Japan Airport Terminal : Financial Report for the First Quarter of the Fiscal Year Ending March 31, 2023 (FY2022) (Consolidated)

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.

Financial Report for the First Quarter of the Fiscal Year Ending March 31, 2023 (FY2022) [J-GAAP]

(Consolidated)

		August 3, 2022
Company name:	Japan Airport Terminal Co., Ltd. ("the Company") Listed stock exchange: Tokyo, Prime Market
Code number:	9706	URL:https://www.tokyo-airport-bldg.co.jp/company/en/
Representative:	Nobuaki Yokota, President and COO
Contact:	Kazuhito Tanaka, Senior Managing Director
	TEL [phone]
Scheduled date of filing securities report:	August 12, 2022
Scheduled date of commencing dividend payment:	－
Supplementary materials on financial results (yes/no)	No
Holding of quarterly investors' meeting (yes/no)	No

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

1. Consolidated Financial Results for the First Three Months of FY2022 (April 1, 2022 to June 30, 2022)

(1) Consolidated Business Results (Cumulative)					(%: Change from the same period of the previous year)
												Net income/(loss)
	Operating revenues		Operating income/(loss)		Ordinary income/(loss)	attributable to owners of
												the parent
First Three	Millions of yen		%		Millions of yen		%		Millions of yen	%	Millions of yen		%
Months of
FY2022	19,371		61.5		(6,201)		-		(6,436)	-	(2,651)		-
FY2021	11,992		-		(11,168)		-		(11,711)	-	(7,129)		-
(Note) Comprehensive income/(loss): First three months of FY2022 ¥-7,416 million (-%)	First three months of FY2021 ¥-10,651 million (-%)
	Net income/(loss)		Diluted net income
	per share				per share
First Three		Yen				Yen
Months of
FY2022	(28.47)				-
FY2021	(76.55)				-

(Note) Although potential shares exist, diluted net income per share for the first three months of FY2021 is not shown due to net loss per share. In addition, diluted net income per share for the first three months of FY2022 is not shown since potential shares do not exist.

(2) Consolidated Financial Position

	Total assets		Net assets	Equity capital to		Net assets per share
		total assets
	Millions of yen		Millions of yen		%		Yen
As of June 30, 2022	456,250		148,592		33.0		1,616.52
As of March 31, 2022	463,878		156,009		33.2		1,655.32
(Reference) Equity capital:	As of June 30, 2022	¥150,557 million As of March 31, 2022	¥154,170 million

2. Dividends

			Dividends per share
Q1-End		Q2-End	Q3-End	Year-End	Annual
	Yen	Yen	Yen	Yen	Yen
FY2021	-	0.00	-	0.00	0.00
FY2022	-
FY2022 (Forecast)		-	-	-	-

(Note) 1. Revisions to the most recently announced dividends forecast for FY2022: None

2. We have decided to postpone the announcement of the outlook for dividend payment for the fiscal year ending March 31, 2023.

3. Forecast of Consolidated Financial Results for FY 2022 (April 1, 2022 to March 31, 2023)

(%: Change from the same period of the previous year)

			Operating		Ordinary		Net income/(loss)		Net
	Operating revenues			attributable to owners	income/(loss)
	income/(loss)		income/(loss)
					of the parent		per share
	Millions of yen	%	Millions of yen		%	Millions of yen		%	Millions of yen		%	Yen
First half	45,400	75.7	(10,500)		-	(11,000)		-	(4,000)		-	(42.95)
Full-year	105,600	85.1	(16,600)		-	(18,100)		-	(5,700)		-	(61.20)
Note:	1. Revisions to the most recently announced forecast of consolidated financial results for FY2022: None

* Notes

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

New: NoneExcluded: None

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

(Note) For details, please refer to page 11 of the appendix materials "2. Quarterly Consolidated Financial Statements and Notes

