Good afternoon. My name is Tatsuo Yasunaga, CEO. Thank you very much for joining us today despite your busy schedule. I'll begin by reviewing progress on the Medium-term Management Plan 2023 while giving a summary of the first half operating results and forecasts for the full year. I will then hand over to our Global Controller, Tetsuya Shigeta, for details of our operating results. This fiscal year began amid immense changes to society and people's behavioral patterns with the spread of COVID-19. During the second quarter, we saw a clear recovery of production activity in China and an improving trend in employment and consumption in the U.S. There was also a recovery of economic activity in other regions. Although there is a view that the worst is behind us, in Europe and elsewhere, we are seeing renewed spread of the virus, so the situation remains deeply uncertain.
Recovery pace to normalization is likely to be gradual, commonly in the whole world, and full economic resurgence cannot be expected until next year or later. At Mitsui, our performance has been underpinned by our iron ore business, supported by solid demand in China, and our trading business, where we have achieved higher results than the initial plan by demonstrating our comprehensive strengths to capture the market needs. At the same time, in terms of businesses such as primary materials, which is facing decline in demand and impacted by weak commodity markets, as well as business areas of which the impact of COVID-19 is likely to be prolonged and severe, such as mobility, Lifestyle, et cetera, we will allocate certain amount of our management resources to defense as we strive for the earliest possible recovery towards the growth trajectory.
On the other hand, our intention is not to focus only on defense, but also to show positive stance for offense, meaning to look for opportunities arising from the pandemic and continue to manage the company to realize the corporate strategy that we outlined in the new Medium-term Management Plan announced in May, believing that this will lead to increase our corporate value. Please now turn to page three, and I will summarize our operating results for the first half of the year. core operating cash flow for the first half decreased by JPY 42.9 billion year on year to JPY 274.1 billion, and profit for the period decreased by JPY 124.2 billion year on year to JPY 110 billion, representing progress to full year target of 69% and 61%, respectively.
Due to the prolonged widespread impact of COVID-19 and the decrease in oil, gas, and coal prices, our results were lower year on year. We are progressing steadily toward plan, supported by factors such as high iron ore prices, revenues from asset recycling, including FVTPL of profit, and trading business. For our full-year forecast, we have upwardly revised core operating cash flow by JPY 80 billion to JPY 480 billion, reflecting steady cash generation. As mentioned at the beginning, our forecast for the profit for the year remains unchanged, considering that we intend to reevaluate existing businesses and review our portfolio as there are business areas that suffer from a deeper and more sustained impact from COVID-19. The annual dividend forecast also remains unchanged at JPY 80 per share with an interim dividend of JPY 40 per share. Please turn to page four.
Here, I will cover progress in our core business areas outlined in the medium-term business plan of Resources and Energy, Machinery & Infrastructure, and Chemicals. Total first half profit from core businesses was JPY 101.7 billion, accounting for more than 90% of consolidated group profit for the period. In Resources and Energy, core operating cash flow for the period was JPY 157.4 billion, and profit was JPY 67.6 billion. Although there was an additional impairment loss of JPY 19.5 billion from Mitsui Coal Holdings associated with a revised 5-year production plan in the second quarter, which followed an impairment loss of JPY 5.1 billion in the first quarter, overall progress was steady, supported by a strong iron ore market and dividend from Vale. In Machinery & Infrastructure, core operating cash flow for the period was JPY 26.3 billion, and profit was JPY 23.4 billion.
Profits from multiple operating companies, mainly in the mobility sector, decreased impacted by COVID-19, but with support from asset recycling, profit for the first half reached a high 67% of the full year plan. In Chemicals, progress was largely in line with plan, with basic Chemicals trading and agricultural supply businesses performing soundly. Please turn to page 5 for an explanation of cash flow allocation in the first half of the year. For the period, in addition to core operating cash flow of JPY 275 billion, cash-in was supplemented by asset recycling of JPY 55 billion, for total cash-in of JPY 330 billion. Investments and loans for the period was JPY 265 billion, which combined with shareholder returns of JPY 110 billion, meant total cash-out was JPY 375 billion.
The business environment remains severe, and we will continue to manage the company with a continued focus on strict discipline for post-FID investment and maintenance CapEx. At the same time, we will pursue new challenges that would contribute to accelerating transform of our company. Let's now turn to page 6 and review the first half balance sheet. Compared to the end of March 2020, net interest-bearing debt decreased by approximately JPY 70 billion to JPY 3.4 trillion. Shareholders' equity increased by approximately JPY 120 billion to JPY 3.9 trillion, and as a result, the net DER ratio was 0.87 x. Please look now at page seven. This page covers the impact of COVID-19 on the first half results and the full-year outlook.
