It's now the scheduled time to start, so we would like to start the conference call regarding the financial results for fiscal year 2026, second quarter. Thank you for your participation. Today, Yamauchi, Managing Executive Officer, will explain the financial results for fiscal year 2026, second quarter. Later on, joined by Mr. Matsuo, General Manager, Accounting Department. We'll open the floor to Q&A later. We schedule to end at 4:50 P.M. Without further ado, Mr. Yamauchi, please go ahead.
Good afternoon. I'm Yamauchi from Sumitomo Chemical. Thank you very much for attending our conference call 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 the briefing of our financial results for fiscal year 2026, second quarter. Please look at slide page four. Before explaining the details of financial results, I would like to give a brief update on the status of profit and loss of the second quarter. Core operating income was JPY 144.5 billion. Net income attributable to owners of a parent was JPY 82.9 billion, both increasing significantly compared to the same period of the previous year and exceeded the forecast announced in August. The first half results were its second-highest first-half results on record.
Regarding the primary factors behind the year-on-year increase in core operating income, first, ICT & Mobility Solutions. Although shipments of display-related materials decreased with semiconductor shortages, shipments of semiconductor processing materials increased. Agro & Life Solutions. Although business conditions for crop protection products outside Japan have been slow to recover, shipments of crop protection products in Japan have remained steady, and profit margins for feed additives improved. Essential & Green Materials. Petrochemicals financial results improved due to the situation in the Middle East, while temporary inventory valuation gains also significantly boosted core operating income. Performance is solid, and with Sumitomo Pharma's capital increase, the D/E ratio improved significantly to 0.73x. Consolidated financial results of the second quarter for FY 2026, sales revenue was JPY 1 . 1728 trillion, up JPY 77.4 billion year on year.
Core operating income expressing recurring earnings power was JPY 144.5 billion, up JPY 35.8 billion year on year. Non-recurring items not included in core operating income was a loss in total of JPY 6.5 billion, worsening by JPY 1.4 billion compared to the previous year. As a result, operating income was a profit of JPY 138.1 billion, up JPY 34.4 billion year on year. Finance income was a loss of JPY 16.1 billion, worsening of JPY 300 million year on year. Gain or loss on foreign currency transactions included in finance income or expenses was a loss of JPY 9.4 billion, worsening of JPY 3 billion year on year. Income tax expenses was JPY 16.3 billion. Compared to the same period of the previous year when tax burden was reduced due to the write-off deferred tax liabilities, tax burden increased by JPY 19.3 billion.
Net income or loss attributable to non-consolidated interests was a loss of JPY 22.8 billion. As a result, net income attributable to owners of a parent for the second quarter was a profit of JPY 82.9 billion, improvement of JPY 43.2 billion year-on-year. Exchange rate and naphtha price, which impact our performance. The average dollar rate during the term was JPY 159.49 to a dollar, and naphtha price was JPY 107,500 per kiloliter. Yen weakened and feedstock price increased year-on-year. Next, sales revenue by reporting segment. Please move to page six. Total sales revenue was up JPY 77.4 billion year-on-year. By segment, sales revenue increased in all segments except Essential & Green Materials, where resale of petrochemical products concluded.
As for year-on-year changes of sales revenue by factor, sales price increased by JPY 84 billion, volume decreased by JPY 64.7 billion, foreign exchange transaction variance of foreign subsidiary sales revenue increased by JPY 58.1 billion. Next is page seven. Total core operating income increased by JPY 35.8 billion year-on-year. Analyzing by factor, price was +JPY 17.5 billion, cost -JPY 4.5 billion, volume variance, including changes in equity earnings of affiliates, was +JPY 22.8 billion. Next, performance by segment. Please move to page eight. Agro & Life Solutions segment. Core operating income was a profit of JPY 20.8 billion, up JPY 9.6 billion year-on-year. Income of crop protection products dropped slightly because of slow recovery in business environment outside of Japan.
Regarding the feed additives, while rising market prices have led customers to become more cautious in their purchasing decisions, the same market upturn has improved our profit margins, resulting in an increase in income. Next page. ICT & Mobility Solutions segment. Core operating income was a profit of JPY 31.9 billion, down JPY 1.2 billion year-on-year. For display-related products, absence of prior year gain on the sale of a large LCD polarizing film business, decline in mobile-related shipments due to shortage of semiconductors, and decline in the selling prices of polarizing films led to decline in income. In semiconductors-related products, though there was increase in fixed costs due to capacity expansion, shipments and profit increased due to growing demand for semiconductors. For mobility-related products, increase in shipments of super engineering plastics led to increase in income. Next page. Advanced Medical Solutions segment.
