Good afternoon. This is Kousuke Uemura, President and CEO. Thank you for taking time out of your busy schedule to join us today. I will present results of the first half of the fiscal year ending March 2026 and progress made against the Medium Term Management Plan 2026, or MTP 2026. I will give the floor to our CFO, Makoto Shibuya, for further details on earnings. Consolidated profit for the first half was JPY 45.3 billion, 39% against the full-year forecast of JPY 115 billion. This is in line with our expectations of around 40% in the first half. The full-year forecast of JPY 115 billion remains unchanged from the beginning of the fiscal year. Better-than-expected progress was recorded for aerospace transportation and infrastructure, and energy solutions and healthcare, while recovery is taking time for some businesses in metals, mineral resources, and recycling, and in automotive.
In light of this, we have revised some of the segment forecasts. Our CFO will later provide more detail by segment. Core operating cash flow is generally in line with plan. Given the current situation, however, particularly for metals, mineral resources, and recycling, we have lowered our full-year forecast by JPY 5 billion to JPY 140 billion. Cash flow from non-resource businesses is growing steadily, and we continue to expect core operating cash flow of around JPY 450 billion over the three years of the MTP. U.S. tariffs are affecting some businesses, but the impact is expected to be within the JPY 5 billion buffer set at the beginning of the year. Under MTP 2026, we strive to create the Sojitz growth story by forming multiple distinctly Sojitz revenue-generating clusters of businesses, or katamari, towards the next stage.
By sharing this process with our stakeholders, we hope to build growth expectations and improve our price-earnings ratio. As we presented at the beginning of the year, we are focusing on expanding new investments and enhancing existing businesses to accelerate the realization of the Sojitz growth story. We are now at the halfway point of MTP 2026. To date, we have executed a cumulative total of about JPY 200 billion in new investments. We are steadily building competitive businesses by focusing on areas where we can leverage our strengths. An increasing number of investment projects are in double-digit billions of yen each. Major investments to date include Capella, a major infrastructure developer in Australia, FreeState Electric, an energy-saving services company in the U.S. with strength in electrical equipment work, Nippon A&L, which produces materials used in lithium-ion batteries.
All these businesses have potential to become foundations for future growth and are expected to grow significantly. The drive for new investments will continue. In the essential infrastructure domain, we will expand BREDS by rolling up existing businesses and acquiring and expanding functions. In the food value chain domain, the focus is on increasing the value of each project. For energy and materials solutions, we will strengthen our earnings base in areas where we have expertise. We have a sufficient pipeline of projects and expect to invest over JPY 100 billion in the second half and over JPY 300 billion in the next fiscal year. We will continue to accelerate earnings growth towards achieving 2X growth. For existing businesses, steady progress has been made in strength augmentation and function enhancement. For chemicals, we have strengthened our trading businesses by anticipating changes in the supply chain.
Additionally, we have stepped into new areas such as manufacturing in niches where we can become the leader. We aim for an annual profit of JPY 30 billion in the next stage through synergy of deepening trading functions and new investments. In the food value chain domain, in Vietnam, we are strengthening individual businesses and further connecting functions to expand sales channels and maximize profit opportunities. On collaboration with external partners, following the partial transfer of shares in marine vessel trading business last year, we have established a joint management structure in the railcar leasing business in North America, with Fuyo General Lease as a new partner. The intent is to further expand the scale of this business by increasing the number of cars leased at an accelerated pace and by diversifying services.
Regarding loss-making and underperforming businesses and strengthening headquarters functions, we're not leaving decisions solely to the field. Management is delving into the details so swiftly. Determine whether to withdraw or revitalize, downsize, or improve. Regarding fundamental structural reforms for underperforming segments, we will advance initiatives with a sense of urgency or speed. This includes projects initiated in the first half, as well as businesses currently under negotiations or consideration. We'll provide timely updates on progress going forward. This time, a Sojitz growth story we present is our trading business capturing supply chain change. Under our mission to deliver goods and services where there is a need, we have been strengthening trading functions and growing by anticipating shifts in the supply chain and the resulting market needs. Recently, global supply chains have become increasingly fragmented due to changes in the international landscape and the resulting uncertainty.
Critical minerals like rare earths symbolize this trend, and the structure of dependence on a specific nation poses significant risks to economic security. Since the 1960s, we have imported rare earth minerals scarce in Japan and continuously supplied them to Japanese customers. Concurrently, to avoid dependence on specific nations and ensure a stable supply, we have diversified our procurement sources. Through our 2011 partnership with Australian company Lynas and the establishment of a robust supply chain network, we now hold over 70% of the domestic market share for neodymium, a key light rare earth. Furthermore, alongside Lynas, we have built mass production capabilities for medium and heavy rare earths, highly scarce elements essential for next-generation energy and EV motors, in addition to traditional light rare earths.
