Sojitz Corp Unsp/Adr

Good afternoon, this is Masayoshi Fujimoto speaking. Thank you very much for taking time out of your busy schedule to join us today. Let me start off with an overview of the financial results up to Q2 and progress of our Medium-Term Management Plan 2023 before our CFO Makoto Shibuya explains financial results in further detail. Please turn to page 5. Consolidated profit for the first half came to 50% against a full-year forecast of 95 billion yen. This is very much in line thanks to a firm coal market and solid retail business. In an increasingly complex economic environment, the degree of progress varies by region and business. Nevertheless, we expect to achieve our initial full-year forecast of 95 billion yen even with changes in market conditions and exchange rates going forward. The revisions in segment forecast will be explained later by our CFO. Core operating cash flow was a net inflow of 57.7 billion yen. We have thus been steadily generating cash. In spring 2021, we made PBR above one as one of the KPIs of the medium-term management plan. With only five months remaining in the current three-year period, we intend to keep moving forward past the PBR equals one mark into the next stage of growth. The entire Thorges Group will work together to take on the challenge of achieving further growth and accumulate tangible results so that we can conclude the medium-term period on a positive note.

We increased investment plan expected at the beginning of MTP 2023 from 300 billion yen to about 500 billion yen. Major investments conducted in the first half and their amounts are shown on this page. In the current MTP, basics of the growth strategy is to focus our management resources to where we can pursue competitive edge and growth market. We believe it is important to take a big picture perspective to broaden and build upon our operations and thereby achieve further growth. we would enhance our functions and networks, which will lead to the next developments. We are sowing seeds and generating synergies, and we believe we are making steady progress. In Vietnam, with its biggest dairy producer and our partner, Vina Milk Group, we are promoting the business of raising cattle, processing and selling beef. By capturing rising beef consumption in Vietnam, we aim to build the largest comprehensive beef business in the country. By utilizing our retail business knowledge fostered in Vietnam, we invested in Rippler, which is a wholesale and distribution business of consumer goods using its digital strength in India. we are newly entering into the growing Indian distribution industry. In Japan, in order to capture the global demand expansion of the processed marine products, following the Marine Foods Corporation, we acquired all shares of Tri Inc., which procures, processes, and sells frozen tuna. In addition to the tuna aquaculture and processing abroad, we have now broadened our capability by adding processing in Japan. By combining their customer base and high-quality and price-competitive processed marine products and our global network, we aim to expand the size of the revenue. In infrastructure and healthcare, We entered in the US energy conservation services business in 2021. We believe that the demand for energy conservation will rise and grow, mainly in developed nations. That is why we entered into the Australian energy conservation services business and also made additional investments in US business. We will constantly implement growth strategy to generate value by strengthening our existing network's functions and by widening the scope. This shows the progress of returns from the new investments from MTP 2017 and onwards. Although there are differences in terms of expected ROI and the progress as of now, we have proactively disposed some unprofitable assets to realize further growth in the next MTP, even under changing external environment, to enhance cost competitiveness and to build lean assets and resilient portfolio. On the front line, we are working on improvement measures persistently and will make efforts toward monetization. In MTP 2023, pandemic delayed monetization of some projects. However, some new projects in focused areas are bringing revenue, and we see some positive developments in retail business in Japan. Rather than investing in the brand new business areas, we will invest to enhance and expand the business domains which are already showing some results, so that the cluster of revenues can be fostered.

As a concrete example of our chunk of revenue, we'd like to share our retail initiatives in Vietnam with you. Even before we became the first Western company to open a representative office in 1986, we had been engaged in various businesses, including natural resources and infrastructure in Vietnam as the country was economically developing. Since the 2000s, we have been actively investing in the retail sector in anticipation of future consumption growth. And by investing in Huntui, a food and wholesale company with which we had a relationship through traditional trade transactions, we began participating in the retail business. Subsequently, in addition to the wholesale business, We entered the retail field through convenience stores with Mini Stop Company Limited. We also participated in the logistics business by owning delivery and warehousing functions for retail stores and participated in the daily delivery and side dish manufacturing business such as rice bowls and sandwiches sold at retail stores in response to the market growth. we have been building a value chain of food products. This year, we launched a beef production and sales business together with Vinamilk, the largest dairy manufacturer in Vietnam. We'll continue to expand profit-earning opportunities by further reinforcing the value chain we have built through the measures and by expanding the scope of our business. We will continue to pursue a stable and sustainable dividend policy, targeting a consolidated dividend payout ratio of approximately 30% during the current medium-term management plan period, with a minimum annual dividend of 130 yen per share for the fiscal year ending March 31, 2024. The acquisition and cancellation of Treasury stock in fiscal year 2023 was completed at the end of September 2023, although the outline of the next medium-term business plan, which will begin in the next fiscal year, is still being formulated will strive to improve Sojitsu's competitiveness and shareholder value with a view to further growth based on the sustainable earning space that we have steadily built up to date. All of the KPIs set forth at the beginning of the formulation of the medium-term management plan 2023 have been achieved ahead of schedule with the exception of PB ratio of over one time. Currently, we're discussing the next stage of growth with a view to reaching the 100 billion yen level of net income in the next medium-term management plan as a starting point. We'll continue to take steps toward the creation of value that is uniquely Sojitsu by implementing measures for steady growth toward the leap ahead. We'll also aim to achieve the remaining P-B ratio of more than one time and further increase corporate value and continue to earnestly engage in dialogue with everyone, including your stock market.