Mitsubishi Corp Ord

Hello, everyone. This is Tarada from IR. I'm the GM. Thank you for your valuable time today, despite your busy schedules. As it's time now, we would like to start Mitsubishi Corporation's Fiscal 22 Q3 results briefing. First, let me introduce who is here with us from our side. We have Representative Director EVP and CFO, Yuzo Nouchi. Also, the GM of Corporate Accounting, Yoshihiro Shimazu. And myself, the GM of IR, Tatsuhiko Terada. We have three of us here. We'd like to now start. Over to you, Mr. Nouchi. This is Nochi, the CFO. Thank you very much for taking time out of your busy schedule today to participate in our fiscal year 22 Q3 results call. First, I will explain the progress of the midterm corporate strategy 2024, including the highlights of the financial results for fiscal 22 Q3. Thank you very much. which used to be separately posted on our website. The contents corresponding to the conventional supplementary information materials are under supplementary information for consolidated financial statements and supplementary information by segment, but I will not be explaining them at this time. Now, please turn to page 3, which is numbered at the bottom right. First, I'll explain the summary of this quarter's financial results. Consolidated net income for fiscal 22 Q3 increased by 311 billion yen from 644.8 billion yen in the same period last year to 955.8 billion yen. We were able to exceed last fiscal year's full-year record high profit of 937.5 billion as of Q3. Additional commentary by segment will be provided later by Mr. Shimazu. In addition to the steady progress leading up to Q3, we have also felt good response in Q4. Therefore, we have revised our full-year forecast upward from 1 trillion 30 billion yen announced in November to 1 trillion 150 billion yen, a 120 billion yen increase from the previous forecast. Despite headwinds such as inflationary cost increases, we recognize that profitability is steadily improving. Regarding shareholder return, we have raised our dividend forecast by 25 yen to 180 yen per share from the November forecast, and we will implement an additional share buyback of up to 100 billion yen. Next, on page 4, which is numbered at the bottom right, I'll provide a supplementary explanation of progress toward the profit targets in the midterm corporate strategy 2024. please refer to the dark blue portion of the bar graph on the bottom half of the slide. Under Mid-Term Corporate Strategy 2024, for this fiscal year's target of profit excluding price factors, we have revised up the target to 730 billion yen, an increase of 80 billion yen from 650 billion yen, which was the outlook at the beginning of the year. We expect profit growth in automotive and mobility, industrial materials, and other segments, and we have reversed our risk buffer of 40 billion by 30 billion, taking into account the reduced uncertainty in the remaining period of the fiscal year. Toward achieving our goal of 800 billion yen in fiscal year 2024, the final year of the medium-term management plan, we will continue to maintain and expand our earning space and will also accelerate investment in EX, DX-related and growth areas. Please refer to page 5 on the bottom right. Now, I would like to explain our progress as of fiscal 22 Q3 toward the cash flow allocation plan set forth in the Midterm Corporate Strategy 2024. Cash inflow for the period was 1.5 trillion yen, consisting of 1 trillion yen in cash flow from underlying operating cash flows and 0.5 trillion yen in cash flow from divestments. On the other hand, cash outflows included investments of 0.6 trillion, resulting in an adjusted free cash flow of 0.9 trillion yen. Shareholder return that has been announced up until today, a free cash flow of 0.9 trillion yen, will be appropriately allocated to investments in growth to enhance corporate value and additional shareholder returns while maintaining financial discipline.

Page 6, please. We plan to invest approximately for the medium term under midterm corporate strategy 2024. We plan to invest approximately 3 trillion yen over the next three-year period, of which approximately 0.6 trillion yen has been already executed. Major investments include in the area of maintenance and expansion of earning space, approximately 0.4 trillion yen invested in Australian meteorological coal and lawson-related businesses, and in the EX-related area, approximately 0.2 trillion yen invested in the Kejabeco copper mine and in the Eneco-related power generation business. Page 7, please. I will explain progress on the growth strategy defined as part of the Midterm Corporate Strategy 2024. In the past nine months, in addition to the maintenance and expansion of the ironing space, we had progress in the areas of EX-related, DX-related, and the regional community revitalization. A major progress was an acquisition of a new offshore wind power generation business right in northwestern Netherlands through ENECO during Q3. Lastly, I will explain about shareholder returns on page 8. In line with the targeted total payout ratio of 30 to 40%, defined under the Midterm Corporate Strategy 2024, we set the total return to shareholders at approximately 430 billion yen, taking into account financial soundness and market expectations for shareholder returns. we are increasing annual dividend to 180 yen per share, reflecting the steady growth of earnings. In addition, we have also decided to buy back shares worth up to 100 billion yen, which explains the difference between the dividend and the 70 billion yen share buyback announced in November. Progress on quantitative targets is summarized on next page, page 9. Please refer to it later. This concludes my brief explanation. Next. The business conditions are still unclear because of the slowdown in the world economy. We would like to accelerate our initiatives and increase the efficiency of the asset. and increase the corporate value over the mid to long term. This concludes my brief explanation. Next, Mr. Shimazu, General Manager of the Corporate Accounting, will go through details.

