Nippon Yusen KK

TSE:9101

Earnings Call Analysis

NYK Line Reports Mixed Q2 Results, Updates Guidance

In the tale of NYK Line's second quarter, revenues reached JPY 1,168.3 billion, with net income at JPY 113.3 billion, both trailing last year's figures. The Liner & Logistics business felt a significant JPY 590 billion profit drop, attributed mainly to lower profits in the Liner Trade segment and Air Cargo Transportation, down by JPY 520 billion and JPY 43.6 billion respectively. Despite the sluggish demand in container shipping and air cargo, the Bulk Shipping business remained resilient. Looking forward, NYK Line tweaked its forecast for the fiscal year. The updated guidance includes revenue rising to JPY 2,280 billion, an increase of JPY 110 billion, and a recurring profit boost of JPY 15 billion to JPY 235 billion, while holding net income steady at JPY 220 billion.

Financial Results and Revised Full-Year Forecast

NYK Line's Q2 financial results showcased a blend of challenges and achievements, feeling the impact of a sluggish cargo demand and market conditions. Total cumulative revenues reached JPY 1,168.3 billion with an operating profit of JPY 98.7 billion and a net income of JPY 113.3 billion, all figures trailing behind the prior year's. The notable drop in recurring profit by JPY 606 billion was largely driven by a JPY 590 billion decrease in the Liner & Logistics business due to lower profits in both the Liner Trade segment and Air Cargo Transportation. Nevertheless, the Bulk Shipping business shined with robust results, balancing out some of the declines. Despite these hurdles, the overall performance was JPY 27 billion above the prior forecasts from early August.

Performance Highlights and Business Segments Analysis

Peering into the business segments, the Liner Trade segment experienced a JPY 520 billion profit drop, while the Air Cargo Transportation segment faced a JPY 43.6 billion reduction. However, the Bulk Shipping business mirrored the previous year's formidable JPY 100 billion profit. In this segment, dry bulk faced hurdles with the economic slowdown in China, but the automotive and energy business provided much-needed support with strong transport demand and favorable market conditions, respectively.

Positive Revisions and Prospects

Looking forward, NYK Line revised its full-year forecast with an optimistic tint. Revenue now is expected to be JPY 2,280 billion, an increase of JPY 110 billion from the previous forecast. Operating profit is projected to hit JPY 165 billion, rising by JPY 19 billion, and the recurring profit is anticipated to be JPY 235 billion, a JPY 15 billion uptick. However, the net income forecast remains steadfast at JPY 220 billion, reflecting an increasingly evident pressure in the global shipping market and tax effects due to exhausted carried over losses.

Dividend Policy Unveiled

Investors can anticipate an interim dividend fixed at JPY 60 and a prospective year-end dividend of JPY 70, though this figure is contingent on the total number of shares post-share buyback. The company's policy aims to maintain a 30% annual dividend payout ratio, safeguarding shareholder returns amidst a backdrop of financial recalibrations.

Strategic Developments and Share Buyback

NYK Line is pushing ahead with strategic objectives from its mid-term management plan. This includes the divestiture of its Air Cargo Transportation business, acquisitions in the Logistics business, and the expansion of its energy transportation fleet with a focus on environmentally friendly vessels. A significant share buyback program amounting to JPY 200 billion is underway, slated for completion by April 2024, spotlighting the company's commitment to shareholder value and an assertive financial strategy. Additionally, the issuance of transition bonds and the implementation of Return on Invested Capital (ROIC) within the company underscore a progressive financial agenda.

ONE's Dividend Decisions and Investment Plans

NYK Line addressed questions regarding ONE's reduced dividend payout ratio, which transitioned from 50% to 30% for the first half of the fiscal year. This change was attributed to a cautious outlook for the container shipping market, which affects future forecasts and the shareholder decision-making process for capital allocation. Moreover, discussions are ongoing about the investment plans for ONE, with the company aiming to solidify its strategy by the end of the fiscal year. A concerted effort is being directed towards understanding the long-term fleet expansion strategy and investment needs rather than short-term market flux.

Earnings Call Transcript 2024-Q2

[岡田 泰章, executive]

[Interpreted] Thank you very much for waiting, and thank you very much for joining us today. We will now like to begin the briefing for NYK Line's financial results, for second quarter fiscal 2023.

