Inpex Aktie

We'd now like to start the analyst meeting of Inpex Corporation. Thank you very much for gathering today despite your busy schedule. My name is Yoshida. I'm from the Corporate Communications and IR unit, and I'll be serving as the MC for the meeting today.

So please allow me to introduce the speakers today. We have Mr. Takayuki Ueda, Representative Director, President and CEO; we have Mr. Takimoto Toshiaki, a Director, Senior Executive Vice President, Corporate Strategy Planning; we have Daisuke Yamada, Director, Senior Managing Executive Officer, Senior Vice President in Financial Accounting. So we'll spend about 35 minutes for the presentation, and we'll spend about 25 minutes for the Q&A session, 60 minute in total. Today's meeting is going to be a hybrid meeting with online participants as well with simultaneous interpretation between Japanese and English. [Operator Instructions] Mr. Ueda will talk about the business overview to start with. And Mr. Yamada will describe the consolidated financial results for the fiscal year ended December 2025 and our forecast for the year ending December 2026. And Mr. Takimoto will give a progress for the sustainable growth of the corporate value.

So Mr. Ueda will start now.

Thank you, everyone, for gathering despite the business schedule today. And for those people participating online as well. Thank you very much. And today, I would like to explain about the financial results as well as the forecast for this fiscal year.

So to begin with, in the results for fiscal year 2025. As you are well aware, our result for 2025 was a net profit of JPY 393.8 billion. But if we adjust for the oil price and foreign exchange rate, what is the number? So that is what we have announced. So on an absolute basis to JPY 393.8 billion, which is the third highest on record. But in 2025, $68 an average the oil price, JPY 149 was the exchange rate on average. And so if we actually do the calculation, and in terms of an absolute number, we were third highest on history. But if we adjust for oil price and foreign exchange rate, the number for 2025 is the best on record. Of course, we are affected by the external factors, and we don't intend to talk just based on those numbers. But I think we have developed ability to generate earnings. And the share price has continued to increase recently as well, your area.

But we are often asked about our share price. Now for myself, and the fact that the share price has increased is probably the great understanding of investors in our company. And so I'm very appreciative of that to begin with. But the PBR is now nearing 1x as well. But if we compare ourselves against many companies in Japan, for example, [ the Prime ] in the Tokyo Stock Exchange, so there are some 86 companies. And so, PBR, on average of 3.8x. Exxon or Shell, the peers on a global basis, the [ DPV ] ratio is around 2x. It's at 2.10x, which I think is the average.

So the oil and gas companies in Japan, if you look at the [ PB ] ratio, 1.3x to 1.4x, I think, is the general level if we take that into consideration for myself, the share price has increased quite significantly. I'm very appreciative of that. But our financial basis, our growth strategy, our shareholder return, if you look at the details, I think we certainly are not second to others. And despite the high level of increase, it's still not a very high level. We feel that we are kind of, I suppose, discounted to, I suppose, peers in that regard.

So this is the highlight for this year. So if we just pick up on the numbers, as I said, for the dividend, JPY 100 for the year. So the total shareholder return ratio is 55.4%. And so -- and we have made somewhat of a conservative outlook for the oil price and for the foreign exchange rate, but we're expecting about JPY 330 billion [ remain ] of profit for this fiscal year. We'll talk about this in more detail later on. You may think that this is somewhat low, but I will come back to explain about that later.

For dividend, what we are assuming for now, annual dividend of JPY 108 per share and total share return ratio of more than 50%, which is our commitment. So we will make sure that we will stick to that. And so based on our forecast at this point in time, we are expecting to pay JPY 108 per share for the dividend.

But let me just talk about the external environment a little and I'll go to the next page. In this page is the one-page description of the changes in an external environment even before the Ukraine war, the oil and gas related external environment for us has changed. And I think we're going through three different stages. So before the Ukraine war, many companies were really focusing on energy transition. So a rapid transition towards clean energy including renewable energy, and they were growing concerns over stranded assets associated fossil fuels. And so when we were speaking with investors, they were saying when are we going to leave from fossil fuel, what will happen if they become a stranded asset? But we are saying that oil and gas will not disappear immediately and renewable energy or clean energy, we will make challenges to all those areas as well, but we're still very much focused on doing the oil and gas business as well. So that was the year that we were in for a while.

Then after the start of the Ukraine War, the energy security became more important, the stable supply became more important. So great emphasis on security and affordability that the [ product ] volume at appropriate pricing was what people had wanted. So not just all decarbonization, but the balance needs to be struck with energy security and that was the new , I suppose, the viewpoint on a global basis after the start of the war.

But what is the situation more recently. Energy addition is the recent -- the popular word so the demand for primary energy is expected to increase by about 30% from the current level to 2050. This is mainly due to electricity, AI or data center has generated a greater demand for energy. In fact, the energy consumption will increase going forward. So on a global basis, will increase. So in that regard, clean energy centered around renewal energy continues to be important. We want to work on that, but that will not be enough.

And so how are we going to address the energy addition? How are we going to accommodate that from the supply side? And this is probably the global energy the transition that we've seen over the past year to 1.5 years. So from energy transition to striking the balance between energy security and now energy addition, and so that was 4 or 5 years with the Ukraine war, the recognition regarding energy around the world has changed significantly. So that was a point that I wanted to mention. So that being the case, and if we look at the various forecast right now, and this is IEA and also [ IEJ ] so how would that things change towards 2050 in regards to the energy. Oil may reach a peak somewhere, but the plateau situation is likely to continue for some time. Natural gas, you can see the demand here. So it will continue to increase towards 2040, 2050. Coal will come down, renewable energy will increase. I think this is the expected situation.

So natural gas are main products. So let's focus on this a little bit more. So right now, the LNG demand on a global basis, and was about 400 million tonnes per year, so right now and what is going to -- this is going to reach 600 million tonnes in 2030. There's 700 million tonnes in 2035 and even up to 800 million tonnes in the future. So more than double the current level.

So where would the demand come from? And please look at the map on the right, and it's quite evident. It's quite clear. It's Asia, we will see a significant growth in demand with a shortage of the supply. This is what is expected in 2035. In the United States, Europe, India and the Pacific Ocean. We will see increases in demand, but we'll see greater growth in the supply. So if we look at the energy balance around the world, where we will see shortage is Asia. So LNG demand until 2040, 2050 will continue to increase in a straight manner and what -- we will see shortage in Asia. So how we go to supply natural gas in Asia? This is the main issue for the energy industry. So this is the basis of our strategy at Inpex. This is the key point. So going to the next page.

So I've been talking about the total picture. But talking about this year for Ichthys, this year, we have 112 cargo shipments [ in ] the production. We had a shutdown in 2025, and there was some delay in the restart up. But overall, compared to the initial plan, it was close to the initial plan at 112 cargo. And the profit contribution was about JPY 270 billion. And for 2026, what are the views and it's kind of hard to understand. But because of the BCM start-up, so talking about this product, Ichthys, the more you produce, we will be extracting from the basement, and there will be less pressure under the ground and with the lower pressure in order to have a long-term stability in the production, there are about 5,000 tons or a booster compressor where the compressor will be used for -- to connect to the CPF, the offshore CPF. And that went well. But in 2026, we don't have a shutdown maintenance, but this booster compressor will have commissioning. And in that process, there will be some stop of the facility. So the production will not be fully recovered. Therefore, it's not like we will have a large recovery in production. More compared to this year, there will be increase, but there are about 10 cargoes in a year. And then for the future backfill and the Train 3 expansion for the new asset acquisition, we are working various activities today. And at this moment, it's still hard to mention the details at this moment. However, at some point in time, we hope we can disclose.

For Abadi, we had a large production in last year. In August of 2025, we had moved to FEED. And today, the FEED work, which is a basic design that is working steadily today at this moment. And by end of this year, some cost estimate will be clear and marketing as well as financing is the activity we have started. For marketing, from many potential customers, we already have discussions. At this moment, as mentioned at the beginning, the Asian LNG is very precious. And many from America and from Qatar, there are many LNG. But from Asia, there's not so many LNG coming out of the region. So the Asia-produced LNG will not have any [ homes straight ] issue and the distance of the ship transportation is short. Therefore, there are a lot of popularity and when it comes to the final binding agreement, we're not able to sign those contracts yet. Wherever there's a lot of needs and we're able to have a good marketing activities. So going forward, as we go into the FID, I would like to go into a more detailed condition negotiations.

And then for the financing. Looking at the recent situation in the global market. For the natural gas, the bank and the finance situation is welcoming more than in the past, and that is working well at the same time.

And for the permits, we are going to receive shortly, the permits.

And for Abadi today, various challenges are still what we are facing, but we are having a steady progress in those activities.

And then for Abu Dhabi, unfortunately, UAE actually a president passed away, and we cannot really communicate well. But the production increase in Abu Dhabi is what we are working on today. Between us and Abu Dhabi, Abu Dhabi as a country, 4 million to 5 million BT or, in some cases, 6 million BT is going to be planed, and we are going to make investments. 2026 investment is large and the biggest reason is Abu Dhabi increasing the capacity. So these are the reasons where we will be increasing production and profit will also be increased. And then outside of that, we have Norway, Indonesia and Malaysia, various activities are in place today. Next page, please.

And then the so-called clean energy, the blue hydrogen area. As you know, in Niigata last year in November, we had the demonstration project for the blue hydrogen in Niigata, Kashiwazaki, we had an opening ceremony in November last year. And the natural gas -- domestic natural gas will be used for the blue hydrogen production and also the CO2, which is the byproduct in that process. The gas field in the Higashi-Nagasaki area is using the CCS technology will be storing those gas and then that is the CCS activities we are planning. And then we have methanation, the e-methane facility together with Osaka Gas, we have the construction in place in Nagaoka today, and we also started the commissioning.

For the renewable energy, as a whole Japan is still in a difficult situation. However, we have the potential energy which is the European company called NL, and it's a subsidiary of NL, but we have a 50-50 joint venture in Australia and through this we have this renewable energy investment in Australia. And this is 838 megawatts of production energy generation based on our stake in the project. And then for Indonesia, we have the Muara Laboh geothermal project. And for the expansion, we have the FID. And then also in the Goto -- offshore Goto of Nagasaki Prefecture, we have the first in kind in Japan, the floating offshore wind farm. And we are also participating in that project.

