三井物産（8031） – Consolidated Financial Results for the Year Ended March 31, 2022 [IFRS]

Years ended March 31,20222021%%RevenueMillions of Yen11,757,55946.88,010,235(5.6)Profit before income taxesMillions of Yen1,164,480158.7450,202(15.7)Profit for the yearMillions of Yen937,670167.6350,381(14.8)Profit for the year attributable to owners of the parentMillions of Yen914,722172.7335,458(14.3)Comprehensive income for the yearMillions of Yen1,410,98841.7996,046－Earnings per share attributable to owners of the parent, basicYen561.61199.28Earnings per share attributable to owners of the parent, dilutedYen561.38199.18Profit ratio to equity attributable to owners of the parent%18.08.0Profit before income taxes to total assets%8.53.7March 31, 2022 March 31, 2021Total assetsMillions of Yen14,923,29012,515,845Total equityMillions of Yen5,795,4164,822,887Total equity attributable to owners of the parentMillions of Yen5,605,2054,570,420Equity attributable to owners of the parent ratio%37.636.5Equity per share attributable to owners of the parentYen3,501.212,739.28Consolidated Financial Results for the Year Ended March 31, 2022 [IFRS]Tokyo, May 2, 2022 – Mitsui & Co., Ltd. announced its consolidated financial results for the year ended March 31, 2022, based on International Financial Reporting Standards (“IFRS”).Mitsui & Co., Ltd. and subsidiaries(Web Site : https://www.mitsui.com/jp/en/)President and Chief Executive Officer : Kenichi HoriInvestor Relations Contacts : Maroshi Tokoyoda, Investor Relations Division TEL 81-3-3285-11111. Consolidated financial results(1) Consolidated operating results information for the year ended March 31, 2022(from April 1, 2021 to March 31, 2022)Note:1. Percentage figures for Revenue, Profit before income taxes, Profit for the year, Profit for the year attributable to owners of the parent, and Comprehensive income for the year represent changes from the previous year.2. Share of profit (loss) of investments accounted for using the equity method for the years ended March 31, 2022 and 2021 were ¥431,263 million and ¥227,910 million, respectively.(2) Consolidated financial position informationYears ended March 31,20222021Operating activitiesMillions of Yen806,896772,696Investing activitiesMillions of Yen(181,191)(322,474)Financing activitiesMillions of Yen(614,325)(486,963)Cash and cash equivalents at the end of the yearMillions of Yen1,127,8681,063,150Years ended March 31,Year ending March 31, 2023 (Forecast)20222021Interim dividend per shareYen454060Year-end dividend per shareYen604560Annual dividend per shareYen10585120Annual dividend (total)Millions of Yen169,586142,589Consolidated dividend payout ratio%18.742.724.0Consolidated dividend on equity attributable to owners of the parent%3.43.4Year endingMarch 31, 2023Profit attributable to owners of the parentMillions of Yen800,000Earnings per share attributable to owners of the parent, basicYen499.71(ⅰ) Changes in accounting policies required by IFRSNone(ⅱ) Other changesNone(ⅲ) Changes in accounting estimatesYes(3) Consolidated cash flow information2. Dividend informationNote:The amount of dividend for the shares related to the share-based compensation plan for employees included in the Annual dividend for the years ended March 31, 2022 and 2021 were ¥405 million and ¥331 million, respectively.3. Forecast of consolidated operating results for the year ending March 31, 2023 (from April 1, 2022 to March 31, 2023)4. Others(1) Increase/decrease of important subsidiaries during the Year : None(2) Changes in accounting policies and accounting estimate :Note :For further details please refer to p.28 “5. Consolidated Financial Statements (7) Changes in Accounting Estimates”.March 31, 2022March 31, 2021Number of shares of common stock issued, including treasury stock1,642,355,6441,717,104,808Number of shares of treasury stock41,423,29148,628,466Year endedMarch 31, 2022Year endedMarch 31, 2021Average number of shares of common stock outstanding1,628,744,1531,683,338,251(3) Number of shares :This earnings report is not subject to audit.A Cautionary Note on Forward-Looking Statements:This report contains forward-looking statements including those concerning future performance of Mitsui & Co., Ltd. (“Mitsui”), and those statements are based on Mitsui’s current assumptions, expectations and beliefs in light of the information currently possessed by it. Various factors may cause Mitsui’s actual results to be materially different from any future performance expressed or implied by these forward-looking statements.Therefore, these statements do not constitute a guarantee by Mitsui that such future performance will be realized.For key assumptions on which the statements concerning future performance are based, please refer to (2)“Forecasts for the Year Ending March 31, 2023” on p.17. For cautionary notes with respect to forward-looking statements, please refer to the “Notice” section on p.21.Supplementary materials and IR meetings on financial results:Supplementary materials on financial results can be found on our web site.We will hold an IR meeting on financial results for analysts and institutional investors on May 6, 2022.Contents of the meeting (English and Japanese) will be posted on our web site immediately after the meeting.- 1 -1. Qualitative Information(1) Operating Environment………………………………………………………………………………………2(2) Results of Operations…………………………………………………………………………………………3(3) Financial Condition and Cash Flows…………………………………………………………………………122. Management Policies(1) Progress with the Medium-term Management Plan…………………………………………………………17(2) Forecasts for the Year Ending March 31, 2023………………………………………………………………17(3) Profit Distribution Policy…………………………………………………………………………….………203. Basic Approach on Adoption of Accounting Standards………………………………………………………204. Other Information……………………………………………………………………………………………..215. Consolidated Financial Statements(1) Consolidated Statements of Financial Position………………………………………………………………22(2) Consolidated Statements of Income and Comprehensive Income……………………………………………24(3) Consolidated Statements of Changes in Equity………………………………………………………………26(4) Consolidated Statements of Cash Flows……………………………………………………………………..27(5) Assumption for Going Concern………………………………………………………………………………28(6) Basis of Consolidated Financial Statements…………………………………………………………………28(7) Changes in Accounting Estimates…………………………………….………………….………………….28(8) Notes to Consolidated Financial Statements……………………………………………………………..….29Table of Contents- 2 -1. Qualitative InformationAs of the date of disclosure of this earnings report, the audit procedures for consolidated financial statements have not been completed.As used in this report, “Mitsui” and the “Company” refer to Mitsui & Co., Ltd. (Mitsui Bussan Kabushiki Kaisha), and “we”, “us”, “our” and the “companies” are used to indicate Mitsui & Co., Ltd. and its subsidiaries, unless otherwise indicated.