I am Okada, the General Manager of the IR Group. First, I would like to introduce you the speakers for this session. The Representative Director, President and CEO, Takaya Soga; and CFO, Representative Director and Executive Vice President, Akira Kono; and Managing Executive Officer, Chief Executive of Liner & Logistics headquarters, Takuji Banno.

First, President Soga will give you an overview of Q2 results. And then we will have a question-and-answer session. We will explain to you how to ask questions later. Today's presentation materials have been uploaded on our website for your information. With your kind understanding, this session, inclusive of Q&A, will be broadcast on demand. Thank you for your understanding. Let us begin. Over to you, Mr. Soga.

[Takaya Soga, executive]

[Interpreted] Good afternoon, everyone. I am Soga, President and CEO of the company. Thank you very much for taking time despite your busy schedule to attend this briefing today. Today, I will provide an overview of the financial results for the second quarter of fiscal year 2023 and explain the revisions to the full year earnings forecast for fiscal year 2023, followed by a brief explanation of the progress of the new medium-term management plan that has started this fiscal year. After that, we will have a question-and-answer session.

As the moderator said, the presentation materials and other ones for the second quarter financial results briefing which was uploaded at your website at noon today, you can either download it or see it on the screen. First, I would like to give you an overview of the Q2 financial results. Please turn to the table on Page 6. As you can see in the blue column on the right, cumulative revenues for Q1 and Q2 combined were, JPY 1,168.3 billion. Operating profit was JPY 98.7 billion. Recurring profit was JPY 159.2 billion, and net income was JPY 113.3 billion, all of which were lower than the same periods last year.

The recurring profit decreased by JPY 606 billion from the same period of the previous year, the main reasons for which is as shown in the far right column on Page 7, titled year-on-year. JPY 590 billion decrease in the Liner & Logistics business. This was mainly due to JPY 520 billion reduction in profit from the Liner Trade segment, including ONE, and JPY 43.6 billion reduction in profit from Air Cargo Transportation segment.

In the containership business of ONE, demand for cargo remained sluggish throughout the first half of the year and market conditions did not recover. In the Air Cargo Transportation segment as well, freight rate levels were sluggish due to an increase in supply of space and softened supply-demand balance as international passenger flights, which can also carry cargo recovered. On the other hand, in the Bulk Shipping business, the first half of this fiscal year has been solid with more than JPY 100 billion recurring profit, the same as last year.

In the dry bulk carrier business, although cargo volumes were firm, recurring profit declined compared to the first half of last year when market conditions were robust due to the impact of the economic slowdown in China, et cetera. However, the automotive and energy business supported the division as a whole. In the automotive business, demand for transportation remained strong.

And in the energy, business, in addition to the strong LNG business, demand for long distance transportation by VLGC also increased, contributing to market conditions improvement. What I have just explained is described on Pages 3 to 5 of the presentation material, which I would like you to refer to.

One thing I would like to add, although it is not explicitly stated in the material is while the first half recurring income decreased by JPY 606 billion compared to the same period last year, it was about JPY 27 billion above the previous forecast made in early August.

Next, I would like to explain the full year forecast for FY 2023. Please refer to Page 12. The blue figures on the right side are for the full year. As a result of a review of the full year forecast for FY 2023, which we announced in early August, net income remains unchanged. But revenue, operating profit and recurring profit have been revised up. For the full year, we now forecast revenue of JPY 2,280 billion, up JPY 110 billion from the previous forecast. Operating profit of JPY 165 billion, up JPY 19 billion. Recurring profit of JPY 235 billion, up JPY 15 billion; and net income of JPY 220 billion, unchanged from the previous forecast.

Please turn to Page 14 of the document. Looking at the current full year forecast of recurring profit by segment, the overall increase of JPY 15 billion from the previous forecast consists of an increase of JPY 23.5 billion in the Bulk Shipping business, a decrease of JPY 10 billion in the Liner Trade business including ONE and an increase of JPY 1 billion in Air Cargo Transportation and Logistics segments -- sorry, Air Cargo Transportation and Logistics segments combined.

As for ONE's containership business, we expect a moderate recovery in the cargo traffic towards the second half of this fiscal year, but a full-fledged recovery is still expected to take some time as the pressure on the shipping supply capacity due to the introduction of the new vessels will continue in the second half. We may have to go one step further down from the last forecast. On the other hand, the profit for the bulk shipping business is expected to increase by JPY 23.5 billion from the previous forecast. Out of this, in the dry bulk business, we do not expect any change from the previous forecast.