Hello, this is Shimazu, GM of the Corporate Accounting Department. I'd like to make a few supplementary comments on the detailed result for the first nine months of fiscal 22. First, I'll explain Q3 results by segment. Please refer to page 11, shown at the bottom right of the document. In Q3 of this fiscal year, 7 out of 10 segments reported year-on-year increases in operating income. or net income. I will now explain the segments with the largest increase in profit. First, natural gas. The first item from the top on the left side of the slide showed an increase of 30.5 billion yen from the same period of the previous year, mainly due to a decrease in dividend income in the LNG-related business and an increase in equity earnings of LNG-related businesses, despite the impact of losses on transactions in the marketing business. Mineral resources. net income increased 137.1 billion yen year-on-year, mainly due to higher market prices in the Australian coking coal business. Now, moving on to the right half of the document, automotive and mobility recorded an increase of 33 billion yen from the same period of the previous year, mainly due to increased equity in earnings of the ASEAN Automobile Business and Mitsubishi Motors Corporation. Finally, urban development, which recorded gains on the sale of a real estate management company in the first quarter, reported an increase of 86 billion yen from the same period of the previous year. Next, I'd like to explain the outlook by segment. Please refer to page 12 on the lower right.

Please move on to page 12. We have revised our full-year forecast upward by 120 trillion yen from 1.03 trillion yen announced in November to 1.15 trillion yen. By segment, out of 10 segments, 8 segments had upward revisions. Let me now explain about 3 with larger revisions. First, on the left-hand side of the material, the first item is natural gas. That revised up 38 billion yen to 170 billion yen due to increased earnings and dividend income from the LNG-related business. Next is integrated materials. Due to increased earnings from the North American plastic building materials, as well as in the steel business, the business revised up 10 billion yen to 62 billion yen. Next is mineral resources. Due to higher earnings from the Australian metallurgical coal business, the business revised up by ¥43 billion to ¥442 billion. Finally, please see page 13. This is the reference material on market assumptions. From this time on, in addition to actual prices of metallurgical coal, we are listing actual and forecast prices of iron ore and impact vis-à-vis the full-year earnings forecast. Please refer to the details later. This concludes the presentation from the company side. With this, we would like to conclude the company's presentation. We will now move on to the Q&A session. As usual, we would like to receive one question at a time and a maximum of two questions per person. If you have a question, please click the raise hand button on the Zoom screen. If you wish to cancel your question, please click the lower hand button. When your name is called by the moderator and your Zoom status is changed to a panelist, please switch on the camera if you don't mind. Unmute yourself and ask your question. So at this point in time, you're ready to speak. And please identify yourself by the name and affiliation. Please refrain from asking questions on specific items of the financial statements. Our IR team would like to answer those questions offline. This meeting is until 6.15 p.m. Japan time. If you have any questions, please raise your hand.