And then for the electricity side, we have the collaboration with the Hokuriku electricity that we signed the comprehensive contract last year, and we are working on those projects as well.

And for 2026, for the profit, as mentioned, we are JPY 330 billion targeting that amount for this fiscal year. And then the rent is $63 and JPY 151 to a dollar. And both for the oil and the forest, there are a lot of discussions. But today, the oil price is at -- just [ less ] than $70 on the brands. And compared to that, it's quite conservative. But many consultants are saying that today or this year, there will be some supply -- oversupply situation. So considering all of the situation, it's $63 in the assumption, I think it might be slightly conservative, and that's my view. And if you look at the ForEx, it's JPY 151, so it's also difficult to explain. But it's JPY 330 billion per year. But if we are to make adjustments on ForEx in the oil price, JPY 151 and $63 of oil price. If we make adjustment based on next year, and then the one-off, if you exclude the one-offs, and then making adjustments on the oil price in ForEx. If we exclude this one-off profit, the core profit is, let's say, JPY 330 million is JPY 315 million for this year. And then the oil price may go down. So it will be JPY 312.3 billion. So it's mostly the same level as 2025. And the forecast of JPY 330 billion is not so high. So you might say it's too low. However, looking at the current oil price situation, we think we can have this level of profit, and that's the estimate today.

For the dividend, we have JPY 108. And also with the profit going down to JPY 330 billion, why we are still increasing dividend? That might be another question. But my view or our view is Inpex' growth basically is still high. We still have a high level of growth with a sound financial situation, and we have a good steady progress in the project, and we have Abadi. However, this year, we are going to -- we have a lot of investment amount, I think you have seen this year for 2025, overall, they were about JPY 400 billion in total. Next fiscal year, we are good to have double to JPY 850 billion or so of investment. And part of that is pushed out from last year to this year. But these investments will be long term for Abadi. But before Abadi in the mid- to short term, we have the existing assets or the acquisition of assets -- production assets and there will be, for the meantime, growth for the meantime, and that's why we have JPY 850 billion.

And then for these investments, we have a high accuracy in these investments. So we think that with this investment, we can have a growth in Inpex. So for the dividend, we are having the same view as before, so we are going to have a growth, and then we will be returning -- rewarding our shareholders.

And for the profit, because of the oil price, we have JPY 330 billion of profit forecast. But in the mid- to long-term perspective, for the growth of our company. From that direction, there is no change in our views. Therefore, based on that, we will have cash flow and profit also depends on the external environment, but the mid- to long-term growth is still going to happen and we have that confidence. And for the market, the JPY 330 billion is the forecast we have for this year. But just like I mentioned, we have confidence, and we would like to reward our shareholders the outcome of those growth. So that's why we have JPY 108 of dividend for this fiscal year as a forecast.

So that's all for me. Thank you.

So next, Mr. Yamada will provide the explanation.

So last fiscal year, for the year ended December 25, I'm supposed to operate the slide myself. So as the CEO has explained, net profit for last fiscal year was at JPY 392.8 billion or so. So it's a decrease but the oil price has come down, then we had the Ichthys shutdown maintenance. And so there were significant factors to push down in profit level. but we have the profit booster or the balance sheet control or we had a significant return of the income tax. And so we ended up with this number of JPY 390 billion to JPY 3.8 billion. So how are we going to assess this? Were at the oil price in the $60 level and almost JPY 400 billion of profit. And so we have -- this is a proof that we are now able to generate earnings. And as the CEO has explained, if we adjust for oil price and foreign exchange rate, this would be the highest record in history. So we do consider this very positively.

This is the analysis of the revenue and profit. And so you can see crude oil at the top and the natural gas below. The crude oil sales volume increase, mainly due to Abadi and so in terms of unit price, it came down significantly because of the rate coming down. And so the operating -- the profit did actually come down. But for natural gas, the sales volume come down. This was due to the Ichthys shutdown. And for the unit price is linked to Brent down. And so in -- so we saw a decrease here for the natural gas as well. They are more than JPY 4,000. So last year was JPY 393.8 billion. If this is the previous year, it was JPY 427.3 billion, a decrease of JPY 33.5 billion because this is the decrease in the revenue that was due to the oil price and exploration expenses last year, we did not have a successful exploration in Australia last year. So that kind of came back and the divestment on the far right. Now last year, in Southeast Asia, we had earnings from the divestiture. And so these are kind of the comparison against the previous fiscal year. And for this fiscal year, the revenue come down and also exist downstream. And this also links to the oil price, and so this came down in terms of the [ Shell ] profit investment account of an equity method but we saw the JPY 153.8 billion positive impact in terms of income tax expenses.

And so here -- and that is actually included in the others as well, but the profit booster. And so this is the recycling or the investment the benefit in Europe and the Middle East growth, JPY 80 billion in delta, it was about JPY 60 billion. And so this is essentially balance sheet control. So about JPY 80 billion of these earnings are accounted for by that, which is one of the key earning pillars for us.

So the forecast for this fiscal year, JPY 330 billion is what we have placed and so $63 for the Brent price and JPY 151 to dollar. So I may think this is somewhat conservative. Some of you may be aware, but last year, too, so we started with the forecast for the fiscal year at JPY 330 billion. And so the oil price was $75 that we have assumed. But if we look at the end, it was $68. So it was $7 less in terms of the oil price, but we still ended up with where we were. And so about JPY 40 billion to decrease against the start of the last fiscal year and essentially came up with this number of JPY 393.8 billion last fiscal year. So it's not going to be in parallel to what we did last year, but we have a greater ability to generate earnings right now. And as you know, if you look at our balance sheet, we have quite a large amount of fixed asset and we have the financial -- the unrealized gains or losses included. So things that we can do now and can do now, we have those, the profit, booster thing, but we can't include all of that at the budget at the start of the fiscal year. And so you kind of go through the year to turn those into actual earnings. So JPY 330 billion is kind of a kind of starting point in that regard.

And these are the factors analysis, and the biggest is the oil price. But in the middle, you have the Ichthys, please have a look at this. So Ichthys, JPY 4.9 billion of increase and there is some up and down in this number. So last year, shutdown impact occurred. So we had about drop of JPY 60 billion or so in the sales volume, but that has recovered. So that is an increase of JPY 60 billion. But on the other hand, as explained by our CEO, we have the booster compression module connection. And by having this, there will be some drop in the utilization.

And then we also have the oil tax. Last year, it was only a 6-month effect but this year, it will be a full year impact. So about JPY 16 billion of decline in profits, and including that, it's plus JPY 4.9 billion.

And then for the profit booster next year -- for this year, CEO [ recycling ] about JPY 90 billion. And in Delta, these are the numbers. So that profit, in total, will be JPY 330 billion. So I might be repeating myself, but these are just a kind of a number we have for this interim.

And then for the sensitivity of the oil and ForEx so it's JPY 5.5 billion for the oil price and the JPY 3 billion for the ForEx.

And then next is the investment. So the cash flow before investment or exploration is shown. But this year, for the growth investment, JPY 850 billion is a large investment we're expecting this year. Last year was JPY 386 million but we have about JPY 463 billion of increase, which is for the pillar number 1, which is mainly around oil and gas for the investment.

And as you know, Abadi, before going to Abadi, how much we're going to -- how we're going to generate profit is the question. I think there were some questions. But having these investments from the late 20s to early 30s, we'll have the outcome from these investments. So we'll be focusing on investment this year. However, this JPY 850 billion is a large amount. But if you look at the bottom left, in the midterm, we had the plan -- interim plan in '25 was JPY 380 billion, but this year is this amount. So it might be a large amount, but it's a 25% over the 2-year period. So it's a run rate -- based on the run rate.

And as you can see, this is the overall breakdown of the JPY 850 billion. So the blue, the dark blue is the Abadi investments. And then the exploration as well as the increase in capacity. So for the Abadi -- Abu Dhabi is an investment. And then the new investment, we cannot mention the detail here yet, but the acquisition of interest and the core area, mainly in Australia, Indonesia, Asia, Norway, Japan will be investment -- making these investments overall.

And then ROIC, unfortunately, will be some decline this year. It was 7.3% last year, but it's going to go down to 6% or so. And ROE, although it's not stated here, we have about 7% this year. And I'm sure there are [indiscernible]. But in terms of the total equity being so large. So if you work on that, it might increase the ROE. But we are not going to lower the equity by lowering the total amount by buyback. We are not thinking of that at this moment, but we have a trustee borrowing, the corporate finance and depending on the credibility of our company, we have to do financing. And considering that, we have to have a [indiscernible] amount of equity and there might be different views from the creditors compared to the investors. But from the creditor standpoint, we should have a certain amount of equity or else it will be difficult to finance. So we have to maintain a certain amount for the financing standpoint.

So that's all for me. Thank you very much.

So please allow me to explain about sustainable growth of our corporate value. And in March 2023, the Tokyo Stock Exchange has made a request that we need to work on realizing the management of the company in view of the share price as well as the efficiency. So we were working on that and so I'd like to talk about the -- what we've done last year as well what we will be doing this fiscal year. So next slide, please.

So what you can see on this slide is looking at the transition in the share price and the PB ratio. Dark blue is the PB ratio, green is the share price. And at the end of 2022, our share price was JPY 1,396, and that 0.4x was the PB ratio by at the end of last fiscal year. Our share price was JPY 3,127 and PB ratio of 0.77x. And -- so based on the share price, we were at JPY 3,998, so 0.98x, it was where we were at as of today. So as you can see here, and the reason behind why PB ratio increased. And so we have some ongoing initiatives as well as changes in external environment.

So first of all, so we have been strengthening shareholder returns and dialogue with investors. We have also worked on enhancing capital efficiency. But above all, there's been significant change in external environment, particularly the natural gas and LNG importance has been revisited and that has now been recognized by the market and our core business, the natural gas LNG business, the importance thereof has laid the share price to increase, which has led to improvement in the PB ratio. Next slide, please.

