It's Tsuyoshi Hachimura, CFO of ITOCHU Corporation. Thank you very much for joining us today. Unfortunately, we cannot have a face-to-face meeting, but let us now start the teleconference. First, the net profit attributable to ITOCHU significantly exceeded our Q1 expectation and recorded JPY 104.8 billion. For the first quarter, we expected the biggest COVID-19 impact. In terms of the full year plan, we believe that we are in the defensive period. That is the first slow, quiet phase. We are focused on the defense. By focusing on lean management, doing cutting and preventing, the biggest achievement was that we generated profits in all segments. The progress of 26% is better than expectation. Some people said that the JPY 400 billion target is too aggressive, but I think that the trust for the commitment-based management was confirmed. COVID-19 greatly affected businesses, as expected, mainly in the consumer sector.
With the accumulation of the solid earnings in diversified sectors and the effort of the reduction of expenses, we generated profit in all segments. Even if we had some COVID-19 impact on some of the businesses, we were helped by the strong earnings of the CP and CITIC businesses, as well as early recovery of China's economy and the higher-than-expected level of the foreign exchange, crude oil, and iron ore. The poorer earnings were seen in, first of all, machinery, including automobiles and airplanes, and also FamilyMart business. We did not include the COVID-19 impact at the beginning of the fiscal year, so The 8th C ompany also suffered due to this. In all segments, we are starting to see some gradual recovery from the end of June, which will lead to the better second quarter.
The COVID-19 impact is unprecedented, and we have already decreased the net profit forecast by JPY 100 billion- JPY 400 billion. We cannot really make the apple-to-apple comparison. As you can see, the first quarter results comparing fiscal 2020 and 2021, you see some decreases, but we believe that we can achieve the full year target toward the end of the fiscal year. The JPY 147.3 billion in Q1 last year was a record high, as I said, a record high net profit, as I said a year ago. We cannot really compare that directly to our JPY 400 billion target. Let me talk about some of the numbers. First of all, the JPY 104.8 billion net profit includes the extraordinary gains and losses of JPY 16 billion and also more than JPY 20 billion COVID-19 related.
The iron ore and foreign exchange and crude oil prices, the assumptions are shown on page eight, and those have improved from our expectations. Also, the Chinese economy recovered earlier than our expectations. Looking at businesses, the meat product businesses such as Prima Meat Packers and HyLife, also the chemical transactions. In North America, the housing-related businesses such as Alta and Master Halco were strong. However, in apparel and automobile and FamilyMart, those were affected by the COVID-19 and started very poorly. Now, concerning the extraordinary items, page seven has the JPY 16 billion total extraordinary gains and losses. The major factor is the gain on partial sale of the E-Guarantee, which is about JPY 12 billion. We still maintain 14.9%.
Also, the FamilyMart-related gain, and also there was a loss related to the Nippon Access in relation to the fire, and the total was JPY 16 billion. There are no other major ones. As I said at the beginning of the year, the buffer of JPY 50 billion has not been utilized. Going to the balance sheet, there are no major changes. Total assets was about JPY 11 trillion, not much change. Total shareholders' equity in Q1 exceeded JPY 3 trillion for the first time. Net D/E R has come down to 0.72, which is the best. Those are the major items. Now, going back to page five, that is cash flow. Also, there is some explanation on page 21. The cash flow from operating activities was JPY 254.1 billion, which is a record high number.
The breakdown of this is that the core operating cash flow is JPY 96 billion, working capital JPY 92 billion, the lease accounting- related is JPY 66 billion. With the strong transactions and also the improvement of the working capital of FamilyMart, those were the positive factors. At the same time, the JPY 96 billion core operating cash flow in comparison to last year is down by about JPY 50 billion. In comparison to last year, if you look at the profit and loss analysis, the JPY 30 billion down in terms of the operating profit and the JPY 10 billion down in terms of the receipt of the dividend, and the corporate tax increase was a little more than JPY 13 billion. As a result, the core operating cash flow was lower by about JPY 50 billion.
As for the progress rate of 26.2%, our first quarter plan, of course, included the biggest COVID-19 impact and probably a little bit alleviated impact in Q2. In the second half, we start to see the better pictures. That is what we mentioned in May. Of course, those were not evenly spread, but if you look at the plan and the actuals of the first quarter, we see about 50% improvement or 50% better than what we expected. The Chinese economy recovered earlier than our expectations. From June, we start to see some gradual recoveries, and we see the better or higher recovery than what we expected. The negative side is the percentage of the profitable companies. If you refer to page 25, there are some details, but out of the 289 companies, the profitable companies is 73.4%. Seventy-seven companies started in red or in deficit.