First person, SMBC Niko Morimoto-san, over to you. Can you, if you don't mind, please turn your camera on and please go ahead with your question. This is Morimoto from SMBC Niko. Yes, we can see you. Thank you. Thank you for your explanation today. And also... Regarding disclosure and your efforts to enhance and improve it, thank you very much. I'd like to extend my gratitude. So because you're taking one question at a time, here's my first question. So regarding dividends, you increased it to 180 a share, but can you talk about the reasons why and the backdrop leading to this? For example, excluding market factors, You were able to see an 80 billion yen increase when you referred to the materials for profits, but what about its sustainability? Are you confident about its sustainability and therefore you set it at 180? So that's my first question. Why is it 180? Yes, I would like to take that question then. Thank you very much for your question. In the middle of the fiscal year, we raised our dividends by 5 yen to 155. And at that point in time, regarding further earnings growth, we wanted to make sure where it was headed. And basically, we are following the concept of 30 to 40 percent of the payout ratio raised in the midterm corporate strategy. And during this midterm plan period, we wanted to continue on with our progressive dividend policy. So that is the reason why. So to answer your question, Morimoto-san, as you rightly pointed out, in a sustainable way, we thought that our earnings can grow by a certain degree. So profit independent of market factors, rather than looking at that, it's more about resource prices and FX, its profit after making some adjustments, which we look at one piece of reference. Of course, it's not just about resource prices. There are other types of market factors that we are susceptible to. But the market volatility is the greatest impact we receive. So we made some adjustments, and we look at how much of a magnitude it is. Of course, there are one-off factors, market factors that we are impacted by. But the degree of the dividend increase is one where we have confidence in to continue on with our progressive dividend policy so it was a comprehensive decision made in making uh decisions on a dividend hike so we believe this level is one where we can continue on with our progressive dividend policy so that's what we looked at For total return, the range is 30% to 40% that we've committed to. And like we said at the interim period, what we commit to is something we would need to protect. Based off that, upon deciding on the total shareholder return, the rest has been allocated to share buybacks. I hope that answers your question. Yes, it does. Thank you. Here's my second question. For this fiscal year and the way you look at your performance in Q4, when you do the math up until Q3, after the upward revision and the progress made by segment, It seems that if you just do the math, it's going to be a sudden drop off, or in other areas and segments, you have already achieved your full year plan. There's many of them. You were saying you had reversed the buffer. You reversed 30, which was 40, and you still have 10 left. So when you think about that, In what way are we going to see the fourth quarter unfold? What are your assumptions and what is the probability? And if you were to exceed and beat your expectations, is the total return ratio of 38% going to be the base off which we should apply in trying to determine your policies? You were saying the buyback is going to be until April 30th. So it really makes us feel that there's going to be some more coming. But what are your thoughts? Well, for the fourth quarter... towards 1 trillion 150 billion for the year, we have made 83% progress as of Q3. So three quarters is 75%, but we've already exceeded that level progress rate wise. And the three month outlook is going to be about 195 billion. And you were saying that that may be conservative. As a risk buffer, we still have about 10 billion in place. But of course, the remaining period is less than three months now. So uncertainty, you never know what's going to happen until the end of the year. So that buffer will be able to handle what may happen. And also, in Q4, We would like to ensure that we will take care of any uncertainties if there is a need. So when you think about all these aspects, it's not as if we are super conservative in guiding Q4, and we're also not expecting profits to drop off substantially either. In the revised outlook of $1 trillion, $150 billion, this is something that we would like to achieve, but of course, You never know what's going to happen in the balance of the year. But we would like to make efforts so that we can achieve the guidance. And of course, depending on the circumstances, we might be able to beat our expectations. For return, are you committing to 38% was pretty much what you were trying to get at in your question. But our basic way of thinking is like explained, progressive dividend policy, total return ratio. and we look at the range of 30 to 40 percent that we raise in the midterm corporate strategy and it should be in that range so we're not committing to that single number of 38 percent and of course going forward for dividend hikes returns and what we're going to do in q4 at this point in time we are not going to rule out any options but we will like to think about the future. Thank you. Thank you very much. I understood you very well.

