Mitsubishi Corp Ord

Ladies and gentlemen, my name is Tatsuhiko Terada, General Manager of our department. Thank you very much for taking time out of your busy schedule to join us today. We will now begin Mitsubishi Corporation's investor call on the results for the nine-month ended December 2021. First, let me introduce the attendees from the company. Mr. Kazuyuki Masu, Executive Vice President in CFO. Mr. Yuzo Noichi, Senior Vice President, General Manager of Corporate Accounting Department, and myself, Tatsuhiko Terada, General Manager of the RR Department. First, Mr. Tamasu, our CFO, will kick off to share our financial results using the presentation on the screen. Direct results for the nine months ended December 2021, followed by Mr. Noichi's more detailed presentation using the same document. Now, without further ado, we'd like to start. Mr. Masu, please start. This is Masu, the CFO. Thank you very much for taking time out of your busy schedule to attend our financial results briefing for the third quarter of FY 2021. I would like to start with a high-level overview of the results, and then it will be followed by a detailed explanation by Mr. Nauchi, General Manager of Corporate Accounting. On page one, I would like to highlight three key points. First, consolidated net income for the third quarter of FY21 increased by 475.7 billion yen year-on-year to 644.8 billion yen. Second, we have further revised our portfolio earnings guidance from 740 billion yen, which is what we announced in November, to 820 billion yen. Last but not least, In view of the upward revision, we will consider additional shareholder returns, and the details will be shared when we announce the four-year results. I would now like to explain the year-on-year fluctuations, so please refer to the box on the lower left. In the same period last year, our financial results were heavily affected by COVID-19, such as falling resource prices and declining demand. However, with the subsequent resumption of global economic activities, in areas including oil-related business, salmon farming, and steel products business, and we steadily converted profit opportunities into actual profit. We also benefited from solid resource prices such as metallurgical coal, copper, and iron ore. As a result, the consolidated net income for the third quarter increased by 475.7 billion yen year-on-year, surpassing the previous record high full-year income just in the first nine months of the year. This was also the highest quarterly profit ever recorded by the company. Next, I'd like to explain the earnings forecast for the year and the shareholder returns. Please refer to the box at the bottom right. We have decided to revise our portfolio forecast again from 740 billion yen announced in November to 820 billion, an increase of 80 billion yen. The approach revision is based on the better-than-expected progress in each business segment, including some affirming an auto-related business, as well as recent trends in resource prices. The revised forecast of 820 billion yen incorporates all possible downside risks and is therefore considered to be a forecast with high conviction. In addition, based on this approach revision, we will consider additional returns to shareholders and will share the details at the time of the full-year results announcement. The specific method of shareholder returns will be determined comprehensively, including share-by-back option. In summary, we have maintained strong performance in a wide range of fields as in the first half, and with accumulated profits in each business, we have exceeded a past record high full-year profit just in the first nine months of the year. We view the performance as strong results. On the other hand, We believe that the favorable business environment for the current fiscal year will not last forever and that ups and downs are bound to occur. For this reason, we will not be swayed by the good results of a single year, but will continue to work steadily on the tasks at hand, such as strengthening the functions of each business and reshuffling assets in order to enhance profitability and corporate value. This will conclude my presentation on the overview of the results. Now, Mr. Noichi from Corporate Accounting will provide a detailed explanation focusing on the status by segment.

