伊藤忠エネクス（8133） – [Delayed]Consolidated Financial Results for the Fiscal Year Ended March 31, 2022

This document is an English translation of financial results report released on April 28, 2022 and written initially in Japanese. The Japanese original should be considered as the primary version. April 28, 2022 Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 Company name: Listing: Stock code: URL: Representative: Contact: Itochu Enex Co., Ltd. Tokyo Stock Exchange 8133 https://www.itcenex.com/english/ Kenji Okada, Representative Director, President and CEO Shinichiro Inoue, Executive Officer, Assistant to Chief Financial Officer, Deputy Chief Operating Officer, Corporate Administration Division Ⅰ and General Manager, Finance & General Accounting Department Tel: +81-3-4233-8008 Scheduled date of ordinary general meeting of shareholders: Scheduled date to commence dividend payments: Scheduled date to file annual securities report: Preparation of supplementary results briefing material on financial results: Holding of financial results presentation meeting: June 21, 2022 June 22, 2022 June 21, 2022 Yes Yes (for institutional investors and analysts) (Millions of yen with fractional amounts rounded, unless otherwise noted) 1. Consolidated financial results for the fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022) (1) Consolidated operating results Revenue Profit before tax Net profit Profit from operating activities (Percentages indicate year-on-year changes.) Net profit attributable to Itochu Enex’s shareholders Comprehensive income Fiscal year ended March 31, 2022 March 31, 2021 Millions of yen % Millions of yen % Millions of yen % Millions of yen % Millions of yen % Millions of yen 936,306 26.7 20,929 22,241 11.0 15,566 739,067 (17.6) 19,346 20,039 0.3 14,364 8.2 0.5 8.4 1.3 13,194 12,168 8.4 0.9 16,192 15,185 % 6.6 7.7 Basic earnings per share attributable to Itochu Enex’s shareholders Diluted earnings per share attributable to Itochu Enex’s shareholders Return on equity obtained as the net profit attributable to Itochu Enex’s shareholders to total shareholders’ equity Ratio of profit before tax to total assets Ratio of profit from operating activities to revenue Yen Yen % Fiscal year ended March 31, 2022 March 31, 2021 9.4 9.2 Reference: Share of profit (loss) of investments accounted for using equity method 116.89 107.79 – – For the fiscal year ended March 31, 2022: For the fiscal year ended March 31, 2021: ¥2,409 million ¥1,726 million % 5.2 5.0 % 2.2 2.6 Fiscal year ended March 31, 2022 March 31, 2021 2. Cash dividends Fiscal year ended March 31, 2021 March 31, 2022 Fiscal year ending March 31, 2023 (Forecast) (2) Consolidated financial position Total assets Total equity Total shareholders’ equity Shareholders’ equity per share Ratio of shareholders’ equity to total assets As of Millions of yen Millions of yen Millions of yen % Yen March 31, 2022 March 31, 2021 447,017 408,327 171,198 161,399 144,297 136,233 32.3 33.4 1,278.32 1,206.88 (3) Consolidated cash flows Net cash flows from (used in) operating activities Net cash flows from (used in) investing activities Net cash flows from (used in) financing activities Cash and cash equivalents at end of the period Millions of yen Millions of yen Millions of yen Millions of yen 39,955 40,214 (19,113) (125) (17,625) (24,528) 38,145 34,841 Annual cash dividends per share First quarter-end Second quarter-end Third quarter-end Fiscal year-end Total Total cash dividends (Total) Dividend payout ratio (Consolidated) Ratio of total amount of dividends to total shareholders’ equity (Consolidated) Yen Yen Yen Yen Yen Millions of yen % – – – 22.00 23.00 24.00 – – – 28.00 25.00 50.00 48.00 5,649 5,423 24.00 48.00 46.4 41.1 41.7 % 4.3 3.9 Note: Breakdown of year-end dividend for the fiscal year ended March 31, 2021: Ordinary dividend of ¥22.00, and anniversary commemorative dividend of ¥6.00 3. Consolidated earnings forecasts for the fiscal year ending March 31, 2023 (from April 1, 2022 to March 31, 2023) Revenue Profit from operating activities Profit before tax (Percentages indicate year-on-year changes.) Basic earnings per share attributable to Itochu Enex’s shareholders Net profit attributable to Itochu Enex’s shareholders Six months ending September 30, 2022 Fiscal year ending March 31, 2023 Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen – – – – – – – – – 1,000,000 6.8 19,400 (7.3) 20,800 (6.5) 13,000 (1.5) 115.17 Note: The Company’s performance is evaluated on a fiscal year basis. Accordingly, consolidated earnings forecasts for the first six months of fiscal year are not prepared. * Notes (1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of consolidation): None None None None (2) Changes in accounting policies and changes in accounting estimates a. Changes in accounting policies required by IFRSs: b. Changes in accounting policies other than the above: c. Changes in accounting estimates: (3) Number of issued shares (common stock) a. Total number of issued shares at end of period (including treasury stock) As of March 31, 2022 As of March 31, 2021 As of March 31, 2022 As of March 31, 2021 b. Number of treasury stock at end of period c. Average number of outstanding shares during period Fiscal year ended March 31, 2022 Fiscal year ended March 31, 2021 * Note on financial results 116,881,106 shares 116,881,106 shares 4,000,969 shares 4,000,323 shares 112,880,475 shares 112,880,739 shares Revenue increased year on year due to the impact resulting from rising sales prices linked