Mitsui & Co. Stock

Good afternoon. I am Makoto Tanaka, CFO. Thank you for joining us today. Firstly, we would like to express our deepest condolences to those who lost their lives in the earthquake in Kumamoto and extend our heartfelt sympathies to all those affected by this disaster. At this point, no material impact on the business activities of Mitsui & Co Group has been confirmed. However, we'll continue to closely monitor the situation and assess any damage. We will also consider appropriate support measures and responses going forward. I'll begin by giving a summary of the operating results for the first 3 months. I will then hand over to Masao Kurihara, General Manager of the Global Controller Division, who will speak on the details of the operating results.

Let me begin by -- or let me begin with a summary of our financial results for the quarter. Core operating cash flow, COCF, increased by JPY 64.6 billion year-on-year to JPY 280.9 billion, while profit increased by JPY 102.5 billion year-on-year to JPY 294.1 billion. Both posted substantial growth. Profit reached a record high for Q1. Both COCF and profit are progressing at a pace well ahead of our business plan, driven by asset recycling and our middle game initiatives. In light of our strong performance and with the aim of improving capital efficiency and enhancing shareholder returns, we have decided on the share repurchase of JPY 200 billion to be completed by the end of January 2027. To continuously enhance per share value, all shares acquired through this repurchase will be canceled. While closely monitoring development in the Middle East, we'll be revising our full year earnings forecast at an appropriate time based on the high level of progress against our business plan and our forward outlook.

Next page. This slide shows the progress of each segment against the business plan. The Innovation & Corporate Development segment made extremely good progress, mainly driven by gains from large-scale asset recycling. The Chemicals segment also made good progress, mainly from trading and methanol business, supported by our middle game initiatives. In the Energy segment, we expect full-fledged earnings contribution from Q2 onwards, mainly from LNG-related businesses and gains from asset sales.

I'd like to explain the updates to capital allocation under MTMP2029. Given we have made a strong start to MTMP2029 and in line with our policy of executing share repurchases in a flexible manner, we have decided to conduct a JPY 200 billion share repurchase. Top-tier investments for growth opportunities are progressing steadily and preparations for new growth projects are also advancing well. Given the high likelihood that we will continue providing additional shareholder returns during this MTMP, we have updated our shareholder returns as a percentage of COCF target to over 50%, which clearly demonstrates management's commitment to shareholder returns. The base case for the management allocation is JPY 2.4 trillion and JPY 200 billion share repurchase announced today will be funded from this allocation. Through our middle game initiatives, we will further strengthen our COCF base and enhance asset value. At the same time, we'll accelerate asset recycling to expand management allocation and balance our capital deployment between highly competitive investments for growth selected from a robust pipeline exceeding JPY 6 trillion and shareholder returns through dividends and share repurchases. To ensure we achieve ROE of 12% in FY March 2029, we'll determine the amount and use of management allocation in response to changes in the operating environment while continuing engagement with our stakeholders.

This slide shows the forecast and results of our capital allocation. Cash inflows totaled JPY 340 billion, consisting of COCF of JPY 281 billion and asset recycling of JPY 59 billion. Cash outflows consisting of investments and loans totaled JPY 147 billion. Given the strong than planned start to the fiscal year, we intend to review our capital allocation in the second quarter, as we have done in the past in conjunction with our full year earnings forecast update.

Next, I will explain our current outlook regarding the timing of earnings contribution from new projects. Investments for growth executed under MTMP2026 are progressing steadily. Waitsia, the natural gas project in Australia that began commercial production in FY March 2026, started to contribute to earnings this quarter. In addition, the solar power generation project in the U.S. invested in 2025 was completed within budget and is expected to begin contributing to earnings in the second quarter.

In line with the 3 evolved key strategic initiatives announced in May 2026 for MTMP2029, we will continue to carefully select and execute investments from a robust pipeline, including projects that were not incorporated at the time of formulating the plan and pursue further growth together through our middle game initiatives across our existing businesses. The proposal announced on July 22 to acquire the free-float shares of Penske Automotive Group has not been included in this slide at this time. We will provide an update at an appropriate timing depending on our future developments.

As previously explained, in light of our good progress in terms of results and with the aim of improving capital efficiency and enhancing shareholder returns, we have decided on a JPY 200 billion share repurchase program to be completed by the end of January 2027. All shares acquired will subsequently be canceled. In line with the expansion of our highly reproducible cash-generative capability, we will continue to increase dividends and we will make flexible decisions regarding share repurchases as part of our shareholder returns policy, including the amount and timing with the objective of improving capital efficiency, among other things.

Going forward, we will continue to enhance shareholder returns while maintaining a balance with investments for growth and we will achieve our target shareholder returns as a percentage of COCF of over 50%. This concludes my presentation.

I am Masao Kurihara, General Manager of Global Controller Division. I will now provide details of our operating results for the first 3 months. First, I will explain the main year-on-year changes in COCF by segment. COCF for Q1 amounted to JPY 280.9 billion, an increase of JPY 64.6 billion year-on-year. In Mineral & Metal Resources, despite higher iron ore and metallurgical coal prices, there was a decrease of JPY 2.9 billion to JPY 69 billion, mainly due to higher metallurgical coal costs. In Iron & Steel Products, there was a decrease of JPY 1.9 billion to JPY 4.4 billion. In Energy, there was an increase of JPY 31.7 billion to JPY 80.1 billion, mainly due to FVTPL valuation gains associated with the IPO of energy business outside Japan and higher earnings in the U.S. gas business. In Mobility, Digital & Infrastructure, there was an increase of JPY 13.1 billion to JPY 46.5 billion, mainly due to increased dividends from equity method investees and investments in general companies. In Chemicals, despite the absence of a gain on the reversal of provisions recorded in the previous period, there was an increase of JPY 8.2 billion to JPY 40.9 billion, mainly due to higher earnings from trading and the methanol business. In Wellness Ecosystem, there was an increase of JPY 8.6 billion to JPY 7.6 billion, mainly due to the absence of intersegmental transaction with Others, Adjustments & Eliminations recorded in the previous period. In Innovation & Corporate Development, there was an increase of JPY 12.6 billion to JPY 24.7 billion, mainly due to FVTPL valuation gains associated with the IPO of quantum computing business. Others, Adjustments & Eliminations recorded a decrease of JPY 4.8 billion to JPY 7.7 billion, mainly due to expenses, interest and taxes not allocated to segments as well as intersegmental transactions with Wellness Ecosystem.

Next, I will explain the year-on-year changes in profit by segment. Profit for Q1 amounted to JPY 294.1 billion, an increase of JPY 102.5 billion year-on-year. In Mineral & Metal Resources, there was an increase of JPY 9.7 billion to JPY 61.2 billion, mainly due to higher copper, iron ore and metallurgical coal prices as well as higher iron ore volumes. In Iron & Steel Products, there was a decrease of JPY 1.2 billion to JPY 5.3 billion. In Energy, there was an increase of JPY 14.2 billion to JPY 34.4 billion, mainly due to FVTPL valuation gains associated with the IPO of an energy business outside Japan and higher profit in the U.S. gas business. In Mobility, Digital & Infrastructure, there was an increase of JPY 23.6 billion to JPY 73 billion, mainly due to higher profit in the automotives and gas infrastructure businesses. In Chemicals, despite higher profit from trading and the methanol business, there was a decrease of JPY 4.3 billion to JPY 26.6 billion, mainly due to the absence of valuation gains and onetime factors recorded in the previous period. In Wellness Ecosystem, while there was an absence of asset sale gains recorded in the previous period, there was an increase of JPY 3.6 billion to JPY 18.4 billion, mainly due to higher profit in food businesses, particularly protein-related operations. In Innovation & Corporate Development, there was an increase of JPY 54.9 billion to JPY 65.2 billion, mainly due to the asset recycling gains in association with the restructuring of the U.S. real estate ownership and operation business, CIM Group, and FVTPL valuation gains associated with the IPO of quantum computing business. Others, Adjustments & Eliminations recorded an increase of JPY 2 billion to JPY 10 billion, mainly due to expenses, taxes and interest not allocated to segments.

This page provides a summary of the year-on-year factor comparison for profit. In base profit, there was an increase of JPY 46 billion, mainly due to higher earnings in chemicals trading, automotive, food-related businesses centered around protein and the methanol business. In resource costs and volumes, which are a component of base profit, there was an increase of JPY 1 billion, mainly due to higher sales volumes and lower costs in iron ore and energy despite higher cost for metallurgical coal. In commodity prices, there was an increase of JPY 14 billion, mainly due to higher copper, iron ore and metallurgical coal prices. In foreign exchange, there was an increase of JPY 17 billion, mainly due to yen depreciation. As a result, commodity prices and foreign exchange contributed a combined increase of JPY 31 billion. In asset recycling, there was an increase of JPY 42 billion (sic) [ JPY 44.2 billion ], mainly due to the restructuring of CIM Group. In valuation gains/losses and onetime factors, there was a decrease of JPY 17 billion.

I will now explain the balance sheet at the end of the quarter. Total assets decreased by JPY 0.1 trillion from the end of March 2026 to JPY 20.7 trillion. Net interest-bearing debt increased by JPY 0.3 trillion from the end of March 2026 to JPY 4.4 trillion. Meanwhile, shareholder equity increased by JPY 0.2 trillion compared with the end of March 2026 to JPY 9 trillion. As a result, the net D/E ratio was 0.49x. This concludes my explanation.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Good morning. I am Kenichi Hori, President and CEO. Thank you for joining us today. Today, after reviewing Medium-term Management Plan, MTMP 2026, I will explain Mitsui's vision under a new plan, MTMP 2029, shaping future through trust and innovation towards 2030 and beyond, as well as the strategies we will pursue to realize that vision.

For FY March 2026, both Core Operating Cash Flow, COCF and profit exceeded our latest forecast. We plan to make a full year dividend JPY 115 per share. In addition, we have completed the share repurchases announced last November of up to JPY 200 billion and have canceled those shares. The three years of MTMP 2026 were a period in which companies were tested on the ability to balance their response to changes with sustainable growth amid significant volatility in the external environment.

Even under such conditions, from FY March 2022 through FY March 2026, we achieved COCF in the JPY 1 trillion level for five consecutive fiscal years, demonstrating our robust cash generation capability. While profit in the final year of the three-year period fell short of the MTMP target, both ROE and the shareholder returns payout ratio exceeded the targets. Over the three years of MTMP 2026, we pursue the enhancement of base profit by strengthening existing businesses, efficiency improvements and turnarounds and through new businesses.

As a result of steady execution across these initiatives, base profit increased by JPY 172 billion as targeted, reinforcing the foundation that supports Mitsui's sustainable growth. Reflecting this enhancement of base profit, we plan our largest dividend increase in our history for FY March 2027.

Over the three years of MTMP 2026, total cash inflows, which is a combination of COCF and asset recycling, amounted to JPY 4.5 trillion. We invested JPY 0.7 trillion to sustain and strengthen existing businesses and JPY 2.4 trillion in investments for growth, totaling JPY 3.1 trillion, steadily executing initiatives towards the next stage in line with our three key strategic initiatives. By allocating the expanded management allocation generated through flexible asset recycling and other inflows across investments for growth, dividends and share repurchases in a balanced manner, we enhance portfolio quality and bolster shareholder returns.

As a result, financial leverage has been maintained at a moderate level. I will now move on to MTMP 2029. Amidst the materialization of geopolitical risks, including the situation in the Middle East as well as changes in the environment, energy, people's lifestyles and new technologies, we continue to face a highly volatile business environment. Against this backdrop, Mitsui continues to evolve its global portfolio, enhance its sophisticated integrated risk management, and pursue continuous business model transformation through innovation. By delivering real solutions and ensuring stable supply, we will fulfill our role in society and contribute to build brighter futures around the world.

MTMP 2029 presents Mitsui's medium to long-term vision, a pathway to 2030 and beyond. We position the three-year period through FY March 2029 as a phase to firmly establish this trajectory and have adopted shaping future through trust and innovation as the theme. As the next stage of leveraging our comprehensive strengths, we define Nonlinear Combinatory Value as a creation of substantial new value by combining professional talent and AI's exploratory power. Through realizing this, we aim to establish a virtuous cycle between enhancing corporate value and tackling social challenges, earning trust from stakeholders. Through results yielded from evolved middle game initiatives and investments for growth made during MTMP 2026, as well as new investments for growth to be executed during MTMP 2029, we have a vision for 2030 of above JPY 1.4 trillion in profit and ROE above 13%.

Beyond 2030, we expect full-scale profit contributions from various large-scale projects for which investment decisions have already been made in MTMP 2026. By developing highly competitive, high-quality resource assets, we will achieve sustainable growth. In addition, by making advanced and strategic use of scarce data assets accumulated in businesses such as health care, we are seeking to generate a step change in value. We have newly defined our corporate strategy around three pillars: distinctive competitive advantages, continuously transforming earnings space, and value creation driven by highly capable individuals. Based on the evolved key strategic initiatives that I will explain shortly, we aim to realize our vision for 2030. Leveraging the trust-based relationships we have built with customers and partners worldwide and the strength of our global matrix structure, we have a project pipeline exceeding JPY 6 trillion, which we continuously evaluate.