Furthermore, for gallium, a mineral essential for manufacturing semiconductors and other products, we have commenced initiatives with Alcore in Western Australia toward establishing a refining business. Moving forward, we will continue to look across the entire supply chain, anticipate and respond to its changes, and realize Sojitz growth stories. The second Sojitz growth story is Uzbekistan, where we are enthusiastically pursuing future growth. Since the 1990s, we have built strong relationships with trust with the Uzbek government and companies through large-scale projects such as plant exports. Today, Uzbekistan is an extremely attractive market backed by Central Asia's largest population and high economic growth rates, with robust infrastructure demand expected to continue. We have quickly recognized this growth potential and are initiating projects in infrastructure sectors where demand will increase, such as power generation, airports, and hospitals.
This includes the Syrdarya-2 gas-fired power generation project, a 1 GW scale wind power project, and the Tashkent new airport, all in collaboration with the local government and key partners. For the Samarkand hospital PPP project, we're once again partnering with Renaissance, with whom we collaborated on a hospital PPP project in Türkiye. Thus, we are steadily creating projects where we can leverage the expertise cultivated internationally. Viewed collectively, these projects represent an investment opportunity of approximately JPY 150 billion, with an expected ROI of around 10%. Finally, I'll explain the shareholder returns policy. For the dividend for the fiscal year ending March 2026, we plan to pay JPY 165 per share, a 10% increase from the previous year. This continues our policy of a progressive, predictable, and stable dividend based on a DOE of 4.5% of shareholders' equity.
Alongside dividends, we continue to implement stock repurchases as another method of shareholder returns. The repurchase announced in May 2025 is, as detailed here. Furthermore, in August 2025, we canceled 15 million shares from the treasury stock previously acquired. Going forward, through realizing Sojitz's growth story, we'll continue to expand earnings accompanied by cash flow, thereby further increasing shareholder returns. Thank you very much.
Good afternoon. This is Makoto Shibuya, CFO. My presentation will be using the part of the earnings material that is marked Index two, Financial Results for the first half ended September 30, 2025, and full-year forecast of fiscal year ending March 31, 2026. Page 12 is a PL summary. Gross profit in the first half was JPY 171.6 billion, up JPY 6 billion from the same period last year. The breakdown by segment is shown on page 16. On a year-on-year basis, gross profit increased for aerospace, transportation and infrastructure, energy solutions and healthcare, chemicals, and retail and consumer service. On the other hand, automotive, metals, mineral resources, and recycling, consumer industry, and agriculture business were down. Energy solutions and healthcare recorded a large gross profit increase thanks to contribution from newly consolidated energy-saving businesses in the United States and Australia.
A significant decline was recorded for metals, mineral resources, and recycling, which was impacted by lower coal prices. SG&A expenses increased by JPY 14.9 billion. Nearly 80% of this is related to changes in consolidated subsidiaries. The rest was mainly due to increased personnel expenses. Share of profit or loss of investments accounted for by the equity method was JPY 20.9 billion, almost unchanged from a year ago. With all that, consolidated profit for the period came to JPY 45.3 billion, as mentioned earlier by our CEO. Page 13 shows the balance sheet summary. Total assets at the end of the period stood at JPY 3,249.4 billion, up JPY 162.1 billion from the end of March, mostly related to investments. Total liabilities increased by JPY 145.8 billion to JPY 2,225.5 billion. The increase comes from new borrowings and investments.
Total equity attributable to owners of the company came to JPY 980.4 billion, up JPY 11.4 billion, thanks to profit for the period, despite dividend payments and stock repurchase. Please refer to page 14 for key financial indicators and forecasts for the end of the fiscal year. These forecasts remain unchanged from the beginning of the year. Page 15 is on cash flow. Cash flow from operating activities was a net inflow of JPY 31.3 billion due to increased core operating cash flow despite an increase in working capital. Cash flow from investing activities was a net outflow of JPY 35.6 billion, mainly due to new investments. The resulting free cash flow was a net outflow of JPY 44.3 billion. Pages 16 to 18 show PL-related numbers by segment.