to higher crude oil prices and the increase in sales volumes of domestic petroleum products. * Financial results reports are exempt from audit conducted by certified public accountants or an audit corporation. * Proper use of earnings forecasts, and other special notes (Caution regarding forward-looking statements and others) The forecasts and other forward-looking statements in this report are based on information currently available to the Company and on certain assumptions deemed to be reasonable by the Company. Actual business and other results may significantly differ from these forecasts due to various factors. Please refer to “1. Overview of Operating Results and Others, (1) Overview of Operating Results for the Fiscal Year Ended March 31, 2022” on page 2 of the attached materials for matters relating to earnings forecasts. Contents of Attached Materials 1. Overview of Operating Results and Others …………………………………………………………………………………. 2 (1) Overview of Operating Results for the Fiscal Year Ended March 31, 2022 ……………………………… 2 (2) Overview of Financial Position for the Fiscal Year Ended March 31, 2022 ……………………………… 7 (3) Profit Distribution Policy and Dividends for the Fiscal Years Ended March 31, 2022 and Ending March 31, 2023 ………………………………………………………………………………………………………… 9 2. Basic Concepts Underlying Selection of Accounting Standards ………………………………………………….. 10 3. Consolidated Financial Statements and Significant Notes Thereto ……………………………………………… 11 (1) Consolidated Statement of Financial Position ………………………………………………………………………. 11 (2) Consolidated Statement of Comprehensive Income ……………………………………………………………… 13 (3) Consolidated Statement of Changes in Equity ……………………………………………………………………… 15 (4) Consolidated Statement of Cash Flows ………………………………………………………………………………… 16 (5) Notes to Consolidated Financial Statements ………………………………………………………………………… 18 Notes on Uncertainties of Entity’s Ability to Continue as Going Concern ……………………………… 18 Segment Information ………………………………………………………………………………………………………….. 18 Earnings per Share …………………………………………………………………………………………………………….. 21 Significant Events after the Reporting Period ……………………………………………………………………… 21 – 1 – 1. Overview of Operating Results and Others (1) Overview of Operating Results for the Fiscal Year Ended March 31, 2022 1) Results of operations During the fiscal year ended March 31, 2022 (April 1, 2021 to March 31, 2022), the Japanese economy continued to require close attention due to factors such as the sudden rise in crude oil prices caused by geopolitical risks, including the situation in Ukraine, and the tight supply of electricity caused by earthquakes in Japan. In addition, despite a moderate recovery from the effects of the novel coronavirus disease (COVID-19) as voluntary stay-at-home directives and requests by local authorities to refrain from business activities eased compared to the previous fiscal year, the future outlook remains uncertain due to factors such as another increase in the number of people infected with repeated emergence of COVID-19 variants. In response, the Group has established the “emergency headquarters for tackling the coronavirus pandemic,” headed by the President, to carry out appropriate management by deciding on and executing company-wide policies and necessary measures, and by continuously collecting and spreading information internally and externally. In addition, with “employee safety” and “infection prevention” as the Company’s top priorities, we are working to reduce the risk of infection through telecommuting, working at staggered hours and thorough disinfection of business sites, as well as to increase operational efficiency by improving the communication network environment necessary for the execution of business. In terms of business, we are promoting our business in accordance with our two-year medium-term business plan “SHIFT! 2022” which was newly formulated in April 2021. Overview of medium-term business plan 1. Name of the plan: SHIFT! 2022 2. Period: Two years (FY2021 to FY2022) 3. Basic policy: Bases, Environment and Energy, and Human Resources Bases ‧ Further enhancement of domestic sale network and customer base ‧ Active promotion of B-to-C business utilizing digital transformation ‧ Strengthening of overseas business development with a focus on Asia Environment and Energy ‧ Forays into untapped areas with environmental products, electricity and various other forms of energy ‧ Further expansion of the electric power business from generation to selling, especially with renewable energy ‧ Enhancing environmental technical capabilities and expand offerings of low-carbon and decarbonized products Human Resources ‧ Cultivating multi-talented human resources who will flourish in Japan ‧ Promoting diversity and fostering a diverse range of values and overseas – 2 – 4. Quantitative plan (FY2021)(*1): Target Consolidated Results for FY2021 (1) Net profit attributable to Itochu Enex’s shareholders: ¥12.5 billion (2) ROE: 9.0% or more Management indicators (1) Substantive operating cash flows(*2): ¥30.0 billion or more each fiscal period (2) Consolidated dividend payout ratio: 40% or more (3) New investment (cumulative total over two fiscal years): ¥60.0 billion (*1) The target consolidated results for FY2022 are (1) Net profit attributable to Itochu Enex’s shareholders: ¥13.0 billion and (2) ROE: 9.0% or more. (*2) Substantive operating cash flows excludes working capital, etc. from cash flows from operating activities. The operating results for the fiscal year ended