A Message from The CEO

I would first like to express my appreciation to all our stakeholders for your ongoing support.
　Looking at the consolidated results for fiscal 2018 among the three businesses of our portfolio, the investment business we are developing in the U.S. posted an operating profit, the fashion brands business broke even, and the construction consultant business posted an operating loss. On a non-consolidated basis, TriIs posted an operating profit. As a result, we are very happy to be able to continue the payment of dividends for the eighth consecutive year, thanks to the support of everyone. (forecast)
　In addition, it has been three years since we established a subsidiary in the U.S., and we are pleased to inform that one of its initial purposes, the assets allocation change across the Group, has been almost completed. In other words, from the viewpoints of not only pursuing global business expansion, but also building a global balance sheet, we have been selling domestic tangible fixed assets and purchasing overseas tangible fixed assets. As a result, compared with the total tangible fixed assets worth 1,016 million yen held by the Group at the end of fiscal 2015, which were entirely domestically based assets, the total tangible fixed assets held by the Group were worth 4,300 million yen at the end of fiscal 2018, in which the domestic tangible fixed assets were worth 300 million yen while the overseas tangible fixed assets amounted to 4,000 million yen, more than 10 times the worth of the domestic tangible fixed assets. On a long-term trend, we predict a diminishing presence of the Japanese economy in the global market, but we believe such trend will contribute to further improvement of the corporate value of the Group in the future.
　Looking into the macroeconomic environment, in the U.S. economy, on one hand, the FRB (Federal Reserve Board) raised interest rates in August 2018 for the seventh time since 2015, when it started doing so; yet, some quarters say that it will temporarily cease to raise interest rates. However, I personally expect that long-term interest rates will rise double or more from current 3% considering the current situation. On the other hand, in advanced economies including European countries and Japan, not only short-term but also long-term interest rates are negative in real terms, and it is apparent that in their foreign exchange markets, the dollar tends to be preferable. The global economy is fraught with worrying factors such as the “America First” policy by the Trump government and the trade friction between the U.S. and China, and as shown by the annual real GDP growth rate forecast of 3.5% for 2019, announced by the OECD (Organisation for Economic Co-operation and Development), the impression of a slowdown in the global economy has been growing stronger.
　The Group, as described above, has completed measures to develop our long-term business and improve our corporate value. We will continue to innovate and negate the conventional wisdom while also establishing a cost advantage through innovation, with the aim to create corporate value that sets us apart in the world. To reiterate, in terms of size, we aim for a small, yet shining corporate group that ranks world No. 1 in its chosen fields by utilizing intellectual capital to insulate ourselves from the adverse impacts of economic fluctuations. Our policies remain unchanged.
　Regarding the upcoming fiscal year, we will strive to post operating profits in all three businesses of our portfolio, to acquire a new business portfolio and to increase operating profits globally. In particular, the investment business we are developing in the U.S. has been accounting for increasingly larger portions of the balance sheet and statement of income for the Group, and we hope that this trend will accelerate the improvement of our corporate value.
　Raising corporate value is significant for all stakeholders of the TriIs Group. All business decisions are made so that they are economically rational with respect to raising corporate value. I would like to again thank all stakeholders of the TriIs Group for your continuing encouragement and support.