Good morning. I'm Kenichi Hori, CEO. Thank you for joining us today. I will begin with an overview of the first half operating results and the full year forecast. I will then hand over to Masao Kurihara, General Manager of the Global Controller Division, who will speak on the financials in more detail. First, I would like to provide a summary of the first half of this fiscal year and the forecast for the second half. Our progress was steady against the full year business plan for Core Operating Cash Flow, or COCF, exceeding 50% for the first half.
Progress was also made in asset reconfiguration through the sale of large-scale assets, listed stocks, and cash inflows expanded from both operations and asset sales. We are encouraged by the progress made in strengthening existing businesses, as well as efficiency improvements and turnarounds, which contributed to enhancing base profit. We also worked on strengthening our long-term earning space through competitive investments for growth, such as the Ruwais LNG project. In addition, we decided to flexibly make additional share repurchases, observing cash inflows and share price levels, being conscious of balancing investments for growth and flexible shareholder returns.
Based on the progress made in the first half and the latest forecast for the second half, we have revised up our full-year profit forecast. We will continue in the second half with initiatives aimed at enhancing base profit and continuous growth. In particular, we will further strengthen existing and new businesses, focusing on LNG, mobility, healthcare, and protein, which will be the main growth drivers during the current MTMP. In addition, we will actively continue asset reconfiguration, focusing on improving ROIC.
With these measures, we will continue to work on improving our business portfolio and strengthening our earnings base in order to achieve our plan, not only in the second half of the fiscal year, but throughout the rest of the MTMP and targeting further growth beyond. We aim to take advantage of our global business portfolio to seize new business opportunities while reinforcing our risk management in light of heightened geopolitical risks and changes in major economies. We will continue to focus on maintaining and further enhancing ROE while continuously being conscious of the balance between investments for growth and shareholder returns.
I will now summarize our operating results for the first half of this fiscal year. COCF increased by JPY 63 billion year-on-year to JPY 538.1 billion, and profit decreased by JPY 44.5 billion to JPY 411.8 billion, both showing good progress against the business plan. Taking into account the progress made in the first half of the fiscal year and the upside expected in the second half, we have revised up our full-year profit forecast by JPY 20 billion to JPY 920 billion. As announced on September 11th, we increased the share repurchase by JPY 200 billion up to JPY 400 billion, and extended the repurchase period to the end of February 2025.
I will now speak on the full-year forecast for COCF. Although we expect the Mineral & Metal Resources segment to be affected by commodity prices, we expect the company as a whole to achieve the business plan of JPY 1 trillion as planned, mainly due to good performances in the Energy segment. Next, I will speak on the full-year forecast for profit. Although here too, we expect the Mineral & Metal Resources segment to be affected by commodity prices, due to the upside in Energy, Machinery & Infrastructure, and Innovation & Corporate Development segments, we have revised our full-year forecast upward by JPY 20 billion from our business plan to JPY 920 billion.
Now I will discuss the results of cash flow allocation. In the first half, we steadily made investments for growth in line with the three key strategic initiatives set out in the MTMP, and also executed large-scale asset recycling. Cash inflows for the period were JPY 884 billion, comprising COCF of JPY 538 billion and asset recycling of JPY 346 billion. Cash outflows were JPY 720 billion, comprising investments of JPY 372 billion and shareholder returns of JPY 348 billion. We are implementing carefully selected investments for growth in line with the key strategic initiatives set out in the MTMP.
The projects shown on this slide in bold have already started to contribute to profit. We are balancing near-term profitability and building a long-term earning space in our investments for growth, and the enhancement of base profit through new projects is on track. Thai gas-fired power generation number two, unit 4, was completed on October 1st this year, and has begun commercial operation and contribution to earnings. With the start of operations at all four units of number two, the total installed capacity, including number one, is now 5 GW.
Mitsui has been working on this large-scale project, which will meet approximately 10% of Thailand's power demand, for six years since the start of construction of number one in 2018. We have been deploying our project management expertise that we have refined over time and reached the completion within budget and on schedule. Contribution to earnings from the Thai gas-fired power generation, number one and number two, from fiscal year March 2026 onwards, is expected to be similar in scale as the Paiton coal-fired power plant project, which was sold in May this year.
Over the three years of MTMP, we plan to increase our base profit by JPY 170 billion, excluding the impact of one-time factors, commodity prices, and foreign exchange. Next, I will explain the progress in enhancement of base profit. In the full-year forecast for fiscal March 2025, the second year of MTMP, we expect to achieve an enhancement of up to JPY 120 billion against the JPY 170 billion target. For strengthening existing businesses, we are seeing steady progress in our middle game initiatives in areas such as mobility, Chemicals, Japanese domestic businesses in food and retail, and Innovation & Corporate Development, and healthcare.
We expect to see a cumulative increase of JPY 45 billion by the end of fiscal March 2025. For efficiency improvements and turnarounds, although the scale of impact for each individual item is not large, we expect to see an enhancement of JPY 35 billion through existing loss-making businesses and accumulation of improvements in business performance. For new businesses, we expect to see an increase of JPY 40 billion as a result of the commencement of earnings contribution from multiple new projects during the current fiscal year.