(1) Operating EnvironmentIn the year ended March 31, 2022, the global economy rebounded overall, although the pace of economic recovery has slowed down due to the impact of the COVID-19 pandemic and supply constraints, such as the shortage of semiconductor and distribution bottlenecks, as well as the detrimental effect of the Russia-Ukraine situation.In the U.S., although the pace of growth has been hampered by the prolonged supply constraints and other issues, personal consumption has been stimulated by the re-opening of the economy and generous cash payments introduced by the government, and much of the economy has followed a firm recovery track. Looking ahead, economic recovery is expected to continue, considering the subsiding impact of the COVID-19 pandemic, easing supply constraints, and a robust employment and personal income environment, while there are some areas of concern, such as rising inflation and increasingly tighter monetary policy. In Europe, high growth was achieved in the first half of the fiscal year as restrictions on economic activity were relaxed. However, against the backdrop of the Russia-Ukraine situation, the deterioration of supply constraints, such as those on energy, further rising of consumer goods prices, and weakening of consumer confidence have restrained recovery and lowered the growth rate. The suppressive effect on the economy caused by the Russia-Ukraine situation will remain significant for the time being, and the recovery that will accompany the reopening of the economy is expected to be delayed. In Japan, consumption, which had been recovering following the lifting of the fourth state of emergency in autumn of 2021, stalled once again due to the impact of the spread of the Omicron variant, occurring at the beginning of 2022, and production of automobiles and other products was also constrained, resulting in a more or less flat economy. Looking ahead, the impact of the COVID-19 pandemic is expected to gradually subside, which is expected to stimulate consumption and lead to economic recovery. In China, the economic recovery has slowed down for reasons such as weakening production and consumption activities resulting from the zero-COVID policy that has involved strong efforts, ongoing since the summer of 2021, to locally contain the spread of infections, in addition to government measures to control real estate investment and other factors. Looking forward, although continuation of the zero-COVID policy would be a hindrance to economic recovery, China’s economy is expected to continue moderate recovery, underpinned by increased investment in infrastructure and monetary easing policies. In Brazil and Russia, rising inflation and increases in policy interest rates have been hampering economic recovery, and Russia, in particular, is expected to undergo rapid contraction of economic activity due to economic sanctions imposed on it by the international community.Going forward, while there are some areas of concern, such as a further worsening and protraction of global supply constraints due to the Russia-Ukraine situation, rising inflation, tightening monetary policy in the U.S., and weakening growth in the emerging economies due to delayed recovery from the COVID-19 pandemic, it is expected that the global economy will continue to maintain positive growth overall as the impact of the spread of COVID-19 infections subsides and economic activities are revitalized.- 3 -(Billions of Yen)Current YearPrevious YearChangeRevenue11,757.68,010.2+3,747.4Gross Profit1,141.4811.5+329.9Selling, General and Administrative Expenses(596.3)(606.4)+10.1Other Income (Expenses)Gain (Loss) on Securities and Other Investments—Net8.77.9+0.8Impairment Reversal (Loss) of Fixed Assets—Net(19.1)(52.9)+33.8Gain (Loss) on Disposal or Sales of Fixed Assets—Net14.54.6+9.9Other Income (Expense)—Net14.9(13.9)+28.8Finance Income (Costs)Interest Income20.019.9+0.1Dividend Income196.5103.7+92.8Interest Expense(47.3)(51.9)+4.6Share of Profit (Loss) of Investments Accounted for Using the Equity Method431.3227.9+203.4Income Taxes(226.8)(99.8)(127.0)Profit for the Year937.7350.4+587.3Profit for the Year Attributable to Owners of the Parent914.7335.5+579.2(2) Results of Operations1) Analysis of Consolidated Income Statements* May not match with the total of items due to rounding off. The same shall apply hereafter.RevenueRevenue for the year ended March 31, 2022 (“current year”) was ¥11,757.6 billion, an increase of ¥3,747.4 billion from the year ended March 31, 2021 (“previous year”). The increase was mainly in the Energy Segment, the Chemicals Segment and the Mineral & Metal Resources Segment.Gross ProfitMainly the Mineral & Metal Resources Segment, the Energy Segment and the Chemicals Segment recorded an increase.- 4 -Billions of YenCurrent YearPrevious YearChangePersonnel …………………………………….¥(333.6)¥(296.9)¥(36.7)Welfare ………………………………………(11.8)(9.2)(2.6)Travel ………………………………………..(10.6)(7.0)(3.6)Entertainment ………………………………..(3.2)(1.7)(1.5)Communication ………………………………(48.6)(46.4)(2.2)Rent ………………………………………….(9.0)(8.7)(0.3)Depreciation …………………………………(35.0)(36.7)+1.7Fees and Taxes ………………………………(12.9)(12.4)(0.5)Loss Allowance ………………………………(20.2)(80.6)+60.4Others ………………………………………..(111.4)(106.8)(4.6)Total …………………………………………¥(596.3)¥(606.4)¥+10.1Selling, General and Administrative ExpensesMainly the Chemicals Segment recorded an increase in expense, while the Mineral & Metal Resources Segment and the Machinery & Infrastructure Segment recorded a decrease in expense due to absence of one-time losses for the previous year. The table provides a breakdown.Other Income (Expenses)Gain (Loss) on Securities and Other Investments—NetFor the current year, a gain on securities was recorded mainly in the Lifestyle Segment, while an impairment loss was recorded in the Machinery & Infrastructure Segment.For the previous year, a gain on securities was recorded in the Machinery & Infrastructure Segment, while impairment losses were recorded in the Mineral & Metal Resources Segment and the Machinery & Infrastructure Segment.Impairment Reversal (Loss) of Fixed Assets—NetFor the current year, mainly the Energy Segment recorded impairment losses on fixed assets.For the previous year, impairment losses on fixed assets were recorded mainly in the Energy Segment and the Machinery & Infrastructure Segment, while an impairment reversal was recorded in the Innovation & Corporate Development Segment.Other Income (Expense)—NetFor the current year, the Energy Segment recorded a provision, while the Mineral & Metal Resources Segment recorded foreign exchange related profits and losses and a gain in relation to asset retirement obligation, the Lifestyle Segment recorded a valuation profit of a put option, the Chemicals Segment recorded insurance proceeds in the business in North America.For the previous year, the Mineral & Metal Resources Segment and the Machinery & Infrastructure Segment recorded losses related to loans, the Mineral & Metal Resources Segment recorded foreign exchange related profits and losses, the Energy Segment recorded an loss in relation to asset retiremen obligation, while the Chemicals Segment recorded insurance proceeds in the business in North America.Finance Income (Costs)Dividend IncomeMainly the Mineral & Metal Resources Segment and the Energy Segment recorded an increase.- 5 -(Billions of Yen)Current YearPrevious YearChangeProfit for the Year Attributable to Owners of the Parent497.6179.9+317.7Gross Profit392.5251.2+141.3Profit (Loss) of Equity Method Investments145.370.4+74.9Dividend Income124.359.8+64.5Selling, General and Administrative Expenses(30.2)(72.3)+42.1Others(134.3)(129.2)(5.1)Share of Profit (Loss) of Investments Accounted for Using the Equity MethodMainly the Mineral & Metal Resources Segment, the Machinery & Infrastructure Segment, the Lifestyle Segment and the Iron & Steel Products Segment recorded an increase.Income TaxesIncome taxes for the current year were ¥226.8 billion, an increase of ¥127.0 billion from ¥99.8 billion for the previous year.The effective tax rate for the current year was 19.5%, a decrease of 2.7 points from 22.2% for the previous year. The effective tax rate was decreased mainly due to an absence of an impairment loss not recognizable for deferred tax in the Mineral & Metal Resources Segment for the previous year.Profit for the Year Attributable to Owners of the ParentAs a result, profit for the year attributable to owners of the parent was ¥914.7 billion, an increase of ¥579.2 billion from the previous year.2) Operating Results by Operating SegmentThe fluctuation analysis for the results by operating segment is below.The order in which reporting segments are presented has been changed in the segment information from the current year, and this change also applies for the previous year.Mineral & Metal Resources Segment・ Gross Profit increased mainly due to the following factors:- Iron ore mining operations in Australia recorded an increase of ¥66.6 billion mainly due to higher sales price.