[Foreign language]
[Foreign language]
[Foreign language]
This is Osamu Yoshida, CFO of Mitsui Chemicals. Thank you very much for joining in our earnings announcement today. Today, we announced our financial results for fiscal year 2024 and our financial outlook for fiscal year 2025. Operating income before special items for the entire group in fiscal year 2024 increased 5% or JPY 4.8 billion compared to the previous year to JPY 101.0 billion, driven by sales volume growth in the specialty chemicals domains and the progress in sales price revision and business restructuring in basic and green materials, which more than offset the negative impact of the ethylene plant failure in Osaka. Operating income before special items in the specialty chemicals domains increased 4% or JPY 4.6 billion year-on-year to JPY 115.9 billion due to generally firm sales volumes.
Operating income before special items fell short of the previous forecast announced at the time of the third quarter financial results, due mainly to a decrease in sales volume in ICT solutions caused by delayed recovery in the semiconductor market. Operating income fell short of the previously announced forecast, due mainly to the recording of an impairment loss on an equity method affiliate of Life & Healthcare Solutions. Net income also fell short of the previously announced forecast due to an increase in income tax expense from the reversal of certain deferred tax assets.
Regarding our financial outlook for fiscal year 2025, operating income before special items for the entire group is expected to increase 9% or JPY 9.0 billion year-on-year to JPY 110.0 billion, driven by business expansion in the specialty chemicals domains as well as benefits from business restructuring and the recovery from the impact of the Osaka ethylene plant failure in basic and green materials. In the specialty chemicals domains, operating income before special items is expected to increase by JPY 6.1 billion year-on-year to JPY 122.0 billion. While we anticipate losses from yen appreciation, we expect sales volume growth in each segment to mainly contribute to the profit increase.
This includes firm sales in Life & Healthcare Solutions mainly in vision care and agrochemicals, sales growth in automotive applications, and the progress in expanding our products into multiple applications in mobility solutions, and overall recovery in semiconductor markets and demand growth in the cutting-edge semiconductor market in ICT solutions. In basic and green materials, operating income before special items is expected to move into the black due to benefits from business restructuring and the elimination of the impact of the Osaka ethylene plant failure. While the impact of U.S. trade policies on our business performance remains uncertain, we estimate a negative impact of approximately JPY 8.0 billion on our direct exports to the United States from our group's domestic and overseas sites, mainly in agrochemicals, automotive, and semiconductor businesses. This impact is reflected in operating income before special items of the others segment.
Although the environment is uncertain, in each of our business segments, in addition to factoring in the negative effects, we aim to capture opportunities that arise from the changing trade policy landscape by expanding sales through our global sites. We also aim to minimize the impact through group-wide efforts to improve our cost structure. I would now like to explain our business performance and its overview and financial statements based on the materials provided. This is today's agenda. First, I would like to provide an overview of our financial results for fiscal year 2024, followed by an overview of our financial outlook for fiscal year 2025. In accordance with the organizational reform implemented on April 1, 2024, we have revised the segments to which Honshu Chemical Industry Co., Ltd. and certain other consolidated subsidiaries and equity method affiliates in ICT solutions and basic and green materials belong.
Additionally, the segments for fiscal year 2023 are disclosed based on the reportable segment classifications after the revisions. Please see page 1. This section describes trends in the major markets related to our business in the financial results for fiscal year 2024 and the financial outlook for fiscal year 2025. First of all, the market environment for ophthalmic lens materials in relation to Life & Healthcare Solutions remained firm in fiscal year 2024. As for the forecast for fiscal year 2025, the market environment is expected to remain firm. The market environment for agrochemicals also remained firm in fiscal year 2024 despite the effects of inventory-level adjustments in some regions. Although the effects of inventory-level adjustments will remain in fiscal year 2025, demand is expected to remain firm. Next is the outlook for global automobile production volume related to mobility solutions.
In fiscal year 2024, automobile production volume decreased from the previous year in every region except for China and also decreased globally from the previous year. Looking ahead to fiscal year 2025, the environment is such that it is difficult to foresee an increase in production volumes, and global production is expected to remain at the same level as fiscal year 2024. In the semiconductor and smartphone markets related to ICT solutions, demand recovered gradually in fiscal year 2024. However, we see that the recovery of semiconductors is uneven depending on their applications. The semiconductor market in fiscal year 2025 is expected to continue to show signs of recovery, driven by the cutting-edge sector, while demand in the smartphone market is expected to remain at the same level as fiscal year 2024. AI-related applications are expected to perform well, but consumer, industrial, and automotive applications are expected to remain sluggish.