From this pipeline, management works closely with on-the-ground teams to carefully select only those projects that meet criteria such as strategic fit and risk return standards. After execution, we take evolved middle game initiatives with determination and resolve to continuously enhance business quality. Through disciplined review processes, we take advantage of opportunities to make timely asset sales and will generate cash in a flexible manner. Under a global matrix structure, we are advancing data-driven management by utilizing data and AI across the group to carry out sophisticated decision-making. Building on this foundation, we will realize a Nonlinear Combinatory Value described earlier.

As illustrated on this slide, across diverse operational front lines spanning the globe, including trading, mining, hospitals and services, we will leverage our corporate culture that has no boundaries, utilize data across businesses and regions, thereby creating unique value. Through the various initiatives undertaken in MTMP 2026, we have gained strong conviction in the effectiveness of our three key strategic initiatives. For MTMP 2029, we have newly established the AI strategy Unit, Integrated Energy Solutions Business Unit and Digital and Infrastructure Solutions Business Unit. By evolving our three key strategic initiatives into Industrial Business Solutions 2.0, Global Energy Transformation 2.0, and Wellness Ecosystem Creation 2.0, we will achieve further growth against a backdrop of complex social issues and rapid digital advancement.

Under Industrial Business Solutions 2.0, for iron ore and copper, we will pursue the development of Rhodes Ridge, one of the world's largest iron ore resources, the integrated operation of Anglo American Sur in copper, and capture further prime opportunities in both fields. In Mobility, we will pursue sustainable business value creation by evolving the business foundation built up with partners and creating new businesses that capture structural shifts in industries. Under Global Energy Transformation 2.0, evolved from its prior form, we will enhance value across the entire value chain, transforming gas and renewable energy into power, compute, and clean molecules such as low-carbon ammonia, increasing value and supplying society.

Under Wellness Ecosystem Creation 2.0, centered on our hospital business, we will utilize the valuable data we have accumulated to expand into new domains, such as drug discovery support, by combining healthcare and data. We will also further strengthen the protein businesses established under MTMP 2026 and expand into growth markets for food demand and adjacent areas beyond the protein value chain. To continuously strengthen our management foundation, we have identified sustainability management, well-being and health and safety, and HR strategy as important themes to be continuously strengthened over the long term. Through sustainability management, we will pursue medium to long-term value creation with an integrated approach.

Through well-being and health and safety, we'll continue to create work environment where all employees can work with peace of mind. Through our HR strategy, we will empower diverse individuals across the group. For FY March 2029, we are targeting COCF of JPY 1.2 trillion, profit of JPY 1.1 trillion and ROE of 12%. We are planning for shareholder returns as a percentage of COCF to be at the 50% level on a cumulative basis over the three-year MTMP period. These targets are based on commodity price assumptions that factor in normalization of Middle East situation by Q2 of FY March 2027. At the same time, while carefully assessing the impact of Middle East situation on the global supply chain and the duration of such impacts, we're looking ahead to further up -- opportunities to demonstrate our solutions, providing functions for customers and to capture upside through our business in oil, gas, LNG, chemicals and other areas as well as through trading that leverages our logistics assets.

In addition to the organic growth of existing businesses through evolved middle game initiatives, under MTMP 2029, we plan to executive execute investments for growth aligned with the evolved three key strategic initiatives with careful consideration of balance across businesses, regions and timing. Through earnings contributions from these investments and from large-scale projects for which investment decisions were made under MTMP 2026 will further strengthen our earnings base. This slide plots the timing of earnings contribution commencement for each investment.

Toward achieving FY March 2029 quantitative targets, we expect steady growth across all segments by fully leveraging fundamental competitiveness, taking advantage of changes in external environment, improving existing businesses, and yielding results from projects for which investment decisions have already been made. I will speak on capital allocation for MTMP 2029 in more detail. The bar chart on the left side of the slide on the screen explicitly shows total cash outflows exceeding total cash inflows as our current base case assumption, while also illustrating the expansion of management options through arrows and gradation. The key point is for Mitsui to secure a wide range of management options in an uncertain business environment.

In addition to a robust COCF base, we will further enhance asset values through evolved middle game initiatives, flexible and timely asset recycling, and expand the management allocation. At the same time, while pursuing long-term capital efficiency and appropriate leverage, we will enhance the debt portfolio and lengthen financing maturities. Through these efforts, we will execute dynamic capital allocation toward highly competitive investments for growth and additional shareholder returns. Given that management will be maintaining a wide range of options, we will engage closely with stakeholders in the event of significant changes in the business environment, including developments in the Middle East.

I'll be happy to go into more detail on this in the Q&A session. We have had a progressive dividend policy in place that has been linked to enhancements to our reproducible cash generation capability. Based on five consecutive years of COCF at the JPY 1 trillion level and JPY 172 billion enhancement of base profit during MTMP 2026, we'll increase DPS by JPY 25 per share, the largest increase in our history. Looking to capital efficiency and further base profit growth, the progressive dividend policy in which the dividend will be maintained or increased will be continued for MTMP 2029, setting the full year dividend of JPY 140 per share as the floor. In the event of additional cash inflows from large-scale asset sales of favorable commodity prices, we will, after assessing the quality and timing of pipeline projects and considering the share price levels and capital efficiency, execute share repurchases in a flexible manner.

Under this policy, we currently expect the shareholder returns payout ratio as a percentage of COCF to be in the 50% level for MTMP 2029. Under MTMP 2029, with the theme of shaping future through trust and innovation, and with a more sophisticated level of integrated risk management, we'll further strengthen our earnings capability by enhancing business value through evolved middle game initiatives and steadily yielding results from new investments along our evolved key strategic initiatives.

For FY March 2029, we're targeting profit of JPY 1.1 trillion and ROE of 12%. By fully executing this new MTMP, we aim to connect these results to our vision of 2030, in which profit exceeds JPY 1.4 trillion and ROE is about 13% and drive further growth beyond that. We plan to manage the business with this as our vision.

Next, Masao Kurihara, General Manager of the Global Controller Division, will explain the details for the operating results for FY March 2026 and the business plan for FY March 2027. This concludes my presentation.

Good morning. This is Masao Kurihara, General Manager of the Global Control Division. I will now explain the details for the operating results for FY March '26 and the business plan for FY March '27. First, I will explain main year-on-year changes in COCF by segment. COCF for FY March 2026 amounted to JPY 978.9 billion, a decrease of JPY 48.6 billion year-on-year. In Mineral & Metal Resources, there was a decrease of JPY 27.5 billion to JPY 330.4 billion, mainly due to declines in iron ore and metallurgical coal prices and a decrease in dividends from equity method investees.

In Energy, despite an increase in U.S. gas prices, there was a decrease of JPY 101.4 billion to JPY 262 billion, mainly due to the absence of large LNG dividends accrued in FY March 2024 that were received in FY March 2025. In Machinery & Infrastructure, there was an increase of JPY 38.9 billion to JPY 184.1 billion, mainly due to an increased dividends from equity method investees and the absence of taxes related to asset sales in the previous year. In Chemicals, there was an increase of JPY 12 billion to JPY 102.6 billion, mainly due to a gain on the reversal of provisions related to business outside Japan.

In Iron & Steel Products, there was an increase of JPY 11.9 billion to JPY 17.9 billion, mainly due to increased dividends from equity method investees and trading. In Lifestyle, there was a decrease of JPY 10.3 billion to JPY 7.8 billion, mainly due to a decrease in profit from coffee trading and an intersegment transaction with Others, Adjustments and Eliminations. In Innovation & Corporate Development, there was an increase of JPY 19.4 billion to JPY 46.4 billion, mainly due to higher earnings from commodity derivatives trading. Others, Adjustments and Eliminations, recorded an increase of JPY 8.4 billion to JPY 27.7 billion, mainly due to an intersegment transaction with Lifestyle.

Next, I will explain the year-on-year changes in profit by segment. Profit for FY March 2026 amounted to JPY 834 billion, a decrease of JPY 66.3 billion year-on-year. In Mineral & Metal Resources, despite higher copper prices, there was a decrease of JPY 31.8 billion to JPY 253 -- JPY 253.6 billion, mainly due to declines in iron ore and metallurgical coal prices and higher costs and lower volumes of copper. In Energy, despite higher U.S. gas prices and the absence of impairment losses in the previous year, there was a decrease of JPY 9.3 billion to JPY 164.2 billion, mainly due to lower LNG volumes and lower crude oil prices. In Machinery & Infrastructure, despite FVTPL valuation gains associated with the IPO of Firefly, there was a decrease of JPY 7 billion to JPY 225.9 billion, mainly due to the absence of asset sales in the previous year.

In Chemicals, despite the valuation gain on ITC Antwerp and the absence of an impairment loss in the previous year, there was a decrease of JPY 8.4 billion to JPY 67.5 billion, mainly due to the absence of gains on asset sales in the previous year and FVTPL. In Iron & Steel Products, there was an increase of JPY 5.7 billion to JPY 18.9 billion, mainly due to higher profit from trading. In Lifestyle, despite higher profit from Fertin Pharma and FVTPL valuation gains, there was a decrease of JPY 1.7 billion to JPY 52 billion, mainly due to the absence of asset sales in the previous year.

In Innovation & Corporate Development, despite asset sales and higher earnings from commodity derivatives trading, there was a decrease of JPY 28.3 billion to JPY 59 billion, mainly due to the absence of asset sales in the previous year and one-time losses at JA Mitsui Leasing. Others, Adjustments and Eliminations recorded an increase of JPY 14.5 billion to JPY 7.1 billion, mainly due to the absence of an amendment to the retirement benefit system in the previous year.

This page provides a summary of the year-on-year factor comparison for profit. In base profit, there was an increase of JPY 32 billion, mainly due to higher earnings in commodity derivatives trading, Protein, Value Dividends, IPP, Iron & Steel Products, Construction & Industrial Machinery and Chemicals despite lower profit related to LNG and tankers. In resources costs and volumes, there was a decrease of JPY 34 billion, mainly due to higher costs and lower volumes of copper and lower volumes in Energy. In commodity prices, there was a decrease of JPY 6 billion despite higher copper, crude oil, and gas prices due to declines in iron ore and metallurgical coal prices. In foreign exchange, there was a decrease of JPY 7 billion, mainly due to yen appreciation.

As a result, for commodity prices and foreign exchange, there was a combined decrease of JPY 13 billion. In asset recycling, despite asset sales such as real estate inside Japan, there was a decrease of JPY 81 billion, mainly due to the absence of large asset sales in the previous year.

In valuation gains and losses and one-time factors, despite one-time losses of JA Mitsui Leasing, there was an increase of JPY 30 billion mainly due to the absence of losses in the previous year. I will now explain the balance sheet at the end of the period. Net interest-bearing debt increased by JPY 0.8 trillion from the end of March 2025 to JPY 4.1 trillion, mainly due to increased borrowings associated with the acquisition of interest in the Rhodes Ridge Iron Ore project. Meanwhile, shareholder equity increased by JPY 1.3 trillion compared with the end of March 2025 to JPY 8.8 trillion, reflecting an increase in foreign currency translation adjustments due to yen depreciation, and increase in FVTOCI financial assets due to higher share prices of listed companies we own shares in and other factors.

As a result, the net D/E ratio was 0.47x. This slide shows COCF business plan for FY March 2027 by segment. Segment names reflect the post reorganization structure, and FY March 2026 results have been reclassified accordingly. Main factors include asset sale gains in Energy, U.S. gas price, gas volumes, the absence of an intersegment transaction with others, adjustments and eliminations in Wellness Ecosystem recorded in FY March 2026, a reduction in losses in coffee trading and dividends from equity method investees in Mobility, Digital & Infrastructure. Based on these factors, the plan for COCF is JPY 1.05 trillion, an increase of JPY 71.1 billion year-on-year. This slide shows the business plan for profit by segment by -- for FY March 2027.

Main factors include asset sales in Energy, the U.S. gas business, the absence of one-time losses at JA Mitsui Leasing in Innovation & Corporate Development, asset sales in mobility, Digital & Infrastructure and absence of impairment losses in the previous year. Based on these factors, the plan for profit is JPY 920 billion, an increase of JPY 86 billion year-on-year. Here, we compare the FY March 2027 business plan with the FY March 2026 results and summarize the changes by factor.

Base profit is expected to increase by JPY 23 billion, mainly due to higher earnings in the Chemicals segment, Mobility, Digital & Infrastructure segment, Coffee trading and Protein business despite lower earnings related to LNG and commodity derivatives trading. Resource costs and volumes are expected to decrease by JPY 17 billion.

Commodity prices and foreign exchange are expected to increase by JPY 23 billion as price increases in metallurgical coal, copper and crude oil and gas outweigh yen appreciation. Asset recycling is expected to increase by JPY 3 billion. Valuation gains and losses and one-time factors are expected to increase by JPY 54 billion due to absence of the previous year and multiple projects. This concludes my explanation.

So thank you very much. As was just introduced, my name is Onda from Corporate Sustainability Division, and I would like to thank you for taking time to join us at today's briefing. I would also like to express my appreciation to the many participants joining us online as well.

Today, I will provide an update on the progress of our sustainability management. First, let me briefly outline the external environment. The key points here are responding to increasingly complex social issues and expectations for real solutions. As I shared at last year's briefing, we continue to operate in a period of transformation with ongoing and persistent volatility across countries, regions and social issues.

Climate change, natural capital and human rights issues are becoming even more interconnected and complex. In this context, we believe that an integrated approach, one that views these issues holistically and drive solutions in a coordinated manner in collaboration with a broad range of stakeholders will be essential.

