YAMAX Corp.

The civil engineering cement products business is heavily dependent on public works investment by the Ministry of Land, Infrastructure, Transport and Tourism and local governments, and product demand fluctuates depending on trends in budget execution and project orders. If public works investment contracts, there is a risk that sales in this business will decline directly. While the Company recognizes demand fluctuations, specific diversification measures are not explicitly stated in the securities report.

Sales in the civil engineering cement products business are linked to the ordering cycle of public works and tend to be weighted toward the second half of the fiscal year. In FY2026 (ending March 2026), the second half accounted for 55.8% of the annual sales of this business, and it is not appropriate to assess full-year performance based solely on first-half results. This seasonal fluctuation is expected to continue going forward, requiring attention in cash flow management.

The Company Group procures working capital and capital expenditure funds through borrowings from financial institutions, with most short-term financing at variable interest rates. If interest rates rise sharply, this could adversely affect operating results through increased interest expenses. As a risk mitigation measure, the Company is working to reduce interest-bearing debt through loan repayments, but there is a possibility that such efforts may not be able to keep pace with abrupt rate changes.

Some manufacturing plants, due to their location, may be affected by natural disasters such as typhoons and earthquakes. In the event of a disaster, damage to products and raw materials, as well as delays or suspensions in materials procurement, production, sales, and logistics, could occur, and if prolonged, this could have a material impact on business performance and financial condition. Although disaster prevention measures are being implemented in cooperation with local governments, complete preparedness against large-scale disasters is difficult.

If the spread of viruses or other infectious diseases occurs within the construction industry, the Company Group's performance could be affected through decreases in private-sector capital investment and interruptions or delays in construction work due to states of emergency declarations. If the spread of infection becomes prolonged and threatens the survival of business partners, an impact on performance would become unavoidable. While the Company Group intends to implement infection prevention measures, the possibility of an impact on performance in the event of infections occurring within the company cannot be ruled out.

If prices of key raw materials such as cement and rebar surge, this could adversely affect the Company Group's performance through increased manufacturing costs. A dedicated procurement department works to gather market information and achieve advantageous procurement through centralized purchasing, but in periods of sharp market surges, it is difficult to completely avoid increases in procurement costs. Fluctuations in raw material prices are largely dependent on external factors, requiring continuous monitoring.