So here, we are talking about enhancement of capital efficiency as well as building confidence in our future growth. And as we have been explaining so far, in the early 2030s, the start of Abadi, and that is the significant expectation for our next large growth but from August last year, as you can see on the slide, we have entered into the FEED phase for Abadi. So now we are nearing the start of development for Abadi. I think the market has recognized that. And in the early 2030s, when we start the Abadi production, in the meantime, what type of growth the story can we be paying. And that is the more immediate issue for us. And when we speak with investors, then -- of course, performance is not bad. Shareholder returns is not bad as well. And that is a comment that we received from investors and for IR meeting and the investors have expressed their satisfaction. But the growth story, until we start production from Abadi, how are we going to come up with that? And that may be the only maybe the issue that we need to address. And so acquiring new assets by working on these in a concrete manner, we want to be able to build that competence in the market in regards to our future growth. And we need to also enhance the earnings base. So we will continue -- we are continuing steady production increases in regards to our project in Europe and Middle East and also enhancing our profit base through a profit boost [ 500 ]. We intend to lift our ROE by some 1% over the next decade. I think we have the ability to do that. And if you look at the graph on the right, and Abadi investment is likely to increase only from 2028 into the early 2030s. But even in that period, we still are able to invest for growth as well as make returns to the shareholders. And of course, debt will increase somewhat. The net debt-to-equity ratio should be controlled within 0.3x to 0.8x and are able to do both the investment for growth as well as making returns to the shareholders. So that is what the graph on the right show.

So the growth investment, we talked earlier for a single year of investment from Yamada-san, but the midterm vision that we announced last year, and we have a 3-year investment plan, which is JPY 1.9 trillion. And growth pillar #1, we have the natural gas and LNG investment, especially and there will be, over 3 years, the amount to JPY 855 billion over 3 period and then we have the Abadi exploration expansion, new asset acquisition, JPY 938 billion for gross pillar #1 as well. And then for growth pillar #1 investment, a JPY 1.9 billion and then [ 2 and 3 ] are shown. These are the amount for investment for growth pillar #2, #3. So in the vision, as we set the target, the operating cash flow, a 60% increase or the increase of the business is what we like to achieve going forward. Next slide, please.

And on the left-hand side, you have the shareholder return and also increase in our dialogue with our shareholders. On the left-hand side, the blue line is the share price trend from 2020 and onwards. In the gray [indiscernible] is the Brent oil price trend over the 5, 5 or 6 years. As you can see, in 2024 from the latter half of that year to the early 2025, and since then, just like an increase in the allocator space, the oil price is going down, but the stock price is going up. So one of the factors is in 2022 onwards, we have started to do a shareholder return of more than JPY 200 billion. And as mentioned before, about the business environment change, practically reducing GHG and furthermore, having energy security as well as affordability of energy. And those are the -- coming from natural gas and LNG and there's more importance of these resources. Therefore, that's the main reason why we have been accepted, we believe. And of course, we don't think that's the only factor. But for the retail investors as well compared to 2019, there is an increase by 17x. So we think that it might be a difference in our credibility and also the fact that we are able to have a frequent dialogue with our investors and explain about the business versus the expectation from the market. We think there is more deepened understanding towards our business and operations. With PBR onetime, we cannot be satisfied and that was explained from our President and CEO. But with that in mind, we would like to have awareness of these capital costs going forward.

The right-hand side, the increase in the dialogue with our investors. Last year, we had 495 dialogues or interviews with our investors in [indiscernible] as you can see on the bottom right, the various initiatives as an example, from our dialogue, there are about [ 6, 7 ] items. So these are the initiatives that we have also been evaluated for our investors. And as explained we have 3,900 or so share price today. So with this, we have been evaluated, and we think that our understanding of our business as well as the support to our business has increased. So I'd like to have these initiatives continued, so that the stock price and also the capital cost will be in our mind through our operation.

So that's all for my presentation.

We will now like to receive questions. We will receive questions from this venue first. Then after that, we will receive questions from Zoom. [Operator Instructions] So I'd like to invite questions from the floor.

Okay. So I have two questions. The first question is to do with the core earnings, JPY 330 billion. the analysis that you have explained. This was something that we've learned for the very first time. So based on JPY 330 billion. And on Page 16 today, and based on JPY 330 billion, ROE, 7%, the ROIC of 6.0%. Now your ROE medium-term target I don't think you have the quantitative number, but to be more than the equity cost tend to be in excess of WACC. I think that is how we have explained. Now on Page 16, you actually did show WACC and the sales equity cost, the 8% and 6%, respectively. So based on the core earnings, the shareholders' capital, the [indiscernible] this is lower. And so for ROIC as well, unfortunately and 6% -- WACC 6%, and the conclusion is that you have not generated corporate value. And so based on core earnings, ROE to be more than 8%. So we are right through the midterm data plan right now. Now can that be realized before Abadi starts generating earnings? So that's the first question.

And the second question is in regards to the free cash flow. Now last fiscal year, you explained about the investment amount. But in terms of investment cash flow, free cash flow was more or less neutral or -- and this fiscal year, the free cash flow because we are going to be increasing investment, so likely to be slightly positive or even negative. But -- so if we define the investment cash flow has been the free cash flow last year to this year, what are the changes? So that's my second question.

So I will start. So the CEO has explained about the core earnings. And let me explain the logic behind that, and I think that was described on Page 10. So the core earnings is something that we have shared with you for the very first time and JPY 330 billion for this fiscal year, we wanted to say that this is not a bad number. So we ended up with JPY 393.8 billion last year, but the oil price and the exchange rate for this fiscal year, $63 and JPY 151. So if we actually modify to that. And if we exclude for the one-off earnings last year. So if we exclude that, then we end up with [ JPY 312.3 billion ], the JPY 330 billion this fiscal year. And so the oil price and exchange as I say, if you exclude for the one-off number, we end up JPY 315.2 billion. So you may as though the earnings has come down, but the core earnings itself hasn't really changed. That is what we wanted to communicate through this number. ROE and ROIC. Now we are not using the core winnings as a basis. So we are using net profit for that. And of course, one-off earnings, so that it would be positive or negative from year-to-year and the ROE, the ROIC is calculated based on that. And as we have indicated, and the JPY 330 billion for this fiscal year, ROE is 7%-- what we are calculating, so 8% for the equity costs will fall short of that. [ ROIC 2 ], we now disclose this number. For this fiscal year, based on JPY 330 billion, we will be at 6% which is more or less the WACC level. So based on these numbers, we are not responding to your expectations.

But the JPY 330 billion is budgeted at the fiscal year. So that's the performance at the start of the year. But like with last fiscal year, throughout the fiscal year, and there are a number of things we have in mind, but not something that we can share with you at this point in time, but we started with JPY 350 billion. we'll give a full year forecast in May or [indiscernible] later in the year as well, and we hope to be able to increase that for our ROE and ROIC at those stages. We're hopeful of those numbers increasing. We need to give it a go, but that's the reasoning behind this number for the free cash flow, maybe we should go to the investment page, which was this page. So the December 2025, this is cash flow before acceleration and investment cash flow, if there is a difference. This is more than JPY 130 billion, so positive. So we had that much of free cash flow, which was quite a steady number, but we were actually making profit. So based on this budget, investment is JPY 850 billion. So that's the investment. And so free cash flow will be negative. In other words, so we are investing more than the operating cash flow. And so unless we raise money, we will not be able to fund investment free cash flow is negative for the first time since March 2019. So have been making returns to shareholders based on our own cash. But this year, we are going to make a large investment. And so 50% of return. That means that we need to do JPY 156 billion, so we need to raise some money. So free cash flow becoming negative as to whether this is going to be a major issue for our management, not really. And so we will raise funds for the investment. So we raised debt, and I think that's quite healthy. But the key is the financial discipline in doing. So I didn't touch this before, we want to invest this year even if we actually raise some debt. The net ratio will still be at 0.39x. And we are saying that the financial discipline is between 0.3x and 0.5x. So we are going to raise debt to the investor. And we feel that this is not going to be a financial, I suppose, issue. So I'm looking forward to the additions to the core earnings.

So I'd like to ask two questions. So number one, this time, the investment plan compared to last year, there will be an increase -- significant increase compared to last year. So as shown on Page 20, looking at these investments, the existing project investment to increase capacity, Abu Dhabi and the Middle East. You mentioned about the increase in the production capacity. But if you can talk more in detail about the content of those investments and also the profit contribution, I think this is for the growth before Abadi. So I think for these existing projects, investment. You can -- if you can talk about the time frame as well as the maybe not so much in size, it might be difficult, equity IRR, in the mid-10% range, whether that is still the case. And in terms of the time line and also what kind of content of investment and how much contribution from the profit side will be made in the time frame. So it's a Middle East project. So I'm sure it's difficult, but if you can maybe give us more details on that. That's number one.

And then the second question is regarding the Abadi project, the FEED started from summer last year in a full scale. And by end of this year, is there any expected milestone for this project in this fiscal year? So in 2017, that is the target year. But in '26 -- between the year '26 with the information government, is there any timing for negotiations or any milestone of such or with the lender, if there's any agreement or any timing for agreement? So in 2026, is there any milestone related to Abadi? If you can explain what is the expected milestone for this fiscal year.