In recent years, the climate-related business environment has presented challenges with policy shifts and changing market conditions, making it difficult in some cases to secure sufficient premiums and profitability. Under such circumstances, companies are expected to take the reality of transformation as a given business premise, provide a broad set of options that meet diverse needs and steadily advance initiatives from a medium- to long-term perspective.

Against this backdrop, uncertainties surrounding the global energy supply-demand balance are increasing, driven by heightened geopolitical risks, including developments in the Middle East. As the risk of fragmentation and destabilization of energy supply chains become more tangible, the stable supply of energy is once again gaining importance as a fundamental prerequisite for the sustainability of economies and society.

We position natural gas and LNG as real solutions that is as transition fuels that help ensure a stable energy supply during the transition to a decarbonized society. We believe that continuing to provide these energy sources in a reliable manner is not only our business responsibility, but also important social mission. And with these points in mind, I will not only provide updates on initiatives previously shared, but also discuss two areas in which we are sensing heightened interest from stakeholders, Business and Human Rights and our integrated approach that underpins our efforts across these areas.

Now this slide outlines the priority areas of our MTMP 2026. In the current plan, we have identified climate change, natural capital and Business and Human Rights as key areas, and we have steadily advanced related initiatives while responding to the external operating environment. We have shared updates on these initiatives sustainability briefings and integrated reports, and we continue to refine our approach through ongoing dialogue with stakeholders, including investors.

Sustainability forms the foundation of our corporate management and a medium- to long-term perspective is essential. We will continue to advance initiatives centered on these three core areas in the next MTMP as well.

In pursuit of our mission, build brighter futures everywhere, we have identified material issues as a key management issue and integrated it into the advancement of our business activities. Materiality represents the risks and opportunities we face over the medium to long term and forms the basis of our MTMP and business planning.

We first identified our materiality in 2015 and conducted a review in 2019. Furthermore, we carried out an additional review in 2025, incorporating a double materiality perspective and newly defined cultivate societies that respect human rights as an independent material issue.

For each materiality, we develop annual action plans and monitor progress, enabling us to more effectively execute business activities aligned with our materiality. In addition, a message on materiality was delivered to employees by the President and the Chief Strategy Officer. We also held 4 materiality roundtables with the participation of all business unit Chief Operating Officers. By while we sharing the discussions internally, we are further advancing the integration of materiality into operations across our business front lines.

Let me begin with the first of our priority areas, climate change. We have set 4 interim targets toward achieving net-zero emissions by 2050. Among them, the target for reducing gross GHG emissions, which does not take into account reduction contribution was newly established in 2025 based on dialogue with our investors.

This slide shows the progress made in FY March 2025 against our interim targets. Gross GHG emissions decreased by 34% compared with FY March 2020, mainly due to divestments of power generation assets. GHG impact decreased by 26%, driven by the accumulation of reduction contribution projects such as renewable energy initiatives across various countries.

Scope 1 and 2 GHG emissions from Mitsui & Company and its consolidated subsidiaries declined by 23%, primarily due to reductions in Scope 2. The renewable energy ratio in our power generation business reached 35%. These results indicate steady progress across all areas. In managing these targets, we track progress towards the interim target year while incorporating both divestments and new investments as part of our asset recycling approach.

While we have already achieved the gross GHG emissions target and the renewable energy ratio target as of FY March 2025, we recognize that uncertainties surrounding policy trends and technological developments as well as potential changes in our business portfolio under the next MTMP. Accordingly, we will continue to manage our portfolio from a medium- to long-term perspective and steadily advance our efforts toward achieving the 2030 interim targets.

We have also begun reviewing the calculation boundaries for GHG in preparation for sustainability disclosure standards starting from FY March 2027. Although some expansion of the calculation boundary is expected in the FY March 2026 results, we will continue to manage progress against the current target boundary in light of the need for consistency.

This section outlines the key initiatives we are implementing to achieve our interim targets. We recognize that the company has proactively advanced initiatives at an early stage in business domains that lead to emissions reductions and reduction contribution. In areas such as next-generation fuels and renewable energy, we have built and nurtured our businesses over many years, working closely with our business partners through repeated cycles of trial and learning. Today, leveraging the lessons gained from these experiences, we are advancing our initiatives from multiple strategic perspectives.

For gross GHG emissions, we are advancing initiatives such as the introduction of CCUS into our LNG project with bp as well as comprehensive decarbonization initiatives pursued jointly with Rio Tinto. For GHG impact, multiple reduction contribution projects that have already reached FID are expected to begin operation toward FY March 2031.

One example is Blue Point, a project we are advancing with CF Industries, the world's largest ammonia producer and JERA, Japan's largest power utility. The project is scheduled to start low-carbon ammonia production at one of the world's largest scales in 2029 and is expected to reduce CO2 emissions by more than 60% compared with conventional ammonia production through the use of CCUS.

For Scope 1 and 2 GHG emissions for Mitsui & Company and its consolidated subsidiaries, we will further explore reduction opportunities by deploying the service of E-A group company with strength in GHG visualization and reduction solutions.

Next, I will explain our contribution toward the realization of a low-carbon society. To date, we have worked to reduce our carbon intensity by reshaping our business portfolio through measures such as divesting power, generation assets and investing in renewable energy. At the same time, we recognize that there remain areas in which emissions cannot be sufficiently reduced through these efforts alone.

Achieving a low-carbon society requires reducing GHG emissions across entire value chains through realistic and actionable means. By leveraging our strengths, collaboration with business partners and customers across diverse industries, we will drive the development and deployment of new technologies and contribute to decarbonization across society as a whole.

One example of such cross-industry collaboration in our participation in global initiatives industry coalitions. In the oil and gas upstream sector, which is set to account for roughly 25% of global methane emissions, we are working with more than 50 upstream operators through the OGDC to reduce methane emissions. In the shipping industry, which accounts for around 3% of global GHG emissions, we participate as a strategic business partner of the Mærsk Mc-Kinney Møller Center for zero carbon shipping, where we are working to develop low-carbon maritime transport using low-carbon fuels. Through these collaborative efforts with industry partners, we aim to continue to reducing GHG emissions across a wide range of sectors and across society as a whole.

We conduct scenario analysis on both transition risks and physical risks to enhance the quality of our portfolio from a sustainability perspective. In addition to our climate-related analysis conducted to date, we have newly incorporated a natural capital perspective, enabling a more integrated view that considers the interlinkages among issues. This approach helps us strengthen our evaluation of medium- to long-term risks and opportunities and develop more effective response measures compared with climate change, natural capital involves a wider range of domains and indicators and the relevant factors differ by region and businesses.

Through this analysis, we aim to advance our internal management metrics and identify new business opportunities that may lead to future value creation. For the analysis, we select businesses with high financial materiality and conduct both qualitative and quantitative assessments with a particular focus on sectors that may be significantly affected by tighter regulations or increased climate-related severity. Currently, we are analyzing businesses such as metallurgical coal for steel, E&P and LNG and renewable energy. We are considering disclosing the results of these analysis at a later date.

Next, I'll outline our approach to business and human rights. This page provides an overview of our framework. We established our human rights policy in 2020 and have since advanced initiatives integrated with our business activities. The first pillar of our approach is the formulation and announcement of our human rights policy and its incorporation into management systems. Under strong executive level commitment, the Board of Directors oversees progress at the operational level. The second pillar is the implementation of human rights due diligence. To appropriately identify and address human rights risks among our suppliers and business partners, we continuously carry out the processes of awareness raising, risk identification, surveys and disclosure and improvements as necessary.

The third pillar is our mechanism for corrective and remedial measures. In the event that potential human rights issues arise, we ensure the ability to provide appropriate corrective and remedial actions, enabling early identification and resolution of issues. We also place great importance on dialogue with investors, suppliers, local communities and other stakeholders, and we remain committed to improving our initiatives.

This page outlines the approach we have taken to advance our human rights initiatives in a phased manner as well as our direction going forward. A key point is that we have expanded our initiatives continuously and systematically beginning with the establishment of a human rights policy, we have gradually strengthened our efforts by implementing human rights due diligence, enhancing our remediation and grievance mechanisms and reinforcing the overall foundation of our program.

In recent years, in addition to expanding coverage, we have also focused on enhancing the effectiveness of our initiative. In particular, improving the effectiveness of human rights due diligence, our core activity requires strong awareness and ownership among employees as well as stakeholders across the value chain. On the next page, we will introduce our continuous due diligence efforts and human rights training that supports these activities.

As with climate change, human rights initiatives must be addressed across the entire value chain. For this reason, our human rights due diligence begins with ensuring 100% awareness of our policies among new suppliers, followed by ongoing engagement through supplier surveys and on-site visits. This approach enables us not only to identify human rights risks, but also to build mutual understanding with on-the-ground partners and facilitate dialogue for improvement.

One example is our palm oil business in Malaysia. During an on-site visit in FY March 2025, we obtained information suggesting the potential existence of human rights issues. As a follow-up, we conducted an additional on-site visit in FY March 2026. In this assessment, we worked with international certification bodies, representatives of local government certification systems and NGOs with deep local expertise. Through site visits to palm oil refineries and plantations as well as interviews with relevant stakeholders, we examined working conditions for migrant laborers and educational environments for their families.

The assessment confirmed that no material issues constituting human rights violations, including forced labor or child labor were identified and that human rights risks were being appropriately managed. We recognize that continuous efforts are essential for the proper management of human rights risks. We'll continue working with certification bodies, local partners and suppliers to build a more sustainable supply chain.

We're also strengthening our human rights training programs to foster a deeper awareness and understanding. In addition to training sessions tailored to employee roles and specific issues, we also conduct sessions led by external experts that include participation from suppliers and other external stakeholders. By promoting an understanding aligned with the employees' day-to-day operations, we are fostering a culture in which human rights are recognized with a strong sense of ownership while steadily deepening understanding of the need for value chain-wide engagement.

This page revisits our road map and explains the key focus areas for the next MTMP shown on the right. The first point is integration with business activities. Rather than treating human rights as a stand-alone sustainability topic, we will integrate human right risk management into our broader credit risk management framework, which forms the foundation of our business operations. This will further strengthen our overall risk management structure.

The second point is the enhancement of human rights due diligence. We will broaden the scope of our due diligence beyond major suppliers to include operating companies and entire supply chain. We aim to reinforce company-wide awareness that managing human rights risks is indispensable for business operations and to build a more robust risk management framework across Mitsui & Company Group.

The third point is the augmentation of corrective and remedial measures. By joining we aim to further improve fairness and effectiveness in the operation of our grievance procedures.

Building on the points mentioned earlier, this page represents concrete examples of how these initiatives are being implemented in our business operations. As part of our sustainability-related risk management across operating companies and the entire supply chain, we have established common assessment items such as respect for human rights and responses to environmental risks, including climate change and natural capital, while also setting additional checks tailored to specific business characteristics. This allows us to manage risks comprehensively and in greater details.

For example, in the fishery business within the food business unit, we assess risk management at affiliated companies using the sustainability due diligence checklist we developed, which covers items such as biodiversity and water resources. We will continue improving visibility and management of sustainability-related risks across business companies and the value chain to build an effective risk management structure.

At the same time, we are enhancing our remediation and grievance mechanisms to ensure preparedness should human rights issues arise. In addition to existing grievance channel available to -- available on our corporate website, we will join an external platform operated by JaCER starting in April 2026. The platform aligns with the United Nations guiding principles and provides a fairer and more effective multilingual mechanism. Through these efforts, we will strive to embed human rights considerations into our daily business operations and strengthen frontline ownership of risk management.

In fact, in the survey conducted as part of our recent materiality review involving both employees and external stakeholders, human rights were recognized as a major risk, indicating that our initiatives are increasingly taking root within the organization. This page introduces our integrated approach, which we consider a hallmark of Mitsui's sustainability efforts. At the core of our sustainability philosophy is the idea that climate change, natural capital and business and human rights should not be addressed in isolation. Instead, we approach them in an integrated manner, recognizing their interconnections across our business activities. This concept was also highlighted in the Integrated Report 2025.

As social issues become increasingly complex, simply addressing each risk separately may no longer be sufficient to sustain business over the medium to long term. We view an integrated approach as a means of both reducing risks and creating new business opportunities and consider our responses to social issues, not as costs, but as drivers of future competitiveness and growth.

Another feature of our approach is that it is embedded directly into our investment decision-making process, which is one of our core business activities. For example, when assessing the investment decisions for the Rhodes Ridge iron ore project, we conducted comprehensive evaluations not only of business viability and profitability, but also partnerships with local communities, protection of cultural heritage and conservation of natural environment. Our participation in the project reflects recognition of Mitsui's strong commitment to sustainability.

Underlying our ability to pursue such projects is the experience and know-how that we have accumulated over many years across a wide range of industries through hands-on trial and error alongside with our business partners. Through our integrated approach, we aim to embed sustainability as a fundamental element of our business, building a robust business platform resilient to external changes.

Lastly, I would like to share what we aim to achieve through an integrated approach. Across our diverse businesses, we identify sustainability-related risks and opportunities from multiple perspectives and advance this approach throughout our operations. We apply an integrated approach across all phases of the value chain from raw material procurement to production and processing usage and recycling, embedding considerations related to climate change, natural capital and business and human rights.

