Good afternoon. This is Kosuke Uemura, CEO. Thank you very much for joining us today for our Q2 earnings briefing. Let me begin with a summary of the first half results and progress made against our Medium-term Management Plan before our CFO, Makoto Shibuya, reports on further details. First, in the first half, profit for the period and the full-year forecast is shown on the slide. Profit for the period was JPY 63.6 billion, 49% progress towards the full-year forecast. Against the full-year forecast of JPY 130 billion, that is. Chemicals made strong progress due to higher market prices, while progress was relatively slow in automotive, undergoing structural reform, and consumer industry and agriculture business. The breakdown may be mixed, but overall, progress towards the full-year forecast is in line with plan. Usually, 40% of the profit comes in in the first half and 60% in the second half.
For this year, it is a little different. We are getting more profit in the first half than usual. The situation in the Chemicals, and that is affected by the situation in the Middle East, is a factor. In the second half, we believe the uncertainty may continue, and that is why the full-year forecast for the profit for the year remains unchanged at JPY 130 billion. There has been some revisions to the breakdown of the forecast by segment, and we will discuss this later. Regarding structural reform, there has been progress for coking coal business, the Gregory Crinum operations in Australia, with an agreement for transfer signed mid-October. We will discuss this in further detail later. I will also discuss some progress in line with MTP2026 and discuss some key Sojitz growth stories. This is a recap of first half results.
As I mentioned earlier, profit for the period came to JPY 63.6 billion, which is 49% against the full-year forecast of JPY 130.0 billion. Our forecast remains unchanged, and things are in line. This is the slide that we have been using for MTP2026. I am sure you are already familiar with this. The idea is to deliver growth by building up distinctly Sojitz businesses with clear path to success, which we call creating the Sojitz growth story. More specifically, the two pillars are expansion of new investments and enhancement of existing businesses, and that is eliminating what is not working and enhancing what is doing well and making them better. With increased new investments, we would like to develop clusters of businesses that are distinctly Sojitz and have clear paths to success.
Over the past 2 and a half years during MTP2026, we have developed several of such distinctly Sojitz growth stories, and let me discuss four of them today. First is the marine products business. Domestically, we have had TRY Inc. and The Marine Foods Corporation. Those two companies are in procurement, processing, and sales, and have top-level market shares in Japan. Both have realized profit growth since joining the Sojitz Group, as you can see on the right-hand side of the slide. We have recently invested in New England Seafood International in the U.K. This is to further reinforce the platform outside of Japan. Combining the existing domestic business platform for marine products with NESI sales and product planning capabilities in Europe would help expand our marine products business internationally and accelerate the growth. Currently, this is worth JPY 4.6 billion in profit for the year.
In the next stage, we will aim for JPY 8 billion plus. The second story is on infrastructure development business. This is Capella. I have discussed this company several times. Capella Capital was established in 2009 and has since built a track record of over JPY 4 trillion in total project value, with a bid success rate of above 50%. Amazing. With continued population and economic growth expected in Australia, and they already have a PPP business scheme established, infrastructure opportunities are abundant there. The project pipeline is worth JPY 3 trillion, and Sojitz investment opportunities are estimated to be worth roughly JPY 180 billion. In addition, we expect non-PPP opportunities, including outside of Australia. We expect recurring opportunities, and the estimate is roughly JPY 1.5 trillion worth.
As shown in the lower part of the slide, with regards to the infrastructure development, there are opportunities and the cycle, and they are recurring multiple layers of earnings opportunities. By accumulating such, we expect accelerated growth in profit, and we will aim at JPY 10 billion plus in the next stage.
Thirdly, energy solution business. In 2021, we did the first acquisition. We acquired McClure in the U.S. After that, in the U.S. and Australia, we made bolt-on investment. As you see on the bottom right-hand side, we acquired those companies. We have been expanding, reinforcing business space. In particular, in the U.S., there is demand to upgrade aging infrastructure. Also, in Australia and the U.S., there is demand for energy conservation, and recently, there is demand for data center construction. We think there are lots of growth opportunities. That is the current situation. Operating company have network and function in each area, and they have their workforce base. By combining them, we aim to achieve efficient business operation, expansion of business space. Going forward, we will continue to reinforce and expand this business.
Under the next stage, we aim at JPY 20 billion or more of profit for the year. Lastly, let me talk about the chemical business, the fourth business. This is related to our all businesses. This is a number of our chemical division numbers. Since five years ago, we have been reinforcing trading functions. We forecast changes of supply chain, and we have been responding to them flexibly. By doing so, we have been generating trading business opportunities and expanding earnings, as you see on the bottom right-hand side. There is the Middle East situation. Because of that, there are supply chain-related issues. Even under such circumstances, we do not miss opportunities for trading business, and that is because of market price factors, we are growing profit. As for market factors, especially methanol, as with crude oil, market price have been increasing remarkably.
