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Thank you, everybody, for being here with us. We would like to get started. We will explain today the Phase 2 of the MOL Group's management plan, BLUE ACTION 2035, which aims to transform the group into a global social infrastructure company. And then this is the briefing session. I will be the MC for the day, Investor Relations Department Head, Ishibe. And the main speaker would be the Chief Executive Officer, Tamura, from the 1st of April 2026; Chief Operating Officer, Umemura; and Chief Financial Officer, Hamazaki. And the first 40 to 45 minutes will be the presentation and the remaining 40 minutes will be Q&A. And we expect the ending time to be around 5:30 p.m. And the Q&A will be with the names that show up on the Zoom. If your current label is not your name, it'd be great if you can change that to your name so that we will be able to identify you with your name.

In April 2023, we launched our 13-year group management plan, BLUE ACTION 2035, and have expanded our field as a social infrastructure company originating from the ocean. And we positioned the 5 years from 2026 to 2030 as the next stage Phase 2, and we'll continue to take on challenge toward realizing our group vision for 2035.

This is the agenda. First, we will provide an overview, including a review of the Phase 1 and the positioning of Phase 2, followed by a detailed explanation of the Phase 2 plan. So the first part will be from the CEO, Tamura-san; and the cash allocation, the shareholder return and the 3 main strategy will be from the CFO, and the detailed execution plan of each business segment will be from Umemura-san.

So Tamura, CEO, please.

Well, to everybody who have joined this session, thank you very much for being here. My name is Jotaro Tamura, who has taken up this position of CEO from 1st of April. Before going into the main position, I would like to make a brief remark on the current situation in the Middle East and the international situation, including around the Strait of Hormuz. It is becoming increasingly unstable and the structure of supply chains, particularly for energy is being recognized as a major issue. And as a social infrastructure company rooted in the ocean, and for Japan, which depends heavily on imports for its resources, energy security is an extremely important issue, and we strongly reaffirm that our group plays a vital role in the global energy supply. So it is precisely under these circumstances that we as the social infrastructure company rooted in the ocean are more mindful than ever of our responsibilities in our daily operations.

So we will continue to prioritize the safety of our seafarers, cargo and vessels and as one group ensures the stable delivery of essential goods that support energy supply and everyday life. And we were committed to working closely with the relevant stakeholders and governments to fully fulfill our role in contributing to the stability of society as a whole. And BLUE ACTION 2035, which we will present today, it's our group's management plan to sustainably enhance corporate value by achieving both economic and social value even in an era of high uncertainty.

With that, I will now move on to the explanation of the details. First of all, this slide, under BLUE ACTION 2035, we manage targets and performance for each phase using our core KPIs and continuously monitor progress toward achieving our goals for fiscal year 2035. In Phase 1, we largely achieved both financial and nonfinancial core KPIs and significantly advanced our transformation toward management that balances growth and stability. And in addition, during the 3 years of Phase 1, and supported by favorable market conditions, we achieved the profit target set for the final year of the period for 3 consecutive years starting from the first year.

If you go to the next page, Slide 5. In addition, in Phase 1, we positioned asset rebalancing as a key theme. We classified our businesses into market-driven and stable earnings types based on their exposure to market conditions and advanced the transformation of our asset composition. Taking into account the high market volatility inherent in the shipping industry, we aim to increase the proportion of stable earnings business in order to achieve an optimal balance that delivers high returns in a strong market, while maintaining profitability for the group as a whole even during downturns. And in the initial Phase 1 plan, we had set an investment plan of JPY 1.2 trillion. However, by proactively capturing opportunities, we executed investments totaling JPY 2.0 trillion, including JPY 1.6 trillion in stable earnings businesses. As a result, we advanced rebalancing to 37:63, nearly achieving the plan in a 40:60 ratio while also bringing forward the expansion of total assets, thereby advancing both the transformation and growth simultaneously.

Page 6. Meanwhile, as we executed the Phase 1 plan, there were changes in the external environment that differed from what we had anticipated 3 years ago. As I said at the beginning, geopolitical risks, including the current instability around the Strait of Hormuz as well as concerns over economic and energy security are causing instability in the global environment and increasing uncertainty. In addition, delays in the energy transition and the rapid advancement of AI could also impact our growth strategy.

And if you go to the next page -- well, sorry, still on this page. Under these circumstances, in Phase 1, we advanced investments aimed at securing stable future earnings through portfolio transformation, enhanced the sales capabilities of our overseas organizations, and created growth opportunities through regional strategies and accumulated achievements and expertise toward decarbonization through our environmental strategy. In the next stage, Phase 2, we will accelerate the realization of returns on investments, adjust the pace of investments that had been executed ahead of schedule and strengthen shareholder returns. While uncertainty is increasing due to changes and instability in the external environment, we will view changes in the business environment such as supply chain restructuring and energy transitions as new opportunities and continue to meet societal needs. In Phase 2, we will shift the focus of management from transformation and expansion to delivering results. Accordingly, we have identified 3 key priorities for Phase 2 aimed at delivering results as shown on the next slide.

Slide 7. The first of the key priorities is enhancing our earnings power, which you see on the left-hand side. We will strengthen the profitability of the entire group by leveraging and enhancing the strength of each individual business. So specifically, we will focus on realizing the full effects of our investments, creating synergies across businesses and regions and undertaking a disciplined risk taking in business exposed to market conditions. The second is a balanced capital allocation. We will pursue growth investments, financial soundness and shareholder returns simultaneously, thereby improving capital efficiency.

Specifically, we will work on balancing investments with the maintenance of a sound financial base, strengthening shareholder returns and prompting asset recycling. The third is building a solid management foundation. Through addressing sustainability issues and enhancing governance, we will strengthen the foundation for sustainable business growth. In particular, we will focus on maximizing the capabilities of our people and organization and then driving business transformation through digitalization and the adoption of AI. So by setting these 3 priorities for Phase 2, we will translate the achievements accumulated in Phase 1 into tangible results in the next stage, aiming to further enhance corporate value.

Next we go to Slide 8. From here, I will explain the details of the Phase 2 plan, covering the overall framework of BLUE ACTION 2035, the profit plan, shareholder return policy and cash allocation, the 3 main strategies and the management foundation.

Page 9. This is the overview. We position BLUE ACTION 2035 as a road map to create economic and social value in an integrated manner and to move toward realizing our group vision. In Phase 2, we have incorporated sustainability issues together with governance into our management plan as part of our management foundation. Through the 3 main strategies and the strengthening of our management foundation, we aim to create both economic and social value and become a company chosen by all stakeholders. So this is the updated overview of BLUE ACTION 2035. The overall structure remains unchanged from the original plan formulated 3 years ago.

The key update this time is the Phase 2 priorities shown near the center of the diagram, the 3 things. In Phase 1, portfolio transformation centered on an asset rebalancing was positioned as a key theme. However, as mentioned earlier, Phase 2 focuses on priorities aimed at delivering results. Under the Phase 2 priorities, we will advance initiatives related to our management foundation comprising 3 main strategies: portfolio, regional and environment strategies as well as core sustainability issues and governance, aiming to realize our vision for 2035.

Slide 11. Again, core KPIs. The core KPIs that quantify our desired state for 2035 consist of financial and nonfinancial KPIs. As in Phase 1, the financial KPIs are pretax profit, net gearing ratio and ROE, while the nonfinancial KPIs cover environment, safety and human capital, and the digital transformation, DX. For pretax profit based on investments made in Phase 1 and plans beyond Phase 2, we have raised the 2030 target from JPY 340 billion to JPY 420 billion and the 2035 target from JPY 400 billion to JPY 500 billion, aligning with our asset size and the portfolio. And from Phase 2 onward, we will place a greater emphasis on improving capital efficiency, setting our ROE target at over 10%. Among the nonfinancial KPIs, we have also reviewed the human capital indicators.

Slide 12. This slide shows the breakdown and the pathway for business toward achieving a pretax profit of JPY 420 billion and ROA of 5.5% in the fiscal year 2030, the final year of the Phase 2. From fiscal year 2026, we will establish a new chemical logistics business consisting of chemical tankers, methanol carriers, product tankers and tank terminals while reorganizing crude oil tankers, LPG and ammonia carriers, LNG and ethane carriers, and wind and offshore into the energy business. This profit plan is based on the assumption that instability around the Strait of Hormuz will settle by the end of April. However, we will monitor developments and update it as necessary at the time of our earnings announcement. And we will also provide details on a pretax profit, profit before tax for container shipping business in the fiscal year 2026 at the end of April.

Slide 13. To achieve the Phase 2 priorities of enhancing earnings power and a balanced capital allocation, we will revise our business management approach. Specifically, we will shift from the previous 2 categories, market-driven and stable earnings, to 3 categories: market-driven, mainly container shipping, and hybrid, primarily other shipping businesses, and stable earnings, including LNG carriers and non-shipping businesses. Further details will be explained in later slides. The purpose is not the classification itself, but rather to institutionalize risk return control as a framework to improve overall ROA. Based on this new classification, we will work to expand scale and improve profitability while maintaining the current asset and profit ratios. And so again, we will work to expand the scale and improve the profitability while maintaining the current asset and profit ratios. In particular, we plan to increase profit before tax in non-containership business from JPY 204 billion in 2025 to JPY 260 billion by 2030.

Slide 14, please. In Phase 2, which is positioned as a phase of delivering results, cash generation capability is also an important indicator. We have defined base operating cash flow as an indicator of fundamental cash generation capability and present its trajectory. We will realize the results of investments made in Phase 1 and steadily expand base operating cash flow, particularly in hybrid and stable earnings businesses, transforming into a structure less dependent on market-driven businesses. Excluding one-off items such as special dividends from ONE, we plan to increase base operating cash flow by approximately JPY 110 billion from fiscal year 2026 to fiscal year 2030. So compared to '25, JPY 120 billion more. So long contract equipped the new vessels will come into operation is one reason and the tank terminal business expansion is another and overseas real estate business contribution and the cruise business expansion. So these initiatives planned for Phase 2 will materialize in numbers are those reasons.

From Page 15, the CFO will explain the details.