I'm Noichi speaking. So, from my side, I would like to give you some follow-ups. So, by segment for the third quarter results, I would like to explain about that. So, please turn to page two. So, for the third quarter results, Out of the 10 segments, all of the segments have increased the income compared to the previous year. Financial gas, year-over-year, from $16.6 billion has increased by $68.5 billion to $85.1 billion. This is due to the energy-related business. The dividend income has increased. In terms of the energy-related business and the North American shale gas business, there was an increase in earnings. In terms of the iron business and the North America plastics and business has improved, and the plastic building materials business, industrial materials, it was increased from $1.2 billion, increased by $3.7 billion to $31.9 billion. For the petroleum and chemical solutions, the LPG-related business and the chemicals business has increased earnings in terms of equity holdings and increased income as well. In terms of the mineral resources, The Australian metallurgical coal business increased market prices as contributed, and the copper business, their dividend income has increased. And for the iron ore business, there has been increased earnings in terms of liquid holdings. Compared to this year's 54.8 billion yen, it has increased by 193.2 billion, ending at 248 billion yen. And going to the right-hand side of the presentation, for the automotive and mobility There has been a loss related to Mitsubishi Motors in the previous year. There has been one of losses, and there has been an increase from that. And Mitsubishi Motors and the Asian automotive business, there has been an increase in equity holdings. There was an $8.7 billion deficit last year, but it has increased by $94.5 billion, and then the income was at a profit of $85.8 billion. So the summer farming business has improved earnings. For the food industry overall, last year it was $30.23 billion, but we saw an increase of profit by $39 billion and ended at $71.3 billion. For the consumer industry, compared to the previous year, the convenience store business and the Thai-related business has seen increased earnings. Lastly, going to the urban development business, The increased fund evaluation profit and the disposal gains of assets in the real estate development business contributed. Despite the impairment losses on the sales of the aircraft leasing company, so last year it was $10.9 billion, but this year it has increased by $19.4 billion and ended at $30.3 billion. Next, going to page three. This is about the cash flow status. According to the right-hand side of the bar graph, at 2021 third quarter, please look at the cash flow situation. The gray, the underlying operating cash flows, $848.2 billion of cash in. The orange investing cash flows is $180.4 billion is cash out. As a result, the adjusted free cash flow is $667.8 billion of adjusted free cash flows. So the breakdown of the investing cash flows is on the lower right. Please look at the orange colored boxes. In terms of the cash out for the copper business, Australian metallurgical coal business, LNG-related business, we have conducted investments and loans. So this was $533.5 billion in terms of cash in for the North American real estate business and the North American share business. We've collected investments. $353.1 billion. Investment cash flows on net basis, $180.4 billion of cash out was seen. Please go to page four. So as we explained at the beginning of the presentation, the full year forecast in November, against that revised forecast, we have further revised it upwards by $80 billion to $820 billion. By segment, Out of 10 segments, at seven segments, we are conducting an approach with development, natural gas, industrial materials, petroleum and chemical solution, mineral resources, automotive and mobility, food industry, urban development, and the seven segments. So since 2018, it is going to have a record high level. of the earnings since we have started to report in this segment. So I would like to focus on the four segments where there has been more of a revision. For the natural gas, we have an increased earnings and transaction profits in the LNG-related business. We have rises upwards from the November numbers by 10 billion yen and 102 billion would be the outlook. So going to the mineral resources, in the copper business, increased dividend income is expected. And in the iron ore business, the earnings is going to increase based on this situation. 16 billion of upward revision is going to be conducted, ending at 256 billion forecast. Going to the right-hand side of the presentation, on the very top, we have automotive and mobility. In the Asian automotive business, we are going to see an increased earnings. This will be a 12 billion yen of upward revision, and 100 billion yen will be the forecast for this segment. Lastly, Going to the food industry, for the salmon farming business, the increased earnings will be seen. So this will be a 19 billion yen upward revision, and 79 billion will be the revised forecast for this segment. Going to page five, this will be the market conditions for our forecast. So please refer to this. That ends my presentation. Thank you very much. So with this, this will end our presentation. So we'd like to go into Q&A. Please ask one question, and then we'll answer a question. And one person will be allowed to ask up to two questions. For those who have questions, please press the asterisk and then press 1. If your turn comes, please state your company name and your name and then ask your question. If you want to cancel your question after the asterisk, please press 2. In terms of the questions related to the IR data, the IR Division will be responding to that, so please refrain from asking the questions about the data. We are planning to end this session by 6.45 p.m. So let's start the Q&A session.