Working collaboratively with business partners and customers throughout this process represents Mitsui's distinctive approach to sustainability. All of the initiatives described today, climate change, natural capital, Business and Human Rights and integrated approach are designed to be embedded into our business activities operated on an ongoing basis. While sustainability encompasses a broad range of areas, our focus is on identifying what is truly essential for the sustainability of our business and which areas we must prioritize.

Guided by this perspective, we advance initiatives that strengthen our business over the medium to long term and enhance stakeholders' trust. We operate amid diverse stakeholders where there is rarely a single correct answer. This is why we position sustainability as a core pillar of our management, remain committed to executing our initiatives with a steady medium- to long-term perspective even as the external environment continues to fluctuate. Going forward, by continuing to provide realistic cross-industry solutions to social issues, we aim to build long-term trust with stakeholders and realize sustainable growth in corporate value.

Thank you very much for your attention.

We would now like to begin our Q&A session. So if you do have a question, go ahead, please.

So I do have two questions. The first question is on Page 6. In preparation for 2030, you have an interim goal, and you did mention that you pretty much cleared this goal. Well, obviously, there are some that are unattained, but you are progressing quite steadily. But now external conditions are uncertain, and you will also reshuffle your portfolio as well. And I do understand that you're still aiming for this interim goal. But new investments, what would be some impacts that have already been fixed or with upcoming investments, what would perhaps change? So I would like to ask about your new investments and the impact of these new investments.

The second question does relate to the first question. So when you choose new projects to invest in, how will sustainability be reflected in that decision? So for instance, GHG emission in the area of climate change or human rights, how will you be designing your future investments in light of these elements?

Thank you very much for the questions. So the first question I would like to respond to. So for the interim targets and the impact of new investments in light of the interim targets, every year, we do slate a new business plan. And always, we look into the year 2050, and we consider the GHG emissions for existing as well as new investments. And as of now, the overall emission and the GHG impact, both for Mitsui & Company and consolidated Scope 1 and 2, we are confirming the progress, and we are moving forward accordingly.

And the second question, I would like to respond to, yes. So you questioned about the discipline of investments for new projects as well as how this reflects sustainability. So when an investment is decided, we have a forum to deliberate that new investment. So I myself leading the sustainability team attends. We look into the profitability. We look at the financial risks of that new project as well as legal risks. And in the same way, sustainability risks are also put on the table for deliberation. And we confirm whether proper sustainability initiatives are being pursued. And if it is deemed to be appropriate, then the green light is given. And that further, depending on the size of the project, it moves on to the Executive Committee deliberation and ultimately, at times to the BOD. So this is not just for climate change. This goes for human rights as well as natural capital.

So thank you for the questions.

I have two questions as well. First one is about palm oil human rights value chain survey. You have done detailed survey. That's what I understood from the presentation. But on the other hand, there's a broad range of value chain that you cover. So if you continue with this type of survey, then the coverage ratio that you target may not be able to increase. So how do you balance out between these two perspectives? That's my first question.

And second question is about climate change and energy -- recent energy issues, how you balance between these two? Energy is now in shortage. And carbon neutrality, which is interim target for you and more recent challenge of energy demand increase inclusive of those for data centers. How do you hit the balance between those issues in your company?

Thank you for the questions. As for the palm oil human rights due diligence and on-site visits, first of all, in our company, there are -- we bring in experts to visit the sites of the partners of the palm oil, and we have a list of questions to ask. There is a format for those questions, and we all checked all these items. And then in the Q&A session, there were no deficiencies that were found. But from the third party, during the on-site visits, those that were not involved in actual commercial transactions, there are some -- there is some information that we've heard about human rights -- possible human rights violations.

So we brought this information back and at the headquarters, we talked to the business unit that is responsible. And between the business units and experts and ourselves, we have visited the site again and then focus on that specific part in our investigation. And then ultimately, we've decided that there's no human rights indication cases that were found. So in this manner, we performed due diligence.

And what about the coverage ratio by performing these detailed due diligence?

Well, our part from last year, for human rights due diligence, it's not our sustainability promotion department that is doing that, but the business units are assigned with this responsibility. And for the whole company, there may be a large number of due diligence cases that you have to perform. But by categorizing this into various business units, in terms of coverage, we may not have such a large concern. That answer your first question.

And second question with regard to climate change and energy balance. Well, especially more recently, LNG and other energy supply necessity has been always at the forefront and stable supply of these energy sources as described in materiality, are management -- important management issues, and we have to ensure that stable supply is provided, and that's what we're going to do. But on the other hand, the transition to decarbonization, there are various developments that we are seeing. But from a broader perspective, we don't think that there is going to be a total reversal. And so we will continue to shift toward decarbonization. That's our estimate.

So for individual projects, there may be some slowdown or delay in ramping up in some projects. So if you look at the individual projects, there may be some specific issues that you may see. But on our part, we believe that this is necessary, and we will steadily pursue the supply of even cleaner energy, and we're developing those projects in line with that. And for LNG or natural gas, we will continue to supply these resources. And on top of that, there will be next-generation fuels that will be provided as well so that we can diversify energy supply sources. So that will contribute to energy security from various perspectives in our view.

I do have two questions. In your presentation, you spoke of LNG as a realistic solution. But at the same time, there is diversification of energy sources as well. So as a business opportunity, GHG emission and bringing this down and focusing on that, Blue Point Ammonia or SEP and CCS and renewable energy. I think you are approaching various endeavors, but costs are rising and perhaps with renewable energy, the cost efficiency might not be all that high. So I know that you are undergoing many initiatives. But in terms of profitability, what will actually lead to a business where you can enjoy a higher profit? You may say all of them, but if you can perhaps pinpoint a few because Blue Point we are not sure as to the profitability, and there have been some fundings that have been announced from an energy perspective. But again, if you could perhaps give us some ideas.

And the second question, and which is a similar question, but a question about renewable energy and your posture towards this initiative. So it's more than 30% or close to 30%, it's exceeded 30%. Now mainstream is struggling at the moment. So is it something that you go after regardless of profitability? So let's say, this 35% in preparation for 2050, what is the outlook? And you have something in mind? Can you disclose that to us? So that will be the second question.

All right. Then the profitability for individual projects, needless to say, we do not touch projects that underperform. So at the stage of when we deliberate a go or no-go for investments, that is discussed. So that is a common understanding throughout the company. And for the individual projects or for the individual projects, it's quite difficult to respond. But within the 3-year current MTMP, we focused on renewable energy as well as next-generation energy as well as you named a few names and mainstream, for instance, there is a challenge. And when we consider the chronological time evolution, some may be a bit in the distance or future. So for instance, hydrogen will emerge in the future, maybe around the 2030s and onwards.

So under all of these circumstances, you did mention a few names and low-carbon ammonia. The Japanese government is focusing on more usage of ammonia, and they have a very strong initiative. And they are obviously offering some price difference funding as well and subsidiaries as well -- subsidies, excuse me, as well. So for the more immediate projects, that will be the low-carbon ammonia because there is a strong support structure made ready for us.

Now for the renewable energies, again, the conditions will differ from project to project. So we do need to look at these one by one, make sure that we select those that will enjoy higher profit. So I think that will be an approach that we need to take. And in the U.S., for instance, not just solar energy, but power trading. In other words, what is generated, how do we trade that energy. And we can perhaps include that into the solution as well to secure again, profit for such projects. So it will be quite the combination of such initiatives, I believe.

And the second question, we would like to respond to.

And as Koni-san just explained, regions that we can exert our strength, we would like to further progress our initiatives. But needless to say, risk return has to be seriously considered in terms of operation. Now this might be a common knowledge, but that is our basic policy. And on top of that, for not just renewable power generation, that alone may be lower profitability. And I think that is the general trend. So energy trading, power trading as well as initiatives that stem from renewable energy will allow us to secure profitability. So that will be a specific business model that we undertake. So in the U.S. as well as here in Japan, we are initiating commercialization of such models. And as of now, in preparation for 2030, renewable energy is an extremely important goal for us. But in 2050, when we proceed to 2050, will it sustain its criticality? We will have to consider that. Do we increase the ratio of RE or not or we do not even set a goal for RE. So that will be something that we need to discuss internally.

I have two questions. This is related to several questions earlier. Your company's decarbonization approach, well, there is a headwind for decarbonization in the world. But 2030 target has been set for you. But in 2050, a country, there is targets for carbon neutrality that has not been changed. But is there any possibility for your company to review and revisit your target? Well, as far as renewable energy is concerned, you said that there will be several options that you would explore, but what about the possibility of changes in other energies? So more recently, coal-fired power generation may begin to see some recovery in demand. So there is thermal coal interest that you have already divested. But are you going to revisit and reconsider the possible investment in those type of projects again? That's my first question.

And second one is an integrated approach that you said you are taking. So that is a positive and preferred approach. But especially for your resources-related businesses, if you are a minority investor in some projects in those businesses, so if you are to take integrated approach in these businesses, the partner that has operatorship or the partner that has larger stake in the same project, how are you going to work with those partners to take specific approaches because of the equity ratio, you may be a minority. So there may be something that you want to do, but you may not be able to do because of the stake that you have as a minority investor. So how are you addressing this issue?

Thank you. Well, 2030 interim target has been set. It's not about versus the target, but our approach as a whole is what you're asking about in my understanding. So 2030 goal involves the there is some movement to stop decarbonization movements. So with regard to that, in terms of external environment, for example, Trump administration, the U.S. and some European countries in order to ensure energy security, petroleum fired -- petroleum fuel may be something that they may go back to. But LNG and natural gas is resources that are required now. So we have to hold on to that. But in the longer term, there will be a movement toward clean energy, and there is no change to that. And so we would like to continue to work on these projects.

But from the commercial business perspective, because of external fluctuations, business structures or whether we can get paid with premiums for projects or whether the demand for the markets -- the market demand may be shrinking or continue to expand, you have to have a discerning eye to figure that out, and you have to make decisions on the appropriate timing to work on those projects. And that approach has not changed and will not change. With regard to the second question, integrated approach, as you said, especially for resources projects, some projects -- there are many projects where we have already all the minority stake. But because you are a minority stakeholder, you don't have to do any screening review. That's not the case. So you have to have these discussions and have alignment with other partners before you get into the projects. As for sustainability initiatives, before you sign the contract, sometimes you get fully aligned with other partners, but that may not be the case in some projects. So as a follow-up for the screening review in our company, well, with regard to sustainability, we will continue to do the follow-up for 5-year or 10-year period, that's what has been made clear since 2 years ago. So from that perspective, we will be aligned with the majority partners in our perspective and ask them to work with us. Thank you.

And I do have two questions. And I asked this last year as well about this integrated approach, GHG emission decrease. And you mentioned natural capital as well. So what is the impact of GHG emission? And is it something that you can actually incorporate into your planning in the future? And that was my understanding from last year. So within this integrated approach and in light of the natural capital as well as climate change.

So in other words, it is not just climate change. If you can perhaps illustrate to us if you can proceed forward with this new approach. So I would like to hear an update from last year. And second, again, human rights and natural capital, you did mention that this is something that each of the regions/business units will be pursuing. But when you do due diligence, including on-site assessments, the environment and human rights, there are overlaps, I think. And if there is an overlap area and if you prioritize that, then I think that will be efficient and that will also serve the integrated approach.

So in other words, when you conduct traceability within the value chain, it's -- you can actually note what is happening with human rights as well as natural capital. So you can actually pursue two wheels. And are you considering such an approach? In other words, to eliminate any type of redundancy in the efforts that you inject?

Thank you for the question. So the integrated approach and GHG emission through natural capital and can that contribute to climate change and GHG emissions. So we are focusing on forestries at the moment because they absorb and exclude, and so that is counted. Is that enough?

No.

So with natural capital, what we are doing now is we identify important areas and what are some of the impacts or interdependencies. Those are first identified. So within each business unit and within each of the assets, we look into them one by one. So again, this is in the context of important areas.

And what we have understood is that for each of the businesses as well as each of the regions, the indices that we look into are quite different, meaning that GHG emission is not always the most important index, depending on the asset, it turns out. So as you questioned, climate change and natural capital, if we pursue this, both and for assets that value climate change and then that perhaps can be incorporated this dual approach. But at this point in time, what or where would be the important factors are currently under investigation.

And human rights due dilutions, the second question as well as the other themes. So I would like to mention that for human rights due diligence, areas with high human rights violation, we have to tackle that first. But if human rights is more or less protected, but there is room to pursue climate change or GHG, then do we pursue that? Rather, we look into the human rights. But within the survey, we just do not follow human rights, but we also look into environmentally related elements or factors as well. So that is also included in our survey. So anything that we deem as high-risk suppliers, we look at not just human rights, but we also look into the client portion. So we look at both.

Thank you. And towards the latter part of your response, so let's say, deforestation in areas undergoing deforestation, the possibility of human rights violation, I'm sure that there is some overlap, and that was my understanding. So I felt that it was a waste to just pursue human rights. And if you take that integrated approach, as you mentioned, maybe you could include the climate aspect. So if you could perhaps include that in the future.

Now for deforestation, we designate individual procurement methods and anything that falls under this category, we look into them one by one. So starting from 2026 March fiscal year, we've started this initiative.

And I would like to add on to that as well. So you mentioned in relation to human rights And it is true that individual investment projects, we do look into environment. We do look into any type of human rights violation as well as natural capital. So at the entry point of any consideration of a project, we look into what is happening. Are there any measures that can be undertaken. So that is discussed. So I just wanted to add that to the response. Thank you.