- Coal mining operations in Australia recorded an increase of ¥65.2 billion mainly due to higher sales price.・ Profit (Loss) of Equity Method Investments increased mainly due to the following factors:- Compañía Minera Doña Inés de Collahuasi SCM, a copper mining company in Chile, recorded an increase of ¥19.6 billion mainly due to higher sales price.- Inner Mongolia Erdos Electric Power & Metallurgical Co., Ltd recorded an increase of ¥17.6 billion mainly in the ferroalloys and chemicals businesses due to higher market prices caused by strong demand and electricity restriction in China.- Inversiones Mineras Becrux SpA, which invests in Anglo American Sur S.A., a copper mining company in Chile, recorded an increase of ¥10.8 billion mainly due to higher sales price.- Iron ore mining operations in Australia recorded an increase of ¥8.9 billion mainly due to higher sales price.- Coal mining operations in Australia recorded an increase of profit mainly due to higher sales price.- For the previous year, an impairment loss of ¥3.8 billion was recorded for the Nacala Corridor rail & port infrastructure business in Mozambique following the revisions to our various assumptions.・ Dividend income increased mainly due to higher dividends from Vale S.A. and iron ore mining operations in – 6 -(Billions of Yen)Current YearPrevious YearChangeProfit for the Year Attributable to Owners of the Parent114.027.2+86.8Gross Profit145.462.9+82.5Profit (Loss) of Equity Method Investments32.318.8+13.5Dividend Income53.625.1+28.5Selling, General and Administrative Expenses(53.1)(47.2)(5.9)Others(64.2)(32.4)(31.8)Australia.・ Selling, General and Administrative Expenses decreased mainly due to the following factors:- For the previous year, an impairment loss of ¥35.9 billion for doubtful debts was recorded regarding the Moatize mine business and Nacala Corridor rail & port infrastructure business in Mozambique following the revisions to our various assumptions.- For the previous year, an impairment loss of ¥8.3 billion for doubtful debt was recorded, based on the conclusion of share transfer agreement for the SCM Minera Lumina Copper Chile, the project company for the Caserones Copper Mine.・ In addition to the above, the following factors also affected results:- For the current year, a reversal of deferred tax liability of ¥6.2 billion was recorded in relation to the reorganization of Japan Collahuasi Resources B.V., which invests in Compañía Minera Doña Inés de Collahuasi SCM, a copper mining company in Chile.- For the current year, a reversal of deferred tax liability for the retained earnings was recorded following the dividend income from Inner Mongolia Erdos Electric Power & Metallurgical Co., Ltd.- For the current year, iron ore mining operations in Australia recorded an increase of ¥4.8 billion due to foreign exchange related profits and losses.- For the current year, coal mining operations in Australia recorded an increase of ¥4.1 billion due to foreign exchange related profits and losses.- For the current year, a reversal of deferred tax liability for the retained earnings was recorded at the iron ore mining operation in Australia.- For the current year, iron ore mining operations in Australia recorded a gain of ¥3.1 billion due to a revision of asset retirement obligation.- For the current year, a gain of ¥3.1 billion was recorded due to a recognition of deferred tax assets following the higher dividend income from Anglo American Sur S.A.- For the previous year, impairment losses of ¥19.2 billion were recorded regarding the Moatize mine business and Nacala Corridor rail & port infrastructure business in Mozambique following the revisions to our various assumptions.Energy Segment・ Gross Profit increased mainly due to the following factors:- Business division at the Headquarters recorded an increase mainly due to more profit related to LNG trading business.- Mitsui E&P USA LLC recorded an increase of ¥17.1 billion mainly due to a higher gas price.- Mitsui E&P Australia Pty Ltd recorded an increase of ¥16.0 billion mainly due to a higher oil price.- MOEX North America LLC recorded an increase of ¥5.8 billion mainly due to a higher oil price.- MEP Texas Holdings LLC recorded an increase of ¥4.9 billion mainly due to higher oil and gas prices.- Mitsui E&P Italia A S.r.l recorded an increase of ¥4.5 billion mainly due to a higher oil price.- Mitsui E&P Middle East B.V. recorded an increase of ¥3.8 billion due to higher oil price.- 7 -(Billions of Yen)Current YearPrevious YearChangeProfit for the Year Attributable to Owners of the Parent120.845.9+74.9Gross Profit142.9107.7+35.2Profit (Loss) of Equity Method Investments146.095.3+50.7Dividend Income4.13.9+0.2Selling, General and Administrative Expenses(127.7)(132.9)+5.2Others(44.5)(28.1)(16.4)- Mittwell Energy Resources Pty Ltd recorded an increase of ¥3.6 billion due to the increase in sales volume.- Mitsui Oil Exploration Co., Ltd. recorded a decrease of ¥15.9 billion mainly due to decline in production, in spite of higher oil and gas prices.・ Profit (Loss) of Equity Method Investment increased mainly due to the following factors:- Japan Australia LNG (MIMI) Pty. Ltd recorded an increase mainly due to higher oil and gas prices.- Mitsui & Co. LNG Investment USA, Inc. recorded an increase of ¥4.9 billion due to the commencement of commercial operation in all three trains at the Cameron LNG Project.- Japan Arctic LNG recorded a decrease of ¥3.4 billion mainly due to valuation loss resulted from changes in oil price, foreign exchange rate and others, as well as provision of valuation allowance for loans caused by downgrade of the Russian government credit rating etc.・ Dividends from six LNG projects (Sakhalin II, Abu Dhabi, Qatargas 1, Oman, Qatargas 3 and Equatorial Guinea(*)) were ¥52.9 billion in total, an increase of ¥28.5 billion from the previous year.(*) Equatorial Guinea was sold during the 3rd quarter of current year.・ Selling, General and Administrative Expenses increased mainly due to the following factor: – Provision of loss valuation of ¥4.1 billion was recorded in relation to loan for Japan Arctic LNG mainlydue to a downgrade of Russian government credit rating etc.・ In addition to the above, the following factors also affected results.- For the previous year, a profit of ¥39.0 billion was recorded due to a recognition of deferred tax assets in accordance with a reorganization in relation to MBK Energy Holdings USA.- Provision of loss valuation allowance of ¥12.2 billion was recorded in relation to Arctic LNG 2 project mainly due to a downgrade of the Russian government credit rating etc.- MOEX North America LLC recorded a decrease of ¥4.8 billion mainly due to derivative related profit and loss.- Business division at the Headquarters recorded a foreign exchange related loss of hedging purpose in LNG trading business.- For the previous year, Mitsui E&P Italia A S.r.l recorded an impairment loss of ¥23.4 billion for its Tempa Rossa project.- For the previous year, Mitsui E&P Australia recorded an impairment loss of ¥17.3 billion mainly for its Meridian production project as well as Toro/Ragnar and Libra exploration projects.- For the current year, Mitsui Oil Exploration Co., Ltd. recorded a profit of corporate income tax of ¥14.7 billion in relation to a reversal of tax allowance for exploration activities, as well as an impairment loss of ¥7.3 billion for Block M-3 exploration project and profit of ¥2.7 billion in relation to a reversal of tax reserve for overseas investment loss.Machinery & Infrastructure Segment・ Gross Profit increased mainly due to the following factors:- PT. Bussan Auto Finance recorded an increase of ¥7.0 billion mainly due to interest income following accumulation of operating assets based on the recovery of markets.- Toyota Chile S.A. recorded an increase of ¥4.5 billion due to steady sales results and high profit margins based – 8 -on tight vehicle supply.