It shows the strong impact of the COVID-19. Profitable companies, 40 of them turned negative, especially in textile. Out of 30 companies, 18 are in red, and there are also new companies which are in red. We expect to see the recovery toward the end of the fiscal year based on our scenario. Toward about 90% of the profitable companies, we will be steadily making improvements, focusing on the lean management of cutting and preventing. For Q1, the profitable company number was poor. If you look at page 20, you see the overall investment of JPY 110 billion. That is the total of major investments. The major item includes the additional investment in PPIH by FamilyMart. Also, ITOCHU Corporation increased the shares of Tokyo Century as well as Fuji Oil by buying their shares.
Other than that, there was capital expenditures. As for exit, it was JPY 15 billion. I mentioned E-Guarantee exit, and others are included. Net investment amount was JPY 95 billion. Now, the forex impact for this fiscal year is not the major one, about JPY 3 billion negative impact from the foreign exchange. As for the end of the term, actually, the shareholders' equity had the positive impact of the foreign exchange by about JPY 18 billion. Now, looking at each segment in textile, the strength was seen in standalone trading business, also ITS business, the sports-related business for China, and others. We saw weaknesses in Edwin, Leilian, and Descente, which started with the red figures due to the closure of the stores and so forth. Machinery, JPY 5.3 billion, Yanase, and others. Auto related and aircraft related were affected severely.
Tokyo Century last year increased the shareholding of ACG, which led to higher equity pickup. Tokyo Century's positive contributed. The geothermal power, the Sarulla, there was an improved equity pickup. In metals and minerals, compared to last year, there was a special dividend in Brazil iron ore business, which was not repeated this year. ITOCHU Minerals & Energy of Australia or IMEA, coal related, thermal coal prices were lower, and that was the negative impact compared with last year. Marubeni-Itochu Steel, the auto steel and oil well pipe numbers were poorer, and therefore it was worse than last year, and the core business in Colombia was also negative. As for energy and chemicals, with lower oil prices, there was a lower profitability of CIECO Azer, but the chemicals trading was active. Also in energy, the Japan South Sakhalin Oil Project was strong.
In food, there was an impact of the COVID-19, especially the decline of the FamilyMart business. In relation to that, the distribution business of Nippon Access was affected, and there was also a fire in the distribution center in Miyagi Prefecture. As for Dole, in comparison to last year, there was a COVID-19 impact. The sales of the pineapple was slightly down, but Dole has packaged food business. In the U.S., there was a demand from people staying home, so packaged fruit and canned pineapple sales were strong, but overall numbers were lower. General products and realty, the major ones, last year there was a partial sale of CIPA and the PWT, and that is not repeated this year. Even more than that, in the U.K., Tire Sales Company, due to the lockdown, this business was severely affected.
Of course, there is e-commerce as well as the services, which is better than the other players, but it started with a negative 2 billion number. In pulp business, both in Brazil and Finland, due to the lower prices, it was stagnant. In North America, maybe you might be surprised to hear this, but in construction material, last year we acquired the fence company, and also in the U.S., we have a long-term business of Master Halco. Also in fence business, they were strong. Also, the condominium sales of the ITOCHU Property Development were strong in Q1. As for ICT and financial business, CTC announced their earnings the other day. This is one of our strengths in the areas of teleworking, servers, and 5G, and system integration. They are doing very well, so we have a lot of expectations, and the mobile phone guarantee business was strong as well.
The mobile phone sales business, Connexio, reported their earnings last week, and they continued non-face-to-face business for two months, but their decline of the sales was 30%. Those were strong. There was a gain from the sales of the E-Guarantee, so ICT and financial business was positive. The 8th C ompany was affected by FamilyMart business, and FamilyMart business is very stagnant, and the budget did not include the COVID-19 impact. As a result of the first quarter, 8th C ompany number worsened by JPY 5.5 billion earlier and ended at JPY 5.2 billion. Under others, CITIC and CP were very strong. As for CITIC, the January to March, we saw the higher equity in earnings. Even while the COVID-19 impact was the biggest, the CITIC Bank was especially strong, and we have converted the investments into yen, and that had the positive impact.
Increasing JPY 1.2 billion and ended at JPY 14.6 billion. As for CP, the pork market in Vietnam recovered, so year-on-year improvement was seen. The JPY 3 billion equity pickup was recorded. Now, if I may talk about some of the details of the COVID-19 impact in Q1, 20% impact on core profit or a little higher than JPY 20 billion decline in profit was seen, especially in apparel retail where the closure of the stores had the major impact, and also the car as well as convenience store sales were affected. There are, of course, some differences depending on the businesses in relation to the consumer sentiment changes, but excluding the FamilyMart situation, the impact of the COVID-19 was similar to what we expected for Q1.