Right. So this is Hamazaki, the CFO, and thank you for being here with us. Regarding the shareholder returns, in the Phase 2, we will introduce a progressive dividend starting at JPY 205 per share and implement flexible share buybacks targeting a total payout ratio of 40%. 2026, so we actually have this assumption of the earnings going to be less than 2025, but JPY 200 is how we'd like to get started with the Phase 2. Hence, we have set the progressive dividend starting at JPY 205. So this was JPY 5. And dividends will be determined based on a level that can be stably sustained in line with the accumulation of stable earnings businesses.

Targeting a total payout ratio of 40%, we will flexibly conduct share buybacks for the difference between dividends and total returns, thereby returning upside from market-driven and hybrid businesses to shareholders. And shareholder buyback is not just the means to return to the shareholders, progressive dividends will enhance dividend visibility while share buybacks will improve capital efficiency. And we will be able to achieve both with confidence is how we are seeing it right now.

So this shows the cash allocation assumed for Phase 2, although fluctuations may occur year-by-year, and a policy that emphasizes the financial soundness, we will accumulate base operating cash flow and further promote asset replacement, shifting away from Phase 1's investment-first approach and not relying on new external funding. At the same time, when attractive investment opportunities arise, we will make growth investments using external funding selectively. So JPY 700 billion was the annual average of investment and the follow-on investment and shipment. So JPY 830 billion is here and JPY 300 billion is the annual increase in the Phase 2. Phase 1 follow-on investment will be cashed out mainly in '26 and '27. And as these vessels come in business, the base cash flow will increase. And by strongly focusing on improving ROA and advancing business and asset replacement, we will ensure the sustainability of both growth investments and shareholder returns.

So from here, I will explain the 3 main strategies in more details. We have reorganized the fundamental approach to our portfolio strategy. These are, strengthening competitive advantage; two, balancing earnings stability with the market upside; and three, creating horizontal and vertical expansion and synergies centered on strong businesses. To achieve this, in the Phase 2, we will further strengthen investment selection, enhance business monitoring and promote business and asset recycling.

This slide explains the 3 business categories. Market-driven businesses generate high profits in favorable markets, but also experience significant volatility. Stable earnings businesses expand steadily with reduced volatility through long-term contracts and fixed income. Hybrid business sit in between the 2, possessing some resilience through high entry barriers and medium- to long-term contracts while strategically managing the market exposure to capture upside during favorable conditions. While Phase 1 focused on strengthening stable earnings businesses and rebalancing the portfolio, Phase 2 will additionally enhance strategic risk taking and upside capture in hybrid businesses. By combining these, we achieve diversification across different market cycles, preventing a downside risk, while generating a significant profit during favorable conditions.

Slide 19. We will also pursue horizontal and vertical expansion and synergy creation centered on our strong businesses, aiming to build a unique portfolio unmatched by competitors. In particular, the trust and the capabilities we have built in maritime transport are key and a close collaboration between our regional organizations and headquarters is essential for execution. Here, we present a diagram centered on the LNG value chain and chemical logistics as a concrete example. So leveraging the strength of each business and regionally-rooted networks and the group-wide connections we have built, we aim to participate in the value chains for decarbonized energy, a new growth area.

And next is Slide 20. The second of the 3 main strategies is regional strategy. In our regional strategy, which predates BLUE ACTION 2035, we aim to capture regional growth worldwide as our own growth. In Phase 2, based on our track record, expertise and regional characteristics, we will focus on key business areas where our strength can be leveraged. Specifically, in Europe and in North America, we will pursue business development in decarbonized energy and vertical expansion from maritime transport into upstream and downstream areas supported by advanced environmental technologies, numerous partners and active innovation. In regions such as Asia, Africa and Latin America, where population growth and high economic growth are expected, we will expand the shipping operations and invest in infrastructure-driven opportunities. Personnel from overseas organizations, including a group of companies that strengthened in Phase 1 will take the lead in advancing regional strategies in close coordination with the headquarters.

Slide 21. In particular, we regard the Indian Ocean region as our top priority area given its strong medium- to long-term growth potential. While we will not go into specific project details today, we have already built a pipeline of projects across various business areas in the Indian Ocean region, spanning from East Africa to South Asia and Southeast Asia. We will continue developing these businesses, aiming for further expansion and early profit contributions from Phase 2 onward.

Slide 22. The final of the 3 main strategies is environmental strategy. We view decarbonization not merely as a regulatory compliance, but as an opportunity for service differentiation and growth. By adopting low and zero carbon fuels and improving fuel efficiency, we will differentiate our transport services and establish a competitive advance. At the same time, we will leverage our broad business platform to capture decarbonization as a new business opportunity. These 3, portfolio strategy, regional strategy and environmental strategy, constitute the core strategies set forth in BLUE ACTION 2035.

And Slide 23, next. Back to Tamura-san.

Next, I will explain the management foundation which, like the 3 main strategies, is positioned at the core of BLUE ACTION 2035. We have reorganized our sustainability issues to focus on those that contribute more significantly to value creation, identifying 4 key areas: environment, safety, human capital, and digital transformation, DX, as our material sustainability issues. Within these 4 themes, we have also identified specific priority areas to focus on. We have established 4 theme-specific visions linked to these sustainability issues within which we manage KPIs and actions.

Slide 24. From here, I will outline the theme-specific visions associated with the 4 sustainability issues. The first is environment. As explained in the environmental strategy slide, we will continue our current initiatives categorized into reducing our own GHG emissions, greenhouse gas and contributing to society's emission reductions, steadily progressing toward net zero by 2050. Through the introduction of alternative fuels and improvements in fuel efficiency, we will significantly reduce our own GHG emissions and expand low and zero carbon businesses, achieving both our group growth and societal decarbonization.

Slide 25. Next is safety. Safety is an absolute prerequisite for business continuity and the highest priority for our group. Through safe operations, we will continue to protect people, assets and the environment, contributing value to society and our stakeholders. To achieve this, we will strengthen our safety foundation, including awareness and organizational systems and further promote initiatives such as empowering our people, leveraging technology and enhancing risk management.

Slide 26. The third is human capital. We will leverage the diverse talent across our group, including new members from Phase 1 and global personnel to maximize the capabilities of our people and organization in alignment with our business strategies. Under the human capital vision linked to this sustainability issue, we focus on 3 key themes: diversity, co-creation and a meaningful work, and we'll continue initiatives aligned with these areas.

Slide 27. The digital transformation vision linked to the fourth sustainability issue aims to enhance profitability, while contributing to both solving societal challenges and achieving corporate growth. Specifically, we will advance initiatives in 3 key areas: AI-driven transformation, maritime digitalization and global core creation infrastructure, maximizing the use of AI, not only for operational efficiency, but also in management and business operations. We will also make onboard operations visible and connected, enhancing operational efficiency and stability, thereby strengthening our competitive advantage. In addition, we will develop information infrastructure that enables unified data and systems globally, facilitating a faster decision-making across regions and businesses.

Slide 28, please. Finally, governance, which together with the sustainability forms our management foundation. As we expanded our business scale in Phase 1, we have developed governance structures suited to our group. We will further evolve our Board of Directors into a strategy-focused and a supervisory body to strengthen corporate governance. In addition to continuing Phase 1 initiatives, we will strengthen our execution structure to drive growth even amid increasing external uncertainty. The following are supplemental materials. As time is limited today, I will focus on key points, particularly the winning strategies of selected businesses and Umezak-san (sic) [ Umemura-san ] will explain this. Right, Chief Operating Officer -- sorry, Umemura, apologies for the mistake.

So first is the Dry Bulk business. Towards 2030, we aim to further strengthen our sales capabilities, both domestically and internationally, enhance service quality and improve both market resilience and upside capture capability. Within the Dry Bulk segment, we will introduce our strategy and a winning approach for the small- and medium-sized bulker businesses. In this segment, we will capture new transport demand arising from population growth and energy transition, seizing global growth opportunities. To achieve this, we have expanded our overseas presence by combining our strong presence in Asia with a global network of G2 Ocean jointly operated with Gearbulk. By integrating capabilities to handle over 160 types of cargo across MOL, Dry Bulk and Gearbulk, we differentiate through high value-added maritime transport, while leveraging cost competitiveness through integrated group operations. This is our group's winning strategy for the small- and medium-sized bulker business.

Slide 31. Next is the Energy business. Toward 2030, we aim to capture the energy transition and achieve sustainable growth by enhancing the profitability of existing businesses and expanding low and zero carbon businesses. Within this segment, we will introduce our strategy and a winning approach for the LNG value chain, which we are strong. In the LNG value chain, we are growing our business by leveraging strong market growth, our leading global market share, industry presence and a competitive fleet structure. We are expanding ethane and LPG fleet through horizontal deployment of our global network and JV models, joint venture models, building stable earnings via FSRU projects through vertical integration and entering new floating facilities such as LNG power vessels and FLNG. We will enhance integrated marketing and engineering initiatives like Wind Challenger, strengthen cost competitiveness and further expand vertically within the LNG value chain. Through these efforts, we will establish a winning position across the entire value chain.

Slide 32, please. Next is the Chemical Logistics business, which is newly set. Toward 2030, we aim to enhance our group's competitiveness by organically integrating maritime transport and onshore storage and to become a leading company in the chemical logistics. Within this segment, we will introduce our strategy and winning approach for the tank terminal business. In the tank terminal business, collaboration between MOL Chemical Tankers and LBC, which joined the group in Phase 1, is key. In addition to improving efficiency through joint sales and operations, we will collaborate with upstream development and maritime transport to pursue business development in next-generation energy and decarbonization of related storage. In addition to the existing chemical business built by MOL Chemical Tankers and LBC, we will capture opportunities from the energy transition by expanding into high-growth Asian markets, broadening the handled products and improving profitability through operational process enhancements. This is our winning strategy for the Tank Terminal business.