As for basic and green materials, cracker operating rates remained low in fiscal year 2024. As for fiscal year 2025, operating rates are expected to remain low with no major recovery in demand expected. Given this situation, we will swiftly implement business restructuring. Please see page 2. This is about the status of our major investment projects. The items in yellow are projects that began commercial operation in fiscal year 2024. Those in blue are projects for which decisions were made in fiscal year 2024. In addition to investing in the specialty chemicals domains, we will also be active in restructuring and optimization. Please see page 3. This is the summary of our financial results for fiscal year 2024. Sales revenue for fiscal year 2024 was JPY 1,809.2 billion, an increase of JPY 59.5 billion compared to the previous year.
Operating income before special items was JPY 101.0 billion, an increase of JPY 4.8 billion year-on-year. Net income attributable to owners of the parent was JPY 32.2 billion, a decrease of JPY 17.8 billion year-on-year. The exchange rate was 153 yen to the dollar, representing a depreciation of 8 yen year-on-year. The domestic NAFTA price per kiloliter was JPY 75,600, an increase of JPY 6,500 year-on-year. Please see page 4. This is the summary of a year-on-year comparison about operating income before special items in fiscal year 2024. In terms of volume, sales of vision care materials increased due to the elimination of the negative impact from inventory-level adjustments in fiscal year 2023. Sales of elastomers increased as we saw growth in automotive applications and expanded our products into multiple applications. Sales of semiconductor-related products increased due to a recovery in demand in the semiconductor and smartphone markets.
Terms of trade improved due to sales price revision, primarily in basic and green materials, and yen depreciation impact. Inventory valuation gains were also recorded due to rising raw material prices. Fixed costs and others increased due to an increase in repair and maintenance costs caused by soaring labor and material costs, as well as active investment of resources, mainly in the specialty chemicals domains. Equity and earnings of overseas affiliates also decreased. Meanwhile, the effects of business restructuring are steadily contributing to profits. Looking at the results by factor within the JPY 4.8 billion increase in operating income before special items compared to the previous year, the volume difference was plus JPY 15.1 billion. Terms of trade were plus JPY 9.1 billion, and fixed costs and others were minus JPY 19.4 billion. Please see page 5. Sales revenue and operating income before special items by segment.
The return on sales, or ROS, in the specialty chemicals domains has improved to nearly 11%. The following pages provide a detailed explanation of the increase or decrease factors for each segment. Please see page 6. Life & Healthcare Solutions reported operating income before special items of JPY 34.2 billion in fiscal year 2024, an increase of JPY 4.2 billion compared to the previous year. The volume difference was plus JPY 5.9 billion. This was mainly due to the elimination of inventory-level adjustments in fiscal year 2023 in vision care, firm overseas sales in agrochemicals, and increased sales due to the establishment of joint venture in nonwovens. Terms of trade improved by JPY 3.8 billion, due in part to the yen depreciation impact in agrochemicals.
Fixed costs and others were minus JPY 5.5 billion, mainly due to an increase in fixed costs associated with the operation of a new plant in vision care and increased costs associated with sales expansion in agrochemicals. Please see page 7. Mobility Solutions reported operating income before special items of JPY 55.9 billion in fiscal year 2024, a decrease of JPY 1.8 billion compared to the previous year. The volume difference was plus JPY 6.2 billion, mainly due to volume growth associated with the recovery of elastomers for automotive applications and the expansion of elastomer products into multiple applications in growth markets. Terms of trade were minus JPY 3.5 billion. Overall, although there were positive effects from foreign exchange impact and gains from time lag in PP compounds, terms of trade worsened compared to the previous year due to a temporary change in market conditions related to elastomers.
