Changes in order volume, order prices and order composition resulting from liberalization and other factors

「It has become necessary to implement measures that also take into account the possibility that new entrants among construction companies could change competition for orders.」

「As competition among operators in the energy industry has intensified further, there are continued concerns about intensifying competition for work under capital investment plans.」

「During the second-quarter cumulative period, there were no new major risks among the matters concerning the business and accounting conditions described in this quarterly report that management recognized as potentially having a material impact on the company's financial position, operating results or cash flows, and no material changes were made to the "Business and Other Risks" described in the securities report for the previous fiscal year.」

「During the first-quarter cumulative period, there were no new major risks among the matters concerning the business and accounting conditions described in this quarterly report that management recognized as potentially having a material impact on the company's financial position, operating results or cash flows, and no material changes were made to the "Business and Other Risks" described in the securities report for the previous fiscal year.」

「As competition among energy operators intensified, cost-cutting efforts continued in both electricity and gas. Accordingly, concerns were raised about changes to the methods used to place orders for work under the capital investment plans of gas utilities, which are major customers from which the Company receives orders, as well as policy shifts by gas utilities following the separation of the pipeline business implemented in April 2022 and reviews of their transaction policies toward construction companies, including the Company.」

「Following the separation of the pipeline business implemented in April 2022, concerns have arisen that policy shifts by gas utilities and reviews of their transaction policies toward construction companies, including the Company, could affect the Company's business environment.」

「During the cumulative second quarter under review, there were no new major risks that management recognizes could have a material impact on the financial condition, operating results or cash flows of the filing company, and no material changes to the “Business and Other Risks” described in the annual securities report for the previous fiscal year.」

「As the full retail liberalization of electricity and gas has diversified the capital and business alliances of related companies and the services they provide, alliances among major energy operators beyond their existing service areas and alliances among companies across industry boundaries have also advanced. Competition among energy operators has consequently intensified, and competitive forces are expected to increase further in both electricity and gas, making cost-cutting efforts more pronounced. Against this backdrop, there are concerns about changes to the methods used to place orders for work under the capital investment plans of gas utilities, which are major customers from which the Company receives orders. Policy shifts by gas utilities and reviews of their transaction policies toward construction companies, including the Company, are also expected to have a significant impact on the Company's business environment going forward.」

「During the first three quarters of the current fiscal year, there were no new occurrences of the major risks that management recognises could materially affect the filing company's financial position, operating results or cash flows among the matters relating to business conditions, financial conditions and other matters described in the quarterly report, and no material changes to the "Business and Other Risks" described in the annual securities report for the previous fiscal year.」

「During the cumulative third quarter of the current fiscal year, there were no occurrences of matters concerning the business situation, accounting situation or other matters described in the quarterly report that could have a material impact on investors’ decisions, and no material changes to the “Business and Other Risks” described in the annual securities report for the previous fiscal year.」

「With the further introduction of competitive forces in both electricity and gas, concerns have arisen about the impact on the unit prices for orders of work related to capital investment plans. Policy shifts by gas utilities and reviews of their transaction policies toward construction companies are also expected to have a significant impact on the Company's business environment going forward.」

「In the equipment sales division, competition in sales remained intense, but continued efforts to provide more efficient renovation services through dedicated staff and to increase opportunities for contact with customers in assigned areas for general gas equipment sales resulted in increases in both renovation work and general gas equipment sales.」

「In the equipment sales division, competition in sales remained intense, but efforts to provide more efficient renovation services through dedicated staff and to increase opportunities for contact with customers in assigned areas for general gas equipment sales resulted in net sales of ¥107 million, up 16.0% year on year. However, higher personnel expenses resulting from staff increases and other factors resulted in an ordinary loss of ¥19 million, compared with an ordinary loss of ¥17 million in the same period of the previous year.」

「As the energy industry entered an era of intense competition following the full retail liberalization of electricity and gas, as an important strategy for achieving long-term growth as a company involved in essential utilities」

「In the equipment sales division, competition in general gas equipment sales remained intense, but sales edged up as the company sought to increase opportunities for contact with customers in its assigned areas. Renovation work, however, declined despite efforts to respond more efficiently by appointing dedicated renovation staff.」

「Continued intensification of sales competition led to declines in both renovation work and general gas equipment sales.」

「Although sales competition for general gas equipment remains intense」

「If intensified energy-sector competition resulting from the full retail liberalization of the electricity and gas markets and other factors causes changes in order volume or order prices, or necessitates restructuring of the order composition」