Let me start by offering a word of appreciation to institutional investors and analysts. My name is Takashi Abe, President, Representative Director, and CEO of the GS Yuasa Corporation. I would now like to report on the results for FY 2024. I would like to explain our business results for the second quarter of the fiscal year ending March 31st, 2025. Net sales were JPY 264.5 billion, up JPY 7.7 billion year-on-year, and operating income was JPY 15.7 billion, up JPY 3.0 billion year-on-year. Operating income before amortization of goodwill was JPY 16.1 billion, an increase of JPY 3.2 billion from the previous year, and ordinary income was JPY 14.5 billion, an increase of JPY 2.5 billion year-on-year. Net income attributable to owners of the parent was JPY 9.4 billion, an increase of JPY 3.4 billion year-on-year.
Net income attributable to owners of the parent before amortization of goodwill, et cetera, was JPY 9.7 billion, an increase of JPY 3.5 billion from the previous year. Net sales and profits at each stage were significantly higher than in the previous year. I would like to explain our business performance trends. The factors that contributed to the increase in net sales and operating income were due to an increase in sales volume of automotive batteries, an increase in projects for emergency and regular use of Industrial Batteries and Power Supplies, and the effect of continuous review of selling prices in each segment. The factors that contributed to the increase in ordinary income were an increase in equity in earnings of affiliates and gain on net monetary assets, and a decrease in loss on sales of bonds.
The increase in net income for the interim period was due to a decrease in net income attributable to non-controlling interests. I will explain the details of the business results for the second quarter of the fiscal year ending March 2025. Both net sales and profits at all levels reached record highs. Both net sales and profits at each stage of the business are significantly higher than our initial forecast. I will explain the factors behind the increase or decrease in operating income compared to the previous year and to the initial forecast. As for the factors behind the year-on-year increase and decrease in operating income, higher volume and favorable changes in product composition, primarily in automotive batteries and Industrial Batteries and Power Supplies, had a positive impact.
In the area of raw material prices and selling prices, there was a sharp rise in raw material prices, mainly in the first quarter, due to the yen's depreciation. In addition, we are continuously reviewing our selling prices, especially for automotive batteries and Industrial Batteries and Power Supplies. Expenses and other costs were negative due to an increase in labor costs, logistics costs, and other expenses resulting from an increase in the volume and inflation. Regarding foreign exchange, although there was a positive effect mainly in the first quarter due to the impact of yen depreciation, the positive effect was reduced in the second quarter due to the significant depreciation of the Turkish lira.
As for the reasons for the increase or decrease compared with the initial forecast, the volume increase in automotive batteries and Industrial Batteries and Power Supplies and the effect of the revision of selling prices have been realized. The depreciation of the yen also had a positive impact. I will now explain non-operating income and loss. Equity in earnings of affiliated companies increased by JPY 0.2 billion year-on-year due to the impact of strong sales of equity-method affiliates.
Equity in earnings of affiliated companies was JPY 1.3 billion in the previous year and JPY 1.5 billion in the current year. Foreign exchange loss was JPY 1.4 billion, mainly due to the impact of increased foreign exchange losses from the depreciation of the Turkish lira. Gain on net monetary assets amounted to JPY 0.3 billion, compared to JPY 0.5 billion in the previous period and JPY 0.8 billion in the current period. Net income attributable to non-controlling interests decreased, but distribution of income to minority shareholders decreased due to the acquisition of Lithium Energy Japan as a wholly-owned subsidiary at the end of fiscal year 2023, and the loss at the Türkiye site.
I would like to explain our business performance by segment. Automotive batteries in Japan increased in both sales and profit. Net sales were JPY 43.6 billion, up JPY 2.5 billion from the previous year, and operating income was JPY 3.4 billion, up JPY 1.2 billion from the previous year. Automotive batteries overseas also posted increases in both sales and income. Net sales were JPY 127.5 billion, up JPY 2.1 billion from the previous year, and operating income was JPY 9.4 billion, up JPY 1.8 billion from the previous year. Industrial Batteries and Power Supplies has also increased in sales and profits. Net sales were JPY 46.2 billion, up JPY 6.7 billion from the previous year, and operating income was JPY 3.9 billion, up JPY 2.5 billion from the previous year. Sales and profits from automotive lithium-ion batteries declined.
