Earnings Call: Q4 2026

May 1, 2026

Hello. I am Nakanishi, the President CEO. Thank you very much for attending our FY 2025 earnings briefing today despite your busy schedules. First, I would like to go over the highlights of our financial results. Please refer in terms of the financial results. The underlying operating cash flow was JPY 1.0481 trillion, and consolidated net income was JPY 800.5 billion. Through our initiatives to enhance and reshape across each business, we have steadily accumulated profits, coupled with the impact of a market upswing toward the end of the fiscal year. Those figures significantly exceeded our full-year forecasts. Moving on to the FY 2026 forecast. As explained recently, driven by the growth of our normalized profit, including the start of earnings contribution from our US shale gas business, as well as sizable asset and business recycling-related gains, we forecast an underlying operating cash flow of JPY 1.25 trillion and a consolidated net income of JPY 1.1 trillion. Given the increasing predictability of our higher profit levels, we will maintain our progressive dividend policy and increase the dividend by JPY 15 compared to FY2025, bringing it to JPY 125 per share. Regarding the progress of our Corporate Strategy 2027. Against our total profit growth plan of JPY 400 billion or higher, driven by initiatives to enhance, reshape, and create, we consider our progress to be generally well on track. For enhance and reshape initiatives of JPY 300 billion or more, please refer to the slide. As for initiatives to create, that is JPY 100 billion or more, in the US shale gas business, we anticipate a profit increase of JPY 60 billion predicated on a 25% stake sale to the founding family to enhance operational stability. We are also exploring a gas value chain concept originating from this business to drive further profit growth. The uncertain environment continues, we will keep driving our value creation mechanism powered by our integrated strengths. We will thoroughly strengthen the earnings base of existing businesses and aggressively pursue growth investments in new businesses, leveraging our broad industrial footprint, aiming to achieve the quantitative targets of our Corporate Strategy 2027. This concludes my initial explanation. Next, CFO Shimazu will provide a summary of the financial results. My name is Shimazu, CFO. I would like to provide a brief overview of our financial results and an update on the progress of Corporate Strategy 2027. Please turn to page 5. In FY2025, although we experienced a negative rebound from the capital recycling recorded in the previous fiscal year, each business steadily accumulated earnings. As a result, both operating cash flow and consolidated net income exceeded our expectations. For FY2026, we expect profit growth driven by initiatives under our enhance, reshape, and create strategy, including our entry into the US shale gas business and the full year operation of LNG Canada. In addition, we expect gains from large-scale sales and evaluations across several projects. As a result, we project an increase of approximately JPY 200 billion in operating cash flow and JPY 300 billion in consolidated net income. Next, I would like to add two comments on the progress of Corporate Strategy 2027. Please go to page 6. First, let me explain the latest outlook for our capital allocation plan under Corporate Strategy 2027. Given the solid trend of operating cashflow and the faster recovery of investments, as well as the ongoing investment pipeline and the dividend expansion, we have raised both cash in and cash out by JPY 0.7 trillion, respectively. We will continue to strengthen cash in and utilize leverage. Additional allocation capacity will be flexibly directed to growth investments and the shareholder returns as we pursue both growth and efficiency. Please turn to page 14. For the profit growth plan under enhance and reshape through FY2027, we made partial revisions in reinforcing the earnings base based on the latest business environment. At the same time, reflecting strong progress in asset turnover-type businesses under executed projects, we continue to plan for a JPY 300 billion profit growth. Plans and progress under executed projects, rebound of core businesses, and reinforcing the earnings base are shown on page 15 and 16 with key initiatives of major categories. We will steadily execute these initiatives to achieve our JPY 300 billion profit growth target. Cash flow results and the segment performance are shown on pages 7 through 12 for your reference. This concludes my explanation. Thank you very much.