Good afternoon, I'm Tetsuya Shigeta, CFO. Thank you for joining us today. I will begin by giving a summary of fiscal year March 2024 Q1 operating results. I will then hand over to our Global Controller, Masao Kurihara, for details of our operating results. During Q1, the U.S. economy showed overall strength underpinned by consumer spending, while monetary tightening continued, and a gradual recovery was seen in the Chinese economy. Going forward, while there continue to be many, many uncertain factors in the global economy, it is expected to pick up moderately. In this operating environment, we made a good start against the projections of our business plan for both core operating cash flow, COCF, and profit. I will summarize our operating results for Q1.
COCF for the period decreased by JPY 44.5 billion year-on-year to JPY 255.9 billion, and profit for the period decreased by JPY 22.1 billion- JPY 252.9 billion. While profit decreased year-on-year due to commodity prices reverting, our results show a progress at the pace exceeding our business plan. Furthermore, of the share repurchases announced in the previous fiscal year, for the JPY 70 billion carried over to this fiscal year, we carried out JPY 61.7 billion by the end of June, and in July, carried out the remaining JPY 8.3 billion, thereby completing the share repurchase as planned. The 22 million shares repurchased are scheduled to be canceled at the end of August. This slide indicates the progress rate of each segment against the full-year business plan.
In Q1, although there was some variation in the progress rate across segments, all segments are progressing steadily against the business plan. Lifestyle segment showed a high progress rate in terms of profit due to the valuation gain on Aim Services. In some segments, the progress rate of profit in Q1 may seem relatively low, as asset recycling based on the business plan is expected to occur in the second quarter onwards. On a full-year basis, things are progressing as planned, if not slightly ahead of expectations. In this section, I will discuss cash flow allocation for the current period. During Q1, growth investments were steadily executed in line with the business plan.
Cash inflow for the period was JPY 308 billion, comprising COCF of JPY 256 billion and asset recycling of JPY 52 billion, including the sale of aircraft in the aviation business. Cash outflow was JPY 297 billion, comprising investments and loans of JPY 235 billion and share repurchases of JPY 62 billion. The main investments and loans executed were growth investments, such as making AIM Services a wholly owned subsidiary, the acquisition of an interest in the South Texas Vaquero shale gas project in the US, and acquisition of Sumitomo Pharma Animal Health. Furthermore, in capital investments related to sustaining existing business, there were outflows for iron ore and metallurgical coal operations in Australia and for oil and gas projects.
This table indicates growth investments along the three key strategic initiatives in the current medium-term management plan, MTMP, as well as progress in our studies and developmental projects aimed at further expansion of the investment pipeline. I will introduce a few examples regarding progress we have made on the investment decisions in each of the key strategic initiatives. In industrial business solutions, in the area of digital infrastructure, we have been moving forward with the tender offer for Relia and business integration with KDDI Evolva. In July, we completed the tender offer and decided to begin operations as Altius Link from September 1st. Through this integration, Altius Link will be one of the largest contact center operators in Japan, a country in which the working population is forecast to decline and subsequently, corporate outsourcing demand is forecast to rise.
In addition to its contact center business, we expect Altius Link to accelerate its digital BPO business, and through taking a significant share of the rising demand, it will aim to become the largest operating company in this space. In global energy transition, we have decided to enter the business of production and sales of e-methanol. We expect to start production in 2024, in what we expect to be the world's first commercial scale and one of the world's largest e-methanol business. In addition to this, we'll expand our business pipeline, or investment pipeline, continuing to consider business opportunities with our partners in various areas that will contribute to realization of a co- decarbonized society, areas such as next-generation fuels, low-carbon metallics and iron making, battery minerals and materials, and CCS, to name a few.
In wellness ecosystem creation, as part of the creation of the food and nutrition value chain, we decided to invest in Nutrinova, which manufactures and sells functional food ingredients. This is an investment that has been realized through our long partnership with Celanese.... that has continued since we began working together in the U.S. methanol business from 2013. Nutrinova is a business in which stable profitability as well as growth can be expected due to high quality and differentiated products, and can immediately contribute to earnings. In addition, the nutrition team in the Chemicals segment and the food team in the Lifestyle segment will work together to combine their respective strengths, knowledge, and networks across industries in an effort to increase Nutrinova's corporate value.