So the first question is from SMBC NICO. Mr. Morimoto, please. Please ask a question one at a time. Yes, this is Morimoto from . Thank you for allowing me to ask questions. My first question is, looking at the results, I think the high interest is the additional shareholder return. And also, you mentioned that one of the options will be share buyback. And I think you have written that clearly in the presentation. And I believe that you had internal discussion to reach this way of communication. And I guess you will come to a decision after closing the year, but looking at the free cash flow after shareholder return, I think the current free cash flow is $460 billion as of Q3, so I think you will have over $500 billion after the full year. So I think you have taken that into consideration regarding the shareholder returns. So I think in view of the next MTP, it may be difficult for you to answer this question, but what kind of discussion took place to reach a decision of additional share buyback? And I think I would just like to learn the balance between shareholder return and the leverage ratio. And I guess it's difficult for you to mention the size of the additional shareholder return, but can you share your thoughts on the shareholder return, please? This is Masuda CFO. I think later Mr. Nouchi will make some additional comments. But what I can say to answer your question is that given the current situation, it was difficult for us to reach one decision. So a lot of discussion took place, as you pointed out. And we knew that it would have been better for us to state some kind of figure. but we did not want to offer something that's abstract, and we have not closed the year yet. So based on the circumstances, we wanted to offer you something more clear after closing the bid for the full year. But we could not refrain from saying nothing. So to the market, we wanted to say that we are considering some options, but we would like to ask for your patience. That's what we wanted to communicate this time. And regarding the cash flow, if I may clear up the mechanism of how we think about the cash flow, six years ago we said that the cash flow after dividends should be zero. And I think that's what we communicated six years ago. And we still maintain that idea. So you may say that you have extra cash flow after six years. But we have given due consideration to our cash flow position. So if you just look at the cash flow, after dividend, we will have some extra cash, but when we do M&A, when we acquire a company with debt, which is Lawson and Eneco, and in those two cases, the acquired company had debt. We did not use the cash flow, but it will hit our leverage ratio. It will not be reflected in the cash flow, but we did see an increase in the debt, so that had an impact on our financial position. We have not been able to share that to the external audience, but we manage that internally. So if we manage our cash flow strictly throughout the past six years, including the schedule of the repayment of the debt, and also we did a share buyback three years ago, so if you put that all together, then we will have the equilibrium for cash flow. So that's one thing that I hope you will understand. And as for what we are going to do going forward, I guess it's not appropriate for me to comment about that, and Mr. Noichi, who will succeed my position, can make some comment on our actions for the future. Hello, this is Noichi, the General Manager for Corporate Accounting, and as Mr. Matsu explained, If I were to make some additional comments in the discussion, we discussed about the progressive dividend, which has been appreciated by the market. So based on that, we would like to consider future returns. And the business performance compared to what we had expected in the past, the volatility has risen. So I think we need to pay due attention to the volatility of the business. So that's also included in our consideration in the discussion. And in view of that, our shareholder return policy today was that we wanted to maintain the soundness of the financial position. And that will be in place. But compared to the past, we now feel that we can incorporate some more flexible thinking toward the shareholder return. But at this point, this is all I can say in a concrete way. But we understand that there are expectations from the shareholders and we would like to respond to those expectations from a medium to longer term view. So that will be my answer. Thank you. Thank you for those answers. My second question is it may be difficult for you to answer this. I think you are in the process of putting together the MTP from next fiscal year and internal discussion is taking place. And if you could share some insights What kind of agendas and challenges are you discussing about in view of putting together the next midterm business plan? If you can share anything with us. This is Naoichi from corporate accounting. Regarding the midterm business plan, we we may not be able to say that we started the discussion. We are kind of on that point. And looking at the direction, now looking at the current MTP of the last six months, and when we reflect on that, we are analyzing what went as expected and what deviated from the expectations. And also, the challenges that we need to address are being identified from various perspectives. So we did a provision of 120 billion yen, and it's still short of the original MTP target of 900 billion yen. However, I think we can be quite satisfied with the numbers, but we did benefit from the strong resource prices. Community prices are going up, and the market-related business has been quite good. So under the circumstances, we can identify the agendas that we need to work on. So apologies, but frankly speaking, we're still In the midst of just starting the conversation, also at this point, there's not much that I can share with you. Thank you very much.

