Billions of yen)
	FY2021 1Q		FY2020 1Q
	Results		Results	Difference	Factors Affecting Circled Figures
	a		b	a-b
Cash flows from operating activities	(18.8)		15.7	(34.5)	Outflows from increase in inventories
Cash flows from investing activities	(42.5)		2.9	(45.4)	Outflows due to aircraft-related businesses and investments
Free cash flow	(61.3)		18.6	(79.9)
Cash flows from financing activities	56.1		9.5	46.6	Inflows from new borrowings and outflows due to dividends paid and
	acquisitions of treasury stock
Core operating cash flow*2	26.6		10.9	15.7
Core cash flow*3	(11.1)		(3.5)	(7.6)

Highlights of Consolidated Financial Results for the First Quarter Ended June 30, 2021 (IFRS) ― Supplementary Materials

(Billions of yen)

Operating Results

August 3, 2021

Sojitz Corporation

(Billions of yen)

Segment Performance 【Gross Profit】 Segment Performance 【Profit for the Period (Attributable to Owners of the Company)】

	FY2021 1Q	FY2020 1Q	Difference	FY2021	Percentage
	Results	Results	Forecast	Achieved
Revenue	492.8	349.3	+143.5	-	-
Gross profit	56.4	39.0	+17.4	220.0	26%
Selling, general and
administrative expenses	(41.8)	(38.8)	(3.0)	(178.0)	-
Other income/expenses	1.1	1.6	(0.5)	4.0	-
Financial income/costs	0.0	(0.9)	+0.9	(2.0)	-
Share of profit (loss) of
investments accounted for using	7.5	1.7	+5.8	26.0	-
the equity method
Profit before tax	23.2	2.6	+20.6	70.0	33%
Profit for the period	18.0	2.7	+15.3	56.0	32%
(Profit attributable to)
Owners of the Company	16.9	2.4	+14.5	53.0	32%
Non-controlling interests	1.1	0.3	+0.8	3.0
Core earnings*1	22.6	0.9	+21.7	66.0	-
Comprehensive income attributable	36.5	3.2	+33.3
to owners of the Company

*1 Core earnings = Gross profit + Selling, general and administrative expenses (before provision of allowance for doubtful accounts and write-offs) + Net interest expenses + Dividends received + Share of profit (loss) of investments accounted for using the equity method

(Billions of yen)

		FY2021	FY2020	Difference
		1Q	1Q
Automotive		10.0	4.4	+5.6
Aerospace &		2.7	2.1	+0.6
Transportation
Project
Infrastructure		4.2	3.6	+0.6
& Healthcare
Metals,
Mineral		5.5	2.9	+2.6
Resources &
Recycling
Chemicals		13.1	7.7	+5.4
Consumer
Industry &		8.9	7.6	+1.3
Agriculture
Business
Retail &
Consumer		7.3	6.3	+1.0
Service
Others		4.7	4.4	+0.3
*4

Total		56.4	39.0	+17.4

FY2021		FY2021	FY2020			Difference	Main Factors Behind Difference
Forecast		1Q	1Q
43.0		1.1	(1.8)			+2.9	Increased due to higher sales volumes in overseas
		automobile transactions
17.0		0.1	(0.3)		+0.4	Recovery of shipping market conditions
							Decreased due to the rebound from asset replacement in
20.0		0.8	2.2		(1.4)	power generation businesses recorded in the previous
							equivalent period
							Increased due to higher profit from steel operating
20.0		6.0	(2.0)		+8.0	company with recovery of steel demand and recovery in
							coal market conditions
46.0		4.0	0.0			+4.0	Increased due to recovery from the drop in methanol
		prices and higher transaction volumes of plastic resins
28.0		3.0	2.1			+0.9	Increased due to higher sales volumes in overseas fertilizer
		businesses
30.0		0.6	0.1		+0.5	Increased due to higher sales volumes in food-related
							company
16.0		1.3	2.1		(0.8)

220.0 16.9 2.4 +14.5

(Billions of yen)

FY2021 Forecast

5.0

4.5

7.5

12.0

10.5

5.0

5.0

3.5

53.0

Progress Overview

Performance expected to be generally as forecast, while the effects of semiconductor shortage need monitoring

Earnings contributions from aircraft-related businesses anticipated in the 2nd half of the fiscal year

Earnings accumulation anticipated from healthcare-related businesses, domestic and overseas power generation businesses, and LNG businesses in the 4th quarter of the fiscal year

Forecast unchanged, while coal market conditions show higher performance than forecast

Performance generally as forecast, while ongoing caution regarding the impacts of COVID-19 on Southeast Asia businesses is necessary