On page 16, I won't discuss gross profit except to say that given progress so far, we have downward revised the full-year forecast from the initial JPY 400 billion to JPY 380 billion. We have revised segment forecasts for automotive, metals, mineral resources, and recycling, and consumer industry and agriculture business. Page 17 shows profit for the period and a year-on-year comparison. Page 18 shows the full-year forecast and the current outlook. On page 17, let me discuss the segments that have large year-on-year difference, namely aerospace, transportation and infrastructure, energy solutions and healthcare, metals, mineral resources and recycling, and others. For aerospace, transportation and infrastructure, profit increased significantly as defense-related and aircraft-related businesses grew steadily, and thanks to gains from the partial sale of railcar leasing business in the United States. Energy solutions and healthcare enjoyed earnings contribution from newly consolidated energy-saving businesses as well as from existing businesses.
The segment also benefited from increased production volume at the L&G operating company. Metals, mineral resources, and recycling was down significantly due to the decline in the coal market and sluggish production efficiency. The decrease in others comes from a reaction to the gain on change in equity associated with the public offering of Sakura Internet, which was recognized in the same period last year. On page 18, we present our current outlook for the full year for each segment. The consolidated full-year forecast of JPY 115 billion stands unchanged. However, given the current situation, we have revised the forecast for some segments. Let me briefly explain by segment.
The automotive division is experiencing negative impacts from U.S. tariff measures on its plenty of recall operations, among other factors. Recovery in its Australian used car sales business is also slightly delayed. For this segment, we have initiated structural reforms, including improvements to underperforming businesses, and have revised the forecast downward by JPY 3 billion to JPY 3 billion. The aerospace, transportation, and infrastructure division expects continued solid performance in aircraft-related and defense-related transactions, including gains from the partial sale of the railcar leasing business. The forecast has been revised upward to JPY 17 billion. The energy solutions and healthcare division, while showing a low progress rate, has seen steady progress across various businesses. Factoring in significant second-half earnings recognized from L&G companies and asset replacements, the forecast has been revised upward by JPY 7 billion to JPY 30 billion.
The metals, mineral resources, and recycling division has been significantly revised downward, reflecting the current situation in the coal business. The chemicals division is largely in line with the initial forecast, supported by steady performance in existing businesses and anticipated earnings contributions Nippon A&L INC. The consumer industry and agriculture business division has been revised slightly downward based on current progress. The retail and consumer service division expects to achieve its initial forecast, anticipating profit contributions from marine products and domestic retail businesses starting in the third quarter, along with some asset replacements. Others are as stated. Page 19 details the cash flow management status. Please refer to it. Based on the segment-by-segment revisions to the profit forecast explained earlier, we have slightly adjusted the forecast for core operating cash flow, asset replacements, and the resulting core cash flow.
For core operating cash flow, we have revised the forecast downward by JPY 5 billion for fiscal 2025, but the cumulative forecast for the Medium Term Management Plan 2026 remains unchanged. As shown on page 20, similar to profit for the period, non-resource businesses are expected to account for more than 85% of core operating cash flow, indicating that our business structure is increasingly capable of generating stable cash flow. Page 21 shows the investment contributions under the Medium Term Management Plan, or MTP 2026. The contribution from MTP 2020 and 2023 has decreased compared to the initial plan for MTP 2026, primarily due to the Australian coking coal and the used car sales businesses not progressing as planned. Progress in all other businesses is generally on or above plan. We will therefore focus on thoroughly improving these two businesses to increase their earnings contribution.
Regarding the earnings contribution from new investments in MTP 2026, we have included the expected returns from the JPY 300 billion planned for execution by fiscal 2025. Even at this stage, we expect that we will be able to significantly raise earnings above the assumptions made at the beginning of the MTP. While we target executing additional new investments of JPY 300 billion in fiscal year 2026, the key to achieving the MTP 2026 and realizing the next stage early lies in how effectively we can further accumulate upside potential for earnings contributions. Starting on page 22, we have included investments and asset replacement. Commodity prices, foreign exchange, and interest rates, segment information, and supplemental information. Please refer to these sections. Finally, the second quarter of the fiscal year ending March 2026 marks the midpoint of the MTP 2026.
Despite uncertainties in the business environment, many initiatives are progressing steadily, and we are firmly on track to achieve our forecast for fiscal year 2025. At the same time, it is also true that some segments require more vigor, while others need restructuring. As explained by the President, we will realize multiple Sojitz growth stories. Simultaneously, we will boldly transform the business structure in segments requiring revitalization. This will establish us as a company with a portfolio of sustainable, high-performing businesses. We are committed to quickly achieving our next stage goals, doubling growth, reaching a profit of the period of JPY 200 billion, achieving an ROE of 15%, and a market capitalization of JPY 2 trillion. We sincerely appreciate your continued understanding and support. This concludes my remarks. Thank you very much.