That is positive on our profit, and that is a forecast for this fiscal year. Going forward, we aim at the expansion of earnings, profitability improvement. We will reinforce trading functions and expand this business. So far, I talked about the Sojitz growth story, growing businesses. Next, on the other hand, we have been working on the structural reform. Let me talk about that. As I mentioned in the beginning, there was a progress to coking coal business sales and transfer in Australia. Let me talk about that. In the middle of October, we signed a transfer agreement of Gregory Crinum coking coal interest. This was already disclosed. Subject to regulatory approval and other procedures, we aim a completion of sales by the end of this fiscal year. In mid-October, we just signed a transfer agreement, but basically, progress is in line with our expectation.
On the other hand, regarding Lake Vermont coking coal business, at the end of last month, we completed sales. Regarding gains and losses related to those transaction, as you see here, in the first half, minus JPY 1.6 billion. For the second half, forecast is more than JPY 1 billion of positive figure. Cash recovery in total is expected to be JPY 40 billion in total. That is about an Australia coking coal sales updated situation. Lastly, shareholder returns. There is nothing special to add. We have not changed shareholder return policy of the current MTP for this fiscal year, and the DOE 4.5% is a target. As for the actual number, annual dividend target is JPY 180 per year, 9% increase year-on-year. That concludes my explanation. Thank you very much.
Good afternoon. Thank you very much. I will also present from the same presentation material and discuss the financial results for the first half and the full year forecast. Let me begin with slide 15. It is a summary balance sheet. Total assets increased by JPY 148.4 billion from the end of March to JPY 3 trillion 796.4 billion. Trade receivables increased due to tobacco transactions and energy solutions businesses. Investment-related assets increased too. The increase in other assets came from asset replacement associated with structural reforms. Total liabilities increased by JPY 79.6 billion to JPY 2 trillion 573.8 billion, with an increase in tobacco-related trade payables and an increase in interest-bearing debt to finance new investments and working capital. Total equity attributable to owners of the company increased by JPY 65.6 billion during the same period to JPY 1 trillion 156 billion.
Dividend payments were offset by accumulation of net profit. Slide 16 lists key financial indicators. Based on progress so far, we have revised our forecast for total assets, total equity, and associated metrics. Slide 17 presents a P&L summary. Gross profit increased by JPY 50.7 billion year-on-year to JPY 222.3 billion. Slide 18 provides a breakdown by segment. Gross profit increased significantly for Chemicals and Energy Solutions and Public Infrastructure. Chemicals enjoyed earnings contribution from Nippon A&L Inc., which was consolidated in Q2 last year. There was also profit growth in the Indonesian methanol business with higher methanol prices and steady performance in domestic and overseas trading. Energy Solutions and Public Infrastructure was up thanks to growth in energy solutions-related businesses in North America and Australia, along with earnings contributions from a newly consolidated company, specifically Capella.
Turning back to slide 17, SG&A amounted to JPY 168.4 billion, a year-on-year increase by JPY 24.2 billion, of which 60% was due to changes in consolidated subsidiaries and 30% due to foreign exchange rates. Other income and expenses include what the CEO discussed earlier, the gain on sale of coal interests and impairment losses associated with structural reforms. Under financial income and costs, interest expenses increased slightly, mainly due to a higher average balance of interest-bearing debt. The effect of rising interest rates is also beginning to show. Share of profit or loss of investments accounted for using the equity method rose by JPY 8.0 billion year on year to JPY 28.9 billion, thanks to overseas industrial park business and the Australian public transportation business, which became an equity method affiliate this year.
With all that, profit for the period came to JPY 63.6 billion, up year on year by JPY 18.3 billion, or 40%. Progress against the full-year forecast of JPY 130.0 billion stands at 49%. We have chosen to maintain our full-year forecast because of a non-optimistic market outlook for chemicals from Q3 onward, as well as certain allowance for expenses related to structural reforms, primarily for automotive. Slide 19 and 20 provide the breakdown of profit for the period by segment. We have made some revisions to our full-year segment forecasts. Let me use slide 20 to walk you through this. For year-on-year comparisons, please refer to slide 19. Overall, on slide 20, similar to Q1, the segments of chemicals, energy solutions and public infrastructure, and retail and consumer service demonstrated robust progress.
Aerospace and transportation infrastructure and metals, mineral resources, and recycling were largely in line with initial expectations, while automotive and consumer industry and agriculture business were rather weak. Given progress so far, we have revised our full-year forecasts. Chemicals is upward revised by JPY 10.0 billion to JPY 32.0 billion, automotive downward revised by JPY 5.0 billion to JPY 0.0 billion, and consumer industry and agriculture business is also downward revised by JPY 5.0 billion to JPY 8.0 billion. Let me review each segment now. First half profit for automotive was JPY 0.0 billion. Businesses undergoing structural reforms, including the Australian used car business currently being turned around, posted losses. On the other hand, businesses in North America and Latin America achieved profit growth. For the business in Australia, margin improvements in retail operations have been an issue, but we are making progress.