Fixed costs and others were JPY 4.5 billion, due to an increase in repair and maintenance costs and other expenses. Please see page 8. ICT solutions reported operating income before special items of JPY 25.8 billion in fiscal year 2024, an increase of JPY 2.2 billion compared to the previous year. The volume difference was plus JPY 6.2 billion, with sales volume increasing due to the recovery of the semiconductor and smartphone markets. Terms of trade were JPY 0.6 billion. The improvement was mainly due to the foreign exchange impact. Fixed costs and others were minus JPY 4.6 billion, due to an increase in fixed costs associated with the operation of a new plant for ICROS Tape , which is an industrial film, development costs aimed at expanding sales, and costs associated with the restructuring of the packaging film business. Please see page 9.
Basic and green materials reported JPY 11.4 billion minus in operating income before special items for fiscal year 2024, an increase of JPY 0.2 billion compared to the previous year. Although there was a negative impact of around JPY 10.5 billion from the failure at the ethylene plant in Osaka, the effects of sales price revision and business restructuring contributed to the increase in profit. The volume difference was minus JPY 3.2 billion minus, affected by the plant failure and sluggish demand. Terms of trade improved by JPY 8.2 billion, due to inventory valuation gains resulting from fluctuations in raw material prices as well as steady progress in sales price revision. Regarding fixed costs and others, repair and maintenance costs increased due to rising labor and material costs, but there were also positive benefits for business restructuring. Please see page 10. This is non-recurring items.
Non-recurring items totaled minus JPY 22.7 billion. The breakdown for fiscal year 2023 includes the impairment losses as a result of separation of Mitsui Chemicals Toseo's packaging film business and partial transfer of its shares in ICT solutions, and the business restructuring in basic and green materials. In fiscal year 2024, we incurred an impairment loss on an equity method affiliate in Life & Healthcare Solutions and an impairment loss on business restructuring in basic and green materials. Please see page 11. This is the consolidated statement of financial position. Total assets were JPY 2,154.0 billion, a decrease of JPY 61.8 billion compared to the end of March 2024.
This decrease was due to the transfer of shares as a result of the restructuring of the packaging film business, as well as a decline in cash and cash equivalent from repayments of interest-bearing liabilities and the acquisition of treasury stock. Please see page 12. This is the consolidated statement of cash flow. Cash flows from operating activities were positive JPY 200.5 billion. Cash flows from investing activities were negative JPY 165.0 billion. Although there were cash inflows from the sale of the Singapore Fenols business in the previous year, the cash flows from investing activities for fiscal year 2024 increased by JPY 41.1 billion year-on-year due to the completion of construction of a large facility. As a result, free cash flows were positive JPY 35.5 billion. Cash flows from operating activities surpassed JPY 200 billion, a record high level, mainly due to a decrease in working capital.
As a result, we secured the free cash flows even with active investments we made in the specialty chemicals domains, such as the completion of construction of a large facility and the investment in a special purpose company to acquire shares in Shinko Electric Industries Co., Ltd. Cash flows from financing activities were negative JPY 74.4 billion, due to the repayment of commercial paper and other factors. Next, I will explain the overview of our financial outlook for fiscal year 2025. In accordance with the organizational reform implemented on April 1, 2025, we have revised the segment to which Mitsui Chemicals Asahi Life Materials Co., Ltd. belonged from Life & Healthcare Solutions to ICT Solutions, as well as that of certain other affiliates from Mobility Solutions to ICT Solutions. Additionally, the segments for fiscal year 2024 are disclosed based on the reportable segment classifications after the revisions.
Please see page 13. This is the highlights of consolidated financial outlook. Regarding the outlook for the full fiscal year of 2025, we expect sales revenue to be JPY 1,770.0 billion, a decrease of JPY 39.2 billion compared to the previous year. Operating income before special items is expected to be JPY 110.0 billion, an increase of JPY 9.0 billion year-on-year, which factors in a negative impact of JPY 8.0 billion from U.S. trade policies. Net income attributable to owners of the parent is expected to be JPY 55.0 billion, an increase of JPY 22.8 billion year-on-year. The exchange rate for the year is expected to be 140 yen to the dollar, an appreciation of 13 yen year-on-year. The domestic NAFTA price is expected to be JPY 65,000 per kiloliter, a decrease of JPY 10,600 year-on-year. Please see page 14.