Slide 33. Next is the Product Transport business. Toward 2030, we aim to grow our business globally by meeting logistics demand in growth regions centered on our competitive container and car carrier businesses. With this segment, we will introduce our strategy and a winning approach for the car carrier business. In this business, we combine stable longer-term demand for maritime transport with our strength, one of the world's largest fleets, a service network spanning 5 regions and 29 locations and a differentiated end-to-end solutions, including eco-friendly fleets and finished vehicle logistics to build a hybrid earnings model. We will provide stable transport based on long-term contracts with key customers, clearly differentiate through low-carbon transport and deepen customer solutions through integrated services. This is our group's winning strategy for the car carrier business.

Slide 34. Finally, the Wellbeing Life business. Toward 2030, real estate aims to improve capital efficiency, ferries aim to capture modal shift opportunities, and cruises aim to enhance brand value, all contributing to increasing group corporate value. Today, we will introduce our strategy and a winning approach for the real estate business. Our real estate business is led by Daibiru, focusing primarily on office buildings, both domestically and internationally. In Phase 1, we actively invested not only in the domestic, but also overseas projects, aiming to diversify and improve profitability.

In Phase 2, we will promote greater liquidity in real estate through initiatives such as entering the asset management business and implement measures to further improve capital efficiency and ROA. As part of our capital efficiency enhancement measures, including asset replacement and the generation of capital gains, we plan asset recycling totaling approximately JPY 230 billion over 5 years. We believe that by maintaining a real estate business that operates under a market cycle different from shipping, the MOL Group can strengthen overall management stability and more proactively capture business opportunities in shipping. In addition to transforming the business model of the real estate business itself and enhancing property value, we will strengthen integrated group-wide sales activities to define a clear winning strategy for our real estate business as the MOL Group and execute it.

Right. So the very last part, again, from myself, Tamura. Slide 35. This is a supplementary slide showing the relationship between the Phase 2 actions focused on strengthening earnings power and reducing capital costs and corporate value enhancement. So we're strongly mindful that all initiatives in Phase 2 will create both economic and social value and lead to enhanced corporate value, and we will continue our efforts towards realizing our group vision for fiscal year 2035.

So I will explain our value as a social infrastructure company finally. As seen in the changing external environment, global stability is being affected by factors such as the situation in the Middle East, and everyday life, not just in Japan, but around the world, is heavily affected. As a social infrastructure company, our group is committed to the mission of realizing a sustainable ocean and a global environment, enhancing well-being and providing infrastructure that supports people's lives and industries. In any era, our group will continue to respond flexibly to changes in the external environment and fulfill our mission of providing infrastructure that supports people's lives and industries.

Our corporate philosophy, from the blue oceans, we sustain people's everyday lives and open the way to a prosperous future, embodies our commitment and a determination to this mission. Through contributing to society by our business activities, we will build greater trust with our stakeholders and strive to remain a company that is chosen now and into the future.

This concludes the explanation of the MOL Group's management plan, BLUE ACTION 2035 Phase 2. Thank you very much for listening and for your attention.

Thank you very much. And we'd like to move on to the Q&A session for the remaining time. [Operator Instructions]. All right. So we'd like to now go to Hirokane-sama.

So this is Hirokane from Nomura Securities. There are 2 questions. Number one, the Middle East situation. So with this circumstance, some business environment can be hoped to go back to how it was. And maybe you would see something not going back forever. And how are you interpreting, as a CEO, of this environment? And how do you think that you can leverage the strength of the company? Maybe Umemura-san will be a suitable person to respond, but because this is a very critical challenge, I would like to ask that as the first question.

Second, regarding this business plan, you are providing numerical KPIs including the cash flow. And then we will be monitoring if you're going to be on track to these numbers. But any approach so that you will keep having these numbers as relevant. So how are you going to revise? How are you going to be agile in revising the plan? How do you intend to leverage this plan?

So the first item, we can have Umemura answering the question. How the Middle East situation is affecting our business and then how can we leverage the strength in that circumstance. Second is regarding the numerical KPIs that has been announced. So numerical targets actually, not KPIs. As we progress alongside the plan, you would assume that some revisions will become necessary. So what is our approach to making revisions and updates to these numerical targets? So Umemura-san, please, for the first question.

My apologies, I wasn't unmuting. So the business environment and the Middle East situation and the impact to our business performances, well, I guess we will talk about it in more details at the end of April when we do this financial briefing. But there are 2 businesses as maritime. So it's the contracted vessels business. So we have customers using our vessels. The second type is the fare incurring. So we provide the service of delivering goods. And for the first part, the contracted vessels, it's a long-term contract that comprise the business. So this Middle East situation is not going to affect this long-term contracts. So this first part is not going to be affected majorly by this situation, but this fare incurring, this delivery service business. So this has, as we speak, been discussed internally, how we should estimate the impact of the situation be for this business.

For goods delivery, the fuel prices, carried by our end. And there are various costs, which will increase, be something that we will bear. And then how the actual movement of the goods be possible or be done and how the maritime situation would be is something that we just need to keep monitoring the changes and give a forecast as we discuss intensively. But we do have 900 vessels around the world and global responses are very much possible with that network. And we would like to make sure that we continue to commit to the needs of our clients and customers.

Okay. Next, the second question, Tamura-san, please.

Thank you very much for your questions. I guess my answer is going to be connected to the first question as well. This plan for the next 5 years, the assumed business environment, out of them, the biggest impact will be the geopolitical situation. And how do I interpret that impact to the maritime businesses? Well, it depends on the type of the vessels, how much or the significance of the scale of the impact. But all in all, the volatility be higher. So it will be drastic ups and downs is what we expect regardless of the type of vessels -- the type of vessel businesses.

And sometimes that will act as a follow-wind for our maritime business, but passing on the price increase of the fuels and other increasing cost will be positive for us. And our strength -- the diversified portfolio, which we consider to be our strength, will become even more meaningful. Even in the maritime business, we are diverse in terms of the type of vessels and the businesses. And when the volatility heightens, actually opportunities for us heighten as well. And we see this as a good potential of increased opportunities in the next 5 years. So we're going to pursue all the upsides and opportunities. But at the same time, because of this volatility, it will be negative to the stability of our business. So that will be increased challenge.

But we are fortunate to have this very stable business being combined with more volatile businesses. So it's good that we can take advantage of the opportunities which arises with this volatile situation, and we are also helped by this stable businesses being a part of our business portfolio. So the look of our portfolio, I believe can be acting as even better than ever strength. And we will fine-tune our business navigation. So it requires careful decision-making. But where we will find the growth opportunities, which regions and which type of vessel businesses, I think we need to sharpen our edges to do excellent work there.

Right. And additional questions. So you said that the energy businesses, you will diversify the sourcing or having more inventory. And you have acquired the companies for tanks, and you do have this chemical value chain, which is quite of scale. And I guess these will help your business in this climate?

Yes. So short term, the volume of goods that we deliver can go up and down. But once this intense situation will be settled, this diversification can help. Then during the pandemic, it was more of a manufacturing, but the energy resources, procurement-wise, more inventory -- there will be a rebound of the situation and the more inventories will be stored everywhere, and then that would impact our business in a favorable way is what we think.

That was Hirokane-san. And let's go to Tsuchitani-san from the Tokai Tokyo Intelligence Lab.

I have 2 questions. It's a very detailed question, but if you go to Page 12, you have this domain-by-domain profit before tax. I would like to ask on each of them. But I guess container part, the market environment driven. I think you do have this basic increase of profit trend. And I guess the increases include the extraordinary profit as well. Is that even bigger extraordinary profit that you are assuming for the Phase 2 than Phase 1? So that's one.

And regarding the market exposure is the second question. So Dry Bulk. I heard what you just said that you will be able to benefit from all these situations. And I think you actually were clever in setting your foundations. But how does this model be different from your business model in the past? So can you elaborate on winning the upside, but avoid the downside? And also, I would love to hear a little more about this market exposure of the energy.

Okay, thank you very much. The first -- so Page 12, the container part. Yes, we see this increase in profit before tax. So is this including the selling of the vessels? And then how are you assuming the market situation to be? So I would like to have Tamura be explaining this.

And the second is regarding the market exposure, the Dry Bulk. You heard the strategy in a positive way. And then how is the business model be different from that of in the past? And how about this market exposure of the energy as well?

Thank you very much for your question. So first, regarding the container business forecast or assumptions for the market environment, how are you projecting was the question. And these container business numbers on Slide 12, so these are based on our own unique assumptions and breakdown. This is our unique business, ONE terminal business, which we haven't given to ONE, and also the leased vessels that we are giving to ONE. And then also the ONE is affiliated in the profit also. So these companies have their own forecast.

I know that this is a very tricky part. But basically, towards 2030, the market environment -- our assumption is that '25-'26 be assumed as more towards the bottom of the cycle, so that '26 onwards will be recovering. So BLUE ACTION Phase 2 end 2030 is one benchmark. So ROE target has this another big component of ONE contribution. And the container business actual market environment is volatile and does fluctuate even within a year and geopolitical situation is exacerbating it. And then there's a good chance that the geopolitical environment continues to shake it. And market environment does change constantly. And we think that '25-'26 will be almost near the bottom and then towards 2030 will be recovering.

And the market makeup wise, the demand and supply balance, '28, '29, the new vessels launches are quite heavy in '28 and '29, and that's very much being recognized. So what would be the profit around '29 might be your interest. And this too, running to fiscal year 2030, the average will be ups and downs; '29 will be averaged out. So those scrapping of the industry, which has been behind the schedule, and recent drastic ups and downs are making it difficult for us to logically explain with just the regular absent demand and the supply situations and bottlenecks can be of the terminals or railways or on-land transportation. So not just the simple demand and supply balance. And we don't think that the bottom is going to be lower, but there will be always an absent down, but it will be more or less stable. And we would like to continue to discuss with the ONE management team how the ONE will invest. That will be the answer for the first question.

Thank you very much, Tamura-san. So projection of the profit before tax and the selling of the vessels are not included. The dry bulk exposure, how are we going to capture the exposure and how we're going to win there was the question. And then even in the past, we actually got this exposure and then there were ups and downs. But this time, how carefully and thoroughly we can do this. Exposure management is going to be the determinant and how much we can win. So it's going to be very thorough and then the detailed management we will be doing.

