Mitsubishi Corp Ord

I'm Nochi, CFO of Omitsu Bishi Corporation. Thank you very much for joining our FY2025 Q1 earnings presentation, despite your very busy schedule. First, I will provide an overview of FY2025 Q1 earnings. Please find page number 3 at the bottom right corner of the earnings presentation material. Underlying operating cash flow for FY25Q1 was 250.4 billion yen, and consolidated net income was 203.1 billion yen. Underlying operating cash flow progressed 28% against the 4-year guidance. While there are variations across segments due to the timing of dividend income, progress was largely in line with 4-year guidance. Consolidated net income showed 29% progress against the four-year guidance. Slightly higher progress was driven by capital recycling gains and one-time items across multiple business units. However, similar to the underlying operating cash flow, progress was largely in line with four-year guidance of 700 billion yen. Next, I would like to explain the key progress made in Enhance, Reshape and Create, which is a value creation mechanism we outlined in our Corporate Strategy 2027. Thus, regarding our efforts to enhance, the LNG Canada project successfully shipped the first cargo as scheduled. Additionally, a wholly owned subsidiary, Thermac, has reached an agreement to acquire the salmon farming business from Greek Seafood. By expanding production in our core Norwegian operations and our Canadian operations, we aim to achieve further growth for SEMAC. Regarding our reshape initiative, a tender offer for the full acquisition of Mitsubishi Shokuhin was completed in July. Regarding our CREATE initiative, we announced today our plan to make Thai Union Group, a major global seafood processing company primarily using tuna and bonito as raw materials, our equity method affiliate. By leveraging the company's business foundation and pursuing synergies with their own operations, We aim to create a new pillar of revenue in the seafood business following our salmon farming business. Together with Enos, we have participated in the renewable fuel manufacturing and sales business by Path Pacific in the state of Hawaii, the United States. By combining the expertise and capabilities of our environment energy group, and the Food Industry Group, we aim to enhance business value and contribute to the realization of decarbonized society. Details of each project are outlined from page 8 for your reference. We will continue to advance initiatives that leverage our comprehensive capabilities to create value in line with the Corporate Strategy 2027, aiming at an average growth of underlying operating cash flow of 10% or more and an ROE of 12% or higher by FY2027. Please find the page 4 indicated on the bottom right of the page. For Q1 FY2035, both underlying operating cash flow and the consolidated net income were down year-on-year. However, as mentioned in the outset, Both underlying operating cash flow and consolidated net income are progressing largely in line with the four-year guidance for FY 2025. Additionally, the share buyback program announced on the 3rd of April with maximum limit of 1 trillion yen progressed smoothly, with a total purchase at the end of June amounting to 347.3 billion yen. Please turn to page 5. The page number is shown on the bottom right. I will now explain the progress against the cash flow allocation plan outlined in the Corporate Strategy 2027, as well as the current status of financial leverage. Cash inflows include underlying operating cash flow of 250.4 billion yen and 179.7 billion yen from divestitures. Cash outflows include 280.2 billion yen for the reinvestment in the Malaysia LNG duo project and investments in the US power business.

As for the shareholder returns, including the share buybacks up to 1 trillion yen announced on April 3rd, we expect a total of 1.5 trillion yen in FY 2025. As we said in the Capital Allocation Strategy of Corporate Strategy 2027, when the investments are executed steadily and if the additional capital is necessary, we will consider the use of leverage as we maintain the financial soundness. At the end of Q1, FY25, the financial soundness indicator net debt equity ratio was 0.38 times, So compared to the ceiling of 0.6 times, we have the debt financing buffer. Based on the active capital allocation strategy utilizing strong financial strength, we will steadily execute the initiatives of enhance, reshape, and create to promote value creation mechanisms. That concludes my part of presentation. I would hand over to Mr. Shimazu, General Manager of Corporate Accounting Department. This is Shimazu speaking. I'd like to make some additional explanation on the details of the Q1 financial results. Please turn to page 6. Let me first explain the major ear-on-ear differences of underlying operating cash flow by segment. In environmental energy, the tax expenses declined due to the reduced capital in European business. Dividend from Asia-Pacific LNG business decreased. Costs associated with the start-up of LNG Canada in North American business increased. Underlying operating cash flow was 35.9 billion yen. down 24.4 billion yen year-on-year. Next, the third from the top, mineral resources. Market prices decline in Australian steelmaking coal business. Dividend from iron ore and copper businesses decreased. Underlying operating cash flow was 37.6 billion yen, down 28.6 billion yen year-on-year. Urban development and infrastructure. In North American real estate development business, dividend declined while tax expenses increased. Also, dividend income from energy infrastructure business decreased. Underlying operating cash flow was 10.6 billion yen, down 12.8 billion yen year-on-year. Please turn to page 7. in explaining the major year-on-year differences of consolidated net income by segment. The top, the environmental energy due to the lower dividend income and absence of previous fiscal year revision of depreciation method in Asia Pacific energy gas, consolidated net income declined 19.9 billion yen year-on-year to 40.9 billion yen. Nexus Mineral Resources, with the absence of previous fiscal year sales gain of vast coal mines and lower market prices in Australia and still making coal business, consolidated net income decreased 140.7 billion yen a year to 25 billion yen. In urban development and infrastructure, with the absence of previous fiscal year provisions for the Toyota Corporation's U.S. Golden Path LNG project and gain on construction completions, In the energy infrastructure business and gain on sale of Japanese real estate developments, the business consolidated net income increased 42.9 billion yen a year to 35.8 billion yen. Supplementary information, including details by segment and assumptions, are shown on the pages 12 and onwards for your reference. Thank you.