Weather Dependence of Raw Sugar Beet Yield, Sugar Content and Quality

「Sales volume and revenue of beet pulp both fell below the previous fiscal year due to reduced production resulting from lower yields of sugar beets harvested in 2025.」

「Although beet sugar selling prices declined due to lower overseas raw sugar prices, sales exceeded the same period of the previous year because beet sugar production recovered, increasing raw sugar sales volumes.」

「Although beet sugar selling prices rose, sales fell below the previous fiscal year because the low sugar content of beets harvested in the previous fiscal year due to the extreme heat and other factors in 2023 caused a substantial decline in sugar production. In addition, persistently high manufacturing costs and an increase in inventory valuation losses on finished goods inventories put pressure on operating profit.」

「Although selling prices rose, beet sugar sales fell below the same period of the previous year because the low sugar content of beets caused by last summer's extreme heat and other factors resulted in a substantial decline in sugar production.」

「Beets harvested the previous year had markedly low sugar content due to extreme heat and other factors, affecting yield and quality.」

「Sugar segment sales increased 11.4% year on year to ¥36,095 million, reflecting a recovery in demand from confectionery and food-service customers, as well as higher selling prices. However, beet sugar production incurred an operating loss of ¥509 million, compared with an operating loss of ¥520 million in the same period of the previous year, due to the markedly low sugar content of the beets used as raw material following last summer's extreme heat and persistently high energy costs.」

「Risks specific to the sugar business, including beet production conditions, may materially affect the operating results of the Group.」

「Beets harvested the previous year experienced stalled growth and were affected in terms of yield and quality by high temperatures and heavy rainfall in summer, particularly in the Tokachi region.」

「National agricultural policy, the international environment surrounding the sugar industry, and risks specific to the sugar business, including the production conditions for beet raw material, may materially affect the operating results of the Group.」

「As described in the “Issues to Be Addressed” and “Business and Other Risks” sections of the securities report for the previous fiscal year, factors that could materially affect the Group’s operating results include the following: the sugar business accounts for approximately 70% of the Group’s net sales, and most of its other businesses also consist of businesses ancillary to or related to the sugar business. Consequently, risks specific to the sugar business, including national agricultural policy, international conditions surrounding the sugar industry, and the production conditions for sugar beet raw materials, could materially affect the Group’s operating results.」

「As described in the “Issues to Be Addressed” and “Business and Other Risks” sections of the securities report for the previous fiscal year, factors that could materially affect the Group’s operating results include the following: the sugar business accounts for approximately 70% of the Group’s net sales, and most of its other businesses also consist of businesses ancillary to or related to the sugar business. Consequently, risks specific to the sugar business, including national agricultural policy, international conditions surrounding the sugar industry, and the production conditions for sugar beet raw materials, could materially affect the Group’s operating results.」

「Although there were concerns about the impact of drought following a period of low rainfall during the first half of the growing season for beets harvested the previous year, growth recovered after subsequent rainfall, enabling the Company to secure high-quality raw materials.」

「National agricultural policy, the international environment surrounding the sugar industry, and risks specific to the sugar business, including the production conditions for beet raw material, may materially affect the operating results of the Group.」

「The sugar business accounts for approximately 70% of the Group’s net sales, and most of its other businesses also consist of businesses ancillary to or related to the sugar business. As a result, risks specific to the sugar business, including national agricultural policy, international conditions surrounding the sugar industry, and the production conditions for sugar beet raw materials, could materially affect the Group’s operating results.」

「As described in the “Issues to Be Addressed” and “Business and Other Risks” sections of the securities report for the previous fiscal year, factors that could materially affect the Group’s operating results include the following: the sugar business accounts for approximately 70% of the Group’s net sales, and most of its other businesses also consist of businesses ancillary to or related to the sugar business. Consequently, risks specific to the sugar business, including national agricultural policy, international conditions surrounding the sugar industry, and the production conditions for sugar beet raw materials, could materially affect the Group’s operating results.」

「Sugar production using beets harvested in 2019 began in mid-October. Although the beets harvested the previous year were damaged by strong winds in May, growth recovered due to favorable weather thereafter, enabling the Company to secure high-quality raw materials.」