In the past, we might have had exposure, but how we were interpreting the exposure or the management of it was not perfectly done. I mean, as long as we try to win the upside, that we need to be ready to have this downside risk. But then we do have this good accumulated profit, which will allow us to tolerate this downside risk. So with that being the foundation, we're going to have a dedicated team, which will be managing the exposure in a detailed manner. And understanding the markets even further is going to be really critical. And for that, actually, in the last few years, we created this global sales team. And Singapore actually has one of the sales team and we're getting a much bigger volume of information because of the base of the sales.

And then tanker business, too, we would like to actually take the exposure, but specifically regarding the tanker, we're going to prioritize the stable businesses more than the risky ones. But at times, we would like to be ready to take upside of the exposure. So we already have this organizational foundation. I think this too will be overseas mainly, but we would like to take this upside of the exposures there.

So thank you very much, Tsuchitani-san. And Himeno-san, please, next.

This is Himeno from JPMorgan. So one is the shareholder return policy. So payout ratio, 40%. So dividend percentage was 40%, but now it's a total payout ratio of 40%. And you said that the ROE priority is one of the reasons. But why 40%? Why not 45% or 50%? Has such discussion happened internally? And this percentage, 40%, ONE will give 30% to the 3 parent companies. And then are you giving out this request to increase that 30%?

Second is the balance sheet control. And the ex-CEO, Hashimoto-san was communicating using this term, balance sheet control. And do you incorporate any of the balance sheet control element in this time, the midterm business plan, cash flow plan, the fundraising, the selling of the assets, and then you actually had this JPY 1 trillion allocation. So I was thinking maybe that would be the balance sheet control element. But then if you do have more details that you can share, that will be appreciated.

Okay. Thank you, Himeno-san. There are 2 questions.

One is the shareholder returns. Right. So 40% of the total payout ratio. So we did explain that, that's because of this ROE focus. But why the percentage is 40%, not in other percentages. And ONE, the payout ratio is at 35% -- sorry, 30%. So for us, has there been any discussion of matching the 30% to the 40%? And next is the balance sheet control. Have we incorporated any of the balance sheet control in this midterm business plan? ONE part, yes -- okay. First point and second point will be explained by Tamura.

okay. First point and second point both will be explained by Tamura.

Okay. So let me respond, and then Hamazaki will add anything that I miss. First, the philosophy around the shareholder returns. So 2021 onwards, we studied how things have been since 2021. I think our capabilities have been stronger, and then 25%, 30% had been the history. So it was a gradual increase. So how much can we realistically be trying to achieve in the next 5 years. So we discussed extensively internally and concluded with this percentage, 40%. And of course, 35%, 40%, 45%. So I know that there are various percentages that can be set. But this is as a result of a comprehensive discussion, I think looking at how we are right now, how we should be after 5 years in terms of capabilities. So we consider the various scenarios. And I think this total payout ratio that we aim to share to the outside world should be 40% was the conclusion.

Regarding the ONE, currently, we are discussing -- so the shareholders and ONE are discussing as we speak. And 40% is what we are requesting and they are constructively considering. So I think we are heading towards the 40% kind of world, but it's still under discussion.

And second, Page 13, if you see the left bottom, there is this asset breakdown and how the total is trending towards how we project it to trend towards 2030. And the JPY 7.7 trillion is the level. So '26 to 2030, so JPY 6.7 trillion becoming JPY 7.7 trillion. So it's an incremental of JPY 1 trillion. And if we see the growth of the last 3 years, the 5 years of growth is much more gradual. But Phase 2's main theme is continuing of growth investment. And then also the financial stability and then the enhancement of shareholder returns. So we knew that we needed to balance these 3 things. And then for us to achieve all of these 3 in a balanced way, what should be the asset volume that we should set as the target for 2030. So again, for these 2, we discussed extensively and set this as the target. So this JPY 7.7 trillion, the scale of the asset is one of the many of the things that we thought to be quite critical.

Okay. So a little additional from me. Cash allocation page, if you can go to the cash allocation, Slide 16. how are we going to create the balance sheet in the next 5 years? And I think the cash allocation is a very critical part, but this is 5 years total. And one thing to be careful is this dark green part, the Phase 1 decision made follow-on investment is the dark green part. And as I said earlier, this is going to be cash out happening mainly in '26 and '27. And the Phase 2 growth investment is going to happen as well. And that will be to improve our portfolio. So that will be including the acquisition. And as Tamura said, the shareholder returns is to be enhanced. So all are included in here.

And CEO talked on Slide 13 about the asset as well. Can you actually show the Slide 13, how the asset total will trend, and then this is broken down by portfolio. This is the left-hand side of the balance sheet. But the right-hand side of the balance sheet is also important in the financial. So let's go to Slide 11, the KPIs or financial KPIs. Net gearing ratio right now, at the end of '25 with a large M&A, that was the Phase 2 investment coming ahead of the schedule. So we leveraged the debt, and we need to bring back the financial discipline. So that's a theme. So that's what we intend to do in a gradual manner. So at the end of '25, what was the right financial makeup is one discussion point. But now, with the various assets, the equity ratio is around 40%, but we think that this needs to be heightened. So net gearing ratio is to be improved as well. So those were the thinking that went behind these numbers.

Okay. Let's go to another question from Miyazaki-san.

This is Miyazaki from Goldman Sachs. Two questions from myself. One will be the profit before tax. The 2030, why the target has been heightened? And then why profit before taxes is KPI. Conventionally, in your financial disclosure, I think the profit that you are sharing was a recurring profit even for the segment. So why now all the profit targets are profit before tax?

And the second is the recycling of the owned asset. What would be the criteria you will be applying in deciding which one to sell when real estate -- for instance, what type of real estate within the real estate can be the subject for vessels? I guess partly it depends on where you find yourself in the cycle, but what will be the maybe profit before the tax and what will be the threshold for you to start considering the selling?

Thank you very much, Miyazaki-san. So first question from Miyazaki-san was about this profit before tax for 2030 be lifted. Why? Second, why the profit before taxes be our KPI now? And the second was about asset recycle. The real estate recycling decision criteria. Both will be answered by Tamura first, and then again, any addition will come from CFO later.

All right. Thank you very much for your questions. First, the why profit before tax has become our KPI? If you go to the original BLUE ACTION, it was always the profit before tax. So that's when we decided to use our profit before tax. And then ROA is one KPI, and I think the vessel sales, the profit, which is in this special extraordinary income should be included was the thinking that we had in why it was set with the profit before tax rather than recurring profit.

And then 2030 snapshot, like the target for 2030 be hiked because -- straightforwardly, because the investment of the Phase 1 became more than originally anticipated. So the orders placed during the Phase 1 of vessels, which is the major part of the investment that we did, and there is inflation happening since then, the vessel prices are hiking, and then those that we placed an order back in 2021, '22, '23 are now in this very competitive pricing. So the profit coming from these will continue to accumulate in a very stable manner. And with that in mind, we thought that, that profit before tax for 2030 can be lifted.

And the second question, the asset recycling decision criteria. So it depends on type of vessels or the type of real estate. So I can't really talk about the specific ones. But if you see overall, we will always have like priority list that we'll continuously discuss throughout the 5 years. And then how do we set the priority. First, we're going to identify where we can leverage our strength and then where are the areas or the subjects that we are not necessarily having strength leverageable. Yes, so anything to add, CFO?

Yes. So let me add some more. So if we go to Slide 17, this is the Phase 2, every characteristic mentioned. So we're going to improve our portfolio. We're going to be improving the ROI. So the cycle of portfolio improvement is a very key component of the Phase 2. And the right-hand side, the business asset recycling. So we will have a good cadence of reviewing and we might find one project or vessel, should we continue, should we sell, we will keep coming back to that discussion. And the profit before tax being the numbers that we look at in the discussion is important. So we're going to be achieving ROA with the capital gain being in that. So that's why the numerator is the profit before tax. It's showing our commitment to achieve the ROA even with no capital gain being in the formula or calculation.

And next is Osaka-sama, please.

All right. So this is Osaka from Morgan Stanley. With the limited time, just one question. Slide 16, cash allocation, the CapEx, so JPY 1.5 trillion, which exclude Phase 1, can you elaborate a little bit on how much of that has already been decision made? And how much of this would be maintenance investment? And the right-hand side, the energy is here as the biggest chunk. It would be great if you can give a granular explanation on this.

Thank you very much, Osaka-sama. So cash allocation on the right-hand side, Phase 2, decision-making breakdown is what you see and then what's already been set in stone or what are visible on the horizon. Tamura will explain first.

Thank you very much for your question. So if you see this right-hand side, this is by business unit. And Phase 1, Phase 2 -- sorry, apologies. So the ones which we already made a decision in the Phase 1 and those which will be making decisions in the Phase 2 are mixed on the right-hand side. So how does this look if we exclude the Phase 1. But this balance is, in a way, a benchmark. So the biggest part continues to be the energy and chemical logistics, so yellow and the green parts.

At this moment, for these 5 business units, we are thinking that breakdown of the total be more or less equally to the 5, while the energy and chemical logistics being the biggest. But then business environment volatility is going to be more dramatic, or we assume. So we'd like to closely monitor how the environment is changing, or how we project them to become, and we fine-tune the balance among these 5 is what's very critical is what I'm thinking right now.

All right. Any amount that's already been set in stone? Decisions already made?

We don't have anything set in stone. Fiscal year '26 is the beginning of the decision-making being done for the Phase 2. And the investment pipeline, yes, we do have. And these numbers are coming. So JPY 2.3 trillion is with the Phase 1 and the pipeline of the Phase 2, but none of these pipelines are set in stone or decision has already been made.

Yes. So you can do this as subtraction, but then that would be how much we intend to spend, but no decisions made on any of the projects included in that pipeline.

Thank you very much, Osaka-sama. And I think we can take only one more question. So that will be from Tabata-sama.

This is Tabata of Elliott. So 2 questions from myself. One, PBR. So in your IR report, PBR target is between 1.2 to 1.5. In this Phase 2 of the midterm business plan, my question is, did you have that as an assumption? And this Phase 2 running up to 2030, what is the level of valuation you are aiming to achieve? And towards the end of this presentation, you talked about this enhanced corporate value, and you are mentioning a PBR. So I thought you should have some target regarding the PBR as well.