But in the automotive business, the tight supply and demand for shipping space will continue in the second half and strong demand for the transportation will continue for some time. And in the energy business, in addition to strong LNG carriers, we also expect active cargo traffic demand of VLGC, especially the long distance transportation from North America. So all in all, we expect the positive cost of income.

If you can go back to Page 12 of the document and look at the forecast from -- for the current fiscal year from the perspective of comparison with the previous year, the recurring profit will decrease by JPY 874.7 billion from last year's JPY 1,109.7 billion. But this was already factored in at the time of the initial forecast and is not a surprise. Rather, the recurring profit for this fiscal year has been increasing from JPY 200 billion in the initial forecast to JPY 220 billion in the August revision and up to JPY 235 billion in the current revision.

In the new mid-term management plan starting from this fiscal year for the coming 4 years, which we announced back in March, we aim to achieve in the range of JPY 200 billion to JPY 300 billion. So we believe that the current forecast is a good start as the first year of the new mid-term plan.

Now as for the dividend based on this full year forecast, please refer to Page 9. Since the net income forecast of JPY 220 billion remains unchanged from the previous forecast, the interim dividend of JPY 60 is now fixed, and the year-end dividend is planned to be JPY 70. However, the year-end dividend of JPY 70 is calculated based on the total number of shares before the share buyback and will be finalized based on the change in the total number of shares at the end of the fiscal year due to the share buyback currently underway. The target annual dividend payout ratio of 30% will remain unchanged. So much on explanation of our full year forecast for fiscal year 2023.

Next, I'd like to briefly touch upon the progress of our newly launched medium-term management plan. Please refer to Page 16 of the document. First, on the left-hand side, I would like to talk about our core strategies. In the Air Cargo Transportation business, we have decided to transfer all shares of NCA to ANA Holdings. And we are in the process of final confirmation for the transfer on February 1, 2024. In the Logistics business centered on [indiscernible] logistics, several new investments, including M&A are being considered, although there is nothing specific we can announce at this point in time yet.

In the energy business as well, we have secured several new medium- to long-term contracts for LNG carriers, and we are working to expand our fleet. In our efforts to achieve net-zero emissions, we are expanding our fleet of environmentally friendly vessels, including LNG-fueled vessels, LPG-fueled vessels and methanol-fueled vessels. We are also preparing for the launch of the world's fast ammonia-fueled Tugboat in Yokohama next year as a demonstration vessel. And we're working with related companies to develop an ammonia-fueled medium-sized ammonia carrier to be in service in 2026.

We have also recently completed a review of the NYK Group's decarbonization targets as suggested in the mid-term management plan and have included details in the NYK Group ESG Story 2023, which was released separately today. We will provide a detailed explanation at a briefing scheduled later today in the evening.

With regard to the financial strategy, we are currently implementing a share buyback program, totaling JPY 200 billion, which is scheduled to be completed by the end of April 2024. In addition, we are in the process of issuing transition bonds and introducing ROIC, ROIC within the company as planned.

Progress on the main financial indicators is shown on the next page, Page 17. So the progress on the financial indicators will be shared with you on a regular basis going forward. So much on the brief explanation of the progress made in the mid-term management plan.

Now I would like to conclude my presentation. Thank you very much.

[岡田 泰章, executive]

So thank you very much. Now I'd like to move on to a Q&A session. So any questions, please?

[Unknown Analyst]

I have 2 questions. July to September or the first half results vis-a-vis the company plan, this -- the bulk shipping business was rather robust. But automotive, dry bulk and the bunker, if you could share with us, the split? And also if you could share with us the assumptions for the second half? Given the rather good first half results, how things are likely to evolve in the second half, I would like to understand more in details?

My second question is, so the net profit forecast remains unchanged, but are there any special factors like special profit and loss, and the like -- or are there any ups and downs anticipated at this point in time?

[Takaya Soga, executive]

Thank you for your question. Your first question, July to September, the bulk shipping business was rather robust, and you are interested in knowing the split. And in the second half, this business, bulk shipping business, is likely to decline somewhat, and how much? Is your question? I understood.