In addition to the full-year profit contribution from businesses invested during the previous fiscal year. Cash inflows are expected to increase by JPY 170 billion from JPY 4.2 trillion to JPY 4.4 trillion during the current MTMP period, due to the increase in asset recycling. As a result, the management allocation would increase from JPY 560 billion at the time of the business plan announced in May to JPY 730 billion.
From this increased management allocation, JPY 90 billion has been allocated to investments and JPY 190 billion to shareholder returns, meaning the management allocation is expected to be maintained at the sizable level of JPY 450 billion. In addition, given our strong financial base, there is potential for us to add to the management allocation. We will continue to allocate capital in a balanced manner between investments for growth and shareholder returns, bearing in mind our solid balance sheet.
Next, our shareholder returns policy. As I mentioned earlier, we decided to increase the share repurchase amount by JPY 200 billion this September. As a result, shareholder returns as a percentage of COCF during this current MTMP period is expected to exceed 45%. We will continue to work to achieve sustained ROE growth by increasing profit with cash through investments for growth and middle game initiatives, as well as enhancing shareholder returns along the way. That completes my presentation today. I will now hand over to the General Manager of the Global Controller Division, Masao Kurihara, for details of our financials.
I am Masao Kurihara, General Manager of the Global Controller Division. I will now provide details of our operating results for the first half. First, I will explain the main changes in COCF by segment compared to the previous period. COCF for the first half was JPY 538.1 billion, a year-on-year increase of JPY 63 billion. In Mineral & Metal Resources, COCF increased by JPY 14.3 billion to JPY 192.1 billion, mainly due to a decrease in tax burden. In Energy, COCF increased by JPY 107 billion to JPY 184.5 billion, mainly due to an increase in LNG-related earnings, such as dividends and trading.
In Machinery & Infrastructure, COCF decreased by JPY 41.9 billion to JPY 73.8 billion, mainly due to a consolidated subsidiary becoming an equity method investee and an increase in taxes associated with asset sales. In Chemicals, COCF increased by JPY 18.2 billion to JPY 42.5 billion, mainly due to improvement in performance in consolidated subsidiaries and trading. In Iron & Steel Products, COCF increased by JPY 0.3 billion to JPY 1.5 billion. In Lifestyle, COCF decreased by JPY 15.3 billion to JPY 14.4 billion, mainly due to lower dividends from equity method investees.
In Innovation & Corporate Development, COCF increased by JPY 1.1 billion to JPY 20.3 billion. Other factors such as expenses, interest, taxes, etc. , which are not allocated to business segments, totaled a gain of JPY 9 billion. I will now explain the main changes in profit by segment compared to the first half of the previous fiscal year. Profit for the first half decreased by JPY 44.5 billion to JPY 411.8 billion. In Mineral & Metal Resources, there was a decline in metallurgical coal and iron ore prices, but profit increased by JPY 26.9 billion to JPY 161.5 billion, mainly due to the absence of impairment loss in the Chilean copper business recorded in the previous period.
In Energy, profit increased by JPY 39.3 billion to JPY 65.3 billion, mainly due to an increase in LNG-related profits, such as foreign exchange related to dividends and good performance in trading. In Machinery & Infrastructure, although there was an increase in asset sale gains, profit decreased by JPY 16.2 billion to JPY 148.2 billion, mainly due to a decrease in profit in the IPP and the automotive businesses. In Chemicals, profit increased by JPY 7.8 billion to JPY 22.1 billion, mainly due to improved performance in multiple affiliated companies and trading.
In Iron & Steel Products, profit increased by JPY 4.3 billion to JPY 7.3 billion, mainly due to the absence of impairment loss in Gestamp in the previous period. In Lifestyle, profit decreased by JPY 49.4 billion to JPY 20 billion, mainly due to the absence of a valuation gain on AIM Services recorded in the previous period, and a decrease in profit in coffee trading. In Innovation & Corporate Development, profit decreased by JPY 8.1 billion to JPY 18 billion, mainly due to the absence of Altius Link valuation gain recorded in the previous period.
Other losses amounted to JPY 30.6 billion, mainly due to the burden of the amendment to the retirement benefits system. This page shows the main factors that impacted year-on-year changes in profit. For base profit, in addition to higher profit from LNG-related business and Chemicals, there were earnings contributions from new businesses. However, there was lower profit in IPP, PTL, and lower profit resulting from the sale of Paiton this fiscal year, leading to an overall decrease in profit by JPY 16 billion.
In resources costs volume, there was an increase of JPY 4 billion, mainly due to an increase in sales volume of iron ore, crude oil, and gas. In asset recycling, there was an increase of JPY 2 billion, mainly due to gains from the sale of Paiton and partial sale of VLI. In commodity prices and Forex, due to a decrease in commodity prices, profit fell in total by JPY 20 billion, consisting of JPY 11 billion for iron ore, JPY 5 billion for metallurgical coal, and JPY 5 billion for crude oil and gas.