Well, the next question is from Nomura Asset Management. Ohata-san, please. If you don't mind, please turn on your camera and ask a question. Thank you very much. From Nomura Asset, my name is Ohata. I'm sorry. My video is not functioning, so I can't turn it on. That's okay. The first question, this may be minor detail. But ENECO, until Q2, there was a huge loss. But from Q3, it turned out to positive profit. This year, this fiscal year, it seems that ENECO as a company is going through tremendous volatility. For Q2, 3 million, 16.2. And in Q3, it's a positive 14.9 trillion. 9 billion. So why is the volatility? And do you accept such kind of volatility? Or are you thinking about anything to do in order to stabilize the profitability towards the next year? Thank you very much for your question. Regarding ENACO, it's true. In Q2 and Q3, there was a significant volatility in especially for this fiscal year, the energy prices during the fiscal year compared with normal years, the volatility is much higher. That is one reason. And in the case of ENECO, Renewable energy power generation is a large part of their business. So the wind conditions also was another factor. That's why we had a negative profit number for Q2. On the other hand, for Q3, and also going forward, coming Q4, well, normally, relatively Q1 and Q2 are low, and Q3, Q4 profit will be higher. That is the normal seasonality pattern. And that itself has not changed so significantly. But as you pointed out, the volatility may be high. Last year, There was a Russian-Ukraine issue and also energy prices in Europe compared with normal years. The volatility is higher. So this is one factor that is impacting the performances of energy companies in Europe, not only Enerco. And Enerco is also affected by those situations. In total, Enerco's profitability earnings power has been improving steadily. That is the perception that we have. Therefore, As the core company, core business in EX, we would like to position Eneco continuously. Thank you. My second question is about food industry and consumer industry. For these businesses, there are loads of downstream businesses. And what is the inflation impact? The electricity prices are going up, especially from the next year. So from next year, how do you anticipate the increase in cost? Or is it from next year? Or when you make the plans, is it something that you are paying attention to when you are budgeting for these businesses? Regarding food and consumer businesses, for both of them, as you pointed out, the cost increase impact from inflation is relatively low. negative compared with other areas. That is true. In fact, for the third quarter, up until the third quarter this fiscal year, if you look at the performance in the food and industry group, until Q3, we had 68.5 billion yen In other segments, up to Q3, they have seen increases in profits, but to a certain extent, there was a decline year over year, exactly 2.8 billion, except for CERMAC and others, which is still performing well or performing more strongly than other years. The grain cost price is affecting the feed business, especially no-sanko in Japan and IPC. No-sanko is a livestock business in Japan. Well, the question, I think, is related to whether the situation continues until next year and whether the electricity prices are going up, I think. When it comes to electricity prices... Well, on the other hand, retail power price going up is happening from now. However, for business-to-business enterprise, electricity prices has gone up to a certain extent already. Of course, electricity prices and other costs which are staying at the high level should continue. going forward. But whether that is affecting our business significantly or not, I don't think so. We don't think that way. So in these areas, How we can pass on the cost increase on the pricing is one question. Or another question is how much we can drive down the cost. So on a day-to-day basis, these are the things that we are working on in an operation, so that we can absorb some of the increasing costs. So we believe that we can absorb those cost increases to a certain extent towards next year. Thank you very much. Thank you very much. I understood. That's all the questions from myself. Thank you very much, Ogata-san.

The next person is from Daiwa Securities. Nagano-san, please turn your camera on if you don't mind before you ask your question. Thank you. This is Nagano from Daiwa. Thank you for taking my question. Yes, we can see you very well. Thank you. I also have two questions. Both of them are regarding segments. The first one, in Queensland and the impact of the cold, because of the heavy rains, seems there is some impact on volume as well as at the ports, as well as at the mines. But in your operations for ports as well as the mines, what is the impact like? And towards next fiscal year, what is the image of production volume? That's my first question. I'd like to take that question. Exactly as you rightly pointed out, the heavy rain impact has been impacting MDP as well because of the torrential rains in Queensland. Of course, it really is specific to certain areas as well as certain ports, but as we speak, cooking coal prices are still going up. So Because supply overall is currently limited, prices are going up. So for volume, it has been impacted by a certain degree. But on the other hand, fortunately, regarding ports facilities, There are some ports that are affected greatly, but relative to that, the ports that we are using, although they are being impacted, the impact is not that great, which was fortunate. So the outlook for next fiscal year at this point in time is it's a matter of we're not really able to foresee what's going to impact us next year. But regarding productivity gains and improvements, this is something that is being conducted on a daily basis. But when it comes to the weather, this is something we can't really control. So if something were to happen like that, Of course, we would like to ensure that we could absorb the impact by a certain degree, and that's what we are working on every day. And from the field or at the mines, at the job sites, we