So I'd like to explain first. For that investment question, JPY 850 billion of investments. So these are quite a significant number in the past several years. But Abadi exploration and increase capacity as well as the new investment. So Abadi is the investment for Abadi, and then exploration is as you can see. But expansion of existing assets, these are the investment for the increase in capacity of existing assets. For example, Abu Dhabi increase in the production, we have investment there. And then when it comes to new asset acquisition, these are acquiring new interests or M&A might also be included but these are the type of investments. So for the increase or expansion of the existing assets, we have JPY 282 billion and the new asset acquisition, JPY 106 billion. So in terms of the area, we have the Australia or Perth or Ichthys, the connection or tie-in investment. And then the growth area, which is Asia, in Abu Dhabi or Japan. The oil and gas mainly where we have quite a diversified investments. And then when it comes to exploration, it will take some time for these investments. And we cannot give details around the number of projects. But quite a quick area of investment we also are expecting this year and next year, where we can generate profit quickly from such investments. Those are expected as well. And for these investments. Cash flow actually tends to go up and down. But in 2030, early 2030s with JPY 850 billion times 10%, they'll be up and down, of course, but that's the amount that we can expect of profit or cash flow contribution and that's the expectation. Of course, depends on the project, there might be investment upfront, and that might be the case. But basically, we have the operating cash flow. And then as our CEO mentioned earlier, until we go to Abadi, we have the bridge, and that is the imminent challenge we are faced today. So last year to this year, we have accelerated activities. The environment is not bad, $60 or above with oil price and the acquisition of interest and those new investments are a certain amount we can expect to make investments in, and those are the target. Free cash flow will be negative. And with the financing, even we have to finance, we'd like to try to make these investments for the future outcome.

So the milestone for Abadi, I'd like to answer that question. So basically, this year, we will do FEED. So whether we can call it milestone, we don't know. But the biggest is the environmental permits AMDAL is what we call, but that's one of the biggest milestone. And from the nation government, if we can obtain that from the government, various activities can start. So that's one milestone we're expecting. And then AMDAL. After receiving AMDAL permit, this project is in the rural area of Indonesia. So we have to have engagement with the community and increase that engagement. So those are the milestones we're expecting. More than that, we have been marketing activities for [ LOY ] we have already received many agreements. But having that in detail agreements, so that kind of interim activities, the key term sheet is how we call it, but the kind of a term sheet is something we have to work in a more detailed manner. And those are things we are expecting as one of the milestones. And with the Indonesian government, the negotiation on the conditions should come after the FEED outcome, and we cannot go without the outcome, but we also have preliminary activities. What kind of project cost and how much we have to pay, that can bring storming activities already started. So this year, these are the negotiations that will -- or discussions that will go in a more full scale. And as for the investment, as Yamada-san said, in the short term to midterm profit, we have to secure those profit and those are important as well.

And there are still many things or some things we cannot mention today. But when we say exploration, we have 6 blocks of exploration in Malaysia that we have already acquired. And we will have about 9 drilling this year. But if there's a lot of pipelines in Malaysia. So if we are able to have a success, we can have a mid- to long-term increase. And we also have Norway -- Pandion with the company called Pandion. We were able to acquire the stakes or interest. And those are things that will increase the profit over the short term to midterm to increase the production as well as profit.

And then we also have the assets, and we have very some considerations of these assets. So once these become more specific, then we have this midterm profit securing until Abadi. So this year, we have a certain amount of assets or budgets, but Abu Dhabi is one of the largest, but we have these various investments in plan.

So I also would like to ask you a question. The first question is related to investment. And I talk about the interest acquisition. So in terms of interest acquisition, you said the environment is favorable right now. But at the same time, buyers -- sorry, the sellers, if my memory serves me correct, there are always, I suppose, taking quite an aggressive stance. So there is always the fear of buying -- end up buying something that is not too profitable. So in regards to the new investment, could you give more description in regards to the environment?

And the second question is regards to the profit booster. I wanted to confirm for this fiscal year, sorry, for December 2025, I think the level was about JPY 80 billion. Is that correct? And for December 2026. So you said the profit boost JPY 500 [ billion ]. So the basis is, I think -- you were saying kind of a starting point. The base is JPY 50 billion. And so the JPY 50 billion is already included there may be others that you may be able to add on top. I don't know how much, but you expect for further addition to that. Is that the kind of thinking that you have? So that's my second question.

So first question in regards to investment, as to whether the environment is favorable, not biased may be quite aggressive. But as to whether the environment right now is favorable for buying things or not, I don't know for sure. But as I said before, we need to place the natural gas as the [ cause ]. So there are many, I suppose -- the players wanting to sell or buying to -- wanting to buy the natural gas assets. So you're probably right, the timing to consider right now. Of course, we set a hurdle rate for the oil and gas business. So the country list does differ from country to country. So we look at the details. But generally speaking, we are looking at the mid -- team as a hurdle rate. So for this fiscal year, that would be the time of project that we seek to invest in. So this is an issue of investment discipline so we are very much mindful of that.

So please allow me to respond to your second question. Profit boost of [ JPY 500 billion ]. And we've discussed this with you for the first time last year. And one is TA recycling. And so what is included as a part of the foreign exchange translation adjustment, this is put through [ PL ]. And the other is the investment incentive effect. And so last year, I've mentioned two numbers, JPY 80 billion and JPY 60 billion. Now what they are is that from the accounting -- these two have contributed to profit by JPY 80 billion. But when we speak with you, we need to kind of define them. So this is something we started from 2025. Now in 2024, we did have those -- the investment -- investment incentive effect. When we speak about the profit boost, on a gross basis, it's JPY 80 billion or so. But in terms of the delta, we need to subtract for the number from the previous fiscal year, which was about JPY 20 billion. So that's the reason we end up with JPY 60 billion. So we actually shared with you two numbers. So from the settlement of account perspective, you've been hearing JPY 80 billion, but the number that we have, speaking with you, we've removed the delta portion so it's JPY 60 billion. And so against the profit-based [ JPY 500 billion ] last year, we were able to do JPY 60 billion. So that was the accurate situation. And that number is JPY 90 billion this fiscal year. And so JPY 10 billion more than last year in terms of material recycling.

Now -- so throughout the year to generate additional earnings, of course, many things. It's not just based on the balance sheet control, but the reduction or other factors generating earnings. But one thing that we can think about is that, in our case, the tax expenses. As you know, JPY 800 billion or JPY 900 billion, and that's the kind of level of tax that we are paying. So to generate great -- the tax benefit. Of course, we need to pay tax properly. But we shouldn't pay tax that we shouldn't be paying and so paying tax properly means that they're generating proper tax benefit. So we need to target for that. So in that regard, we have a significant balance sheet. Our balance sheet is in excess of JPY 7 trillion. And so for example, our currency translation, all fixed assets. And so given the fact that the oil price and FX are changing on a daily basis, so the financial, our profit and loss, the taxation, profit or loss or taxation based unrealized gains and losses. We have all of these generating at [ order ] times. How can we combine them? So we need to control the balance sheet to generate earnings. And this is something that we intend to do, of course. And so we report based on the IFRS. And so our balance sheet is accurate. And so we do have the balance sheet to reflect the actual situation. And also [indiscernible] we have the PL, the profit and loss. And so our balance sheet is so correct. And so we need to come up with a P&L, which is accurately reflecting the difference. So what's realized on the balance sheet unrealized profit and [ look ] and the financial profit and losses and taxation profit and loss, we need to combine them well. That is one way of putting a financial position and starting point and the expectations to see additions to that. So inclusive of all of that, we are hopeful generating earnings in that way. I hope I answered your question.

So I'd like to ask two questions. Number one is about Ichthys. The low pressure BCM with the connection, there will [ be not ] an increase in profit. But maybe I didn't recognize this before, but I think we never heard this, so we haven't heard this before. So this BCM with this utilization, we won't have so much production this year. Was that planned from the past or started from '26 or something that you have started to look at this year or recently? And whether that will be fully recognized next year or whether there'll be some shutdown in maintenance at some point. So if you can give some update about the production profile of Ichthys.

And then the second question is on Page 17 about the forecast for this year, the impact of oil price. JPY 556 billion of minus impact based on the oil price assumption and the past assumptions. I think there are a lot of a large impact. So maybe the timing issue, maybe it's a timing issue or -- as you mentioned, the JPY 330 billion is the number you have. But whether there will be some conservatism in this number as well. So you'd like to ask whether that's the case or not.

So the production profile of [ Ichthys ] over the BCM connection. Of course, this is something that we have been expected as a company. And talking about the low pressure module. So even though the pressure in the well will go down over the future, we will still have a production secured. So for that, we have a booster compressor which is [indiscernible] to the CPF, the offshore facility, and we have this installed. So at the beginning of last year, we started that installation. And then this year, we have started decommissioning and after installation, we have to collect the lines. So there are huge lines and pipelines in a huge amount of workload. So to do the commissioning, that was the plan before. And then with the actual commissioning, how much time will require and how much drop in production we will have those forecast is something that we were able to come up recently. And so we have not mentioned those details in the past. But those work is something that we have been expecting from the past. And then this is sort of a one-off factor. And of course, the production amount or the -- if the commissioning will be delayed, then that would also impact the schedule, but that is a one-off. And then for 2027, we are going to start planning for this, however, but some sort of maintenance will be required. So how those will be unfolded is something we have to discuss and decide and we have to put that together.

And the second question. The initial budget with the oil price of JPY 52 billion impact. So this is including the natural gas, LNG, the lagging factories included. So if you look in detail, there are about JPY 30 billion on the oil price. And then the -- based on the dropped oil price, there are 4 months delay. So that's the LNG marketing or sales. And the spread is also being adjusted. So that's about a JPY 20 billion of impact. So in that sense, JPY 50 billion breakdown is the breakdown as mentioned. And then from the beginning of this year, if you look at from the beginning of this year, the sensitivity multiplied by these 6.8x to 6.3x the sensitivity, that's not the case. But initially, we have the oil price and then looking at the lagging factor. So in total, we have the oil price sensitivity and JPY 52 billion or so. And then this is different from the earlier factors. But just plainly looking at the oil price, that is the number we have. So thank you very much for the answer.

I also have two questions. And I wanted to ask a little more about the low-pressure production facility and the impact of this is likely to come in the first half of the year. Because I wanted to understand the scheduling aspect.

And the second question is in regards to cost. Production cost forecast is shown on Page 31. If you could give some background information to that not including royalty we expect some increase. But if you include royalty, it will come down slightly. So could you explain the background to the extent possible?

And in regards to the low-pressure production facility or the booster compressor module, BCM, it's not like a shutdown maintenance stopping everything to link the equipment. So we are actually doing a link up while being in operation. When you are linking pipeline, we need to stop the related facilities. And once the line up, you start the operation again. And so it's not the case that you kind of shut down for a period, we will connect and restart. So it's a little bit different from that type of shutdown maintenance in that regard, where we're going to do this rather than it being a first half of the year or the second half of the year, we are going to do this work gradually throughout the year. So in terms of our cargo number, we are expecting about 10 cargo [ 3 months ] that is the assumption that we have for this fiscal year. And so reflective of this impact, that's the kind of level of production we're expecting for the year.