For Forex, profit increased by JPY 30 billion, mainly due to the weaker yen. In valuation gains and losses, one-time factors, there was a decrease of JPY 45 billion, mainly due to an amendment to the retirement benefit system. Here we have a comparison of full-year forecast against the business plan with a summary of the factors involved. Base profit is expected to decrease by JPY 13 billion, mainly due to lower FBTL-related profit and decrease in profit in the aquaculture, coffee trading, and Iron & Steel Products.
While we expect to see increase in wide range of businesses, including LNG, ships, industrial and construction machinery, and Chemicals. Resources cost volume is expected to result in an increase of JPY 7 billion, mainly due to cost improvements in the upstream Energy business, including exploration. Asset recycling is expected to result in an increase of JPY 55 billion due to upside from gain on sale of Paiton and partial sale of VLI in the first half, as well as sale of multiple assets expected in the second half.
Commodity prices Forex expected to result in a decrease of JPY 19 billion, mainly as a result of impact of weaker yen, partially offsetting the fall in iron ore and metallurgical coal prices. Valuation gains, losses, and one-time factors are expected to result in a decrease of JPY 10 billion, mainly due to the higher burden due to amendment of the retirement benefit system. Looking at the balance sheet as of the end of the first half of the current fiscal year, compared to the end of March 2024, net interest-bearing debt decreased by JPY 0.3 trillion to JPY 3.1 trillion.
Meanwhile, there was no change to shareholder equity, which was JPY 7.5 trillion. As a result, Net DER is 0.42x. That concludes my presentation.
We'd like to start the Q&A session.
I'd like to ask two questions. The first question, about the thoughts behind the performance results this time. From the market, because of the asset recycling, it is more than JPY 100 billion. That is quite sizable, and maybe to the next year, there may be some decreases in that profit going forward. Towards the next fiscal year, what are your thoughts behind the financial results? Of course, there may be some opinions from the front line that you may be receiving. Mr. Hori, you may have a wide network with managers globally.
How are they taking on the economic progress going forward? That is from external factors that I'd like to know. As for internal factors, of course, are you feeling that there will be good responses from asset recycling going forward? When it comes to increasing the profit next fiscal year, are you convinced of how you'll be advancing forward? That would be my first question. The second question about cash flow allocation. You said that there is a background of a very strong base profit, and you'll be making profit going forward, but with asset allocation. 45% was the allocation of shareholders' returns for COCF.
Of course, this is something that we were able to calculate easily. However, you have JPY 450 billion remaining. With a flexible market communication, you said that you'll be making flexible responses going forward, however, the benchmark itself is very unclear. You said that you exceeded 45%, but how would you be improving the capital efficiency going forward, which is an annual factor from our side. Therefore, can you give us your hint about how you progress going forward? You have JPY 1.2 trillion, and are you having deep discussions as to how you will be utilizing that JPY 1.2 trillion? That is my second question. Thank you very much.
Yes, thank you very much for your question. About your first question about the economic responses, the external or internal outlook going forward, that is something that I would like to talk about first. When we look at the external factors, of course, I go around the world and I do talk to managers globally, and I feel that by country or when it comes to geopolitical risks, yes, they are heightened. Volatility is heightened, I feel. However, in North America, the economy, I think, is quite resilient, and that is how I feel. In China, there are some downward risks.
However, on the other hand, when it comes to economic management, there is a strong commitment towards financial management from China. As for G20 nations or regions, of course, the countries in G20, they are exploring how to do economic management, and G20 countries have links which are changing. Therefore, global regional strategy, of course, we work in southern and northern hemisphere, but I think those links are very important, and they need to be maintained. Of course, here in Japan, there are many issues, but with the industrial reconfiguration, there are growth areas that we can focus on.
Speaking to managers here in Japan, I think there are opportunities here in Japan and also opportunities to link Japan to the world. Looking at the bigger trends, each managers, and us included, of course, we need to have wider options ready in our hands. I think that is very essential. Therefore, we need to have secure management options to go forward. I think that is a key going forward. With that being monitored, of course, looking at the internal factors, of course, asset recycling, as was mentioned, has been done significantly.
When it comes to asset recycling, there are two things I want to say. First, of course, this is model-wise. There are a number of divisions that are selling their businesses to gain profit, and they may be transient, but this is one part of the business model, so that will be continued. Infrastructure division, they have develop and sell model, and in our company, we have Corporate Development Division. The other one is when we look at the global picture, of course, we need to have a wide range of options to enhance our portfolio.
Asset recycling needs to be done in an agile manner and in a strategic manner as well. We need to have a decisive power to make decisions, and I believe that is important. In the past few years, I think we are seeing good results coming from these perspectives, and we would like to have a certain level of those results seen every fiscal year. Therefore, with that, we would like to continue with asset recycling, especially in the past seven, eight years. For the third year of the MTMP, from the two perspectives as I mentioned, we would like to continue with the asset recycling, and we need to see good results from that move.
