Presentation Materials with Script (PDF 5,441KB)

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The consolidated net profit for the 1st half reached a record high of JPY500.6 billion, the highest ever for the 1st half of the fiscal year, even approaching the full‐year record‐high of JPY501.3 billion of the FYE 2020.

Although there were factors such as the historic soaring prices of iron ore and concentrated realization of extraordinary gains, we enjoyed the recovery of overseas business following the resumption of economic activities in China, Europe, and the United States, and steadily accumulated efforts based on the principle "earn, cut, and prevent."

As a result, we have achieved very well‐balanced earnings growth by steadily increasing core profits in consumer‐related sector, basic industry‐related sector and resource sector.

In addition, based on the results of the 1st half, we have revised our full year forecast for consolidated net profit upward to JPY750.0 billion.

As a company with strength in the area of the domestic consumer sector, we will secure this JPY750.0 billion in light of the recovery in domestic consumption due to lifting of the restrictions on activities. We will steadily proceed with our business operation aiming for further accumulation of profit in the 2nd half.

This year, against the backdrop of the recovery of overseas economy overcoming the impact of COVID‐ 19 led by China and other countries, as well as unexpected soaring of resources prices, the results of the general trading sector became significantly favorable. In terms of how to earn money, however, I think the differences among companies have become more apparent.

Our Company's basic policy is to build up businesses in the non‐resource sector, which is our strength. We place a great importance on steadily strengthening and evolving a well‐balanced and stable earnings base. In the 1st half, I believe we have been able to make a steady growth and evolve the business that is typical to ITOCHU, which is what we are aiming for.

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ICT & Financial Business Company, which our peers do not have, has been working for digitalization of the world as a pioneer and is making inroads into the fields of mobile communications, IT systems, and fintech.

The Company has the momentum to jump up to the No. 1 segment in our non‐resource sector with its annual consolidated net profit of JPY100.0 billion.

We aim to make the Company grow so that it can become a major source of stable earnings for the non‐resource sector.

I will explain about the status of DESCENTE, the core Group company of the Textile Company.

We took a strategy to increase our stake through additional purchase, which was rather challenging. It was the first successful hostile TOB in the Japanese security market, and became a historic case that pioneered hostile TOBs that have been carried out in large numbers since the success.

We have undergone transformation from South Korea‐focused profit structure, which had been the management issue, into a balanced profit structure focusing Japan, China, and South Korea.

For chronically loss‐making Japan business, we renewed DESCENTE brand, resulting in a launch of many new products.

As a result, we have improved the brand value and have already achieved profitability. In addition, in China business, the new DESCENTE China was launched with a partnership with ANTA, a leading global sportswear company in China.

Business performance has grown significantly and is now achieving rapid growth beyond the plan. Through those initiatives, we have realized a well‐balanced profit structure with these pillars. Regarding the forecast of consolidated net profit for the current fiscal year, DESCENTE has already announced upward revisions twice.

As a result of these measures, the share price rose from the TOB price of JPY2,800 to an all‐time high at present.

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We have announced a new dividend policy for the current medium‐term management plan in response to various comments from the market.

We set the minimum dividend per share (DPS) for the current fiscal year at JPY110, an increase of JPY22 from the previous year.

In addition, the progressive dividends during the medium‐term management plan was clarified again, and we introduce "incremental increases to the minimum dividend," setting the lower limit of JPY120/share for FYE 2023 and JPY130/share for FYE 2024.

Furthermore, we commit to achieving a dividend payout ratio of 30% in the final year of the medium‐ term management plan.

We have received comments from the market that our payout ratio was behind peers, and discussed this issue in depth internally.

The new dividend policy shows our willingness to sincerely listen to the voices from the market and clarify the path toward a payout ratio of 30%.

There is no change in our policy of linking shareholder returns to the enhancement of corporate value for a medium to long term.

As for the status of our thermal coal interest, following the sale of Drummond thermal coal mine, we have decided to sell Ravensworth North coal mine, another thermal coal interest in Australia.

As currently discussed in COP 26, efforts toward a decarbonized society will continue to accelerate going forward.

With these new values, I believe the general trading companies must not be bound by immediate profits but must promote "Sampo‐yoshi (good for the seller, good for the buyer, and good for society)" initiatives by contributing to the international community, and aim for sustainable business and management.

I would like to conclude my remarks by stating that non‐resource business, which is our strength, and our core profits are growing beyond our target. Your expectations will never be betrayed.

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