Kyogoku unyu shoji Co., Ltd.

Environmental regulations related to air pollution control imposed by national and local governments are expected to be further strengthened going forward. This is expected to result in increased capital expenditure for vehicle replacement and higher operating costs in the Domestic Transportation Business, a core business segment, which would pressure corporate earnings. The annual securities report does not contain any specific description of countermeasures.

Weather conditions, such as decreased transportation volume of petroleum products due to a mild winter or decreased transportation volume of gas for cooling due to a cool summer, directly affect the profit and loss of the Domestic Transportation Business, International Logistics Business, and Energy Business. This is a risk that spans multiple core business segments, with seasonal and weather-related fluctuations undermining the stability of earnings. The annual securities report does not contain any specific description of countermeasures.

Surges in the prices of materials such as steel and crude oil worsen the profit and loss of the Domestic Transportation Business and the Drum Can & Pail Can Business through a decline in drum can sales volume and an increase in vehicle fuel costs. There is a risk that profitability will decline if the increase in raw material costs cannot be passed on to selling prices. The annual securities report does not contain any specific description of countermeasures.

Overseas demand trends affect the sales and purchase volumes of client companies, which primarily constitutes a factor causing fluctuations in the profit and loss of the International Logistics Business. Global economic fluctuations and geopolitical risks influence customers' transaction volumes, a structure that has ripple effects on the Group's international logistics earnings. The annual securities report does not contain any specific description of countermeasures.

Orders for part of the Drum Can & Pail Can Business and the Tank Cleaning Business are received through a bidding system, creating a risk of losing orders if competitors bid at lower prices. Losing bids directly affects the sales and profit/loss of the relevant businesses, making the maintenance of price competitiveness an important challenge. The annual securities report does not contain any specific description of countermeasures.