With regard to shareholder returns, as we explained in the current MTMP that we released in May, we will strengthen stable and flexible shareholder returns in line with the expansion of our cash-generating capability. That completes my presentation today, so I will now hand over to the General Manager of Global Controller Division, Masao Kurihara, for the details of performance in Q1.
I am Masao Kurihara, General Manager of the Global Controller Division. I will now provide details of our operating results for the first quarter. First, I will explain the main changes in COCF by segment compared to Q1 of the previous fiscal year. COCF for the period was JPY 255.9 billion, a year-on-year decrease of JPY 44.5 billion. In Mineral and Metal Resources, COCF decreased by JPY 51.1 billion- JPY 91.1 billion, mainly due to the falling prices of metallurgical coal and iron ore, the decrease in dividends are due to the sale of our shares in SMC, an Australian metallurgical coal business, in Q3 of the previous fiscal year.
In Energy, although affected by a decrease in LNG dividends and a fall in gas prices, COCF increased by JPY 2.9 billion- JPY 55.3 billion, mainly due to the absence of derivative valuation losses in LNG trading, which were recorded in Q1 of the previous fiscal year. In Machinery & Infrastructure, COCF increased by JPY 24.6 billion- JPY 60.2 billion, mainly due to an increase in dividends from equity method affiliates in areas such as automotive and construction machinery and IPP, as well as bringing forward some of the dividends within the fiscal year. In Chemicals, COCF decreased by JPY 11.7 billion- JPY 20.3 billion, mainly due to a fall in prices of fertilizers and feed additives. There were no significant changes in Iron & Steel Products and Lifestyle.
In Innovation & Corporate Development, COCF decreased by JPY 4.8 billion- JPY 7.1 billion due to the impact of taxes paid in this fiscal year associated with the real estate sales executed in Q4 of the previous fiscal year. Other factors such as expenses, interest, taxes, et cetera, which were not allocated to business segments, totaled an outflow of JPY 2.1 billion. I will now explain the main changes in profit by segment compared to Q1 of the previous fiscal year. Profit decreased by JPY 22.1 billion- JPY 252.9 billion.
In Mineral & Metal Resources, profit decreased by JPY 41.9 billion- JPY 77.9 billion, due to the lower prices of metallurgical coal and iron ore, and due to the sale of SMC, an Australian metallurgical coal business, in Q3 of the previous fiscal year. In Energy, although affected by a decrease in LNG dividends and a fall in gas prices, profit increased by JPY 3 billion- JPY 286.7 billion, mainly due to the absence of derivative valuation losses in LNG trading, which were recorded in Q1 of the previous fiscal year.
In Machinery & Infrastructure, although there was an impairment loss at Mainstream, profit increased by JPY 13.7 billion- JPY 52.6 billion, mainly due to the increase caused by the absence of one-time items and valuation losses that were recorded in Q1 of the previous fiscal year, as well as a good performance in the automotive and construction machinery, ship, and FPSO businesses. In Chemicals, although there was a valuation gain at an associated company, profit decreased by JPY 7.6 billion- JPY 15.5 billion, mainly due to the falling prices of fertilizers and feed additives. In Iron & Steel Products, profit decreased by JPY 1.4 billion- JPY 5.6 billion, mainly due to a fall in steel prices.
In Lifestyle, profit increased by JPY 33.8 billion- JPY 60.3 billion, mainly due to the fair value gain of Aim Services . In Innovation & Corporate Development, profit decreased by JPY 12.3 billion- JPY 8.1 billion, mainly due to the absence of gain on sale of real estate business, which was recorded in Q1 of the previous fiscal year. Other factors such as expenses, interest, taxes, et cetera, which were not allocated to business segments, totaled a profit of JPY 6.2 billion. This page shows the main factors influencing year-on-year changes in profit.
Base profit was driven by the absence of advanced recognition of derivative valuation losses in LNG trading and one-time losses recognized in Q1 of the previous fiscal year, as well as a good performance of multiple businesses such as the US food business, Ventura Foods, automotive and construction machinery, ships, FPSO, and fashion. However, there was a decrease in profit from trading in areas such as Chemicals and grain due to sales prices reverting, a decrease in LNG dividends and a decrease in profit due to the sale of our shares in the Australian Metallurgical Coal business, SMC, in Q3 of the previous fiscal year. These were the main factors behind base profit decreasing by approximately JPY 8 billion as a net total.