・ Profit (Loss) of Equity Method Investments increased mainly due to the following factors:- MBK USA Commercial Vehicles Inc. recorded an increase of ¥25.1 billion due to good performance in the truck leasing and rental business.- Penske Automotive Group, Inc. recorded an increase of ¥13.3 billion due to steady sales results.- For the previous year, an impairment loss of ¥0.9 billion was recorded for the Nacala Corridor rail & port infrastructure business in Mozambique following the revisions to our various assumptions.- Investments in IPP businesses recorded a decrease of ¥7.1 billion mainly due to reversal of deferred tax assets and mark-to-market valuation loss of power derivatives in Australia, and foreign exchange losses on yen-denominated lease assets and borrowings in Indonesia.- For the current year, a loss was recorded at a vessel owning company due to the sluggish tanker market.- For the previous year, a portion of impairment loss of ¥4.7 billion for equity investments was recorded in relation to passenger rail franchise business in the UK, while a gain of ¥1.9 billion was recorded on reversal of the loss for the current year.・ Selling, General and Administrative Expenses decreased mainly due to the following factors:- For the previous year, an impairment loss of ¥9.0 billion for doubtful debt was recorded, reflecting the revisions to various assumptions regarding the Moatize mine business and Nacala Corridor rail & port infrastructure business in Mozambique.- For the previous year, a loss allowance for doubtful debt of ¥4.9 billion was recorded in the passenger rail franchise business in the UK, while a gain of ¥2.1 billion was recorded on reversal of the loss allowance for the current year.・ In addition to the above, the following factors also affected results:- For the previous year, a gain on sale of the IPP business in North America was recorded.- For the current year, an impairment loss of ¥9.7 billion was recorded, based on the conclusion of sale and purchase agreement for the shares of MT Falcon Holdings S.A.P.I.de C.V.- For the previous year, ¥9.3 billion impairment loss was recorded in the rolling stock leasing business.- For the previous year, impairment losses of ¥4.8 billion were recorded regarding the Moatize mine business and Nacala Corridor rail & port infrastructure business in Mozambique following the revisions to our various assumptions.- Investments in drillship business recorded an increase of ¥4.8 billion due to the reversal of loss allowance in the previous year.- For the previous year, a provision for loss on guarantee of ¥1.5 billion was recorded in the passenger rail franchise business in the UK, while a gain of ¥0.2 billion was recorded on reversal of the loss allowance for the current year.- 9 -(Billions of Yen)Current YearPrevious YearChangeProfit for the Year Attributable to Owners of the Parent68.943.5+25.4Gross Profit183.0124.9+58.1Profit (Loss) of Equity Method Investments20.711.3+9.4Dividend Income3.33.0+0.3Selling, General and Administrative Expenses(112.8)(95.5)(17.3)Others(25.3)(0.2)(25.1)(Billions of Yen)Current YearPrevious YearChangeProfit for the Year Attributable to Owners of the Parent26.92.1+24.8Gross Profit35.521.2+14.3Profit (Loss) of Equity Method Investments26.04.3+21.7Dividend Income1.71.4+0.3Selling, General and Administrative Expenses(23.6)(22.0)(1.6)Others(12.7)(2.8)(9.9)Chemicals Segment・ Gross Profit increased mainly due to the following factors:- European agrochemical company, Belchim Crop Protection NV/SA recorded an increase due to consolidation of the company in the current year.- An increase of ¥5.7 billion was recorded in MMTX, Inc. mainly due to a higher methanol price.- Mitsui Bussan Agro-Business S.A. recorded an increase mainly due to a higher fertilizer price.- Chemicals trading business at the Headquarters recorded an increase mainly due to good performance of fertilizer and its raw materials.- An increase of ¥3.0 billion was recorded in Novus International, Inc. mainly due to price sales and cost reductions.・ Profit (Loss) of Equity Method Investments increased mainly due to the following factor:- Japan-Arabia Methanol Company Ltd. recorded an increase of ¥4.7 billion mainly due a to higher methanol price.・ Selling, General and Administrative Expense increased mainly due to the following factor:- European agrochemical company, Belchim Crop Protection NV/SA recorded an expense increase due to consolidation of the company in the current year.・In addition to above, the following factor also affected results:- For the current and previous year, insurance proceeds were recorded in the business in North America.Iron & Steel Products Segment・ Gross Profit increased mainly due to the following factor:- Mitsui & Co. Steel Ltd. recorded an increase of ¥4.8 billion mainly due to increases in the unit price of steel products and handling volumes.・Profit (Loss) of Equity Method Investments increased mainly due to the following factors:- Numit LLC, which invests in Steel Technologies LLC, recorded an increase of ¥8.7 billion mainly due to the improvement of operating time by the recovery of automotive production in the U.S. and an increase in the unit price of steel products.- Gestamp companies recorded an increase of ¥5.6 billion as a result of the cost reduction due to structural transformation.- 10 -(Billions of Yen)Current YearPrevious YearChangeProfit for the Year Attributable to Owners of the Parent61.512.7+48.8Gross Profit143.0133.8+9.2Profit (Loss) of Equity Method Investments41.113.4+27.7Dividend Income5.65.60Selling, General and Administrative Expenses(130.7)(129.4)(1.3)Others2.5(10.7)+13.2Lifestyle Segment・ Gross Profit increased mainly due to the following factors:- UHS PARTNERS, INC. recorded an increase of ¥5.6 billion due to good performance in the healthcare staffing business.- An increase of ¥5.4 billion was recorded mainly due to good performance in grain trading at a business division at the Headquarters.- XINGU AGRI AG, an agricultural production business in Brazil, recorded an increase of ¥3.5 billion mainly due to an increase in soybean and cotton harvests, and higher prices.・ Profit (Loss) of Equity Method Investments increased mainly due to the following factors:- IHH Healthcare Berhad recorded an increase of ¥12.8 billion due to the effect of the COVID-19 pandemic in the previous year as well as the absence of an impairment loss of goodwill over a subsidiary in India, and increased demand for COVID-19 related services, an operation improvement for the current year and a recognition of deferred tax assets in its subsidiary in Turkey.- Mit-Salmon Chile SpA recorded an increase of ¥4.1 billion due to recovery of the sales price and increase in sales volume in the salmon farming, processing and sales business in Chile.- WILSEY FOODS INC. recorded an increase of ¥3.9 billion due to the good performance of Ventura Foods LLC, a U.S. manufacturer of processed oil food, reflecting a higher soybean oil price and recovery from the impact of the COVID-19 pandemic.・ In addition to the above, the following factors also affected results:- For the current year, a valuation gain of ¥10.7 billion was recorded following a merger of Mitsui Bussan I-Fashion Ltd. with the textiles business of Nippon Steel Trading corporation.- For the current year, a gain of ¥8.9 billion was recorded as a total amount of the gain on partial sales of the shares in PHC Holdings Corporation and a valuation gain due to the deconsolidation of PHC Holdings Corporation from Mitsui’s equity accounted investee.- For the current year, a valuation gain of ¥6.2 billion was recorded for a put option in relation to investment to JSC R-Pharm.- For the current year, ¥9.1 billion of foreign exchange related loss for hedging purposes was recorded in a coffee trading business at a business division at the Headquarters.