Notice Regarding the Recording of Non-Operating Income (Foreign Exchange Forward Valuation Gain)

Regarding the Recording of Non-Operating Income (Foreign Exchange Forward Valuation Gain)

In the consolidated financial results for Q3 of the fiscal year ending March 2026, a fair value gain of 4,688 million yen on the unsettled balance of foreign exchange forwards is expected to be recognized as non-operating income. This gain arises from the fair value evaluation of a long-term foreign exchange forward contract entered into by a consolidated subsidiary, Ishikari Bioenergy LLC. Following the suspension of hedge accounting application due to the power generation facility explosion accident in July 2024, this valuation gain is directly recognized in the profit and loss statement.

Impact on Earnings and Dividends

Since the foreign exchange forward valuation gain is heavily influenced by exchange rate fluctuations, it was not incorporated into the consolidated earnings forecast for the fiscal year ending March 2026 announced at the financial results on November 13, 2025. There is no revision to the earnings forecast due to this recording. Furthermore, this valuation gain is excluded from the dividend payout ratio calculation, and the shareholder return policy under the current medium-term management plan (consolidated payout ratio of 70% or more, minimum return on equity dividend ratio of 2.0%) will be maintained.