Looking at resources, costs, volume, profit decreased by approximately JPY 8 billion, mainly due to decrease in volumes and increases in depreciation and exploration costs in some energy upstream businesses, and decrease in volume and an increase in unit costs in the copper business. Asset recycling resulted in a decrease of approximately JPY 4 billion, mainly due to the absence of a gain on sale of real estate business that was recorded in the previous fiscal year, although there was a valuation gain at an associated company in the chemical segment. In commodity prices and Forex, due to the decrease in commodity prices, profit decreased by approximately JPY 18 billion for metallurgical coal, JPY 13 billion for oil and gas, JPY 9 billion for iron ore, and JPY 4 billion for copper, which resulted in profit decreasing by approximately JPY 44 billion in total.
For Forex, profit increased by approximately JPY 15 billion, mainly due to the weaker yen. Finally, valuation gain loss and special factors contributed to an increase of approximately JPY 27 billion, mainly due to the fair value gain of Aim services. Let's take a look at the balance sheet. As of the end of quarter one of the current fiscal year, compared to the end of March 2023, net interest-bearing debt increased by approximately JPY 100 billion to JPY 3.3 trillion. Meanwhile, shareholder equity increased by approximately JPY 400 billion to JPY 6.8 trillion. As a result, the net D/E ratio was 0.49 x. We are confident that we have strong financial base, sufficient enough to withstand the ongoing uncertainties of this operating environment. That concludes my presentation.
Now we'd like to start taking questions. Those of you who are participating on Zoom, please, push the Raise Hand function on the Zoom, and if your turn comes, then your name will be called. Please unmute yourself and identify yourself and affiliation first before asking questions. Please limit the questions to two per person, and please ask all the questions at a time. You can ask as many times as possible, but sometimes we may limit the number of people who can ask questions in the interest of time. If you have any questions, please raise your hand. The first question? Thank you very much.
Thank you for the presentation. There are two questions. First, the first quarter evaluation is what I'd like to ask about.
Earlier, Mr. Shigeta said that in all segments, the progress has been made steadily, but there are several one-time factors involved. At a glance, in each of the segments, how to interpret and evaluate the progress is quite unclear. Looking from outside, if you look at the true earnings capability, Machinery & Infrastructure is strong, and Nutrition & Agriculture, and Chemicals are weaker. On a basis excluding one-time factor, there are some differences and variations from segment to segment. If you look at the true status of each segment, how do you evaluate each of the segments, Mr. Shigeta? If the base profit, JPY 170 billion growth that you're expecting for medium-term management, if you can also relate your response to that context, if you, if you can share that with us, that would be appreciated.
In the news conference, the, if there is any additional, shareholder, return, that will be considered. I think that's what you said. For the prospects for the rest of the year, there are not many risk factors that you are sensing. That's what I glanced, based on your comments. In the stock market, there is no concern for the recession, so stock prices are quite strong. If you look at the results of the first quarter and the most recent, voices from the front lines, is there any changes or signs of changes that you are looking, observing, and especially focusing on risks? If you can answer that question, that would be appreciated.
Thank you very much for the questions. For the true status basis, real, status basis, it's not just a comparison with the plan, but, the trend from the previous quarter, and what are the trends? I think that's what you're asking about. First of all, compared to the previous fiscal year, there was a pent-up demand after the COVID-19 that will be settling down. So the logistics trading, or rather, trading, prices reverting or settling down, I think that has been incorporated in the plan. Also the trends from the previous fiscal year or year before last, we have, come up with a plan for this fiscal year. There is variation from segment to segment. The Machinery and Infrastructure, especially the mobility, especially the automotive sector, the business was quite strong.
...in the expansion in the previous quarter and the quarter before last, there was some decline in the profit, but we are feeling the strength. On the other hand, as you rightly said, in Chemicals, NA, Nutrition & Agriculture, and fertilizer materials and raw materials, the prices went down, and there's more reduction in profit. It really depends on the segment that you're talking about. Structurally speaking, I suppose in this first quarter, relatively speaking, there are some segments and business units that have started late or started up late. There will be cost reduction or pass on some costs increase into the prices. Those approaches will be taken on a full-year basis.