- 11 -(Billions of Yen)Current YearPrevious YearChangeProfit for the Year Attributable to Owners of the Parent57.650.2+7.4Gross Profit97.7107.0(9.3)Profit (Loss) of Equity Method Investments19.713.9+5.8Dividend Income2.83.8(1.0)Selling, General and Administrative Expenses(67.8)(63.7)(4.1)Others5.2(10.8)+16.0Innovation & Corporate Development Segment・ Gross Profit decreased mainly due to the following factors:- For the previous year, a gain of ¥13.1 billion in the valuation of fair value was recorded at a holding company as a result of sales of its entire shareholding in OSIsoft LLC.- For the previous year, ¥3.5 billion gain for the valuation and sales of shares was recorded associated with the IPO of QD Laser, Inc., while for the current year, a loss of ¥1.1 billion in the valuation of fair value was recorded.- For the previous year, ¥5.6 billion gain was recorded due to a fair value valuation and a gain on shares in Hutchison China MediTech Ltd., while for the current year, ¥1.1 billion gain was recorded as a result of sales of the entire shareholding thereof.- For the previous year, a gain of ¥3.3 billion in the valuation of fair value was recorded associated with the IPO of shares held through G2VP, LLC., while for the current year, a loss of ¥0.5 billion in the valuation of fair value was recorded.- A business division at the Headquarters recorded an increase of ¥3.5 billion mainly due to an increase of occupancy rates of an integrated development project in the 2, Otemachi 1-Chome District.・In addition to the above, the following factors also affected results:- For the current year, MBK Real Estate LLC recorded a gain on sale of a multi-family housing property.- For the current year, ¥5.1 billion gain on sale of land was recorded.- For the previous year, ¥4.3 billion gain of an impairment reversal on land was recorded.3) Evaluation of assets and liabilities for the Russian LNG businessIn Russia, we mainly participate in the LNG business in the Energy Segment, as well as in pharmaceuticals and automobile businesses. For the current year, LNG business recorded a decrease of ¥80.6 billion (pre-tax) in the investments through Other Comprehensive Income and a loss of ¥20.9 billion in the Profit for the Year Attributable to Owners of the Parent due to a reassessment of its discount rate following a downgrade of Russian government credit rating etc. The balance of investments, loans and guarantees as of March 31, 2022 was ¥404.7 billion (investments and loans: ¥222.5 billion, and guarantees: ¥182.2 billion) and the provision on guarantees was ¥18.1 billion. For further detail, please refer to “5. Condensed Consolidated Financial Statements (8) Notes to Consolidated Financial Statements ⑥ Impact of the Ukraine situation on the Russian LNG business”.- 12 -(Billions of Yen)March 31, 2022March 31, 2021ChangeTotal Assets14,923.312,515.8+2,407.5Current Assets5,716.74,207.5+1,509.2Non-current Assets9,206.68,308.4+898.2Current Liabilities3,808.62,701.7+1,106.9Non-current Liabilities5,319.24,991.2+328.0Net Interest-bearing Debt3,338.93,299.8+39.1Total Equity Attributable to Owners of the Parent5,605.24,570.4+1,034.8Net Debt-to-Equity Ratio (times)0.600.72(0.12)(3) Financial Condition and Cash Flows1) Financial ConditionAssetsCurrent Assets:・Cash and cash equivalents increased by ¥64.7 billion.・Trade and other receivables increased by ¥491.1 billion, mainly due to the following factors:- An increase in trade receivables by ¥503.4 billion, mainly due to higher market prices and increases in trading volume in the Energy Segment, the Chemicals Segment, the Mineral & Metal Resources Segment, the Lifestyle Segment and the Iron & Steel Products Segment, as well as due to consolidation of European agrochemical company, Belchim Crop Protection NV/SA in the Chemicals Segment; and- A decrease in the current portion of long-term receivables by ¥39.3 billion, mainly due to loan collection of ¥57.6 billion in the copper business.・Other financial assets increased by ¥567.9 billion, mainly due to market fluctuation and increase in trading volume in the Innovation & Corporate Development Segment, and higher market prices in the Lifestyle Segment and the Energy Segment.・Inventories increased by ¥334.5 billion, mainly due to higher market price and increases in trading volume in the Lifestyle Segment, higher market price in the Energy Segment, increases in trading volume in the Innovation & Corporate Development Segment, and consolidation of European agrochemical company, Belchim Crop Protection NV/SA, in the Chemicals Segment.・Advance payments to suppliers increased by ¥39.7 billion, mainly due to an increase in trading volume in the Machinery & Infrastructure Segment.Non-current Assets:・Investments accounted for using the equity method increased by ¥343.4 billion, mainly due to the following factors:- An increase of ¥296.4 billion resulting from foreign exchange rate fluctuations;- An increase of ¥431.3 billion corresponding to the profit of equity method investments for the current year, despite a decline of ¥354.2 billion due to dividends from equity accounted investees;- An increase in investment balance at MN Inter-Fashion Ltd. due to change to an equity method investee as a result of the merger of Mitsui Bussan I-Fashion Ltd.;- An increase of ¥34.9 billion due to an investment in Mitsui E&P Mozambique Area 1 Limited, which participates in the Mozambique LNG Project;- A decrease of ¥11.5 billion due to deconsolidation of an equity method investee in the fashion & textile business;- 13 — Japan Arctic LNG recorded a decrease mainly due to ¥36.4 billion downward valuation of the equity interest in Arctic LNG 2 Project in Russia due to downgrade of Russian government credit rating etc.; and- A decline of ¥71.9 billion due to partial shares sale of PHC Holdings Corporation and reclassification to Other investments.・Other investments increased by ¥391.8 billion, mainly due to the following factors:- An increase of ¥71.1 billion due to reclassification of PHC Holdings Corporation from Investments accounted for using the equity method, as result of partial shares sale;- As a result of subscription to convertible bonds of PT CT Corpora, the holding company for CT Corp, for ¥67.0 billion;- Fair value on financial assets measured at FVTOCI increased by ¥158.1 billion (including decrease of ¥44.1 billion due to valuation of the equity interest in the Sakhalin II project held through Mitsui Sakhalin Holdings B.V.), and those measured at FVTPL increased by ¥27.5 billion; and- An increase due to participation in Hendrix Genetics B.V. through investment in fund.・Trade and other receivables increased by ¥14.0 billion, mainly due to an increase in the loan at PT. Bussan Auto Finance.・Other financial assets increased by ¥26.0 billion, mainly due to increases in trading volume in the Machinery & Infrastructure Segment.・Property, plant and equipment increased by ¥15.8 billion, mainly due to the following factors:- An increase of ¥46.9 billion (including foreign exchange translation profit of ¥34.3 billion) at iron ore mining operations in Australia;- An increase of ¥28.0 billion due to consolidation of Inversiones Mitta SpA, which is the parent company of the fleet management operating company in Chile;- An increase of ¥16.2 billion (including foreign exchange translation profit of ¥8.6 billion) at coal mining operations in Australia;- An increase of ¥15.6 billion mainly due to establishment of a logistics center by MITSUI FOODS CO., LTD.;- An increase in the chemical related businesses in North America due to the impact of foreign exchange translation and asset acquisition;- An increase of ¥10.0 billion mainly due to the impact of foreign exchange translation and asset acquisition by MBK Real Estate LLC in the USA;- A decline of ¥14.0 billion due to sale of the contract manufacturing businesses of MicroBiopharm Japan Co., Ltd.;- A decline of ¥ 24.2 billion due to asset sales by MyPower Corp, a company engaged in the power generating business;- A decline of ¥28.8 billion due to reclassification of agricultural land owned by XINGU AGRI AG to Investment property, upon conclusion of lease contracts; and- A decline of ¥55.6 billion (including foreign exchange translation profit of ¥41.9 billion) at the oil and gas projects.