Net sales were JPY 36.3 billion, down JPY 4.3 billion from the previous year, and operating income was - JPY 1.8 billion, down JPY 2.5 billion from the previous year. Specialized batteries and others increased in both revenue and earnings. Net sales were JPY 10.9 billion, up JPY 0.7 billion from the previous year, and operating income was JPY 1.2 billion, up JPY 0.1 billion from the previous year. Regarding the business environment, automobile production has been affected by the shutdown of operations by car manufacturers due to certification irregularities, as well as typhoons and other factors, resulting in a decrease in volume. Automotive lithium-ion batteries are on an improving trend despite the impact of a decline in the lithium market, mainly in the first quarter. Regarding lead prices, LME prices are on a downward trend due to global economic trends, especially in China.
The domestic lead price has slightly settled down from its high level due to the rapid appreciation of the yen. The yen has been appreciating to a certain extent due to the Bank of Japan's interest rate hike and the FOMC meeting, but it has been weakening significantly from yesterday to today. I would like to explain about automotive batteries in the domestic market. Net sales were JPY 43.6 billion, up JPY 2.5 billion from the previous year. Operating income was JPY 3.4 billion, up JPY 1.2 billion from the previous year, an increase in both sales and income. The volume of sales for new automobiles decreased due to the shutdown caused by the certification fraud from the first quarter and by typhoons. On the other hand, net sales increased due to the revision of selling prices, which has been implemented since last fiscal year.
Sales volume of replacement batteries increased due to a decline in sales of new automotive batteries. As for the reasons for the increase and decrease, in the area of volume and composition change, demand for replacement with high profit margins is increasing. In addition, demand for batteries for vehicles with start-stop systems is on the rise. Raw material prices and selling prices increased due to the ongoing review of selling prices for new automobiles. This is the percentage of ISS and EN compliant batteries shipped for new automotive batteries and replacement batteries. For the percentage of JIS/ISS shipments, 30% for new automobiles, down 10% compared to the first half of fiscal year 2020. The sales for replacement are 40%, up 15% compared to the first half of fiscal year 2020.
The demand for new automobiles is shrinking, partly due to a decrease in the ratio of vehicles with start-stop systems due to electrification. On the other hand, demand for replacement is on the rise due to strong demand for replacement of vehicles with start-stop systems sold in the past. As for the percentage of EN standard shipments, new automobiles 40%, up 15% year-on-year. For replacement, 5%, up 5% year-on-year. For new automotive batteries, Toyota has a large share of the market, and the ratio of EN batteries used in TNGA is on the rise. On the other hand, the replacement period has not yet arrived for replacement batteries, so while the ratio of EN batteries is increasing, the impact is limited. I would like to explain about automotive batteries overseas. Net sales and operating income increased by JPY 2.1 billion and JPY 1.8 billion from the previous year.
Sales in ASEAN, especially in Thailand, Indonesia, and Vietnam, are strong. However, sales for new automobiles in Thailand are declining due to stricter automobile loans for new automobiles and plant shutdowns caused by typhoons. Sales for replacement remained steady. In Indonesia and Vietnam, sales of both automobiles and motorcycles remained strong. I would like to explain about Europe, EU, and Türkiye. In the European market, where demand is strong, the sales volume of automotive batteries, which are competitive due to the depreciation of the Turkish lira, has remained strong. However, in Türkiye, demand is weak, and volumes are down significantly due to the depreciation of the Turkish lira. In Australia, as the only manufacturer of lead-acid batteries in Australia, sales volume remained strong with Made in Australia. Net sales increased due in part to foreign exchange effects.
As for factors for the increase and decrease, in the area of volume and composition change, the volume increased at strategic sites in ASEAN, Europe, and Australia. Raw material prices and selling prices have increased due to the reflection of cost increases in selling prices. Inflation in Türkiye has an impact of +JPY 3.3 billion. Regarding expenses and other items, in addition to the increase in expenses, the significant increase in inflation in Türkiye has had a significant impact. The effect of yen depreciation was reduced due to the continued depreciation of the Turkish lira, although there was a foreign exchange impact from the yen's depreciation. Net sales by region are explained below. Regarding trends in Asia, the China site was accounted for by the equity method in September 2023 and was excluded from consolidation. We maintain a high market share in Thailand, Indonesia, and Vietnam, our main markets.