Performance generally as forecast, with earnings contributions from overseas fertilizer businesses anticipated in the 1st half of the fiscal year

Steady progress in food-related business anticipated

(Reference)

FY2020

Results

1.1

1.8

8.2

(1.8)

5.8

4.6

4.9

2.4

27.0

Financial Position

Cash Flows		Commodity Prices and Exchange Rates

Organizational Reforms

(effective as of April 1, 2021)

		Jun. 30, 2021	Mar. 31, 2021	Difference		Mar. 31, 2022
			Forecast
Total assets	2,449.4			2,300.1	+149.3	2,450.0
Total equity*2	645.2			619.0	+26.2	640.0
Equity ratio	26.3%			26.9%	(0.6%)	26.1%
Net interest-bearing debt*3	693.6			610.6	+83.0	780.0
Net D/E ratio (times)	1.08			0.99	+0.09	1.2
Risk assets	400.0			390.0	+10.0		‐
Ratio of risk assets to	0.6			0.6	0.0		‐
equity (times)

	MTP* 2020	FY2021 1Q	FY2021	MTP* 2023 three-year
	three-year
	Results	Forecast	cumulative forecast
	cumulative results
Core operating	219.0	26.6	70.0-75.0	Approx. 240.0-250.0
cash flow
				Positive over the 6-year
Core cash flow	56.0	(11.1)	(65.0)-(75.0)	period of MTP* 2020
				and MTP* 2023
Free cash flow	108.0	(61.3)	(1,400.0)	‐

* Medium-term Management Plan (MTP)

Note: As of the end of June 30, 2021, in addition to cash in bank of 282.5 billion,

Sojitz maintains a ¥120.0 billion long-term commitment line (which remains unused) and a US$1.8 billion long-term commitment line (of which US$1.02 billion has been used).

	FY2020 Results	FY2021 Assumption	FY2021 Results	Latest Data
	(Apr.-Jun. '20 Avg.)	(Annual Avg.)	(Apr.-Jun. '21 Avg.)	(As of July 28, 2021)
Coking coal**1	US$119.0/t	US$127.5/t	US$139.1/t	US$216.0/t
Thermal coal**1	US$54.4/t	US$80.0/t	US$109.0/t	US$159.2/t
Crude oil (Brent)	US$33.4/bbl	US$50.0/bbl	US$69.1/bbl	US$74.7/bbl
Exchange rate**2	107.4/US$	108.0/US$	109.8/US$	109.9/US$

**1 Coal prices are based on standard market prices and therefore differ from the Company's selling prices.

**2 Impact of fluctuations in the exchange rate on earnings: 1/US$ change alters gross profit by approx. .5 billion annually, profit for the year (attributable to owners of the Company) by approx. .25 billion annually,

*2 "Total equity" above refers to "Total equity attributable to owners of the Company" and is used as the

denominator when calculating "Net D/E ratio" and the numerator when calculating "Equity ratio."

*3 Lease liabilities (under current liabilities and non-current liabilities) have been excluded from the calculations of net interest-bearing debt.

and total equity by approx. 1.5 billion annually.

Note: Effective April 1, 2021, four machinery-relatedsubsidiaries-Sojitz Machinery Corporation, Sojitz Autrans Corporation, e-Energy Corporation, and Sojitz Marine & Engineering Corporation-were merged. After the merger,

the surviving company was placed under the control of

the Portfolio Transformation (PX)Office in the Others segment.

Segment information for the three-month period ended June 30, 2020, has been restated to reflect the change in reportable segments.

Financial Results for the First Quarter

Ended June 30, 2021 (Reference)

Caution regarding Forward-looking Statements

This document contains forward-looking statements based on information available to the company at the time of disclosure and certain assumptions that management believes to be reasonable. Sojitz makes no assurances as to the actual results and/or other outcomes, which may differ substantially from those expressed or implied by such forward-looking statements due to various factors including the timing at which the COVID-19 pandemic ends, changes in economic conditions in key markets, both in and outside of Japan, and exchange rate movements.

The company will provide timely disclosure of any material changes, events, or other relevant issues.

August 3, 2021

Sojitz Corporation

Copyright © Sojitz Corporation 2021

1

Index

1. Financial Results for the First Quarter and
   Full Year Forecast of Fiscal Year Ending March 31, 2022
2. Dividends

【Supplemental Data】

• Segment Information

• Summary of Financial Results

Copyright © Sojitz Corporation 2021

2

1. Financial Results for the First Quarter and

Full Year Forecast of

Fiscal Year Ending March 31, 2022

Copyright © Sojitz Corporation 2021

3