Itochu Corp

Thank you. This is Hachimura, CFO. Thank you very much for taking the time out of your busy schedule and especially on the day when the market was so volatile. At 3 p.m. today, we made multiple announcements and Q1 business results were the First part, and at the same time, we made announcement about 150 billion yen share buyback and also tender offer for shares in CI Takiron and Descent. So I'd like to go through all of them. First, starting with the page three of the material that you have in front of you. Q1 results, the net profit was 206.6 billion yen. Last year, it was 213.2 billion yen. So compared to that, it's down by 6.6 billion yen. Last year, there was a major extraordinary gains and losses. And extraordinary gains and losses are down this time by 18.5 billion yen. So core profit increased by 12 billion yen year on year. Also, the core profit changed from 190 billion to 202 billion yen this quarter. So this is the growth of 6.3%. At the beginning of the fiscal year, we said that we aim for 10% growth, and half of that comes from the organic growth, and the remaining is the additional, including the new investments. And of course, the new investment part will not appear in Q1. So about 6% growth rate is within the expectations that we had. As for the progress, compared to our forecast of $880 billion, was 23%. It appears a little bit low, but 880 billion is not evenly spread. So we are above the budget level, so we made a good start. And we made announcement of two TOBs. The total of the investment is 220 billion yen. And first quarter growth investment appears a little bit low, but this is due to the timing difference of the cash out. And we said that no growth without investment. And we have had the full discussion and we are making preparation for the execution. And about the 150 billion yen buyback of our shares at the beginning of the year, Fiscal year ending 25, we mentioned that the cash allocation will be split half for the shareholder return and half for the growth investments. And to achieve the total shareholder return of 50%, so 200 yen per share or 30% dividend payout ratio, either of the higher ones. So 150 billion yen buyback. Concerning this, as we discussed today, we have been having the discussion about the TOB, and we, of course, needed to avoid violating the insider trading regulations. Now, since we made these announcements of the TOB, we wanted to announce the 150 billion buyback at the early timing. And in Q2 and onwards, it's possible that we once again have the timing to potentially violate the insider trading regulations, so we wanted to avoid that. So toward the end of the fiscal year, we will be executing this buyback. As for the business results, Yamaura will explain the details of each segment, but overall trend, is not so different from the Q4 trend of the previous year. So CITIC profit growth as well as the improvement of the performance of the CPP, although it is in red still, the machinery, food, ICT and financial business and aid company, the non-resource businesses did well, while the minerals, metals and minerals and energy showed some weakness. And General Products and Realty, Itochu Fiber Limited, still has some red figure, which will be explained later. But about the resource businesses, there are some difficulties remaining. And as for the segment information, I would ask Mr. Yamaura to give you the details. Thank you. I am General Manager of Accounting. My name is Yamaura. I'd like to go through the net profit by segment. Please go to page 4. Also, pages 12 to 20 give you the details of each segment. Starting with the textile company, Q1 results were 5.3 billion yen, up 0.6 billion yen. The strength continues. Apparel-related companies were strong in Japan and abroad, especially in Hong Kong and China. Machinery, 34 billion yen, up 2.4 billion yen. This is the record high number. There was an extraordinary gain on the Australian infrastructure company, 2 billion yen, and excluding that, the core profit was up by 400 million yen. Yanase and auto-related, and also the leasing-related, especially the aerospace, Transactions were strong, and as for North American electric power-related business, the profitability deteriorated. Metals and minerals, the results were 52.5 billion yen, down by 3.7 billion yen. In Australia, EMEA, the prices of the iron ore and coal decreased, but with the weaker yen, the profit increased by 700 million yen. The trading Itochu metals, non-ferrous related transactions and companies were strong. Marubeni Itochu steel earnings were down, deterioration in profitability of North American business. And as a company as a whole, it was down by 3.7 billion yen. Energy and chemicals results were 17.8 billion yen, down 19.6 billion yen. The extraordinary gains last year was 18.5 billion yen. In terms of core profit, it was down by 1.1 billion yen. In chemicals, the profit increased by 2.7 billion. But energy and trading deteriorated, and as a whole, the results came down. As for food, the results were 19 billion yen, down by 1.8 billion yen year on year. excluding the external gain, core profit increased by 1.7 billion yen. Food distribution-related companies such as Nippon Access were strong, and the meat product-related company High Life in North America, improvement was observed, which were the driver. For the general products and realty, the resource was 18.8 billion yen, up by 1.4 billion yen. The core profit was about the same as the previous year. As mentioned, the earnings of IFL, the European pop-related company, was lower, resulting from the higher material cost. Daiken was converted into the consolidated subsidiary, and its equity stake increased, and the domestic business was strong. Also, the real estate sales of the Itochu property development was also strong. ICT and financial business, the results was 16 billion, up by 1.6 billion yen. The strength continues. CTC, there was an increased stake and the transactions were strong. The performance was strong. And also overseas retail finance-related companies are growing. and mobile phone-related companies' lower earnings were offset. The eighth, the Q1 results, was 10.9 billion yen, up by 0.3 billion yen. Despite the higher cost, Family Mart daily sales increased, resulting from the enhancement of product appeal and sales promotion. And it was the profit increased by 700 million yen. Others, adjustment and eliminations improved by 12.2 billion yen year-on-year. Concerning CPP, there was an improvement of the market conditions in Vietnam and the lower feed cost. This was a 3.4 billion yen improvement. And CITIC Limited profit also increased by 6.7 billion yen. Now going to page 5. shows the core profit trend as a whole. The core profit increased by 12 billion yen, 15 billion forex, down 1.1 billion in interest, and down 4.5 billion in resource prices, and net worth 2.5 billion. As for the forex impact, On page 10, if you look at the assumptions, in Q1, the average was 155.85 yen to the dollar. The yen has weakened by 21.2 yen. And on the after-tax profit, the impact was 15 billion yen. Especially the impact was big in metals and minerals and machinery. As for the extraordinary gains and losses, the total was 4.5 billion yen, small impact, unlike last year's major extraordinary gains and losses. Next is cash flows. The eighth and general products and realty. Already we talked about the sale of the condominiums by the Itoju Property Development and operating revenue increasing and also the dividend from equity pickup in the metals and minerals. and the cash flow from operating activities was 207.8 billion yen. The core operating cash flow was a record high at 238.8 billion yen, 66 billion increase. Going to page 21, investments. This shows the last year's results and this year's results. In Q1... Total major new investments were 118 billion yen. The major one is shown at the top. In consumer-related sector, the investment in weak cars, 18.8 billion yen. In basic industry-related sector, the investments in a North American electric power-related company and energy from waste project company, this is a little less than 20 billion yen, environment-related. Others are CapEx-related. The new investments, 118 billion yen. As for exit, 20 billion yen. We did not have a major sale of assets this time. And the net investment amount is 98 billion yen. If you only look at this number, you might think that the investment amount is small. But as we announced, we have two TOBs, which amount to 220 billion yen. So if you add that up, that would be 330 billion yen. And we are making steady progress in investments. Concerning the group companies, out of 264 companies on page 25, the percentage of the profit-making company is 84.5%. Usually the number in Q1 is low, and of course we try to achieve 90% throughout the year. What is not written here is that compared to last year, 160 companies increased the profit in Q1. And also 181 companies had higher numbers than the plan. So those companies are growing steadily in their profits. And with that, I'd like to end my presentation. Thank you very much for your attention.