In recent years, due to the economic growth in each country, both automobile and motorcycle applications have expanded significantly. We will continue to expand our business with an eye on the Mekong Economic Zone, including Cambodia and Laos. Regarding trends in Europe, we consolidated our Türkiye site in April 2022 and are utilizing its geographical location as an export site to Europe and the Middle East. We are on an expansionary trend, partly due to the growing demand for replacement batteries in Europe. In Australia, as I mentioned earlier, our base in the country is the only Australian manufacturer of storage batteries. Sales remain strong, taking advantage of the Made in Australia priority. Industrial Batteries and Power Supplies also increased in both sales and income.
In the regular use for domestic, batteries for power grids, net sales increased due to the delivery of a project that was delayed at the end of the previous fiscal year, as well as a project whose delivery date was brought forward. In the emergency use, demand from data centers is strong, in addition to strong sales to government agencies and nuclear power plants. Net sales have remained strong due to improved component delivery times for mini UPS, which had been affected until last year. Forklifts for global maintained the same level as the previous year due to a revision of selling prices despite a decrease in volume. Regarding the factors of increase and decrease in terms of volume and composition change, the volume of both regular use and emergency use increased due to an increase in projects.
With regard to raw material prices and selling prices, selling prices are being reviewed for emergency use and forklifts. These effects led to an increase. Sales and profits of automotive lithium-ion batteries decreased. In batteries for HEVs, sales volume increased due to model changes, such as Freed of delivered models, mainly to Honda. Net sales remained at the same level as the previous year, mainly due to the residual effects of lower selling prices caused by the decline in the lithium market from the end of the previous fiscal year through the first quarter of the current fiscal year. Sales of batteries for PHEVs decreased significantly due to a decline in sales volume of the model delivered, Eclipse Cross. Net sales of 12 V lithium-ion batteries increased due to an increase in sales volume of models delivered to Europe and the effect of a revision of selling prices.
As for the factors for the change in volume and composition, while sales of HEVs and ESSs increased significantly compared to last year, the sales volume of PHEVs decreased significantly due to the end of sales of the models, and the capacity utilization rate also declined. Although raw material prices and selling prices declined due to the drop in the lithium market, compared to the first quarter, there is an improvement trend. In the area of expenses, there was a decrease in expenses due to a decrease in the volume of materials. Specialized batteries and others also increased in both sales and income. Net sales of submarine lithium-ion batteries for the Ministry of Defense increased due to a review of contract unit prices.
Regarding lithium-ion batteries for aircraft, sales volume for new installations increased, but sales volume for airlines for replacement batteries decreased, partly because the special demand from the post-corona recovery in passenger demand has run its course. As for the factors for the increase and decrease, although there was a review of contract unit prices for submarine lithium-ion batteries and other products, operating income remained almost the same level as the previous year due to an increase in expenses. I will explain only the main points regarding the balance sheet. Total assets are almost unchanged from the previous year. Tangible fixed assets increased by JPY 17.5 billion due to the acquisition of land for the production of batteries for BEVs and investments to increase the capacity of Blue Energy's second plant to 70 million cells per year. I will explain about cash flow.
Although we secured pre-tax income of JPY 14.3 billion, operating cash flow was JPY 5.1 billion, a significant decrease from the previous year due to the reduction of trade payables. Due to the acquisition of land for manufacturing batteries for BEVs and capital investment to increase production capacity at Blue Energy's second plant, net cash used in investing activities was JPY 36.7 billion, and free cash flow was - JPY 31.6 billion. We also issued sustainability-linked bonds and borrowed funds to meet the above financing needs. The figures for capital investment, depreciation, and R&D costs are as shown in the table on page 18. Next is the outlook for the business environment of fiscal year 2024 and the financial forecast. I would like to explain our perception of the business environment for the second half of the fiscal year ending March 31st, 2025.
First, in automotive batteries in Japan, we expect that the effects of certification irregularities and typhoon-related shutdowns on new automobile batteries will gradually improve in the second half of the year. It will be difficult to make up for the decline in the first half, in the second half. On the other hand, we expect sales of replacement batteries to remain strong, especially in the third quarter, which is also a demand period. Regarding automotive batteries overseas, in Thailand of ASEAN countries, conditions remain difficult due to production scale reductions and withdrawals by Japanese car manufacturers, partly because of stricter regulations on new automobiles and loans, typhoons, and reduced subsidies for some pickup trucks. In Indonesia and Vietnam, sales for automobiles and motorcycles, both new vehicles and aftermarket, are strong.
