Hello everyone, this is Keita Ishii, President. First, I will explain the overview of the FYE 2025 business results and FYE 2026 management plan. Afterward, CFO Hachimura will provide details on the quantitative aspects. First, please refer to page 3 regarding the FYE 2025 business results. Regarding consolidated net profit, against a plan of JPY 880 billion, we achieved JPY 880.3 billion, setting a record high. The business environment in FYE 2025 shifted to weak in the second half, unlike FYE 2024. In this circumstance, businesses influenced by international markets, such as resource prices, did not perform well, marking a year with clear distinctions between prosperous and unprosperous businesses. On the other hand, the yen depreciation unexpectedly to over JPY 150 in the second half remained more depreciated than anticipated throughout the fiscal year, which supported our performance.
Consequently, including extraordinary gains and losses of JPY 110 billion, we managed to achieve a planned growth of 10%. Next, the core profit decreased by 2.4% compared to the previous fiscal year to JPY 770 billion. There were turnarounds in CPP and HyLife, which struggled in FYE 2024, and profit accumulation from growth investments. However, significant declines in resource prices, accidents, and operational issues in two coking coal projects led to substantial declines in the resource sector. Additionally, Marubeni- Itochu Steel, the North American Electric Power and Construction Materials businesses, struggled due to the economic downturn in North America, resulting in an overall decline in earnings. By segment, although machinery, food, ICT, and financial, the eighth, and other segments, achieved record high core profit. The decrease in resource sector and the decline in some businesses significantly impacted the results.
On the other hand, our strength in group companies' profitability remained stable, particularly in Japan, maintaining a ratio of group companies reporting profits at about 92%, recording the highest profits/losses of group companies. This stability in group companies' profitability significantly contributed to our robust growth thus far and symbolizes our strong fundamental profitability that is resilient to economic fluctuations. Regarding investments, under the policy of no growth without investments, we steadily accumulated promising projects such as the privatization of Descente and C.I. TAKIRON, and the Brazilian iron ore business, executing investments amounting to JPY 766 billion in gross investments. Including projects approved and executed in FYE 2026, we decided to execute investments totaling approximately JPY 1 trillion as planned.
With the execution of growth investments, interest-bearing debt increased, but the increase in shareholder equity surpassed it, maintaining a strong financial foundation with a net DER of 0.51 times, almost equal compared to the previous fiscal year. ROE continues at a high level of 16%, the same level as the previous fiscal year. Regarding shareholder returns, we executed a record high dividend of JPY 200 per share and share buyback of JPY 150 billion, resulting in a total payout ratio of approximately 50% as forecasted. This concludes the explanation of the FYE 2025 business results. Now I will explain the contents of the FYE 2026 management plan. Please refer to page 4. As announced last week, we plan for consolidated net profit to reach a record high for the second consecutive year at JPY 900 billion. This plan includes approximately JPY 88 billion gain on the sale of CPP.
Regarding core profit, given the unpredictable and uncertain business environment, we have disclosed a range for our forecast. In FYE 2025, the business environment remained challenging, with persistent inflation in the U.S. keeping interest rates high and resource and general commodity markets slumping due to the economic downturn in China. As a result, core profit growth, particularly in trading-related businesses, fell short of expectations. Furthermore, significant losses from accidents and operational issues at coking coal projects had a major negative impact on performance, ultimately preventing growth in core profit. For FYE 2026, the Trump administration's all-encompassing tariff policy remains the greatest concern, and it is difficult to foresee the endpoint. Moreover, the settled U.S. inflation trend and U.S. economy appear uncertain due to these factors. At present, it seems that President Trump is engaged in deal negotiations using reciprocal tariff policies and introducing additional tariffs to test global reactions.
This approach, where tariffs are imposed before negotiating the terms, complicates the situation as it targets many countries, including both allies and non-allies. The endpoint of each individual deal is yet to be determined, but we will calmly assess the outcomes of each deal and the scope of their impact and respond appropriately. Leveraging our frontline capabilities, we will stay sensitive to the micro-level realities of each industry, making necessary adjustments while swiftly responding with our inherent agility. Moreover, even in the case of unexpected negative factors, we will use our ability to act in advance to minimize any impact. The core profit of JPY 770 billion recorded in FYE 2025, a year impacted by multiple headwinds, is regarded as the lower end for FYE 2026.
