During the first three months of the fiscal year under review, the Japanese economy continued on a moderate recovery trend, with signs of recovery in personal consumption and capital investment, as well as improvement in employment conditions. On the other hand, the outlook remains uncertain due to factors including instability in international conditions, including the situation in the Middle East, fluctuations in exchange rates and financial markets, and increases in raw material prices, logistics costs, and personnel expenses.

In the business environment surrounding the Group, crude oil prices and propane CP prices, which affect purchase prices for petroleum products and LP gas, remained at levels higher than in the corresponding period of the previous year due to the impact of the situation in the Middle East and other factors. In addition, while demand for building management and maintenance remained firm, in mobility services, attention continued to be required regarding the impact on profitability due to factors including the introduction of traffic citations for bicycles, weather factors, and changes in consumer behavior.

Within this environment, the Group is advancing initiatives toward the completion of its Third Medium-Term Management Plan, with a view to its 100th anniversary in April 2027 and further growth beyond that. On April 1, 2026, the Company sold all shares of Sinanen Facilities Co., Ltd., and advanced the transformation of its business portfolio. In addition, the Company carried out the integration of its core businesses and business restructuring, and transitioned to a Group management framework centered on the three business domains of Energy, Maintenance, and Mobility. Through the integrated development of the three business domains, the Group is providing services that support the lives, buildings, and mobility of local customers, and is working to transform into a service company that provides new value to local communities.

As a result of the above, the financial results for the first three months of the fiscal year under review were as follows: Net sales were ¥72,381 million (up 14.6% year on year), operating profit was ¥1,184 million (up 63.1% year on year), ordinary profit was ¥1,621 million (up 64.2% year on year), and profit attributable to owners of parent was ¥1,273 million (up 151.3% year on year).

[Energy Business]

In the Energy Business, Shinanen Co., Ltd. engages in the sale of petroleum products, gas, electricity, etc., while Minos Co., Ltd. engages in the development and sale of business systems related to gas, electricity, etc.

During the first three months of the fiscal year under review, crude oil prices and propane CP prices remained at levels higher than in the corresponding period of the previous year against the backdrop of factors such as the situation in the Middle East. In petroleum products, although sales volume decreased year on year due to sales emphasizing stable supply and profitability amid high purchase prices, gross profit per unit increased year on year, resulting in higher profit. In gas as well, although sales volume decreased year on year, gross profit per unit increased year on year, resulting in higher profit. On the other hand, in electricity, although sales volume increased year on year due to an increase in bilateral transactions, profit decreased due to narrowing margins. In addition, the systems business remained generally stable.

As a result of the above, in the Energy Business for the first three months of the fiscal year under review, net sales were ¥67,177 million (up 16.2% year on year), and operating profit was ¥1,046 million (up 82.6% year on year).

[Maintenance Business]

In the Maintenance Business, Shinanen Axia Co., Ltd. engages in building maintenance, residential building maintenance, real estate, and home facility-related services.

During the first three months of the fiscal year under review, although there was a burden of costs due to increases in material prices and personnel expenses, etc., net sales and operating profit both exceeded the corresponding period of the previous year. This was supported by an increase in new contracts in the building maintenance business, an increase in the number of orders in the residential building maintenance business, and an increase in sales of housing equipment-related products in the home facility business, among other factors.

As a result of the above, in the Maintenance Business for the first three months of the fiscal year under review, net sales were ¥2,825 million (up 14.6% year on year), and operating profit was ¥88 million (up 112.1% year on year).

[Mobility Business]

In the Mobility Business, Shinanen Bike Co., Ltd. engages in the bicycle wholesale, retail, and planning and development business, while Shinanen Mobility Plus Co., Ltd. engages in the bicycle sharing business.

During the first three months of the fiscal year under review, in the bicycle wholesale, retail, and planning and development business as well, challenges remained on both the sales and profitability sides due to factors including increases in purchase prices, logistics costs, and personnel expenses.

In the bicycle sharing business expanded to a scale of 99 municipalities, 3,335 stations, and 17,438 bicycles installed, steadily expanding its service area, although the number of uses temporarily declined due to the introduction of traffic citations for bicycles and weather factors, resulting in soft net sales. In addition, changes in the external environment related to service operations and increases in operating and maintenance costs resulted in a challenging situation on profitability as well.

As a result of the above, in the Mobility Business for the first three months of the fiscal year under review, net sales were ¥1,857 million (down 2.7% year on year), and operating profit was ¥29 million (down 76.1% year on year).