Announcement of Q2 2022 Financial Results & October 2022 Regular Press Conference: President Hayashi's Message

• Consolidated net sales for the second quarter of FY2022 totaled 1,779.2 billion yen. An increase in the fuel cost adjustment as a result of soaring fuel prices among other factors pushed net sales upward by 618.7 billion yen year-on-year.
• On the other hand, ordinary loss of 23 billion yen was recorded, resulting in the first deficit in the second quarter in nine years since FY2013.
• Income decreased by 86.7 billion yen year-on-year mainly as a result of an increase in time-lag loss due to soaring fuel prices. The power transmission and distribution company, Chubu Electric Power Grid, also faced increasing costs associated with regulating power demand and supply.
• Net loss attributable to owners of the parent company amounted to 42.6 billion yen, a decrease of 85.2 billion yen from the previous year, mainly due to the recording of impairment loss on fixed assets as an extraordinary loss at a subsidiary.

• Performance for the first half of the fiscal year has been finalized. And while the fuel prices and wholesale electricity market prices that are the basis of the forecast remain uncertain, we have made certain assumptions and forecasted financials for FY2022.
• Consolidated net sales are expected to be around 4,100 billion yen.
• We expect an increase in sales of about 1,395 billion yen year-on-year due to an increase in the fuel cost adjustment resulting from soaring fuel prices.
• As for consolidated ordinary loss, we expect ordinary loss of about 170 billion yen.
• We expect consolidated ordinary income to decrease by approximately 111 billion yen from the previous year as the financial structure worsens as a result of a sharp rise in fuel prices.
• Excluding the impact of the accounting standard, we expect an ordinary loss of about 20 billion yen.
• For the second half of the fiscal year, we anticipate a significant rise in resource prices and further depreciation of the yen. We expect this to further push up power supply procurement costs at Miraiz, increase costs associated with regulating power demand and supply at the Power Grid, as well as the affect spot procurement of LNG at JERA, leading to an overall increase in losses.
• In addition, net loss attributable to shareholders of the parent company is expected to be approximately 130 billion yen.

（Executive compensation）

• Given the tough financials of this year, executive compensation for FY2022 will be reduced by around 30%.

（Dividends）

• The interim dividend for this year was set at 25 yen per share.
• We have revised our year-end dividend forecast from 25 yen to undecided. We expect a loss for the fiscal year ending March 31, 2022, excluding adjustments made to reflect accounting standards, and there is a strong sense of uncertainty about future supply and demand, fuel prices, and the business environment overall.
• We will continue to work as a Group to improve our financials to meet the expectations of our shareholders.
• This ends my presentation.