I'm participating online. So MTMP is going to be announced. So I would like to ask about the definitions and GHG reduction target is there and then reduction contribution and impact target is set. So with regard to reduction contribution, new energy and CCS and forest, I think those are part of the definitions. It is characteristic of trade -- social trading firms. And so you have set this as a trading company. But I asked this question earlier, but in your target industries, Scope 3 data disclosure and reduction plan could be mandated and obligated going forward.

So in terms of impact, there are various ways to contribute and there will be various measures that you can take. For example, Category 1, 4 or 11 for Scope 3. So you can broadly take the scope for this. And then you can emphasize what you're doing as an appeal to the external world. I think that could be something that you could do. This may be a bit different from your sub topic, but would it be a realistic idea at all? That's my one question, only question.

Thank you for the question. So GHG impact that we are presenting -- as you said, this covers Scope 3 and Category 15 only. But what about other categories? Well, that's what you're asking about. That's my understanding. And with regard to Scope 3, there is difficulty. From March 2023, in our company, investors and partners are asking about what about other categories, that's what we get asked. So we have started the whole Scope 3 disclosure since that year. But with regard to this calculation method, before the regulatory requirements for disclosure, there's improvements made for calculation method in our understanding. And incorporating this into our goal is actually varied in terms of calculation method and estimate method from company to company. So it's going to be very difficult to make comparison between companies. So how important significant would it be to incorporate that into our own goal, that's what we're wondering about now.

So if you look at these figures, and incorporating share numbers into objectives or goals is a bit too early in our view. So with regard to GHG impact, we will continue on with category 15 Scope 3 because that will be having a large impact on our business. So we would like to stay on that course for the time being. But as you said, with regard to Scope 3, I think as a comprehensive trading company, these are the impact of the results of what we have done as a business activities. And this has not been included in this year, but in sustainability briefing last year, Scope 3 reduction or businesses that we're working on that will contribute to reduction of Scope 3. In what part of Galligan are we doing our businesses? And the scopes what part of the balance chain is contributing to Scope 3 reduction. That was presented we would like to wait for the rules to be decided in terms of numbers, but we would like to disclose what we are doing as initiatives at least disclose that. Thank you for your advice.

And I do have just 1 question. as was earlier mentioned, I do believe the impact that your company carries is quite big, and it was explained as well. But carbon intensity utilizing such initiatives. And in relation with the denominator and the numerator using the EBITDA for the numerator and then using GHG emission as well. So you generate profit, but then at 1 point, at what point can you actually limit your GHG exposure. So at the stage when you can cite numbers, I think carbon intensity can be usable KPI. So this is more of a request.

Now I do have a question. For ICP, internal carbon pricing. I think every -- all of your business units use this, the internal pricing. So I think this is something that you have to be mindful about. But when you consider your investees, how will you manage in the future, your ICP framework.

So carbon intensity was raised for the future. And Scope 3, we have yet to hear the official rules. So in that regard as well, it will be a future endeavor. And from our end, it is true that we have a vast variety of businesses and is it accurate to look into carbon intensity. So what should be the denominator? What should be the numerator? And one would be GHG obviously, but maybe intensity perhaps can be a KPI as well. But at this point in time, I believe that there are still areas that we have to iron out. And the internal carbon pricing that you raised.

Again, in the investment committee when we discuss in Range is issued, carbon pricing is used as a part of the simulations that are conducted. And the base case is depicted by the respective business unit considering what will happen in the future as well.

But by utilizing carbon pricing, when the society changes, what will be the impact? And looking at the impact level as well. That is also included in the simulation, and that is included in the ring for discussions.

So let's say that if that is a major impact upon climate change, then what will be the probability or the feasibility, if it is high, we may say that profit may drop to this extent. But this approach perhaps lends to further discussion. So this is how we use the ICP. I do hope that responds to your question. So I was hoping that maybe some type of average can be issued by the company. So this will conclude this session Q&A part.

Good afternoon. I'm Tetsuya, Managing Offer and General Manager of Human Resources and General Affairs Division 1. This is agenda for this presentation. I would like to talk about Mitsui Human Capital.

And please turn the page, and this is the agenda of the presentation. Since 2023, we have been publishing the human capital report -- and while today's presentation includes many items that have already been disclosed. I would like to explain the particularly important points regarding Mitsui's human capital.

First, I would like to talk about Mitsui's talent management. At Mitsui, since our asset, we have regarded people as a source of sustainable value enhancement, and we haven't emphasized the people-centered approach and investment in people. With the words of Takashi Masuda, the first President of former Mityosui and company -- it all starts with people as a starting point, successive management have also made statements that place emphasis on people.

From a legal perspective, there is no continuity between the former Mitsui company and the present Mitsui and company, and they are totally separate entities. However, the spirit of challenge and innovation at the founding of the former Mitsui company and open mindedness and philosophies, we continue to poll today, and these taking deep root among our employees as part of our DNA, there's the strengths of ours. This slide shows the history of our initiatives.

Mitsui's roots are in trading and characteristic of the company is to effectively change ourselves in line with changes in the environment. at time of our assessment immediately after world or 2, our mission as nation building for Pool Japan based on trading and stable securement of resources. As times have changed, we have continued to grow by reassessing our functions and roles in light of the social challenges of each period.

From around this time, we looked at issues that were affecting society and continue to grow while we're drilling our functions and roles leading to our current business model of create, grow and extend. In a human reason strategy as well, soon after our service, we launched the foreign language and business culture of train program in 1952. And in 1975, we also began transfers of employees higher than verses to Japan. -- forming the foundation of our current strategy.

Our human resource strategy consists of the development of capable individuals, inclusion and strategic assignment of personnel as described in the green part. And from the next fiscal year onward as well, based on these 3 pillars, we will continue efforts to develop people who respond immediately to change and create future strategies and extract the maximum potential from each employee.

Human capital is an important type of management capital that generates sustainable value, and it supports the ability to continue the ceaseless transformation of business portfolio, which is a source of competitiveness of Mitsui Group. While investment in human capital is results after multiyear initiatives with a certain level of continuity, we try to constantly visualize each human capital initiatives as much as possible, while accelerating measures that support employees, challenges, experiences and learning and are making investments to create an environment that support sustainable value creation.

This slide shows the quantitative indicators and results generated from human capital investments. In terms of quantitative impacts, there are limitations to can be constitutively visualized and in many cases, most investments take the form of the execution of initiatives themselves. Among these, we have organized key items that can be visualized. For example, investment in improving the environment for excelling globally takes the form of introducing a transfer choice system and work life management support during overseas transfers. And as a result, outcomes such as increasing the number of female employees transferring improved employee retention rates and strengthened hiring capabilities are emerging.

Because human capital investment is also forward-looking, investments in FY March 2023 and FY March 25, that is shown here to not necessarily appear as quantitative results. But I think you can see results have emerged from having previously executed human capital investment. In this page, you can see the key management indicator for measuring the overall results of human resources strategy, which is employee engagement. The Mitsui engagement survey is conducted once a year. The results are shown as multiple important causal categories indicated in the bottom right and positive response rates for employee engagement and employee enablement at the top.

Because the important causal categories have a strong influence on employee engagement and employee enablement at the top, we believe it is important to keep the cycle turning firmly, linking it to organizational development and to improvement and review of measures centered on the important causal categories. In addition, the year-on-year change in the results of employee engagement and employee enablement, are components of remuneration plans for directors of our company.

From here, I will explain initiatives to extract maximum potential from each employee. Page -- it goes without saying that motivating and developing the skills of employees is important in order to extract the maximum potential from each employee but we also believe it is important as a company to provide environments and mechanisms that support employees' growth.

These 3 environments are shown in the figure on the right. The first is opportunities for the development of capable individuals, which is shown at the bottom. This includes diverse on these experiences as well as training programs that support growth achieved through those experiences. These capable individuals work collaboratively with each other under a corporate culture where diverse values and differing opinions are expected. And this inclusive culture -- this is the second environment -- based on these environments, we have established a mechanism that enables employees autonomous career development and facilities transfers that place the right people in the right roles beyond organizational and regional boundaries. And this is the third environment at the top indicated in Mason.

Through these environments, employees grow further and edge closer towards having their ideal skill set which met leverages to realize the sustainable enhancement of corporate value. Mitsui has a phase. People make business business coast. And we believe that this relationship between employees and the company becomes the virtuous cycle of each individual career realization and value enhancement of Mitsui Group. And this is the group's value creation model from the talent perspective.

Next, I'll explain the foundations for realizing the value creation model. The global talent management policy defines a common vision for Mitsui and its employees strive toward to realize our mission of build brighter futures everywhere and Mid leadership in action, which is occured to achieve this. Based on these 2 foundations, we will advance our talent strategy by leveraging talent data in blue, our global talent management platform written at the right bottom -- the HR strategy meeting is as a space to check on the progress of the human resources strategy execution, a place where important themes related to people at the business unit level are excluded in depth and management members who are discussions once a year.

Through this foundation, we aim to continuously strengthen our human capital. The global talent management policy that I just mentioned earlier is a globally common basic policy that describes Mitsui's long inherited thinking and talent management, talent strategy, corporate culture, development opportunities and was clarified in July 2024. We -- through this, it further supports the active contributions of our globally diverse employees who are the barriers of sustainable value creation.

This slide is related to the vision of employees to realize value creation as shown in the global talent management policy -- the first component of this vision is professionalism of the employees to take on challenges across diverse products and fields and generate new value by striving for higher levels of achievement. -- that needs to redefine such people as capable individuals.

The second component is related to personnel who embody our corporate culture of Open minus embrace diversity and innovate together with colleagues in an inclusive environment. The third component is related to personnel who have the will to continue growing autonomously clearly define what they aim to achieve through their work and are motivated to autonomously accumulate the necessary experience and skills. We believe this is the most important component. We, as the team in charge of human resources also put effort into developing people who can embody these 3 components.

As a global common code of contact for employees to realize the desired talent profile outlined earlier, we have established Mitsui leadership in action. It specifies the value which support challenge and innovation as part of our mission, vision and values as a code of conduct for our employees. We are advancing its practice by using it across a series of processes such as global recruitment, development, evaluation and appointment of talent and encourage employees to put it into practice.

As part of the strategic assignment of personnel, we conduct annual HR strategy meetings and take stock on the diverse and wide-ranging talent of the Mitsui Group and for important positions, we conduct succession development planning that takes into account required skills and capabilities.

Now this slide is on our human resources structure within the global matrix organization. Our talent management is closely integrated with a global matrix organization structured around both business units and regions. And each business unit under its Chief Operating Officer, the HR management personnel get an understanding of the business unit's talent and regional CHRO take on that role for talent outside Japan.

There is mutual coordination among business units to work on initiatives and develop an environment that supports the development and effective utilization of employees. In order to realize this talent development and various initiatives under the global matrix structure, we have established HR code for all employees worldwide.

The HR code indicates the primary business or functional domain in which an employee is active and along with each employing company -- it represents the business unit or corporate staff function that drives talent management. Through this HR code, we are realizing globally optimal assignment regardless of employment location, advance employees' medium- to long-term career development and deepen global talent management.

Next, I will speak on Bloom, our global talent management system. Starting in December 2024, we integrated talent management data that had been held separately by group companies across each country and region and have been able to visualize the expertise, experience and capabilities of approximately 9,000 employees as well as each person's career aspirations. -- by linking the HR code, I spoke on in the previous slide with Bloom, we are now able to execute our global talent strategy in a more agile and effective manner.

In matching people to roles across the group globally, it is important for relevant parties to firmly grasp employees' career aspirations. At Mitsui, we conduct a talent development and utilization survey once a year. This survey includes information filled in by the employee and information where there's superior feels in future development and utilization plans based on that and serves this data on that individual's career and the direction for their strategic assignment of them.

Starting last year, we conducted the survey on Bloom, and we will use it as data for both HR personnel of the employee company and the business unit to advance strategic assignment of personnel.

Next, I will speak on the 3 pillars of the human resources strategy. and we'll focus on the particularly important initiatives in the interest of time. First is the development of capable individuals. In order to realize this, we believe that employee's attitude toward building their careers on their own evolution is extremely important. We define autonomous core development at Misias proactively creating one's own unique strengths that are highly valued by customers and partners. This slide shows the process required to strongly support that approach.

First, individuals focus on deepening the skills needed for their current roles. They then broaden their strengths by taking on experiences across various areas and industries. Then by continuously learning on their own initiative, they strive to become professionals who can succeed in any environment.

At Mitsui, employees themselves draw a concrete road map toward achieving their goals. While we respect each individual's efforts to the greatest [ 60, ] we also believe it is important for individuals to consider what they can and should do for their colleagues while completing 1 assigned duties.

The second pillar is inclusion. For diverse talent to actively contribute in the workplace, we placed particular focus on aiding the active contribution of employees hired outside Japan and female employees at Mitsui & Company.

Change leader program is one of the initiatives for regionally hired employees. It is a selective program to develop leaders who proactively drive transformation in order to develop businesses by being deeply rooted in each country and region around the world.

For Mitsui and Company, as one initiative toward achieving the target of 20% for percentage of female managers by FY March 2031, we implement the women leadership initiative as a selected next-generation leader development program. Those are long programs of about 0.5 year to 1 year and through follow-up by the human resources and general first divisions after completion, they also lead to strengthening optimal placement such as segments to group companies and assigning them to line manager roles and important positions in various locations.