March 31, 2022 are as follows. Revenue Profit from operating activities Net profit attributable to Itochu Enex’s shareholders Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Change (Millions of yen) 739,067 936,306 197,239 19,346 12,168 20,929 13,194 1,583 1,026 Revenue was ¥936,306 million (up 26.7% year on year). This was mainly due to an increase in selling prices of domestic petroleum products resulting from higher crude oil prices. Profit from operating activities was ¥20,929 million (up 8.2% year on year), and net profit attributable to Itochu Enex’s shareholders was ¥13,194 million (up 8.4% year on year). This was mainly due to the impact of inventory valuation factors associated with higher LP gas import prices and valuation gains from making large-scale solar power plants (mega solar power plants) subsidiaries of the Company, while there was a reaction to the temporary revenue from operations that captured crude oil price fluctuations in the previous fiscal year. 2) Results of operations by segment Results of operations by segment are as follows. Home-Life Division Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Change (Millions of yen) Revenue 78,962 93,992 Profit from operating activities Net profit attributable to Itochu Enex’s shareholders 1,553 1,726 2,635 2,759 15,030 1,082 1,033 In LP gas business of the Home-Life Division during the fiscal year ended March 31, 2022, the number of customers under direct LP gas supply contracts increased by approximately 5,000 from the end of the previous fiscal year to approximately 557,000 as a result of activities to acquire new customers and sales rights in the LP gas business. Although demand for commercial and industrial use, which was affected by COVID-19, is on a recovery trend, LP gas sales volume decreased slightly year on year overall as demand for automotive gas for wholesale and taxi use decreased. – 3 – Regarding sales of electricity for households, the division promoted the expansion of the customer base by focusing mainly on selling LP gas as a set. As a result, the number of supply contracts was a total of approximately 118,000 (an increase of approximately 9,000 from the end of the previous fiscal year). In the industrial gas business, sales volume increased year on year due to the recovery in utilization rates of restaurants and plants to which we are supplying gas that had experienced reduced demand due to COVID-19. As a result of these activities, the operating results for the fiscal year ended March 31, 2022 are as follows. Revenue was ¥93,992 million (up 19.0% year on year). This was mainly due to an increase in selling prices resulting from higher LP gas import prices. Profit from operating activities was ¥2,635 million (up 69.7% year on year), and net profit attributable to Itochu Enex’s shareholders was ¥2,759 million (up 59.8% year on year). This was mainly due to a recovery in the industrial gas-related business in line with the resumption of economic activity and the impact of inventory valuation factors associated with higher LP gas import prices. Car-Life Division Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Change (Millions of yen) Revenue 414,641 516,670 102,029 Profit from operating activities Net profit attributable to Itochu Enex’s shareholders 7,604 4,054 7,657 3,971 53 (83) Looking at the Car-Life Division during the fiscal year ended March 31, 2022, in the Car-Life Stations (CS)(*3) business, the number of the CS was 1,636, a decrease of 51 from the end of the previous fiscal year. Sales volumes of petroleum products were slightly higher year on year, as sales volume of gasoline and diesel fuel picked up, compared to the previous fiscal year, which saw a significant decline, despite the impacts of the spread of COVID-19 as well as poor weather conditions in the summer and a warm winter. In the automotive business, our car dealer business subsidiary OSAKA CAR LIFE GROUP CO., LTD. experienced a decrease in sales volume year on year due to the spread of COVID-19 and a decrease in the number of cars produced because of semi-conductor shortages. As a result of these activities, the operating results for the fiscal year ended March 31, 2022 are as follows. Revenue was ¥516,670 million (up 24.6% year on year). This was mainly due to an increase in sales prices of domestic petroleum products linked to crude oil prices and an increase in sales volume. Profit from operating activities was ¥7,657 million (up 0.7% year on year), but net profit attributable to Itochu Enex’s shareholders was ¥3,971 million (down 2.0% year on year). This was mainly due to a contraction in retail margins in the CS business, while the increase in the earnings ratio per vehicle in the automobile dealer business contributed. (*3) Car-Life Stations: Car-Life Stations are service stations offering multiple services provided by the Company. – 4 – Industrial Business Division Revenue Profit from operating activities Net profit attributable to Itochu Enex’s shareholders Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Change (Millions of yen) 160,778 224,496 63,718 5,010 3,857 4,674 3,250 (336) (607) Looking at the Industrial Business Division, during the fiscal year ended March 31, 2022, the asphalt sales business conducted its sales activities with an awareness of profitability, despite a decrease in sales volume. In the marine fuel sales business, although sales volume for domestic vessels increased year on year as a result of expanding supply for new routes from existing