Core operating income was a loss of JPY 3.7 billion, down JPY 2.3 billion year-on-year. Income dropped as a result of difference in sales mix of active pharmaceutical ingredients and intermediates, and decline in profit margin at an affiliated company due to situation Middle East. Next page. Essential & Green Materials segment. Core operating income was a profit of JPY 62.1 billion, increase of JPY 80.7 billion year-on-year. Income increased as a result of inventory valuation gains in Japan and Singapore, accompanying increase of its stock and product market prices. Further, at Petro Rabigh, Saudi Arabia, impact of prior year periodic plant maintenance and improvement of refining margins improved for equity method investment profit, leading to improved income. Next page.
In Sumitomo Pharma segment, core operating income was JPY 43.6 billion, down JPY 53.8 billion year-on-year. Shipments increased thanks to growth in sales of ORGOVYX, a therapeutic agent for advanced prostate cancer, and GEMTESA, a treatment for overactive bladder. On the other hand, there was an absence of the gain on the sale of the Asian business in the prior year, as well as the impact of lower shipments resulting from that sale. This concludes the overview of results by segment. On the next slide, I'll explain the consolidated statement of financial position. Total assets as of the end of September 2026 was JPY 3 . 6261 trillion, an increase of JPY 221 billion from the end of the previous fiscal year.
The main factors were a temporary increase in working capital, such as trade receivables and inventories in current assets, owing to the restart of the Chiba plant following the scheduled maintenance carried out in January through March 2026, and the surge in naphtha prices, and an increase in investment securities in non-current assets. Interest-bearing liabilities were JPY 1 .0 874 trillion, a decrease of JPY 64.1 billion from the end of the previous fiscal year. Equity was JPY 1 . 4826 trillion, an increase of JPY 246 billion from the end of the previous fiscal year. This was mainly due to net income attributable to owners of the parent and Sumitomo Pharma's capital increase through a public offering. As a result of this, equity ratio and D/E ratio significantly improved to 32.1% and 0.73x respectively. Next, I will explain about the consolidated statement of cash flows.
Please look at page 14. Cash flows from operating activities were an inflow of JPY 66.6 billion, an increase of JPY 8.9 billion year-on-year. The increase was due mainly to improved profit. Cash flows from investing activities were an outflow of JPY 84.9 billion, an increase of outflow of JPY 68.2 billion year-on-year. In the same period of the prior year, there were large inflows from items such as Sumitomo Pharma's sale of its Asian business and the sales and others. As a result, free cash flows were an outflow of JPY 18.3 billion, a deterioration of JPY 59.3 billion compared with an inflow of JPY 41 billion in the same period of the prior year.
Cash flows from financing activities were an inflow of JPY 16 billion, due mainly to Sumitomo Pharma's capital increase through a public offering, an increase of inflow of JPY 130.8 billion year-on-year. Next, I will explain our financial forecast for FY 2026. Please turn to slide 16. Let me begin with the business environment surrounding the company. As for economic conditions, although growth in the field of technology is firmly supporting the global economy, the outlook remains uncertain due to geopolitical risks, including tensions in the Middle East. In the business environment section, we show our main business areas and our assessment of their business environment using weather icons. Starting from the top, for crop protection, the recovery of crop protection products outside Japan has been delayed.
For feed additives, the temporary supply shortage caused by the Middle East situation has been resolved, and the current supply-demand balance has been settling down. Although profit margin improved in the first half, the outlook for the second half and beyond remains uncertain. For displays, the mobile device market has become sluggish due to worsening procurement conditions for memory chips and other components. Silicon semiconductors remain solid, mainly driven by AI-related areas. For petrochemicals and raw materials, we have secured enough raw materials to meet current production plans, but the impact of high raw material prices continues. This concludes the business environment. I will now give an overview of our financial forecast. Please turn to slide 17. This is a summary of our financial forecast for FY 2026. We have revised the previous forecast announced in May to reflect recent business trends.