Although the economy in most of the developed markets have begun to recover, there's still a lot of uncertainty in areas such as Central and South America, Southeast and Southwest Asia. If we look at each business segment, while some have adapted to stay-at-home demand and changes in consumer behavior, and are performing well in mobility and related materials, along with consumer businesses, the downward pressure on business has been more intense than anticipated. Although it is under a recovery trend, we expect that certain negative impact will remain through the second half. To manage the situation, we will continue with damage control measures while reappraising existing businesses in light of the different business environment and changes in social structure. At the same time, we'll manage the company by paying close attention to search for signs of new business opportunities.
Please turn to page eight, where I will review our progress on the action plan we announced at the start of the period. Regarding ensured safety and minimized damage amid COVID-19, we adopted guidelines with comprehensive measures to prevent the spread of infection, while gradually restarting operational activities. We closely managed financial liquidity in each business during the peak period of the pandemic. As a next step, we are under evaluation of how we could build an ideal business portfolio considering various risks, including credit risk. We're also pursuing more progress in operational efficiency and cost reductions through further digitalization. Regarding steady implementation of business plan, the full-scale operations have begun at the Cameron LNG liquefaction plant and Fukushima natural gas power plant. The Mozambique Area 1 project has progressed with the securing of project finance. We have been implementing trading contracts and addressing demand from stay-at-home consumers.
Regarding acceleration of business reinforcement and transformation, there were progress in reorganization of sugar manufacturing industry and consolidating intermediary distribution subsidiaries, merger, and pursuing reorganization and restructuring of existing businesses. Our aim will continue to be leaner company group as a whole. Page nine to 11 will be explained shortly by our global controller, so please turn now to page 12. As I mentioned earlier, we will upwardly revise our forecast core operating cash flow for the full year to JPY 480 billion. This reflects good iron ore pricing and maximizing FVTPL portfolio companies after boosting their corporate value. Please turn to page 13. Our full-year profit and tax forecast is unchanged at JPY 480 billion.
Downward pressure on profits has been less than initially expected due to contribution from iron ore business, improvement of FVTPL in Innovation & Corporate Development segment, and strong trading in chemical products and other areas. However, the operating environment has been harsh for the Mineral and Metal Resources, Energy, and Machinery & Infrastructure segments. There were substantial impact to some businesses in those areas. We held the strategy meetings again with each business unit, first time since the beginning of the fiscal year, and came to a conclusion that we need to thoroughly evaluate the existing businesses and review the portfolio, taking into consideration mid- and long-term improvement of corporate value. By doing the above, we're not able to preclude the possibility of recording one-time profit and loss, thus determined to maintain the figure of the initial business plan.
Please now look at page 14 for an explanation of cash flow allocation and shareholder returns. In reviewing our full year forecast for the year to March 2021, we also reviewed the Medium-term Management Plan announced in May this year. There is continuous downward pressure to our asset recycling, we are working on thorough cost reduction in existing businesses, in addition to upward revision to our core operating cash flow. We determine that there is no outstanding changes to our cash generation capacity, thus, we have not changed the cash flow allocations contained in our three-year plan. The forecast annual dividend is unchanged at JPY 80 per share with an interim dividend of JPY 40 per share. Looking ahead, we aim to implement a highly flexible strategic allocation of available cash for growth investment focused on capital efficiency. That completes my presentation today.
I will now hand over to our Global Controller, Tetsuya Shigeta, for details of first half performance.
Thank you. My name is Tetsuya Shigeta, Global Controller, and I will now provide details of our operating results for the first half. Please turn to page nine. First, I will explain the main changes in core operating cash flow by segment compared to the first half of the previous fiscal year. Core operating cash flow for the first half of the year was JPY 274.1 billion, a year-on-year decrease of JPY 42.9 billion. In Mineral and Metal Resources, core operating cash flow decreased by JPY 22.6 billion to JPY 97.2 billion, mainly due to a decrease in the sale price of coal at Australian coal mining operations. In Energy, core operating cash flow decreased by JPY 56.2 billion to JPY 60.2 billion due to a decrease in oil and gas prices and a decrease in LNG dividends received.