I think that is included. The pace of asset recycling may vary every year because it is a transaction-based activity, but I think it is built in to our business. In the third MTMP, if you look at the original plan, asset recycling is not included that much. Therefore, we would like to accumulate such assets going forward so that we have a higher perspective, and we have these market conditions being included in that plan. From the middle game, we would like to make sure that we will be able to enhance base profit. That is included in the action items that we will be conducting.
With that, we would like to accumulate the current activities, the businesses that we have, so that we can adjust against the market conditions, and hope that we will be able to achieve the plan that we have set for ourselves. That is the answer to the first question. As for the next fiscal year, of course, I think we are too early to talk about the next fiscal year. We will continue to work with the results that we have received in the first half. As for the cash allocation question, having options from the external factors from the previous MTMP, we have enhanced the balance sheet, and I think this is a very important option that we have in our hands.
Of course, when there are changes in the management environment, of course, we need to endure, therefore, we need to have certain reserves or preparation that we need. When it comes to the pipeline projects, of course, the number of projects is increasing, but we need to be more disciplined. There are things that we want to do. However, some have not come to a stage in which we can expect the returns like we have set for ourselves. As they are polished, I think we will come closer to that state.
Depending on the scale of the projects, of course, with the agility needed in share repurchases, I think we need to make sure that we will utilize some of the spares that we have in the balance sheet. I think that is something that we need to work on. When it comes to cash allocation, I think we are looking at the flow of the cash, but from the balance sheet as a whole, we need to make sure that we look at it so that we can come with proactive activities going forward.
Of course, looking at the global picture, I think we need to make sure that, as you see the numbers in the material provided, this is something that we will base activities and decisions going forward. About the rate of shareholder returns that was asked, maybe you can ask additional questions later, but anyway. As a result, looking at the result in the three years of the MTMP, 45% or more of COCF, that was our plan. It started with 37% or so. In the previous MTMP, in the third year of that MTMP, that was when the shareholder returns rate went up. We looked at the three years results.
In the current MTMP, we decided that 37% will be the starting point as a benchmark. It's been a year and a half since we started MTMP, and the shareholders' return, we were able to improve. That's how we see our results. Engagement with the investors will be continued. We do not know if there will be a following MTMP. When we announce the next business plan, we would like to share the benchmark that we set for ourselves. Looking at the movements in the current MTMP, we will decide on what we will do next fiscal year.
That is too far into the future, therefore, I think it's too early to have a deep discussion on that point. However, capital efficiency and return on capital, the benchmarks will be shared going forward. It's only been a year and a half of this current MTMP. This benchmark that we have set for ourself originally is something that we will continue to target. We are only showing the upside to that plan. We hope to make continued effort. Thank you very much.
Thank you very much. There are two questions. The first question, on page 10, in the current MTMP, base profit enhancement progress is now shown. As in the previous period, the waterfall chart in page 16, JPY -16 billion in base profit , JPY -87 billion , and here there is JPY +120 billion . There is a big difference between those numbers. After the pandemic, things have been working well in some areas. There were some reverse response. What was the reason behind these negative numbers? Can you explain more on those?
On the base profit enhancement on page 10, maybe from next year, there will be no rebound. There will be growth return that will be driving the performance. When are we going to see that? At this moment, even though there are positive factors, there are sizable negative numbers as well. What are the bigger factors in negative territory? Can you explain more on that? On the second point, the way the investments are being made and reflected. After halfway along in the MTMP, JPY 1 trillion investment for growth has been spent.
What has been the performance? Maybe some investments may have worked well and others may have not. From your perspective, President, how are you looking at the performance so far of the investments made? Also the convenience store being reported. Are you going to accelerate your investments in the second half of MTMP, or are you going to maintain the current pace? What is your read on the performance so far, and the prospect for the future investments?
Thank you for your question. First, the base profit enhancement progress. Let me explain more about this. On page 10, you're looking at page 10. As you said, on a year basis comparison, there is some rebound from the better performance in the past, so it may be difficult to see the enhancement. The turnaround in existing business strengthening, of course, there are positive factors on the full year basis. The first half effect has been reflected in these numbers. For example, in the strengthening existing businesses, in external environment, there are negative factors.
For this, for example, steel market has been the headwind for us, so we have not been able to produce results as we had expected for strengthening existing businesses. In agriculture business, in the existing business, there was some impact from the market. Also, crop harvesting, more recently, has been something that we have been struggling with, but we are expecting a recovery in the second half. Those are some of the factors, for example. The external environment has been proving negative in those areas, even though there has been offset by positive factors.
As for coffee trading, compared to the previous benchmarking, in the turnaround, it has been regarded as positive, but actually they are short of budget still. There are some issues to be addressed still. The inventory position reduction has been made, and the market prices are against us. We are trying to mitigate that impact with our efforts as much as possible. For the positive factors, I'm not going to repeat myself, but there are some homework that has still yet to be addressed. That has not changed.
