Summary of Q&A for Results Briefing of the 3rd Quarter of Fiscal Year 2022 held on February 3, 2023

It may be a declining factor in profits when the fisheries market deteriorates, but we think we don't have any other significant concerns.

The fisheries trading business performed well both in Japan and overseas, and the buri yellowtail and tuna aquaculture businesses performed well. In particular, while farmed buri yellowtail supply was low in the entire market, we realized a stable supply of it, taking advantage of the strengths of complete aquaculture. Not only were the fisheries market prices good, but the aquaculture production was also good, contributing to our performance.

The market prices of shrimp and crab are already falling, and the prices of other fish species that have risen too much are expected to fall. By enhancing the function of manufacturers, we will promote initiatives to reduce the volatility of business performance due to fluctuations in market prices.

Effects such as securing workers, reviewing product mix, and selecting target customers are starting to appear. Alaska's pollock quota is also recovering. We believe that business performance is expected to remain stable.

The cost increase has decreased from 13.1 billion yen, forecasted in November, to 12.5 billion yen. Since the selling volume in some product categories has fallen due to price increases, we expect the sales volume to fall by about 5% when we raise the price from February to March. If price increases permeate as planned, we believe the decline in profits due to cost increases will be recovered.

It isn't easy to give a quantitative answer at this point. Additional measures will be considered if there is a further rise in raw material prices.

French food business, which had been doing well until last year, is struggling due to the incitement of cost increases, while the business in the United Kingdom, which was struggling until last year, is recovering due to the effects of the integration of production operations.

Since the high-cost situation continues, it is necessary to absorb the cost increase by price increase, but it is gradually becoming difficult to negotiate price increases with customers. In the U.S., we will make many efforts on commercial food products, which had been sluggish until this fiscal year. In Europe, we will increase production capacity at factories to expand the sales area.

Since plant operations are decreasing due to the suspension of exports of pharmaceutical raw materials to the United States, the fixed cost burden of the plant is heavy, which is a factor in the decline in profit.

We are applying to the European Medicines Agency (EMA) for the export of pharmaceutical raw materials to Europe. Exports to North America are expected to resume in the second half of the next fiscal year.