In Machinery & Infrastructure, core operating cash flow decreased by JPY 11.5 billion to JPY 26.3 billion, mainly due to a decrease in dividends from equity method affiliates. Chemicals achieved core operating cash flow of JPY 22.7 billion, a year-on-year increase of JPY 9.4 billion, which was mainly due to a one-time factor at an overseas affiliate. In Iron & Steel Products, core operating cash flow was down JPY 0.1 billion to JPY 0.5 billion. In Lifestyle segment, core operating cash flow was JPY 1.3 billion, down JPY 1 billion. Innovation & Corporate Development achieved core operating cash flow of JPY 30.9 billion, up JPY 36.6 billion, mainly due to strong commodities trading and the absence of FVTPL loss recorded in the first half of the previous year, in addition to FVTPL profit. Other factors comprising expenses, interest, taxes, et cetera, not allocated to business segments totaled JPY 36 billion.
Please turn to page 10. I will now explain the main changes in profit by segment compared to the first half of the previous fiscal year. Profit for the quarter decreased JPY 124.2 billion to JPY 110 billion. In Mineral and Metal Resources, profits decreased JPY 30.6 billion to JPY 71.3 billion due to an impairment loss at Mitsui's coal mine business and a decrease in the sale price of coal at Australian coal mining operations. In Energy, profits decreased by JPY 68.3 billion to negative JPY 3.7 billion due to a decrease in the price of oil and gas, decreased LNG dividends, and an absence of deferred tax assets associated with the FID for Mozambique Area 1, recorded in the same period of the previous fiscal year.
In Machinery & Infrastructure, profits was decreased by JPY 13.6 billion to JPY 23.4 billion due to impairments at Mitsui's Coal Mine business and at the rolling stock leasing business. In Chemicals, profits was up JPY 6 billion to JPY 10.7 billion, mainly due to a one-time factor at an overseas affiliate company, strong trading performance in basic chemicals, and agricultural input business. In Iron & Steel Products, profits was down by JPY 8.5 billion to negative JPY 5.5 billion, mainly due to a decline in demand for steel for the automotive industry and a decline in operation rate.
In the Lifestyle segment, profits decreased by JPY 28.8 billion to negative JPY 11.9 billion due to the absence of reduction in corporate income tax burden recorded in the first half of the previous fiscal year, and the impact of decline in dining out and purchasing demand on affiliated companies in food, retail, and fashion. Innovation & Corporate Development achieved profit of JPY 24 billion, a year-on-year increase of JPY 22.4 billion, mainly due to strong commodities trading and the absence of a FVTPL loss recorded in the first half of the previous year, in addition to FVTPL profit. Turning now to page 11. Here we will look at the factors influencing year-on-year changes in the first half profit. Base profit declined by approximately JPY 6 billion. FVTPL recovery and Vale dividends were positive factors.
The impact of COVID-19 contributed to a decline in profit of approximately JPY 38 billion, primarily in non-resources areas. Next, in resource-related cost volume, the deterioration of mining conditions resulting in lower volumes and higher costs contributed to a decline in profit of approximately JPY 5 billion. In Energy, while cost benefits from the capitalization of Maple's contributed to a profit increase of approximately JPY 2 billion, production decline in MOECO, Thai Offshore, was a main factor in a decrease in profit of JPY 10 billion. Asset recycling contributed to a decline of approximately JPY 16 billion due to the absence of a reduced corporate tax burden included in the same period of the previous fiscal year. Despite a gain on sale of power generation businesses in North America.
In commodity prices Forex, a decrease in the price of oil and gas was a main factor in a decline in profit of approximately JPY 24 billion, while a decrease in the price of coal was behind the decline of approximately JPY 16 billion. In Forex, Australian dollar appreciation against the US dollar was a main contributor to a decline in profit of approximately JPY 8 billion. Finally, valuation gain, loss, and special factors contributed to a decline of approximately JPY 42 billion due to the absence of deferred tax assets associated with the FID for Mozambique Area 1 included in the same period of the previous fiscal year, impairment loss at Moatize coal mine business this first half, and other factors. Page 12. I will now explain the factors by segment in the full-year forecast described earlier by Mr. Yasunaga.
The full-year forecast for core operating cash flow has been revised upwards to JPY 180 billion. The strengthening of the price of iron ore was a main factor in an upward revision of JPY 70 billion in Mineral and Metal Resources. A greater-than-expected recovery in oil and gas prices was a main factor in an upward revision of JPY 10 billion in Energy. FVTPL profit and strong commodities trading contributed to an upward revision of JPY 20 billion in Innovation & Corporate Development. Conversely, the impact of decline in dining out and purchasing demand on affiliated companies in food, retail, and fashion were the main factors in a downward revision of JPY 10 billion in the Lifestyle segment. Please turn to page 13. The full-year forecast for profit after tax remains unchanged at JPY 180 billion.