By adding extraordinary gains already realized, organic growth from existing businesses, and profit contributions from growth investments, we believe that achieving JPY 900 billion, a record high profit for the second consecutive year, is well within reach. This JPY 900 billion is a milestone toward achieving JPY 1 trillion in the future. Despite the challenging business environment, we aim to achieve this steadily while maintaining commitment-based management. Regarding investments, we will continue to accumulate growth investments up to JPY 1 trillion, as we did in FYE 2025. A market downturn presents an opportunity to invest in low-cost, promising projects. However, considering the highly fluid environment in investment decisions, we will continue to evaluate correctly based on our investment criteria and the four lessons for investments supporting high certainty investments.
For shareholder returns, we will continue to maintain a total payout ratio exceeding the lower limit of 40% or more set in our management policy, aiming at 50% for two consecutive years. Specifically, we plan to maintain a dividend of JPY 200 per share and execute share buyback exceeding the previous fiscal year's level, approximately JPY 170 billion. We will maintain ROE at a global standard level of 15%, focusing on highly efficient management, which is one of our advantages, and realizing sustainable corporate value enhancement. I will now have CFO Hachimura explain the details.
This is Tsuyoshi Hachimura, CFO. I will explain the details. In FYE 2025, we achieved consolidated net profit of JPY 880.3 billion, reaching a record level. In the current FYE 2026, we are aiming for JPY 900 billion, which will be record consolidated net profit for two years in a row.
Based on our commitments, we have set the plans for this current fiscal year, and the whole senior management team is working under the resolution that this year will be very important in regaining the number one position among general trading companies in net profit, ROE, and market cap. Please turn to page 5, which shows the review of the results and the waterfall chart. This shows the one-off P&L of JPY 110 billion, the revaluation gain of Descente, and the China business reorganization of FamilyMart, and core profit resulted in JPY 770 billion. This page 5 includes the organic growth in our existing business, turnaround, and contribution from new investments. If you look at page 12, we show the breakdown by factor.
As part of the JPY 770 billion, there's the impact from resource prices, as well as the slowdown in the business in the resources area, as well as the impact from the currency. The core profit in the resources business has declined by JPY 39.5 billion. Overall, if we go back to page 5, the majority of the JPY 19 billion decline in core profit was due to resources. The details are as shown here, so I will skip that to allocate more time to Q&A. As for the breakdown of the JPY 880 billion, which we announced at the end of Q3, there was JPY 820 billion of core profit and JPY 60 billion of one-off items. As explained at the time, there are three division companies that are not making much progress.
Based on that situation, we revised down the core profit by JPY 40 billion at the time of the first half results announcement. We explained that we did not adjust the breakdown of the numbers. If we do the math, in the Q4 forecast, we were expecting JPY 238.5 billion of core profit and -JPY 35 billion of one-off losses. It turns out that in Q4, we achieved JPY 188.5 billion of core profit and JPY 15 billion of one-off gain. There was + JPY 50 billion in the one-off gain and -JPY 50 billion impact on the core profit. That JPY 50 billion is one of the factors in the turnaround and growth, which are the solid profit drivers in the FYE 2026 plan, which I will explain later. As for the details of FYE 2025, we have the data for each segment.
If you could ask in the Q&A session, I will answer. Next, on the next page is the profit plan for FYE 2026. Let me explain the concept. We gave a lot of thought about how to set and announce our management plan in this current environment of rising uncertainty, which was also reflected in the policy announcement by the Fed today. Traditionally, we would have calculated bottom-up the profit from each division company and applied a buffer at the corporate level. We thought that would be a little too optimistic. We first looked at the core profit in FYE 2025 and made adjustments to currency and resource price assumptions. If you look at page 5, we are using JPY 140 to the dollar, and we are assuming the current resource prices to persist. We show the assumptions in the latter pages.
We are expecting a total of -JPY 50 billion of negative impact from currency and resource prices. This relates to the solid profit drivers, which I explained earlier. There is around JPY 30 billion from turnaround and around JPY 20 billion of profit contribution from new investments. The details are as shown here in terms of investment results. If you factor those in, it is - JPY 50 billion and +JPY 50 billion. The starting point for core profit will be about the same in FYE 2026 compared to FYE 2025. We have chosen to review the collaboration with the CP Group at this time, as also announced earlier. We have decided to sell off the shares of CPP to reshuffle our assets and make good use of the cash. Let me explain that first.
As already announced, we will recognize JPY 122.4 billion of net profit at the standalone level in FYE 2026. On a consolidated basis, we plan to book JPY 88 billion of profit in FYE 2026 in relation to this. To summarize the overall business with the CP Group, first, for FYE 2026, there was more than JPY 170 billion of cash in at the end of April, including the special dividend and the disposal of shares. If we look at the cumulative total with CP Group, there was around JPY 120 billion of contribution, including the cumulative cash in and the initial investment. In terms of trade synergies, there's around JPY 50 billion of trade business conducted every year in a wide range of businesses, including food, ICT and finance, metals, etc.