In terms of the production cost per barrel, and $5.3 was expectation last year and the production volume in the Europe and the Middle East, liquids production volume and OpEx related to [indiscernible] the balance that will have the impact on this number. And so those, including royalty or not, the royalty will have more impact in terms of the European than the Middle East. How much contribution from that business will have that impact. So -- and last year, those that include royalty coming down and those increasing that does not include royalty that the Australian or the associated production volume, that is having the impact. So the cost increase overall is not what you're expecting. It's just a change in balance where the increase from -- the production of acquired cost is higher, that -- yes, for cost reduction, the excess project that we are the operators, we are working on further cost reduction. And so the excess portion, we will aim for further the cost reduction. But we have already made a significant progress on this, and we are currently nearing the lowest level so to what extent can we still do. And also overall, their production volume. So it's the balance of these two, that is reflected in these numbers.

So one question. So this time about the increase of dividend against the growth in the business and the cash flow is returned and I think that's really welcomed. But JPY 108, the level of this dividend. What kind of discussion was made and how did you come to this decision? I think it was overall [ compensative ] discussion. But in the past, 30% of payout ratio was the typical case. But this time, from that, it will be 40% or less of increase in payout ratio. So what kind of discussions were in place? And then how did you come to the JPY 180? It's not really a clear number. It's not so clear, maybe it's kind of a halfway, but how did you come up with that number?

Well, there are a lot of discussions. And one thing is the EPS already profit -- against the profit this year, how we're going to return to our shareholders. And this time, JPY 330 billion, let's say. With that, it will be 50% total payout and then [ 156 ] or so. But if it's JPY 108 per share of dividend, it's JPY 120 billion of cash required, and there is a difference between those numbers. Therefore, of course, the JPY 330 billion is just an outlook so we don't know whether that will be the exact number. But with the certain visibility, if we have JPY 108 per share of dividend, then in order to achieve that 50% total payout in the interim, we may have an increase in dividend or have a change. But we wanted to have that kind of room in the dividend. That's one number. One idea.

And the other side is, as we're not increasing so much profit, so we can set the same level of dividend as this year. But because of the inflation or in the past, there was a deflation. So the dividend yield in the deflation, let's say, [ Fx ] was 3%, that would lead to returning to our shareholders. But then with the inflationary environment, there will be a decline in [ Rio ]. So it's not a situation -- welcomed situation. So that's why we came up with a number of JPY 180 of share this time.

So we'd like to conclude the [ session business ], we have reached the scheduled time. And for those that we were unable to respond to, please contact our IR group. Thank you very much for your participation despite your busy schedule today.

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

So I would like to start the earnings call of Inpex Corporation. I thank everyone for coming despite your busy schedule today. My name is Yoshihiro, General Manager of the Corporate Communications unit and I will serve as MC for the meeting today.

Please allow me to introduce the attendees from Inpex Corporation. We have Mr. Takayuki Ueda, Representative Director, President and CEO. And we have Director, Senior Managing Executive Officer, Senior Vice President, Mr. Daisuke Yamada; and we have Director, Senior Managing Executive Officer, Senior Vice President, Mr. Toshiaki Takimoto.

And for the program today, we'll spend about 35 minutes to give the presentation and spend about 25 minutes for Q&A, 60 minutes in total. And today's session will be held in a hybrid manner with our online participants with simultaneous interpretation provided for Japanese and English.

For those people participating through Zoom, please select the languague of your choice. Also for the presentation material, please choose the language from the button at the top of the screen. And Mr. Ueda will first give the business overview and Mr. Yamada will then explain about the consolidated financial results for the 6 months ended June 30, 2025 as well as the consolidated financial forecast for the year ending December 2025. So Mr. Ueda over to you.

This is Ueda, President and CEO. And thank you very much for coming despite your busy schedule as well as in the rain the weather for the first time in a while. So please allow me to report the business overview.

So please look at the first page. So the overview for the first half of the year. In regards to the detailed numbers, Mr. Yamada will explain later. And so we ended up with the JPY 223.5 billion, improving by about JPY 10 billion. Despite the volatile external environment, I think we have been able to realize the profit pickup. But above all, the stable operation of the Ichthys LNG is a big factor, and we were able to ship 12 cargoes per month for 3 consecutive months this year. And this is the first time that we have been able to ship at that rate on record.

In the second half of the year, the oil price and the FX remains to be very volatile. So there are uncertainties, but we are expecting stable operation. And so for the full year, we are expecting JPY 370 million of profit. And this was the upward revision that we have made for the forecast excess LNG. We have a scheduled shutdown maintenance and a large milestone.

We have started the FEED work for Abadi LNG. There are various risks, and you can see number shown on the slide. And what we are often asked about is the risk regarding U.S. and the Middle East. As you can see on the slide, we currently do not operate in the United States, and we don't export to the U.S. either. And so there is only a very limited impact directly but based on the portfolio for us, which is centered around Oceania and Asia, we are likely to receive the impact.

And the Abu Dhabi project continued to perform quite stably and haven't experienced any major issues. As for the oil price, we are seeing volatility continue. But if you look back over the first half of the fiscal year, despite it being stable, but it was still relatively stable. So at the end of the first half of the year, the average was about $70 Brent. That was the average for the first half of the year. So this was stably higher than what we had expected.

Now going forward, there are still a lot of uncertainties. But what often is talked about is the impact of the Trump tariff from the state will have impact on the global economy and that could potentially push down the oil price or that OPEC+ has announced that they are going to ease the reduced production that could potentially cause the price to come down in terms of oil. But the Asian economic condition remains to be quite strong based on certain opinions and geopolitical risk like the Ukraine conflict, there are those uncertainty factors and that those are likely to continue.

But when you look at the futures market, it hasn't really come down very much. And so the assumption for oil price going forward despite the volatility, we will probably see a gradual decline towards the end of the year at the $67. And so we have been able to see quite a stable profit going forward. Now this -- one of the factors behind the stable profit, and this is more medium- to long-term perspective, but our financial structure, there are a number of factors to change this in a number of ways. So please allow me to explain what they are.

Now on this occasion, at the year-end, the profit, are we looking at this for the full year? On the left, you can see the final profit transition in the past. And the highest level was the JPY 460 billion in 2022 and the JPY 420 billion last year is the second highest and the JPY 370 billion we are assuming for this fiscal year will be the third highest, but the oil price has been higher or the yen may have depreciated. So there were various factors.

And so what we are showing on the right here and we're expecting 69-year average for the full year for oil price, $70 in the first half of the year and 65 years for the second half of the year, the average is $69 on Brent. FX is 147 is what we are assuming for the full year. But what you can see on the right is that if in the past years, if the oil price and exchange rate is what we're assuming for this year, $69 and JPY 147, then we looked at the sensitivity and we have evaluated the past profit on those basis. Not a strict number. It's a rough number. But if we do that kind of calculation, as you can see, the JPY 370 billion this year would have been the highest profit level in comparison to the past.

A couple of years ago, JPY 260 billion or JPY 220 billion, that was the prelude the impairment and so forth. But apart from that year, it has been increasing gradually. And when you actually adjust for the FX as well as oil price, this year's final profit is at the highest level. And one of the factors behind this is what we have named as Profit Booster 500, which is essentially enhancement of structural and medium-term profitability. So this is what I wanted to kind of explain. So we are expecting a profit contribution of about JPY 50 billion per year. So it's not just a one-off impact, but this is something that will continue structurally over the medium term.

So if we see this continue for 10 years, that's JPY 500 billion of positive impact that we can expect from this reform. Now what is this? And so there are a couple of reasons behind this. First is, as you can see on the slide, this is a foreign exchange gain from Ichthys paid in capital reduction. As you know, Ichthys is operating very stably right now. And in the past, so the investment we made in Australian company. But we are now in the stage to recover the profit. That's the judgment we made. And in 2 years' time, so we started the feed.

But towards Abadi, we are in a position to start building up some reserve. And so for that, so part of the investment that we made in Australia, so we are essentially undertaking the paid in capital reduction from Australia to Tokyo. And so there is no PL impact because we're just out there transferring the money. But because of this, we end up registering the foreign currency gain, and this is about JPY 20 billion. It does fluctuate from year-to-year based on the in comparison to the past exchange rate. And so we'll continue to engage in this paid in capital reduction.

So you can consider this as been a long-term factor. Another factor is the investment incentive effects in Europe and Middle East regions. And I can't talk about the details because of the contract without the counterparties, but there is an incentive effect. And so whether it be Middle East or whether it be in Europe, we're expecting incentive effect of around JPY 30 billion per year. So in total, that's about JPY 50 billion of impact we're expecting on an annual basis. And this -- the excess ping capital reduction with excess is something that we have finally been able to agree to with the accounting auditor this year. So it's not included in the medium-term plan.

And so for the investment incentive effect, it does contain part of that. But put together, that's about JPY 50 billion per year of the profit increase per year. And so this is what we are expecting. We expect this to continue for around 10 years. And for this year, as you can see at the top, JPY 58 billion out of the JPY 370 billion comes from these impacts of profit recognized on the P&L on that basis.

So I can explain this from a different perspective. It's the same thing, but the ability to generate profit in regards to the oil price or the exchange rate, we have been able to improve our resilience.