「The beet sugar business is heavily affected not only by weather but also by fluctuations in international sugar prices and the outcome of various border measures, including those under the WTO (World Trade Organization), EPAs (Economic Partnership Agreements) and FTAs (Free Trade Agreements). In light of the severe business environment expected ahead, the Company must strengthen its financial position and expand its business foundation.」

「The beet sugar business is heavily affected not only by weather but also by fluctuations in international sugar prices and the outcome of various border measures, including those under the WTO (World Trade Organization), EPAs (Economic Partnership Agreements) and FTAs (Free Trade Agreements). In light of the severe business environment expected ahead, the Company must strengthen its financial position and expand its business foundation.」

「The beet sugar business is heavily affected not only by weather but also by fluctuations in international sugar prices and the outcome of various border measures, including those under the WTO (World Trade Organization), EPAs (Economic Partnership Agreements) and FTAs (Free Trade Agreements). In light of the severe business environment expected ahead, the Company must strengthen its financial position and expand its business foundation.」

「The beet sugar business is heavily affected not only by weather but also by international policy changes, including agricultural negotiations under the WTO (World Trade Organization), EPAs (Economic Partnership Agreements) and FTAs (Free Trade Agreements), as well as the outcome of negotiations over participation in the TPP (Trans-Pacific Partnership). In light of the severe business environment expected ahead, the Company must strengthen its financial position and expand its business foundation.」

「The beet sugar business is heavily affected not only by weather but also by international policy changes, including agricultural negotiations under the WTO (World Trade Organization), EPAs (Economic Partnership Agreements) and FTAs (Free Trade Agreements), as well as the outcome of negotiations over participation in the TPP (Trans-Pacific Partnership). In light of the severe business environment expected ahead, the Company must strengthen its financial position and expand its business foundation.」

「Although yields and sugar content improved for beets harvested in 2017 and sugar production was expected to increase substantially, the additional beet sugar production could not be sold to general customers under the applicable system and resulted in economically unprofitable raw sugar. Accordingly, an inventory valuation loss was recorded for inventories held at the end of the quarter.」

「Although selling prices rose year on year in line with higher domestic sugar market prices, beet sugar sales volumes and revenue both fell below the same period of the previous year because sales volumes of raw sugar declined substantially following the sharp drop in sugar production from the 2016 crop.」

「The beet sugar business is heavily affected not only by weather but also by international policy changes, including agricultural negotiations under the WTO (World Trade Organization), EPAs (Economic Partnership Agreements) and FTAs (Free Trade Agreements), as well as the outcome of negotiations over participation in the TPP (Trans-Pacific Partnership). In light of the severe business environment expected ahead, the Company must strengthen its financial position and expand its business foundation.」

「In fiscal 2016, weather conditions in the Tokachi area, the main production region, included wind damage in May, continued abnormally low temperatures and insufficient sunlight due to rainfall from June through July, and prolonged flooding and loss of farmland following successive typhoons at the end of August. Cloudy weather continued in September due to a prolonged autumn rain front. As a result, the beets suffered poor growth, disease outbreaks and poor maturation, making raw material collection and sugar production difficult and causing costs to rise.」

「Sugar segment sales increased 3.7% year on year to ¥31,300 million due to higher selling prices resulting from firm overseas sugar market conditions. Segment profit increased 75.2% year on year to ¥545 million, despite lower yields and deteriorating quality of beets harvested in 2016, as higher selling prices and cost-reduction efforts offset these factors.」

「The beet sugar business is heavily affected not only by weather but also by international policy changes, including agricultural negotiations under the WTO (World Trade Organization), EPAs (Economic Partnership Agreements) and FTAs (Free Trade Agreements), as well as the outcome of negotiations over participation in the TPP (Trans-Pacific Partnership). In light of the severe business environment expected ahead, the Company must strengthen its financial position and expand its business foundation.」

「The beet sugar business is heavily affected not only by weather but also by international policy changes, including agricultural negotiations under the WTO (World Trade Organization), EPAs (Economic Partnership Agreements) and FTAs (Free Trade Agreements), as well as the outcome of negotiations over participation in the TPP (Trans-Pacific Partnership). In light of the severe business environment expected ahead, the Company must strengthen its financial position and expand its business foundation.」

「Because beets, the raw material for beet sugar, are an agricultural product, their production volume, sugar content and quality are heavily affected by weather. This may affect factory operating rates and cause significant fluctuations in the profitability of the beet sugar segment.」