FVTPL profit and strong commodities trading contributed to an upward revision of JPY 20 billion in Innovation & Corporate Development, while strong trading in basic Chemicals and strong performance in the agricultural input business contributed to an upward revision of JPY 5 billion in Chemicals. Conversely, the impact of decline in dining out and purchasing demand on affiliated companies in food, retail, and fashion were the main factors in a downward revision of JPY 15 billion in Lifestyle segment, while a decline in demand for steel for automotive industry and decreased operation rate contributed to a downward revision of JPY 10 billion in Iron & Steel Products. Thank you.
Now, we'd like to take questions. The first question: Through the response and impact from the COVID-19, was there any learning for the sake of the company? What was the impact on the first half from the COVID-19, and what would be the impact on the full-year plan that has been revised? What was the changes in the assumption from the beginning of the period? The President will answer the question.
Through the response to COVID-19 and impact from COVID-19, what was the learning? First of all, for quite some time, we have been promoting a paper-free practice in the company. Through this, we have been able to simplify the processes, and duplications inside the company operations have been reviewed. Also, we have used this for data-driven business management.
Those were the aims, and through the COVID-19 pandemic, this whole practice has been accelerated and has taken root inside the company. Through this remote work and the physical work, coming to the office, the coexistence between these two have been done by working out how to best do the company operation in each of the division. Especially our mainstay, the overseas business, the overseas subsidiaries and overseas affiliates. In those operations, the function has been working quite well. Under the lockdown, there was an impact on the mainstay businesses. In order to avoid impact, rather, on the main infrastructure that we are responsible for, we have making contributions through trading and also make the logistics work properly. By doing so, we have been contributing to the maintenance of infrastructure and supply.
As I said, we have been able to reap the trading profit, as I said. The other thing is related to data-driven practice for each business and for each employee, the productivity has been further visualized. For businesses, of course, there has been prolonged and severe impact in some areas, and we have been responding to those, and we have not been hesitating to allocate resources to those areas, and we have been quite flexible enough to do that. Another thing is that this is not related to direct contribution to profit, but this is more or less related to CSR. In domestic operations, there is an AIM Services, which is providing school lunches. Through these companies, hospitals, and senior citizens' homes, and schools, for those public organizations, this company has been providing the school lunches.
In order to encourage healthcare professionals and those that are working in those organizations, we have tried to improve the menu of the school lunches. On a specific day, we're providing free lunches, and also masks and other personal protection equipment have been provided to healthcare professionals. Through those efforts, we have been contributing them, we received the appreciation from those healthcare professionals directly. We have been able to feel that we were able to contribute to society through our businesses. On the other hand, as for the numerical impact from COVID-19, at the beginning of the fiscal year, the plan that we had initially planned, compared to that, a downside of about JPY 200 billion has been seen.
For breakdown in the resources, the market related, JPY 100 billion downside, and in non-resources, demand disappearance and supply chain review, and production plan will be reduced, and so there is another JPY 100 billion downside that was expected at the beginning. After six months have passed, what we are seeing is that as for the market, as was said, the iron ore business is strong, and oil prices have not fallen as much as we had expected. In the resources area, about JPY 50 billion was upside from the initial fear. On a net basis, JPY 50 billion impact was seen actually in resources. In non-resources, the impact has been prolonged and become more severe in some areas, and that is now still continuing. Having said that, we have seen strong trading business and also in the mobility business.
With regard to automotives and ships, there has been relatively more signs of recovery. In mobility, the airline and passenger railway have been impacted more. If you offset those factors each other, from the JPY 100 billion impact, it's about JPY 90 billion, so there will be JPY 10 billion improvement. JPY 200 billion was the total expectation, it's about JPY 140 billion impact that we will actually see probably. That means that JPY 60 billion improvement should be seen. That's what you would say, as was said in our presentations, the review of the portfolio has been done for specific time frames, and the reshuffling of portfolio would be something that we do not hesitate to do. There could be one-time profit and loss that could be recorded, and we cannot preclude that.
That's why we ended up leaving the initial forecast of JPY 180 billion unchanged. Thank you very much.
Moving on to the next question. For the fiscal year ending March 2021, the profit after tax has been maintained from the original announcement. The reason was not to preclude the recording of one-time profit and losses. Will there be a major impairment risk for the second half? Should we be conscious about downward pressure? Can you give us a sense of scale for the second half?
I think I have touched on this in my reply to the first question. The achievement of funds. In other words, in the core operating cash flow, we have given an upward revision of JPY 80 billion. Steadily, our earnings power is, well, as we had seen in the Medium-term Management Plan, it was JPY 550 billion. That is an annual increase every year. That was our plan.