So you can see both the left and right. The left-hand side is the oil price. So if we set these ForEx as a set number and if you look at the oil price sensitivity to gain -- so JPY 300 billion, how much oil price we can have is shown. Until last year, as you can see on the bottom graph, to gain JPY 300 billion will be set at JPY 147. And in that assumption, the JPY 300 billion profit will come from $68 of oil price and $69 was necessary with the $13 decline, even though the oil price -- even though in that situation, we will still have a JPY 300 billion of profit. On the right-hand side, the same thing is on the ForEx exchange rate sensitivity we've assumed Brent oil price at the set number. So the oil price, $69 on assumption and how much we can gain JPY 300 billion with the what kind of foreign exchange. So we had had JPY 147. But this time, if it's JPY 122, we can gain JPY 300 billion profit. So that is shown in this graph. Therefore, the profit capability of our company comparing to the oil price or the ForEx, even though there is an oil price decline or the yen appreciation, we are able to have a more profit-generating capability as a company. So this is not a one-off, but we're able to have this over the long term, and that's what we want to mention in this slide. Then going forward, with the allocation, cash allocation. In the midterm plan, there are a couple of allocations we mentioned. Going forward, the return as well as the growth investment are the main areas. For this year, $69 is to price and 137. So the ForEx in the oil price is set at 147, $69 with that assumption. Over the next 3 years, what kind of cash in and cash out will be seen in the company is shown in this slide. So based on the current oil price assumption, you can see the cash allocation forecast. And we have $70 as assumption and JPY 135 that is converted. So the cash flow before allocation exploration is about JPY 2,500 billion. And they're about debt of JPY 400 billion. So over the next 3 years, the cash flow will be JPY 2.9 trillion. So how we'll be using this -- so out of that JPY 2.9 trillion, the growth investment will be JPY 1.9 trillion, but it was 1.8 trillion during the midterm plan and that was what we mentioned before. Today, we have JPY 1.9 trillion as an assumption. For the shareholder return, we talked about JPY 400 billion or more before, but now we have JPY 562.5 billion or more as a shareholder returns. And then the cash reserve for Abadi, which is important for the FEED work.

And looking at the FID in the next several years. This year and next year, we have JPY 400 billion to JPY 500 billion of cash reserves for the Abadi LNG development. So, so far this year, for the next year -- for this year, we are planning to have JPY 400 billion of the cash, and that is the current assumption today. And the right-hand side, based on that assumption, our DE ratio is 0.3, 0.4 or less, and that is how much DE ratio has declined. So the next 3 years, that DE ratio will not deteriorate largely, and that's the assumption. And then the cash reserve after Abadi FID starts, we can inject those cash reserves. And how much we will do the borrowing? How much it takes for Abadi is the question and it's not so clear today at this moment. But a certain amount, we'll be able to downsize the borrowing at that time. And we have confidence that over the mid- to long term, our financial solves is in place, and we can also achieve the growth our growth in the future. So that's what I'd like to mention.

Next is the shareholder returns. So as we had the press conference before, we have the progressive dividend and the JPY 90 in the mid term plan is now increased to JPY 100. This share buyback is in the size of JPY 80 billion. And from our investors, especially for the dividend, there are a lot of expectations. This year, we have more weight on the dividend, and that's the shareholder return for this fiscal year.

And then talking about the business activities. As you may already know, for Ichthys, it's going very smoothly. The shutdown maintenance is from the middle of August and for about 1.5 months, all of the equipment will be suspended or stopped, and then we will open and do the maintenance work. And then for the surrounding blocks, Cash Maple and others will be continued. And for Abadi, the biggest business activities topic at the interim is that we are able to reach the FEED phase. And what is FEED? So it's basically basic design. It's a huge amount of work. And for the FEED -- entire FEED, you have various phase and we have to spend about JPY 1 billion in total. So JPY 140 billion, JPY 150 billion. It's not just a design, but that's how much we have to spend. And mainly in 4 areas, we'll be doing the FEED work. Four areas. One is the onshore LNG facility and then the pipeline, the subsea pipeline, FPSO and then the wells SURF. S-U-R-F. And this FPSO and the onshore LNG is a dual feed, where in 2 consortiums, there are competition and whichever is better FEED, we'll be continuing to do the EPC work, the construction. So 2 consortiums is competing with the FEED and then whoever wins will continue the EPC. So that is the assumption that's called dual FEED. So the dual FEED with FPSO and also for our LNG, we'll have these structure. So our FLNG and if the episode, the 2 FEEDS will be conducted. And the SURF and the pipeline will be on FEED. So in total, 6 FEEDS will be running simultaneously.

And as mentioned, the cost is quite a large amount, JPY 1 billion, and it's JPY 100 billion just for our company alone. So that's a huge amount of engineering RD design that is required. And this FEED along with this FEED, there are also mainly 2 other activities. One is marketing as mentioned. So from various companies, we talk with our customers -- potential customers. And for Abadi, in Asia, we have the LNG in Asia. So there are a lot of interest. And on nonbinding manner, we already have a lot of expectation exceeding the past production level. So together with the feed, we have this nonbinding LOIs and turning that to the binding long-term contract is what we're doing in the marketing activities along with the FEED work. The other is financing. The necessary cash we have this upstream. But basically, we will do the borrowing for the downstream. And for the upstream, we'll have the utilized equity. So that's the basic structure.

But Today, we have a lot of good progress. And last week, I went to Indonesia and we talk with the minister to talk about at the start of the FEED, and we talk about post-recovery and we came to an agreement. So we came to an agreement to do proceed with the FEED work, and that's how we came to an agreement with the Indonesia government. And also because of the energy scarcity in the future. They want us to do this FEED work early as we can, and that is the situation today. But the next 2 years, we'll be doing a full scale of design work. And I will think about the financial structure. And if possible, 2 years later, we will go into the final investment decision, and that is the current schedule we have in mind.

And then for Abu Dhabi, UAE as a whole at 5 million barrels per day by 2027, and we are aligned with this schedule. So in the midterm, this increase in production will be made, and naturally, we have to make more investment. So we will also receive those proceeds from those investments. And over the midterm, we will be a large profit source. And for the meantime, for Norway, we have acquired assets. For Indonesia we also acquired the block and those developments are made in other projects as well. So in short, while doing those things, we'd like to secure the business foundation over the midterm.

So next is effort in the Energy & Resources fields. And there are a number of major movements in terms of CCS. And first of all, in regards to the hydrogen in the Kashiwazaki City, Niigata Prefecture we are working on the integrated Blue Hydrogen ammonia production utilized a demonstration test project. We started recommissioning our operation already.

Now also in regards to CCS, there is also a metropolitan CCS project. In this regard, too, this was identified as being one of the Metropolitan Area Advance CCS project. And so we have established a company called Metropolitan CCS through which we are conducting this business. And this is a project 100% funded by the national government. And so over the next year, we are going to do pre-FEED and FEED and we'll start drilling wells as well.

Also, near Ichthys in Australia, we have CCS project called Bonaparte, and this is for the sequestrating as CO2 from Ichthys based on the assessment, this could become one of the major world-class CCS project going forward. Just recently, this has been awarded as being a Major Project Status by the Australian government. And so Australia considered this to be a very important project for the Australian economic development. So this was what has been considered and there is about 140 the licensing and approval process that one needs to obtain in Australia just for CCS, but that type of work will become easy as a result of this project as a nation. And renewable, we are conducting business in Australia with Potentia energy, we recently obtained a new asset. So right now, altogether, and so we currently have about 800 megawatts of capacity in total. So these are the major progress.

And just going back to what I said at the outset. So we have the ability to make money with our profitability base, making significant improvement. Large milestone is the start of the Abadi FEED, and the FEED will take 2 years. And so we are targeting for FID in 2 years' time. And so you might know about the Abadi, but how are we going to generate a profit increase in the meantime. And one is the Profit Booster 500 that we referred to and the other is we are going to make investment in Abu Dhabi in line with the production increase and the plan. And so the profit from Abu Dhabi will increase alongside Indonesia, Malaysia and Norway. And smaller the production increase is what will continue. And so because of this structure, even during the 3 years of midterm management plan, we will continue to expand our profitability once the Abadi starts production that will become a large boost for us to achieve further growth. So that is the growth strategy for us right now. And that is something that I wanted to communicate to you for your understanding today. So that completes my explanation. Thank you.

So as the CEO has explained, we have a high confidence over medium to long term. We have been able to strengthen our profit base. But today, I would like to talk about more near term. And so I'd like to talk about the first half of the year results. But the results is, as you can see, for the oil price, the oil price came down $12 year-on-year. So despite the stronger yen, net profit up JPY 220 billion or so. And so 2022 was the highest number. But as the first half of the year, this year was the second highest. So it was a pretty good result that we have been able to achieve.

So here, you can see revenue. The revenue did come down. And if you look at the crude oil, so it had come down at JPY 892 to JPY 780 and natural gas at JPY 281 to JPY 251. So if you look at the details, the sales were good, but the oil price and the gas price came down. So that certainly had an impact and the yen also appreciated. So the revenue itself came down as a consequence of those. And this is the waterfall chart. And so JPY 212.5 billion last year, the same year and JPY 223.5 billion.

And for the revenue, as I said, for -- there was some reduction in royalty as well, but the exploration expenses were quite significant. And so that did come down and also the share of profit in investment accounted for using equity method, this was slight negative because of the drop in the unit price. And there is also income tax benefit as well. But about the JPY 70 billion is related to profit, the other non profit and so the taxation or utilizing the external tax exemption and so forth. But we had about JPY 93 billion returning as a consequence.

But the revenue coming down in the year in a country with a large high tax rate, certainly had a large impact. And so the forecast for this fiscal year, as the President has explained, we're expecting $69 for FX and JPY 147 for FX. As for revenue, we're expecting around JPY 2 trillion for operating profit, more than JPY 1 trillion. And the net profit is JPY 370 billion. And JPY 370 billion against the JPY 300 billion that we have expected in May is an increase of JPY 70 billion, an increase of 23%. As I've explained in the previous slide, we've adjusted -- after adjusting for oil price and the FX, this is the highest level on record, ROIC at 7.1%.

This is higher than WACC. ROE, so this will be higher than the shareholders' equity cost. And so 8.2% in the first year. So this is higher than the shareholders and cost of shareholders' equity. So this is the though the waterfall chart again. And so there is about 200 benefit from market factors, increase in the sales volume. This was a strong performance of Ichthys. And also the foreign exchange gain from Ichthys paid-in capital reduction is included here and said about JPY 30 billion. And so this is looking at this vis-a-vis May. And so JPY 23 billion became JPY 30 billion essentially.