JPY 170 billion is a target on the third year of MTMP. Against that, we have progressed to JPY 120 billion. As a reaction, we have been quite positive. For new businesses, there has been build-up. In the second half of the question, I'll answer this part, but probably in year three of MTMP, if you include the budget until that, then the JPY 60 billion, which is the target, can be well in our sight. That is how I look at the performance. Of course, we are all-out efforts on a company-wide basis for middle game initiatives. We have to connect all these efforts, which is important.
As for loss-making businesses, we exit from those businesses. About JPY 17 billion worth of effect has been seen, but individual sizes were not that large, so we have been accumulating individual items. The way we see the effect is quite clear. Sometimes, one time a loss could be charged, but we are absorbing the loss from the exit, so that we can enhance the base profit for the mid to long term, which is important. We are focusing on that as well. As for the second question on investments, well, it is a bit of a repetition of what I said in the previous question.
For the near-term pipeline projects, I think the number has been increasing. What sort of projects have more probability to implement? Well, the areas that we are more familiar, or in adjacent areas to those areas. If we have insight to extend the existing business to the adjacent businesses, if we are well aware of that. As the projects where we can be a main operator, are some of those projects that are being finished. There is still a strict discipline that is working. If there is no return target to be achieved, then we will not going to do that.
There will be some returns from those pipelines, so this is a positive surprise. If we are to implement the projects, we like to look at the status of the company and carefully proceed with them. There are immediate effect projects and also the projects that will enhance the long-term stability of our financial position or earnings. There are two different types, and we have to do both in order to have a good balance. We're not sure if we end up with that is how we are enhancing our projects, in terms of how we navigate the business management.
Thank you.
Thank you very much for today. I have two questions I'd like to ask. My first question, as you have just explained on page 10, I'd like to ask some additional questions. Of course, strengthening existing businesses, efficiency improvements, turnaround. For the three-year period, it looks as if it is going very smoothly. You talked about the negative factors, when it comes to strengthening existing business or efficiency improvements and turnaround, what are the targets? These are the results we are seeing. There may be things that are doing well and not doing well.
What is going well, and what are the things that are not doing well against the plan? What is the middle game that you're playing in order to improve the areas which are not going well? That is my first question. My second question is on page 11 about cash flow allocation. I have an additional question I'd like to ask, following on from the previous question. You talked about strong base profit, in the past three years, you were able to strengthen the financial base. In the MTMP, the cash flow after shareholders' returns, you don't have to make it positive.
I think you think that you are satisfied with the progress that you are seeing at the moment. What are the indicators that you're looking at? For example, Net D/E or ROE? I think the target is 12% at the moment, and in MTMP, I'm sure that will be the basis. Consciously, as you are seeing progress against the plan, the ROE, do you have a higher perspective when it comes to the next period? For the cash flow, how you utilize the debt, or how you understand the ROE going forward? That is what I'd like to know.
Yes, thank you very much for your question. The areas that are going well and not going well, of course, this is really the overview, but anyway. What is going well, for example, the vessels in mobility and automotive businesses, especially the Americas automotive business. These are the areas in which are doing well. Of course, Chemicals, I think, is doing well as well. As for food, Mitsui Seito, Sugar, and of course, the fees and brand businesses. I think they are doing well according to the plan.
I may be repeating myself, but coffee trading, this is something that we are monitoring very closely, but the market environment is continuing to be very difficult. There are many headwinds. We are making initiatives so that we can see good results. I think this is an area we need to continue to respond to, and especially drug discovery support fund that you see here. Within our portfolio, there are a number of weaknesses, so we need to recover in those areas. Investment model may need to be adjusted. Of course, this is the big picture.
What is important is that management-wise, this is what we look at in order to improve our portfolio. We do make hands-on responses, and people working in the front line are conscious of that. We are glad that we were able to take this in for this current MTMP. We like to realize our target in the third year of MTMP. Maybe this is following on from the previous question, but in order to see the results, I think maybe we can see it by year and maybe in the final year, the third year of the MTMP. Comparatively, I think we are seeing good results in new businesses.
Domestic outsourcing. These are doing well against the plan. Food science. The Thai gas-fired power generation, I think they are doing well as well. We are getting good responses in those businesses. Of course, our protein portfolio, including prawns or shrimps, I think this is something that we are responding to the market changes. We have high expectations towards the next year. The current situation and the market condition, that is something that we need to differentiate, separate in thinking about what we do as a response against the plan.
As for your question on page 11. Net D/E ratio or ROE was your question. What are the options that we need to secure, and how do we utilize The potential, the spare power that we have in the balance sheet, that is something that I have touched on in the previous question, but how the market will change is something that we need to look at. When we think about the Net D/E ratio, do we need to have target against the Net D/E ratio? At the moment, we do not have Net D/E ratio as a target because the world is changing so fast.