1. 1. Notes on Quarterly Consolidated Financial Statements: Adoption of Special Accounting Methods for Preparation of Quarterly Consolidated Financial Statements".
2. Changes in accounting policies, accounting estimates, and restatement of revisions
3. 1. Changes in accounting policies due to revisions of accounting standards, etc.: Yes
   2. Changes in accounting policies other than 1) above: None
   3. Changes in accounting estimates: None
   4. Restatement of revisions: None

(Note) For details, please refer to page 11 of the appendix materials "2. Quarterly Consolidated Financial Statements and Notes

1. 1. Notes on Quarterly Consolidated Financial Statements: Changes in Accounting Policies".
2. Number of shares outstanding (common stock)
3. 1. Number of shares outstanding at the period-end (including treasury stock):

	As of June 30, 2022	93,145,400 shares	As of March 31, 2022	93,145,400 shares
2)	Number of treasury stock at the period-end:
	As of June 30, 2022	8,747 shares	As of March 31, 2022	8,737 shares
3)	Average number of shares outstanding (quarterly consolidated cumulative period):
	First quarter of FY2022	93,136,654 shares	First quarter of FY2021	93,136,782 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. For the assumptions used in financial forecasts and precautionary statements regarding the use of the forecasts, please refer to page 5 of the appendix materials "1. Qualitative Information on Consolidated Financial Results for the First Three Months of FY2022 (3) Explanation of Consolidated Financial Forecasts and Other Forward-looking Statements".

Japan Airport Terminal Co., Ltd. (9706) Financial Report for the First Quarter of the Fiscal Year Ending March 31, 2023 (FY2022)

Contents of the Appendix Materials

1. QUALITATIVE INFORMATION ON CONSOLIDATED FINANCIAL RESULTS FOR THE FIRST THREE

MONTHS OF FY2022 (APRIL 1, 2022 TO JUNE 30, 2022) ............................................................................................	- 2 -
(1) EXPLANATION OF OPERATING RESULTS ...................................................................................................	- 2 -
(2) EXPLANATION OF FINANCIAL POSITION ...................................................................................................	- 5 -
(3) EXPLANATION OF CONSOLIDATED FINANCIAL FORECASTS AND
OTHER FORWARD-LOOKING STATEMENTS ............................................................................................	- 5 -

2. QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS AND NOTES ......................................................	- 6 -
(1) QUARTERLY CONSOLIDATED BALANCE SHEETS.......................................................................................	- 6 -

1. QUARTERLY CONSOLIDATED STATEMENTS OF INCOME AND QUARTERLY CONSOLIDATED STATEMENTS OF

COMPREHENSIVE INCOME ....................................................................................................................	- 8 -
Quarterly Consolidated Statements of Income ...............................................................................................	- 8 -
Quarterly Consolidated Statements of Comprehensive Income ......................................................................	- 10 -
(3) NOTES ON QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS..........................................................	- 11 -
(NOTES ON THE PREMISE OF A GOING CONCERN) ...................................................................................	- 11 -
(NOTES ON A SIGNIFICANT CHANGE IN SHAREHOLDERS' EQUITY)..........................................................	- 11 -
(ADOPTION OF SPECIAL ACCOUNTING METHODS FOR PREPARATION OF QUARTERLY CONSOLIDATED
FINANCIAL STATEMENTS) ....................................................................................................................	- 11 -
(CHANGES IN ACCOUNTING POLICIES) ....................................................................................................	- 11 -
(ADDITIONAL INFORMATION)...................................................................................................................	- 11 -
(SEGMENT INFORMATION)......................................................................................................................	- 12 -

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Japan Airport Terminal Co., Ltd. (9706) Financial Report for the First Quarter of the Fiscal Year Ending March 31, 2023 (FY2022)

1. Qualitative Information on Consolidated Financial Results for the First Three Months of FY2022 (April 1, 2022 to June 30, 2022)

(1) Explanation of Operating Results

During the first three months of the fiscal year ending March 31, 2023, the Japanese economy showed a gradual recovery. Looking ahead, it is expected that the recovery trend will continue, resulting from the effects of various policies, while thorough measures are taken to prevent the spread of the new Coronavirus ("COVID-19") infection and social as well as economic activities return to a normal state. However, it is necessary to pay close attention to downside risks due to a volatility in the financial and capital markets amid the tightening of monetary policy around the globe, an increase in raw material prices, and restrictions on supply chain networks, among other factors.