Core operating income for FY 2026 is projected to be JPY 270 billion, an upward revision of JPY 55 billion from the previous forecast of JPY 250 billion. As a result, core operating income is expected to reach a new record high. By segment, core income in ICT & Mobility Solutions, Essential & Green Materials, and Sumitomo Pharma, three segments were revised upwards. The details will be explained in later slides. The net income attributable to owners of the parent is projected to be JPY 90 billion, an upward revision of JPY 20 billion from the previous forecast of JPY 70 billion. The year-end dividend is revised upward to JPY 9, with a JPY 1 increase. As a result, annual dividend is projected to be JPY 17, JPY 1 higher than last projected. Please go to page 18.
For FY 2026, we forecast the following: sales revenue is JPY 2 . 490 trillion, up JPY 130 billion from the previous forecast. Core operating income of JPY 270 billion, as mentioned in the previous slide. Net income attributable to owners of the parent being JPY 90 billion. As for our exchange rate and naphtha price assumptions, we assume an exchange rate of JPY 150 to the dollar for the second half, or JPY 157 for the full year, and JPY 99,000 per kiloliter for the full year. Next, I will explain slide 19, sales revenue and core operating income by reporting segment. Looking at the full-year forecast by segment, for Agro & Life Solutions, although profit margin for methionine has improved, the recovery in sales of crop protection products outside Japan has been delayed, so we have left the previous forecast unchanged.
For ICT & Mobility Solutions, we expect an increase from JPY 55 billion to JPY 60 billion due to increased shipments of semiconductor processing materials. For Essential & Green Materials, we expect a large increase in profit from JPY 20 billion to JPY 75 billion due to the improvement in Petro Rabigh profit and loss that has been impacted by the Middle East situation and temporary inventory valuation gains. For Sumitomo Pharma, we expect an increase in profit from JPY 94 billion to JPY 108 billion due to strong sales of GEMTESA. Please note that the lower profit in the Others segment compared with the previous forecast is because we have factored in certain levels of risks. This concludes our explanation of the financial results and forecast. We would now like to open to the floor and receive your questions.
Thank you very much. Now, we would like to receive your questions. Now we will have the first question from Morgan Stanley MUFG Securities, Mr. Watabe.
Thank you for your presentation. My name is Watabe. About Agro & Life Solutions, I had a question. First, in the second quarter, compared to the forecast, it is lower. What is the background for that? In the second half, there is upward revision. Overseas crop protection chemicals were slow in recovering, but what is the background and what is the situation by region about agro? Methionine market price seems to be fluctuating, so could you also explain that?
Yes, thank you for your question. Overseas crop protection chemicals, demand recovery is delayed in Middle and South America. Previous year, compared to 2025, 2026, we accept the recovery in Latin America and expected recovery of a market, but there is a delay in recovery.
One factor is the credit uncertainties in the farmers, which has not yet been resolved. This year, Super El Niño is being mentioned. This impact seems to be seen somewhat in Brazil. It is not yet a level that would affect the cultivation, but the farmers are refraining from purchasing, so there is a delay in recovery of demand. By region, North America, it is not that it is worsening, but there is a shift of shipments from the first half to the second half. In India, in the first quarter, because of El Niño, monsoon arrival is delayed, but finally, it is starting to rain. The volume of rain seems to be low. Compared to the forecast, there is underachievement. In India, second half, the INDIFLIN was launched last year, so we hope we can recover through these products in the second half.
Methionine, in the first half, there were some confusions and the market price remained high. It is stabilizing slightly now. For the second half, the assumption is that if a level, the sales price in the forecast is expected. Underachievement in the first half is the delay in the Middle, in the Central and South America, and impact of monsoon in India, which led to underachievement. It seems that there is an increase in the second half because there is a shift, and the additional methionine is expected to be better than the original forecast. For the forecasting, May, we did not expect any positive figures for methionine, but in the current forecast, we made the upward revision of income. In general, for the crop protection chemicals compared to May, we have incorporated some downward revision.
I think you mentioned that you expect overachievement in the second half, but yes, your explanation was clear. Thank you.
Thank you very much, Mr. Watabe. We would like to take the next question from Mizuho Securities. Mr. Yamada, please go ahead.