customers, sales volume for ocean-going vessels decreased, resulting in a year-on-year decline in volume. In the corporate fleet fuel card business, sales volume increased year on year as a result of continuous efforts to acquire new customers. In the AdBlue®(*4) sales business, which is being pursued as a business to reduce environmental impact, there was a severe environment with urea shortages in Japan and overseas, but the Company made efforts to ensure stable supply to existing customers by maximizing the use of our own nationwide supply hubs, including the Saitama AdBlue plant, which was established in the current fiscal year. As for the GTL fuel(*5) sales business, sales volume has been increasing steadily, as the supply area has been expanded and the product has been adopted at construction sites in Japan. As a result of these activities, the operating results for the fiscal year ended March 31, 2022 are as follows. Revenue was ¥224,496 million (up 39.6% year on year). This was mainly due to the increase in unit sales prices of industrial petroleum products resulting from higher crude oil prices. Profit from operating activities was ¥4,674 million (down 6.7% year on year). Net profit attributable to Itochu Enex’s shareholders was ¥3,250 million (down 15.7% year on year). This is mainly due to the fact that, while the asphalt sales business increased its profit, it was largely affected by the reaction to the temporary revenue from operations capturing crude oil price fluctuations in the previous fiscal year. (*4) AdBlue® is a world-standard High-Grade Aqueous Urea used in the decomposition and detoxification of diesel exhaust. (AdBlue® is a registered trademark of Verband der Automobilindustrie e.V. (VDA).) (*5) Abbreviation for gas to liquids, a clean diesel replacement fuel made from natural gas with low environmental Power & Utility Division impact. Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Change (Millions of yen) Revenue 84,686 101,148 16,462 Profit from operating activities Net profit attributable to Itochu Enex’s shareholders 5,220 2,669 6,180 3,483 960 814 In the electric power business of the Power & Utility Division, during the fiscal year ended March 31, 2022, high-voltage power sales volumes(*6) increased year on year due to landing a large-scale project. Low-voltage sales volume increased year on year due to an increase in the number of contracts, particularly for households, and retail electricity sales volumes increased year on year overall. In the heat supply business(*7), demand for heat decreased year on year in the first half due to the significantly lower average temperature this summer compared to the previous fiscal year. On the other hand, demand for heat increased year on year in the second half due to the lower average temperatures – 5 – this winter compared to the previous fiscal year, and full-year demand for heat was only slightly below the previous fiscal year. As a result of these activities, the operating results for the fiscal year ended March 31, 2022 are as follows. Revenue was ¥101,148 million (up 19.4% year on year). This was mainly due to the effect of an increase in market wholesale volume and an increase in prices in the electric power business. Profit from operating activities was ¥6,180 million (up 18.4% year on year). Net profit attributable to Itochu Enex’s shareholders was ¥3,483 million (up 30.5% year on year). This was mainly due to the contribution of valuation gains, etc. from making large-scale solar power plants (mega solar power plants) subsidiaries of the Company (impact of ¥2,935 million on net profit attributable to Itochu Enex’s shareholders), while the electricity retail margins contracted due to higher procurement prices caused by surging resource prices. (*6) Electricity sales volume includes brokerage volume for both high voltage and low voltage. (*7) Heat supply business: The heat supply business supplies cold and hot water for air conditioning to multiple office buildings and other buildings from a heat source plant using pipes. 3) Forecasts of consolidated financial results for the fiscal year ending March 31, 2023 In the forecast of consolidated financial results for the fiscal year ending March 31, 2023, we project ¥1,000,000 million in revenue, up 6.8% year on year, ¥19,400 million in profit from operating activities, down 7.3% year on year, ¥20,800 million in profit before tax, down 6.5% year on year, and ¥13,000 million in net profit attributable to Itochu Enex’s shareholders, down 1.5% year on year. Basic earnings per share attributable to Itochu Enex’s shareholders are projected at ¥115.17. – 6 – (2) Overview of Financial Position for the Fiscal Year Ended March 31, 2022 1) Analysis of assets, liabilities, equity and cash flows Assets, liabilities and equity Total assets Total liabilities Total equity Cash flows As of March 31, 2021 As of March 31, 2022 Change (Millions of yen) 408,327 246,928 161,399 447,017 275,819 171,198 38,690 28,891 9,799 Total assets amounted to ¥447,017 million as of March 31, 2022, an increase of ¥38,690 million from March 31, 2021. This was mainly due to an increase in property, plant and equipment of ¥24,201 million due to the acquisition of subsidiaries and an increase in trade receivables of ¥19,147 million due to an increase in selling prices resulting from a rise in the crude oil prices. Total liabilities amounted to ¥275,819 million, an increase of ¥28,891 million from March 31, 2021. This was mainly due to an increase in