Second is regarding the cash allocation. So cash in page has this JPY 1.7 trillion. And there is mentioning that the external asset, the leverage is going to be in a limited way. So how much will come from external and how much will come from the switching of the asset? And the real estate switching of the asset is JPY 230 billion. So JPY 1.7 trillion minus JPY 230 billion. So that's JPY 840 billion. Is that coming from the selling of vessels? Is my thinking correct?

So first question. So yes, we actually have this mid- to long-term goal of the PBR in the integrated report to be 1.2 to 1.5. So your question was, did we have that as an assumption? And what is the valuation that we are trying to achieve? And the second was regarding the cash allocation. If we go to Page 16, left-hand side, cash in, other than the working cash flow, there is this external component as well as this real estate. So in the remaining JPY 840 billion, is that mainly coming from the sales of the vessels?

Thank you very much for your question. So Phase 2 goes up to 2030, and we have laid out a plan. But if you look at Phase 1, the investment, the results of these investments will be coming gradually from '26 to 2030, and those will contribute to those targets. And the investment -- particularly of the vessel, the lead time is quite long, 2 to 3 years from the placement of the order. So there's always time lag in terms of when it's going to start contributing. And then I don't think these numbers were expressed until now. Now it's there. With this plan that we've laid out today, the time lag will now be billed. And I think the valuation will be more accurately reflecting what's out there.

And the PBR 1.2 to 1.5 laid out in the IR report. So that's a mid- to long-term goal. And I think by achieving this, what we laid out in this presentation, it's going to help bringing the PBR to 1.2 to 1.5. So we would like to really focus on achieving what we laid out in this Phase 2 plan. That's my answer for the first question.

And second question will be answered by Hamazaki-san.

So if you show the cash allocation page, this is the cash allocation for the next 5 years. And cash in part, you see this JPY 1.07 billion (sic) [ trillion ] and there's a gradation, the 2 colors and then how that's done. So asset switching will be the main part of the lighter blue and the darker is cash in, cash out. There's another circular icon in between. And currently, what's already set in stone are the darkest green, the Phase 1 investment. So that lighter green investment, which is our Phase 2, will gradually be decision made and the cash will keep coming in while doing so.

And asset replacement, sometimes it's possible, but it might not be coming in time. And then we will actually leverage this external financing. And we do have this real estate component and the vessel sales. The breakdown between the 2 is not here, but then we need to see the progress of investment, and we will just proceed with asset replacement seeing how the progress goes.

Thank you very much for the questions. I guess, we've already exceeded the scheduled end time and we need to conclude now. And with the limited time, there might have been questions that we couldn't respond. So please contact our IR team, and we'll make sure that we respond to any questions that you might have. Thank you very much once again for participating.

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

Good afternoon. Thank you very much for joining us today on such short notice. We will now begin this press conference regarding the appointment of the Chairperson, President and Vice Presidents of Mitsui O.S.K. Lines LTD, and we do have this -- today's presenters coming into this venue. So let me introduce now who will be addressing today. To your left is President; Takeshi Hashimoto, Representative Director and President. To your right, is President designate, Jotaro Tamura.

Today's program will begin with the remarks from Hashimoto, followed by remarks from Tamura, we will then move on to a Q&A session and a [ photo ] opportunity, and we are scheduled to conclude by 04:00 p.m. Please note that this press conference is also being streamed online, and also, please be advised that we will accept questions only from those attending in person.

With that, we will begin first, President Hashimoto, will provide an explanation.

Good afternoon. Thank you for being here with us. I know this is a very busy season of the year. So we actually had a Board of Directors meeting in the morning today and we approved the organizational structure for the coming years, and we would like to make an official announcement. As the press release was out, I've already gave remarks on the page. So I'm not going to be repeating well -- as in my mind because it's stated already on the page. But I'd like to elaborate a little more about why I consider that this is that fitting timing for us to make such organizational changes.

So as you know, BLUE ACTION 2035 is a long-term business plan. And the first 3 years of Phase 1 is coming to an end, even before that, the phase at 2021 was when I actually became the President. So the first 2 years, back then, there was this rolling planned system. So it was 2 single year business plan we formulated. And since then, we have shifted to this more of a long-term business plan based business conduct. So that was the background of the BLUE ACTION 2035. And Phase 1, as I said, is ending at this 2026 March.

And I think this is a nice 1 closure we are coming to. And as you probably are aware, there were a lot of events but our business performance expanded significantly during my being a President and the roles and responsibilities of President kept expanding as our organizational group scale became larger. And then we are coming into this space that cannot simply be carried out by a single person. And I just became turned at 68 years old. And I thought that, well, maybe this is time that I pass this baton to a younger generation and make this an organization ready to build a future with these younger capabilities. And we do this -- have this Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, 3 CXOs.

So this is going to be a collaborative management structure led by these CEO, COO and CFO. This was my strong request that the structure will be set in that way. And it's coming from my the previous 5 years' experience. I just realized that in all these responsibilities that I was carrying out was really realistically very challenging in terms of time and also how many people would be needed to carry out all these. So would like to have this executive team a very strong 3 capable members leading the whole group and then this -- now President will be the head of the whole group as a part of this 3 collaborative management structure.

So this CEO designate Tamura-san is a completely different person in terms of the background. He was long involved in the container business. He was a long involved in overseas business. We expanded organizations, and he was -- he led this expanded team. So I have a full trust that he will be very capable as CEO leading this an expanded organization. He has a great trust in internally and in externally, and he has great personality and great traits. So we're still in progress of making an execution plan for the Phase 2. And then I think he's the very fitting CEO to be leading the group. And I will remain as a Chairperson and I will be still directors Board member, but I will be more stepping back but I will do utmost to support the executive members of this group.

So I would love to seek your continuous support for us to be building even bigger, greater future. Thank you very much.

Right. Next, President designate Jotaro Tamura will deliver.

Well, good afternoon. And today, following the resolution of the Board of Directors, I've been appointed to assume the position of our President and CEO. As of April 1 next year, my name is Jotaro Tamura, and I'd like to do a quick introduction of myself. I joined the former Osaka Shosen Mitsui O.S.K. Lines in 1991 and was appointed Executive Officer in 2022. And I'm now in my fourth year in the role at the age of 57. As Hashimoto-san kindly mentioned, for most of my career, I've been involved in managing overseas organization -- spending -- so I was overseas person spending 18 of my 31 years with the company stationed in London and Hong Kong.

And over the latter 2 of my 4 years as an executive officer, I have been responsible for the Asia region, commuting from Tokyo to Singapore and other Asian locations while leading local organizations. In terms of business fields, approximately 2/3 of my career has been devoted to the container shipping business along with the involvement in the car carrier business and the iron ore and raw material shipping. From 2020 onward for 4 years, I was engaged in overall group management as a General Manager and Executive Officer of Corporate Planning.

In that capacity, I supported President Hashimoto and also contributed to the formulation of our current group management plan at BLUE ACTION 2035. Other initiatives, I worked on during my time in the corporate planning include the 2021 revision of the corporate philosophy and a group vision, the group's values and code of conduct as well as the subsequent formulation of the environmental vision and corporate governance policy.

On the business front, these initiatives include the tender offers for DAIBIRU and Utoc as well as the formulation of the Cruise business strategy and the acquisition of MITSUI OCEAN FUJI. And April next year marks the start of a new 5-year period designated as a Phase 2 in our management plan and receiving the baton of the presidency at this milestone carries significant meaning. And I take this extremely significant responsibility very seriously.

Looking back, our company posted exceptional results in 2021 and in '22, which led to a rapid expansion of our balance sheet. In response, key management challenge at that time was the need to redefine our medium- to long-term management policy and I believe that the management plan launched in the fiscal 2023 enabled us to respond to this challenge relatively swiftly.

During the 3 years designated as a Phase 1. We made very proactive investments to enhance the competitiveness of our core shipping business and to create additional pillars of stable earnings. And I myself have also been deeply engaged in these initiatives as the executive responsible for the Asia region.

The next Phase 2 will be critically important period in which we convert the results of our large-scale investments into tangible earnings and we will place the greatest emphasis on executing its strategies across each business and each region to achieve this goal. At the same time, while maintaining a balance between the financial discipline and the shareholder returns, we will also focus on the next investment cycle during the Phase 2 period as a global company that develops a wide range of social infrastructure businesses centered on shipping.

As stated in our group provision, we will further enhance our presence. We will continue to pursue value creation at a global standard. We will firmly uphold the 3 key strategies set out in our management plan, transformation of the business portfolio, addressing environmental challenges with a focus on a vessel decarbonization and expanding global business development through revitalization of regional organizations.

In leading our global organization, I intend to fully leverage my experience to deliver concrete results. Our group operates more than 900 vessels, including dry bulk, carriers, tankers, LNG carriers, chemical carriers and car carriers, making us a truly comprehensive shipping company. We take pride in being a globally unique presence in the industry. We will further strengthen each of these areas of expertise to make them even more robust.

In the container shipping business which I continue to oversee, I will continue to actively support the management of Ocean Network Express, ONE, from our position as a shareholder. Today, as part of the new management structure, the appointment of 2 new executive vice presidents were announced alongside my assumption of the Presidency. The 3 of us will serve respectively as CEO, COO, CFO, forming the core of the management team. Together, we will build a collaborative management style. So that's our thinking. Given the significantly expanded scale of our business compared to the past collaboration will all stakeholders is essential to maximize corporate value.

And this requires a top management to continuously demonstrate balanced decision-making and execution based on a broad perspective and foresight. And at the same time, the ability to foster deeper teamwork within the management team will be more important than ever. And the 3 of us executives will take on the role of leading this teamwork aspect. I sincerely would like to ask for your continued support and cooperation going forward. Thank you very much.

Thank you very much. That was from Hashimoto and Tamura. And we will now move on to the Q&A session.