This is Yamada from Mizuho Securities speaking. Thank you. I have one question regarding ICT & Mobility Solutions. The display, the information appliance is not doing well, and usually in this section, there is a revision, but the first half of JPY 13.9 billion and the second half revised is a JPY 28.1 billion core operating income. So it seems that there is no difference between the first and second half. Is that because, or correct to think that that is because in semiconductors going to grow in the second half? If it is a semiconductor, what is strongly performing within that? Regarding the resist sales situation, are there any changes to the new product sales? Can you share that with us?
Thank you very much for your question. FY 2026, the difference between the first and second half is your question, is how I understood it. Well, first of all, regarding the display, as usually is, there is a difference between the first and second half. Compared to the first half, the second half, due to the seasonality, there is a decline in profit. That is our projection. As for the semiconductors, compared to the first half, the second half is going to further grow. That is our outlook. Therefore, here, the usually occurring difference between the first and second half is becoming slightly milder.
Is there a certain product that is contributing to this?
Semiconductor-related product markets is strongly performing. So in our case, at this point, is the front end. Resist and semiconductor chemicals for us, and these products are performing well for us. Super engineering plastics was performing well as well.
How much of a positive impact did they have for the volume increase, and is this situation going to continue in the second half?
For the super engineering plastics, I did explain in the first quarter, the Chinese economic stimulus measures due to that towards the electronic components, the shipment is strong, and that market price is continuing.
Okay, understood. Thank you very much. I have high expectations.
Thank you.
Thank you very much, Mr. Yamada. The next question. From SMBC Nikko Securities, Mr. Miyamoto.
Thank you. I am Miyamoto from SMBC Nikko Securities. I have a question about Essential & Green Materials. First, compared to the previous forecast, the first half, it is quite upward by about JPY 20 billion, and towards the second half, it is about JPY 13 billion. Petro Rabigh net loss, the level in July, September, it was very high, as high as the previous quarter. I do not expect such a large loss, but what are the assumptions for those figures? Naphtha shortage in Singapore is having an impact. Could you tell me the factor for your forecast for Essential & Green Materials and comparison with the first half for Essential & Green Materials? What was good about the first half?
The forecast in August, compared to the forecast in August, as of August, in the first half, inventory evaluation gains was posted, and about half we thought with the stabilization situation in the Middle East. Second half, we start with losses. That was our forecast. Naphtha remains at a high price, so the valuation loss of first quarter still remains. Another point. In the forecast of August, some under others item, we expected some gains from sales of businesses, but actually in the first half, some was reflected in essentials. That was the situation in the first half. So, throughout the year, second half looks weaker. First, for Petro Rabigh, results up to September is already announced. In our case, the third quarter includes those assumptions. From October to December, the refining margin at the moment is advancing quite steadily, but there are also risk factors.
For the fourth quarter, we are not assuming positive factors. Naphtha price currently is more than JPY 100,000. Towards the end of the year, we expect JPY 90,000 in the second half. So, for the inventory valuation loss or gains, we expect there will be some recovery in the second half.
What is the situation in Singapore?
In Singapore, there is not much change. After the force majeure declaration, it is still not been lifted. Naphtha price remains at a high level, and naphtha is becoming easier to procure, but we have to consult with the customers in conducting these operations. So, the level of the operation remains at a similar level as that of the first quarter.
Thank you very much.
For naphtha price, the assumption three months ago was JPY 104,000. The result was JPY 107,000, so it's not that difference. Singapore operations in Singapore, the spot price for naphtha and crude oil would directly impact. So, maybe that was the factor of the impact.
For the gains of selling the business, is that at the two-digit level?
Yes, first, for naphtha, in the second quarter, we expected higher levels, but the inventory valuation loss is the price as of end of the term. So, we assumed some drop at the end of the second quarter. The sales gains
We cannot There's nothing that we can talk too much. We expect about JPY 5 billion, but it is more than that. Under summary, the figures excluding those gains are included. So if you calculate from that, I think you can have an idea of the amount.
Yes, understand. Thank you very much.
Mr. Miyamoto, thank you very much. I would like to take the next question from Daiwa Securities. Mr. Umebayashi, please go ahead.
Thank you. This is Umebayashi from Daiwa Securities. My question may be slightly in detail. The core operating income, the other adjusted areas, the second half was about -JPY 30 billion. In your previous explanation, you said that you are reflecting some risks to a certain level. So is it okay to simply look at it as a buffer, or is there some specific item for this, is what I would like to know.