・Investment property increased by ¥43.8 billion, mainly due to the following factors:- An increase by ¥28.8 billion due to reclassification of agricultural land owned by XINGU AGRI AG from Property, plant and equipment, upon conclusion of lease contracts; and- An increase by ¥11.0 billion due to completion of construction at Hibiya Fort Tower, redeveloped by Mitsui & Co. Real Estate Ltd.・Intangible assets increased by ¥64.4 billion, mainly due to consolidation of Belchim Crop Protection NV/SA, a European agrochemical company and Inversiones Mitta SpA, which is the parent company of the fleet management operating company in Chile, and the impact of foreign exchange translation in the Machinery & Infrastructure Segment.- 14 -LiabilitiesCurrent Liabilities:・Short-term debt decreased by ¥18.7 billion mainly due to debt repayment in the Energy Segment, while there was an increase due to consolidation of European agrochemical company, Belchim Crop Protection NV/SA.・Trade and other payables increased by ¥425.8 billion, corresponding to the increase in trade and other receivables.・Other financial liabilities increased by ¥631.9 billion, corresponding to the increase in Other financial assets.・Advances from customers increased by ¥78.3 billion, mainly due to corresponding increase in advance payments to suppliers and increase of trading volume in the Lifestyle Segment.・Provisions increased by ¥11.7 billion, mainly due to a valuation loss allowance recorded in the Energy Segment.Non-current Liabilities:・Long-term debt, less the current portion, increased by ¥190.1 billion.・Other financial liabilities increased by ¥30.5 billion mainly due to the following factors:- An increase by ¥19.1 billion mainly due to corresponding increase in derivative assets; and- An increase by ¥18.1 billion due to increase in provision on guarantees for Arctic LNG 2 Project.・Deferred tax liabilities increased by ¥103.2 billion, mainly due to the following factors:- An increase in the profit of equity method investments in the Machinery & Infrastructure Segment; and- A decline by ¥18.2 billion mainly due to reversal of tax reserve for exploration activities and for losses from overseas investments in Mitsui Oil Exploration Co., Ltd.Total Equity Attributable to Owners of the Parent・Retained earnings increased by ¥618.2 billion.・Other components of equity increased by ¥453.6 billion, mainly due to the following factors:- Foreign currency translation adjustments increased by ¥396.8 billion, mainly reflecting the appreciation in the U.S. dollar, Australian dollar, and Brazilian Real against Japanese yen; and- Financial assets measured at FVTOCI increased by ¥97.9 billion.・Treasury stock which is a subtraction item in shareholders’ equity increased by ¥17.6 billion, mainly due to the shares buy-back for ¥174.9 billion, despite cancellation of the stock for ¥156.7 billion.- 15 -(Billions of Yen)Current YearPrevious YearChangeCash flows from operating activities806.9772.7+34.2Cash flows from investing activities(181.2)(322.5)+141.3Free cash flow625.7450.2+175.5Cash flows from financing activities(614.3)(487.0)(127.3)Effect of exchange rate changes on cash and cash equivalents etc.53.341.2+12.1Change in cash and cash equivalents64.74.4+60.3(Billions of Yen)Current YearPrevious YearChangeCash flows from operating activitiesa806.9772.7+34.2Cash flows from change in working capitalb(407.4)56.2(463.6)Repayments of lease liabilitiesc(55.6)(58.4)+2.8Core Operating Cash Flowa-b+c1,158.7658.1+500.6(Billions of Yen)Current YearPrevious YearChangeMineral & Metal Resources552.8308.1+244.7Energy280.2123.2+157.0Machinery & Infrastructure144.078.7+65.3Chemicals93.862.5+31.3Iron & Steel Products12.42.0+10.4Lifestyle35.219.8+15.4Innovation & Corporate Development46.655.1(8.5)All Other and Adjustments and Eliminations(6.3)8.7(15.0)Consolidated Total1,158.7658.1+500.62) Cash FlowsCash Flows from Operating Activities・Net cash from an increase or a decrease in working capital, or changes in operating assets and liabilities for the current year was ¥407.4 billion of net cash outflow. Repayments of lease liabilities for the current year was ¥55.6 billion of cash outflow. Core Operating Cash Flow, which equaled cash flows from operating activities without both cash flows from changes in working capital and repayments of lease liabilities, for the current year amounted to ¥1,158.7 billion.- Net cash inflow from dividend income, including dividends received from equity accounted investees, for the current year totaled ¥554.8 billion, an increase of ¥247.0 billion from ¥307.8 billion for the previous year; and- Depreciation and amortization for the current year was ¥296.4 billion, an increase of ¥22.8 billion from ¥273.6 billion for the previous year.The following table shows Core Operating Cash Flow by operating segment.- 16 -Cash Flows from Investing Activities・Net cash outflows that corresponded to investments in equity accounted investees (net of sales of investments in equity accounted investees) were ¥27.1 billion, mainly due to the following factor:- An investment in Mitsui E&P Mozambique Area 1 Limited, which participates in the Mozambique LNG Project, for ¥34.9 billion.・Net cash outflows that corresponded to other investments (net of sales and maturities of other investments) were ¥43.8 billion, mainly due to the following factors:- A subscription to convertible bonds of PT CT Corpora, the holding company for CT Corp, for ¥67.0 billion (net amount of ¥100.0 billion for subscription to convertible bonds and ¥33.0 billion from redemption of corporate bonds);- Sales resulted into cash inflow in the power generating businesses, mainly in MyPower, for ¥17.8 billion; and- A sale of the contract manufacturing businesses of MicroBiopharm Japan Co., Ltd.・Net cash inflows that corresponded to an increase in loan receivables (net of collections of loan receivables) were ¥50.0 billion, mainly due to loan collection of ¥57.6 billion in the copper business.・Net cash outflows that corresponded to purchases of property, plant, and equipment (net of sales of those assets) were ¥156.6 billion, mainly due to the following factors:- An expenditure for iron ore mining operations in Australia for ¥40.9 billion;- An expenditure for the oil and gas projects for ¥35.3 billion;- An expenditure for coal mining operations in Australia for ¥21.4 billion;- An expenditure for power generating businesses for ¥12.2 billion; and- An expenditure for chemical related businesses in North America.・Net cash outflows that corresponded to purchases of investment property (net of sales of those assets) were ¥4.5 billion, mainly due to the following factors:- An expenditure for construction at Hibiya Fort Tower, redeveloped by Mitsui & Co. Real Estate Ltd., for ¥13.0 billion; and- An expenditure for ¥12.3 billion by MBK Real Estate LLC, while there was also sale of multi-family housing properties in the USA by MBK Real Estate LLC for ¥21.9 billion.Cash Flows from Financing Activities・Net cash outflow from net change in short-term debt was ¥82.5 billion, net cash outflows from net change in long-term debt was ¥55.0 billion, and cash outflow from repayments of lease liabilities was ¥55.6 billion.・The cash outflow from the purchases of treasury stock was ¥174.9 billion.・The cash outflow from payments of cash dividends was ¥148.2 billion.・The cash outflow from transactions with non-controlling interest shareholders was ¥98.1 billion, mainly due to an additional acquisition of shares in Mitsui Oil Exploration Co., Ltd.