Japan Airport Terminal : Financial Report for the Third 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 Third Quarter of the Fiscal Year Ending March 31, 2023 (FY2022) [J-GAAP]

(Consolidated)

		February 8, 2023
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:	February 10, 2023
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 Nine Months of FY2022 (April 1, 2022 to December 31, 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 Nine	Millions of yen		%			Millions of yen	%	Millions of yen	%	Millions of yen		%
Months of
FY2022	76,027		78.5			(9,325)	-	(10,329)	-	(2,587)		-
FY2021	42,590		-			(30,892)	-	(33,240)	-	(19,326)		-
(Note) Comprehensive income/(loss): First nine months of FY2022 ¥-11,724 million (-%) First nine months of FY2021 ¥-30,183 million (-%)
	Net income/(loss) per		Diluted net income
	share					per share
First Nine			Yen			Yen
Months of
FY2022		(27.79)			-
FY2021	(207.51)			-

(Note) Although potential shares exist, diluted net income per share for the first nine months of FY2021 is not shown due to net loss per share. In addition, diluted net income per share for the first nine 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 December 31, 2022		454,528		144,283					33.3	1,625.04
As of March 31, 2022		463,878		156,009					33.2	1,655.32
(Reference) Equity capital:	As of December 31, 2022 ¥151,350 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			-			0.00		-
FY2022 (Forecast)												-	-

(Note) 1. Revisions to the most recently announced dividends forecast for FY2022: No

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
Full-year	105,900	85.6	(14,300)		-	(15,600)		-	(4,600)		-	(49.39)
Note:	1. Revisions to the most recently announced forecast of consolidated financial results for FY2022: No

* 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 12 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 12 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 December 31, 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 December 31, 2022	8,953 shares	As of March 31, 2022	8,737 shares
3)	Average number of shares outstanding (quarterly consolidated cumulative period):
	Third quarter of FY2022	93,136,607 shares	Third quarter of FY2021	93,136,724 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 6 of the appendix materials "1. Qualitative Information on Consolidated Financial Results for the First Nine Months of FY2022 (3) Explanation of Consolidated Financial Forecasts and Other Forward-looking Statements".

Japan Airport Terminal Co., Ltd. (9706) Financial Report for the Third 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 NINE
MONTHS OF FY2022 (APRIL 1, 2022 TO DECEMBER 31, 2022)	- 2 -
(1) EXPLANATION OF OPERATING RESULTS	- 2 -
(2) EXPLANATION OF FINANCIAL POSITION	- 6 -
(3) EXPLANATION OF CONSOLIDATED FINANCIAL FORECASTS AND
OTHER FORWARD-LOOKING STATEMENTS	- 6 -

2. QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS AND NOTES	- 7 -
(1) QUARTERLY CONSOLIDATED BALANCE SHEETS	- 7 -

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

COMPREHENSIVE INCOME	- 9 -
Quarterly Consolidated Statements of Income	- 9 -
Quarterly Consolidated Statements of Comprehensive Income	- 11 -
(3) NOTES ON QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS	- 12 -
(NOTES ON THE PREMISE OF A GOING CONCERN)	- 12 -
(NOTES ON A SIGNIFICANT CHANGE IN SHAREHOLDERS' EQUITY)	- 12 -
(ADOPTION OF SPECIAL ACCOUNTING METHODS FOR PREPARATION OF QUARTERLY CONSOLIDATED
FINANCIAL STATEMENTS)	- 12 -
(CHANGES IN ACCOUNTING POLICIES)	- 12 -
(ADDITIONAL INFORMATION)	- 12 -
(SEGMENT INFORMATION)	- 13 -

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

1. Qualitative Information on Consolidated Financial Results for the First Nine Months of FY2022 (April 1, 2022 to December 31, 2022)

(1) Explanation of Operating Results

During the first nine months of the fiscal year ending March 31, 2023, although there are signs of weakness in some parts, 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 coexisting with the new Coronavirus ("COVID-19") infection. However, the downturn in overseas economies is becoming downside risks to the Japanese economy amid the tightening of monetary policy around the globe. It is also necessary to pay close attention to price increases, restrictions on supply chain networks, volatility in the financial and capital markets and the impact of the spread of COVID-19 infection in China among other factors.

Under these economic conditions, in the airline industry, flight demand continued to recover with the start of the nationwide travel support program and a significant easing of entry restrictions. The number of passengers at Haneda Airport on domestic flights for the first nine months of FY2022 was just over 70% of the same period of FY2019, which was before the impact of COVID-19 hit, and approximately 30% of the same period of FY2019 on international flights. For the third quarter of the current fiscal year, domestic flights recovered to just over 80% and international flights to approximately 50% 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 new Medium-Term Business Plan that the JAT Group has put together is a backcast by 2025 that reflects our goals for 2030, which is when the government is setting targets including achieving 60 million foreign visitors to Japan. We are implementing various measures to achieve the management goals in the plan. With respect to our efforts related to sustainability, we put together our basic policy in May 2022 and established the structure to accelerate our sustainability initiatives in July. In September, we expressed our support to the recommendations made by the Task Force on Climate-related Financial Disclosure (TCFD) and we are now putting together our Medium-Term Sustainability Plan.