So July to September, the second quarter, automotive and dry bulk as well as LNG vessels compared with original budget, all 3 exceeded the budget. To some extent, dry bulk market conditions or market assumptions, we took a conservative view. But basically, all of the 3 businesses had a positive growth. Having said that, however, Automotive, as was pointed out in the past, our forecast for automotive business was rather pessimistic. And therefore, in comparison, the automotive business is likely to enjoy a rather huge upside. So that is July to September situation.

Turning to the second half, dry bulk, which I touched upon is unclear at this point. Of course, we have set some assumptions, but we would assume that it will decline somewhat.

With regards to the Automotive business, in the second half, we are not assuming a decline and whether it will be at the same level as the first half, maybe not. So taking into account all those factors compared with the first half, inclusive of July to September, the second half will be somewhat smaller, but how much smaller? It will not be so different from the assumption included in the original budget. In other words, it is within the expectation. So this is my response to your first question.

Responding to your second question, the net income seems low. So only net income remains unchanged and background of that will be explained by CFO, the Vice President, Kono.

[Akira Kono, executive]

Thank you for your question. So net income from recurring profit, minus tax, et cetera. And carried over losses, there was a big amount and therefore, effective tax rate was suppressed to low level but it was almost entirely used up in the first half. And therefore, inclusive of international taxation, the taxes, which were almost non-existent, is now added on top. So that is one impact. So I hope we answered your question.

[岡田 泰章, executive]

So next question is from someone with the hand up. if you can unmute yourself and ask a question.

[Unknown Analyst]

I have 2 questions or point of clarification on ONE. The first point is why you have announced $80 million dividend. So ONE's first half results was the base for the payout ratio of 30% dividend, I believe. Compared to the conversion of 50% payout ratio, it has gone down, of course, it was not your policy to have it at 50%. So that's fine. But the fact that the payout ratio has come down to 30%.

So what was the background? What was the process of coming to this conclusion? For the international vessels, the future container forecast, there is some cautiousness. So there is a move to shrink the share buyback. And it's just so happen that there was the same timing with the lowering of the payout ratio. So if you can elaborate on that?

And my second point is also on the ONE, the progress of the revision of the investment plan as well as the mid-term management planning, has there been any progress made? Or what are you expecting going forward? As much as you can share with us, those are my 2 points.

[Takaya Soga, executive]

Thank you very much for those questions. So 2 questions on ONE. I'd like to ask Mr. Banno, the Managing Executive Officer, to respond.

[Takuji Banno, executive]

Thank you for those questions. The first point on dividend. As you pointed out, the payout ratio for the first half is 30% and we have results on that. So the specific ratio, so far, it has been at 50%, but it's not that there was a specific growth set. But each time between the shareholders, there's a discussion. And this time, it just happen, so that it's 30%. And as you had guessed, looking at the second half forecast, well, we originally announced in August, there has been a downward revision -- to the august revision. And for the rest of the fiscal '23 and fiscal '24, as there's going to be a larger capacity, how would that impact the market, that there is still uncertainty. So this time for the time being, we've decided to have the dividend at 30% payout ratio.

Moving on to your second question about the mid-term. Rather than the mid-term, and I think you know, ONE Singapore had a media conference for the first time in 2 years and explained what we would like to do going forward. And so for the capital policy, the funding, that part was somewhat missing from that explanation on that day. So [ 3 ] shareholders, there is a discussion going on.

So when it comes to investment or rather should I say, cash allocation, where are we going to spend? And what is the plan for the business expansion with the investment, we need to have specific numbers. And now that 5 years have passed. So for ONE's future, with the shareholders and operation company, we would like to align ourselves and would like to spend as much time as possible to have a discussion around that.

And honestly speaking, from other shareholders, it seems like there was a comment by the end of the calendar year, but I myself would like to spend a good time. I would like to make announcement at least by the end of the fiscal year, but by the end of December, it might be quite challenging for us to share with you anything. But when we do, we would like to share with you what we have in mind on the future of ONE, and I would like to share that plan with you. That's all from me.

[Unknown Executive]

Another point of clarification. So by the end of the fiscal year in terms of the timeline, downward revision and [ half of ] freight late for the Europe traffic. I think with those factors, it's taking time for you to reach a conclusion, or in 2 months or so, the freight rate has come down more than we had anticipated. And we started to -- the downward revision for the second half. But the mid-term is up to [ 2030 ] for 7 or 8 years.

So rather than this short term of 1 or 2 years, but beyond that, how to expand this fleet and what will be the investment and how much leverage do we have. We are focusing on that discussion. So the latest market is not necessarily the factor for [indiscernible] this discussion.