For this fiscal year, we will not reach JPY 550 billion, but we will be recovering close to JPY 500 billion. With the impact of COVID-19, I think we are able to manage that impact to a degree. With this cash-generating power, on the other hand, as I mentioned earlier, we have seen impacts from COVID-19, which is getting more serious. In the mid to long term, we do have to be mindful of COVID-19 impact, but there are consumer sentiments regarding ESG or industry perspective on ESG, and there are some political agendas that are related to ESG. We need to accelerate the review of our portfolio. I think there are areas in which we need to do that.
To be more specific, businesses related to coal and E&P, and also what I touched on earlier, freight, and also rail, and also air, is something that we need to be mindful of. Portfolio review needs to be done on a thorough basis, and if needed, we need to think about the exit strategy. That is something that I am mindful of. The cash generation power is strong, so the original figure is something that we are confident of achieving. However, on the other hand, we need to think about the upside of our cash-generating ability. How that can be evaluated is going to be clear in the follow-up to the discussions of departments that I mentioned earlier.
We have come to a conclusion that by portfolio review, we will be able to have a stronger base for future growth, and that is something that we need to enhance. We'll be able to adapt to the one-time profit or losses that may occur. That is something that we considered in maintaining our original forecast. Thank you very much for the question.
Next question. The question is as follows: The review portfolio and the revaluation of the businesses. The specific policy determination and strategy determination, what will be the timeframe for that? While looking at the situation of COVID-19 pandemic, are you going to decide when to do that, or are you going to do this immediately? The president will answer that question.
I think I referred to this partially earlier as well, the head of each business unit, with some challenges, and also as the ESG trend accelerates going forward, the portfolio needs to be reevaluated in the business domain. In those business units, there has been intensive discussions, more specific policies or directions have been already shared amongst those people. With regard to more concrete individual projects, because we have business partners and other entities that we have to consider.
In what way, specifically, as a result of review of the businesses, are we going to finalize the directions? For that question, for those that have the earlier timing, by the end of this fiscal year, we would include the timeframe for implementation as well. As I said, the numbers that we have shared have taken that into consideration. Rather than looking at the pandemic situation in the current business environment, if we see already the future directions of the business, we don't waste any time to start doing this immediately. Thank you for the question.
Next question is about the oil price. Consulting companies and public institutions have announced long-term oil price, but the assumptions differ. How are you going to respond going forward? That is the question. Mr. Yasunaga, please.
Yes. I mentioned that we are reviewing E&P, but when it comes to the assumption of long-term oil price, I think we need to take a little longer. IEA has made an announcement already, but we will look at the numbers announced by different external institutions to come up with changes to the long-term oil price scenario if needed. Of course, our partners, oil majors, their trends will be something that we'll be taking as reference. In addition, mid to long term, hydrocarbon portfolio review will be done. From oil to gas, and to renewable energy to hydrogen, that is the transformation that we need to secure. In the meantime, we believe that gas is a transitional energy that is going to take place of coal and oil. Hydrogen and also renewable energy is something that we want to focus on going forward.
That is a direction that we have confirmed with the frontline people. Thank you.
Thank you for the question. The next question. There are several people who asked this question. With regard to Lifestyle segment, the second quarter has seen more losses than in the first quarter. Especially fashion and food have been inherently weak. With the COVID-19, that weakness has been manifesting itself further. Compared to the peer, there is no other trading house that has suffered losses in the Lifestyle business as a whole. Can't you do any fundamental actions? The President will answer the question.
The biggest reason for loss increase in Lifestyle segment for this quarter was that as a next strategic focus, there is a healthcare business segment. Unfortunately, the mainstay of healthcare, the IHH, had to give priority to the prevention of infection of COVID-19. This is, of course, natural for healthcare professionals that is in this business.
Through that, each country and organizations and authority in each country is the entities that we have been working with in taking actions against pandemic. This has been affecting the day-to-day businesses, and the first half numbers have been under a severe downward pressure. Fortunately, the IHH that we are engaged in business and the countries that IHH is engaged in, 12, counts 12, and each of the countries has been in recovery. For the second half, however, in the first half, because of the actions against pandemic and COVID-19, the priority has been given to that and the numbers have worsened in the first half, and this will not be able to be offset by the end of this fiscal year.
However, through the pandemic, the importance of medical institutions and also how you can make the clinical practice online and non-contact type clinical operations have to be facilitated. That has been recognized. Even before corona or COVID-19, 6 million persons worth of personal data has been utilized in IHH in order to make the telemedicine work and also in prevention of diseases or pre-disease prevention. People with health problems have seen the severity worsened in the COVID-19. In order to maintain the health, you have to have good nutrition, and you have to take measures against pre-disease. We call this nutrition healthcare, but this integrated practice or business operation that we have been promoting already will be facilitated. IHH has personal data or patients' data of 6 million.