are hearing that they are working on it. So even if there is a weather factor, hopefully the impact can be minimized through our efforts. Thank you. Thank you. Regarding production volume, of course, for weather, this is something we can't control. I understand it's difficult to foresee. But the reason why production volume was weak this year is this pretty much attributed fully to weather. Yes, yes, basically, yes. There's no other special factor. For example, strikes. There were some concerns at one point, but more than we thought, the impact was limited and we were able to go beyond it. So the production volume decline is pretty much due to weather conditions. Okay, got it. And also for the ports, for Darling Pool Bay, it seems that it's not that impacted, but for Hay Point that BMA utilizes, it's close by, but the impact was small. Is that the case? Relative, relatively speaking, but it has been impacted by a certain degree. But we have been hearing that one of the port facilities have been impacted heavily, and BMP is close by to the ports that were mentioned. But I'd like to keep my comments there. Okay, so moving on to the second question for NatGas. This time around, you have revised up the full year forecast substantially, so I think the trend is favorable. So regarding the factors Y, as well as its sustainability, when you think about next fiscal year, how much earnings power do you think that the NatGas Group has? For natural gas, the reason why we did the upward revision was natural gas. But in reality, whether it be the third quarter, spot prices were trending high. Basically, we conclude long-term contracts for the majority of contracts But production volume, we were able to make more, which we were able to sell more of. So compared to our assumptions, we have been able to generate better profits. And in Q2, in our trading business, there were some missed opportunities. But this also already has been taken care of. And we have been able to respond to what has happened. So our fundamental earnings power has been improving for this business. For next fiscal year, apart from our outlook, I would like to say that for natural gas, its earnings power is steadily improving. That is the feel we have. But including long-term contracts, when it comes to price volatility, this is something that happens, which is hard to control. And what's most important is end production of the project to ensure that production is steady. So that is part of the business that we would like to address, which will allow us to capture the upside when prices go up. So I think that's where we are. That's it for me. Thank you. So you're headed towards that position, meaning for Q1 and Q2 for this fiscal year, for transactions with Europe and spot volume, there were some areas where production was weak. Was that the case? Because you were saying you were making more and you're seeing an improvement in production volume. And for the transaction in Europe and the issues you faced, it's pretty resolved, which means that is the starting point going to be higher for this business next fiscal year? For trading losses, this already has been taken care of, and we're not expecting something similar to happen next year, next fiscal year. So yes, that wasn't the upside we were able to capture. For production volume, Project by project, we have been optimizing. And for Q3, additional production has been realized. So for next fiscal year onwards, We believe we are at a point where we could meet expectations, and personally I have good expectations towards this business as well. Thank you.

Well understood. Thank you, Mr. Nagano. Some supplementary comment. In Europe, rainfall has been increasing overall. So irrespective of specific industry, there are some impact in different industries. So next question is from Narita-san from Nomura Securities. If you don't mind, please turn on your camera. Thank you. This is Narita from Nomura Securities. Your image is not right. Sorry, I'm trying. It's okay now. I'm sorry about that. There are two points. The first one is about metal resources. the breakdown in Q2, Q3. MDP, they had higher profit despite the lower pricing. And Kejabeco, the losses are increasing. So there was a significant change in Q3 from Q2. So what were the factors behind it? Could you explain about the factors? Yes, Narita-san, you talked about the metal resources. I talked about MDP and Kejabeco. Okay, for both of them. So for MDP, Mr. Shimazu, manager of corporate accounting, will answer. Yes, this is Shimazu from corporate accounting. For MDP, from Q2 to Q3, I'd like to explain about the changes. The actual for Q2 were $42 billion, and in Q3, we had $59.8 billion. The changes from Q2 to Q3 was about 18 billion, a positive movement by factor. The pricing and the loyalty was minus 7 billion, and the volume and the cost was positive 17 billion yen. Foreign exchange rates, positive 3 billion yen, and others, positive 5 billion yen. So as you pointed out, from Q2 to Q3, if you only look at the index, Q2 was 250 and the Q3, it was $278. So if you only look at the dollars and then index, it looks like it's going up. But the actual selling price is not necessarily linked to index. Therefore, in terms of the pricing, pricing royalty from Q2 to Q3 was negative 7 billion yen. Regarding Keija Vehicle, I would like to answer your question. Already in production from July last year, we had already commenced the production. And in September, from the authorities, the license was issued and we started the commercial operation. And we started shipping in October last year. It's not the full capacity production yet. There is a time lag of three months continuously. So that's part of the reason. So up to Q3, we incurred cost, but not the sales yet. So for Q4... There are certain profits that we are already expecting at a reasonable level. So that's why in the revised plan, we have fully taken that into consideration. In terms of the full capacity production, it will happen in the second half of FY 2023. So this is something that can benefit the next year's performance. So we have a very positive expectation from that, and we can expect