FUJI UNITED HOLDINGS COMPANY, LTD.

Kerosene and Fuel Oil A sales volumes may decline during mild winters. In addition, it is explicitly noted that the environment-related business (renewable energy power generation) may experience reduced power generation due to adverse weather such as heavy rain or heavy snow, which could have a material impact on business performance. Weather is an uncontrollable external factor, and the business structure is directly affected by seasonality and climate variability.

Both asphalt sales and the Rental Business (machinery for road construction) depend on public investment in road construction. If public investment decreases, sales volume and transaction volume may decline, potentially affecting business performance. Government fiscal policy and trends in public works budgets are key external variables for the business.

Before trade receivables are collected, customers may fall into credit difficulty, potentially requiring bad debt write-offs or provisions for doubtful accounts. As countermeasures, the Company has established credit limits based on its credit management system, accepts guarantee deposits, and conducts cash-on-delivery transactions, and has built a monthly monitoring framework through the "Receivables Management Committee" at each business site and the "Credit Transaction Committee" at head office.

The purchase price of petroleum products, the Company's core products, is linked to crude oil prices. If price increases cannot be sufficiently passed through to selling prices during a crude oil price surge, profitability may be squeezed. Since petroleum product sales form the core of the business, fluctuations in the crude oil market have a direct impact on overall business performance.

The Company's main supplier of petroleum products is ENEOS Corporation, and purchases from this company accounted for approximately 80% of total purchases in the consolidated fiscal year. Although stable supply is received based on a basic transaction agreement, if the business relationship becomes difficult to maintain, the Company may be unable to procure products to fulfill orders, making securing alternative procurement channels a key challenge.

The Group is subject to various environmental regulations, and stricter regulations could increase environmental countermeasure costs. While provisions for future environmental countermeasures are recorded based on reasonable estimates, there is a risk that additional costs may arise due to changes in regulatory content. As a countermeasure, the Group is working to expand and strengthen its supply chain in anticipation of handling next-generation liquid energy.

Natural disasters such as fires, earthquakes, typhoons, and tsunamis may damage owned assets and business operations, potentially affecting business performance. As a countermeasure, the Company has taken out property insurance on important owned assets to mitigate the impact of natural disasters, but there remains a risk that losses exceeding insurance coverage could occur in the event of a large-scale disaster.

If the recoverable amount of fixed assets declines due to changes in business plans or market conditions, it may become necessary to recognize impairment losses. Although indications of impairment are carefully assessed, recognized, and measured, changes in the assumptions or premises underlying estimates could affect business performance. As the Company actively invests in the environment-related business and other areas, the absolute scale of this risk may increase along with the growth in fixed asset balances.

The Company is making active investments to expand earnings in new businesses and existing growth businesses, but business performance could be affected if investments exceed appropriate valuations, expected performance or synergies are not achieved, or personnel and customers are lost. As a countermeasure, the Company strives to reduce business investment risk by conducting thorough due diligence, although it may be difficult to respond to changes in the business environment after an investment has been made.