[岡田 泰章, executive]

Let us move on to the next question.

[Unknown Analyst]

I have 2 questions. You have just explained about the dividend payout, ONE. So you said that 3 parties will discuss this matter. My understanding may not be correct, but it will be no less than the parent company dividend payout ratio of 30%. Am I correct or not? And my second question is inclusive of containership, the Panama Canal restriction, I do not think it has a major impact, but has it been impacting operation or market conditions? If there are any, please share with us.

[Takaya Soga, executive]

Thank you. Your first question about the dividend from ONE, I would like Banno to respond. And the second one with regards to the Panamanian, I will respond.

[Takuji Banno, executive]

So thank you for your question. Dividend, it's not that this tri-party agreement stipulates the dividend policy. So we can discuss each time on make decisions. But each party needs to pay a dividend. And ONE, it is equity-based subsidiary, and we understand that due amount of a dividend that needs to be paid. Based upon that discussion, we came up with this decision. And it's not that it must not go below 30%. It may, in fact, go below 30%. But each company -- each company pays a dividend, we will discuss that matter from each shareholders perspective.

[Takaya Soga, executive]

And your second question, Panamanian Canal question, I would like to respond. If you say there are no impact, there are some impacts although it depends on the vessel type, how much impact is there. And as I explained, the VLGC and it's from North America, East Coast to the Gulf. And if the Panama -- if we cannot go through the Panama, it is huge burden and VLGC market in itself has become much tighter and freight rate increase is because of this. But the demand will not decrease because of this and the demand remain robust.

Take, for example, automotive transportation from Asia to East Coast of North America or Latin America, it needs to go through Panamanian Canal. So there are some impacts, but the NYK automotive fleet is not impacted that severely, at least not at this point. But the NYK Lines, the vessel space has been large. I mean, the vessel space allocated to us has been large. To begin with, maybe we are in advantageous position. But if this Panama issue becomes much more serious, from Pacific Ocean to Atlantic Ocean side, if the number of vessels is reduced significantly, then it may end up in a shuttle service going back and forth.

And the automobiles were transported to the East Coast, but it may have to be [ uploaded ] on the West Coast and then [ brought ] on the ground. Such a possibility is not 0, although at this point in time, we are not seeing a big impact. I hope I answered your question.

[岡田 泰章, executive]

Let us move on to the next question.

[Unknown Analyst]

On Page 11, revision of the full year forecast, the logistics, you made an upward revision, not necessarily that big. So if you can elaborate, I think the Air Cargo transportation is still rather sluggish. But on the other hand, I think Logistics are offsetting that, and there's a slight upward revision. So for logistics, what are you working on? And what is contributing to this upward revision, if you can elaborate further?

[Takaya Soga, executive]

Thank you very much for that question. So I would like to respond to your question. So actually, in the new mid-term management plan, we said that the logistics is one of our core businesses, and we do intend to grow this business as one of the core businesses. There are several significance [indiscernible] to that. One big part is that the containership business using ONE that we would like to grow, the volatility for that business is quite high. And the source of the demand is quite broad in the logistics and the general logistics itself compared to the container business.

The volatility is quite limited for the general logistics. Therefore, by having logistics face the ONE, then we can sort of offset the impact. That's what we said in the mid-term and that remains unchanged, but this logistics business -- in this logistics business, as it explains here, air freight and ocean freight, the forwarding part of the business that is [ ONE ], the container vessels freight situation and the space situation and for the air freight, actual supply capacity and the [ situation ] of the freight. Those are the factors that could bring about a significant impact.

So in terms of the volatility, ONE container, it's very close to that. On the other hand, contract logistics, what we call contract logistics. So the real core part of the logistics, the big network business, especially where it's impacted by the forwarding, that is very much limited where it's impacted. So that part has a limited volatility. So that's why we would like to continue to expand that part of the business. That's our aspiration. Now this time, only JPY 500 million, but we did make an upward revision. But basically, in that sense, the logistics is quite steady in making a contribution to the profit.

As a matter of fact, in Europe and in the United States, inflation, where there's a financial impact and that would also have impact on the logistics customers' clients as well. But relatively speaking, where we receive orders and we handle the logistics, it's quite steady, both in U.S. and Europe. We see a robust business. So in terms of our outlook, we'd like to make sure for the entire year to generate revenue and profit. That concludes my response.