trade payables of ¥17,459 million due to an increase in purchase prices resulting from a rise in the crude oil prices and an increase in bonds and borrowings of ¥15,470 million due to the acquisition of subsidiaries. Total equity totaled ¥171,198 million, an increase of ¥9,799 million from March 31, 2021, due to factors including an increase of ¥13,194 million from net profit attributable to Itochu Enex’s shareholders and a decrease of ¥6,408 million by payment of cash dividends. We consequently ended the fiscal year with a ratio of shareholders’ equity to total assets of 32.3%. While taking COVID-19 into consideration, the Group will expand peripheral businesses, develop new business areas, and aggressively promote investment in environment-related businesses, using the cash flow generated from its core businesses. With respect to financing capacity for the time being, we have sufficiently secured account overdraft facilities and commercial paper issuance facilities, in addition to maintaining ample cash and cash equivalents. Moreover, we are essentially free of debt amid a situation where we have maintained healthy levels of debt thus far, which is currently reflected by our net debt-equity ratio (net DER) of negative 0.04 times. Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Change (Millions of yen) Cash flows from operating activities 40,214 39,955 (259) Cash flows from investing activities (125) (19,113) (18,988) [Free cash flows] Cash flows from financing activities Net increase (decrease) in cash and cash equivalents Effect of exchange rate changes on cash and cash equivalents Cash and cash equivalents at the end of the period [40,089] (24,528) [20,842] [(19,247)] (17,625) 6,903 15,561 3,217 (12,344) 37 87 50 34,841 38,145 3,304 – 7 – Cash and cash equivalents (net cash) totaled ¥38,145 million as of March 31, 2022, up ¥3,304 million from March 31, 2021. Cash flows from operating activities Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 (Millions of yen) Change Cash flows from operating activities Changes in working capital and others Substantive operating cash flow* 40,214 7,359 32,855 39,955 6,109 33,846 (259) (1,250) 991 *Substantive operating cash flow excludes working capital, etc. from cash flows from operating activities. Operating activities provided net cash of ¥39,955 million. Major items included profit before tax of ¥22,241 million, depreciation and amortization of ¥20,780 million, and income taxes paid of ¥7,162 million. Net cash provided decreased ¥259 million year on year. Moreover, substantive operating cash flow increased ¥991 million year on year. Cash flows from investing activities The Group has always made investments with an awareness of capital efficiency based on our investment strategy. In the two years of the “SHIFT! 2022” medium-term business plan, we plan to invest a total of ¥60.0 billion, ¥30.0 billion to maintain and strengthen the important revenue base that generates cash, and ¥30.0 billion to invest in growth, such as renewable energy, environment-friendly business, and overseas business. Investing activities used net cash of ¥19,113 million. This was mainly due to payments for acquisition of additional shares in silent partnerships with the aim of operating large-scale solar power plants (mega solar power plants) of ¥8,397 million, and payments for purchase of property, plant and equipment and investment property of ¥10,999 million. Net cash used increased ¥18,988 million year on year. Cash flows from financing activities The Group aims to streamline Group-wide financing activities to enhance our corporate value. Enhancing Group-wide financial management through our Group Financial System* resulted in ¥17,625 million in funds used for financing activities. This was mainly due to repayments of lease liabilities of ¥11,359 million and cash dividends paid to Itochu Enex’s shareholders of ¥5,762 million. Net cash used decreased ¥6,903 million year on year. *The Group Financial System streamlines fund management and procurement costs by sharing funds within the Group. – 8 – 2) Cash flow indicators Fiscal year ended March 31, Ratio of shareholders’ equity to total assets (%) Ratio of shareholders’ equity to total assets at market value (%) Ratio of cash flow to interest-bearing debt (years) Interest-coverage ratio (times) 2020 33.1 24.6 0.9 25.0 2021 33.4 30.2 0.4 37.6 2022 32.3 25.9 0.8 40.2 Ratio of shareholders’ equity to total assets: Total shareholders’ equity / Total assets Ratio of shareholders’ equity to total assets at market value: Market capitalization / Total assets Ratio of cash flow to interest-bearing debt: Interest-bearing debt / Cash flow Interest-coverage ratio: Cash flow / Interest expense (Note 1.) All of the above ratios were calculated using consolidated financial statement data. (Note 2.) Market capitalization was calculated by multiplying the fiscal-year-end closing share price by the number of shares outstanding at fiscal year-end (net of treasury stock). (Note 3.) “Cash flow” is “Cash provided by (used in) operating activities” on the Consolidated Statement of Cash Flows. (Note 4.) Interest-bearing debt is all debt, of the debt carried on the Consolidated Statement of Financial Position, on which interest is payable. March 31, 2023 (3) Profit Distribution Policy and Dividends for the Fiscal Years Ended March 31, 2022 and Ending In terms of shareholder returns, we aim to maintain a consolidated dividend payout ratio of at least 40% in accord with our policy of paying stable