Thank you very much. So going to the next question from Diary of Securities, Mr. Nagano-san, please. Please ask one question at a time. I'm Nagano from Diary of Securities. Can you hear me? Yes, we can. Thank you very much for your presentation. I would like to ask two questions. The first one is you said that in the first quarter, the share buybacks or the return to shareholders, you will be announcing about that. I would like to ask more about that. In the fourth quarter, you will discuss or execute those initiatives. So in terms of your decision to do so, who actually gathered to make that decision? Is it the Nakanishi-san and Oichi-san, who will be the next top management, how was the discussion conducted, giving consideration to the successors? So when you were engaged in that discussion, why did you decide to do it in the fourth quarter? Because you have the profit level is quite high. Of course, you don't know about the commodity prices until the year closes, but you do have some assumptions. And in terms of the capital policies of the MTP, in terms of the investment outlook, so I think basically taking that into account, you decided to do in the fourth quarter. Into the next MTP, in the investment amount, is it the case that you're discussing to invest more in the next MTP so that you decided to announce in the fourth quarter? So I would like to know the... the background, why you decided to make these announcements in the fourth quarter. So, Masu will answer the question first. Yes, please. So, the framework of the idea is that myself and so we call this a kind of a a division who will take care of these, you know, the handover and transition teams, we call it, and of course Mr. Nobuchi is engaged in those type of discussions, and then we discuss that maybe this would be the way to go. So, of course, it wouldn't do for us to not announce anything. We don't know whether it's going to be share buyback, but including options such as share buybacks, we will commit to returning to the shareholders. So for the next president, Mr. Nakanishi, I told them that we should take the – ask Mr. Nakanishi to get the permission. So for the current president and the current CEO and the current chairman, I get this permission. So basically, we just went through these procedures as a company. I think this is normal. So maybe you could say that we can decide it right now, but that's it. So we don't know how the numbers will go, and we don't know how the next fiscal year is going to go. Compared to three months ago, yes, we have some visibility, but compared to now, in May, after we close this fiscal year, we have more visibility. So rather than saying something... and then leave it as is, I think it is best for us to give you the return that fits your expectations. So rather than doing it in the half-baked way, we thought that making that announcement decision in the fourth quarter would be good. So, of course, never say never is what I want to say. We are not committing fully. Maybe we only give it in. Maybe we will combine that with the share buybacks. So in terms of the decision, the best timing of making the decision was not now. That was what we thought. Understood. Thank you very much. So thank you very much for making that decision. My second question is what I want to hear is about the metallurgical coal. So up until the third quarter, in terms of the price, the rise of the price of metallurgical coal, So the MDP's profit in the third quarter, maybe that is not according to your calculation. Within your company, in terms of the upswing of your price, is that basically reflected to your price, or there was a lack of volume, or there was some lagging in terms of the numbers of books? So can you... Enlighten me about that in terms of how this happened in the third quarter. And how about the switch out by the fourth quarter in terms of volume? So you are doing business with BHP. So I think basically you have a lot of spot contracts. So in terms of maybe more of the ratio increasing from those type of contracts, I would like to know about what type of situation is impacting this business in terms of the current demand and supply situation. from the corporate accounting division, general manager, from the up until the third quarter in terms of the results, as you have pointed out. I think basically there has been a back and front price. Compared to the previous year, about 108 billion improvement has been seen in terms of the breakdown. I'd like to give you an idea. In terms of price or the royalty, about $140 billion of upside. So I talked about $108 billion improvement, but even more improvement was seen coming from the price. In terms of volume cost, compared to the previous year, about a $14 billion impact. In terms of currency, the Austrian dollars and the US dollars and yen, well, the relation of these currencies, about $16 billion of reduction of profit, and about $3 billion of other negative factors. And all in all, we are seeing this $108 billion improvement. In terms of price, the biggest impact, well, after price, basically volume and the forex has had an impact on this business. And in terms of price per se, I think I mentioned this before, but When the price is rising, there is a lag when we would be able to see that contribution coming. So rather than going to the index prices, there'll be a lag that is reflected to a performance. That's one factor. So in terms of the MDP that they sell meteorological coal, So all the meteorological coal is not the first grade meteorological coal that is affected in the index. So depending on the mixture or the type of coal that is sold, there will be some differences or gaps. So because of the situation, I think the investors will look at the price. And then maybe you assume that we'll be able to get this level of profit. But I think this is the reason why we were short of that expectation. In terms of the future outlook, it's very difficult to say. But in terms of volume, well, the reason why we didn't have enough volume is that I think it's the impact of weather in Australia. the output has declined. And due to the Omicron virus, there was a decrease in the production. But I think basically, compared to the third quarter, we will see some improvement. Well, that is our expectations, at least. So, yes, that is my answer. Thank you. Thank you very much. So in terms of metallurgical coal, I would like to ask a follow-up question. So the price is very high right now. So what is the reason behind this? What is your analysis behind this? So this is Noiti speaking. I will answer your question. Well, the current price, I think maybe it's overheated. It is too high. So in terms of the trend of the prices of the metallurgical coal, I think basically you are following that from the year end. It has started to go up. The reason behind this is that rather than demand, I think it's on the supply side. So I talked about the weather issues. So there was the lack of output from Australia. In Canada, there has been a delay in production as well. I think these were the reasons that have impacted on the supply side. So if the supply, this amount of situation softens, of course, we do not think that this level of price will continue. So that's all from me. Thank you. Thank you for your explanation.