To each one of those patients, how we can contribute is something that we will see as the burgeoning of the seeds of the business. We have to also look at the profitability of each of the business operations with some challenges, and we have been reviewing that quite properly. What differentiates us from a peer is that we do not have any major revenue source in the Japanese market. Why is that? Because we have done the portfolio review, and in the B2C area, we have determined that we shouldn't stay in Japan, but rather go to the rest of Asia. Asia has been more affected by COVID-19 this time. We would focus on the market of Asia. That basic strategy will stay unchanged.
In the strategic focus, we believe that this is important, and so this is something that we will continue to do. On the other hand, in Japan, which is relatively stable, we are lagging behind, and that is a fact that we have to accept. With this COVID-19 as a trigger, we have to facilitate the transition from physical, face-to-face, in-person to remote operations. With the deregulation by Suga administration, there could be structural changes in many of the industries. As we look at that, we have to do sound businesses in Japan, such as AIM Services that I mentioned earlier. There are several selected businesses that we have done properly in Japan, so we would like to take advantage of those to transform them into the platform to explore the new challenges. Thank you.
Moving on to the next question. On the cash flow allocation and shareholders returns, core operating cash flow has been revised upward. Can you talk about that revision and also asset allocation going forward? Yes, Mr. Yasunaga?
Yes. As I touched on earlier, for the full year, the core operating cash flow has been revised up JPY 80 billion. We have the good cash generation power. That is something that we have secured. There has been some difference in the first half and the second half, and that is because FVTPL occurred in the first half, and there were some tax-related matters. With the economic recovery, the expenses will be increasing in the second half. That is our assumption. They are factors related to seasonality. The cash flow achievement close to JPY 500 billion is something that we are seeing.
I may be repeating myself, but structural reform is something that we need to focus on. That is going to be the priority in the second half of this fiscal year. Portfolio review will be prioritized, and accordingly, we are not forecasting cash out. However, the JPY 180 billion, the PL numbers, will be our focus going forward. At the end of the fiscal year, we are going to review the asset allocation. I may be repeating what I've just said, but we will work on structural reform, and portfolio review is something that we first would like to work on. Thank you.
Let's move on to the next question. The question is as follows. The iron ore business share in the profit has been increasing, and because of the conflict between China and Australia, and import regulation on coal has pushed down the prices of coal. How do you see the risk factors for falling market prices of iron ore? The president will answer the question.
The political conflicts and confrontation between China and Australia is something that we are worried about as well. For iron ore business, there's a limited source of procurement. For the moment, it is difficult to find alternative suppliers, and the relative position or advantage of Australia is expected to continue. As we move into the second half, the prices of iron ore is something that we're not that optimistic, we're rather slightly conservative in seeing the prices. Securing alternative procurement sources is something that we need to do as Japan has diversified the energy sources, and there's automotive demand in China, and there will be such trend that we will see.
There are limited iron ore mines available, and there are some others, but they have not been developed because of the cost prohibitiveness. Even if there are competitors with higher costs that would emerge, the price advantage or prohibitiveness will not be undermined. That's our view for the midterm. From the longer perspective, in the iron ore business, from the perspective of ESG, from the furnace to electric furnace with scraps as a feedstock or direct reduction method is something that we would probably see as a focus in the future. The iron ore material future demand is something that we would like to closely watch to figure out the growth of our iron ore business. That is our basic strategy. Thank you for the question.
The next question, about the trading. Trading is very strong. Can you talk about the sustainability of trading, please? From Mr. Yasunaga.
Yes. As I mentioned earlier, under this coronavirus pandemic, the supply source was affected under the lockdown, and steady source was affected. Of course, there has been some impact in the delivery. There is some unsteadiness when it comes to demand and supply. In the first half, commodities, especially Chemicals and petrochemical products, there was some volatility in the situation. We have virtual pipelines as a trading company. With our functionality, refinery and chemical complex have been connected, and chemical complexes and clients' mines have been connected. That has been evaluated highly, and through them, we were able to gain profits.
Towards the second half, as we are now used to the COVID-19, and we are seeing situation becoming more steady, and volatility and special factors are reduced as a whole. We do not think the strongness we saw in the first half will continue in the second half. Measures to be taken in emergency or volatility, we saw lead to profitability to a degree in the first half. In the second half, in the trading business, we believe that we will go back to the profit situation that we had before in the second half. In the first half, the LNG trading, because of the impact of the hurricane in the Cameron LNG, led to certain suspension of operation. Therefore, there has been loss in the LNG trading.