Throughout the year, we will be able to make some recovery. As for fertilizer, raw materials, there is some seasonality to be taken into account. In the previous fiscal year, March 2023, the segments that were extremely well, compared to that, there may be some decline. If you compare the levels on the pandemic basis in each of the segments, the performance and base profit, I think there are some sectors that have achieved the improvements in terms of levels of base profit. That's what we sense.
You are not asking about comparison with the plan, but throughout the year, and compared to the forecast in the at the beginning of the fiscal year, we probably be able to achieve the exceedance or overachieve the forecast. JPY 170 billion for the medium-term management plan. In terms of breakdown for that, at this moment, we're not in a position to respond immediately. For this, we would like to build up our performances and results so that we'll be able to explain more. Part of JPY 170 billion actually is something that we have seen already. As for additional return, shareholder return, the base profit and core operating cash flow increase, especially the fundamental level improvement.
Through that, cash dividend will be made in the form of progressive dividend. That's what we explained at the beginning of this fiscal year. We'd like to improve the level, and also, depending, if there's an upside from the commodity prices, and then, we would like to make additional return. There is no change from the conventional policy, we would like to continue to consider that. There's many risk factors, geopolitically or environmentally. In light of this, there are various risks or integrated risks that are being heightened. If you look at the economy, this fiscal year, in the U.S., we are away from the concern about serious recession for the U.S.
In Japan, the monetary policy and dialogue with the market are, seem to be going well, and we don't expect to face any shocks. On the other hand, the economic slowdown is prolonged in China, so effective stimulus measures could bring about recovery. There is some expectation on that, but there's a concern that that expectation may not be met. In Europe, and also in Europe, the economic slowdown could be prolonged. Those are some of the risks that we have to address properly. We have a strong profit foundation in the Global South. We have to ensure the profitability there, and also, we have to build up the growth investment. It's not the case that we don't sense any risk factors.
There is a concern about integrated risks, we like to build up the profit so that we won't face a downside risk. Thank you. As for the second question, you explained from the macroeconomic perspective, if you look at this from the bottom-up perspective, from the front lines, any ominous signs that you're not hearing, is that correct? Well, it's not the case that there is none, honestly speaking, in the new process, the starting up may not be going as well as expected. Of course, inclusive of measures against those, how they are addressing this is something that we're looking at. There are numerous examples.
I think this is something that we see on a day-to-day basis, but, there is information coming up from the front lines with the transparency about bad news, and, how to avoid loss-making is what they are addressing. So it's not the case that there's no concern. On the other hand, if there is any huge impairment loss that is impend, that is impending, that is not the case. We don't feel that. Thank you.
Next question, please. Thank you very much for taking my question. I'd like to ask two questions. First question, I ask this question every time about Energy. Can you hear me? Yes? My first question is on Energy. I asked at the beginning of the year as well, cost and volume, there is a downside that has been projected. In the first quarter, I don't think that really surfaced. After the second quarter, do you think there will be decline in profit? When we look at the trading, last year, there was, like, a trade, a derivative, assumption that was incorporated. In the first quarter, when it was explained by the CFO, you said that the progress is good.
However, from first quarter to the second quarter, is there a negative that you had projected? Is that going to appear going forward? The second question, the CFO earlier said that China may be concerned, and I think the market is thinking the same. Maybe I can ask Kuni-san about, you know, the market may be strong, there may not be demand, but maybe we are seeing strengths which is underlying. Maybe we can talk about demand and supply as well. How do you see the situation? Is there a risk that it may decline, or do we not have to worry about such risks? May I ask for your comments, please? Yes, the second will be answered by Kuni-san from IR department.
First question on energy. Yes, currently, as we had projected at the beginning of the year, cost increases and also a decline in volume, we believe that that is going to appear from the second quarter onwards. With that assumption, we are making responses, initiatives in each of the projects. In Western Australia, there is a plan that the negative volume is something that we had incorporated. Compared to that plan, we are going to increase the production. That is something we are starting to see. The negative factors that we had included in the plan is something, yes, we are projecting. However, we hope to make sure that we can shrink it as much as possible. That was the answer to your first question.
If that is the case, of course, the progress was about 20% or so in the first quarter. From the second quarter onwards, of course, if there are negative factors, then the start may not be, may not have been good. Is that how you value this? Or with dividend included with this progress, do you think this is on par with your plan? How should we interpret this? Yes, of course, there are seasonal factors, and if that is adjusted, I think we are on the line that we'll be able to achieve the plan. Seasonality and dividend and LNG trading, that is strong in the winter months. If we consider all these factors, then yes, I think we are on par with the plan. Thank you. Understood.
