Good afternoon. Thank you very much for joining us for the briefing. First, I'd like to express my deepest sympathies to those affected by the latest earthquake in Kumamoto, and my sincere respect to all of those involved in various recovery efforts. My presentation will follow the material titled Financial Results for the First Quarter ended June 30th, 2026, and Full Year Forecast of the Fiscal Year ending March 31st, 2027. Slides are available on the web. Slide four is a summary of Q1 results. During the first quarter, we faced an unstable economic environment characterized by rising energy prices due to the situation in the Middle East, resulting inflationary pressures and challenges in the supply chain. Against this backdrop, Sojitz's consolidated profit for the period came to JPY 30.2 billion, up JPY 9.1 billion, or 43% year-on-year. The progress rate toward our full-year forecast is 23% and is in line with our expectations. core operating cash flow was a net inflow of JPY 40 billion, marking steady progress of 27% against the full-year forecast. In this final year of our Medium-term Management Plan 2026, our priority is to expand business domains that provide clear paths to success for our next stage. We have made steady progress in this regard, with execution of new investments worth JPY 60 billion, investment decisions on several projects, and more in the process of negotiations and due diligence. Structural reforms initiated in the previous year are also largely progressing in line with plan. Given the continued uncertainty in the business environment, including the situation in the Middle East, we are maintaining our initial full-year forecasts, including those by segment. Let me provide more details starting from Slide five. Slide five is a balance sheet summary. Total assets increased by JPY 82.4 billion from the end of March to JPY 3,730.4 billion. Tobacco-related trade and other receivables decreased, but inventories and investment-related assets increased. Total liabilities increased during the quarter by JPY 22 billion to JPY 2,516.2 billion. While tobacco-related trade and other payables decreased, interest-bearing liabilities increased due to financing for new investments and working capital. Total equity attributable to owners of the company increased by JPY 54.3 billion from the end of March to JPY 1,144.7 billion. The effect of dividend paid was more than offset by the positive impact of stock prices of shares held and foreign exchange rates. Slide six shows key financial indicators. Slide seven is a summary of profit or loss. Gross profit increased by JPY 29.1 billion year-on-year to JPY 111.3 billion. Slide eight shows the breakdown of gross profit by segment. Chemicals, Energy Solutions & Public Infrastructure, and Retail & Consumer Service posted significant year-on-year increases. Chemicals benefited from earnings contribution from NIPPON A&L INC., which is consolidated from Q2 last year. In addition, the Indonesian methanol business was up with higher methanol prices, and trading businesses, both domestic and overseas, performed solidly. For Energy Solutions & Public Infrastructure, profit increased thanks to earnings growth in the energy solutions business in North America and earnings contribution from a newly consolidated business. Retail & Consumer Service was up thanks to one-time gain related to a tax revision for tobacco, as well as improvement in the commercial food wholesale business in Vietnam, which was sluggish in the previous year. Consumer Industry & Agriculture Business, on the other hand, was down year-on-year due to poor progress in the overseas fertilizer business. The overseas fertilizer business, which is a key earnings driver for this segment, has an earnings structure that usually generates much of the profit in the first half of the year, particularly in Thailand. This year, however, transaction volume is down due to insufficient rainfall caused by El Niño. We are well positioned to make up for this once the rainfall returns, but the timing of rain will be the key factor. Now let us go back to slide seven. SG&A came to JPY 83 billion, increased year-on-year by JPY 12.8 billion. 2/3 of this increase came from changes in consolidated subsidiaries, and the remaining 1/3 is due to the impact of foreign exchange. For financial income and costs, interest expenses increased due to an increase in the average balance of interest-bearing debt. Share of profit of investments accounted for using the equity method increased by JPY 3.3 billion- JPY 14.1 billion. This is thanks to the overseas industrial park business and the Australian public transportation business, to which the equity method is applied starting this year. With all that, consolidated profit for the period came to JPY 30.2 billion. Slide nine and 10 describe profit for the period by segment. Slide nine provides year-on-year comparisons. The message is consistent with what I just explained earlier regarding gross profit, and I will only point out that we have provided here descriptions of main factors behind the difference for each segment. Slide 10 describes our latest outlook for the full year. Overall, we see strong progress in Chemicals, Energy Solutions & Public Infrastructure, and Retail & Consumer Service. Aerospace & Transportation Infrastructure and Metals, Mineral Resources & Recycling are generally in line. Progress is somewhat weaker in Automotive and Consumer Industry & Agriculture Business. Since we presented the forecast at the beginning of the fiscal year, we have received many questions regarding the feasibility of the full year forecast of JPY 130 billion. So let me explain that by segment. Automotive posted a loss of JPY 300 million. While businesses undergoing structural reforms, such as the used car sales business in Australia, remained loss-making, businesses in North America and Latin America are delivering profit growth. For the Australian business, we were unable to achieve significant improvement in Q1 due to sluggish demand for used cars in general due to the situation in the Middle East. However, we are making progress in improving profitability of retail operations in Victoria, which had been a long-standing issue. We will continue to work toward achieving single-month profitability within the first half by maintaining optimal inventory levels while expanding sales volume. In North America and Latin America, where we are achieving profit growth, we have newly participated in a multi-brand automotive sales business in Costa Rica. Its earnings contribution will start in Q3. For this segment, we will implement structural reforms and focus on business areas where we can leverage our strengths to drive profit growth. For Aerospace & Transportation Infrastructure, Q1 results were only 18% against the full-year forecast. However, earnings from aircraft, business jet, and defense-related transactions tend to be concentrated in the second half. In addition, we expect earnings contribution from new investments such as the Australian public transportation business and Japan Investment Adviser, or JIA. We therefore expect to be generally in line with the initial forecast. Energy Solutions & Public Infrastructure is making steady progress against initial forecast, thanks to the new