While demand in Europe for replacement is strong, we assume that Türkiye is at high risk due to the deteriorating situation in the Middle East, exchange rate and inflation effects, although inflation has slowed down recently. We assume that in Australia we will continue to perform well, taking advantage of the fact that it is the only Australian manufacturer of storage batteries. Regarding Industrial Batteries and Power Supplies, the environment for domestic regular use will continue to see strong demand due to the impact of the multi-year extension of subsidies to cover the period, preferential policies for domestically produced storage batteries, and the Long-Term Decarbonization Power Source Auction. In regular use, strong projects for government, nuclear power projects, and data centers will continue.
Regarding lithium-ion batteries for automotive applications, the impact of the decline in lithium prices for HEVs has been improving, and the gap between selling prices and raw materials has decreased and is improving. In addition, volume is increasing due to model changes, Freed, et cetera, mainly for Honda. The number of PHEVs to be delivered in the second half of the fiscal year is expected to increase due to an increase in the number of models, Outlander, to be delivered in the second half of the fiscal year. In specialized batteries and others, we expect the effect of the revision of contract unit prices for submarines to continue in the second half of the fiscal year. For aircraft, we expect sales to airlines to decrease and sales to new aircraft manufacturers to also decrease slightly from the initial forecast.
I would like to explain about the revision to the segment forecasts. Forecast of operating income of automotive batteries in Japan is JPY 8.5 billion, up JPY 0.5 billion. Operating income for automotive batteries overseas is JPY 17.5 billion, up JPY 1.0 billion. Operating income for Industrial Batteries and Power Supplies is JPY 13.5 billion, up JPY 0.5 billion. The revised forecast for these three segments reflects the upward revision due to the increase in volume and the revision of selling prices in the first half. On the other hand, we have revised downward our forecast of operating income for automotive lithium-ion batteries from JPY 4 billion to JPY 2 billion.
Although the impact of the lithium market is expected to improve for HEVs and the volume of batteries for PHEVs is expected to increase in the second half of the fiscal year, we expect a decrease in profit as it will not be enough to cover the impact of the decrease in profit, mainly in the first quarter of the fiscal year. As of the first half of fiscal year 2024, our performance is as I mentioned. Economic trends are very uncertain due to political events in various countries, the impact of Japan's lower house election, the U.S. presidential election, central bank policy changes, and interest rate fluctuations. In addition, raw material prices and exchange rates have been changing rapidly due to economic trends and the economic situation in China, et cetera.
We have not revised our full-year forecast in total from the initial forecast announced in May, as we have decided to leave the full-year results unchanged. This concludes today's presentation. The second quarter cumulative results exceeded the initial plan for the first half, but how much did they exceed the internal plan? What is the status of the upward or downward swing of the results against the internal plan for each segment? Regarding automotive batteries in Japan, sales for new automotive batteries decreased, but this was covered by volume of replacement batteries. The upward swing is due to the fact that price increases for new automobiles are to some extent higher than expected at the beginning of the period. Regarding automotive batteries overseas, situations varied by region. In ASEAN, there was an upswing due to strong sales in Indonesia and Thailand.
In Türkiye, there was a downward swing due to tougher-than-expected conditions in Türkiye. In Europe and Australia, sales continued strong. Regarding Industrial Batteries and Power Supplies, the initial plan was conservative. The performance was higher than the initial projection due to the postponement and advance of projects in the regular use field and many profitable projects in the emergency use field, such as nuclear power plants. Regarding automotive lithium-ion batteries, as explained in the first quarter, the results were significantly lower than initially expected due to the impact of inventory write-downs and a delay in eliminating the spread between raw materials and selling prices. In the second quarter, the impact is making a recovery, and if you look at the second quarter alone, the segment as a whole has returned to profitability. Going forward, we will work to further improve the impact of the spread.
Regarding automotive batteries overseas, when calculating backward from the full-year plan, the forecast for the second half of the year is expected to show a decrease in profit compared to the first half. Are you anticipating any transitory factors? For example, is there any possibility of an increase in the impact of hyperinflationary accounting? You mentioned that the domestic situation in Türkiye is difficult, but how much is the impact in Türkiye? In Thailand, there was a sharp decline in volume for new automobiles due to the government's EV promotion measures, which is putting a sudden brake on the market. In Türkiye, inflation and the Turkish lira's downward trend are causing interest rates to rise, which is making it difficult for dealers in Türkiye to raise funds.