- 17 -2. Management Policies(1) Progress with the Medium-term Management PlanReference is made to our Presentation Material on Financial Results for the year ended March 31, 2022 “Review of Medium-term Management Plan 2023 and FY Mar/2023 Business Plan -Transform and Grow-” on our web site. Reference is also made to “Medium-term Management Plan 2023 Transform and Grow” released on May 1, 2020.[Assumption]ForecastResultExchange rate (JPY/USD)120.00113.04Crude oil (JCC)$98/bbl$77/bblConsolidated oil price$88/bbl$68/bbl(Billions of Yen)March 31,2023ForecastMarch 31,2022ResultIncrease /(Decrease)DescriptionGross Profit1,150.01,141.4+8.6Selling, General and Administrative Expenses(660.0)(596.3)(63.7)New consolidation of affiliatesGain (Loss) on Investments, Fixed Assets and Other50.019.0+31.0Asset recyclingInterest Expenses(75.0)(27.3)(47.7)Higher interest rateDividend Income135.0196.5(61.5)Lower commodity pricesProfit (Loss) of Equity Method Investments430.0431.3(1.3)Profit before Income Taxes1,030.01,164.5(134.5)Income Taxes(200.0)(226.8)+26.8Non-Controlling Interests(30.0)(23.0)(7.0)Profit for the Year Attributable to Owners of the Parent800.0914.7(114.7)Depreciation and Amortization250.0296.4(46.4)Core Operating Cash Flow950.01,158.7(208.7)(2) Forecasts for the Year Ending March 31, 20231) Forecasts for the year ending March 31, 2023・For further major assumptions in addition to oil prices and USD/JPY and sensitivities, please refer to “2)Key commodity prices and other parameters for the year ending March 31, 2023”.- 18 -(Billions of Yen)Year endingMarch 31, 2023Year endedMarch 31, 2022Increase /(Decrease)DescriptionMineral & Metal Resources330.0497.6(167.6)Iron ore price, dividendsEnergy160.0114.0+46.0Oil and gas pricesMachinery & Infrastructure160.0120.8+39.2Absence of losses in previous year,Commencement of operationsChemicals70.068.9+1.1Iron & Steel Products20.026.9(6.9)Steel priceLifestyle50.061.5(11.5)Swing back effect of previous yearInnovation & Corporate Development40.057.6(17.6)FVTPL profit, commodity derivative tradingOthers / Adjustmentsand Eliminations(30.0)(32.6)+2.6Consolidated Total800.0914.7(114.7)(Billions of Yen)Year endingMarch 31, 2023Year endedMarch 31, 2022Increase /(Decrease)DescriptionMineral & Metal Resources370.0552.8(182.8)Iron ore price, dividendsEnergy270.0280.2(10.2)DividendsMachinery & Infrastructure130.0144.0(14.0)DividendsChemicals90.093.8(3.8)Iron & Steel Products10.012.4(2.4)Lifestyle40.035.2+4.8Innovation & Corporate Development30.046.6(16.6)FVTPL profit, commodity derivative tradingOthers / Adjustmentsand Eliminations10.0(6.3)+16.3Consolidated Total950.01,158.7(208.7)The profit forecast for the year, attributable to owners of the parent by operating segment compared to the year ended March 31, 2022 is as follows:The forecast for Core Operating Cash Flow by operating segment compared to the year ended March 31, 2022 is as follows:- 19 -Impact on profit for the year attributable to owners of the parentfor the year ending March 31, 2023March 2023AssumptionMarch 2022ResultCommodityCrude Oil/JCC-9877Consolidated Oil Price (*1)¥2.2bn (US$1/bbl)8868U.S. Natural Gas (*2)¥1.0bn (US$0.1/mmBtu)4.893.72 (*3)Iron Ore (*4)¥2.2bn (US$1/ton)(*5)←153 (*6)CoalCoking¥0.5bn (US$1/ton)(*5)272 (*7)Thermal¥0.1bn (US$1/ton)(*5)110 (*7)Copper (*8)¥0.7bn (US$100/ton)9,1509,315 (*9)Forex (*10)USD¥4.6bn (¥1/USD)120.00113.04AUD¥2.5bn (¥1/AUD)88.0083.33BRL¥0.3bn (¥1/BRL)25.0021.442) Key commodity prices and other parameters for the year ending March 31, 2023The table below shows assumptions for key commodity prices and foreign exchange rates for the forecast for the year ending March 31, 2023. The effects of movements on each commodity price and foreign exchange rates on profit for the year attributable to owners of the parent are included in the table.(*1) As the crude oil price affects our consolidated results with a 0-6 month time lag, the effect of the crude oil prices on consolidated results is estimated as the Consolidated Oil Price, which reflects this lag. For the year ending March 2023, we have assumed that there is a 4-6 month lag for approx. 35%, a 1-3 month lag for approx. 60%, and no lag for approx. 5%. The above sensitivities show annual impact of changes in the consolidated oil price.(*2) As Mitsui has very limited exposure to U.S. natural gas sold at Henry Hub (HH), the above sensitivities show annual impact of changes in the weighted average sale price.(*3) U.S. gas figures for the year ended March 2022 are the Henry Hub Natural Gas Futures average daily prompt-month closing prices traded on NYMEX during January to December 2021.(*4) The effect of dividend income from Vale S.A. has not been included.(*5) Iron ore and coal price assumptions are not disclosed.(*6) Iron ore results figures for the year ended March 2022 are the daily average (reference price) spot indicated price (Fe 62% CFR North China) recorded in several industry trade magazines from April 2021 to March 2022.(*7) Coal results figures for the year ended March 2022 are the quarterly average prices of representative coal brands in Japan (US$/MT).(*8) As the copper price affects our consolidated results with a 3-month time lag, the above sensitivities show the annual impact of US$100/ton change in averages of the LME monthly average cash settlement prices for the period March to December 2022.(*9) Copper results figures for the year ended March 2022 are the averages of the LME monthly average cash settlement prices for the period January to December 2021.(*10) Impact of currency fluctuations on reported profit for the year of overseas subsidiaries and equity accounted investees denominated in their respective functional currencies and the impact of dividend received from major foreign investees. Depreciation of the yen has the effect of increasing profit for the year through the conversion of profit (denominated in functional currencies) into yen. In the overseas subsidiaries and equity accounted investees where the sales contract is in USD, the impact of currency fluctuations between the USD and the functional currencies (AUD and BRL) and the impact of currency hedging are not included.- 20 -(3) Profit Distribution PolicyOur profit distribution policy is as follows:・In order to increase corporate value and maximize shareholder value, we seek to maintain an optimal balance between (a) meeting investment demand in our core and growth areas through re-investments of our retained earnings, and (b) directly providing returns to shareholders by paying out cash dividends.・In addition to the above, share buy-backs aimed at improving capital efficiency should be decided in a prompt and flexible manner as needed concerning buy-back timing and amount by taking into consideration the business environment such as future investment activity trends, free cash flow and interest-bearing debt levels, and return on equity.For the current year, we have repurchased our own stock for ¥174.9 billion in total. Additionally, today we announced a new buy-back program, targeting up to ¥100.0 billion of our own shares to be conducted from May 6, 2022 to September 22, 2022. For details, please refer to the “Notification of Stock Repurchase” on our website.The annual dividend for the year ended March 31, 2022 will be ¥105 per share (an increase of ¥20 from the previous year, including the interim dividend of ¥45 per share).Also, the annual dividend for the year ending March 31, 2023 will be ¥120 per share (an increase of ¥15 from the year ended March 31, 2022, including the interim dividend of ¥60 per share), taking into consideration the Core Operating Cash Flow and net income (attributable to owners of the parent) in the consolidated financial results, as well as the stability and continuity of dividend payments. We set this amount as the minimum dividend under the current Medium-term management plan.We will continue to flexibly and strategically allocate funds for investment in growth and additional shareholder returns (additional dividends and share buybacks) according to the business performance during the Medium-term business plan period.3. Basic Approach on Adoption of Accounting StandardsInternational Financial Reporting Standards was adopted on our annual securities report under the Financial Instruments and Exchange Act for the year ended March 31, 2014 for the purpose of improving international comparability of financial information as well as enhancement and efficiency of our financial reporting.