This is the summary of our outlook of operating income before special items for the fiscal year. Compared to the previous year, we expect sales volume to increase mainly in the specialty chemicals domains. Sales of vision care materials are expected to remain firm, and sales volume of agrochemicals is expected to increase overseas. Sales volume of elastomers is expected to increase due to the expansion of products into multiple applications in growth markets. While automobile production volume is not expected to expand globally, we expect sales of PP compounds to increase through sales expansion in key regions. Sales of semiconductor applications are expected to increase due to the recovery of the semiconductor market and growing demand in the cutting-edge semiconductor market. Terms of trade are expected to worsen due to the impact of yen appreciation and inventory valuation losses due to a decline in raw material prices.
Fixed costs and others are expected to increase, although we expect an improvement in the equity and earnings of overseas affiliates and positive effects of business restructuring. The impact of major regular maintenance at Ichihara Works, which is carried out once every four years, and the operations of new plants are expected to increase fixed costs. We also anticipate negative impacts from U.S. trade policies. Consequently, the projected increase in profit of JPY 9.0 billion over the previous year is attributable to a number of factors, including a positive volume difference of JPY 27.5 billion, a negative terms of trade impact of JPY 9.5 billion, and a negative impact of fixed costs and others of JPY 9.0 billion. Please see page 15. This is our outlook for sales revenue and operating income before special items by segment.
The following pages will provide an explanation of the factors behind the increase or decrease in each segment. Please see page 16. Life & Healthcare Solutions operating income before special items for the full year is expected to be JPY 35.5 billion, an increase of JPY 1.4 billion from the previous year. The volume difference is expected to be plus JPY 5.0 billion. We expect sales to remain firm in vision care and sales volume to increase overseas in agrochemicals. Terms of trade are expected to be negative JPY 2.0 billion, mainly due to yen appreciation. Fixed costs and others are expected to be negative JPY 1.6 billion. This is due to an increase in SG&A and R&D expenses, mainly registration and maintenance expenses associated with the expansion of agrochemicals, although we expect a positive effect from business restructuring in oral care. Please see page 17.
Mobility Solutions operating income before special items for the full year is expected to be JPY 53.0 billion, a decrease of JPY 2.1 billion from the previous year. The volume difference is expected to be positive JPY 10.0 billion, due to increased sales of elastomers driven by expansion of products into multiple applications in growth markets, as well as expanded sales of PP compounds in key regions. Terms of trade are expected to be negative JPY 8.0 billion, due to the elimination of the gains from time lag in PP compounds in fiscal year 2024 and yen appreciation. Fixed costs and others are expected to be negative JPY 4.1 billion, due to the operation of new plants for TAFMER and high-performance PP. Please see page 18.
ICT solutions operating income before special items for the full year is expected to be JPY 33.5 billion, an increase of JPY 6.8 billion from the previous year. The volume difference is expected to be plus JPY 10.0 billion. We expect sales volume to increase in line with the demand recovery in semiconductor markets and the demand growth in the cutting-edge fields. Terms of trade are expected to be negative JPY 2.0 billion, mainly due to yen appreciation. Fixed costs and others are expected to be negative JPY 1.2 billion due to increased costs for the operation of new plants for coating and engineering materials and for accelerating new product development. Please see page 19. Basic and green materials operating income before special items for the full year is expected to be JPY 1.5 billion, an increase of JPY 12.9 billion from the previous year, turning into a profit.
The volume difference is expected to be plus JPY 2.5 billion. Terms of trade are expected to be plus JPY 2.5 billion, due in part to the elimination of the impact of the ethylene plant failure, although there will be inventory valuation losses due to a decline in raw material prices. Fixed costs and others are expected to be plus JPY 7.9 billion, due to an improvement in equity and earnings of a polyurethane's affiliate as well as business restructuring. Please see page 20. This is the cash flow outlook for the full year. Cash flows from operating activities are expected to be positive JPY 200.0 billion. Cash flows from investing activities are expected to be negative JPY 155.0 billion. As a result, free cash flows are expected to be positive JPY 45.0 billion.
We will continue securing free cash flows in fiscal year 2025 by generating JPY 200 billion in cash flows from operating activities while making active investments. Please see page 21. Regarding our shareholder returns, at this time, we have maintained our annual dividend outlook at JPY 150 per share due to negative impacts from U.S. trade policies. We will consider increasing dividends during the fiscal year, taking into account the progress of our business performance, developments regarding U.S. trade policies, and other factors. That is all for the explanation about our financial results for fiscal year 2024 and our financial outlook for fiscal year 2025. Thank you very much for your kind attention.