As for your second question about the situation in China, about the market of iron ore, of course, this is very solid when it comes to its foundation and when we look at the trends. When we look at the demand and supply, of course, you mentioned that the demand may be slow, but I don't think that's what we are seeing with crude steel. Of course, when we look at our interest, of course, our cost curve on the left-hand side, we are securing enough margin. That is the kind of asset situation that we have at the moment. I don't know.
I think that is going to be quite strong, and and the margin from iron ore, I think, is going to be quite strong for us as well. That was the plan, and at the moment, the plan has not changed. Did that answer your question? Yes, thank you very much.
Thank you very much. Next? Next question, please. Thank you very much for today. There are 2 questions. First is about trading. In the segments, Chemicals, especially methionine, and probably prices overall are weak in terms of trading, it seems, and you explained that Chemicals and Grains, prices are declining. That's what you said. Profit in trading, in your initial forecast, compared to that, is it weakening? How do you see the Chemicals, Energy, Steel, and Grain, how do you see your prospect going forward after 2Q? Second point is the shareholder returns. You told us your policy on shareholder returns, but if you can drill this down, and in light of other companies' movements, I'd like to ask this question.
Mitsubishi Corporation, in the fourth quarter of March 2023, for JPY 300 billion share buyback was announced, and JPY 200 billion was started because of the improvements in balance sheet. The financial position is quite similar in your regard. In order to maintain the balance in the core cash flow, if you just look at the 37%, then ROE is bound to decline. How to maintain that ROE level is also I'd like to ask about, if you explain more about your policy in shareholder return in this regard, that would be appreciated. Thank you. As for the trading, Chemicals, Energy, Iron & Steel Products, and the grain, that's what you asked about. For each one of these, I will explain.
For Chemicals, basic materials, performance materials, and Nutrition & Agriculture business units. In the previous fiscal year, there was a pent-up demand, and there was a tailwind in this, in that regard, but there was some declining trend now compared to the previous fiscal year. Of course, so I'm not saying that it is, it keeps deteriorating, but the opportunities to gain margin or margin rate shrinkage, it was seen compared to the previous fiscal year. In terms of environment, the things will continue to be challenging for the time being. That's my frank view. China or Southeast Asia, in those areas, the economic recoveries and also the volume and prices associated with the economy, if there is any rebound, we can capture profitability and profits.
Of course, we are taking that into account, we are taking every measure to reduce cost, working with partners and business partners. I'm not saying that we would be in the financial position to keep losing money, but how to secure margin is something that we have to address. With regard to energy, in terms of trading, in the long, we are covering with long-term contracts for the most part, so we have to perform that contract, and so the basis is quite strong. Beyond that, with improved production, the spot sales, depending on the volume, equivalent to the increased volume, if there is any such opportunities, we like to aim for further upside.
As for LNG trading, in the previous fiscal year, the Cameron production was performing quite well, so there was a big positive number. Compared to that, we cannot avoid a decline in profit, profits. We would like to exhibit our functionality so that we can secure a certain level of profits, and that is what we are going to continue to do throughout the year. As for steel products, in the previous fiscal year and the year before last, there has been continuing trend of strength from Japan to Japan, and also trilateral trading is something that we excel at, and so we are pursuing business opportunities. Of course, in addition to the profits from various businesses, some businesses, in the trading, we would like to also secure profits.
As for grain, UGC, and other base businesses are available, but the international commodity prices are affecting grains. If there is more volatility, there'll be more profitability opportunities for us, so we like to capture that. As we did in the past, we are expecting the environment to be challenging, while at the same time, capturing trading profits properly. From the perspective of food, I think there is a great impact from the climate. There will be continued fluctuations in prices, so we have to maintain the supply chain or contribute to the maintenance of supply chain, aim for capturing upside.
I have been a bit vague in my response, but, I have responded to the trading questions on for commodities. As for shareholder returns, well, in 2014, well, since that year, we have been performing share buybacks on a continuous basis, steadily, slowly but steadily. We have been building up the repurchases, and that has contributed to the capital efficiency, or we have given priority to shareholder return. That, in line with that philosophy, we have been continuing with this practice. As you said, in order to maintain a high level of ROE, how to maintain equity is a question, and how you can improve part of ROE, and also, to what extent, we use leverage.