- 21 -4. Other InformationNotice:This flash report contains forward-looking statements about Mitsui and its consolidated subsidiaries. These forward-looking statements are based on Mitsui’s current assumptions, expectations and beliefs in light of the information currently possessed by it and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause Mitsui’s actual consolidated financial position, consolidated operating results or consolidated cash flows to be materially different from any future consolidated financial position, consolidated operating results or consolidated cash flows expressed or implied by these forward-looking statements.These important risks, uncertainties and other factors include, among others, (1) business investment risks, (2) country risks, (3) risks regarding climate changes, (4) commodity market risks, (5) foreign currency risks, (6) stock price risks of listed stock Mitsui and its subsidiaries hold, (7) credit risks, (8) risks regarding fund procurement, (9) operational risks, (10) risks regarding employee’s compliance with laws, regulations, and internal policies, (11) risks regarding information systems and information securities, (12) risks relating to natural disasters, terrorism, violent groups and infectious diseases. For further information on the above, please refer to Mitsui’s Annual Securities Report.Forward-looking statements may be included in Mitsui’s Annual Securities Report and Quarterly Securities Reports or in its other disclosure documents, press releases or website disclosures. Mitsui undertakes no obligation to publicly update or revise any forward-looking statements.- 22 -(Millions of Yen)AssetsMarch 31, 2022March 31, 2021Current Assets:Cash and cash equivalents¥1,127,868¥1,063,150Trade and other receivables2,303,1401,811,990Other financial assets997,862429,986Inventories949,663615,155Advance payments to suppliers183,370143,714Other current assets154,780143,477Total current assets5,716,6834,207,472Non-current Assets:Investments accounted for using the equity method3,387,3713,044,001Other investments2,347,4141,955,607Trade and other receivables319,977305,952Other financial assets167,845141,848Property, plant and equipment2,190,9022,175,072Investment property318,570274,847Intangible assets253,039188,555Deferred tax assets100,743112,055Other non-current assets120,746110,436Total non-current assets9,206,6078,308,373Total¥14,923,290¥12,515,8455. Consolidated Financial Statements(1) Consolidated Statements of Financial Position- 23 -(Millions of Yen)Liabilities and EquityMarch 31, 2022March 31, 2021Current Liabilities:Short-term debt¥281,831¥300,485Current portion of long-term debt410,257450,941Trade and other payables1,739,1491,313,341Other financial liabilities1,003,156371,298Income tax payables68,45658,915Advances from customers202,074123,806Provisions48,58936,909Other current liabilities55,11446,027Total current liabilities3,808,6262,701,722Non-current Liabilities:Long-term debt, less current portion4,185,3753,995,311Other financial liabilities147,031116,531Retirement benefit liabilities38,04540,253Provisions266,161261,365Deferred tax liabilities653,979550,776Other non-current liabilities28,65727,000Total non-current liabilities5,319,2484,991,236Total liabilities9,127,8747,692,958Equity:Common stock342,384342,080Capital surplus376,516396,238Retained earnings4,165,9623,547,789Other components of equity827,441373,786Treasury stock(107,098)(89,473)Total equity attributable to owners of the parent5,605,2054,570,420Non-controlling interests190,211252,467Total equity5,795,4164,822,887Total¥14,923,290¥12,515,845- 24 -(Millions of Yen)Year endedMarch 31, 2022Year endedMarch 31, 2021Revenue:¥11,757,559¥8,010,235Cost:(10,616,188)(7,198,770)Gross Profit1,141,371811,465Other Income (Expenses):Selling, general and administrative expenses(596,311)(606,423)Gain (loss) on securities and other investments-net8,7057,888Impairment reversal (loss) of fixed assets-net(19,117)(52,923)Gain (loss) on disposal or sales of fixed assets-net14,4804,646Other income (expense)-net14,909(13,945)Total other income (expenses)(577,334)(660,757)Finance Income (Costs):Interest income19,99919,877Dividend income196,505103,655Interest expense(47,324)(51,948)Total finance income (costs)169,18071,584Share of Profit (Loss) of Investments Accounted for Using the Equity Method431,263227,910Profit before Income Taxes1,164,480450,202Income Taxes(226,810)(99,821)Profit for the Year¥937,670¥350,381Profit for the Year Attributable to:Owners of the parent¥914,722¥335,458Non-controlling interests22,94814,923(2) Consolidated Statements of Income and Comprehensive IncomeConsolidated Statements of Income- 25 -(Millions of Yen)Year endedMarch 31, 2022Year endedMarch 31, 2021Profit for the Year¥937,670¥350,381Other Comprehensive Income:Items that will not be reclassified to profit or loss:Financial assets measured at FVTOCI163,811477,184Remeasurements of defined benefit pension plans18,94632,514Share of other comprehensive income of investments accounted for using the equity method(19,631)1,671Income tax relating to items not reclassified(55,126)(119,092)Items that may be reclassified subsequently to profit or loss:Foreign currency translation adjustments103,754174,725Cash flow hedges(69,905)(831)Share of other comprehensive income of investments accounted for using the equity method338,09386,445Income tax relating to items that may be reclassified(6,624)(6,951)Total other comprehensive income473,318645,665Comprehensive Income for the Year¥1,410,988¥996,046Comprehensive Income for the Year Attributable to:Owners of the parent¥1,370,647¥964,652Non-controlling interests40,34131,394Consolidated Statements of Comprehensive Income- 26 -(Millions of Yen)Attributable to owners of the parentNon-controlling InterestsTotal EquityCommon StockCapital SurplusRetained EarningsOther Components of EquityTreasury StockTotalBalance as at April 1, 2020¥341,776¥402,652¥3,362,297¥(223,910)¥(65,138)¥3,817,677¥243,255¥4,060,932Profit for the year335,458335,45814,923350,381Other comprehensive income for the year629,194629,19416,471645,665Comprehensive income for the year335,458629,194964,65231,394996,046Transaction with owners:Dividends paid to the owners of the parent(135,476)(135,476)(135,476)Dividends paid to non-controlling interest shareholders(13,982)(13,982)Acquisition of treasury stock(71,337)(71,337)(71,337)Sales of treasury stock(125)(154)28011Cancellation of treasury stock(46,722)46,722–Compensation costs related to share-based payment3041,7712,0752,075Equity transactions with non-controlling interest shareholders(8,060)888(7,172)(8,200)(15,372)Transfer to retained earnings32,386(32,386)–Balance as at March 31, 2021¥342,080¥396,238¥3,547,789¥373,786¥(89,473)¥4,570,420¥252,467¥4,822,887Profit for the year914,722914,72222,948937,670Other comprehensive income for the year455,925455,92517,393473,318Comprehensive income for the year914,722455,9251,370,64740,3411,410,988Transaction with owners:Dividends paid to the owners of the parent(148,206)(148,206)(148,206)Dividends paid to non-controlling interest shareholders(26,260)(26,260)Acquisition of treasury stock(174,918)(174,918)(174,918)Sales of treasury stock(234)(336)57111Cancellation of treasury stock(156,722)156,722–Compensation costs related to share-based payment3041,8822,1862,186Equity transactions with non-controlling interest shareholders(21,370)6,445(14,925)(76,337)(91,262)Transfer to retained earnings8,715(8,715)–Balance as at March 31, 2022¥342,384¥376,516¥4,165,962¥827,441¥(107,098)¥5,605,205¥190,211¥5,795,41