Thank you for your ongoing support.

The Toho Zinc Group recorded net sales of 145,764 million yen for the 124th period (April 1, 2022, to March 31, 2023) due to an increase in the sales prices in Japan on average over the year resulting from the weak yen.
Operating income was 4,049 million yen and ordinary income was 3,137 million yen due to pressure from factors such as high costs following the rise in energy and material prices in our smelting and refining business, a decrease in the volume of high-grade ore extracted in the mineral resources business and the slowdown of operations at ore beneficiation plants due to the impact of the COVID-19 pandemic. In addition, the net income attributable to the owners of the parent company was 794 million yen, as we recorded a loss on the valuation of investments in affiliates.
The company will pay a year-end dividend for this period of 75 yen per share after considering a comprehensive review of our business results, the business environment faced by the Group, the retention of earnings for future business development and the maintenance of stable dividends.

Outlook for fiscal 2023

The global economic outlook is highly uncertain due to factors such as the Russian invasion of Ukraine and the U.S.-China trade war, and the market prices of metals, energy prices and trends in demand are also unpredictable.
The earnings forecasts for fiscal 2023 announced in May were based on the market prices for metals and costs of various materials and energy at the time, and we plan to sell the amount equivalent to our production volume. The planned production volume is 82,000 tons for zinc products, 83,000 tons for lead products, 355 tons for silver products and 400,000 tons for crude ore processing at the Rasp mine at CBH Resources.
To reduce the impact of the risk of fluctuations in the price of raw materials on our business results, we will implement a sell-hedge strategy using commodity futures contracts for the portion of metals purchased.

Our 12th Three-year Medium-Term Plan

Fiscal 2023 is the final year in our 12th Medium-Term Plan, and we will take the following measures as stepping-stones to the next medium-term plan.

Following the release of the request from the Tokyo Stock Exchange titled "Action to Implement Management that is Conscious of Cost of Capital and Stock Prices," our company has also studied and implemented specific measures as we aim to break away from the current price-to-book ratio (PBR) of less than one as soon as possible. In April we started up a business strategy study team for the purpose of formulating growth scenarios.
While we will announce the overall vision in May 2024 in the next medium-term plan as it requires coordination with relevant stakeholders since the restructuring of the business portfolio is involved, we will bring forward the announcement of growth strategies to an appropriate time.
We are also in the process of formulating the 10-year vision, the basis for the medium-term plan, as a new growth scenario considering increases in energy and environmental costs and the restructuring of our business portfolio.
While we will announce specific processes for each business sector at the right time, we believe stable coverage of capital costs is the way to recovering the PBR ratio to one or above, and all members of the Group will work to achieve this.

I would like to extend my appreciation to our shareholders for your ongoing cooperation and support.

ITO Masahito
President