The third pillar is the strategic assignment of personnel and assigning global talent transferring personnel within the group are also an important element. Because employees hired outside Japan may view intergroup transfers and relocation differently to employees at Mitsui and Company in Japan.

We introduced the global mobility program to standardize transfer processes and rules, lowering the hurdle for cross-border transfers. For employees of Mitsui and Company in Japan, too, with the new HR system introduced in July 2024 and we introduced a system in which employees choose whether they desire a transfer or not every 3 years. by each person making a choice based on their plans and the stage of their career, employees are encouraged to think autonomously about their career plans and Mitsui by increasing the certainty of succession for a certain period makes it possible to realize strategic assignment of personnel.

Here, I will speak on initiatives for assignment of personnel according to their abilities, skills and expertise. Under the HR bulletin board system, if they choose to, Employees can challenge to apply for positions where they can fully apply their abilities, skills and expertise. In addition to applying for open positions across business units, it is also possible to present one skills and experience and request a transfer.

It is possible to apply without going through one superior, and it serves as a platform for matching company needs and the will of employees beyond organizational boundaries. The expert band is a career plan for people who have mastered expertise in a specific domain separate from the mine management career path such as depart General Manager, or division General Manager. It targets employees who have high special expertise and seek to deepen their careers in a specific domain and we have introduced a flexible evaluation and compensation framework accordingly. While respecting employees desires, we run both systems determining each individual's suitability and how good and match they are for the position.

At Mitsui, we positioned Human Capital as a source of sustained enhancement of corporate value and continued initiatives and investments based on our human resources strategy. We look to thoroughly understand the results, including quantitative results and through continuous improvement, applied into developing employees and enhancing corporate value. This concludes my explanation.

Now I'd like to take questions. Are there any questions?

I have 2 questions. First question, female managers ratio 2030 target, how to -- how are you going to achieve this? Is there any specific plan?

So the 30% is the female managers ratio among the career course, female employees and for other mail final employees 11%. It seems that it is a bit low. And in other companies, in order to increase female managers, the shortage of pool of female employees. How are you going to increase the female manager ratio in your company. Can you be more specific?

And the second question is from a broader perspective. So how are you going to disclose human capital in a global disclosure framework if there is any thought. So already in the human capital report based ISO-based disclosure is being made. But globally, or rather, TSFD there's a new task was like to use SFD. So -- is there any global disclosure framework that you're going to use or any measures that you are taking in order to address this social global trend that you see. Thank you for the questions.

For the first question about the female medics ratio for Mitsui and company ahead of 20% target. Well, this is about slightly more than 30% of female managers in Korea. Of course, female employees, but there is variability across generations. For example, those new graduates that are being hired, if you look at the gender ratio -- last year, females exceed more than 40%, and there will be new graduates coming in the next month, and it's going to be mostly 50-50 between mail and females.

Of course, there's a question of whether we can be in time for 2030, but it is increasing as a full steadily. So conventionally, regardless of gender in order to become a manager, there is a certain number of years of service and experiences. There are specific comments. But it used to be , but based on the performance and the capability of individual, you can have the opportunity to reach the management managerial level.

Of course, there is a certain level of experience that is regard, but you can reach the managerial level faster than previously for both male and female. So the higher generation order generation, there is already a mechanism for female employees to reach managerial level faster. So there is some expectation from there.

And another thing is the transport choice system that I mentioned and it was just introduced this time has not passed that much. But -- so in the short term, for those who are applying for this program, especially based on Japanese society, for female employees to be transferred geographically, that will be important -- difficult. And there are some employees that were reset. But those that were actually applying for Mitsui because of this program in the new graduates and also career in hired personnel among female applicants.

So if there is more of those people, then there will be further improvement in the pool of candidates for managers in among female employees. But those -- none of those initiatives are not that old. So we have to closely keep looking at the developments going forward.

The second one, the global human capital disclosure framework. So depending on the items of disclosure, there are some that have significant in disclosing globally, but there are others that have -- do not have that significance. If you look at the hiring system in Japan, it is more relatively speaking, unique compared to other countries.

For example, on a consolidated basis, there is 50,000 employees, but industries are too varied. So you cannot go to that level in on go. But if you look at just the local subsidiaries of 9,000 and there are 6,000 in Japan, -- so of the 6,000 people like in the case of female managers, if they belong to those domestic subsidiaries, -- of course, there are items that have unicorns in being disclosed globally, but there are others that are not -- do not have that significance. So we have to keep looking at that. And once there is a disclosure criteria globally said, what would be the specific items that have the significance in being disclosed globally. So that's what we have to do. Does that answer your question?

I also have 2 questions. Page 7, please. So investing in hiring diverse people, and I think it's double on this chart. So why this increase? So if you can perhaps explain the backdrop to this increase?

And the second question, this is the compensation based on optimal assessment. So I think there are improvements when I look at the slide, but 60.4%. So I think there is a gender gap still. And what are some of the reasons for these results? Why is there a gender gap? And maybe it's due to the life stage differences, but how will you plan to fill this gap -- so investing into diverse recruitments.

So we do hire new grads as well as mid-career hires as well. So at various seminars as well as what is also disclosed on our home page. -- we are emphasizing such initiatives. So enriching content, for instance, or increase Mitsui Exposure. And this is something that we have been doing from the past. However, for instance, Japanese students that are studying abroad outside of Japan, and they are interested in Mitsui and company. We are proactively trying to tap in the 2 such students as well. And in 2 years, it's doubled. It looks like a large increase, but it is the results of these accumulated activities. Now the gender pay gap. It is, as you point out, it is about the ratio of managerial positions because there is a big gap there. And depending on the age bracket, the ratio differs.

So we are not a seniority-based salary scheme. So but in general, the higher the age bracket there is higher compensation, which is more or less filled with some the male employees. So we do have candidates for manager positions as well. So same capabilities, same type of work, and there is no gender difference. And when we look at it by group, just below the manager of position, there is virtually almost no gap amongst gender. So this number or the gender gap itself is shrinking.

I have a question about overseas business. Earlier, those higher overseas originally, have different views about being transferred compared to those who are employed by Mitsui and Company. I can imagine the differences, but what are the specific differences -- and then those that are higher overseas could come to Japan. I think there are increasing cases in your company. How are you going to -- or how are you go about overcoming those difficulties? Is there any different treatments, including compensation or mobility care provided to those who are hired overseas.

Thank you for the question. Those are locally hired or maybe it's not the right word. Those are higher regionally or overseas -- with regard to mobility of those personnel, there are 2 different factors involved. First, the conventional mitten company or the conventional practice at Mitsui and company headquarters and overseas branches, there's a division of labor. So the headquarters will figure out what to do globally. And then the local subsidiaries would figure out what to do with their local customers. That's how we used to do. And in order to do that, we decided to hire local personnel. That was the starting point for hiring local cost now.

So there is a legacy from that old days. And those people who are hired back then still with us. And they are actually working on that premise. And they find it worthwhile to work in midterm companies, so they stay with Met -- so then the personnel situation is different.

But on the other hand, Mitsui company, in Japan, the people are hired, assuming that they will be transferred overseas because of a trading company. So there is a difference. And then secondly, we would like to encourage the people who are hired overseas to be transferred because it's not just a job to stay in their own regions. But the trading firms job or Mitsui company's jobs, you can be transferred from 1 to 1 business to another as a generis. -- but there are several areas where you have more expertise. So that kind of career profile that we have may not be so common in some regions or some countries.

For example, I'm an expert in chemicals. I am an expert in energy so in Houston in Mitsui, you would like to stay in the energy business. So this mindset that you can find overwhelmingly a larger number of people in the pool, but once you are employed by Mitsui, there is still other choices that you can explore and you have to get them understand that possibility, but it takes time. So if you just ask them to sign up.

Well, those that are hired in Japan, they want to be transferred overseas. That's why you choose it. But those who are hired overseas are not applying for is because of that reason at the top necessary. So -- but if you are relocated to other departments, -- they -- some people who are hired overseas find it increasingly exciting and there is this mindset that we are exploring in hiring people overseas.

So those who are coming to Japan, if you don't speak Japanese, then there's so higher level of difficulty in living in Japan. And also for the workplace, those who are hired in Japan have to be able to communicate in English basically, but when it comes to day-to-day conversation, because 95% of employees are Japanese.

So you tend to use Japanese language. So in that sense, those who are coming from overseas to Japan, they -- those can be confided in 1 department or 1 specific unit or they can get together and consult with each other about private life and professional life. So there's this mechanism that HR department can lead to provide or -- so when they are hired, there should be some organized structure for onboarding process for those people.

And maybe those are the things that we are engaged to do, but there's linguistic issue, but technology overcome those issues to a large extent. So even if we are having this type of conference on teams, nobody is participating online, but you use teams the function and interpreting function. And people who don't understand Japanese can understand what's going on in Japanese conversation.

I do have 2 questions. global talent management, the introduction of Bloom. So I believe that you have been focusing on assigning the right people to the right location, but creating this visualization or transparency? Are there any new findings? And are these new findings perhaps being reflected into your HR initiatives if you have a focus in a specific area?

So let's say, with the ever-changing business portfolio and how you assign your resources depending on the business, there may be a gap that you've realized and you now realize that you need to approach this GAAP and you realize that you have to accelerate in filling this gap. So if you have something like that as a concrete example, that would be nice to know.

And the second question, if I may. In relation with corporate value, you did highlight this a bit. So for instance, employee engagement. So how do you launch initiatives to further promote engagement. But once engagement is elevated, will the employees' performance elevate as well? So have you analyzed that relation.

So let us take it, depending on the business unit or division, I don't know what the unit will be. But with a higher engagement score, maybe business units actually have a higher performance -- so in other words, is there a correlation to higher engagement and indirectly accelerating corporate value. So are there any prep signs of some co-relation emerging? I would like to know that as well. Thank you for the questions.

So I would like to first respond to the Bloom question and what are some of the challenges that are illustrated as a result of Bloom implementation. Now starting from 2024 year-end, we implemented balloon globally. So it's been a little over a year now.

And the challenges that have emerged through Bloom is: one, let us use Bloom to begin with. So your experiences, you need to acknowledge that, and that is how you use Bloom because we want our employees to input that into bloom. And so the employees need to understand the merits of uploading that. And when you're in Tokyo, -- it's very quick.

In other words, basically word of mouth, you share information. This person is talented in this domain or that domain, and now this is systemized through bloom. But when you go to the other side of the globe, outside of Japan, that was not necessarily the case. So we wanted to make sure that this was something embedded into the day-to-day work. So it's probably the argument of whether the chicken or the aim was first. But actually, registering yourself in your experiences on bloom. -- somebody calls you up because they want you for a specific project.

And once we accumulate these cases, I do believe that the positioning of Bloom will expand. So I would like to cite a concrete example. And it is the accumulation of various phenomenon, but 1 person that was hired outside of Japan and transferred to a different country, not Japan, but a different country from the original recruited countries. So this person used Bloom to search for a mentor and the mentor was somebody that was working in that location, but immediately before that person had already returned to Japan. But anyways, the request came -- and the buses that are right, I will serve you as your mentor. And this person is now using the smelter as a role model.

So is there a difference amongst business units? And is there a performance difference as a result.

I do believe that since we are still in the exception stage, it will take a little more time to understand that. Now going on to the engagement and performance relation and hence leading to corporate value, that is quite a difficult thing.

So in general terms which is the reason or the cause that's up for discussion. But I think many companies conduct such engagement surveys. And there are many large institutions that offer these engagement surveys. And when we look at that massive amount of data accumulated by these firms, companies with high performance have high engagement scores. But if the engagement score is high, will it lead automatically to high performance of the company? Maybe not. We do not know.

But engagement score is really low, but performance is very high. Will that form a sustain?

Probably not. So maybe that sheds light on what is happening. Now having said that, internally, within the company, depending on the business unit or the organization, yes, there are differences in the results of the scores, so then what are the respective performances. When we look at the, let's say, profit line, at least in the case of Mitsui, we have 16 business units and the environments and the absolute numbers demanded by -- from these business units are very different.

So it's probably meaningless to make comparisons. However, business units with a higher engagement have a tendency to be able to portray let's say, the management message all the way down to newly joined members as well. So we confirm that. And ultimately, that will lead to better performance. I know that this was an ambiguous response, but thank you.

The talent strategy and business strategy, the linkage between the 2. As a trading firm, you have a number employee number system -- and once you are in 1 specific business division, then you tend to stay on that division. And if I remember correctly, so when [indiscernible] and say, there is a good job system, and there were some cross business transfer. But it's been 20 years in stance. What are the strategies that you have now?

And as I listened to your presentation, my employees have the opportunities to choose their careers. [indiscernible] if there are some employees that want to move to different divisions or business units. But those who have very strong expertise in one specific business. unit, then they will be required and demanded to stay. So would you give priority to that or if there is a tractor that will help improve their performance as well as company's performance, which one do you focus more on?

Well, it is true that a long time ago, trading firm had a rigid mindset. But -- there's no HR colis not the system that we used to have as an employee member system. So the business unit Chief Operating Officer, if they are the king and then the employees subjects, but you belong to this specific business unit now. And as a business unit, a Chief Operating Officer, we -- I am supervising what you were doing, but through various jobs, you have to grow. That's what HR quote is about. So you can see various directions that those ores are pointing to.