Similar to that, the core operating income and operating income, in between that, the first half was - JPY 6.5 billion, and the second half is about JPY 49 billion after all the calculations. The reason why this negative number is going to become enlarged in the second half is, I would like to know the reason.
Thank you very much for your question. For the other risk factors, money amount-wise, it is about JPY 10 billion that is incorporated. At the start of the fiscal year or the quarter, which is May, we did reflect the risks of the Middle East situation, and as a result, a similar amount is incorporated. Specific, it is not that specific risks are existing. The Middle East situation is still uncertain, so we have reflected that.
Also, the inventory valuation, a positive number, the naphtha, we are looking at 90,000, and we assume that the valuation is going to remain to the second half. But there are areas that is difficult to have a clear visibility. Including those type of risks as well, we are incorporating it as risk factors.
Thank you very much. The non-recurring items.
Well, for non-recurring items, the business situation is still uncertain. Last fiscal year, there was about nine non-recurring items, about JPY 55 billion. That was actually reflecting such as the business structuring, restructuring expenses, and others. We are at this point incorporating some risk factors. Same as the last fiscal year, towards the second half, it becomes more prominent. That is why we are reflecting these within the second half numbers as well.
Thank you very much. Related to Singapore, is there a possibility that something may come up?
Apologies, I cannot speak about the content. I would like to refrain from commenting.
Okay, understood. That is all. Thank you.
Thank you.
Thank you very much, Mr. Umebayashi. The next question is from BofA Securities, Mr. Enomoto.
Thank you. My name is Enomoto from BofA. About ICT & Mobility, photoresist or semiconductor chemicals, semiconductor materials, what is the situation with price revision? The competitors are talking about revising the price, and I think that would affect your company as well.
Yes, thank you for the question. Well, mainly, with the higher feedstock prices, you are asking about price revision in a certain company. Yes, in our case also, we are consulting with the customers and revise to an appropriate price level.
If possible, could you tell me what would be the scale? With higher feedstock prices, there is price revision, but what is the assumption for the spread? I think with the strong demand, you can enjoy some spread.
The scale or the amount, I have to refrain from mentioning that. Improvement of spread, also, that is our sales strategy, so it is quite difficult to talk about it. In terms of cost, not only feedstock price, but fixed cost is also increasing, including labor cost. Including that, we are having discussions about the price revision.
Understand. Thank you very much.
Thank you.
Mr. Enomoto, thank you very much. We would like to take the next question from Nomura Securities. Mr. Okazaki, please go ahead.
This is Okazaki from Nomura Securities. Thank you very much. Against the first half, the second half, we have announced an increase in dividend. I would like to know the way of thinking behind this. You are aiming for a JPY 24 per share dividend. I know that. But this time, Sumitomo Pharma or ICT performs strongly. But on the other hand, maybe it is temporarily, but Rabigh or methionine market price is improving, and that is contributing to the improvement of profit. But moving forward, you would like to avoid from decreasing the dividend. But what is the direction? And I would like to know the thoughts behind a dividend. That is all.
Thank you very much for your question. Regarding the dividends, well, it may become a qualitative type of explanation. However, this fiscal is a performance, and also from next fiscal year onwards performance outlook, we took a comprehensive look at those and decided on it. And regarding this fiscal year, the first half business performance was quite strong. And also regarding the second half, there are some uncertainties. Therefore, we do consider certain risk factors. But considering all that, we have decided on the amount of dividend. So in that sense, as you pointed out, Mr. Okazaki, the past high of a JPY 24, past record high of JPY 24, of course, as a company, we would like to aim to do that. However, the uncertainties in the future and some outlook for next fiscal year onwards, if it becomes brighter, we would like to decide upon the dividend once again.
Okay, understood very well. That is all. Thank you very much.
Thank you.
Thank you very much, Mr. Okazaki. Let me move to the next question. From UBS Securities, Omura-san.
Thank you. I am Ms. Omura from UBS Securities. I have a question about the cash flow on page 14, investment cash flows. Plan for this year, JPY 150 billion, and seems that the progress is slightly higher. So in the first half, cash flows from investing activities, about the content and the full-year plan, are there any changes in the plan?
Thank you for the question. Cash flows annual forecast, the revised figures are not being disclosed, but performance itself is good. Positive factors on cash flow do exist. However, on the other hand, we are seeing improvement in performance. There is improvement of equity method investment gains and also inventory valuation gains not related to cash flows. I think that should also be taken into consideration. That is all.