dividends on an ongoing basis while maintaining sustained business growth. For the fiscal year ended March 31, 2022, we plan to pay a year-end dividend of ¥25 per share. For the fiscal year ending March 31, 2023, we plan to pay annual dividends of ¥48 per share (including an interim dividend of ¥24 per share). With respect to internally retained funds, our basic policy is to use such funds to invest in our business to strengthen our operating foundation and further increase earnings. – 9 – 2. Basic Concepts Underlying Selection of Accounting Standards The Itochu Enex Group has adopted IFRS (International Financial Reporting Standards) from the fiscal year ended March 31, 2014, in order to improve international comparability and the convenience of financial information in capital markets. – 10 – 3. Consolidated Financial Statements and Significant Notes Thereto (1) Consolidated Statement of Financial Position As of March 31, 2021 (Millions of yen) As of March 31, 2022 ASSETS Current assets Cash and cash equivalents Trade receivables Other current financial assets Inventories Income taxes receivable Trade advances paid Other current assets Total current assets Non-current assets Investments accounted for by the equity method Other investments Non-current financial assets other than investments Property, plant and equipment Investment property Goodwill Intangible assets Deferred tax assets Other non-current assets Total non-current assets Total assets 34,841 99,764 17,900 25,495 3,055 100 2,710 183,865 29,437 4,246 10,330 136,291 12,797 521 19,688 9,728 1,424 224,462 408,327 38,145 118,911 14,957 22,161 118 150 2,704 197,146 28,042 3,396 13,883 160,492 12,979 521 19,232 8,412 2,914 249,871 447,017 – 11 – LIABILITIES AND EQUITY Current liabilities Short-term bonds and borrowings Trade payables Lease liabilities Other current financial liabilities Income taxes payable Advances from customers Other current liabilities Total current liabilities Non-current liabilities Non-current bonds and borrowings Lease liabilities Other non-current financial liabilities Non-current liabilities for employee benefits Deferred tax liabilities Provisions Other non-current liabilities Total non-current liabilities Total liabilities Equity Common stock Capital surplus Retained earnings Other components of equity Treasury stock Total shareholders’ equity Non-controlling interests Total equity Total liabilities and equity As of March 31, 2021 (Millions of yen) As of March 31, 2022 3,041 102,768 10,285 5,614 3,874 11,006 14,353 150,941 14,418 50,499 14,425 9,925 1,001 5,465 254 95,987 246,928 19,878 18,974 99,829 (576) (1,871) 136,233 25,165 161,399 408,327 23,091 120,227 9,468 7,527 3,054 10,780 11,190 185,337 9,838 48,160 14,691 10,480 1,038 6,006 269 90,482 275,819 19,878 18,990 107,617 (315) (1,871) 144,297 26,901 171,198 447,017 – 12 – (2) Consolidated Statement of Comprehensive Income Revenue Cost of sales Gross profit Other income and expense Selling, general and administrative expenses Loss from tangible assets, intangible assets and goodwill Other – net Total other income and expense Profit from operating activities Financial income and costs Interest income Dividends received Interest expense Other financial income and costs – net Total financial income and costs Profit before tax Income tax expense Net profit Net profit attributable to: Net profit attributable to Itochu Enex’s shareholders Net profit attributable to non-controlling interests Total Share of profit of investments accounted for by the equity method Fiscal year ended March 31, 2021 (Millions of yen) Fiscal year ended March 31, 2022 739,067 (652,178) 86,889 (67,115) (1,369) 941 (67,543) 19,346 41 509 (1,070) (513) (1,033) 1,726 20,039 (5,675) 14,364 12,168 2,196 14,364 936,306 (852,715) 83,591 (68,065) (615) 6,018 (62,662) 20,929 31 119 (994) (253) (1,097) 2,409 22,241 (6,675) 15,566 13,194 2,372 15,566 – 13 – Fiscal year ended March 31, 2021 (Millions of yen) Fiscal year ended March 31, 2022 Other comprehensive income, net of tax effect Items that will not be reclassified to profit or loss FVTOCI financial assets Remeasurement of net defined benefit liability Other comprehensive income of investments accounted for by the equity method Items that may be reclassified to profit or loss Exchange differences on translating foreign operations Cash flow hedges Other comprehensive income of investments accounted for by the equity method Total other comprehensive income, net of tax effect Comprehensive income Comprehensive income attributable to: Comprehensive income attributable to Itochu Enex’s shareholders Comprehensive income attributable to non-controlling interests Earnings per share attributable to Itochu Enex’s shareholders Total Basic Diluted 219 26 77 (65) 147 417 821 15,185 12,945 2,240 15,185 107.79 – 53 40 59 16 229 229 626 16,192 13,810 2,382 16,192 116.89 – (Yen) – 14 – Balance at April 1, 2020 Net profit Other comprehensive income Comprehensive income Transactions with owners Cash dividends Changes due to additional acquisitions and sales of interests in subsidiaries Transfer from other components of equity to retained earnings Purchase and disposal of treasury stock Share-based payments Balance at March 31, 2021 Balance at April 1, 2021 Net profit Other comprehensive income Comprehensive income Transactions with owners Cash dividends Changes due to additional acquisitions and sales of interests in subsidiaries Transfer from other components of equity to retained earnings Purchase and