With a set Net D/E ratio, I think we'll be limiting ourselves when it comes to options. I don't think there's a high necessity to maintain the current Net D/E ratio. I think we can relax Net D/E ratio a little bit, we do have the U.S. presidential election coming up, but as the world changes, the management environment is changing accordingly as well. There are things that we can do. However, I think there will be too much risk in having Net D/E ratio as a target. I think we can be flexible.
When it comes to ROE, we are targeting 12% or over as ROE, but two digits of ROE, looking at the potential of our portfolio, I think that is something that is expected from our investors. That is what we are conscious of. We need to have leverage in ROE as well. There is ROE that we want to maintain on the long run and also on the short run as well. This is something that we are targeting. We will think about the two in tandem. The level of ROE that we have at the moment, this is something that we place importance on. I hope that answers your question. Thank you very much.
First question is, again, base profit enhancement. As you explained, for example, the business environment in U.S. seems to be solid. That's what you said at the outset. For one single project in base profit enhancement, whether you can show visibly that can be done, that would be important. For example, in the U.S. business, trucks leasing related business. Compared to the conventional well-performing year, there's some shadow overhanging.
In Machinery & Infrastructure, likewise, the mainstream that you have been explaining, while we're seeing some reduction in negative factors, but as you start up on a full-scale basis, what is your view for the business sentiment, economic sentiment, while interest cut is going to be the prevalent in the U.S., so the headwind could be converted to tailwind. In the middle game, what you are working on may have some areas where you don't see much results or you see headwind. What are you going to foresee on this? That's the first question.
Then page nine, the timescale information, that is quite easy to see, but year by year, the more visibility will be seen. That would be ideal. For the long-term project, March 2027 onward, that is how you show us for the long-term projects. As we predict your performance, what is going to materialize in March 2027 or those that will be materializing after that should be clearly distinguished. If those projects that have more probability or more certainty, in terms of time frame, if you can summarize what can be realized in shorter term and longer term with the time frame added.
Thank you for your question. First of all, for your first part of your question, the enhancement of base profit and how are we going to make it visible in North America and renewable energy? I'd like to explain about that. As for North America truck leasing business, the Penske Group joint venture with Penske Group has been performed, but after the pandemic, the supply chain was disrupted significantly. If we consider that as a base, then we would be misguided. After the normalization of supply chain, whether the base profit can be grown or not, that is the question.
We are having positive reaction. On a year-on-year basis comparison, you may think that we're down, but the product lineup and handling of product, we are growing. For North American economy, if there's more potential growth, then we can capture some of that, but we like to closely monitor that. There is also adjacent investments. For example, used car auction or used truck auction business has been acquired. We're quite familiar with this area, and North American mobility business, there is a complimentary nature with a quick return that we can expect to North American mobility business.
You said that mainstream investments, you've been following the initial investments, and we of course, would like to produce more results. We are working on turnaround to some extent, and we have to be honest with that. In Chile, the portfolio has to be sorted out, and that's what we are doing right now. In other areas like South Africa and Australia, there are promising projects. Globally, we are changing the geographical balance. As for renewable energy investments, the power market inclusive of power market or local state government's initiatives, there are various regulations.
In terms of template, some of our long-term IPP contract structure is a bit different from what we are doing. There is still less refinement, and those who are taking risks have to be able to see the path toward the return, so that the template is being reformed. We are trying to reform our structure by ourselves, so we have to be half step ahead. Taking advantage of lessons learned, we'd like to turn into a profitable business. As for construction machineries and ships, base profit enhancement, in terms of that perspective, we are seeing results near term.
Machinery & Infrastructure, I have touched upon main areas in this segment. New earnings drivers, you can see them as a new earnings driver for us. For the second part of your question, page nine, March 2027, which one will actually come out in March 2027? That's what you asked. It's a bit too early to say for sure, honestly speaking, but Mineral & Metal Resources and gas businesses, in those businesses we are taking a lot of measures, including shale gas in North America and gas in Australia. As for LNG, the project period is longer, and there is still time until the ramp up.
We'd like to talk about each one of those individually, but in terms of itemization, Mineral & Metal Resources and natural gas E&P development, every year we are going to see a certain level of results. As for renewable energies, on a turnaround basis, we'd like to realize this. Clean methanol and clean ammonia, we'd like to do the steady progress. Initially, we're modest in terms of size, but in terms of profit, from March 2027 onwards, we can expect some.
As for CT Corp at the bottom, in the future, capital events is something that we are aiming for, and what sort of preparations can be done is what we are trying to figure out. Because of capital events, we cannot say the timing, but we are trying to aim for that. That's all. Thank you.
Thank you very much. I have two questions I'd like to ask. I'd like to confirm the numbers first. First, LNG, which is the dividend and also trading, what is a change from the plan that led to increase, and will it be sustained going forward? That is my first question. My second question, the progress in the first half, Chemicals and also steel and also infrastructure was not very good. Lifestyle was not very good. What are the catch-up factors that will lead to progress enhancement? That is my question. Thank you.
