Business and Financial Highlights

The business environment surrounding our group in the current consolidated fiscal year has shown signs of improvement, such as an improvement in employment conditions and a recovery in personal consumption. Although there are still some areas where the eco nomy is stagnant, it has been on a gradual recovery trend. On the other hand, the outlook remains uncertain due to factors such as the downward pressure on consumer sentiment caused by continued price increases, trends in U.S. trade policy, and fluctuation s in the financial capital markets.

The current consolidated fiscal year is the second term of the medium term management plan " Medium Term Management Plan 2025 " which has its final year in fiscal 2025. Regarding the performance in the current consolidated fiscal year, the number of continuing transaction customers in the group increased by 64 thousand (an increase of 59 thousand in the previous consolidated fiscal year), reaching 3,42 3 thousand. The number of TLC members increased by 53 thousand (an increase of 56 thousand in the previous consolidated fiscal year), reaching 1,267 thousand. Due to the increase in the number of group customers, sales amounted to 24 3,482 million yen (an increase of 5.2 % compared to the previous consolidated fiscal year), operating profit was 16,841 million yen (an increase of 8.6 %), ordinary profit was 17,370 million yen (an increase of 11.8 %), and profit attributable to owners of parent was 9,216 million yen (an increase of 8.7 %). As a result , sales have increased for eight consecutive periods, and each profit item has increased for two consecutive periods, both setting new records.

As topics for the current consolidated fiscal year, we acquired shares of FujiPro Co., Ltd (Chigasaki City, Kanagawa Prefecture), which operates an LP gas business, in April 2024, making it a consolidated subsidiary. Additionally, in the same month, we est ablished PT TOKAICOM Mitra Indonesia (South Jakarta, Republic of Indonesia) together with PT Sisnet Mitra Sejahtera Co., Ltd to expand and develop cloud service related businesses and cloud talent development in the Republic of Indonesia, officially start ing business operations in September. In August, we opened a sales office for LP gas sales in Kagoshima City, Kagoshima Prefecture, which is the third base in the Kyushu area, working to expand our business foundation. In December, we acquired shares of G& F Co., Ltd (Shinjuku City, Tokyo), which engages in building IT systems, making it a consolidated subsidiary. We are also actively promoting initiatives for Green Transformation (GX ) in response to climate change, and in January 2025, we published " Tokai G roup Regarding GX Initiatives." Furthermore, in the current consolidated fiscal year, we have actively worked to improve employee engagement by expanding human resource systems aimed at solving issues for workers, such as childcare support and nursing care sup port for employees.

Our group has formulated the TOKAI Group 'Medium Term Management Plan 2025' targeting the three fiscal years from 2023 to 2025. This plan focuses on three key themes for our group's sustainable growth: Growth of business earning power Strengthening of foundations for sustainable growth and Full energization of human capital and organizations."

In the fiscal year 2025, we plan to increase sales primarily through an increase in the number of customers and expansion into new areas in our main businesses. While incorporating appropriate sales strategy costs, we expect an increase in operating profit , ordinary profit, and p rofit attributable to owners of parent.

Based on the above, the consolidated performance outlook for the fiscal year 2025 is as follows.

During the consolidated cumulative third quarter period, the business environment surrounding our group saw a moderate economic recovery, supported by improvements in employment and income conditions, leading to a gradual rebound in personal consumption. Additionally, expectations toward the new administration contributed to the Nikkei Stock Average reaching record highs. On the other hand, concerns remain over the impact of U.S. trade policies, fluctuations in financial and capital markets, heightened geopolitical risks, and downside risks to consumer sentiment due to rising prices. As a result, the outlook continues to be uncertain.

Amidst this situation, our group is fully committed to achieving the goals of the 'Medium-Term Management Plan 2025,' which is now in its final year.
During the current third quarter consolidated accounting period, the number of continuing transaction customers in the group increased by 42 thousand (an increase of 56 thousand in the same period last year), totaling 3,465 thousand. The number of TLC members increased by 41 thousand (an increase of 40 thousand in the same period last year), reaching 1,308 thousand.
Due to the increase in the number of group customers, sales amounted to 177,382 million yen (an increase of 2.4% compared to the same period last year), operating profit was 12,332 million yen (an increase of 27.0%), ordinary profit was 12,734 million yen (an increase of 25.6%), and net profit attributable to the parent company's shareholders for the quarter period was 7,514 million yen (an increase of 33.1%).

During the current third quarter cumulative period, a key topic was the expansion of our telecommunications infrastructure to the Kyushu area in April 2025, aimed at providing a variety of services to support corporate digital transformation (DX) in the region. This expansion has extended our service area from the Northern Kanto region to Kyushu.
In addition, within the Aqua business, we offer three services: "Tasty Water Delivered to your Door" (returnable bottles), "The Gift of Delicious Water: Ulunon" (one-way bottles), and "Shizuclear" (water supply type purification servers). As of the end of July of this year, the total number of customers for these services surpassed 200 thousand accounts.