[Operator Instructions]

This is Kaiji Press [indiscernible]. And I have 2 questions, 1 question each to the gentlemen. First to Mr. Hashimoto. So you navigated the last 5 years and you implemented various initiatives and what is the most proud results that you brought. And if you have something that's still to be accomplished? And what would that be? And to Mr. Tamura for this new appointment, when were you approached? When were you announced and what came up in your mind when you first heard the news?

Thank you very much for your question. I will answer my -- the question that came to me. When I came to become President back in 2021. From the beginning of the 2020 was the pandemic. And there were a lot of confusions in the environment. But even the last 10 years right before the pandemic. There was no shipping business, no hard period, and we needed to do several structural reforms in that last -- in that 10 years. And people's mindset, as a result, wasn't necessarily a growth-centered mindset.

There was rather reserved and then it was more of like a risk avoidance kind of mindset. It was, I guess, to a certain degree necessary, but then the trend was changing Abenomics in Japan, started showing results and then the share prices of the companies were coming up. The economy was better. But then our internal mindset or morale was more to do with cost reduction. And then -- so we weren't necessarily having this in a full spirit of expanding into new area or expanding our business to a next level. So mindset change internal -- internally was, well, I consider to be very vital. So from defense to offense. So that was what I was strongly thinking when I became President. And then with that conviction, I rolled out various initiatives, the compensation system changes, HR system changes and also, we changed the organizational structure.

So we did numerous things. And I think that -- those things brought significant changes. Now we have really great motivation, morale motivation. And we do have very open discussion valued culture. And so that's something that I am proud of and I think that certain results were -- had been achieved or have been achieved and yes, that we do have a lot that we can grow or improve further.

I might highlight 2 aspects. One, the last 5 years, we actually accumulated a number of investments of significant scale. And it's to grow our stable businesses. So chemical tank terminal businesses would be 1 type or cruise ship business. So shipping business FLNG or offshore power plant generation. So these are -- for these investments to bring in earnings and we need continuous effort to bring those investments into successful earning generating form. And I think when -- I think it will take a few years before these investments will start bringing in significant earnings but we can't really wait 5 years. So apologies. I can't really be going for another 5 years as a president. So I thought that this should be the timing to pass this baton to Tamura. But we expanded new business areas up until now.

So I look forward to seeing the flourishment of these new businesses but how great success they're going to be, I know that I didn't really deliver till the very end because it still requires a few more years. And then I guess I needed it to realize at a much earlier timing. But what I learned and as we went along was that our human capital is the vital part. And then if you create a strong team, even you have a very complicated, difficult business, you will be able to overcome it. But you need to nurture people. You need to bring it best of everybody that's something that wouldn't happen overnight.

And it requires very robust, sustainable efforts. So training, nurturing people so that we will be able to be ready for the bigger -- future is something that would be -- will continue to be a big challenge for our management team. And -- but -- so we are already clear what are the challenges we need to tackle. And then I think what we have left is how well we can execute.

So I will stay as a member of the Board, I will be supporting in every possible way for him to lead the execution part.

All right. So I'd like to answer the question from my end. So when was I informed, what came up in my mind when I heard the news that I will be the next President. So from 2021 for 3 years, and I was the head of the business planning under the leadership of Mr. Hashimoto for 3 years from 2021. So I was involved in a daily strategic discussions. So I had the visibility of how he was formulating these strategies. And then 2021 was the timing but that's been the where I was fortunate to be in the position of. And -- yes, and then this timing was the very -- the official timing when I got this know the succession plan. And as you would imagine, I was very surprised.

But how I'm interpreting it? Well, my stance has always been if I can be of any service, any contribution, I'm willing -- I would take any responsibility, I'm trusted upon graciously. So I responded saying that if I can be of any help and the contribution, yes, I graciously will take this on.

Any other questions, please? So we will go to the first row of the right block, please.

So this is [ Jan Marine ], the newspapers Hashimoto -- so this is the -- sorry, to Mr. Tamura. So I may be overlapping in what I'm asking but the challenge -- so in the profile statement, there was this -- the word, challenge. So you've been seeing the Asian market as a leader, and you probably know a lot of challenges needed to go through these challenging times as well. As a President now for your company to globally grow, what are the transformations you think or changes you think you will be needing to lead?

Well, thank you very much for your question. Well, I might be repeating what Hashimoto-san said. But then for a long time, there was this shipping business harder times, and then it changed and then now it's in a very favorable environment. So what are we going to do was a big question. But mindset-wise, we weren't experiencing this in a favorable environment. So we needed it to create everything from scratch with a totally different mindset of going aggressive going into new arena. So what do we need to do? How do we need to do was all these explorative things. And it wasn't just the Asia region that I was leading but in every region, until then, I was totally headquartered in Tokyo been a top down and giving instructions but we decided to change it completely. But it took time for us to transition.

But I think the spending those 3 years, we managed to transform ourselves. So here onwards, it's not just going to be the challenging spirit that we're going to be exercising. We need to really bring in results, concrete results. We need to focus on how we can effectively execute what we planned or what we envisioned. So as President, yes, headquarters is going to be very important functionality. But now we're going through this awakening period of all these regional organizations, and I would like to really make things happen with all these regional organizations.

Okay. Next question will be from the left block.

Yes. This is Nikkei Newspaper. Two questions, one for each. One question to Mr. Hashimoto. It'd be great if you can elaborate more what kind of person Tamura-san is?

And a question to Mr. Tamura. You -- okay, so it was mentioned that your business has been diversified with a lot of an investment you did in Phase 1. But in the Phase 2, I guess, you need to see which one would be a long-standing one, which one you need to recede.

Okay. So I don't know how credible mine describing him would be or -- but how I'm a good person to describe. But he -- for method of things, he takes a very logical approach, break something big down into elements, components and you would like to be able to have this analytical eyes and be able to construct the solution mechanically or systematically. So he has a very logical approach. So he has a very clear cut of a building strategies and execution plan, I think that helps him governing -- garnering trust from people. But at the same time, he's very passionate and then a very quiet but very passionate flame at the core. And when you are a very logical capable person, you might appear to be as someone who's a cold or robot-like, but no, he has this passionate side as well. And I think that's one of the many balances that he has at a great level.

Another thing the -- my experience over 5 years of being President. What's really critical is how well you can communicate to outside world, particularly in English, it's been more than ever important. And one, because our customers, clients, business partners are global, and we need to have this top -- at the top -- the top one-on-one. And then that's really important but it's not necessarily just that. We have so many global talents working in our group, and we have business leaders and we have increasing percentage of non-Japanese leaders and employees, and then you need to really motivate those colleagues.

And if you can't communicate effectively, it wouldn't happen. And so not just the language capabilities and you need to be able to effectively influence or to garner a mutual understanding in both languages. And then he can even speak Chinese. And then we do business in China, Taiwan, and also in the Southeast Asia, where we have a lot of Chinese-speaking partners. So him being a great communicator in all the 3 languages in the English, Chinese, Japanese are really great trade and then I look up to him. I'm envious in a way.

Okay. So I'd like to answer my question. So how are we going to be having this new select and concentration. So how -- what is the approach of us getting into Phase 2? I guess there are 2 aspects of external environment-related and internal environment. So -- and then if we think that something keeps having this potential to succeed that we need to keep pushing and external environment from the beginning of this year. It's particularly prominent at this geopolitical risks coming about.

And the trend -- global trend changed towards environmental topics. So would like to really be attuned to what's happening outside the world and fine tune and orchestrate and adjust what we intend to do and how we do it. And anything we do, it's fitting to our strength, then that should be something that we need to continue. But I'm sure, as you pointed out, that we will find that certain things and are not going in the way we originally thought. So yes, so my answer is that we will closely monitor what's happening outside and inside of our organization and we continue to make necessary decisions as we go along without really staying complacent with where we are.

Okay. Another question, please from the back end on the left-hand side, please.

This is Maritime at Bridge Japan Yamamoto. So my question is also two, one each, Mr. Hashimoto, you said that if you don't have enough like the gust or the energy that you can no longer be president. I'm sure you're still full of energy but so you're going to now be Representative Director, Chairperson of the Board; and Tamura-san, President. So is this the very first time for your company that you take this kind of segregation and the separation of roles and responsibilities. So how are you going to be supporting the management team from your new position. So that's question to Hashimoto-san and to Mr. Tamura.

So PBR has often talked about target and then the shareholders if you do this equity. So 2021 to 2025, it just became a 6x and PBR denominator is much larger. So even maybe it's really difficult to catch up with the scale of expanding, but the PBR is what investors continue to see. So how are you going to continue improving the PBR?

Okay. So I will answer my part. So this arrangement of organization that we made today is a little bit irregular. So directors on appointment, we can actually have this special meetings. But normally, the director's appointment has always been the annual -- the June meeting. So, April -- as of 1st of April, he wouldn't be a director. So he would be President, Chief Executive Officer, but wouldn't be director until June. So for the 3 months from April to June, I would continue to be the Representative Director, while him being the President, but that's just -- I think the -- principally, the representative director should be President, but because of -- as of 1st of April, he wouldn't to be director.

So I would be, for the formality of Representative Director, but Tamura-San, Umemura-san with the assumption that they will be chosen as a Director, I will actually be stepping aside from the Representative Director. And the 3 gentlemen will be the representative director. So June -- April to June will be slightly irregular. So there will be 2 timings of organizational changes. And then as for -- what's in my intention. So it might take some time but I would like to be transitioning from the execution aspect to the Board of Directors leading.

So during the April to June, it will be a transitioning period. So I will be handing over. I'll be passing all this in the necessary information and duties. So that's the setup.

My stamina and energy level is still high. Yes, but like a physical stamina, yes, it's becoming more challenging. I'm not -- I'm well. I'm not suffering from any unwellness. But this year, I had quite a lot of overseas trips, and it was a 1.5 times a month and was at times very physically demanding. I had 2 or 3 times when I thought there was a very, very physically demanding and it told me that maybe this is a good timing.

And then now we have Tamura-san. So I'd like Tamura-san and Umemura-san and Hamazaki-san all thriving in their responsibilities. And then just a little more, I'm sure Tamura-san will talk about this. But regarding the PBR. Well, one, so we would be investing on at the front, because we need to grow in a long run for the future. And the LNG business in particular, it takes no averagely 4 years to construct a vessel.

