2003.T

• Overall Business Execution: The group is advancing initiatives aligned with its Medium-Term Management Plan 2026, which organizes key priorities into 8 core areas: quantitative expansion and qualitative improvement of existing businesses, improvement and stabilization of profitability, expansion and self-sufficiency of overseas businesses, growth investment connected to new business areas, promotion of productivity-focused digital transformation (DX), optimization of human capital, capital policy based on improved capital efficiency and financial stability, and promotion of sustainable management. - Core Flour Business Performance: Strong demand for noodle-use wheat flour drove an increase in the core segment's sales volume, leading to overall interim consolidated revenue growth of 1.6% year-over-year to 35.414 billion yen. Following a 4.6% average cut in the government selling price of imported wheat in April 2025, the company revised its wheat flour product prices effective for shipments starting July 10, 2025. - Restaurant Business Operations: The segment's operator Sawayaka (covering the January-June consolidated reporting period) grew revenue driven by new store openings for its core Kentucky Fried Chicken locations, but was hit by sharp cost increases. - Logistics Business Restructuring: In October 2025, the company completed a partial share transfer of its consolidated subsidiary Nitto Fuji Unyu to Maruzen Showa Unyu. The transferred entity is rebranded as M&F Logistics Co., Ltd., and will move from Nitto Fuji's consolidated group to an equity-method affiliate, with Nitto Fuji retaining a 33.3% voting stake. This restructuring aims to strengthen the group's logistics system to meet new regulatory requirements for reduced waiting time and improved delivery efficiency under Japan's logistics efficiency promotion laws, leveraging Maruzen Showa Unyu's comprehensive logistics expertise to benefit both Nitto Fuji customers and the broader flour milling industry. - Financial Position: As of the end of the interim period, total assets stood at 61.882 billion yen, a decrease of 1.064 billion yen from the end of the prior fiscal year, driven by reductions in receivables and a markdown in the fair value of investment securities. Net assets totaled 49.035 billion yen, a decrease of 391 million yen from the prior fiscal year end, while the equity capital ratio rose 0.7 percentage points to 79.1%.

• Annual full-year consolidated revenue is projected at 73.0 billion yen, representing a 0.9% increase from the prior fiscal year. Full-year operating profit is projected at 3.5 billion yen, a 31.3% decrease year-over-year, ordinary profit at 4.1 billion yen (26.3% decrease year-over-year), and net income attributable to parent shareholders at 3.1 billion yen (12.7% decrease year-over-year). This represents a downward revision to the full-year net income forecast from prior public guidance. - The full-year forecast incorporates costs and impacts from planned large-scale factory renovation work: planned repair expenses, additional depreciation from equipment updates, demolition costs for aging facilities, and the impact of temporary shipment reductions during renovation periods. - The interim period's negative earnings surprises (15.3% lower operating profit and 32.8% lower net income than the May 2025 forecast) are not expected to impact full-year results, as the corporate tax adjustment related to the Nitto Fuji Unyu share transfer will be reversed in the second half, and there are no changes to planned asset sales for the full year. - The full-year annual dividend forecast is maintained at 280 yen per share, with an interim dividend of 140 yen per share declared for the second quarter.

1. Flour Milling and Food Business: Revenue of 29.807 billion yen, accounting for 84.2% of total interim consolidated revenue, representing a 1.0% year-over-year increase. Segment operating profit was 1.547 billion yen, a 24.4% year-over-year decrease. 2. Restaurant Business: Revenue of 5.557 billion yen, accounting for 15.7% of total interim consolidated revenue, representing a 5.3% year-over-year increase. Segment operating profit was 2 million yen, a 98.7% year-over-year decrease. A 10 million yen impairment loss on store assets was recorded in this segment. 3. Transportation Business: Revenue of 1.238 billion yen, accounting for 0.1% of total interim consolidated revenue, representing a 28.3% year-over-year increase. Segment operating profit was 35 million yen, a 71.0% year-over-year increase.

• In the flour milling and food business, the company has not been able to fully pass through increased distribution freight costs to product prices, putting downward pressure on segment profitability. - The restaurant business faces sharp, ongoing increases in labor costs and food raw material costs, which have nearly erased segment operating profit despite revenue growth. - A product recall incident at the company's Shizuoka Food Factory in October 2024 revealed gaps in equipment maintenance, requiring large-scale renovation of aging factory facilities over 2025-2026 that will reduce full-year 2026 fiscal year profit. - The domestic macroeconomic environment presents headwinds: persistently high prices have stagnated personal consumption, and U.S. tariff increases have created visible headwinds for Japanese exports, leading to uneven overall economic performance.

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