The next question is from Mr. Narita from Nomura Securities. This is Narita from Nomura. I have two questions. My first question is, going back to the shareholder return, I guess you have not decided on the specific details and the methodology of shareholder return. But you have indicated an option of share buyback in the document. And I think you have always been saying that you will consider shareholder return in view of the leverage ratio. I think you're saying the appropriate leverage ratio will be between 40% to 50%. And as of Q3, what is the level of your leverage ratio right now? And... If it goes below 50%, it will be within the range of a comfortable leverage ratio. Would that mean that you can still do share buybacks? I think you said that if it's below 25%, you have done a share buyback. So it can give us some very rough idea of what you think about leverage ratio and the potential execution of share buyback. And I think the way you communicate may not be so transparent because looking at the other trading houses, they look at the market expectations and they It reflects those expectations, including dividend hikes and also share buybacks, and I think that was the case for the other trading houses. But how do you want to communicate your thinking about the shareholder return and your mentioning of share buyback option in an explicit wording? Okay, this is Masa speaking. Regarding the leverage ratio, I guess we can say that we have changed the way we think. Previously, if the leverage ratio is within a certain range, we will not do share buyback. And if it goes above a threshold, and if the capital is perceived to be excessive, we would share buyback. That was the previous policy, but this time, if we stick to that policy, then there could be volatility from year to year, for a good year and a bad year. And with the business being so volatile, and if we just rely on the dividend for shareholder return, that's going to put us in a complicated situation. So if the capital is above the leverage ratio, and if we have excess capital, that's when we want to execute the additional shareholder return. But on top of that, with the volatility of the business, observed in reality. So at this point, dividend plus share buyback is something that we may need to reflect in our traditional shareholder return policy. So that was the message within our communication. That's the first question. So in that sense, Your communication regarding the additional shoulder return is agnostic of the leverage ratio. So if you believe that the right way to return the profit is something that you will consider agnostic of leverage ratio for this current fiscal year, that is correct. And next year will be different. I see. So my second question is, so now you are projecting for 820 billion yen with stopwatch revision. And looking at Q4 from Q3, I think you're implying that the process is going to come off by $100 billion versus Q3. I know that for consumer business, you incur some costs for Lawson, but given the current circumstances, are you expecting to break some big laws? Because looking at the current business trend, it seems like you will not see a big decline in Q4 from Q3. But what are you reflecting in the projection for Q4? Are you expecting a big decline? This is Malachi from Corporate Accounting. Let me address the question. In Q3, $180 billion for the three months. In Q4, we'll be down by $100 billion from this level. In Q4, the LNG-related dividend timing and also... The asset sales of real estate, they don't happen regularly. For auto and food business, there was the year and the demand. So those were some two, three special factors of few tens of billions of yen. And looking at Q4, we're not expecting any special loss or impairment, but with asset reshufflement, there will be a certain level of loss, and that's really reflected into our projection. And furthermore, I guess if you look at the segments, you will see that on the corporate level, We'll be looking at the resource prices and also the business environment. And we are affecting 20 billion yen of potential downside. So if you aggregate that, we're looking at 820 billion as the new four-year guidance. So we're not being overly conservative. So some downside risks that we are expecting, if they do not realize, we may be able to see some upside from the current guidance. Thank you very much.

