9221.T

• Overall Financial Performance • 2025 March fiscal year (first year of the medium-term management plan) delivered record-high revenue of 9.383 billion yen, operating profit of 1.152 billion yen, and net income of 1.033 billion yen, marking the 5th consecutive year of record-high revenue and operating profit. • Net income increased 292.5% year-over-year, due to the prior year posting extraordinary losses from investment securities valuation impairments and debt guarantee loss provisions. • ROE reached 19.5% as of March 31, 2025, with PBR of 1.8x, well above 1x reflecting market recognition of the company's growth trajectory.

• Operational Expansion Updates • The newly opened Aichi Eighth Factory (Ichinomiya) started smooth operations in October 2024, and the Nagoya Factory is scheduled to begin operations in October 2025. Pre-development site selection has been completed for 12 additional new factory locations. • In the Biomaterial Business, which produces biomass fuel chips and pulp raw material chips from domestic wood waste, new factories (Gifu Second, Nishi Tokyo, Aichi Eighth) operate smoothly, and the company accepted disaster waste from the Noto Peninsula earthquake, increasing raw material procurement volume and revenue. The business benefits from a

• 2026 March fiscal year is projected to deliver another round of record-high revenue and profit, with revenue guidance of 10.322 billion yen, gross profit of 4.757 billion yen, operating profit of 1.303 billion yen, ordinary profit of 1.335 billion yen, and net income of 0.905 billion yen. Growth will be driven by volume expansion led by the upcoming Nagoya Factory.
• Medium-term management plan targets for 2028 March fiscal year remain unchanged: 15 billion yen in revenue, 3 billion yen in operating profit, 20% operating profit margin, sustained ROE above 15%, and construction of at least 16 new factories to reach a total of 36 operating facilities. The first half of the plan (2025-2026) is focused on growth preparation and investment, with accelerated growth to come in the second half as new factories start contributing to financial results.
• Dividend guidance: A full-year dividend of 28 yen per share will be paid for 2025 March fiscal year, with a 30 yen per share full-year dividend planned for 2026 March fiscal year. The company maintains a progressive dividend policy through 2028 March fiscal year, with a target long-term payout ratio of approximately 35%.

• Biomaterial Business: Revenue of 6.848 billion yen, operating profit of 1.09 billion yen, contributing 72.3% of total company revenue. Segment profit increased 21.7% year-over-year driven by volume expansion and value-add product focus.
• Resource Circulation Business: Revenue of 1.591 billion yen, operating profit of 72 million yen, contributing 16.9% of total company revenue.
• Other Businesses: Revenue of 1.014 billion yen, with a 6.6% year-over-year revenue increase driven by logistics equipment sales and demolition project orders. Combined revenue from the two core businesses increased 11.1% year-over-year.

• The broader market faces concerns over rising costs and higher environmental impact from imported wood resources due to yen depreciation, though the company's focus on domestic wood resources mitigates this risk via stable transport costs and lower carbon emissions.
• Rising operating costs: Personnel costs increased 96 million yen year-over-year due to an average base wage increase of more than 5% over the past three years, and transportation costs increased 103 million yen driven by higher sales volume of wood chips. The company's strong revenue growth has outpaced these cost increases to date.
• Potential risks to ordinary profit in 2026 March fiscal year were flagged for investor discussion, though no specific detailed risks were laid out in the provided transcript.

Q: What is driving the sustained growth in operating profit margin for the company? / A: Management states that sustained profit growth comes from volume expansion from new factory openings paired with a focus on higher value-added wood chip products. The company's fixed cost base has remained relatively stable as revenue grows, allowing operating profit to grow faster than sales. The double income structure of the Biomaterial Business, which earns revenue from both waste recycling processing and chip sales, also supports high and stable margins.

Q: What is the outlook for growth in biomass energy for the company? / A: Management sees strong long-term growth potential for domestic biomass energy, as demand for low-carbon domestic energy sources rises amid concerns over imported resource costs and carbon emissions. The company's existing capacity expansion aligns with growing demand for biomass fuel chips, and new factories will support further growth in this segment.

Q: Is there expected to be a decline in the volume of waste wood available as raw material for recycled chips? / A: Management expects that domestic waste wood supply will remain stable for the foreseeable future. The company is expanding its raw material sourcing network, including accepting disaster waste and increasing intake from construction sites, to maintain stable supply to support its capacity expansion plans.

Q: What impact will Trump-era tariffs have on the company's business? / A: Management notes that the company relies almost entirely on domestic wood raw materials, so changes in US import tariffs are expected to have no material direct impact on Furuhashi EPO's operations or financial performance.