Net DER is only 0.49 times for this quarter, so it has been maintained at the lowest level ever. The balance of those 3, the growth investment through growth investment, base profit increase or improvements, and equity level, focusing on capital efficiency and leverage, looking at the total balance sheet, you have to hit the right balance between these 3 factors, and we are in a position to be able to pursue that because of the performance improvement that is in sight still. While looking at this balance, and closely watching the balance, we are trying to improve each of these in a positive direction, and we are hoping that this will be the case in the discussion is within the management.
As you said, of course, this will be directly linked to the evaluation from the market, including all of this, so we'd like to meet that expectation. I'd like to ask more about shareholder return. After the last medium-term management plan, management allocation of about JPY 1 trillion was there to spare, and this has been carried over to this fiscal year. In March, there was some financial crisis in the U.S., and there was some stability pursued back then. Now, in society in general, that view has been weakened, so Net DER, compared to that time, is something that you can more solidly look at. 0.49 times is the end of June Net DER, with a further decline.
What would be the appropriate level that you see as Net DER? Well, there's no fixed, numerical target or the appropriate level that we have, come up with as a consensus. We haven't had that discussion yet. If you look at the balance sheet, we are looking at various growth investments. The size of the balance sheet itself, whether it is appropriate or not, we haven't decided which size is appropriate specifically. The appropriate equity level throughout this medium-term management plan period, probably we would end up with a appropriate percentage or rate in terms of the efforts, as part of the efforts to improve, to what extent we can enhance the capital efficiency. That will be part of our efforts. Thank you.
Thank you very much for taking my question. My first question, I just want to confirm what was presented. In the one-time factor explanation, you talked about JPY 9 billion. I'm sure it is not that big, however, this JPY 9 billion is something that I want to confirm with you today. About the Python, about the delay in the sale of shares. If this is not a major project, how can we interpret the sense of delay? Is it going to impact the cash flow for the full-year or not? That is something that I want to confirm with you today. Also, on page seven, about growth into investments, you gave explanation about some pipeline and project investments.
When it comes to energy transition, they are very interesting projects that we see. The agreement of contracts for business, what is the time access from agreement to implementation of business? What can we expect for the projects, the time access for important projects? If that can be shared, it would be appreciated. Okay, thank you very much. About Mainstream, this is Chile renewable energy. Impairment has been recorded. I'd like to ask the Global Controller to give us details. Mainstream, of course, globally. Into the future, we are going to develop these pipelines going forward. This is the kind of business that we have.
So, Chile asset, after acquiring, we are facing impairments, and of course, we want to utilize this further globally as a renewable energy project. We want to continue to work on new projects so that we can expand this business further. The global controller will explain the details later. As for Python... Yes, I'm sorry, we made a disclosure that there will be some delays, and of course, we are waiting for the signatures of the relative parties. I hope you will wait a little while for this to be closed. Your second question about the pipeline projects. MTMP, of course, when we ask for your understanding, I think it is very important that we see the progress of those investments.
That's why we added a slide about this. We talked about the investments we made and agreements to be made to invest, et cetera. The contract that has been agreed to and closed. The progresses are different, but anyway, when it comes to a basic agreement that has been reached with a number of projects, of course, we may be co-operating with the projects. We may have agreement on paper for some of these projects. We believe that in a short time, so time access-wise, about our next generation fuel, low-carbon metallics, and iron making CCS, et cetera, we hope that with short time access, we'll be able to implement these projects.
The time access is as such for the projects that are listed on this page. As for the impairment of Mainstream that you asked about in Chile, as for the assets in Chile, of course, we need to think about the receivable of energy in Chile. Of course, we have to look at the spot prices, and there is a difference between receivable and the spot prices. This is to be paid by the energy company. Of course, with the Ukraine status, of course, the spot prices went up, and the difference has expanded, and the cost is increasing.
Of course, we want to have thermal energy, and that the fuel prices that is to be paid by the energy company, and the cost is increasing there. Therefore, including Mainstream, the RE companies are taking on the losses at the moment. Of course, our maintenance of the lines, the energy lines, there are losses there as well. We have Arca, which is a partner, and for the Chile asset, there is uncertainty when. That is continuing, therefore, fixed asset impairment has been recorded. In us as well, we are recording it as the equity share that has been lost. Thank you very much. Understood. Thank you very much. There is only 10 minutes left. At this moment, there are 4 people who are raising hands.