a considerable contribution from that. Thank you very much. My second question. Well, this time you have announced the share buyback and dividend increase in line with the market expectation. I saw that phrase in the statement. And in your outlook for the performance, the profits, independent of the market factors, you... said it was 730 billion yen. How can I interpret that? You said that the next year there are still uncertainties, but when it comes to FX and the resource prices, all of these upside factors will not be gone next year. Therefore, 730 billion, is this the normalized level for the company already? So if the market factors, some of them are still remaining, maybe you can achieve 800 billion yen or so. Or is 730 billion just the bottom-up numbers of different factors? So how did each segment decide their forecast? It's difficult to see from outside. So if you could give a supplementary comment on 730 billion yen, that would be great. Yes, the bottom-up number of 730 – it's not a complete bottom-up number. So when we talk about the company's capability or normalized level, it is misleading. So when we look at the resource prices and the FX rates, so it's the profit after the adjustments of the resource prices and the FX rates. So during the mid-term period, mid-term plan that we have this time, So, what is the normalized level? That's not always the normalized level. There are some price or market factors as well as one-time factors included. Some of them are included. But the biggest factor of volatility is the resource price fluctuation. So at a certain resource price levels and FX levels, we have made some assumptions as benchmark. And then that is reflected. And towards the end of the final year of the MTP, we are trying to reach that level so that we can make an overall improvement in profitability or earnings power. By doing so, the current progressive dividend scheme, while continuing with that, we would like to increase the level of increase year by year. under the progressive scheme. So you are asking about the reasons for the increase? It's not that we are intentionally increasing that. So one of the reasons for the increase is that, well, although there was a risk buffer that we secured in the beginning, because we only have several months to go for this fiscal year, so we put back some of it. And also, the resource prices are increasing. However, the volume... Well, they are working towards the other way around between price and volume, but we took that into account, and there were some negative factors included. But other than those, for the auto and also industrial materials, for those areas, compared with the original expectations, as we try to make upward revision of 120 billion yen, And as we looked into the content and the breakdown, we realized that the profitability or earnings power of these sectors are increasing. So based on that, with certain assumptions, we announced the changes. Well, these are not the absolute level, but it can be one aspect. reference level when we think about whether the earnings power is getting higher or not. This is one of the indicators that we can look at when we think about that. So that's how we have conducted the analysis internally this time. Thank you. Well, I'm curious. You increased the dividend this time, but it's not that you are increasing the dividend unless there is no increasing profit? How important is it? Well, it depends on the reasons, breakdown of the profit. In the beginning, as Mr. Morimoto asked and as we answered earlier, Well, this time we decided to increase the dividend because the basic progressive dividend scheme, as we try to maintain that scheme, and then while maintaining that, how much dividend increase we can make, that's the question that is always in our mind. And as we thought about it, we decided to raise the dividend at a certain level. And because we were confident that with that level, we can maintain the progressive dividend scheme. So as we thought about it, the profit independent of the market factors, that is something we always look at. Thank you.

So next question is from UPS Securities. If you don't mind, please turn on the camera and go ahead with your question. This is Goro from UBS Securities. Thank you for taking my question. Thank you. Well, related to what's been discussed is my first question. So profits independent of market factors by 24, you're aiming for $800 billion. And the lead up to that, earnings contribution was large from some businesses this quarter. When you look at the quarterly trends, automotive mobility is a good example. But it seems that from the first half going into the second half, we were seeing some decelerating trends. Maybe due to economic deterioration, is that your view? Or is it just simply seasonal factors for each segment? So for fiscal 23, as we head towards the next fiscal year, in order to increase profit independent of market factors, which segments are going to contribute? Can you comment on that together with the momentum you've been observing for the segments for this quarter? Thank you very much for your question, Goro-san. As you rightly said, there are some one-off profits as well, so that needs to be taken into account. But for normalized underlying profit for some of the segments, When you think about the economy or this fiscal year, from the beginning of the year, rate hikes started in Europe and the U.S., and inflationary trends have taken off, leading to people talking about the deceleration in the economy. It hasn't materialized as much. That's how we feel. The slowdown in the economy has been a factor that may be materializing in some areas, but going forward, we need to continue to closely watch the trends to see how things unfold. There are some segments that are more susceptible on a relative basis to the economy. However, in the medium-term value plan, we would like to engage in value-added cyclical growth, such as replacing our assets. So for those projects that don't exceed our hurdle rate or have been slowing down, we would like to consider divestments. And also, we would like to concurrently ensure that we recognize capital