So the money will go out, but then the return is going to take some time to come back. It takes at least a few years, and we can't really control that. So cash flow-wise, I mean, I guess, avoiding investment were to make cash status position better and enrich the shareholder return might be 1 thing that we can do to make it look prettier or just thinking how investment is going to be bringing return from day 1? And for that, maybe 1 thing that we can do is to purchasing bonds, but -- so we do have ways to improve PBR center but as a management, I think what really need to focus and emphasize prioritize is this mid- to long-term business growth.

So -- and we do have shareholders. We're seeing our performance in a long-term vision and understanding. And then our return coming from this investment is going to continue being better second year more than a first year, third year better than second year. And then I would like to really ask a long-term vision. I mean the short-term improvement, yes, we can do share buyback but is that really the way we go. I'm not really sure. I wouldn't agree. I don't really agree that's the way to go about? Well, it's ultimately to the next executive team. But okay.

So I agree with what Hashimoto-San just said. And then I guess the one important thing is the prioritization. And well, we have both at hands and then we do have this currently in PBR state. And all this set in stone investment to be brought to a very successful state of maximizing earnings. And we would like to shorten the time for these investments to start bringing earnings. So the speed is important, and the scale is another and so we know that the first priority try to maximize the speed and the scale and again, executive team will continue fine-tuning.

Okay. Another question?

Sangyo Newspaper. So geopolitical risk is what I'd like to ask a question about. So during Hashimoto-san's period, there was Ukraine situation and you needed it to -- well, and the possible situation in the future as well.

Yes. So we weren't expecting that Russian conflict to happen and Suez Canal and the U.S., the tariff port charge issue and then this tension between the U.S. and China and retaliatory tariffs. So we've been shaken by so many different factors. So that was how I would summarize the 5 years. But shipping businesses -- the geopolitical risks are not necessarily acting negatively to our business with the Suez Canal being blocked that we needed to change the route and then the demand/supply situation actually got tightened. And the -- they actually helped our improving the earnings. And so all these geopolitical situation, would it be headwind, a tailwind, would it be long term, short term, it will be different one by one. And we need to be very agile, adjusting how we invest or how we respond. And what we did in the last 5 years, well, it's limited in how much we could do. But well, ONE thing that we focused on is this intelligence gathering.

So it was partly new. So we opened an office in Washington, D.C. and also Beijing to gather intel, and this World Economic Forum member we became. It's an annual event. And Davos meeting is the January in Switzerland annual, right? But WEF have this same forum and New York meeting. And also, there's this meeting in China. So there are various global conferences. And it's not just me who attended but various directors and leadership went there, had a networking and not just forming a stronger network within the shipping businesses but we try to create this network where the various topics in Intel will come swiftly to our team.

We invested quite significantly time, both time and money to strengthen that network. And from last year, we created this new Advisory Board which invites specialists and experts of various areas and them acting as our Board adviser. And so this is a mechanism which ensures us to be exposed to all these cutting edge or the very expertised knowledge. So it's not going to be when decisions that we're making, it's going to be Intel information intelligence and supported the decision-making that we can now have and a number of people who are working in back office is heavier as a result. It is a burden on an expense side, and it can be quite challenging.

But I think this is a very vital part that we continue to have. We need to get the information we need to create scenarios and then hypothesis, and we need to be making business decisions based on these mechanism. And I think we are have matured to do that now quite a bit.

Okay. So one more, so the shipping business, the vessels are always moving around nation and yes, the international policies, trade patterns when changes are made, it's constantly changing now and when an investment is on land, you can't really mobilize it. But when it's like in the Ocean business [Sorry I have to listen] trend pattern can actually work for us and then we can actually leverage changes to turn it into our opportunities and that was what we captured these opportunities in the last 5 years. So I would like to really see what can be turned into our opportunities and then again, it will be agile. But structural changes of the world, is this something that we can't really accommodate with that kind of stand. So with such changes, I guess, we need to have this long-term vision and make our trajectory connected decision.

Okay. So non-shipping businesses is what you are doing more whether some of real estate businesses, how would you evaluate that?

Well, DAIBIRU business managed to expand this real estate business outside and inside of Japan has 100 years history. It always had various business intelligence know-hows. So what we did was just unleash all this potential and they were very agile when we proposed all these investment opportunities, and we're very grateful. So in India, London, we managed to invest in a real estate and then a little bit of real estate but warehouse operation is what we started in the Southeast Asia. And it's a quite wide diverse business portfolio we managed to create. So it's quite -- we're very pretty confident -- proud of what we achieved.

And then we do have this -- power generation business is quite a new arena for our company. And we are increasing our presence, but for us to nurture this business into earnings pillar, we need to be very patient and we need to keep tackling this challenge but -- and I think we need to have a long-term thinking in nurturing it.

So what I would say would be incremental. So cruise ship business next year, MITSUI OCEAN SAKURA, the new cruise ship will start. I think 2026 September, we're super looking forward to, and I would love you to feature this new endeavor we're going to start with that new cruise ship.

Any other questions?

All right. So this is [ Misaki ] from [ Nihonkai Shi ]. This is a question to Mr. Tamura. So longer-term BLUE ACTION 2035 is there, and you're moving into this in a Phase 2. So you already have this direction that set and it's going to be a collaborative management team approach. But how do you intend to give this Tamura way? I know that you would value this team work approach, but how would it be very unique to Tamura-san now that you will be the President?

I haven't prepared anything that's very cool or dashing, but I would have this 3 months from today till the 1st of April. I would like to talk with the various people and Umemura-san and Hamazaki-san would like to talk a lot, and then I'd like to set that how I will be President. But just now listening to everyone's input, feedback and just adding them up, but it's not going to be dynamic or agile enough. So I think it's really important that there are edges. So I will be all years getting advices and input from everybody, but at the end of the day, I will be the one that needs to take all the responsibility. So I'd like to make a decision on how I'm going to be leading as the President before becoming one.

Okay. This is going to be last one.

Diamond, the company, Tamura. So you said that if you just incorporate everyone's advices and then opinions then it's not going to be blunt and it's not going to be edgy, but anything that you would like to really value prioritize or change as you become President.

I don't have a very direct answer to that question. But as I said earlier, BLUE ACTION first 3 years, I was the formulator -- part of this formulation of this action, and I was assisting Mr. Hashimoto, now we're moving into this Phase 2, 5 years, mean it's a 13 years plan. So the basic direction, basic approach is not going to change but the next 5 years would be the recent 3 years as a foundation, and we're going to calibrate how we go about with observing what's happening inside and outside, and there will definitely be some collaborations. So I don't have anything definite definitively now, but that's the stance that I have. I would like to really keep monitoring what happens around us and be agile and calibrate as things become necessary.

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

I am Takeshi Hashimoto, President of Mitsui O.S.K. Lines. Let me start with a general overview. In the first half of fiscal year 2025, we achieved ordinary profit of JPY 114.6 billion and net income of JPY 116.2 billion. Our results exceeded our previous forecast, partly due to a stronger dollar than we had assumed. As a result, our balance sheet shows total assets exceeding JPY 5.39 trillion and shareholders' equity exceeding JPY 2.58 trillion. Our shareholders' equity ratio, including estimated lease obligations of JPY 900.0 billion was 39%.

I will now explain our full year forecast. We revised our previous ordinary profit forecast downwards by JPY 18.0 billion to JPY 152.0 billion, and we revised our previous net income forecast downwards by JPY 20.0 billion to JPY 180.0 billion. The main factors behind our forecast of lower profit in the second half compared with the first half are seasonal factors in each business, lower freight rate assumptions in the Containerships business, periods of non-operation in the Energy business and the concentration of repairs and maintenance and dry docking expenses in the second half.

Next, I will explain progress on the MOL Group management plan, BLUE ACTION 2035. Since we expect execution of real estate investment in the U.K. and investment in floating liquefied natural gas, FLNG vessels in the U.S. in the second half of fiscal year 2025, we have upwardly revised our total investment plan for the Phase 1 period to over JPY 2 trillion. During Phase 1, we have invested in the LNG and Ethane Carrier business, the offshore business and overseas real estate, all of which can be expected to generate stable cash flow. And we have also made acquisitions in the chemical tanker business and chemical tank terminal business aimed at strengthening the chemical logistics business. During Phase 2, we will increase the profitability of these investments and our core businesses and implement necessary asset recycling to generate cash flow.

Finally, I will explain the dividend forecast. At the beginning of the fiscal year, we held off increasing shareholder returns due to the effects of tariffs, geopolitical risks and other factors. However, given that we now have a clear idea of fiscal year 2025 financial results and think our current stock price does not fully reflect our business fundamentals and future growth potential, enhancement of shareholder returns is deemed necessary. We have decided to increase the full year dividend to JPY 200 per share, keeping in mind a target payout ratio of 40%.

Looking ahead to Phase 2, we will consider improvement of capital efficiency and a capital policy for sustainably increasing our corporate value. This latest dividend increase is underpinned by the cash flows that can be expected from investments in assets that generate stable cash flows made in Phase 1 and our strong financial position, and we aim to provide sustainable returns to shareholders. We expect that this increase will encourage a more reasonable valuation of our stock.

Our CFO, Kazuya Hamazaki, will now give an overview of the financial results based on the financial results presentation materials.

For details of our business performance in the first half of fiscal year 2025, please refer to the outline on Page 6 and 7 in the briefing materials. In our fiscal year 2025 first half results, we recorded ordinary profit of JPY 114.6 billion, up JPY 9.6 billion from our previous forecast. Income before income taxes of JPY 134.9 billion, up JPY 8.9 billion from our previous forecast and net income of JPY 116.2 billion, up JPY 4.2 billion from our previous forecast.