And R&D expenditure, this has come down slightly. And so as you can see on the right, so the taxes related to optimization, organizational structure is included. So Australian exploration company, and this has been divested, and we just made a single company for doing the exploration. And so the Japanese entity is 100% investor. So if we disband this company, then we can get a tax benefit in Japan. And so last year, because exploration didn't go well, so we had the tax benefit. And this time, we want to capture the benefit in Tokyo, and that is included in this JPY 24.3 billion.

Next is the cash flow and is JPY 175 billion (sic) [ JPY 875 billion ]. As you can see, as a CFFO, the operating cash flow before exploration, the cash flow from investment is JPY 703 billion and JPY 467 billion is included as the growth strategy and the remainder -- and so this is more than 3 months of the securities with reserve for Abadi going forward. And so Abadi cash flow is included within this JPY 703 billion. And so we have the financing the cash flow of JPY 277 billion, which includes dividend and the share buyback to make up the number.

And I said that the growth -- the investment is JPY 467 billion. You can see the breakdown. Pillar for Growth is for the oil and natural gas and JPY 56 billion for the exploration. In Norway, the thing that we have obtained and Ichthys Abu Dhabi is the largest, which is for maintaining the existing facilities. And for the second Pillar for Growth, CCS and this is about JPY 40 billion (sic) [ JPY 4 billion ] and renewable and electricity is about JPY 25 billion or so. So this is a breakdown of the growth of investment.

So this is as we have indicated in the midterm management plan, we will maintain the investment discipline, but we'll make the investment in a selective way, oil and gas, equity IRR of the mid-10% range or the mid-teen level. That's what you're looking at for CCS and renewable energy area, around 10%. And so that is the investment criteria. And so if we have project less than these levels, we will not engage in it. So that's the kind of judgment that we have made.

And regarding ROIC, 7.1% we have a 1% increase and we have 8.2% -- 8.1% [indiscernible]. And this is Ichthys, mostly decided by Ichthys. So that's why for ROIC, we have disclosed these numbers. That's all for me.

Now I would like to move on to the Q&A session. First, I would like to entertain questions from the room, and then we would like to ask people from online. [Operator Instructions].

I'd like to ask 2 questions. Before I go into the question, just to explain about my question, do you have the midterm plan and the vision, it's been 6 months, and we have further initiative, as you mentioned today. And also, the feedback from the investors, and I think you came up with these initiatives to respond. And I think it was a good outcome.

And after that, I'd like to talk about Abadi my question. So first question is for the Abadi project, as Ueda-san mentioned earlier, there was an explanation about the progress today. And the FEED is going to start. And also alongside Abu Dhabi, the finance and marketing activities. And one of the important point is, I'm sure it's concerned about investors, but the communication with the Indonesian government. So to consider Abadi, these are the major points, the key points.

And within that, my question for the next 2 years, you'll be focusing on FID, you're working towards FID. But based on what you mentioned today, marketing finance and also with the government to gain return, the communication in those including the tax systems. If you look at these 3, from your viewpoint, Ueda-san, what is the biggest hurdle to achieve? Or what is the toughest negotiation among these 3. At this point, can you please evaluate and explain your view at this moment as number one.

And then number 2 question. You have the Booster and then the cash flow allocation on Page 8 was explained today? And I'd like to ask questions. So for the use on the right-hand side, so you have investment return and also the Abadi cash reserve. So it was really clear in the explanation. I think it was really good.

But among these 3, the way of thinking about the cash allocation is the question. So first, you have the JPY 400 billion to JPY 600 billion of cash reserves for Abadi. And for this year, it's about JPY 400 billion. That's visibility. But this level that you set these numbers at? Is there anything that you have in mind? whatever you can disclose today, while you have this range of JPY 400 billion to JPY 600 billion for the cash reserves for Abadi. So if you can ask for your thoughts around that.

And along with this question, the gross investment is JPY 140 billion, and we have the shareholder return from JPY 562.5 billion or more. So to take this positively, you will have the growth investment within this range and the shareholder return, depending on the profit, you will try to achieve these numbers or higher. So that is my interpretation, but is that correct? And that's another thing I'd like to clarify. Those are the 2 questions.

So I'd like to talk about the Abadi question. So regarding Abadi, what is the toughest initiative going forward? So honestly, all of the activities are tough, but the toughest is the Indonesian government and or with the central government to maintain that relationship and communication.

As mentioned before, for Abadi, this is a remote area in the greenfield project and high-risk project as well to some extent. So with a high IRR, the mid-10% range of IRR is something that we are seeking for.

Going forward, the biggest challenge is looking at the recent market, the Abadi cost may escalate. And how much escalation we will have is something we don't really know, honestly. However, most probably, it will be increasing for sure. So in that case, IRR may go down. And with the Indonesian government, we have to -- whether we have to talk about the economics again. And if necessary, we will receive incentives. So those are the process that we have committed today. But in substance, how much incentive we will have in addition, these are up to discussions in the future.

So those are -- that's something we have to decide. But those are things that we have to work with the Indonesian government with the economics, how we're going to adjust the project is the question. And honestly, that will be a tough negotiation as a possibility.

On the other hand, with the Indonesian government, we have received their request of working on Abadi early or fast. And there's an increasing demand and there's a Tangguh gas decline. So Abadi natural gas is necessary. And in this kind of difficulty, basically, I am thinking this optimistic because Abadi gas those people who want to have Abadi gas are really a huge amount of buyers.

The Asian gas compared to Middle East, there are less geopolitical risk and is close in distance. So Abadi attractiveness is very high. And that is also necessary for Indonesia. So there are so many buyers who want to buy and then there's a project. So from my standpoint, ultimately, we think we can proceed this, and that's the current view we have.

And then for Abadi's cash or the fund, we have a cash reserve of JPY 400 billion to JPY 600 billion. And how much it takes for Abadi project is the question. And 2018, we talked about JPY 20 billion of cash necessary for Abadi, but that's basically based on 2018 figure. And after that, additional CCS and cost increase may lead to several tens of percentage of increase.

And Abadi Finance is split between upstream and downstream. For the upstream, the so-called capital will be used. So it's about half upstream and downstream. And the downstream is the LNG facility, liquefaction facilities, and that's about half. So for the downstream cash, we'll be doing borrowings, trustee borrowing. So that's the structure we'll be using.

For the upstream, we'll be using our own funds, and those are the current assumption. And it's about less than half of the entire amount of investment, and we have about 65% share. But most probably for the Indonesian government, 10% will be given to the Indonesian local party. So ultimately, we'll have 50% in the end, and that's the current assumption.

So from that total perspective, our company, necessary cash will be limited. And to some extent, some part of that cash is between that JPY 400 billion to JPY 600 billion. There are a lot of detailed calculation and how much it requires is not so clear. So it's hard to say in detail. But in terms of how we are working in our minds, that's how we came up with this number, JPY 400 billion to JPY 600 billion.

The Profit Booster 500, which is a new thing that came up on this occasion. Now you talked about the foreign exchange gain from Ichthys paid-in capital reduction of JPY 25 billion. So this will change from year-to-year, but you said JPY 500 billion for 10 years cumulatively. So you expect this to do this over 10 years.

When you do actually paid in capital reduction, it will run out in the end. But is this something that will discontinue for 10 years or more than 10 years?

And also, you've also said JPY 30 billion for the investment incentive effect, and this is quite a large amount. Could you give more detail? Of course, there are confidential information that you can't talk about, and that's okay. But if you could give a little more explanation about this -- the investment incentive effect.

The second question is that for now, the net production volume. I understand that this is increasing. And what is the reasons behind this pickup in the net production? So is it based on your own effort? Or is it that the crude oil price has come down. So the amount of the oil handed over has increased. So I wanted to understand whether the production increase is purely due to the increase in production itself.

So please allow me to talk about Profit Booster. We wanted to give a catchy name so that you can remember this. Now in regards to the paid-in capital reduction, this is something that we are referring to from last year, and we have been discussing with our accounting auditor and we have been able to do accounting treatment, we are able to do this. And so as a consequence, included this -- we have been able to include this in our plan.

Last year was 0 this year onwards, this will be included. And this is essentially as we have explained previously, there are 2 factors as to why we are able to do this from an accounting perspective. First is that Ichthys is now in a stage of recovering investment. This has been recognized in discussion with the accounting auditor. So we are now able to recoup the capital back to Tokyo.

Now second is Abadi. Now Abadi, the FEED has started. And so this means that we have made an official start in regards to the Abadi project. And for us to invest in Abadi, then from Australia to Japan, there is now the requirement for us to move money. So from Australia to Japan, we have been able to do this -- the capital reduction, essentially transfer.

And putting aside whether this is by chance or not, there is now a foreign exchange gain. So when we invested in Ichthys was JPY 85. And so we have been able to recycle this on a P&L for FX. And this year was about JPY 31.1 billion or so. And it's not the case that it's perpetual because it's important that the oil price and the FX to be at this level.

And FX is very important, but oil price is also important because we have upstream and the downstream company, and there are free cash flows. And that is actually moved to the interim holding company, and then we'll do capital reduction from there. And so the free cash flow amount is the upper limit. And so if you want to do JPY 300 billion a year, you can't do that. We can only do this within the scope of free cash flow when it comes to the capital reductions, and we are able to get the foreign exchange gain associated with that.

And so when you look at the current the translation adjustment, and we are able to do this for 10 years. So in the meantime, what will happen to the FX and what will happen to the oil price and also free cash flow, this will be determining factor. But it may continue for more than 10 years, but on a rough basis, we should be able to enjoy the foreign currency gains for around 10 years. And so we said about JPY 500 billion for the 10 years.

And we feel that, that's the kind of the profit base enhancement over the medium term. And in regards to the investment effect, this is mainly for Europe and the Middle East by us investing. And of course, there are investment provided in various countries, but the investment -- the incentive effect, this was something that we were able to generate in the past as well. There will be incentive benefit. So there is an increase in delta vis-a-vis the previous midterm management plan. We are expecting this to be about JPY 30 billion per year.