The volume of batteries delivered by our company to dealers is low due to the impact of the lack of increase in the volume of batteries. Therefore, we believe that we have to pay considerable attention to the situation in Türkiye in the second half of the year. As for the breakdown of sales at the Turkish site, are most of the deliveries made to dealers in Türkiye? Although we refrain from disclosing the individual business results for the Turkish site, its basic policy is local production for local consumption. Since domestic sales are the main source of sales at the Turkish site, a decline in volume would have a significant impact. Have the effects of hyperinflationary accounting been factored into the plan for the second half of the year?
Although the amount will vary depending on the inflation rate, we have factored in the same level as in fiscal year 2023. The automotive lithium-ion battery segment turned profitable in the second quarter. I believe that the company controlled expenses, but the impact of the spread between raw materials and selling prices seems to be appearing in the same way as in the first quarter. Will the impact of the improved spread start to appear in the second half? If so, how certain are you that the business will improve from the second half? We are taking efforts for the second half of the year, including improvement of selling prices. The spread is becoming smaller than in the first quarter and is improving. Regarding the second half of the year for automotive lithium-ion batteries, the company is planning to increase profits compared to the previous year.
How much of an impact do you expect in the second half compared to the first half if divided by volume, selling price, and expenses? The spread between raw materials and selling prices for HEVs was very large, but it has been improving since the second quarter. In the first half, there was a large decrease in the volume of PHEVs delivered, but the business is expected to recover in the second half as the volume of PHEVs will increase due to the increase in new car models from the second half. We revised the initial profit forecast of JPY 4 billion due to the large gap of margin in the first quarter. Is the impact of the spread between raw materials and selling prices in a positive direction compared to the second half of the previous year?
Lithium market prices have settled down, and the gap between cost and selling prices has only narrowed, but not in a positive direction. We are in dialogue with major manufacturers and are negotiating with them to reduce the impact of the spread between raw materials and selling prices due to fluctuations in the lithium market. How much will sales increase as HEV production capacity increases to 70 million cells per year in the next fiscal year? What is the company's outlook for the number of models? Please forgive us for not being able to disclose the specific car models in which they will be installed. We believe that it will be difficult to produce 70 million cells per year at full capacity, but we have secured a quantity close to 70 million cells per year, and we are currently preparing facilities for production.
Regarding Industrial Batteries and Power Supplies, I believe there is a policy to give preferential treatment to domestically produced batteries in the regular use field. But how exactly will they be treated? What benefits will GS Yuasa receive as a result of the preferential treatment for domestically produced batteries? Also, the full-year profit forecast appears to be weak. What does the company consider to be the risk? Although the government has not clearly indicated that companies have a preferential treatment to domestically produced batteries, there are some changes in the bidding process, and we believe that the advantage of the preferential treatment is that it is a business that provides a system for maintenance after delivery, et cetera, and we believe that this has been well-received by our customers.
As for the conservatism of the full-year profit forecast for the Industrial Battery and Power Supply segment, we believe that this is partly due to the fact that some customers have postponed deliveries for the current fiscal year because the subsidy period for regular use has changed from a single year to multiple years, and some projects have been postponed and will be delivered next year or the year after next. In the regular use field, demand for data centers is strong, but profitability is poor, putting pressure on profits. Although the company can secure sales for data centers, profitability is difficult. Last year, the supply of mini UPS was delayed due to insufficient components, but this has improved in the current fiscal year.
There is the replacement demand for UPS for a major convenience store project, and although this is a large sales figure, profitability is tight, which is putting downward pressure on profitability. Profits are expected to be weak relative to sales due to delivery delays in the regular use field and the concentration of low-profit projects in the emergency use field. Please tell us about the profitability and impact on profit of automotive lithium-ion batteries in the next fiscal year. As sales are expected to increase in the next term, the company will also increase the production capacity. Why are you factoring in some initial costs? When BEC's performance was strong, the operating income margin was up to about 10%. What is the outlook of operating profit margin for BEC?
In the explanation of the new car manufacturer, there was some talk about the integration of batteries for PHEVs and HEVs. What is the outlook for improvement in profitability of automotive lithium-ion batteries, and what is the growth potential for profit in the next fiscal year and in the medium to long term? The volume of automotive lithium-ion batteries is expected to increase over the medium to long term, and profits are expected to recover steadily along with the increase in volume. In a single year, there were special factors such as the impact of the worsening spread, but in the long term, both sales and profits are expected to increase. The lithium-ion battery business is a mass production business, so the volume is important, and we believe that increasing factory capacity utilization is essential for profit growth.