gains to harvest in our past investments. So if the economic sentiment were to worsen, and if there were some businesses where earnings power is declining, we would like to ensure that we are able to offset those trends with other parts of the business. But of course, timing is important as well. So on a fiscal year basis, I'm not sure if we can continue to see this grow in a linear way. But going back to Narita-san's question, but profit excluding independent of market factors may fluctuate as well. But over the longer term, we would like to ensure that it continues to grow. And during the midterm period, we would like to manage to reach 800 billion. In order to achieve that, we will be implementing various initiatives. Thank you. My second question is a question as well as a request at the same time. Regarding the breakdown of investments for EX, you have included $60 billion for ENECO, but you were talking about the volatility of ENECO earlier, but in your EX strategy, For core companies that you invest into, I think there's various elements of investments. For example, offshore wind power generation in the Netherlands that was covered in the press, as well as the president and media has been talking about green hydrogen opportunities. And I think that is also included in investment plans as well. So instead of saying profitability may be fluctuating every year, How are you going to go up the steps? It's kind of hard to get a better picture. So can you talk about give more flavor on the investments that you are going to make or making and towards 2030 in your long term vision as growth drivers? How is your allocation like and which part or how much of investments are going to be in the nature of sowing the seeds for the future? So it was a question as well as a request at the same time. Allocation to increase your profit as well as sowing the seeds for the future. So the answer is regarding EX, over the course of the midterm plan, we are planning to invest 1.2 trillion yen. And as we have in the materials, it's not just for Eneco, Kejaveco. And apart from what's noted here, in North America, power generation business opportunities are in place, and also LNG-related investments are included in this budget as well. Apart from that, regarding future investment plans, including our commitments, we have accounted for that in this plan. So for – in order to respond to your request about raising visibility – I think that's what you're trying to get at – we will consider your request.

Thank you. Thank you very much. For EX related, as the CFO just explained, for copper, HKW, and offshore power wind, wind power, we are working on those. So when the time comes, we'd like to give you more details going forward. We still have some time left. So if you have any questions, please raise your hand. Thank you very much. I see a hand from Tokai Tokyo Research Center, Kuribara-san. The floor is yours. Please turn on your video if you don't mind, please. This is speaking. Can you hear me? Yes, we can hear you. Thank you very much for your question. Yes, you may have already mentioned this, but for the fourth quarter, the end of the year, last year there was 80 billion yen one-time loss. You had an accounting process. And this year, I'm sure that you will be looking at the asset. But in terms of the amount, I don't think that there will be another one-time loss to be recorded this fiscal year. Well, at the moment, we wouldn't have three-digit oku yen level or two-digit billion level asset impairment or such significant impairment this fiscal year. We are not planning that. Last year, Well, for any assets with any concerns, we thought that we should take care of them as early as possible. That was the stance last year. And for this fiscal year, for the assets with any concern, we have already taken care of those pretty much. But if there is any left, we would like to do so. But even if we do so, the amount would not be as large as last year. Of course, if there is anything that comes up, we wouldn't hesitate to record such an accounting item. Okay. Going to the second question about the auto and the mobility, the business is going well, as I understand, and there is a shortage of semiconductors, and that led to the shortage in products. That means your profits are stable because of that. Is this trend still going on, and how do you see the trend going in the future? for the auto and mobility business. Yes, the business is doing very well for this fiscal year. And in Thailand, in Indonesia, the business... So far, it has been strong. We have hit a record high in history, as you suggested. In terms of the volume, sales volume, there isn't such a tremendous growth. However, we are seeing very positive growth in the profitability of each car sold. It is because of the demand-supply situation, partly, and also it is because of the cost reduction efforts that we are making during the COVID-19 pandemic, and that is turning out to be very effective. So we believe that this initiative is going to have a positive effect continuously. On the other hand, in terms of the demand-supply situation, as the gap is being addressed in terms of the profitability. For this fiscal year, compared with the past, we had a high-level profitability. So in the future, there may be some negative repercussion, but we would like to cover up for that by increasing the efficiency in our sales. Understood. Thank you. Thank you very much, Kurihara-san. Thank you very much. It's time, so we would like to wrap up the Q&A. Just one point I want to add. Morimoto-san, at the very beginning, asked about the duration of the share buyback. The 70 billion yen announced in November, for that, in the middle of this month, 15th, we are going to finish the program earlier than planned. And other than that, the new share buyback plan of 100 billion yen at the maximum will be started. And by the end of April, we would like to finish that program. Thank you. Thank you very much for taking time out of your busy schedules today to attend our financial results briefing for Q3 FY 2022. This concludes the briefing. Thank you very much. Thank you for your participation