We have built a relationship of trust under a stable business environment, and we chose to cash in this investment while continuing our collaboration on the business side, including the CITIC investment, CTEI, which was spun out, and HyLife. We will continue these businesses together while there was the cash in resulting from the asset reshuffling. Going back to the table on page 6, there was JPY 90 billion of one-off realized gain, and there are other factors, as I will touch upon later, but this is what we expected when we set the plan, and JPY 860 billion will be the starting point. Let me explain this JPY 860 billion starting point, as well as how we thought about factoring in the highly uncertain recession risk into the numbers for each division company.
We have looked at the impact of the reciprocal tariffs and looked at the trading businesses of each company, each division company. There's the portion which goes from Japan to the U.S. There's also the business from China to the U.S. and Asia to the U.S. We do a lot of businesses. If we just add up the tax impact, there could be around JPY 15 billion-JPY 20 billion of impact. The tariffs for Japan, 24%. Tariffs for China were not as high as the 120% or 145% back then, but we had a rough image. This is just one-off. This number was too small when considering the overall impact to economic recession. Back in FYE 2021, during COVID, when almost all of our business activity stopped, that had a minus 6.8% impact on our core profit.
Of course, the impact from the North American tariffs and also the U.S. government is not going to be serious, but it is not as serious as it was back then when economic activities came to a halt around the world. This time, we have calculated the impact to be around 5% or JPY 40 billion to be factored into the numbers of each division company. That leads to the JPY 80 billion positive number. There is the organic portion, as well as the contribution from new investments. On page 8, we show the JPY 20 billion contribution from investments made in FYE 2025. As shown in number 4 at the bottom right, there is the new contribution from investments to be made in FYE 2026.
In terms of how much contribution to expect from new investments, each company has very aggressive investment plans as of the first quarter. We have a strong pipeline of potential investments towards the JPY 1 trillion investment target. As for those investments, what we can say as of this moment is there is the JPY 1 trillion investment target, and on top of that, there is the JPY 240 billion portion that was carried over from the last fiscal year. Our CapEx is around JPY 200-JPY 300 billion per year. There is also the cash in from the CPP disposal, as I mentioned earlier. There will be around JPY 300 billion from exits, including CPP. That is how we think about our investments.
In terms of the size within this plan, we are expecting a similar contribution from new investments in FYE 2026 as we did in FYE 2025, as shown in number 4. If you look at the organic growth portion shown in number 3, on page 9, we show the six businesses from which we are expecting organic growth from our existing businesses. These will be the key drivers of our organic growth. We have some information about each segment in the latter half of the presentation. You will be able to see the ups and downs if you look at those pages. I will take questions about this later. In terms of the growth areas, on page 28, we show some qualitative information regarding the details of the growth areas.
As for the FYE 2026 plans of each group company, please see the information for each segment. In terms of shareholder return, our long-term return policy is to pay a total payout ratio of 40%. Last year, we paid out 50% total payout ratio. As we continue aggressive investments, we plan to pay out 50% total payout ratio this year while maintaining our long-term policy of 40% or more. If we do the math and add the JPY 200 or 30% dividend payout ratio, share buyback will be around JPY 170 billion. Q1 has just begun. There's a lot of uncertainty in the economy. As a first step, we have started the JPY 150 billion share buyback from yesterday. This dividend policy and return policy is the minimum number that we are targeting. We highlight our thinking about sustainable growth and future organic growth on page 21 onwards.
In terms of organic growth, this is not just growth from the standalone level, but also the growth from the group companies as they become bigger. We have some analysis on page 21 about that. In terms of our business structure, there are 148 group companies which generate JPY 2 billion or less in profit. There are not that many that generate more than JPY 10 billion of profit. The question is how to grow these companies which are generating JPY 2 billion-JPY 5 billion and from JPY 5 billion-JPY 10 billion. This strategy comes with low investment risk, and we can use our expertise in adjacent areas. We plan to grow overall through the growth of our group companies. Last year, there were investments made by our group companies, although the sizes are not that large.
For example, ITOCHU KENZAI , ITOCHU CHEMICAL FRONTIER , ITOCHU Retail Link, and a subsidiary of C.I. TAKIRON. These are small investments, less than JPY 5 billion each, but we intend to grow our business through these new investments. As you can see in the bubble chart, we have already done the analysis at each segment. Going forward, we will analyze not just our balance sheet, but conduct further analysis of our group companies at the ALM committee, which discusses how to improve our ROA and achieve steady growth of each of our businesses. We will be taking questions later in the Q&A session. Thank you.