In the second half, we will not see such factors, and towards the winter, the LNG price is trending higher. The Chemicals will stabilize, but when it comes to LNG into the second half, the negative factors will be eliminated. That is how we think. Thank you.
Let us move on to the next question. Under the COVID-19 pandemic, how do you think the way you work has been changed, especially for President and Senior Management? How have you been compensating for the decrease in business travel, and where did you see increased efficiency compared to the past? The President will answer the question as well.
The number of business travel trips was 35 x last fiscal year, so three per month, including domestic and overseas trips. For this fiscal year, it's been only three trips after slightly more than six months. For that much prolonged time, I have stayed in Tokyo, and this has been unprecedented. Actually, I have visited 66 countries on an online basis. For the major countries, I have remotely visited many times, especially the regular meetings with the top or head of the local subsidiaries.
Actually, I have been finding myself talking to customers more often under the pandemic. For example, for Mozambique project that we engage in, or Cameron project, or Vale in Brazil, and one of the customers in the U.S., Nucor, and European majors, including all these entities, we have done web conferences many times, and most of the web conferences have been able to cover most of the talks. What about the business trips that we had done before COVID-19? Many Americans and Europeans are saying that we had been able to see each other in person already, and we knew each other already quite well. That's why we are able to have this online conference as well.
All the analysts that we're talking to today, we have met them already many times, and if this were the first time that we see each other, then they may be wondering what would be the meanings between the lines, and they could be wondering what we meant, actually. If we continue forever only through web conferences, then that could be worrisome. We have already talked about what we have already talked about and what we are going to do, actually implement them. We will be able to make decisions on an online basis. That's what we found. The number of business trips and the density of the business trips will be looked at based on this experience this time.
Having said that, the seeing each other in person would bring about a unique empathy, and that is something that we need to embrace. As we engage, especially in major large-scale projects, in the end, the trust relationship between the top management will be the key. Therefore, we need to continue to have selective business trips. Staying in Tokyo for a long time should not end up increasing the unnecessary business processes inside the company. With the digital transformation, or data-driven business transformation, there are many rooms for simplification still. Web conferences and digital tools on the various nature with the impact of COVID-19 have been implemented in society in a facilitated manner. At least there's a business environment that would allow for that, and that could help increase the efficiency of the entire company, and we can do more.
Thank you.
Moving on to the next question. When it comes to valuation, profit and loss, and also that being excluded, resource and non-resources, can you talk about the ability of the business for this period? Thank you.
First of all, at the beginning of the fiscal year, pre-COVID-19, that is when we formulated the plan. As our ability, we had looked at the 50/50 ratio. That was what we were forecasting. Non-resources being weak, that was what we had heard. Because of management efforts and improvement efforts, we requested to the frontline, and in Machinery & Infrastructure and in Chemicals, non-resources pillars are growing. Therefore, we had looked at the ratio of 50/50 between resources and non-resources, and we believe that that is something that we'll be able to achieve. With COVID-19, excluding coal, the non-resources
The disappearance of demand was clear, and impact was greater in non-resources. Therefore, looking at the current situation, maybe it's 60 : 40 or 2 : 1. The resources, two, and non-resources, one. I think that is the ability of the businesses that we are seeing at the moment. Enhancement of non-resources with COVID and post-COVID is something that we need to take initiatives in, and we believe that is going to be a continued management challenge.
Let us move to the next question. The question is as follows: Can you tell us your investment approach toward renewable energy? In this area, the valuation is increasing, and I believe that a large amount of capital investments and business acquisition will be required. What would be your investment discipline toward the business expansion in this area? The President will answer the question.
As you said, under the pandemic of COVID-19, each of the countries, the government is looking at ESG, and especially in the environment, the political or strategic inducement and the pressure from the equity market were seen. The renewable energy has become a sort of boom. In other words, there could be a bubble of renewable energy. That's how I feel.
In reality, there's not that big capability to produce or generate cash, and there could be a higher premium for the future expectation than the reality in this area. Basically, what we are focusing on is brownfield projects with increased value. Rather, that will be given less priority, and we would pursue, rather, the greenfield in the grassroots level. That's what I have been talking to the people in the field. In Taiwan, the offshore wind power that we are engaged in is there. Of course, on a grassroots level, there is a huge amount of human resources to be spent, if you're talking about grassroots projects, but this is something that we have to start from scratch. Even under the pandemic, the hydrogen supply centers or hydrogen supply stations in California have been enlarged with increased investments.