Under these economic conditions, in the airline industry, flight demand steadily recovered and the number of passengers on domestic flights at Haneda Airport for the first three months of FY2022 was just over twice the number of passengers during the same period of last year, and was just over 60% of the same period of FY2019, which was before the impact of COVID-19 hit. As for international flights, border control measures are being eased worldwide with the exception of some countries and regions. And in Japan, quarantine measures at the time of entry were eased in June, and acceptance of foreign tourists to Japan resumed with certain conditions. On the other hand, a cap has been set on the number of passengers entering Japan per day. As a result, although the number of passengers on international flights at Haneda Airport has increased to about four times year-on-year, it remains at the level of just over 10% of the same period of FY2019. The Japan Airport Terminal Group ("JAT Group") continues to take measures at various locations within the terminal buildings to prevent the spread of COVID-19 and ensure the safety and security of airport users and employees.

Under these circumstances, the JAT Group has put together the new Medium-Term Business Plan (FY22-FY25) "To Be a World-Best Airport 2025 -towards becoming one of the most advanced, human-and-eco-friendly airports by 2030-". Setting the years of 2030 and 2025 as milestones, the plan is a backcast by 2025 that reflects our goals for 2030. 2030 is when the government targets 60 million foreign visitors to Japan and a 46% reduction in CO2 emissions compared to 2013 and 2025 is when the number of passengers is expected to recover to the level of before COVID-19. The main pillars of our management strategy in the Medium-Term Business Plan are to establish a foundation for regrowth, to capture future airline demand and to expand our earnings base. In order to promote these strategies in a sophisticated and efficient manner, we will strengthen the management foundations of digital transformation, organization, personnel, governance, and financial strategies, and position sustainability as a core concept in our business operations.

On the sales front, during the first three months of FY2022, we opened two renewed "Samantha Thavasa" stores that sell upcycled products. In addition, we actively held events such as product and tourism fairs of various regions of Japan in an effort to capture demand driven by the recovery in the number of passengers. We also launched "HANEDA PICK UP", which allows customers to pick up items ordered through our official e-commerce website "HANEDA Shopping" at our Haneda Airport stores. Other than that, we are promoting efforts to link e-commerce and brick-and-mortar stores, such as selling "in-flight meals from around the world" at vending machines in the airport terminal buildings, which are popular on our e-commerce website.

In terms of facilities, we are taking measures to improve passenger convenience that take into account the "New Normal" including the installation of private work boxes suitable for working outside the office. At the same time, to cooperate with the request from the Ministry of Economy, Trade and Industry to save power, we are turning off some of the lights and controlling air conditioning operation in the terminal buildings in response to the tight supply and demand of electricity. We will also steadily push forward investment plans for the future, such as selecting the contractor for the construction of connection between the satellite building on the north side of Terminal 2 and the main terminal building.

In addition, we are increasing the number of installations of "Radi-Cool", a radiant cooling material for which we serve as a sales agent, at other domestic airports and elsewhere. We will also continue our efforts to reduce environmental burdens and build a recycling-oriented society including the hosting of "HANEDA Fashion Swap vol. 2", an event to collect and exchange unwanted clothing. In May, a new terminal at the Palau International Airport, in which we participate, commenced operation. As the only international airport in the Republic of Palau, we aim to contribute to the sustainable development of the economy and society of Palau, where tourism is a key industry.