As for FamilyMart, we have issues, for example, the concentration on the urban areas of the convenience stores as well as the assortment and the inability to respond to the customer needs. Those are the concerns. That is what happened with the 8th C ompany. As for food, FamilyMart, I already talked about the Nippon Access distribution was also affected, although they saw increase for the supermarket as well as the drug store. The restaurant and commercial businesses were severely affected. As for textile, although the e-commerce was strong, the supply chain damage affected the businesses of Leilian, Descente, and Edwin. They started with the deficits. Next is the machinery with cars. Yanase started with the deficit due to the suspension of the factory operations as well as the closures of the stores.
The overseas car sales as well as the export to overseas markets were very weak. Those are same as the car manufacturers. As for aircraft-related business, of course, as people are not moving by airplanes, we saw poor results. As for metals and chemicals and distribution, the auto steel and also the chemicals, we saw the negative impact. General products and realty, as I said, ETEL, the tire sales were down. In ICT and financial business, Connexio, the mobile phone sales, and Hoken no Madoguchi, they are seeing the steady recovery of the customers, and they are starting the online business, but the face-to-face business was affected. Now, under those circumstances in Q1, we focused on the lean management, cutting and preventing. What I would like to explain is that about expenditures.
From this year, Prima Meat Packers and Hoken no Madoguchi became a subsidiary, so their expenses are included in Q1. We cannot really make the apple-to-apple comparison, but excluding those, JPY 18 billion decrease of the expenses were realized before tax. If you look at that, based on the 70% including tax, there was a negative of about JPY 20 billion due to the COVID-19, and this means that we have offset this by about 60% with lower expenses. This is the efforts made by ITOCHU. As for preventing, from autumn of last year, we started to see the changes in economy. We decided to focus more on the lean management, and of course, we did not expect the COVID-19, but we have been reducing the inventories as well as the net exposure.
Because of this, from the second half of the fourth quarter of last year, we started to hear about the bad debts or bankruptcies, but we did not experience any of those ourselves. The asking for the reschedule and overdue in machinery happened in March, and that was the peak. April to May, we preserved the credits and we collected our capital, so there are no concerns. Also in China, due to the COVID-19 impact, asking for the overdue has already stopped. We are strictly abiding by the accounting rule, and we have been increasing the provisions. The provision of JPY 3 billion is JPY 1 billion higher than the year before, but this is the proactive and conservative measure. It does not mean that there are any problems. Also about China, there are some positives.
CITIC, January to March equity pickup in CPP and ITOCHU China, there was a pickup of the domestic demand, for example, electronic materials and display and commodity resin and hygroscopic polymer. The trading has been very strong. Maybe there were some expedited demand for the second wave or third wave of the COVID-19, but they also worked on the control of the expenses, and these businesses were strong. About JPY 23 billion, or overall 22% of the overall business, is directly related to China business. If you include the indirect businesses, for example, sales of the iron ore since the end users are in China, or auto steel sales or plastic sales or paper and pulp, and the meat also end users are in China.
If you include those indirect businesses, China accounts for a little less than JPY 40 billion, or 37% of JPY 104.8 billion. Having said that, 1/3 profit coming from China, those are mainly consumer necessities, and they are not, for example, telecommunication, information, machinery, or high-tech related businesses. Risks that we have, or the risks involving China, U.S., or supply chain related risks are not the major ones. I think we can say that because of this high percentage of China related business, we had those good strong numbers. Maybe I can mention something on the fiscal 2021. For four years, we mentioned that maybe 10% impact due to the COVID-19. At that time, we did not factor in the COVID-19 impact into the FamilyMart business.
This time, our assumption is that the second quarter COVID-19 impact would be a little better than the Q1. In the second half, we will be able to see the overall pictures, but still, for apparel and automobile and FamilyMart businesses, we believe that there could be some bigger and longer-term COVID-19 impacts. We reviewed this. We did say 10% for four years, but as we expect the increase of the negative impact for FamilyMart, automobile, and aircraft, rather than 10%, it will be 10%-15% COVID-19 impact or JPY 60 billion. In some of the businesses, the COVID-19 impact would be higher, but in other businesses such as ICT, financial business, and China, better. Also, we have a buffer of JPY 50 billion.
There are concerns about the second wave and third wave, but we believe that we will be able to manage our company so that we can achieve the JPY 400 billion by focusing on the lean management by cutting and defending. Now, in terms of the weaknesses and the strengths, ICT and financial business, metal and minerals, and energy and chemical, those are stronger. The weaknesses we see in textile, machinery, and the 8th C ompany. Although this is not directly related to the business results, on the third of August, we made announcement about the share buyback.
Last year, we have announced that we would share buyback shares, but we could not do so in relation to some insider-related risks. As we announced the FamilyMart TOB on the 8th of July, now the insider risk is eliminated. Now we can place an order. As of the end of July, 2.4 million shares were bought back. In comparison to JPY 70 billion, we made a progress of about 7%. In the medium to long term, we are trying to buy back about 100 million shares, and therefore the progress is 68% so far. That concludes the Q1 business results. Thank you.