Sinanen Holdings Group launched its 3rd Medium-Term Management Plan in the previous fiscal year toward the 100th anniversary of its founding in FY2027. To achieve our vision of "Evolution into a comprehensive energy life creation group that contributes to achieving a decarbonized society," we are accelerating shift to a stronger management foundation and advancing our growth strategy. In business development, we will improve profitability by expanding earnings from existing businesses and creating new businesses that contribute to the realization of a decarbonized society as we work as a unified group under the new management structure.

In the interim period of the fiscal year under review, sales volume of petroleum products and electricity decreased. As a result, net sales were 123,535 million yen (down 12.5% year on year). In terms of profit and loss, mainly in the electricity business, in some dealings, the negative spread has been eliminated where procurement prices are remaining higher than selling prices, marking a return to profit. As a result, there was an operating profit of 242 million yen (compared to operating loss of 2,150 million yen in the same period of the previous year) and ordinary profit was 353 million yen (compared to ordinary loss of 1,765 million yen in the same period of the previous year). In addition, due to factors such as impairment in non-current assets, interim profit attributable to owners of parent came to 160 million yen (compared to interim loss attributable to owners of parent of 2,074 million yen in the same period of the previous year).

[Retail/Wholesale Energy & Related Business (B to C Business)]

The mainstay area of LP gas and kerosene sales declined due to the decrease in sales volume as a result of average temperatures that were higher than usual.

In terms of profit and loss, although factors such as transportation costs and personnel expenses increased, the loss was reduced mainly due to such as improvements in electricity business gross profit, which had deteriorated in the previous fiscal year.

We will continue to promote efforts towards our "strengthen retail service strategies" as outlined in the 3rd Medium-Term Management Plan.

As a result of the above, in the Retail/Wholesale Energy & Related Business (B to C business) for the interim period of the fiscal year under review, net sales were 27,626 million yen (down 0.1% year on year), and operating loss was 420 million yen (compared to operating loss of 688 million yen in the previous year).

[Energy Solution Business (B to B Business)]

The sales were down mainly due to reduced sales volume in the mainstay petroleum business.

In terms of profit and loss, profit increased mainly due to such as improvements in electricity business gross profit, which had deteriorated in the previous fiscal year.

Beginning in the interim period of the current fiscal year, Sinanen Co., Ltd. has jointly established the EV Wireless Power Transfer Council. We will continue to promote the practical application and widespread use of wireless power transfer as part of social infrastructure.

As a result of the above, in the Energy Solutions Business (B to B business) for the interim period of the fiscal year under review, net sales were 85,350 million yen (down 17.4% year on year), and operating profit was 500 million yen (compared to operating loss of 1,790 million yen in the same period of the previous year).

[Non-energy Business]

Overall for Non-energy Businesses, though sales were up due to strong performance mainly in the bicycle sharing business and the building maintenance and management business, profits were down, affected by increased SG&A expenses, etc.

The circumstances of each business are outlined below.

Although sales of private brand products contributed, the bicycle business operator Sinanen Bike Co., Ltd. saw lower sales and profit due to such as seasonal factors including rainy weather and extreme heat.

Bicycle sharing business operator Sinanen Mobility Plus Co., Ltd. is promoting development of bicycle sharing service DAICHARI locations. As of September 30, 2024, the scale of the business has grown to more than 3,800 stations and more than 13,000 bicycles, and the number of uses has been growing steadily. Both sales and profits were up as a result. In addition, we participated in JTB Corporation's area development projects on Shodoshima Island, which aim to enhance the real value of tourist destinations and promote sustainable development, and also jointly introduced 160 dedicated DAICHARI bicycles to Shodoshima Island. We will continue to build a system to take charge of maintenance responsibilities for other companies, improve HELLO CYCLING's overall operational quality, and conduct demonstration experiments and other activities to provide services that are tailored to local governments.

Environmental and recycling business operator Sinanen Ecowork Co., Ltd. saw lower sales and profit due to a reduced volume of construction waste materials delivered because of sluggish growth in the number of new housing starts as well as an increase in manufacturing costs due to recording repair expenses at recycling centers.

Antimicrobial business operator Sinanen Zeomic Co., Ltd. reported higher sales and profits due to strong sales of products for North America. We are also continuing our efforts to develop new sales channels in Europe.

Systems business operator Minos Co., Ltd. posted an increase in sales but a decrease in profits due to the increase in SG&A expenses, such as personnel expenses and fixed costs, despite the stable contribution from its flagship LP gas backbone operation system. We will continue to promote new developments such as next-generation systems while promoting sales activities focused on leading industry players.

Building maintenance and management business operator Sinanen Axia Co., Ltd. posted lower profits due to an increase in SG&A expenses associated with the integration, despite the increase in sales due to the expansion of its area of building maintenance operations for multi-family housing and the increase in sales due to strong performance of the facility operation business such as funeral halls and hospitals. In addition, in the interim period of the fiscal year under review, we have been preparing for the opening of the Shonan Office and Kanazawa Office. We will continue to open new locations and promote initiatives for "ensuring stable profits" such as new orders for large properties.

As a result of the above, in Non-energy Businesses for the interim period of the fiscal year under review, net sales were 10,459 million yen (up 3.4% year on year), and operating profit was 334 million yen (down 34.0% year on year).

The environment surrounding the oil and gas businesses, which are the mainstay businesses of the Group, remains harsh as energy demand continues to decline in the face of a decreasing population in Japan, the spread of energy-saving equipment, and changes to lifestyles. Furthermore, in addition to heightened awareness of global decarbonization and SDGs, efforts to achieve carbon neutrality by 2050 are picking up steam in Japan. Demand will rise significantly for us to take responsible action as a comprehensive energy service group.

For the following fiscal year (FY 2024), which will be the 2nd year of the 3rd Medium-Term Management Plan that started from the fiscal year under review to respond to these changes in the business environment and trend of the times, we will continue to accelerate a shift to a stronger management foundation and implement growth strategies to achieve our "evolution into a comprehensive energy life creation group that contributes to achieving a decarbonized society".

The full-year financial results forecasts for the next fiscal year are net sales of 340,000 million yen (down 2.4% year on year), operating profit of 2,800 million yen (operating loss of 711 million yen for the previous fiscal year), ordinary profit of 3,100 million yen (ordinary profit of 93 million yen for the previous fiscal year), and profit attributable to owners of parent of 1,800 million yen (net loss of 1,039 million yen for the previous fiscal year). In terms of profit, we expect significant profit increases overall due to improved profitability in the electricity business, which stagnated significantly in the fiscal year under review.