Thank you very much. Next, Tokyo Research Center, Kurihara-san. So please ask your question one at a time. So this is Kurihara-san, Tokyo Tokai. So my first question is about the domestic offshore wind power generation. So in the three areas, you have been able to win the tender. So basically, I think the price was lower than the consensus. I think they would send a shockwave in the market. So why were you able to do so? What was the difference to your competitors? And what is your strategy going forward? I think there's a lot of things that you cannot mention, but within what you can talk, I hope that you can comment about that. That's my first question. So this is Masa speaking. I would like to respond. So there's a lot of media reporting surrounding this issue, and I thank you for asking that question straightforwardly. So what basically what the major media doesn't write about or report about is that in terms of the offshore wind power generation project, so it's a kind of a seabed installed type. It's not the thing that we have started from 10 years. So Enerco, basically we acquired the company, so we started this relationship with Enerco 10 years ago. So the North Sea... So we conducted this seabed type of the wind power generation, offshore wind power generation. And we have a lot of know-how. And we have the best people to ENICO. And I think we have good human resources. And we have been able to accumulate the cutting-edge know-how from Europe. So based on that, we calculated the cost. So... We basically responded to the tender based on this most cutting-edge European cost level. So I think we made the best proposal from the global perspective, maybe. So we didn't actually stretch ourselves just to get this tender. I think we have offered the optimal proposal. So this will be a tender situation. I won't be able to talk about that strategy, so I won't be able to talk more about this. Thank you. So the second question is that in the consumer industry, in the fourth quarter, I think basically you are planning this to be loss-making in the fourth quarter. Could you elaborate more upon that? So MNOG, the Corporate Accounting Department, So in the consumer business, so I think this happens every year. So this specifically is about Lawson, a subsidiary. In terms of the equity income that we see from them, that has a huge impact. In terms of Lawson, they have their own reporting. In the fourth quarter, there will be some impairments related to stores. So basically, every year in the fourth quarter, they conduct their impairment about this source in the fourth quarter. So for this fiscal year, again, similarly, Lawson is planning to book some impairment. So reflecting this, that is a fourth quarter result. So this is not something special that has happened only for this year. Thank you. This hasn't been responding. Thank you. Thank you for your answer.

Next question is from Mr. Ohata from Nomura Asset Management. Thank you for this opportunity. My name is Ohata from Nomura Asset. I have two questions. My first question is, regarding offshore wind project. You took all of the three projects, and I think the gross investment is going to be quite big. And looking at this as a FIT project, I think you will have a certain level of leverage using project finance. So looking at next year onward, under your next MTP, what is the impact going to be on your cash and investment from the offshore wind business? That's my first question. If this is Masu, I will address that question. I don't have the detailed presentation on hand, but as you pointed out, we will not fully fund this project by ourselves. We will use some leverage. And the leverage portion is also going to be quite big. And we're not really worried about project finance. Because for the renewable energy business, in the finance industry, it's a popular project. I believe that there will be ample capital that will come to a project. We may have more than we need. And the financing for this offshore wind or renewable energy will not be a huge burden for us in the future. Thank you. I am comforted by your answer. My second question is regarding the oil price, the assumption for the oil price, and also the direction of your LNG-related business. So I know that there is a time lag to the oil price, and I think your assumption for the oil price for this fiscal year is $60. Right now, the oil price is over $80. And looking at the sensitivity, I think there will be an impact of about a few tens of billions of yen Is that the right understanding? Or are there going to be some positives and negatives? Regarding the LNG business for this fiscal year, 102 billion yen, what is the projection for next fiscal year? Yes, this is Naochi. I will take that question. First, Leading up to Q3 for this fiscal year, the United Gas Business was fairly strong. From last year, the profit increased by 68.5 billion yen. Based on our internal analysis, roughly speaking, the impact from oil price rising was about 36 billion out of 68.5 billion yen. On top of that, the LNG spot price also rose, and the benefit of that was about 27 billion yen on our profit. Also, on our disclosure, we show the oil price assumption and also the sensitivity to the oil price. Also, roughly speaking, there is a time lag of about six months. So that's the basic framework. But if you look closely, there are some