Notice Concerning the Establishment of the Medium-Term Business Plan (FY2025-2027) NEW!

May 14, 2025

Company name: OKUMURA CORPORATION Name of representative: Takanori Okumura

President and Representative Director (Securities Code: 1833; Tokyo Stock Exchange Prime Market)

Inquiries: Arihiko Fukatsu

General Manager of Corporate Planning Department, President's Office (Telephone: +81-6-6621-1101)

Notice Concerning the Establishment of the Medium-Term Business Plan (FY2025-2027)

The Okumura Group (the "Group") hereby announces that at the meeting of the Board of Directors held today, it resolved to establish the Medium-Term Business Plan (FY2025-2027).

The Group has formulated "Vision toward 2030," which shows where it wants to be in the future, and engages in management from a long-term standpoint to continue its business long-term and contribute to the sustainable development of society.

The Medium-Term Business Plan (FY2025-2027) is positioned as the third step in achieving "Vision toward 2030." Under the plan, the Group will steadily pursue its three Basic Policies of Business Strategy founded on the theme "Strengthen the business base to achieve sustainable growth" - (1) "Increase corporate value" centered on enhancing earning power and technological capabilities in the construction business, (2) "Expand business domains" to build a stable earnings base that does not rely on the construction business, and (3) "Utilize human resources," securing and training talent and creating environments where diverse human resources can play active roles by making maximum use of their abilities. The Group will implement a range of measures based on these policies, aiming to achieve its vision.

"Vision toward 2030"

・Increase corporate value and strengthen our position within the industry

・Expand business domains to achieve sustainable growth and build a robust earnings base

・Be a company that its employees are proud of and that leverages and values its people

(Our Aspirations)

At the Okumura Group, we aim to be a corporate group that continues to grow by developing businesses and services that anticipate the changing needs of society to contribute to its sustainable development, as well as fulfilling the trust placed in us by society, providing a sense of security, and sharing prosperity with everyone concerned through reliable technology and honest business operations.

Overview of the Medium-Term Business Plan (FY2025-2027)

1. Basic Policies of Business Strategy

   Increase corporate value	Expand business domains	Utilize human resources
   ・Enhance earning power and technological capabilities ・Promote alliances ・Strengthen ESG/SDGs measures	・Strengthen the real estate business ・Enter into new businesses ・Strengthen the overseas business foundation	・Improve employee engagement ・Secure and train human resources

2. Financial Targets

   Consolidated item	FY2024 (Actual)	FY2027 (Target)
   Net sales	298.2 billion yen	330.0 billion yen
   Operating profit	9.7 billion yen	20.0 billion yen
   ROE	1.5%	8.0% or more

3. Non-Financial Targets (Key Targets)

   CO2 emissions at the construction stage and from offices	Turnover rate among new graduate employees in their first 3 years	Percentage of women among managers	Number of fatal accidents	Safety performance: incident frequency rate
   48 kt-CO2 or less (Target for FY2027)	Less than 10% (Target for FY2027)	6% or more (Target for FY2027)	Zero (Target for each fiscal year)	0.50 or less (Target for each fiscal year)

4. Capital Policy

For details, please see the attached materials.

1 Philosophy and Long-Term Vision… P3-7

2 Review of the Previous Medium-Term Business Plan

3 Medium-Term Business Plan (FY2025-2027)

-Basic Policies of Business Strategy-

-Main Targets-

-Business Strategy (Civil Engineering, Building, Investment Development, etc.)-

-Capital Policy (Shareholder Return Policy, Reduce Cross-Shareholdings)-

-Finance Plans (Funding Plan, Investment Plan)-

-Sustainability Initiatives-

4 Action to Implement Management that is Conscious of Cost of Capital and Stock Price

… P8-12

… P13-26

… P13

… P14

… P15-19

… P20-21

… P22

… P23-26

… P27-30

[Management Philosophy]

Contribute to bettering the world through the expansion of business endeavor, excel as a corporate entity committed to the principles of "steadfast management" and "sincere operation," and continue to play an essential role in society.

[OKUMURA CORPORATION's Purpose]

"Connecting People and Nature through the Power of Technology"

Since Okumura was established in 1907, our mission has been to contribute to society through businew endeavor under our principles, "steadDst management" and "sincere opeation."

While continuing to refine our technical expertise and flexibly adapting to the changing needs of society, we will steadily advance as a general infrastructure company with the civil engineering business and the building business as well as the investment development business, progressing beyond the limits of a construction contractor in our aim to realize a sustainable society with both comforbble, safe and secure lives for people, and beautiful nature.