disposal of treasury stock Share-based payments Balance at March 31, 2022 (3) Consolidated Statement of Changes in Equity Fiscal year ended March 31, 2021 (Millions of yen) Non-controlling interests Total equity Common stock Capital surplus Retained earnings Treasury stock Total shareholders’ equity 19,878 18,934 (1,870) 128,333 12,168 23,551 2,196 777 12,945 (5,084) – – 44 2,240 (675) 50 151,884 14,364 821 15,185 (5,759) 50 – (1) 161,399 15,566 626 16,192 (6,408) (1) (1) 19,878 39 18,974 99,829 (576) 1 (1,871) 40 136,233 25,165 40 161,399 Fiscal year ended March 31, 2022 Common stock Capital surplus Retained earnings Other components of equity Treasury stock Total shareholders’ equity 19,878 18,974 (576) (1,871) 136,233 13,194 25,165 2,372 (Millions of yen) Non-controlling interests Total equity 616 13,810 (5,762) 10 2,382 (646) (23) (23) – (23) 356 (356) – (1) (1) – (1) 19,878 39 18,990 107,617 (315) – (1,871) 39 144,297 26,901 39 171,198 Shareholders’ equity Other components of equity (1,370) 777 777 92,761 12,168 12,168 (5,084) (17) 17 Shareholders’ equity 99,829 13,194 13,194 (5,762) 616 616 – – 15 – Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 (Millions of yen) (4) Consolidated Statement of Cash Flows Cash flows from operating activities Profit before tax Depreciation and amortization Loss from tangible assets, intangible assets and goodwill Gain on remeasurement resulting from companies becoming subsidiaries Financial income and costs Share of profit of investments accounted for by the equity method Increase in trade receivables Decrease (increase) in inventories Increase in trade payables Other – net Dividends received Interest received Interest expense Income taxes paid Income taxes refund Net cash flows provided by operating activities Cash flows from investing activities Purchase of investments (including investments accounted for by the equity method) Proceeds from sales and redemption of investments (including investments accounted for by the equity method) Acquisition of subsidiaries, net of cash acquired Proceeds from acquisition of subsidiaries Proceeds from sales of subsidiaries, net of cash acquired Payment for loans receivable Collection of loans receivable Payments for purchase of property, plant and equipment and investment property Proceeds from sales of property, plant and equipment and investment property Purchase of intangible assets Proceeds from sales of intangible assets Decrease in deposits paid – net Other – net Net cash flows used in investing activities 20,039 19,930 1,369 – 1,033 (1,726) (12,927) (4,807) 18,950 6,143 3,105 41 (1,006) (10,028) 98 40,214 (5,375) 5,521 – 11 – (875) 1,180 (11,646) 700 (1,618) 219 11,021 737 (125) 22,241 20,780 615 (4,211) 1,097 (2,409) (19,145) 3,318 17,119 4,817 695 31 (886) (7,162) 3,055 39,955 (1,023) 2,550 (8,397) – 825 (749) 815 (10,999) 1,089 (1,811) 29 – (1,442) (19,113) – 16 – Cash flows from financing activities Proceeds from bonds and borrowings Repayments of bonds and borrowings Repayments of lease liabilities Net increase in short-term borrowings Capital contribution from non-controlling interests Cash dividends paid to Itochu Enex’s shareholders Cash dividends paid to non-controlling interests Purchase of treasury stock Net cash flows used in financing activities Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the period Effect of exchange rate changes on cash and cash equivalents Cash and cash equivalents at the end of the period Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 (Millions of yen) 11,050 (18,941) (11,106) 179 50 (5,084) (675) (1) (24,528) 15,561 19,243 37 34,841 1,050 (1,896) (11,359) 989 – (5,762) (646) (1) (17,625) 3,217 34,841 87 38,145 – 17 – (5) Notes to Consolidated Financial Statements Notes on Uncertainties of Entity’s Ability to Continue as Going Concern No items to report. Segment Information i) Outline of Reportable Segments The reportable segments of the Group are components of the Group whose separate financial information is available. These segments are periodically evaluated by the Board of Directors in deciding how to allocate management resources and in assessing performance. The Group is organized into business divisions, consolidating related businesses. Each business division plans strategies for each category of target customers and markets and develops business activities. The Group has four reportable segments that correspond to the business divisions, namely the “Home-Life Division,” “Car-Life Division,” “Industrial Business Division,” and “Power & Utility Division.” The Home-Life Division engages in sales and services involving LP gas, kerosene, town gas (Nakatsu City, Oita Prefecture and Kanto region), industrial gas, electricity, household equipment, smart energy equipment, remodeling, residential lithium-ion electricity storage systems, pressure resistance inspection for gas containers and welding materials. The Car-Life Division engages in sales and services involving gasoline, kerosene, diesel oil, electricity, automobiles, car rental, lifestyle and automotive products. The Industrial Business Division engages in sales and services involving gasoline, kerosene, diesel oil, fuel oil, LP gas, high-grade urea solution “AdBlue®,” GTL fuel, corporate fleet refueling cards asphalt, and marine fuel, as well as recycling of fly ash, recovery and recycling of slop, import/ export of petroleum products and terminal tank rental. The Power & Utility Division is engaged in the sale of electricity (wind, hydropower, photovoltaic