In terms of organization and governance, the Company shifted to the Prime Market of the Tokyo Stock Exchange in April. In June, the Company transitioned to a company with an Audit and Supervisory Committee to accelerate decision-making. In addition, in July, we established a new Sustainability Committee and created the Sustainability Promotion Office as a dedicated organization. Going forward, we will accelerate our sustainability initiatives across the entire company, while establishing theme-based

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Japan Airport Terminal Co., Ltd. (9706) Financial Report for the First Quarter of the Fiscal Year Ending March 31, 2023 (FY2022)

working groups.

Haneda Airport's passenger terminals have been awarded first place for the second consecutive year in the "Best Airports in Asia", a comprehensive evaluation of airports in Asia, in the 2022 Global Airport Rating by SKYTRAX in the UK. In addition, we were second place globally, for the fourth consecutive year in the "World's Best Airports", which comprehensively evaluates various aspects of airports. Furthermore, we were awarded first place in the "World's Cleanest Airports" (for the seventh consecutive year), "World's Best Domestic Airports" (for the tenth consecutive year), and "World's Best PRM / Accessible Facilities" (for the fourth consecutive year).

As a result of the above, with respect to the consolidated financial results for the first three months of the fiscal year ending March 31, 2023, operating revenues was ¥19,371 million (an increase of 61.5% year-on-year) due to the increase in operating revenues for all of the business segments compared to the same period of the previous year in line with the steady recovery of passenger volume. As a result of the recovery in revenue and sustained cost reduction, operating loss decreased to ¥6,201 million (compared to operating loss of ¥11,168 million during the same period of the previous year), ordinary loss was ¥6,436 million (compared to ordinary loss of ¥11,711 million during the same period of the previous year), and quarterly net loss attributable to owners of the parent was ¥2,651 million (compared to quarterly net loss attributable to owners of the parent of ¥7,129 million during the same period of the previous year).

(Millions of yen)

Operating Results

First Three Months of FY2021	First Three Months of FY2022	Year-on-Year
(ended June 30, 2021)	(ended June 30, 2022)	(%)

Operating revenues	11,992	19,371	61.5
[Facilities Management]	9,014	12,486	38.5
[Merchandise Sales]	2,289	5,306	131.7
[Food and Beverage]	687	1,578	129.6
Operating income/(loss)	(11,168)	(6,201)	-
Ordinary income/(loss)	(11,711)	(6,436)	-
Quarterly net income/(loss)	(7,129)	(2,651)	-
attributable to owners of the parent

Although the outlook remains uncertain, as evidenced by the increasing number of new cases of COVID-19, passenger volume on domestic flights at Haneda Airport has remained steady. The number of international flights is also gradually increasing, with the resumption of flights to South Korea at the end of June, and further recovery is expected in the future. The JAT Group will continue to apply the lessons learned from the COVID-19 pandemic to its terminal operations, while capturing the recovering passenger demand and pave the way for renewed growth. And we will work to enhance the value of Haneda Airport, the gateway to Japan and the greater Tokyo area, by further improving the convenience, comfort, and functionality of the Haneda Airport Passenger Terminal as well as by ensuring the safe and smooth entry, exit, and transportation of all customers.

The following is a breakdown of earnings / (loss) by segment. Note that the figures for operating revenues of each segment include intersegment sales and the figures for operating income / (loss) are equivalent to those for segment income / (loss).

Overview by Segment[Facilities Management]

(Millions of yen)

Operating Results

First Three Months of FY2021	First Three Months of FY2022	Year-on-Year
(ended June 30, 2021)	(ended June 30, 2022)	(%)

Sales to external customers	9,014	12,486	38.5
Rent revenue	4,486	5,012	11.7
Facility user charges revenue	1,940	4,720	143.3
Other revenues	2,588	2,753	6.4
Intersegment sales and transfers	389	538	38.5
Total of Operating Revenues	9,404	13,025	38.5
Segment income/(loss)	(6,776)	(3,225)	-
	- 3 -