consolidation of Capella Capital, the Australian infrastructure development business, and increased transactions at energy solutions businesses in North America and Australia. We will also actively pursue new investment opportunities. For Metals, Mineral Resources & Recycling, production efficiency at the Australian coking coal business has not improved sufficiently, and volumes have been below expectations. As I explained at the beginning of the fiscal year, we are working on this with a view to having an exit plan in place during the first half. The Chemicals segment is as explained earlier. Progress has exceeded initial forecast in each business, and we expect this solid momentum to continue. New business opportunities are also increasing. Although Q1 progress rate was already 50% against the full year, we are maintaining the initial forecast at this time. We will continue to closely monitor the potential impact of the prolonged situation in the Middle East. In Consumer Industry & Agriculture Business, as I explained earlier, sales volume for fertilizer decreased due to delay in planting and fertilization caused by insufficient rainfall in Southeast Asian countries. We aim at recovery with rainfall in Q2. We need to continue to monitor closely rising prices and shortage of fertilizer raw materials due to the Middle East situation. However, I think we can manage to some extent in our businesses. Besides, the business of Sojitz Foods transferred to this segment in this fiscal year will make earnings contribution toward the second half. In Retail & Consumer Service, on top of temporary earnings growth from tax reform in tobacco business, continued solid progress is expected for marine products and domestic retail businesses. In commercial food wholesale business in Vietnam, which was sluggish in the last fiscal year, profitability is improving, and new transactions are expanding in line with the original expectation. Partial asset replacement is expected in the second half, and the current progress is faster than the initial forecast. In others, earnings contributions from digital-related businesses weighted toward the second half, together with other profit and loss are expected. Progress is almost in line with the forecast. That's all for explanation by segment. As we are assessing the implications of the prolonging Middle East situation and working on structural reforms in some segments, we don't change forecast as of now. Despite differences by segment, we are steadily progressing in line with the original forecast. Slide 11 shows cash flow. Cash flow from operating activities recorded an outflow of JPY 57.3 billion due to an increase in working capital despite accumulation of core operating cash flow. Cash flow from investing activities recorded an outflow of JPY 41.9 billion, mainly due to new investment. As a result, free cash flow recorded a net outflow of JPY 99.2 billion. Slide 12 shows cash flow management in the current MTP. While core cash flow will be significantly negative due to upfront growth investments under MTP 2026, we plan to balance cumulative core cash flow over the MTP 2020, 2023, and 2026 periods. Cumulative core cash flow for the period is currently expected to be JPY 60 billion-JPY 70 billion. Slide 13 is about investment and asset replacement. In Q1, new investments came to JPY 60 billion and asset replacement JPY 20 billion. Although progress of asset replacement may appear modest against the full-year target of JPY 100 billion, we expect asset replacement to exceed the initial forecast. From Slide 14, you see creation of the Sojitz growth story, as Slides 14 and 15 simply reiterate our concepts shown in the beginning of the fiscal year. I'll skip the explanation. Please go to Slide 16 for co-creation with Japan Investment Adviser. In June, we acquired additional shares in Japan Investment Adviser, JIA, making it our equity method affiliate. JIA and Sojitz have been involved in aircraft operating lease business. We expect to expand profits through the increased number of handled aircraft by mutually leveraging a wealth of track record, network, and strengths. Also in real estate, renewable energy, and various infrastructure asset fields by combining JIA's financial product structuring capabilities and investor network, and with project and asset development capabilities and operation and management capabilities. We aim at expanding the business field and profit further. Through mutual business growth toward next stage, we expect to increase profit from about JPY 3 billion at present to JPY 5 billion or more. Reinforcement of finance and investment solutions capabilities at our company will lead to development of investment assets meeting the needs of markets and investors, and increased speed of investment asset turnover. By building and expanding such businesses and expanding scale of capital-efficient business, we aim to achieve ROE of 15%, our target set in next stage. Slide 17 shows trading business capturing supply chain changes. We aim to strengthen trading capabilities by responding to changes in supply chain dynamics and evolving market needs, mainly in Chemicals. These initiatives delivered results despite supply chain disruptions caused by the situation in the Middle East. Also, in Metals, Mineral Resources & Recycling, we decided to participate in gallium production, contributing to expansion of the stable supply of critical minerals by building robust trading capabilities and businesses with competitive advantages and sustainability. We are expanding high cash ROIC business fields, leading to achievement of ROE of 15%. Slide 18 shares business progress in Uzbekistan. The role of our business in Uzbekistan is to leverage long-standing trust with partners, expertise, and network to capture growth markets and to build long-term stable and sizable earnings opportunities. As announced in yesterday's release, we signed a concession agreement to enter new Tashkent International Airport development and operation business in Uzbekistan. We also plan to start operation of gas-fired power plant business we've been working on within this fiscal year. While executing each project thoroughly, we aim for future project expansion and continued group-wide profit growth. Slide 19 is about shareholder returns. There is no change to the policy. Based on progressive and predictable stable dividend policy, dividend forecast for FY 2026 is JPY 180 per share, JPY 15 or 9% increase year-on-year. Please refer to Slide 20 for commodity prices, foreign exchange, and interest rate results and assumption, and Slide 21 onward for segment information and supplemental information. Despite continued uncertain business environments, as we explained, we are progressing steadily toward consolidated profit for the year of JPY 130 billion, the numerical target for the final year of MTP 2026. Initiatives such as acquisition or refinement of business fields with competitive advantages toward next stage are steadily delivering results. We will move forward to next stage by creating multiple new Sojitz growth stories with you and fully implementing structural reforms. I would appreciate your continued understanding and support. That concludes my presentation.
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