businesses with a time lag of three months. So that's one factor to consider. And also the LNG spot price. Recently, the LNG spot price has been spiking up. So the benefit of that on the profit was quite big for this fiscal year. On the other hand, as you pointed out earlier, As you understand, roughly speaking, the time lag is six months. So that's the time lag of the oil price being reflected on our numbers. So from end of last year leading up to now, the high oil price is going to benefit our performance for the first half of next fiscal year. So I think that's fair to say. And on top of that, the LNG spot price and also there are some impact which will not equate to a time lack of six months. Thank you very much. If I may ask a follow-up question for the LNG spot price. You said the benefit was 27 billion yen. Is that for Q3 from October to December? because I think there was a big deviation from the spot price and the long-term contract price. So the $27 billion is for Q3. So this is Nochi again. The $27 billion benefit that I mentioned is for the first nine months of the year. And I don't have the breakdown by quarters of this $27 billion, but in Q1 and Q2, the LNG spot price was relatively high. It was plateauing at a high level. So I will not say that the big chunk of $27 billion derived from Q3. Thank you very much. That's very clear. Thank you. And we will be able to offer you more details on your question later from the IR department.

So from UBS Securities, Gorosa, please. So please ask your question one at a time. from UBS Securities. Thank you for taking my question. So my first question is about the minimum resources. So the copper, next year or this year, the Kijabeko is going to start up. So you can see that the planned numbers here So 2022, how will this contribute to fiscal 2022 in terms of profit, in terms of volume? At this point, if we can talk about this, I would like to ask about that. So Noichi from the corporate accounting, I would like to answer for Kitabeko. So in the first half of 2022, production is going to start. and they will start to contribute to our profit. That is our estimation. Specifically, how much of contribution is going to come at this point, we will not be able to respond. But going forward, so going to 2023, fiscal 2024, the output will continue, the contribution will continue to grow. That is our expectations. So in terms of the production contribution and the income contribution, if the price is at that level, this will be linearly connected? Yes. Yes, I think that's the correct understanding. So in terms of the sensitivity, it's shown here. So next fiscal year for Kitabeko, basically, the contribution will be at that level for Kitabeko as well. So the second question is about the essential quantity. The automotive has made an upward revision. I think it will be able to maintain a higher profit level. But due to the lack of semiconductors of the automotive industry, there's a lot of download pressure. And I think basically that's the performance that we have shown. So in terms of your business, how much was there in terms of negative pressure, meaning that next year, do you think that there's room for recovery for the automotive business, for the automotive and mobility business? I would like to confirm the impact of this type of negative factors. Excuse me. We were not able to hear the first part of the question. You talked about the semiconductor shortage, how much... Did we receive a down version? How much are we going to recover for next fiscal year? Yes, I'm asking whether your, my understanding is that you have been able to have upward revision, including those factors, but in terms of, and going to next fiscal year for the automotive mobility, are there any further room to have a further, better performance for next fiscal year? Yes, I would like to take that question. In terms of the impact of semiconductors, so there has been some concern about this will put a downward pressure. Yes, there is still concern about the downward pressure in some businesses, but we have tried to minimize that impact. So the direct impact will be the companies that are actually, the OEMs that are actually producing the automobiles. So in terms of our business, so Mitsubishi and Isuzu, and how much impact will they have, from our point of view, from our side, I would like to refrain from responding to specific numbers of that impact. But in terms of the impact of the semiconductor shortage, sales volume, that will be directly impacted by the semiconductor shortage. For instance, our main sales market, which is Indonesia. So actually, the sales volume has increased compared to the previous year. On the other hand, Thailand. And for those markets, the sales volume in itself is not growing, but the share is increasing. So through these efforts, This fiscal year's forecast, automotive mobility segment, 100 billion yen of forecast. Well, last year, MMSC has conducted an impairment. So that was a 1-0. So the hurdle was lower. But even though, if you consider this, I think basically we are at a good level. So for the next fiscal year for the automotive mobility business, as a core segment, we hope that it will contribute to the profit. So it's not the case that this year is bad, so next year we're going to see a rebound. We are not thinking in that manner. So thank you. Understood. Thank you.