During the third quarter of the current fiscal year, in terms of facilities, we cooperated with the request from the Ministry of Economy, Trade and Industry to save power, by turning off some of the lights and controlling air conditioning operation in the terminal buildings. In addition to carrying out renovation work in preparation for major disasters, we are steadily pushing forward investment plans for the future, such as commencing the construction of connection between the satellite building on the north side of Terminal 2 and the main terminal building. We are also working toward the realization of a carbon-neutral society by studying the conversion of airport vehicles to electric vehicles and researching the potential demand for hydrogen fuel.

In addition, we have added a new function to Haneda Airport's official app "Haneda Airport" that guides passengers to boarding based on the latest flight information and suggests ways to spend time in the airport according to the purpose of use. Furthermore, the "Haneda Airport Escort Service", which was first introduced for international flights, has also been launched in the domestic terminal to provide services that meet a variety of needs.

In terms of sales, in response to the recovery in demand for international flights, we changed the operating hours of duty-free shops and opened a total of three shops in Terminal 3, including Louis Vuitton and Dior, both of which were opened for the first time in Japan as a duty-free shop. On domestic flights, we opened "GOOD NEWS TOKYO", which offers upcycled products, in Terminal 2, and actively held events such as the "Haneda Airport Selection", which features various products including those exclusive to Haneda Airport, and product and tourism fairs of various regions in Japan, in an effort to capture demand driven by the recovery in the number of passengers.

Outside of Haneda Airport, we opened the "HOKKAIDO SHOKUHIN KAN" selling foods produced in Hokkaido at Narita Airport Terminal 1. In addition, we offered products exclusive to Haneda Airport, such as lunch boxes sold at airports ("soraben") and frozen in-flight meals at a product exhibition held at Keikyu Department Store, as we are striving to expand our sales channels. Furthermore, as a sales agency business that leverages our installation experience and operational expertise at Haneda Airport, we are increasing the installation of Radi-Cool, a radiant cooling material, and robots for operations including guiding and cleaning. We are expanding earnings from new businesses while contributing to solving social issues such as reducing CO2 emissions and addressing labor shortages.

In June 2022, Haneda Airport's passenger terminals were awarded first place in the "Best Airports in Asia" for the second consecutive year by SKYTRAX, and second place globally for the fourth consecutive year in the "World's Best Airports", which comprehensively evaluated various aspects of international 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). In November, we were also awarded the world's highest standard

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

"5-star Airport" rating for the ninth consecutive year in the SKYTRAX "Global Airport Rating".

As a result of the above, with respect to the consolidated financial results for the first nine months of the fiscal year ending March 31, 2023, operating revenues was ¥76,027 million (an increase of 78.5% 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 recovery of passenger volume. As a result of the recovery in revenue and sustained cost reduction, the degree of loss decreased from the previous fiscal year and operating loss was ¥9,325 million (compared to operating loss of ¥30,892 million during the same period of the previous year), ordinary loss was ¥10,329 million (compared to ordinary loss of ¥33,240 million during the same period of the previous year), and quarterly net loss attributable to owners of the parent was ¥2,587 million (compared to quarterly net loss attributable to owners of the parent of ¥19,326 million during the same period of the previous year).

(Millions of yen)

Operating Results

First Nine Months of FY2021	First Nine Months of FY2022	Year-on-Year
(ended December 31, 2021)	(ended December 31, 2022)	(%)

Operating revenues	42,590	76,027	78.5
[Facilities Management]	29,847	44,375	48.7
[Merchandise Sales]	9,971	25,821	159.0
[Food and Beverage]	2,771	5,829	110.3
Operating income/(loss)	(30,892)	(9,325)	-
Ordinary income/(loss)	(33,240)	(10,329)	-
Quarterly net income/(loss)	(19,326)	(2,587)	-
attributable to owners of the parent

Currently, passenger volume at Haneda Airport continues to show a recovery trend. For domestic flights, as the nationwide travel support program continues beyond January, it is expected that the program will support the demand for tourism travel. For international flights, it will take time for the number of visitors from China to recover since the border control measures have been strengthened against entry from mainland China while Chinese tourists were the largest group of foreign visitors before COVID-19. However, there has been rapid recovery in visitors from other foreign countries, especially those from Asia and the United States. In January of this year, we concluded a memorandum of understanding for business cooperation with the Hawaii Department of Transportation, which manages and operates the Daniel K. Inouye International Airport in Hawaii, one of the most attractive destinations for Japanese travelers. We will contribute to the development of airline business in Hawaii and Japan by exchanging expertise and ideas on airport operations and providing high-quality services.

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.

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