Sumitomo Chem Co Ltd Ord

We will now begin the conference call for the presentation of the financial results for the fiscal year 2025 second quarter. Thank you very much for your participation. Today, Mr. Sasaki, Representative Director and Senior Managing Executive Officer, will give a briefing on the financial results for fiscal year 2025 second quarter. Later, he will be joined by Mr. Yamaguchi, Executive Officer and General Manager of Accounting Department to take questions. We will conclude the call at 4.50. Mr. Sasaki, over to you. Thank you, I'm Sasaki from Sumitomo Chemical. Thank you very much for attending our conference call today despite your busy schedule. I'd like to thank investors and analysts for your daily understanding and support to our management. Thank you very much for that. Now let me start with a presentation of financial results for fiscal year 2025 second quarter.

Please turn to page four.

This is a summary page. For operating income and net income attributable to owners or parents significantly improved compared to the same period of the previous year. Corporate income of essential green materials increased significantly year over year. There were also profits at Sumitomo Pharma with strong sales results leading to recording of a sales milestone of Orgovix and partial divestiture of the Asian business. Compared to the forecast announced in August, in addition to strong sales at Semitomo Pharma, there was improvement in foreign exchange gain or loss from Mayen weaker than anticipated, as well as a reduction in the deferred tax liability resulting in a reduction in the corporate income tax expenses, leading to increase in both core operating income and net profit. Please turn to page 5. Consolidated financial results of a second quarter. Sales revenue was ¥1,095.4 billion down ¥146 billion year-on-year. Core operating income was ¥108.7 billion up ¥79.2 billion year-on-year. Non-recurring items not included in corroboreity income was a loss in total of 5 billion yen. In the same period of the previous year, there was an impact of recognizing our interest in pejorative debt forgiveness gain of 86.5 billion yen as a non-recurring factor leading to a profit of 91.8 billion yen. So, compared to the same period of the previous year, this has worsened by 96.8 billion yen. As a result, operating income was a profit of 103.7 billion yen, down 17.6 billion yen year over year. Finance income was a loss of 15.8 billion yen. Improvement of 136 billion yen compared to previous year, when a loss on debt waiver, Petro Rabic, was recognized. Gain or loss of foreign currency transactions included finance income expenses was a loss of 6.4 billion yen, improvement of 28.4 billion yen year on year. Income tax expenses was a gain of 3 billion yen, increase of tax burden of 7.2 billion yen year over year. Net income or loss attributable to non-controlling interests was a loss of 51.2 billion yen, worsening by 65 billion yen year-on-year with the improvement of Sumitomo Farmer's income. As a result, net income attributable to owners of a parent for the second quarter was a profit of 39.7 billion yen, up 46.2 billion yen year-over-year. Exchange rate and NAFSA price which impact our performance, average rate during the term was 146.02 yen to a dollar, and after price was 64,900 yen per kiloliter. Yen appreciated, and fish stock price declined compared to the same period of the previous year. Next, page six. Total sales revenue was down 146 billion yen year on year. By segment, sales revenue decreased in all segments except Semitomo Pharma. As for year-on-year changes of sales revenue by factor, sales price decreased by 25 billion yen, volume variance decreased by 88.1 billion yen, and foreign exchange transaction variance of foreign subsidiaries sales revenue decreased by 32.9 billion yen. Next, page seven. Total core operating income increased by ¥79.2 billion year over year. Analyzing by factor, price was ¥6.5 billion, cost ¥6.5 billion, volume variance including changes in equity in earnings of affiliates was ¥66.2 billion over positive factors. Next is performance by segment. First, agro and life solutions. Core operating income was a profit of 11.2 billion yen, down 2.9 billion yen year over year. Price variance, profit margin improved for overseas crop protection products. Volume variance, in addition to decrease in shipments of overseas crop protection products, There was lower income from exports due to stronger yen and stronger yen's effect on the sales of subsidiaries outside Japan when converted into yen. Next is ICT and mobility solutions segment. Cooperating income was a profit of 33.1 billion yen, down 10.5 billion yen year over year. Price variance, selling prices of display-related materials declined. Volume Variance Though there was a gain on the sale of a large LCD polarizing film business, there was lower income from exports due to stronger yen, and stronger yen's effect on the sales of subsidiaries outside Japan when converted into yen and decrease in shipments of display-related materials. Advanced Medical Solutions Segment Core operating income was a loss of 1.4 billion yen down 1.7 billion yen year over year. Shipments decreased because of difference in the timing of shipments compared to the same quarter previous year for some pharmaceutical ingredients and intermediates. Essential in green material segment, core operating income was a loss of 18.6 billion yen, improvement of 16.1 billion yen year over year. Price Variance With a drop in NAFSA price which is the main feedstock, profit margins improved to insynthetic resins and alumina. Volume and other variances There was improvement in profitability in investments accounted for using the equity method at Petro-Rabic due to factors such as improved refining margins. For Sumitomo Pharma Segment Core Operating Income was a profit of 97.3 billion yen up 94.3 billion yen year over year. Price variance, selling prices declined in Japan with NHI drug price revisions. Cost variance, there was a decrease in selling expenses and general and administrative expenses due to progress in rationalization. Volume and other variances, in addition to expanded sales of Orgabix, a therapeutic agent for advanced prostate cancer, and Gem Tester treatment for overactive bladder. Gain posted on a partial divestiture of Asian business and Orvovic sales milestone are included. This is all for the results per segment. Next is consolidated statement of financial position.