Now it's difficult for me to talk about the details. So if I actually try to break this down further, it would be a little bit of problematic. So please understand based on what I'm saying. But this is based on the actual cash flow, the actual investment plan and the actual incentive. We need to actually multiply those factors.

And when we look at it, we expect this to continue for around 10 years, and incentives continue for around 10 years. And that is JPY 30 billion per year, JPY 300 billion over the 10 years. I apologize for not being very succinct in my response, but that is all I can say.

And so in terms of production volume, please allow me to explain. So the production volume in the second quarter was the 673,000 barrels per day of oil equivalent. And so second half is the 690,000. So that's 842,000 for the year. So that's about 10,000 increase in terms of production volume. And this is not due to offtake increasing, but it's very strong performance from Ichthys to the second quarter. And as the CEO explained, Abu Dhabi as a nation is increasing production volume, and that benefit is also shown here. And so that's about 10,000 barrels per year. So we are seeing the production volume, the core ability improving. So if you could understand it in that way.

So next question.

This is [ Sveta. ] So regarding the paid-in capital decrease, I think it's good to have increase in profit from our standpoint. But this means you will have profit increase, and that means you will have more tax payment. And regarding that tax, what kind of discussions were made internally upon making this paid-in capital reduction decision?

So first, like you mentioned, this is where we have ForEx gain. And with the ForEx gain, that means there will be a tax payment. Our tax structure is very complicating, and there is the deduction. So how much loss we will have is really hard to forecast.

But the ForEx gain plus this is exactly where we have to do the tax management. However, based on the tax system, there are a couple of areas where we can book a loss. But because of the general deduction, if you miss the timing, it's not really so effective. So from that standpoint, there are a lot of loss on a tax perspective and using that loss, we would like to maximize the ForEx gain as much as possible.

So depending on the environment, this largely changed. And from the initial, we cannot be planned and it's like we have to really see how it goes. But how much gain we can achieve is something we have to manage well. So as much as possible, we'd like to lower the tax rate as much as possible, and that's how we like to bring the situation going forward.

Is regarding Profit Booster 500. And because you have named it the Profit Booster 500, I would assume that you are thinking of JPY 500 billion. Of course, it does depend on the crude oil price and FX rate. And so it's not the case that you've committed to JPY 500 billion, but we are mindful of this JPY 500 billion in given this name.

And I think the incentive portion, I think, is quite strong. But when you think about foreign exchange gain from the paid-in capital reduction, depending on the FX rate or how much you reduce, do you try to realize JPY 20 billion every year based on that? Or will you do a kind of dollar-based operation with JPY 20 billion like this year. And so depending on how much you register on the P&L in Japanese yen would different. So what will be your focus in this regard going forward? That's the first question.

The second question is the JPY 100 of dividend. What is your thoughts behind this? This CEO said that the investor tend to prefer a dividend. So you said that mindful of the dividend level based on this. But were you mindful of the Profit Booster 500? Was that JPY 370 billion? Or is that the total returns ratio? You probably will say that you thought of all of these factors, but you have declared progressive dividend payment and to go up to JPY 100 of dividend needed quite a courage. So your thoughts behind this JPY 100. And what is the kind of dividend level that we should expect going forward? So these are my 2 questions.

So please allow me to respond to the first part. Profit Booster 500. And the Booster is like rocket engine. And so we will be firing the Rocket Boosters going forward. And the 500 is mindful of the JPY 500 billion or JPY 50 billion this year. But when we look over the next 10 years and if FX and the oil price remains at the current level, then we are quite confident of being able to do JPY 50 billion, particularly the paid-in capital reduction.

As you know, bringing money from Australia to Japan, and there are 3 ways to doing this. First is -- so we can use this to pay down debt, which is secured through Singapore. So that's using free cash flow.

Other is the dividend payment or the capital reduction. So depending on the combination of this, the amount will change. So we may be able to lower our dividend and lower the loan payment and to increase the paid-in capital reduction or vice versa. But it is depending on how much free cash flow is generated, what's the FX environment, what's the oil price, how much money is needed in Tokyo.

So we need to look at all these factors in making the decision. But all these combinations will be possible from a theoretical perspective, and we said that JPY 50 billion per year from the profit level. So that is what we'll kind of keep in mind as we manage this. So to extent, it is variable. But the upper limit is deter by oil price and the FX. If we stop the free cash flow from Ichthys stopping then we can transfer the money. So these are determining factors in terms of the receivings. But we do have a level of freedom in regards to the combination. How much are we going to do this year or next year. So we do have a certain level of freedom in that regard.

And regards to your second question, your thoughts in making decision about JPY 100 dividend. In the end, it was as a result of considering various factors. But -- so we have done share buybacks and dividend so far. And some people really like share buyback, but the share buyback benefit is relatively limited in my view. And we have quite a large number of individual shareholders and the individual shareholders prefer a stable dividend, and we have promised a progressive dividend payment.

So we need to -- well, they are quite interested in seeing the dividend level increase going forward. And we want to expand the base of the filament to shareholders in that regard. Some people prefer a share buyback because they don't have to pay tax, but there are still a lot of people who prefer a dividend. So when we take that into consideration, we had the option of going from JPY 90 to JPY 95. But in regards to dividend, in order to communicate various messages, we decided to increase this by JPY 10 to JPY 100. And we are saying that we're going to pay the dividend in a progressive way. So over the medium-term period, we will not be able to lower the dividend level.

But if we think about the profit structure of the company, we felt that we are still able to accommodate this type of progressive dividend going forward. So that was taken into consideration where we have prioritized the dividend somewhat. Of course, we are going to do JPY 80 billion of share buybacks. So we are going to do share buyback as well. From an overall balance perspective, we have tried to communicate the message by increasing the dividend to JPY 100 on this occasion. Thank you very much.

So it is progressive. So are you feeling the pressure that you can lower the dividend or the share buyback and dividend, the waiting -- is it that you want to prefer more -- you want to do the dividend more preferably?

Well, we had the dividend payout has been the basis of our return in the past. But dividend is difficult to lower. It's difficult to lower the dividend once you actually pay a certain level. So we wanted to use the dividend as the fundamental approach and to use a share buyback in a supplementary way. And so we will continue to, I suppose, stick to this type of the returns policy.

Major question. So first, I'd like to talk about my impression today. Ichthys is coming to one kind of milestone or goal. And since the listing, I've been covering your company. So it's been quite impressive. And for Abadi, now we have this progress again. So I'm also happy to hear this well analyst. And then also, you talked about the disclosure, and you want to make this really clear, and that's the stance we understand.

And also after the midterm plan announcement in this short period of time, I think Abadi was the major reason, but you have disclosed this information again. So we really appreciate that. And ROE, you talked about your concern about your interest or focus on ROE as well. So we really appreciate.

But first, regarding Ichthys going to FEED and doing equity finance before FID. And then after FID, we have the production start. So I was just remembering all the history. And as mentioned before, we have the cost escalation, we have some delay and these things happen. So I'd like to have ask the management to work hard going forward.

But one question is regarding Abadi, the amount of participating interest of Abadi. If you recollect Ichthys, you had to keep the majority, wanted to keep the majority, but still want to have other participants paying interest as well. So you want to expand to Total and other companies. So you had lowered your participating interest of Ichthys in the history. And for Abadi, you talked about the 10% of the local participant. But outside of that, the thinking about the participating interest, can you share about that? If you can make comment like the old days of the Ichthys, I think that would be grateful.

Or if you are still in the consideration today, that's fine. But can you please give some comment around the participating interest for Abadi?

So regarding the interest, Abadi is currently -- or until recently, our company and JOGMEC was 50-50 split between the two until recently. And then going forward, we'll be spending a lot of money for the FEED and also FID. So how we're going to change this participating interest is the major challenge. And we are still under negotiation today. It's hard to talk about details today.

But after FID, we'll get close to production. So as a company, there is a less risk we'd like to take the risk for exploration or the risk of exploration will go down. So we'd like to take risk. So from that 50%, we think you'll be largely increasing the interest or participating interest as number one.

And number two, we have 65% and Pertamina and Petronas is 35%. But based on the Indonesian law, 10% is going to be given to Indonesian participants. The local designated company by the government will be holding, and that's already decided. So that 10% is ourselves, Pertamina, Petronas, it will be pro rata based of sale of the interest.

And then just like Ichthys, the buyer or potential buyer, let's say, there are some people who want to participate like the case of Ichthys. So from a few percentage of our request may come. So in that case, we will also sell the participating interest of the upstream as a possibility. So with the JOGMEC and also with the Indonesian participants and the buyers, thinking about all these people, we would like to decide on the end -- at the end, how many percentage will hold. But ultimately, we think half or so will be the end participating interest for this project.

Just one question. And I want to follow up explanation about the growth investment and the 3-year forecast, this was increased from JPY 1.8 trillion to JPY 1.9 trillion. But this fiscal year, when you look at the cash flow for growth investment, it has come down by about JPY 100 billion. So the 3-year, the investment growth, investment for growth has been increased.

And there are, I suppose, an increase in projects that meet your financial or investment discipline. So there is a bit of the time slippage. So the percentage or likelihood in regards to the investment growth, if you could give some commentary on that, please?

So please allow me to give some explanation in that regard. So when we announced the midterm management plan, it was between [ JPY 8.9 billion, ] and this was increased to JPY 1.9 trillion. So FX has been changed from JPY 135 to JPY 147. And so even at the same investment amount, if you compare to Japanese yen, the amount will increase. So that's one factor that was reflected into the numbers.

And also as to whether there is a timing of the slippage, well, the investment for growth, something that we intended to do this year and something that will slip to the next fiscal year. That's about JPY 100 billion in total. So in total, we probably will do about JPY 600 billion of investment for growth per year. But acquiring new gas, the interest, this has been delayed somewhat, so that will slip to next year. But over the 3 years, we want to spend somewhere between JPY 1.8 billion to JPY 1.9 billion of the 3-year midterm management plan. This year is slightly lower, but that does include the timing of the slippage.

Thank you very much. So now we are at the hour. So we'd like to end today's meeting. And if you have any further questions, please come to the IR group, contact the IR group today going forward. So thank you so much for all your participation today. Thank you very much.

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