Thank you very much for your question. As for LNG dividend and trading, in our case, the profit realization will be balanced in the second half, that is design-wise. We will be seeing profit realization in the second half more. As for the dividend and also trading from the original plan, we are seeing proactive activity. In trading, for example, we are able to have a demand and supply adjustment mechanism that is provided to our customers.
We have seen an increase in the business opportunity, and we have seen upside in the trading. That is included in the second half. When it comes to dividend, it is doing very well. We were able to lead it to revision in the numbers in the second half. We'll be accumulating them, and we are conducting it with a high probability. In Energy related to LNG, we are seeing upside being more visible. As for the first half, the net profit, how they appear, well, every quarter we do not announce the budget.
This fiscal year, we are seeing more tendency for it to appear in the second half, so we are progressing in line with the plan. But there are a number of areas that we need to catch up on. For example, in iron ore and steel, of course, the demand for steel was quite weak. With the interest rate cut in the U.S., we believe that we can expect a recovery going forward. The volume of trade and production volume, we are looking for recovery, and that is included in the second half. We are conducting cost reduction measures as well, which will be effective.
When it comes to Iron & Steel Products, I think there is a catch-up needed. Of course, when it comes to Chemicals, we are seeing good cash generation and, of course, there was some impairment, and that is something that we need to catch up on. In Chemicals, of course, in the downstream areas, we had asset recycling, which are planned in the second half. Included, and those included, we will be realizing the business plan, and that is the progress we are seeing in Chemicals.
When it comes to Lifestyle, of course, especially food-related businesses, I mentioned this earlier, but coffee trading turnaround to a degree is expected, and this is something that we need to realize. When it comes to food trading, of course, we are going to see increase towards the end of the year, and this is something that we're expecting in the second half. Lifestyle, if we keep EL improvement, is also seen. In the second half, I believe there is a certain catch-up that we need to make.
Currently, with those accumulation of factors, we were able to come to the result that we are seeing currently. The probability as a whole, from the original plan, it is in line with some upside. I think there are some upward revisions that we have made. I think that will be the summary of what we are seeing. When it comes to the next generation, of course, there are things that we are not seeing, especially with innovation. There are some FTEs that were not included in the plan. We are seeing accumulation, so we believe probability is high.
That is how we look at the second half going forward. I hope that answered your question.
Yes, thank you very much.
The follow-up question. As for LNG, for the past few years, compared to the initial forecast, you have been producing profits more than that. As President said, the business opportunities are increasing more than you had expected. As a base profit, the profit level as a basis, has it been enhanced compared to the initial term of the MTMP? Or we just have seen that it's proved more than you had expected. What is your gut feeling?
Cameron LNG production volume has been performing well. If that's the case, the LNG volume that we handle will increase. In that sense, production plan has been quite standard at the beginning of the period. If things go well in production and extra volume has been produced, if that happens, obviously, the trading business and supply-demand adjustment will be done, and we will have more opportunities for businesses, and that is obvious. That is not something that has to be included in the business plan in terms of nature, I hope you can understand that.
Thank you.
Thank you very much.
Thank you very much for your presentation. There's one question on page seven. This is slightly related to the previous question, but the upward-revision was done in some segments, and recycling was the factor behind that. Machinery & Infrastructure and Innovation & Corporate Development. As for Innovation & Corporate Development, I think the things have come out, which was not part of your guidance. That's what you said. For example, some things that you expected in the next fiscal year has been moved forward in terms of asset recycling.
If there is anything that you have seen, can you share that with us? As for downward-revision, the Mineral & Metal Resources and Iron & Steel Products, of course, steel demand has been weak. That must have been the main factor. In the second half, as you look ahead, market conditions, prices, and your assumed steel products situation, if you can share that with us, that would be appreciated. Thank you.
In the full year forecast, upward- and downward-revision, if something that we had expected in March 2026 had not been moved up, in terms of assumption, there's no such thing. In the business as usual, normal business activities, some opportunistic opportunities have been captured. There's no moving up of the projects from next fiscal year down to this fiscal year. As for Mineral & Metal Resources and Iron & Steel Products, of course, the factors from China. In China is something that we have to monitor to some extent.
As I said at the outset, the real estate market in China, there are measures taken, have been issued one at a time, a bit late, whether that will be accelerated, we have to closely monitor that. Steel is exported from China, that would push down the steel market globally, and we are affected by that. We are one of those that are affected by that, we are closely monitoring that. What we can see in the near term is that for steel products in the Mineral & Metal Resources, the market situation has been taken into account.
If there is more deterioration, we have to take action. What we can see for now has already been discounted in this forecast. As for seaborne steel products or iron ore, rather, in China, if you look at the competitiveness of local players, there's a certain level of downside resilience. In the midterm, the iron ore demand is largest in China now, inclusive of India. The steelmaking sites could be more diversified globally, you have to closely look at the macroeconomic movement so that we can be more agile in responding to that.
Thank you.