So in order to facilitate those movements of arrows. So even though we are calling this autonomous, employees cannot independently just move to different units, but there are 8,000, 9,000 employees, including local subsidiaries. But as the Tokyo HR department, it is impossible to control all those employees. So which business unit or which organization will be responsible for career of individual employees. So that's how what the HR quote is about. So there's horizontal movement that is also facilitated.

So in Mitsui, the cross-business unit jobs like fuel ammonia business, that was mentioned in the earlier presentation. So those jobs are becoming increasingly common in Italy. So it just happens that you belong to a specific business unit. But in 3 years' time, that doesn't mean that you will be -- stay in the same business you don't know which business unit that you're in because that will depend on various factors. So that is the assumption that people have. And as a company, that's what we are encouraging.

But on the other hand, with regard to specific expertise, specialization and generalization. So there are people who would like to take advantage of their expertise in some specialized field. And if the company sees this benefit. And this deep person would not be transfer to business in that it has nothing to do with that. But if the expertise can be used in this business of A, but sometimes without knowing it, this expertise could be used in business in or the areas that straddles between this unit A and unit B.

So even if you have the professional specialization, you may not necessarily stay in 1 specific business unit. So that is the kind of profile that we would request and demand from those who are having some specialized knowledge.

We have run over the scheduled time, so we'd like to conclude this briefing.

Thank you very much for joining us of your busy schedule today once again.

Good afternoon. I am Tetsuya Shigeta, CFO. Thank you for joining us today. I will begin by giving a summary of the operating results for the first 9 months and the full year forecast. I will then hand over to Masao Kurihara, General Manager of the Global Controller Division, who will speak on the details of our operating results.

Although the global economy saw a gradual pickup during the third quarter, uncertainties remain due to factors such as developments surrounding tariff policies in the U.S. and geopolitical risks. Even under such conditions, we continue to strengthen our earnings base by thoroughly executing integrated risk management and improving the quality of our globally diversified business portfolio that spans a wide range of industries.

Let me begin with a summary of operating results for the first 9 months. Core operating cash flow, or COCF, was JPY 748.8 billion and profit was JPY 611.9 billion. There was solid progress in COCF at a pace exceeding the forecast that was revised upward in the second quarter. Reflecting the strong progress, we are revising up our full year forecast for COCF once again by JPY 50 billion to JPY 950 billion.

Despite recording a onetime loss in relation to JA Mitsui Leasing, profit has progressed steadily across the board against the forecast that was revised upward in the second quarter, and we are maintaining this full year forecast of JPY 820 billion.

I will now move on to the forecast for COCF. The Minerals & Metal Resources, Energy, Machinery & Infrastructure and Iron & Steel Products segments all had progress of above 80% against the previous forecast. Based on this, we have revised up the full year forecast by JPY 50 billion to JPY 950 billion.

Regarding profit, progress was steady overall with strong results in the Mineral & Metal Resources, Energy, Machinery & Infrastructure and Iron & Steel Products segments, and we have made no change to the previous forecast of JPY 820 billion. In Innovation & Corporate Development, we recorded a onetime loss at JA Mitsui Leasing. However, we expect gains from asset sales before the end of the fiscal year.

Let me provide some details regarding JM Mitsui Leasing. As JM Mitsui Leasing announced today at 12:00, in connection with the recoverability of risk of receivables from a counterparty of one of its group companies, Katsumi Global, Mitsui recorded a JPY 34.1 billion loss in the third quarter. This amount includes approximately JPY 3 billion impact that we explained in the full-year forecast at the second quarter financial results announcement.

This matter concerns the counterparty's account receivables, for which there are emerging indications of possible inflated and fabricated billing or multiple assignments. Based on this, JA Mitsui Leasing has recorded a provision for doubtful accounts. We will continue to closely monitor developments.

And while JA Mitsui Leasing will make every effort to recover the receivables, we will also take appropriate actions as a shareholder. For details, please refer to today's press release from both JA Mitsui Leasing and Mitsui.

Next, I will discuss cash flow allocation for the first 9 months. Cash inflows totaled JPY 950 billion, consisting of JPY 749 billion in COCF and JPY 201 billion from asset recycling. Cash outflows totaled JPY 1,442 billion. This includes JPY 1.206 trillion in investments and loans. As in the third quarter, we completed the acquisition of our interest in the Rhodes Ridge iron ore project and JPY 236 billion in shareholder returns.

I will now speak on the progress made in the current period related to investment for growth executed during the current Medium-Term Management Plan or MTMP.

Investments for growth aimed at the long-term enhancement of our earnings base are progressing steadily. For the Rhodes Ridge iron ore project, we completed the acquisition of our interest.

And based on favorable results from the pre-feasibility study, we have decided to move on to a comprehensive feasibility study toward development of the own deposits. This study is a key milestone towards making a final investment decision and will assess development of an initial production stage of 40 million to 50 million tonnes per year with completion of the study in 2029 and first ore by 2030.

The Mozambique LNG project lifted the declaration of force majeure in November 2025 and announced a restart of all activities, including construction on January 29, following improvements in security conditions around the project site. We continue to target commencing production by 2029.

Regarding the U.S. low-carbon ammonia project Blue Point, we acquired certification for Japan's price gap support system from the Ministry of Economy, Trade and Industry. Based on the business plan for which we have certification, we will work towards developing a low-carbon ammonia supply chain for Japan.

By executing carefully selected investments for growth, aligned with our key strategic initiatives, we continue to solidify and further enhance our earnings base heading into the next MTMP. We will persist in our efforts to substantially enhance our cash generation capability.

Regarding shareholder returns, there is no change from the policy announced at the time of the fiscal year March 2026 second quarter financial results. The JPY 200 billion share repurchase announced in the second quarter is progressing steadily, and we plan to complete the acquisition and cancellation by the end of March 2026. We will continue to consider enhancing shareholder returns, maintaining a good balance with investments for growth.

This concludes my part of the explanation. I will now hand over to General Manager of the Global Controller Division, Masao Kurihara, for details of our financials.

I am Masao Kurihara, General Manager of Global Controller Division. I will now provide details of our operating results for the first 9 months.

First, I will explain the main year-on-year changes in COCF by segment. COCF for the first 9 months decreased by JPY 44.7 billion year-on-year to JPY 748.8 billion. In the Mineral & Metal Resources segment, there was a decrease of JPY 40 billion to JPY 244.8 billion, mainly due to lower metallurgical coal and iron ore prices and lower dividends from equity method investees.

In the Energy segment, despite higher U.S. gas prices, there was a decrease of JPY 62.3 billion to JPY 215.5 billion, mainly due to the swing-back of large LNG dividends received in the previous year. These dividends were from FY March 2024, but the payments were delayed into FY March 2025.

In the Machinery & Infrastructure segment, there was an increase of JPY 20.6 billion to JPY 136.1 billion, mainly due to an increase in dividends from equity method investees and the absence of taxes paid in the previous period due to asset sales.

In the Chemicals segment, there was an increase of JPY 4.5 billion to JPY 74.7 billion, mainly due to the gain on the reversal of provisions related to business outside Japan.

In Iron & Steel Products segment, there was an increase of JPY 13.3 billion to JPY 17.7 billion, mainly due to trading and increase in dividends from equity method investees.

In the Lifestyle segment, there was a decrease of JPY 18.8 billion to JPY 10 billion, mainly due to an intersegment transaction with others, adjustments and eliminations and coffee trading.

In Innovation & Corporate Development segment, there was an increase of JPY 11.9 billion to JPY 30.5 billion, mainly due to the absence of taxes paid in the previous period due to asset sales.

Others adjustment and eliminations recorded an increase of JPY 26.1 billion to JPY 19.5 billion, mainly due to an intersegment transaction with the Lifestyle segment.

Next, I will explain the main year-on-year changes in profit by segment. Profit for the first 9 months decreased by JPY 40.3 billion year-on-year to JPY 611.9 billion. In the Mineral & Metal Resources segment, there was a decrease of JPY 29.5 billion to JPY 199.7 billion, mainly due to lower prices of metallurgical coal and iron ore and higher costs and lower volumes for copper despite higher dividends from Vale.

In the Energy segment, there was an increase of JPY 14.6 billion to JPY 138.5 billion, driven by higher U.S. gas prices and absence of impairment losses despite lower crude oil prices.

In the Machinery & Infrastructure segment, there was a decrease of JPY 23.9 billion to JPY 162.1 billion, mainly due to the absence of asset sales despite valuation gains related to FVTPL from the Firefly IPO and higher profit from automotives.

In the Chemicals segment, there was an increase of JPY 15.2 billion to JPY 55.5 billion, mainly due to a valuation gain on ITC Antwerp and the absence of an impairment loss.

The Iron & Steel Products segment, there was an increase of JPY 7.6 billion to JPY 16.5 billion, mainly due to trading. In the Lifestyle segment, there was an increase of JPY 0.8 billion to JPY 33.1 billion, mainly due to asset sales despite lower profit from coffee trading.

In the Innovation & Corporate Development segment, there was a decrease of JPY 62.9 billion to JPY 4.2 billion, mainly due to the absence of asset sales and a onetime loss of JA Mitsui Leasing.

Others, adjustment and eliminations recorded an increase of JPY 37.8 billion to JPY 2.3 billion, mainly due to the absence of an amendment to the retirement benefit system.

This page provides a summary of the year-on-year factor comparison for profit. Base profit increased by JPY 56 billion, mainly due to increases in Vale dividends, LNG-related businesses, iron and steel products, automotives, IPP, protein and chemicals despite decreases in tankers, coffee trading and oil trading.

Resources cost volume decreased by JPY 23 billion, mainly due to higher costs and lower volumes in copper and lower volumes in energy. Commodity prices saw a net decrease of JPY 11 billion due to lower metallurgical coal and iron ore prices despite higher U.S. gas prices.

ForEx decreased by JPY 9 billion due to a stronger yen. As a result, commodity prices and ForEx decreased by JPY 20 billion. Asset recycling decreased by JPY 77 billion, mainly due to the absence of gains recorded in the previous period. Valuation gains, losses and onetime factors increased by JPY 24 billion, mainly due to the absence of losses in the previous period and valuation gain at ITC Antwerp despite onetime losses at JA Mitsui Leasing and Mainstream.

This page provides a summary of the latest full year profit forecast against the previous forecast. Base profit is expected to be JPY 21 billion lower, mainly due to chemicals trading, coffee trading and other factors despite higher Vale dividends and FVTPL than previously expected. Resources cost volume is expected to be JPY 1 billion lower. Commodity prices and ForEx is expected to be JPY 28 billion higher, mainly due to higher prices for iron ore, copper and U.S. gas and the weaker yen.

Asset recycling is expected to be JPY 30 billion higher due to several asset sales we have planned for Q4. Valuation gains and losses and onetime factors is expected to be JPY 36 billion lower, mainly due to a onetime loss related to JA Mitsui Leasing.

Finally, I will speak on the balance sheet as of the end of the third quarter. Net interest-bearing debt increased by JPY 1.1 trillion from the end of March 2025 to JPY 4.4 trillion, mainly due to borrowings associated with the acquisition of our interest in the Rhodes Ridge iron ore project.

Shareholder equity increased by JPY 0.9 trillion to JPY 8.4 trillion, reflecting an increase of foreign exchange translation adjustments driven by the weaker yen and increase in FVTOCI financial assets due to rising stock prices of listed holdings. As a result, the net D/E ratio was 0.52x.

This concludes my explanation.

Simultaneous interpretation is provided by third-party interpreters for the convenience of non-Japanese speakers. While reasonable efforts are made to provide accurate interpretation, portions may be incorrect. In case of any discrepancy, the original Japanese shall prevail. We will upload the summary of this session shortly in Mitsui's home page in English for your review.

It is time. So we'd like to commence Mitsui & Company's financial results briefing for the second quarter of the fiscal year ending March 2026. Thank you very much for joining us today despite your busy schedules.

Today's session is being held as hybrid event for institutional investors and analysts accessible via the venue, Zoom webinar and online streaming. President Hori and General Manager of Global Controller Division Kurihara will provide approximately 15 minutes of explanation. Afterwards, we will take questions from the audience. Additionally, to enable individual investors to review the earnings briefing in real time, we are providing a live stream.

Please refrain from unauthorized reproduction or use of images or audio from today's presentation. Please note that today's presentation is being recorded and will be available on demand on the Mitsui & Company website at a later date.

Now allow me to introduce today's presenters. President and Chief Executive Officer, Kenichi Hori; Executive Vice President and CFO, Tetsuya Shigeta; Global Manager of Global Controller Division, Masao Kurihara. I am Konishi from IR department serving as a moderator. Thank you for your cooperation. We will now begin the briefing. President Hori, please.

Hello, I'm Kenichi Hori, President and Chief Executive Officer. Thank you for joining us today. First, I will speak on the progress of the Medium-term Management Plan, MTMP. I will then hand over to Masao Kurihara, General Manager of the Global Controller division, who will speak on the details of the financial performance.

Let me start with an overview of the first half of this fiscal year and our initiatives for the second half.

For the first half, both core operating cash flow, COCF, and profit progressed steadily at 55% against the business plan. When we formulated the plan, we incorporated a certain level of conservatism regarding uncertainties over U.S. tariffs and associated macroeconomic conditions. However, the direct impact of U.S. tariff in the first half was limited.