power, coal-fired, natural gas-fired) and steam, as well as in providing district heating services, comprehensive energy services, electricity/heat supply services, electric power supply/demand management services, and asset management business. – 18 – ii) Information on Reportable Segments Fiscal year ended March 31, 2021 Home-Life Division Car-Life Division Reportable segment Industrial Business Division (Millions of yen) Total Adjustment Consolidated Revenue 78,962 414,641 160,778 84,686 739,067 – 739,067 Intersegment revenue 54 10,910 5,262 20,450 (20,450) – Power & Utility Division 4,224 88,910 10,258 79,016 20,429 425,551 166,040 46,776 9,426 759,517 (20,450) 739,067 86,889 – 86,889 (18,750) (39,162) (4,103) (4,985) (67,000) (115) (67,115) (157) (214) (310) (668) (1,349) (20) (1,369) Other profit (loss) 31 204 (3) 615 847 94 941 1,553 7,604 5,010 5,220 19,387 (41) 19,346 Financial income and costs (14) (453) (855) (884) (149) (1,033) 181 1,726 – 1,726 4,546 2,669 20,229 12,306 (190) 20,039 (138) 12,168 1,410 2,949 1,726 20,282 4,309 1,350 69 7,220 4,054 429 2,146 5,876 (3,887) (7,604) (1,799) (5,089) (18,379) (1,551) (19,930) (119) (136) (295) (496) (1,046) (1,046) 72,235 150,123 56,288 94,979 373,625 34,702 408,327 8,532 5,931 630 29,437 12,817 9,772 447 13,264 29,437 9,775 – – 3 Intersegment transactions have been decided by reference to the market price. The adjustment of negative ¥138 million to net profit attributable to Itochu Enex’s shareholders represents corporate profit (loss) not allocated to reportable segments. The adjustment of ¥34,702 million to total assets represents corporate assets not allocated to reportable segments. Revenue from external customers Total revenue Gross profit Selling, general and administrative expenses Loss from tangible assets, intangible assets and goodwill Profit from operating activities Share of profit of investments accounted for by the equity method Profit before tax Net profit attributable to Itochu Enex’s shareholders Other items Depreciation and amortization impairment loss Total assets Investments accounted for by the equity method Capital expenditures Increase in right-of-use assets (Note) 438 66 5,514 3,857 194 431 1,916 – 19 – Fiscal year ended March 31, 2022 (Millions of yen) Total Adjustment Consolidated Home-Life Division Car-Life Division Reportable segment Industrial Business Division Power & Utility Division Revenue 93,992 516,670 224,496 101,148 936,306 – 936,306 Intersegment revenue 103 14,324 7,440 5,055 26,922 (26,922) – Total revenue 530,994 231,936 106,203 963,228 (26,922) 936,306 46,383 8,408 7,074 83,591 – 83,591 (19,189) (38,735) (4,781) (5,125) (67,830) (235) (68,065) (56) (226) (76) (255) (613) Other profit 154 235 5,998 2,635 7,657 21,146 (217) 20,929 Financial income and costs (9) (429) (535) (948) (149) (1,097) 308 2,409 – 2,409 4,486 6,180 5,953 3,483 22,607 13,463 5,876 5,057 614 28,042 12,574 4,968 (2) 20 (615) 6,018 (366) 22,241 (269) 13,194 – – 236 84 28,042 12,810 5,052 (4,076) (7,464) (2,023) (5,725) (19,288) (1,492) (20,780) (483) (115) (43) (123) (764) (764) 77,719 149,627 70,757 117,272 415,375 31,642 447,017 94,095 21,726 2,025 4,651 2,759 21,219 3,481 1,113 Revenue from external customers Gross profit Selling, general and administrative expenses Loss from tangible assets, intangible assets and goodwill Profit from operating activities Share of profit of investments accounted for by the equity method Profit before tax Net profit attributable to Itochu Enex’s shareholders Other items Depreciation and amortization impairment loss Total assets Investments accounted for by the equity method Capital expenditures Increase in right-of-use assets (Note) Intersegment transactions have been decided by reference to the market price. The adjustment of negative ¥269 million to net profit attributable to Itochu Enex’s shareholders represents corporate profit (loss) not allocated to reportable segments. The adjustment of ¥31,642 million to total assets represents corporate assets not allocated to reportable segments. 75 7,303 3,971 738 3,380 1,309 1,123 4,674 25 1 4,700 3,250 209 656 1,932 – 20 – iii) Products and Services Information This information is omitted because the classification of products and services is the same as the classification of reportable segments. iv) Geographic Information This information is omitted because revenue from external customers in Japan accounts for a large percentage of the revenue recorded in the consolidated statement of comprehensive income for the fiscal years ended March 31, 2021 and 2022. v) Major Customers Information This information is omitted because there is no major external customer from which revenue accounts for 10% or more of the revenue recorded in the consolidated statement of comprehensive income for the fiscal years ended March 31, 2021 and 2022. Earnings per Share Basic earnings per share for the fiscal years ended March 31, 2021 and 2022, were calculated as follows: Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022 Net profit attributable to Itochu Enex’s shareholders Weighted-average number of ordinary shares outstanding Basic earnings per share attributable to Itochu Enex’s shareholders (Thousands of shares) (Millions of yen) (Yen) 12,168 112,881 107.79 13,194 112,880 116.89 (Note) Diluted earnings per share attributable to Itochu Enex’s shareholders are not presented because there were no dilutive potential shares. Significant Events after the Reporting Period No items to report. – 21 –