For PHEVs, the volume will increase from the second half of the year with the release of the new Outlander, and for HEVs, the volume for both Toyota and Honda will increase. We expect both sales and profits to remain strong as we secure volume for the 70 million cell system for HEVs. As for initial expenses, depreciation expenses and initial costs are expected to be incurred to a certain extent due to the expansion of the production line at BEC's second plant, which may be a downside factor. On the other hand, we believe that the volume of HEVs will continue to increase toward 2035, so we would like you to have a long-term perspective on our company rather than a short-term perspective of one to two years. Please update us on the development status and commercialization of all-solid-state batteries.
I have heard that Toyota, Honda, Nissan, et cetera, have already started development and are close to launching their products on the market. What are the specifications of GS Yuasa's all-solid-state battery development compared to other companies and its future potential in terms of commercialization? We are developing all-solid-state batteries with the utilization of a NEDO grant. Although mass production, including investment, is still some way off, we believe that the solid electrolyte we are developing is a very promising technology in terms of water resistance. Car manufacturers are also moving forward with development for mass production, but we do not yet know on what scale it will be put to practical use. We believe that the technology for mass production is still a high hurdle. We would like to continue development toward practical application, starting with special applications.
What is the purpose that the company is expected to manufacture not only batteries for BEVs but also for ESS in the BEV battery plant? We will produce high-capacity LIBs at the plant in Shiga Prefecture, and since LIBs for ESS and LIBs for BEVs have a high affinity, from the beginning, we have planned that the factory for BEVs would also produce for ESS. I am aware that it is easy to convert a production line built for BEVs to production for ESS, but what percentage of the production capacity at the BEV battery plant is expected to be used for ESS? We cannot give a specific breakdown of the production capacity, but since production for industrial use will be based on actual demand and cannot be planned, we will discuss this in the future.
Regarding the preferential treatment of domestically produced LIBs for stationary use, will competing manufacturers other than GS Yuasa be eligible for the preferential treatment even if their cells are LFPs made in China, as is the case with manufacturers such as PowerX. We recognize that PowerX is a competitor since it is subject to the Long-Term Decarbonization Power Source Auction. The Ministry of Economy, Trade and Industry has also determined that PowerX is eligible for subsidies. GS Yuasa intends to take advantage of its network, footwork, and other strengths as a domestic battery manufacturer. Specifically, GS Yuasa would like to sell its post-delivery support services and win firm bids for projects. We recognize that the impact of the spread between raw materials and selling prices due to the lithium market decline will be eliminated.
We have heard that you are planning to review the mechanism for reflecting selling prices due to the increased losses caused by the sharp drop in lithium prices, but will it take until about 2025 to realize the plan? Please tell us if there are any changes in the timeline for realization, such as if the review is already underway. We have been trying to eliminate the time lag and reduce the profit and loss impact since the lithium price had been falling sharply and the selling price was ahead of the price, resulting in a negative impact. We are negotiating diligently with major manufacturers to change the contract format so that the impact can be minimized by the end of FY 2024. Regarding the Türkiye site, we have heard that the main business is exporting batteries produced in Türkiye to Europe.
We recognize that the recent depreciation of the lira has resulted in favorable selling prices for exports, leading to an increase in market share. What has affected the Turkish site as a risk, such as changes in sales destinations? The decline in domestic sales in Türkiye is severe. We believe that the weaker lira is favorable for exports, but since Türkiye has a large domestic sales volume, a decline in sales volume would have a significant impact and would be a risk. Regarding the outlook for the second half of the year in the domestic market for automotive batteries, although there will be a decline in the volume of new automotive batteries, I think we can expect an increase in sales due to an increase in the volume of replacement batteries. Since lead prices are on a downward trend, there may be a little more room for profit growth.
We consider the lead quotation situation to be a risk. Although we have stated that the exchange rate impact is flat, the impact is not zero. In particular, lead prices are affected by the exchange rate. There is some concern that the recovery in volume for new automobiles will be delayed a little. Since demand for replacement may have come in ahead of schedule, we are assuming a flat volume in anticipation of a rebound. Thank you for taking the time off your busy schedules to attend today's earnings presentation. We will continue our utmost efforts toward a results recovery in the second half, so we request your continued support and understanding. Thank you for your time.