I'd like to ask one question. The growth drivers during the MTMP includes healthcare and protein businesses. I think it's a new area for your company. How do you evaluate it currently, and what is going to happen in the future? Is there some points that you would like us to have expectations for? If you do, please let us know.
Thank you very much for your question. As for protein, in the recent investment, India, Egypt, we have invested in poultry, the broader business. They are vertical integration that is ongoing in Egypt, in the Mediterranean area, in Africa. These are the areas that are covered in India as a nation. These are areas in which consumption and, of course, population will increase. We were able to accomplish investment in this area, which was significant. I think there is growth opportunities. Salmon and shrimp, I think these are very good protein contributors.
We'd like to expand the area, the market condition is weak, especially in the U.S., especially the salmon and shrimp, the market is weak. These are areas that we'd like to continue to focus on. The current operation and also capturing upside into the future, we are seeing very good progress in those areas, especially protein-related businesses. For poultry, we are seeing different types and of course, in shrimps and salmon. We believe that the original genetics and also the feed is very important and also animal health and genetics.
These are all related areas, we will selectively work on these businesses, we'd like to complete the ecosystem going forward. When it comes to healthcare- In the first half, IHH is about JPY 15 billion worth in the first half. The hospital M&A with IHH, it is progressing well. The integration after acquisition, I think it is progressing very well. We will acquire hospitals, that is a part of the business model, organic growth can be expected in this business. Hospital business centered healthcare business, one step before, new healthcare services in preventive medicine and also in food science.
We would like to work in this area so that the people will not get sick. That is what we will be working on as disease prevention. That is being done. Eu Yan Sang is a Chinese traditional medicine investment that we are working on, and we can see synergistic effect. We are seeing this growth in Asia. We have worked on it with Rohto, this is something that we can have high expectations for going forward. From hospital business, diseases prevention to nutrition and essential food chemical business, for example, Nutrinova has artificial sweeteners that they are working on.
This is very important. Wellness ecosystem is something that we want to establish going forward. This will be a long-term strategy, we would like to enhance this further. Healthcare, is it accelerating as a business? Yes, we want to accelerate this further. However, just doing M&A in the existing business, the multiple is too high, we want to use our discipline. We want to enter early, we want to enter from the function side and grow our platform further. That is a model that we would like to take.
With the projects that we would like to be more selective so that we will be able to accelerate this business. As for healthcare data that we have been talking about, there are no projects that we can announce. However, we want to increase our know-how inside so that AI calculation logic can be adapted to healthcare. NVIDIA have provided computing time and different efforts. Drug discovery support is what we are offering at the moment. There are so many insights that we can gain from that business.
The front line of drug discovery, the hospital, how they are operated, the knowledge related to those is changing very rapidly. There will be new businesses that will come out from those. There are no projects that we can share at the moment, once it is completed, we would like to share them with you. In the mid to long term, these are the areas that we want to be involved in further.
There are two questions. Page 10, the exit from loss-making businesses. In associated companies profit, there are several other large loss-making companies that are seen. With exit from loss-making businesses, what is more improvement leeway that you have? What will be the gross losses that you are experiencing for now? That is my first question. The second question is pipeline, page nine. In March 2026, Waitsia is a profit increasing factor. In April, there was a Beach Energy release, there was a delay that was expected.
Beach, there was IR that the forecast or guidance will be maintained. What is the probability of profit increase in Waitsia, and what will be the size that you expect? You may not be able to say more than Beach here, but what is your view on that? Thank you very much.
As for loss-making businesses, in our company's case, for example, Mineral & Metal Resources and Energy, E&P, in those development stage, there are some businesses are making losses. This is part of our business model. In most of the companies, the upfront investments are leading to losses. Those are not categorized in those groups. As a growing concern, if businesses are making losses, that is the worst-case scenario. Those companies, we have to look at each one of those and pick them up one at a time to make improvements.
That's how we come up with a list of loss-making businesses or exit. Most of them are more or less smaller, and management resources that are spent on that is really a waste. We have to be as efficient as possible in management resources allocation in those. Those companies that are old and well-known are under our group, we are not making any exceptions. For some structural reasons, if loss is continued, if there is something else that can be done than just resolving those issues, we would put this on this list and exit from that.
There is no macro list, that's how we are addressing this issue. As for Waitsia, as an operator, this is an E&P business in Australia that we are conducting, Beach is making investments, we're not disclosing our performance. Waitsia profit contribution timing and progress in our project. We have been a bit delayed, by the end of this fiscal year or next fiscal year, a certain milestone can be achieved, in my view. If there are opportunities that we can update this, we will. There are certain progress being made. That's how I can answer this question.
Thank you.
With that, we'd like to end the Q&A session. As has been announced through email, Thursday, December 5th, from 3:00 P.M., we will have the Investor Day 2024. We will have CEO, CFO, and also Matsui, who is a representative director, to give presentation. It will be a hybrid session. We ask for your cooperation and participate in the Investor Day session. Thank you very much for your participation today despite your busy schedule. Thank you.