Dry Bulk business. The Dry Bulk business posted ordinary profit of JPY 3.1 billion, an increase of JPY 0.1 billion from the previous forecast. Looking at the market rates for each type of vessel. The Capesize bulker market rates remained firm due to steady iron ore shipments from Western Australia and Brazil. The market rates for Panamax and smaller vessels operated by MOL dry bulk held firm, underpinned by China's increased coal imports and solid shipments of South American grain, and minor bulk commodities. However, the market rates for wood chip carriers that transport wood chips for paper production and fuel were lackluster due to stagnant domestic demand in China. The Open-hatch vessel business posted higher profit than previous forecast due to contracts won for highly profitable project cargoes and lower-than-expected depreciation despite sluggish pulp demand from China.

Energy business. The Energy business posted ordinary profit of JPY 47.7 billion, an increase of JPY 4.7 billion from the previous forecast. Tankers and Offshore business. Crude oil tankers generated steady profit, reflecting higher spot rates due to geopolitical risks and limited new vessel supply as well as stable profit contributions from long-term contracts. The market rates for product tankers softened under the impact of decreased production associated with lower refinery throughput in China. The market rates for chemical tankers softened amid weakening cargo demand due to economic stagnation in China and Europe.

The Offshore business posted higher profit than previous forecast, reflecting a stable profit contribution from the FPSO business and a profit contribution from the CTV business. Liquefied gas business. The LNG or ethane carriers and gas infrastructure businesses were more profitable than previous forecast, reflecting profit contributions from long-term charter contracts, decreased expenses as a result of the rescheduling of dry docking for some vessels to the latter part of the fiscal year and onetime non-operating income related to refinancing.

Product Transport business. The Product Transport business, which includes the Containerships business, posted ordinary profit of JPY 63.5 billion, down JPY 5.4 billion from the previous forecast. Containerships business, please refer to Page 3 of ONE's magenta colored materials. ONE posted lower profit than previous forecast, reflecting lower-than-anticipated freight rates due to a weakening supply-demand balance amid pressure from new vessel supply despite continued firm shipments following a provisional agreement to reduce tariffs between the U.S. and China in May.

In the first half of fiscal year 2025, ONE reported after-tax profit of USD 371 million and MOL integrated its 31% share of these earnings into segment profit as equity and earnings of affiliated companies. Please look at Page 4 of the slides for details of changes in liftings, capacity utilization rates and freight index.

Please return to Page 7 of MOL's blue-colored materials. Due to these earnings at one, our Containerships business reported ordinary profit for the first half of fiscal year 2025 of JPY 22.5 billion, which represents a decrease of JPY 6.4 billion from our previous forecast. Vehicle transport business. In addition to firm shipping demand for completed cars, improved operational efficiency resulting from the easing of port congestion in Australia and the Middle East led to steady profit. Terminal and Logistics business. The domestic terminal business remained firm. In the Logistics business, shipments to the U.S. declined, resulting in lower profit than previous forecast.

Wellbeing & Lifestyle business. The Wellbeing & Lifestyle business achieved ordinary profit of JPY 0.8 billion, an increase of JPY 0.3 billion from the previous forecast, mainly reflecting the revenue and profit contribution of the Real Property business. Real Property business. The Real Property business achieved higher profit than previous forecast due to accounting changes in overseas business in addition to the profit contribution of newly acquired overseas properties.

Ferries and Coastal RoRo Ships business. In the Ferries and Coastal RoRo Ships business, both the cargo transportation business and the passenger transportation business performed strongly. Cruise business. In the cruise business, profit decreased from the previous forecast due to decreased revenue as a result of the nonoperating period of MITSUI OCEAN FUJI and delay in recovering passenger numbers after the vessel resumed operations.

Associated businesses. The Associated businesses posted higher profit than previous forecast due to the contributions of the Tugboat business and the trading business. This concludes the summary of the financial results for the first half.

Next, I would like to explain our fiscal year 2025 full year forecast. Page 9 of the financial results presentation material shows our consolidated ordinary profit forecast by segment. Please refer to the key points for each segment on Page 11 and 12. We revised our exchange rate assumption to JPY 145. Assuming that transit through the Red Sea will not be resumed until April 2026 and factoring in the market rate assumptions of each business, we forecast ordinary profit of JPY 152.0 billion, income before income taxes of JPY 215.0 billion, and net income of JPY 180.0 billion.

Dry Bulk business. The Dry Bulk business is expected to record ordinary profit of JPY 1.0 billion, which represents an upward revision of JPY 2.0 billion from the previous forecast. The Capesize bulker market rates are expected to remain firm until the end of the year on expectations for iron ore shipments from Brazil and recovery of bauxite shipments from West Africa. We assume that from the beginning of next year, Brazilian iron ore shipments will decrease due to Brazil's rainy season and market rates will soften.

The market rates for Panamax and smaller vessels are expected to remain firm for the rest of the year, supported by increased grain shipments and demand for fuel for heating. However, we assume that shipments of wood chips for papermaking and fuel will decline. We assume that Open-hatch bulkers will continue to win contracts for highly profitable project cargoes, but that pulp demand from China will remain weak as in the first half. We revised our previous forecast for the Open-hatch vessel business upward because depreciation expenses associated with the consolidation of Gearbulk as a subsidiary were lower than previous forecast.

Energy business. The Energy business is expected to record ordinary profit of JPY 65.0 billion, which represents an upward revision of JPY 1.0 billion from the previous forecast. Tankers and Offshore business. In the tanker business, long-term contracts will contribute to profit and market rates are likely to hold firm, reflecting tighter vessel supply and demand as a result of rising geopolitical tensions since the previous fiscal year. We assume that the chemical tanker business will continue to make a steady profit contribution, although we have factored in weakening spot freight rates as a result of economic stagnation in China and Europe.

The forecast for the offshore business was revised upward due to the contribution of existing long-term charter contracts in the FPSO business, the contribution of more efficient FPSO operations and the improved profitability of the CTV business. In the liquefied gas business, there will be a boost from the delivery of new vessels and existing long-term contracts are likely to make a stable profit contribution. We revised our forecast upward even though we assume that the impact of recognizing dry docking expenses, et cetera, in the second half instead of the first half will have a negative impact on the second half performance.

Product Transport business. In the Product Transport business overall, we forecast ordinary profit of JPY 88.0 billion, which represents a downward revision of JPY 18.0 billion from our previous forecast, reflecting downward revision for the Containerships business.

Containerships business. Please refer to Page 5 of ON's Magenta colored materials. ONE has lowered its previous forecast for after-tax profit by USD 390 million to USD 310 million. Freight rates are worse than previous forecast due to pressure from the supply of new vessels and lack of progress in scrapping old vessels, and we assume that ONE will post a negative EBIT of minus USD 70 million in the second half, reflecting deterioration in the supply-demand balance after China's National Day. Please refer to once response to recent changes in the business environment later on Page 6 for further details.

Please return to Page 12 of MOL's blue-colored materials. Taking once forecast into consideration, we lowered our previous full year forecast for our Containerships business by JPY 17.0 billion to JPY 25.0 billion. Vehicle Transport business. We assume that in the second half, the vehicle transport business will outperform the previous forecast given expectations for steady shipping volume, even though more demurrage days and higher operating expenses in response to changes in U.S. trade policy are anticipated.

Terminal & Logistics business. The Terminal & Logistics business is expected to fall short of the previous forecast due to the impact of U.S. tariffs in the logistics business, Well-being and Lifestyle business.

The Well-being and Lifestyle business is expected to post ordinary loss of JPY 2.0 billion, which is a decrease of JPY 4.0 billion from our previous forecast. Real Property business. We upwardly revised our forecast for DAIBURU, our core real property subsidiary, by JPY 1.0 billion due to the profit contribution of newly acquired properties overseas. While performance has deteriorated year-on-year under the impact of interest and development expenses for properties under development and the acquisition cost of newly acquired properties, performance will likely improve due to the existence of properties in Japan and overseas that will contribute on a full year basis from next fiscal year.

Ferries and Coastal RoRo Ships business. In the Ferries and Coastal RoRo Ships business, the Logistics business and the passenger transportation business are both expected to perform strongly. Cruise business, we assume profit will be lower than previous forecast due to decreased revenue as a result of the nonoperating period of MITSUI OCEAN FUJI and delay in recovering passenger numbers after the vessel resumed operations. Associated businesses. We revised our previous forecast upward because strong performances are expected for the Tugboat business and trading business.

Finally, I will explain the dividend forecast. We plan to pay an annual total dividend of JPY 200 per share, which is an increase of JPY 25. We are planning an interim dividend of JPY 85 per share and a year-end dividend of JPY 115 per share, which is an increase of JPY 25. This concludes my explanation of the fiscal year 2025 forecast.

Fiscal year 2025 shareholder return policy. I will explain why we have switched to a fixed dividend of JPY 200 per share, increasing the full year dividend by JPY 25 when we expect lower profit than previous forecast. In fiscal year 2025, our performance has been worse than expected, reflecting a weak performance in the Containerships business associated with the effects of geopolitical risks and U.S. tariffs and oversupply of new vessels as well as the impact of increased depreciation expenses for tangible and intangible assets.

Our ROE has also fallen short of the targeted level of 9% to 10%. However, we expect to be able to generate JPY 70.0 billion more cash than initially assumed through operating cash flow and asset recycling combined and have allocated around JPY 20 billion, including the dividend increase announced in the first quarter to shareholder returns. For this fiscal year, we have decided to pay a fixed dividend of JPY 200 per share, keeping in mind a target payout ratio of 40%.

Since Phase 2 will start from next fiscal year, we plan to announce our business plan, action plan and shareholder return policy for Phase 2 in March 2026. As for cash allocation, we will formulate a plan concerning the balance between investments and shareholder returns. Regarding the shareholder return policy, we will formulate our plans with consideration for the dividend at this time and stable shareholder returns.

Cash allocation. Finally, I would like to explain our latest forecast for Phase 1 cash allocation. Please look at Page 16 of the presentation materials. Our operating cash flow is expected to exceed the initial forecast by around JPY 10.0 billion. Together with an additional JPY 60.0 billion from planned asset replacement, in total, we are assuming additional cash in of JPY 70.0 billion. We are allocating around JPY 20.0 billion to shareholder returns and JPY 50.0 billion to additional investment.