• 
  
  

  "Vision toward 2030" shows where the Group wants to be in the future. We see it as a guidepost shared by all employees as they continue to vigorously promote the Group's business endeavors for the future, aspiring to achieve a robust growth trajectory. We will engage in management worthy of the trust of all our stakeholders as we aim to realize our "Vision toward 2030."

  Increase corporate value and strengthen our position within the industry

  Expand business domains to achieve sustainable growth and build a robust earnings base

  Be a company that its employees are proud of and that leverages and values its people

  At the Okumura Group, we aim to be a corporate group that continues to grow by developing businesses and services that anticipate the changing needs of society to contribute to its sustainable development, as well as fulfilling the trust placed in us by society, providing a sense of security, and sharing prosperity with everyone concerned through reliable technology and honest business operations.

  
  
  
  
  
  
• 
  
  

  Medium-Term Business Plan (FY2019-2021)

  Strengthen selling power and build the earnings base

  Medium-Term Business Plan (FY2022-2024)

  Improve productivity primarily in the construction business

  Medium-Term Business Plan (FY2025-2027)

  Strengthen the business base to achieve sustainable growth

  Medium-Term Business Plan (FY2028-2030)

  1

226.3 220.7

242.4

249.4

288.1 298.2

330.0

2

0.0

1.5

2.8

2.6

1.8

3.7

9.7

2019 2020 2021

2022 2023 2024

2027

2030

• • Consolidated net sales (unit: billions of yen) ■ Consolidated operating profit (unit: billions of yen)

    
    
    
• 
  
  
  
  
  
  
  
  

• We are working to address sustainability issues, including climate change, based on a recognition of these as key management issues, and we have analyzed ESG/SDGs-related risks and opportunities and the impact if they materialize. We then identified ESG/SDGs-related issues based on the two axes of likelihood and impact. In identifying issues relating to climate change, we also assessed their importance using scenarios based on the TCFD recommendations.

  As a result of analyzing the importance of these issues, we identified the following ESG/SDGs-related material issues (materiality) for the Group. By reflecting our strategies for solving these issues in each division's measures under the Medium-Term Business Plan, we are pursuing endeavors that integrate both our business activities and our ESG/SDGs initiatives.

  Material issue (1)

  Contribution to sustainable social infrastructure

  Material issue (2)

  Promotion of environmentally friendly businesses

  Material issue (3)

  Creation of workplaces that realize wellbeing

  Material issue (4)

  Stronger corporate governance

  The Group's material issues (materiality)	Specific initiatives to address the material issues
  	We will pinpoint the changing needs of society and leverage the technology we have developed so far to build high-quality, long-lasting social infrastructure while also maintaining, renewing and renovating aging infrastructure and existing buildings and actively utilizing our real estate stock, thus contributing to building sustainable social infrastructure as a general infrastructure company.
  	Under our basic philosophy of "creating and sustaining an environment that is friendly to both people and the planet," we will promote the reduction of CO2emissions from construction, ZEB and other energy-saving building design, and environmentally related technological development. In addition, we will actively engage in the effective utilization of resources, including recycling, and the operation of facilities aimed at ensuring the stable supply of renewable energy, pursuing environmentally friendly businesses to achieve a decarbonized society.
  	In addition to ensuring a safe, secure, and fulfilling labor environment, we will create workplace environments that maximize the individual potential of diverse human resources, including women, and enable all our employees to work with health and vigor, thus promoting the realization of wellbeing.
  	We strive for more substantial corporate governance through accountability-focused decision-making by the Board of Directors and monitoring by the Audit and Supervisory Committee based on the Corporate Code of Conduct to ensure management fairness and transparency and increase corporate value, so that the Group can continue to play an essential role in society. We will work toward more effective corporate governance and strive to gain the trust of our stakeholders by continuing to provide thorough training to raise the compliance awareness of our officers and employees, as well as pursuing honest business activities based on corporate ethics.

• Basic Policies of Business Strategy

  Basic Policy 1: Increase corporate value

  Enhance earning power by strengthening selling power, technological proposal capabilities, cost reduction capabilities, design change proposal capabilities, etc.

  Strengthen solution proposal capabilities for design, construction, etc.

  Promote business activities that contribute to solving environmental and social issues, such as initiatives to address climate change, etc.