[岡田 泰章, executive]

Let us move on to the next question. So another person who has raised his hand, please ask your question.

[Unknown Analyst]

I have 2 additional questions. One, ONE, the freight rate strategy, what is the situation? Spot rate. In the past 2 weeks, in Shanghai, the spot rate has been rising and how ONE is responding to that? As alliance, what is the capacity schedule, inclusive of the situation of the competitors, if you could share with us please?

My second question is on Page 17. [ KPI ] Based upon a mid-term plan and the latest results, the profit and share buybacks. Because of that, the ROE seems good. And our capital ratio has declined a little bit, but the operating cash flow JPY 50 billion or JPY 60 billion up. So half year later probably, you will put together another plan, and then I can repeat that. But when the difference of is -- the plan gets expanded, do you feel it is necessary to make adjustment in a meticulous way or in the longer term, like 1 year or 2 years? Are you planning to look at a cumulative situation? So my question is about how you manage these plans?

[Takaya Soga, executive]

Thank you for your question. Inclusive of ONE, particularly regarding ONE, the freight rate strategy, G Alliance capacity plan included, so ONE -- whether ONE has a strategy or not, is your question, I understood.

So I would like to ask Mr. Banno to respond. Your second question, these financial positions, which are the targets stipulated in the mid-term plan, and there are some variances and how we will respond to them. Regarding that question, I would like to ask CFO, Kono, to answer. So the first question over to you. Mr. Banno.

[Takuji Banno, executive]

Thank you for your question. So recently, September and October, we were expecting that the rate would be decided sooner, and we were hoping that it will not decline much. However, actually, it dropped more than we expected. In early October, the freight volume has been recovering. But us, ONE -- not only ONE, but other companies towards year-end or January up till the Chinese New Year, [ people are ] wanting to increase the numbers. So they are now trying to tighten the vessel supply. So G Alliance, we have sort of suspended services to China and North America, but the North America East Coast, we are also suspending and reducing the overall services at the same timing on November 1, the price hike we announced at the same time.

It's quite huge increase, $400 for North America and Europe, because prices in Europe dropped significantly. And therefore, we decided to raise price in Europe significantly. I, of course, haven't discussed with other companies, but looking at other companies' movement, probably, they are inclined to our European market even more than us. And therefore, they seem to be raising prices for Europe rather than changing the route. The European companies that have not -- that did not suspend the services in the past are now suspending some of the services. And therefore, the rate is increasing as a result. But market conditions are not recovering quickly. And therefore, to what extent the demand can recover. As a result of tightened supply, it's something we are carefully watching.

But in January and February, I think there is a possibility that the rate would drop once again. So that is how we look at the situation in the short term. I hope I answered your question.

[Akira Kono, executive]

So I would like to respond to your second question, the financial position. Thank you for your question. Regarding financial positions, this year's plan at this point, the forecast, the recurring profit is recovering a little bit. And the net income remains the same. So it's basically in line with the expectations, but investment, the cash flow and NCA's share transfer involved money lending and it will be repaid about JPY 100 billion. So that is included in the number this time.

It was not decided at the time of formulation of medium-term plan. So inclusive of that investment amount itself is somewhat bigger at this point. The reason for that is, one thing is weak yen because the vessel service price is oftentimes dollar denominated. And because of a weak yen, investment amount is becoming bigger and also material cost increase is also impacting. And there are many other variable elements, the ForEx and the like.

So it is quite possible that the investment amount will change in a single year basis, whether we will review the overall financial position, we have not decided anything yet at this point. But inclusive of the current situation, probably at this point, the midterm plan target for 2026, I think it's basically in line with the plan. If the situation changes dramatically, we may consider changing the numbers. But as is announced as part of a medium-term plan and management allocation exists within that. We can make additional investments or the additional amount that can be absorbed.

And we have bought back JPY 200 billion of our own shares and the DER and shareholders' equity ratio have not worsened or rather have improved. And therefore, additional shareholder return is quite possible. And it's not that we need to review financial position at this point in a single year basis. I hope I answered your question.

[岡田 泰章, executive]

Moving on to the next question. Are we okay? Is there anyone else with questions? Well, since there are no further questions, we are a bit early, but we would like to close this briefing. So with this, we would like to close the briefing for the financial results for the second quarter financial fiscal year 2023. Thank you very much for attending the briefing today.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]