Thank you very much. For cash flows from investing activities, any major item in the first half and from second half onwards, compared to the initial JPY 150 billion, is there anything that would go beyond that level? Maybe inflation, maybe related.
The first half cash flows from investing activities, partially, not ordinary capital investment M&A, but from accounting reasons like surplus funds, even if that is deposited on banks for more than three months, that would be deducted as investment activities cash flow. In the first half, these items are included. Compared to the actual situation, cash flows from investing activities may look bigger. This is a one-time case. It would return towards end of the year. In the second half, no major changes from what we assumed in the beginning of the year.
Thank you very much.
Thank you.
Mr. Omura, thank you very much. We would like to take the next question from Morgan Stanley MUFG Securities. Mr. Watabe, please go ahead.
Sorry for the second round question. I wanted to ask about the dividends as well, but that was already asked. Petro Rabigh's third quarter financial results, within there were geopolitical disruptions. Such wording was used. Even though the refinery margin was so good, the profit was not so good. Is that because of this reason or the Strait of Hormuz is closed right now? The Red Sea side is in operation. Because of that, is there some confusion regarding the Rabigh's supply? Is there any issues? Can you explain about that?
Thank you very much for your question. Regarding Petro Rabigh, at the Middle East, there are various media reporting. However, from the company side, it will be the financial results announcement.
Information more than that, it is difficult to share that with you in a public situation. At this point, we do not think that there is a large impact in the shipment. For the July situation, there was a slight impact for the operation, but our understanding is that that was the reason.
There was an impact on the operation. What was the reason for that?
The Middle East situation, I cannot share details with you, because right now in the Middle East, various things are occurring. Of course, we understand that there are various risks there as well. Partially, there was some impact to the operation that became recognized. However, if you look at the numbers, you will know that it was not a large impact. I would like you to understand it in that way.
Okay, understood. Thank you very much.
Thank you very much, Mr. Watabe. We still have a few minutes before the scheduled time to close. We can receive one more question. Any other questions? If you have any questions, please let us know. Mr. Yamada from Mizuho Securities.
Thank you. I am Yamada from Mizuho Securities. I have one question. This may be a very detailed question. Today, the final contract of succession of Takara was announced today. From Q3, this business is going to be consolidated, and for Advanced Medical Solutions, this business would be included. In the first half, there was a slight underachievement, and of course, there is a final agreement in July. I think it is included in August. Advanced Medical Solutions now is no change. Because of this succession in the second half, do you expect a shift to surplus? Towards the next fiscal year, can we expect improvement? Would this be included under others? Could you tell me that?
Yes. Thank you for waiting. Yes, as you mentioned, in the second half, that will be included in the AMS segment. For the first half and second half, in the second half, there is a concentration of profit. This is one of the factors, but rather, under pharma solutions, shipment timing is one factor. It is more of a second-half business. That is the situation.
Understand. Last year, I think there was a loss of JPY 1.4 billion in the first half and +JPY 2.4 billion in the second half. A pattern like last year, and also former Takara's business will also be making contributions. Is that correct?
Yes, your understanding is correct.
Thank you very much.
Thank you.
Yamada, thank you very much. It has become close to the scheduled ending time, so we would like to take the last question. As the last question, from Daiwa Securities, Umebayashi, please go ahead.
This is Umebayashi from Daiwa Securities. Regarding the methionine, I would like to ask some confirmation questions. The second half, the price is in line with what you have expected, is what you said. To begin with, this first half, it was slightly high. That is because there was a supply restrictions or constraints of your competitor, and that has become resolved, so the price has come back to the usual price. Compared to the start of the fiscal year plan, it seems that slightly the raw material prices is changing. So the way of thinking towards the margin, can it remain as the same as the start of the fiscal year? I just wanted to confirm that.
Thank you very much for your question. Regarding methionine, in the first half, as you saw, the confusion of the supply and demand has started to settle down. However, the raw material prices has remained high. So for us, we would like to thoroughly discuss with our customers, so that we will be able to pass on the cost. That is how we will think about it, so I would like you to understand in that way as well.
Okay, thank you.
Thank you.
Thank you very much, Umebayashi. This concludes today's conference call. Thank you very much for your participation.