We're seeing solid growth in base profit through our middle game initiatives. We have also made progress in bolstering our long-term earnings base, steadily proceeding with carefully selected investments for growth, such as Rhodes Ridge iron ore, Ruwais LNG and Blue Point low-carbon ammonia. Additionally, for mainstream which has continued to make losses, we have made impairments in accordance with the narrowing down of the development plan, thereby reducing the book value of investments and loans on an accounting basis.

Based on this progress in the first half and the latest outlook of the second half, we have made an upward revision for our full year forecast for COCF by JPY 80 billion and profit by JPY 50 billion. We will, however, target achieving further upside exceeding these new targets. We have also decided to allocate the entire remaining management allocation to investments for growth and shareholder returns and have decided to make JPY 200 billion of share repurchases.

During the current MTMP period, we expect investments for growth to have a total JPY 2.5 trillion and total shareholder returns to have totaled JPY 1.6 trillion. In the second half of this fiscal year, we'll continue to put emphasis on our integrated risk management, considering geopolitical risks and the financial landscape. We'll continue to work on improvement measures for our remaining challenges and further expansion of base profit to enhance ROE.

Next, I will give an overview of our financial performance for the first half of the fiscal year. COCF decreased by JPY 89.6 billion year-on-year to JPY 448.5 billion, while first half profit increased by JPY 11.9 billion year-on-year to JPY 423.7 billion. Both progressed steadily against the business plan. The main reason for the year-on-year decrease in COCF was the absence of large LNG dividends recorded in the previous period, which were from FY March 2024, but the timing of receipt was delayed into the following fiscal year. Excluding this impact, COCF is at a similar level compared to the previous fiscal year.

Given the solid progress in the first half and the outlook for continued solid performance in the second half, we decided to make an upward revision compared to the business plan. The full year forecast will be revised up to JPY 900 billion for COCF, an increase of JPY 80 billion, and JPY 820 billion for profit, an increase of JPY 50 billion. As mentioned earlier, we will target achieving further upside and intend to finish strong through to the end of the MTMP.

Based on solid cash flows and review of the cash flow allocation, we have decided to make share repurchases of JPY 200 billion, which is to be completed by March 19, 2026. In order to continuously improve our value per share, we will cancel all shares acquired in this repurchase by the end of March 2026.

Next, I will give an overview of the full year forecast for COCF. Based on strong progress and outlook in each segment, such as capitalization of interest expenses associated with the acquisition of Rhodes Ridge, an increase in dividends from equity method investees in Mineral & Metal Resources, LNG-related items in Energy and dividends from equity method investees in Machinery & Infrastructure, we have made an upward revision to the full year forecast by JPY 80 billion to JPY 900 billion. The full year forecast for profit has been revised upward by JPY 50 billion to JPY 820 billion, reflecting strong progress and outlook in Mineral & Metal Resources, Energy and Machinery & Infrastructure.

I would like to provide an update on the impact of U.S. tariffs and policy changes. Profit from our business in the Americas in the first half was around JPY 170 billion, of which profit from the U.S. was around JPY 110 billion. When divided into 3 business types, domestic operations, exports and imports and sales, the share of profit from domestic operations remain the largest, and the direct impact of tariffs was limited. In the second half, we will continue to enhance our awareness to changes in the business environment and take agile measures as needed.

Cash inflows during the current MTMP period are expected to increase by JPY 60 billion from JPY 4.37 trillion announced this May to JPY 4.43 trillion. Since our last update in May, the management allocation expanded from JPY 400 billion to JPY 460 billion. Taking into consideration our current investment pipeline and enhancement of capital efficiency, JPY 260 billion of this has now been allocated to investments for growth and JPY 200 billion to shareholder returns, meaning the entire management allocation for the current MTMP has now been allocated. However, we will continue to manage this in a flexible manner.

Next, I will speak on the cash flow allocation results for the first half. In the first half, we executed investments for growth aligned with the key strategic initiatives, including LNG, European tank terminal business, ITC Antwerp which was made a 100% subsidiary and phased investment in the low-carbon ammonia business, Blue Point. We also made steady progress in asset sales, including our stakes in several listed companies. Although not included in the first half results, in October, we began to deploy capital for the acquisition of the interest in the Rhodes Ridge iron ore project.

Cash inflows totaled JPY 562 billion, comprising COCF of JPY 449 billion and asset recycling of JPY 113 billion. Cash outflows totaled JPY 498 billion, comprising investments and loans of JPY 339 billion and shareholder returns of JPY 159 billion. Many projects executed during the current MTMP that started contributing to near-term earnings have further strengthened profitability, elevating base profit.

There are several projects that have undergone concrete progress this fiscal year. The Waitsia natural gas project in Australia is scheduled to start commercial production soon. The Taiwan offshore wind power project has begun operations in stages and started contributing to earnings, progressing within budget and on schedule towards full commercial operation in 2026. The Sneha broiler business in India has also started contributing to earnings.

Investments for growth that fortify the long-term earnings base are also progressing steadily. In October, we started deploying capital for the Rhodes Ridge iron ore project and expect to complete the acquisition of our 40% interest soon and are on track for first ore by 2030. The Tatonka shale gas upstream project in Texas is scheduled to start production this calendar year. We expect a good productivity and earnings contribution from fiscal year March 2027.

The JPY 2.5 trillion investment for growth during the current MTMP will significantly bolster the depth of our earnings base. Steady progress in these projects will significantly enhance our earnings ability, enable us to absorb market fluctuations and provide us the edge to compete at a higher level.

For FY March 2027 and beyond, we will continue to enhance our earnings base by executing new investments for growth, carefully selected from our abundant investment pipeline while maintaining our strict investment discipline. We will significantly enhance our cash generation capability based on a variety of competitive high-quality assets.

Next, I will speak on our progress in enhancement of base profit. We calculate base profit by excluding items such as onetime factors from profit based on assumptions for commodity prices and exchange rates at the FY March 2026 levels we have set when we announced the current MTMP in May 2023. The target was to enhance base profit by JPY 170 billion over the 3 years of the MTMP period. And although there has been some variation within the breakdown of this total, we have made steady progress towards achieving this target.

For strengthening existing businesses, we are steadily pushing ahead with middle game initiatives in mobility, chemicals and innovation and corporate development. We expect a cumulative base profit enhancement of around JPY 75 billion, which exceeds the target of JPY 70 billion.

For efficiency improvements and turnarounds, while efforts continue in businesses such as coffee trading, we have progressed with tools from loss-making businesses and performance improvements in multiple affiliate companies and expect a cumulative base profit enhancement of around JPY 40 billion, in line with our target.

For new businesses, in addition to those that we invested in the previous fiscal year that will contribute to earnings throughout the year such as the truck auction business in the U.S. and shrimp farming in Ecuador, multiple projects such as the Taiwan offshore wind power project and the broiler business in India have started contributing to earnings this fiscal year. We expect a cumulative base profit enhancement of around JPY 55 billion against a target of JPY 60 billion.

Next, I will go over our shareholder returns policy. As mentioned earlier, based on solid cash flows, we have decided on making a JPY 200 billion share repurchases to be completed by March 19, 2026. As a result, the ratio of shareholder returns as a percentage of COCF during the current MTMP is expected to exceed 54%. Beyond current MTMP, we will maintain our progressive dividend policy, and we'll continue to make dividend increases from the highly recurring portion of COCF which we will continue to enhance. Together with this, we intend to make share repurchases flexibly using additional cash flows from commodity price upsides and asset recycling as sources of funds. In addition, we intend to continue to cancel treasury stock associated with repurchases. Through these measures, we'll continuously enhance our value per share.

That concludes my explanation. I will now hand over to Mr. Kurihara for some more details on the operating results.

I'm Masao Kurihara, General Manager of the Global Controller division. I'll speak on details of operating results.

COCF for the first half decreased by JPY 89.6 billion year-on-year to JPY 448.5 billion. In the Mineral & Metal Resources segment, there was a decrease of JPY 29.9 billion to JPY 162.2 billion, mainly due to lower metallurgical coal and iron ore prices. In the Energy segment, there was a decrease of JPY 83.7 billion to JPY 100.8 billion, mainly due to the absence of LNG dividends received in the previous period. These dividends were from FY March 2024, but the payments were delayed into the following fiscal year.

In the Machinery & Infrastructure segment, there was an increase of JPY 21.8 billion to JPY 95.6 billion, mainly due to the absence of taxes paid in the previous period due to asset sales. In the Chemicals segment, there was an increase of JPY 12.7 billion to JPY 55.2 billion, mainly due to the reversal of provision and higher demand in Europe for crop protection.

In the Iron & Steel Products segment, there was an increase of JPY 5 billion to JPY 6.5 billion, mainly due to trading and dividends from equity method investees. In the Lifestyle segment, there was a decrease of JPY 19.4 billion to minus JPY 5 billion, mainly due to intersegment transactions and lower profit in coffee trading.

In the Innovation & Corporate Development segment, there was a decrease of JPY 0.8 billion to JPY 19.5 billion. Other, Adjustments & Eliminations recorded an increase of JPY 4.7 billion to JPY 13.7 billion, mainly due to an intersegment transaction with the Lifestyle segment.

First half profit increased by JPY 11.9 billion year-on-year to JPY 423.7 billion. In the Mineral & Metal Resources segment, there was a decrease of JPY 47.2 billion to JPY 114.3 billion, mainly due to lower metallurgical coal and iron ore prices. In the Energy segment, there was an increase of JPY 37.6 billion to JPY 102.9 billion, mainly due to LNG-related profit and higher gas prices despite weaker oil trading.

In the Machinery & Infrastructure segment, there was a decrease of JPY 46.2 billion to JPY 102 billion, mainly due to the absence of asset recycling gains recorded in the previous period and onetime losses at mainstream despite FVTPL valuation gains from an IPO of Firefly and higher profit in the automotives and IPP businesses.

In the Chemicals segment, there was an increase of JPY 21.4 billion to JPY 43.5 billion, mainly due to a valuation gain on ITC Antwerp and the absence of impairment losses recorded in the previous period.

In the Iron & Steel Products segment, there was an increase of JPY 4 billion to JPY 11.3 billion, mainly due to trading despite the absence of asset sale gains recorded in the previous period.

In the Lifestyle segment, there was an increase of JPY 0.8 billion to JPY 20.8 billion, mainly due to asset sale gains despite lower profit in coffee trading. In the Innovative & Corporate Development segment, there was an increase of JPY 7.3 billion to JPY 25.3 billion, mainly due to FVTPL valuation gains.

In Others, Adjustments & Eliminations, there was an increase of JPY 34.2 billion to JPY 3.6 billion, mainly due to the absence of an amendment to the retirement benefit system, which occurred in the previous period.

This page provides a summary of year-on-year factor comparisons for the first half. Base profit increased by JPY 88 billion, mainly due to higher earnings related to LNG, IPP, automotives and iron and steel products despite lower profits in oil trading and coffee trading. In particular, large LNG dividends being recorded in the second quarter for the fiscal year was a major factor.

Resources cost volume decreased by JPY 12 billion, mainly due to higher costs and lower volumes in the copper business. And commodity prices increased by JPY 4 billion in oil and gas, but decreased by JPY 20 billion in mineral and metal resources due to lower metallurgical coal and iron ore prices, resulting in net decrease of JPY 16 billion.

ForEx decreased by JPY 17 billion due to yen appreciation. Overall, commodity prices and exchange rates decreased by JPY 33 billion. Asset recycling decreased by JPY 55 billion due to the absence of large asset sales recorded in the previous period. Valuation gains, losses and onetime factors increased by JPY 24 billion, mainly due to the absence of losses recorded in the previous period and valuation gains on ITC Antwerp despite onetime losses at mainstream.

Here, we compare the full year forecast with the business plan by factor. Base profit is forecast to be JPY 10 billion higher than previous expectations, mainly due to higher profit related to LNG, capitalization of interest related to the investments in Rhodes Ridge, automotives as well as FVTPL gains and other factors despite lower earnings in coffee trading, chemicals and oil trading. Resources cost volume are expected to improve by JPY 12 billion, mainly due to lower depreciation in upstream energy and higher volumes in iron ore.

Commodity prices and ForEx are expected to improve by JPY 38 billion, mainly due to higher iron ore, copper and metallurgical coal prices and depreciation of yen. For asset recycling, there were sales of a portion of the overseas retail business and fixed assets in the retail business in Japan recorded in the first half. In the second half, we are expecting to make several asset sales, and so there is no change to the business plan. Valuation gains, losses and onetime factors are expected to decrease by JPY 10 billion, mainly due to onetime losses at mainstream.

Also, in relation to our recent announcement by JA Mitsui Leasing regarding the risk of collection of certain account receivables at one of their group companies, we have included a negative impact of around JPY 3 billion into this full year forecast. Factor comparison is that we compare the FY March 2025 results and the FY March 2026 full year forecast by factor. I will not go over the details now, but please refer to this information as needed.

Finally, I will speak on the balance sheet as of the end of the first half. Net interest-bearing debt was JPY 3.3 trillion, the same as at the end of March 2025. Shareholder equity increased by JPY 0.5 trillion to JPY 8 trillion compared to March 2025. As a result, net DER was 0.42x.

That concludes my explanation.

That concludes the presentation.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]