So we still have some time. Are there any further questions from the audience? You can ask your second question if you wish. So if you have a question, please press Start and 1. And if you want to cancel a question, please press Start and 2. Are there any further questions from the audience? Mr. Morimoto from SMBC NICO, please. Thank you for allowing me to ask the second round of questions. I want to confirm two points. The first point is for the investment, the new investment and maintenance investment. And I think for Q3, it was a cash out of $533.5 billion. And looking back the fiscal year, In terms of a new investment, you did not spend a lot of money. And going forward, I think there's opportunity for offshore wind. You may enjoy project financing, so you may not need a lot of internal cash, but I guess for an investment, there's opportunity for offshore wind. But what is your thinking of investment? Can you give us some insights? And my second question is, we will take one question at a time. Okay. So this is Nochi from corporate accounting. Let me take the question. I was looking at the investment for this fiscal year. As we have discussed, it is what it is. And for next fiscal year onward, for maintenance capex, and also things that are under development for resource business. We have already made some commitment to investment. So they will be incurred on a regular basis. So that's something we can communicate with visibility. And also new investment, we are considering different opportunities. And at this point, we cannot give you a specific amount of how much we're going to invest into X business. But I can say that we do not have an immediate plan to spend the huge money. So that is the answer to your first question. Thank you very much. My second question is regarding CERMAC. So Q3, later up to Q3, was $23.7 billion. And I think you have acquired this business a few years back, and I think just this year you will be achieving a record high profit. The sales volume has been increasing since the time of acquisition, and also the market price was also favorable, as indicated in your supplementary data book. And looking at the impact to the business performance, I think as one business, it's quite big, generating a few tens of billions of yen. Bali and Chile, I think the market prices are quite high. So what is the supply chain situation for CERMAC business? And what is your projection for the market price? And what is your outlook for the growth of the sales volume? Thank you for the question. Nobuji will take that question. And as you pointed out, for the CERMAC business, We have benefited from the recovery in the market price, so the business is good in the current performance. Already today is achieving record high, and also in Q4, we believe the business will also be quite upbeat. And as for the impact from the market price, there is a huge impact. And what I want to say and emphasize is that in Chile, where we struggled before, We have seen a huge cost improvement. So that was one achievement. And compared to when we acquired the business, the production cost has improved by 17% at this point. So that's the progress we've made. And the death ratio, mortality ratio of the silence And also, the feedstock cost has been improved. And in Chile, the position was slightly weaker compared to the competitor. But at this point, I think we are competing on the same stage. Also, market price is something that's beyond our control. But to countermeasure the prices, we want to consider things like augmenting the frozen business and also improving the selling price by selling the processed goods. So on the sales front, we can make further improvement and we can also make further improvement on the cost side so that we can mitigate the volatility of the market prices. Thank you. I think I can at least say that the fundamental strength of the business has been augmented. Thank you very much.

Thank you very much, Mr. Morimoto. So I think our time is up. I'd like to end the Q&A session at this point. Lastly, from Masu, the CFO, in March 2022, he will leave the post of the CFO, so Mr. Masu would like to say a word to all of you. This is Masu speaking. So I think this will be the last opportunity to talk to you. So I have been working for 40 years in this company. In the last six years, I have been taking the post as the CFO, and this the type of attention or the responsibility. I felt keenly that I am working at a listed company, a public company, so it was a very precious opportunity. On the other hand, maybe, I think in Japan, for the listed companies, the issue is that you have to have been in this position to feel the type of attention or a sense of crisis. I think that with all your support, we have been able to serve the CFO of this company So taking this opportunity, I would like to thank all of you. So for the next earnings report, Mr. Noguchi is going to serve as CFO and make the presentation. So I will ask for your follow-up support for Mr. Noguchi as well. Thank you very much. So thank you very much. This is by your business schedule for attending for the fiscal year 2021 third quarter results announcement. Thank you very much. With this, I would like to end the conference. Thank you. please make sure you turn off your telephone.