  Strengthen ESG/SDGs measures

Basic Policy 2: Expand business domains

Strengthen the real estate business

Enter and expand new businesses Build an overseas business foundation

strengthen initiatives induding redevelopment projects, land readjustment projects, etc. Promote the energy business, PPP agreements, concessions, etc.

Strengthen earning power in Taiwan, Singapore, etc.

Basic Policy 3: Utilize human resoures

Promote work-style reforms

Strengthen education

Improve productivity to reduoe overtime and enable employee9 tO Achieve a work-life balance, etc.

Promote recruitment activities for diverse talent with consideration for the optimal structure of human re9oUroes for the future, etc.

Rebuild the education system, etc.

• 
  
  

  (Unit: billions of yen)

  Net sales	249.4	288.1	298.2		We were able to achieve our target by working our way steadily through ongoing projects while also making firm progress on construction orders.
  Operating profit [Operating profit margin]	11.8 [4.7%]	13.7 [4.8%]	9.7 [3.3%]		We made steady progress on strengthening the earnings base. This included initiatives to enhance various programs to stably secure human resources and increase employee motivation, in addition to improving productivity through operational efficiency and promotion of DX, primarily in the construction business. However, operating profit and ordinary profit fell short of the targets due mainly to the losses recorded on specific large-scale civil engineering projects in Japan, as well as the explosion that occurred in the power generation equipment at a consolidated subsidiary, ISHIKARI BIO ENERGY GODO KAISHA, resulting in the suspension of commercial operation, both in FY2024.
  Ordinary profit [Ordinary profit margin]	12.9 [5.2%]	14.8 [5.2%]	8.9 [3.0%]
  ROE	6.6%	6.9%	1.5%		Despite our efforts to improve capital efficiency, such as the steady implementation of our shareholder return policy and the reduction of cross-shareholdings, ROE fell short of the target due chiefly to the substantial extraordinary losses (impairment losses) recorded at a consolidated subsidiary, ISHIKARI BIO ENERGY GODO KAISHA, in addition to lower-than-targeted operating profit and ordinary profit in FY2024.

  [Reference] Orders received (Non-consolidated)

  279.9 336.8 376.6

  
  
  

• Amount of power generated from the renewable energy business
  CO2emissions from the construction business
  Operational energy consumption in buildings designed and constructed by the Company

  *Compared to FY2013 levels

  ・We achieved the target for "Amount of power generated from the renewable energy business" in FY2023, ahead of schedule, but fell short of the target in FY2024 due to the explosion that occurred in the power generation equipment at ISHIKARI BIO ENERGY GODO KAISHA in July

  2024, resulting in the suspension of commercial operation and making power generation impossible.

  
  
  

• Progress on the Investment Plan

  Investment Plan

  50 billion yen in total

  
  
  

  Constructed an employee dormitory using a hybrid wooden structure

  Developed a digital twin system combining 4-dimensional models with web camera monitoring

  Improve operational

  eñiciency

Increase corporate value

Develop technologies

Promote DX

Expand business Utilize human domains resouroes

Real estate business

New businesses

Devdoped a variable oil damper (VO£P} for application In ademlc

*Click on the blue titles to visit our news releases presenting detailed information on each topic (in Japanese).

Received the Engineering Award at the 26th JSSI Award held by The Japan Society of Seismic Isolation

• 
  
  

  FY2022 FY2023 FY2024

≪Shareholder Return Policy≫

[Basic Policy]

Distribute profits by business results and flexibly implement share buybacks on the premise of stable dividends.

[Policy during the Medium-Term Business Plan (FY2022-2024)]

Consolidated dividend payout ratio of 70% or more

≪Reduce Cross-Shareholdings≫

"Vision toward 2030"

Position of Medium-Term Business Plan in Vision

Medium-Term Business Plan (FY2019 - 2021)

Medium-Term Business Plan (FY2022 - 2024)

Medium-Term Business Plan (FY2025 - 2027)

Medium-Term Business Plan (FY2028 - 2030)

2020 2025 2030

At the Okumura Group, we will continue to contribute to the sustainable development of society through medium- and long-term growth. We have formulated "Medium-Term Business Plan (FY2025-2027)" as our third step in achieving "Vision toward 2030," which is where the Group wants to be in the future.