Of course, transportation cost is still high for hydrogen. However, in California, where there is a high awareness about environmental protection, the state government and the public organization in each of the municipalities and vehicle users and automotive manufacturers and operators of the pipeline and gas suppliers and ultimate service stations for gas, those who are supporting the supply chain or supporting the ecosystem will have to share the cost of the transportation so that the total supply of hydrogen will be increased. That system has been beginning to be in place. If that is in place, then local production and local consumption type new energy is something that we can pursue, and we will pursue. Thank you.
The next question, about Berkshire Hathaway. What is your thought on Berkshire Hathaway purchasing your stocks? Yes, Mr. Yasunaga.
Actually, I should be listening to the opinions of our analysts. Personally speaking, Warren Buffett has made the announcement in and outside of the company, and I have made this comment that achieving our goals, that is the most important thing for us. Medium-term Management Plan, transformation, and growth has been analyzed by people at Berkshire Hathaway, and that is how I felt. Through that analysis, the direction that we are moving toward. For us to steadily achieve and realize these objectives is going to be most important. If we do so, and by doing so, we believe that dependent on the situation, that would lead to increased purchases of our shares, and that is our expectation. Of course, we have to think about synergy.
They have given us many hints. For example, in the healthcare area, Berkshire Hathaway is a main shareholder with DaVita. Expanding collaboration with them is something that we have been working on. Going forward, in relation to IHH, DaVita Asia-Pacific is something that we want to grow further. That is going to lead to enhanced synergy and enhanced relationship between us and Berkshire Hathaway. Thank you.
A question is the following. I'd like to know the status of the progress of the strengthening of business management capability that was advocated under Transform of Medium-Term Management Plan. Partly due to the pandemic, the non-resources earnings power, especially Lifestyle business segment, has been falling significantly. Except for the turning around of the external environment going forward, when do you think we can see the visualization of the result of business management capability looking from outside? The President will answer that question.
Thank you for the question. Even at this moment, the strengthening of business management capability resulting in more strengths in individual subsidiaries or affiliates. We have seen many examples of them. For example, Mitsui Sugar, one of the affiliates, has taken the lead in reorganization of the industry.
As we do so, the post-integration company's direction has been twofold, the overseas and non-sugar business area, and they have clearly identified those. Of course, in the newly established integrated company, we'll have to come up with the sound growth strategy. First and foremost, in that domestic industry, the reorganization, industry-wide reorganizations has been led by one of our affiliates, that is the attestment to our strength. Obviously, as I said earlier, in Japan, there'll be digitalization and deregulation and things will change significantly. This is one of the things where we can make our presence clearer and expand our presence. For individual companies, affiliates, I have talked about being data-driven earlier. The monthly reports of individual companies affiliates have been eliminated, unnecessary reporting practice has been eliminated inside the company.
Management status of the affiliates has to be able to be grasped on a real-time basis, through cockpit tool, and that has been facilitated. Of course, individual companies have to promote themselves, but head of each business unit that is responsible for individual operations can interfere if necessary. In order to reactivate the industry as a whole, you can take the next step. In order for them to be able to do that, the visualization of the business management of individual companies and affiliates is important. Together with the strengthening of individual capability for business management, we have been promoting this as well. Under the pandemic, we'll have to continue with this effort. By doing so, when the demand recovers after COVID-19, we'll be able to be responsible for the business management of the companies. Thank you for the question.
The next question is, thank you very much for sharing your cash flow allocation policy earlier. I'd like to ask a related question. In the previous and Medium-term Management Plan, you adopted a thought of interlocking core operating cash flow and shareholders' returns. I believe that is being followed on in the current Medium-term Management Plan. Upward revision of COCF will lead to enhanced shareholders' returns. Is that a high possibility? Yes. Core operating cash flow, we believe is most important management KPI for a company, and interlocking COCF with shareholders' return. That has not changed. We have to look at the impact from COVID-19. Under this pandemic with corona, as I explained earlier, structural reform will be something that we will continue to work on.
What kind of outcome or results we will see in the second half is something that we need to look at so that we can review the full year shareholders returns. That is the opportunity we would like to hold. On the other hand, we place importance on cash flow, but that is not reflected in our share price, and that is our concern. We would like to have your understanding of it from the analyst on this point. Thank you very much.
With that, we'd like to end this Q&A session for today. That was the financial results for the six-month period ended September 30th, 2020, the First Half Results for the Fiscal Year ending March 2021. We are planning to hold Mitsui & Co Investor Day 2020 next week on the 10th of November, Tuesday.
We'd like to talk about transformation and also our growth going forward, and we'd like to have your participation. With that, we'd like to end the financial results presentation. Thank you very much for your participation despite your busy schedule. Thank you.