Notice Regarding Recognition of Loss on Valuation of Affiliates’ Shares and Differences Between Full-Year Consolidated Earnings Forecast and Actual Results

Overview of Performance

In the standalone financial statements for the fiscal year ending August 2026, ASULINA Co.,Ltd. recorded a loss on valuation of affiliates' shares of 35,000 thousand yen. Differences arose between consolidated earnings forecasts and actual results: net sales fell short of prior forecasts, and operating income, ordinary income, and net income attributable to owners of parent decreased. The primary causes are delays in the cosmetics manufacturing and sales business, increases in raw material prices, and delays in the sale of a grid-scale storage facility. The valuation loss was recorded only in the standalone financial statements and has no impact on consolidated results.

Outlook and Policy

We will continue to build the sales framework for the cosmetics business, control raw material costs, and pursue final negotiations for the storage facility project to achieve an early sale. We will prioritize strengthening the financial base and allocate resources to businesses with high growth potential and profitability to achieve stable management.