Medium-Term Business Plan

(FY2025 - 2027)

Strengthen the business base to achieve sustainable growth

Under the Medium-Term Business Plan (FY2025-2027) toward the realization of our "Vision toward 2030," we aim to increase corporate value by enhancing the earning power of the construction business as well as maintaining and extending our medium- and long-term technological advantage, primarily on technological development, to improve medium- and long-term performance. We will also expand business domains, including the development of businesses linked to the construction business as General Infrastructure Company, while also embarking on new business endeavors, to build a stable earnings base that does not rely on the construction business. At the same time, we aim to utilize human resources to be a company our employees are proud of. This includes securing human resources essential for business development (strengthening recruitment activities and preventing employee turnover) as well as focusing on creating environments where diverse human resources can play active roles by making maximum use of their abilities, and making efforts for human resources development to lead the sustainable growth of the Group.

In this way, we will strive to achieve "Vision toward 2030."

■

[Policy during the Medium-Term Business Plan (FY2025-2027)]

Consolidated dividend payout ratio*1 of 70% or more

*1: Consolidated dividend payout ratio = Total annual dividends (interim + year-end) / profit attributable to owners of parent

[Excluding the impact of one-off special factors (valuation gains and losses on forward exchange contracts)]

*2: DOE = Total annual dividends (interim + year-end) / equity

• Net sales	298.2 billion yen	330.0 billion yen
  Operating profit [Operating profit margin]	9.7 billion yen [3.3%]	20.0 billion yen [6.0%]
  ROE	1.5%	8% or more

  
  
  

Key target

CO2emissions at the construction stage and from offices

Key target

Turnover rate among new graduate employees in their first 3 years

Key target

Percentage of women among managers

Key target

Number of fatal accidents

Key target

Safety performance: incident frequency rate

48 kt-CO2or less

(Target for FY2027)

Less than 10%

(Target for FY2027)

6% or more

(Target for FY2027)

Zero

(Target for each fiscal year)

0.50 or less

(Target for each fiscal year)

Enhance construction capabilities to expand the business scale

Net sales Gross profit (margin)

FY2030

FY2027

(Medium-Term Business Plan targets)

FY2024

FY2023

FY2022

Aim for further expansion

19,000

(15.8%)

11,968

(12.1%)

17,367

(16.8%)

16,438

(16.9%)

99,024

103,154

97,286

120,000

(Unit: millions of yen)

[Business Environment and Issues Perceived]

・Domestic public sector investment is forecast to remain firm due to factors such as projects relating to building national resilience, in addition to demand for the

maintenance, management, and renewal of aging infrastructure

・The profit margins of projects on hand have declined in the absence of the large-scale high-profit projects completed in FY2022-2024, and it is essential that we are selective

about properties, focusing on profitability

・Our continuing manpower- and labor-saving efforts in the construction division have not led to an improvement in productivity indicators so far, and it is essential that we persist

in these efforts while also focusing on building systems to enable effective results with a limited number of personnel

－Improving productivity and securing human resources－

Toward FY2027, we will focus on improving productivity through more efficient construction systems,

the use of manpower- and labor-saving technologies, and human resources development, as well as securing human resources by strengthening recruitment and preventing employee turnover.

[Overseas Business]

－Building on the overseas business foundation established so far to aim for further growth－

(Expanding the business while monitoring geopolitical and other risks)

・We are actively expanding orders received in Taiwan and Singapore, primarily for shield tunnel construction, where we have extensive construction achievements and

advanced technological capabilities

・We revised the organizational structure of the overseas business effective April 2025 in view of factors such as the scale of overseas business in recent years and the

forecast of firm demand for projects in Taiwan over the medium and long term, and we are striving to strengthen our organization for stable business promotion

・Based on the company's existing business foundation in civil engineering, we will also consider expanding into related businesses.

[Reference] Performance of the Construction Business to FY2024 (Orders Received and Net Sales)

≪Topics≫ Establishment of an International Branch (as of April 1, 2025)

We have strengthened the organizational structure, including the establishment of the International Branch, which is in charge of overseas business, under the management of the West Japan Branch Office. In Taiwan, where our business scale is expanding, we also established departments under the Taiwan Branch to engage in sales and management.

