FUKUYAMA TRANSPORTING CO., LTD.

Deregulation has increased the number of operators in the trucking industry, exposing the company to intense excessive competition. In particular, the mainstay commercial freight transportation business has many competitors and is also affected by economic trends, making improvements in transport quality, productivity, and capital investment essential; these factors increase costs and affect business performance. Investment in wage improvements and better working conditions also represents an additional cost burden.

The company operates its business under the Motor Truck Transportation Business Act and the Freight Forwarding Business Act, and there is a possibility that legal restrictions may be imposed on part of its operations due to serious vehicle accidents or similar incidents. Increases in transportation costs due to amendments to the Road Traffic Act and similar laws, as well as vehicle equipment cost burdens due to tightening of environmental regulations such as exhaust gas restrictions, may affect business performance. The company is making every effort to prioritize legal compliance as its top priority.

In the trucking business, serious accidents involving vehicles or cargo may occur and lead to litigation, and depending on the amount of damages, this may affect business performance. As of March 31, 2026, no litigation that would affect business performance has occurred.

As of March 31, 2026, the balance of interest-bearing debt was ¥111,333 million, and changes in the financial environment at the time of refinancing affect funding costs. The company seeks to achieve lower funding costs by negotiating and comparing various terms, such as the proportion of fixed-rate borrowings and the borrowing period, with prospective lenders; however, depending on future interest rate conditions, this may affect business performance.

Through its trucking business and other operations, the company handles a wide variety of information related to customers' cargo, and in the event of equipment failure or information leakage, this could become a credibility issue for the company. This may affect business performance due to the occurrence of damages claims and similar costs.

The mainstay trucking business is highly dependent on fuel costs, and fluctuations in crude oil prices directly affect the cost structure. In periods of rising crude oil prices, increased fuel costs put pressure on business performance.

The shortage of drivers in the trucking business is expected to continue into the future, affecting business performance. The company recognizes the need for investment in wage improvements and better working conditions to make recruitment activities more advantageous, and these also constitute cost-increasing factors.

In the event of a new infectious disease outbreak, the company's policy is to conduct business activities with thorough infection prevention measures to ensure the safety and health of customers and employees. If an infectious disease becomes prolonged or spreads widely, this may affect business performance through a decline in sales due to stagnation of economic activity and restrictions on business activities.

The semiconductor shortage may cause delays in vehicle production, making it difficult to procure the necessary vehicles, which could hinder business operations and affect business performance. Since vehicles are a core business asset in the trucking business, delays in procurement directly affect the maintenance and expansion of transportation capacity.