Toyo Engineering : Announcement on Execution of Agreement regarding Establishment of Joint Venture Company with MODEC, Inc.

August 5, 2022

For Immediate Release

To Whom It May Concern

Company Name: Toyo Engineering Corporation

President & CEO: Haruo Nagamatsu

Stock Code: 6330, Stock Listing: Tokyo Stock Exchange

Prime Market

Inquiries: Yoshifumi Shiraishi, General Manager of

Corporate Communications Department

TEL [phone]

Announcement on Execution of Agreement regarding Establishment of

Joint Venture Company with MODEC, Inc.

Toyo Engineering Corporation ("TOYO", President & CEO: Haruo Nagamatsu) announced today that TOYO and MODEC, Inc. ("MODEC", President & CEO: Takeshi Kanamori) have executed today the agreement for the establishment of a joint venture company for the Engineering, Procurement, Construction and Installation (EPCI) business of Floating Production Storage and Offloading (FPSO) vessels.

The establishment of the joint venture company is subject to obtaining official permits and approvals of relevant authorities.

Notes

1. Purpose of establishing a Joint Venture Company

TOYO is a global engineering group that has rich EPC experience in industrial facilities, such as oil & gas development, refinery, petrochemicals, fertilizer and power generation. There are 6 autonomous EPC group affiliates widespread across the world. With this global network, TOYO is aiming for solutions emphasizing both "Aim to realize an environmentally-friendly society" and "Enrich people's lives".

MODEC is a leading provider of floating production solutions such as FPSOs to the offshore oil & gas industry. MODEC performs EPCI activities, and further by owning and operating its own FPSOs, it provides oil companies around the world with comprehensive and competitive solutions for oil & gas production services. As offshore oil and gas development projects increase in scale and move into deeper waters, the durations of the client contracts for FPSOs have become long-term as well as FPSOs have increased in size and complexity. As one of the few companies that can address these large-scale FPSO projects, MODEC recognize the importance of enhancement of its engineering and project management capabilities to meet clients' requirements and expectations. Furthermore, MODEC, as a leading company in the industry, is aiming to develop environmentally-friendly technologies for next- generation FPSOs.

For the past 15 years, TOYO has been collaborating with MODEC which is one of the world's leading FPSO-related companies, on the topside EPC scopes for several FPSO projects. Through the establishment of the joint venture company, TOYO and MODEC will further deepen the form of collaboration and jointly strengthen the engineering and project management capabilities in order to carry out the challenging large-scale FPSO projects, and the two companies jointly aim to strengthen the technological capabilities and competitiveness in the FPSO industry. Furthermore, synergies between TOYO and MODEC are expected to be demonstrated in the exploration of new technology and product opportunities in growth markets as well as in the development of environmentally-friendly FPSOs for realization of decarbonized society.

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2. Outline of the Joint Venture Company

(1)	Name	Offshore Frontier Solutions Pte. Ltd.
(2)	Head Office	Singapore
(3)	Representative	To be nominated
(4)	Business	EPCI business for FPSOs

1. Investment Ratio (*) 10 million United States dollars
2. Shareholding ratios (*) MODEC Offshore Production Systems (Singapore) Pte. Ltd. ("MOPS", wholly owned subsidiary of MODEC) 65%
   TOYO 35%

(7) Date of establishment (*) August 2022 (planned)

1. Originally established by MOPS alone, TOYO is scheduled to participate in the investment by around September 2022 (on the assumption that the approval of the relevant authorities is obtained).

3. Overview of joint venture partners

(1)	Name	MODEC, Inc.
(2)	Head office	Nihonbashi Maruzen Tokyu Building 4th & 5th Floors, 3-10,
Nihonbashi 2-chome,Chuo-ku, Tokyo 103-0027 Japan
(3)	Representative	Takeshi Kanamori, President & Chief Executive Officer
		Engineering, Procurement, Construction and Installation, sales,
(4)	Business profile	leasing and operation services for floating offshore oil and gas
		production facilities
(5)	Capital stock	30,122.49 million yen
(6)	Date of	June 1, 1987
establishment
	Major shareholders	Mitsui E&S Holdings Co., Ltd. (49.10%)
(7)	and shareholding
Mitsui & Co., Ltd. (14.87%)
	ratios
		Capital relationship Not applicable
		Relationship in	Not applicable
		human resources
	Relationship
	Business	No business transactions in the last 12 months
(8)	between TOYO and	relationship
	MODEC
	Whether MODEC
		falls within a	Not applicable
		related party to
		TOYO

1. Consolidated financial results and financial position for the last 3 years

Accounting period	FY2019	FY2020	FY2021
Consolidated total	125,366 million yen	95,015 million yen	$554,759 thousand
equity
Consolidated total
assets	383,189 million yen	357,532 million yen	$3,425,542 thousand*
(*Consolidated total
liabilities and equity)
Consolidated net assets	2,161.43 yen	1,622.30 yen	$9.45
per share
Consolidated revenue	332,644 million yen	309,925 million yen	$3,899,748 thousand
Consolidated operating	(4,841) million yen	(21,614) million yen	($317,552) thousand
profit
Consolidated ordinary	294 million yen	(12,854) million yen	－
income

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Comprehensive income	(18,227) million yen	(13,076) million yen	($363,975) thousand
attributable to Owners
of parent
Consolidated net income	(323.47) yen	(232.05) yen	($6.46)
per share
Dividend per share	45.00 yen	45.00 yen	15.00 yen

• Consolidated financial statements have been prepared based on International Financial Reporting Standards since the term ended December 31, 2021 (FY2021).

(1)	Name	MODEC Offshore Production Systems (Singapore) Pte. Ltd.
(2)	Head office	9 North Buona Vista Drive, #21-01 The Metropolis Tower 1,
Singapore 138588
(3)	Title and name of	Soichi Ide, President & Chief Executive Officer
representative
(4)	Business profile	Engineering, Procurement, Construction and Installation services
for floating offshore oil and gas production facilities
(5)	Date of	August 25, 2003
establishment
	Major shareholder
(6)	and shareholding	MODEC, Inc. (100%)
	ratio
		Capital	Not applicable
		relationship
		Relationship	Not applicable
		in human
	Relationship	resources
	Business	Collaboration on the topside EPC scopes for FPSO
(8)	between TOYO and
relationship	projects
	MOPS
	Whether
		MOPS falls	Not applicable
		within a
		related party
		to TOYO

1. • The capital stock of MODEC Offshore Production Systems (Singapore) Pte. Ltd. and the consolidated results of operations and consolidated financial position of the company over the last three years are not disclosed due to restrictions on disclosure of information under the joint venture agreement.
2. Schedule
3. 
   Execution of the agreement for the establishment of the joint venture company: August 5, 2022
4. Future Outlook
   Although TOYO expects that the impact of this matter on its consolidated financial results for the

fiscal year ending March 2023 will be minor, it will promptly disclose any matters that should be disclosed when necessary.

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