International Branch

(Newly established)

International Management Department

Taiwan Branch

International Project Department

▲ Taiwan Branch ▲

(Relocated to a new office in August 2024)

7,440 million yen

Cumulative net sales

16,052 million yen

Cumulative orders received

21,419 million yen

Cumulative net sales

98,641 million yen

Cumulative orders received

Strengthen the business promotion system for future growth while maintaining business scale

Net sales Gross profit (margin)

FY2030

FY2027

(Medium-Term Business Plan targets)

FY2024

FY2023

FY2022

Aim for further expansion

18,500

(10.0%)

12,961

(7.8%)

11,309

(8.1%)

19,237

(10.4%)

139,362

165,185

185,000

185,551

(Unit: millions of yen)

[Business Environment and Issues Perceived]

・Private-sector investment is forecast to remain firm on the back of vigorous capital investment, primarily in redevelopment projects, semiconductor-related facilities, and

logistics warehouses

・While net sales and profit rose steadily from FY2022 through FY2024, the expansion of the business has also led to safety- and quality-related issues, making it vital to

establish a system to achieve stable business promotion

・Although we have achieved some results in terms of productivity improvements, there is still a shortage of technical staff. Securing human resources has become an urgent

issue. Additionally, a supply-demand imbalance has emerged for skilled workers in certain trades, making it necessary for us to plan the progress of projects while taking into account our spare construction capacity

－Improving productivity and securing human resources－

We will focus on securing human resources by strengthening recruitment and preventing

employee turnover in anticipation of further growth, while working to maintain and update the business promotion system with high production efficiency that we have established so far.

FY2024

(Results for the final fiscal year of the previous Medium-Term Business Plan)

Net sales 13.6 billion yen

Gross profit 0.4 billion yen

FY2027

(Targets for the final fiscal year of the new Medium-Term Business Plan)

Net sales 22.0 billion yen

Gross profit 5.5 billion yen

• Breakdown of the Investment Development Business, etc.

  [Real Estate Business]

  Expand business domains focusing on construction-related fields to build a stable earnings base for the future

－Securing stable earnings and promoting a circular reinvestment model－

・With an emphasis on the efficient use of capital, we aim to expand our business through the acquisition, development, and sale of properties with high potential

value. At the same time, we will work to increase earnings through investments aimed at enhancing the value of our existing assets (such as renovations) to ensure stable earnings in the long term

・ We will build systems to promote development projects to secure earnings.

This includes leveraging our construction and environmental technologies and

joint development with partner companies to enhance real estate value

[New Businesses]

－Promoting long-term projects through public-private partnerships and developing the decarbonization business－

・We will leverage our achievements in comprehensive sewer management outsourcing to expand into public-private partnership (PPP) projects centered

around "water PPP." We will also focus on the development and commercialization of environmental technologies, including renewable energy

・ We will engage in business development that contributes to the revitalization of the local economy and the sustainable development of local communities

through solutions to regional issues

・We will also strive to create new businesses and solutions through collaboration with industry, government, academia, and local communities, as well as

expanding our business areas through partnerships, capital alliances, and M&As

[Other Businesses]

・We will enhance the production capacity of Okumura Machinery's manufacturing plant and aim to expand order and sales volumes

• 
  
  

  Founded	February 1970
  Capital	20 million yen
  Head office location	Minato-ku, Tokyo
  Business overview	Real estate leasing, purchase, sale, intermediary services and land and building management

  Okumura Machinery Corporation Taihei Real Estate Corporation

  
  
  

  [Photo: Inside Okumura Machinery Corporation's HQ No. 2 Plant (Osaka-shi, Osaka)]

  [Photo: A rental property held by Taihei Real Estate Corporation (Ota-ku, Tokyo)]

  Founded	March 1953
  Capital	100 million yen
  Head office location	Nishiyodogawa-ku, Osaka-shi, Osaka
  Business overview	Design, manufacture, etc. of shield machines, segments, automatic cranes, and industrial machinery

  Location	Ishikari-shi Hokkaido
  Business operation	Began in March 2023
  Business overview	Power generation business using wooden pellets and PKS (Palm Kernel Shells) as fuel; power sales through FIT
  Anticipated annual power generation	Approx. 360 million kWh (Equivalent to 110,000 average households)

  Location	Hirata-mura, Ishikawa-gun, Fukushima
  Business operation	No. 1: Began in May 2022 No. 2: Began in April 2023
  Business overview	Power generation business using domestically sourced wooden chips (from thinning, etc.) as fuel; power sales through FIT
  Anticipated annual power generation	Approx. 29 million kWh (Equivalent to 9,300 average households)

  ISHIKARI BIO ENERGY GODO KAISHA HIRATA BIO ENERGY GODO KAISHA

  
  
  

  [Photo: Ishikari Bay New Port Biomass Power Plant]

  [Photo: Fukushima Hirata-mura Biomass Power Plants No. 1 and 2]

• Shareholder Return Policy

  [Basic Policy]

  Distribute profits by business results and flexibly implement share buybacks on the premise of stable dividends.