We were, however, unable to curb losses due to sluggish overall demand for used car, which was impacted by the situation in the Middle East, and this has been continuing from the beginning of the year. Efforts to increase sales volume while maintaining appropriate inventory levels will continue alongside fundamental measures addressing costs, among others. For the segment, while continuing to focus on our core strengths to drive profit growth, we plan to accelerate structural reforms in preparation for the next MTP. Expecting related expenses in the second half, we have revised the full-year forecast to JPY 0.0 billion.
In aerospace and transportation infrastructure, progress versus forecast is only 35%. However, in addition to continued steady progress of overseas industrial park businesses, earning structure of business jet services, defense-related transactions, and others is skewed toward the second half. Also, due to earnings contribution from new investment in public transportation business in Australia and Japan, investment advisor performance will be generally in line with initial forecast. Energy solutions and public infrastructure is generally progressing in line with the initial forecast due to the new consolidation of Capella, the infrastructure development business in Australia, and increasing transactions of energy solution businesses, North America and Australia. In metals, mineral resources, and recycling, as president explained, the structural reforms in the coking coal business in Australia progress with the execution of sales of Lake Vermont business and the signing of a transfer agreement of Gregory Crinum business.
Gain on sales of Lake Vermont business offset loss of Gregory Crinum for the fiscal year, including the second half and additional impairment losses. Metal One, niobium business, and others are progressing in line with the initial full-year forecast. In chemicals, progress exceeded the initial forecast due to methanol price increase impacts, earnings contributions from Nippon A&L Inc., and other domestic and overseas businesses. Because of that, as profit for the period in the first half exceeded JPY 20 billion and we expect continued steady progress, we revised up full-year forecast to JPY 32 billion. We assume market prices conservatively. We expect the market price impact of about JPY 8 billion for this fiscal year, although it's a ballpark figure. Profit for the year, excluding the market price impact, will be about JPY 24 billion.
Profit of consumer industry and agriculture business was significantly below the initial forecast and the same period last year due to decreased fertilizer demand as a result of continued lack of rain in Southeast Asia in overseas fertilizer businesses. As earnings of fertilizer businesses are skewed toward the first half, mainly in Thailand, and it is hard to offset the decreased earnings in the full year, we revised down the segment forecast. In retail and consumer service, in addition to one-time earnings increase due to tobacco tax reform, profitability of commercial food wholesale businesses in Vietnam, which was sluggish in the previous year, improved, and new transactions expanded. Also, due to earnings from asset replacement, progress exceeded expectation in the first half.
Also, in the second half, on top of earnings contribution from the marine product businesses and domestic retail businesses, as well as asset replacement, we expect progress in line with the initial forecast. Others are generally in line with the forecast as we expect earnings contribution from digital-related businesses backloaded to the second half and other profit and loss. Slide 21 shows cash flow. Cash flow from operating activities recorded an inflow of JPY 8.9 billion due to accumulation of core operating cash flow, despite an increase in working capital. Cash flow from investing activities recorded an outflow of JPY 77.5 billion, mainly due to new investment as a result. Free cash flow was net outflow of JPY 68.6 billion. Slide 22 shows cash flow management in the current MTP.
While core cash flow will be significantly negative due to upfront growth investment under MTP2026, we plan to balance cumulative core cash flow over the MTP 2020, 2023, and 2026 periods. It is currently expected to be positive tens of billions of JPY. Although new investments will be about JPY 500 billion against JPY 600 billion in MTP, we are considering multiple high-quality investment opportunities which were not incorporated in the forecast and working on those projects with a sense of speed. Slide 23 shows investment contributions. For MTP 2020 and 2023 investments, as earnings contributions from businesses undergoing structural reforms are significantly below planned return is low. We are working to see a clear path to exit from or profit improvement of businesses undergoing structural reforms by the end of this fiscal year. Return from MTP2026 investments are ahead of plan, both in scale and profitability.
Mainly in the businesses explained in the Sojitz growth story, businesses contributing to future earnings expansion and profitability improvement are accumulated. Please refer to slide 24 for investments and asset replacement, slide 25 for commodity prices, foreign exchange, and interest rate, and slide 26 onward for segment information and others. Lastly, in this fiscal year, the final year of MTP2026, new investments and structural reforms are steadily progressing. We assess the probability of achieving the initial profit forecast of JPY 130 billion is increasing. The issue is low speed of ROE improvement. On this point, towards the next MTP and next stage, we recognize it is important to expand capital-efficient businesses, mainly in business fields introduced in the Sojitz growth story, and to review low-profit and inefficient businesses through structural reforms and enhance speed of exit. We are steadily tackling them. I would appreciate your continued understanding and support.
That concludes my presentation.