I would like to take as many questions as possible from as many people as possible.
... If you raise your, if you ask questions, if you limit your question to one, that would be really appreciated. The next question, please. Thank you very much. Can you hear me? Yes. The only one question. I have a question on investment, especially the management allocation, JPY 1.13 trillion. How to spend that? Compared to the beginning of the year, is there any increased pipeline? What is your mindset on the investment? Is there any change? In the Q&A, as comments, there are some heightened risks, but there's no less risk for serious recession in the US. What is your mindset towards investment right now, is my only question. Thank you.
Investment and pipelines, compared to the beginning of this fiscal year, up to now, the double the amount that is shown or more than double the amount worth of projects are building up. We're now severely selecting the projects. There is some, I don't know if this is the correct word, but there is some sort of competition for funds, strategic-ness and the awareness and immediately contributing profit or not, or expertise in existing business or strong relationship with, relationship with partners and on field deals. From these perspectives, we are prioritizing the projects through discussions.
Originally, in our company, amongst the existing businesses, both on, and adjacent business or peripheral businesses and business clusters, are the ones that we are, are pursuing in the business. That's our business model. Of course, sometimes it depends on the prices, so the timing of investment decision should be carefully considered. We'll spend we spend time, enough time, to build up these projects. From the beginning of the fiscal year up to now, the pipeline of investments has not changed in terms of the volume. Thank you for the question. Thank you.
Thank you very much. I'd like to ask one question about Moeco, about the Hokkaido, in Niseko. There has been some steam release. Is there any information that you can give us? Please, let us know. We believe that the incident is ongoing, so if you cannot discuss, please let us know that way, too. As for this incident, of course, to the people living in the neighborhood and to the municipality, we are sorry for the inconvenience and for causing concerns. We'd like to give a sincere apology, but, we believe this is something serious, and, with Moeco, we hope that we'll be able to respond appropriately, and we are supporting their efforts at the moment.
Steam release, that is something that we need to suppress, and that is something that we are prioritizing at the moment. As for whether it is going to have impact on the business, that is something that we need to think about later. As for the first quarter, the setting of the pipes and e- emergency engineering or consultation responses, the third party is supporting this matter. This cost, compared to the business scale, it is not that big, but these costs are being recorded. If there's going to be a big impact on the performance, we will share that information in a speedy manner, but currently, we are not at a stage of giving any estimation at the moment. Thank you very much.
Thank you very much for answering my question.
Thank you very much. We are close to ending time, so the next question will be the last one that we can take. Next question, please. Thank you. I have one question. With regard to investments, in the first quarter, JPY 235 billion in gross investments. What will be the full-year amount? In these investments, in this fiscal year and next fiscal year, what will be the, the projects that or the investment that will give you immediate returns? Is there any? Well, in the framework of cash flow allocation, cash inflow and cash outflow should be balanced, and that hasn't changed. From the previous medium-term management plan, there has been some investment projects that have been carried over.
Ultimately, what would happen, this should be looked at from the three-year perspective. In that sense, the amounts that are shown in the cash flow allocation is what we would like to fulfill and perform during the three-year period. Immediate contribution, well, through quarterly disclosure, we like to share the information with you. For example. As I explained, Celanese, collaboration with Celanese, in this project, because this is existing project, business, there is some immediate effect we can expect. When this is expected to start contributing to profit is something that we would like to share with you in some way or other. I haven't been able to answer your question exactly. I'm sorry. Let me make some additional comments.
As for the timing of the starting of the contribution to profit, in the Medium-Term Management Plan, at page 35, the new project starting time, this is the forecast that we had at the beginning of the current Medium-Term Management Plan. We would like to take a proper follow-up and keep you posted. I'd like to ask for your kind understanding. Thank you.
It is time. We'd like to end the Q&A session for today. We have some announcements regarding the IR events. As you can see on the last page of the PowerPoint material, September 21st from 4:00 P.M., we are going to have a business explanation session at the Otemachi Mitsui Hall. November 30th, afternoon, we are going to have Investor Day in this Otemachi Mitsui Hall as well. The details will be sent to you by email. We hope that you'll be able to participate. With that, we'd like to end this briefing for today. Thank you very much for your participation despite your busy schedule.