  [Policy during the Medium-Term Business Plan (FY2025-2027)]

  Consolidated dividend payout ratio*1 of 70% or more

  *1: Consolidated dividend payout ratio = Total annual dividends (interim + year-end) / profit attributable to owners of parent

  [Excluding the impact of one-off special factors (valuation gains and losses on forward exchange contracts)]

  *2: DOE = Total annual dividends (interim + year-end) / equity

  
  
  

  Consolidated dividend payout ratio		55.2%	51.5%	51.0%	72.9%	70.4%	292.1%
  Consolidated total return ratio		92.8%	51.5%	76.9%	72.9%	70.4%	391.3%
  Annual dividend		143 yen	140 yen	172 yen	223 yen	237 yen	216 yen
  	Interim dividend	41 yen	37 yen	65 yen	66 yen	77 yen	113 yen
  	Year-end dividend	102 yen	103 yen	107 yen	157 yen	160 yen	103 yen

  Notes: Shareholder return policy during the Medium-Term Business Plan (FY2019-2021): Consolidated total return ratio of 50% or more and consolidated dividend payout ratio of 30% or more Shareholder return policy during the Medium-Term Business Plan (FY2022-2024): Consolidated dividend payout ratio of 70% or more

• Reduce Cross-Shareholdings

  • Continue to engage in reducing cross-shareholdings, aiming to decrease their proportion of consolidated net assets.

  • Engage in the planned and ongoing sale of shares that have become available for disposal while considering the need to fund growth investments and other measures aimed at realizing our'Vision toward 2030," premised on our basic shareholder return policy of continuing stable dividends.

(Unit: millions of yen)

35.9%

32.8%

27.9%

24.1%

17.1%

15.0%

Continue to engage in reduction

32,785

41,770

46,761

55,133

56,069

FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 FY2027

Amount of cross-shareholdings recorded on consolidated balance sheet Proportion of consolidated net assets

• Cash Plan

Approx. 30 billion yen

Utilize interest-bearing debt, etc., if there is shortage of funds for investment

Financing

Approx. 29 billion yen

Approx. 57 billion yen

[Investment in growth]

Approx. 49 billion yen

[Investment in the business base] Approx. 8 billion yen

Investment

[Cash Inflow] [Cash Outflow] ■ Investment Plan *Amounts represent totals over three years

• Non-financial targets [●=key targets] FY2022 FY2023 FY2024 FY2025 FY2026 FY2027

Notes: 1. As of the day following the last day of the relevant fiscal year (April 1)

1. Equal to the number of male workers who took childcare leave, etc., divided by the number of male workers whose spouse gave birth during the relevant fiscal year

2. An indicator of workplace accident frequency equal to the number of workers who suffered injury or death from a workplace accident per million aggregate hours worked (only including accidents resulting in four or more days off work)

[Toward achieving a decarbonized society]

Environment

E

Key target

CO2emissions at the construction stage and from offices

－Aiming for continuing reductions through the adoption of environmentally friendly construction methods and machinery, as well as promoting the development of technologies that contribute to reducing CO2emissions －

At the Okumura Group, we have established an environmental plan along with the Medium-Term Business Plan to promote initiatives aimed at achieving our targets to reduce CO2emissions. In addition to adopting construction methods, machinery, and vehicles with a consciousness of energy conservation and developing technologies that help to make construction more efficient, we promote the use of electricity from renewable energy sources and environmentally friendly fuels to contribute to achieving a decarbonized society. In January 2023, we obtained SBT certification for the greenhouse gas (GHG) emissions reduction targets that we have established as long-term indicators and targets for our initiatives relating to climate change.

Under the Medium-Term Business Plan (FY2025-2027), we will implement measures to raise and ensure compliance awareness, such as compliance training for all officers and employees and information security training to build robust security systems, as initiatives aimed at the "penetration and firm establishment of compliance awareness."

・Although ROE has exceeded the cost of equity capital in recent years (except for FY2024), PBR remains below 1.00, making it essential to increase the equity spread*.

*Equity spread = ROE - cost of equity capital

・The lackluster ROE in FY2024 was due to a deterioration in financial results mainly attributable to recording losses on specific large-scale civil engineering projects in Japan and extraordinary losses (impairment losses) by ISHIKARI BIO ENERGY GODO KAISHA, a consolidated subsidiary.