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Jan 5,2022

2022 New Year's Message from the President (Summary)

Ryoichi Oka, President & CEO and Representative Director of Mitsui E&S Holdings Co., Ltd., has delivered his New Year's message to all personnel, including those of Group companies. It is summarized below.

Happy New Year to you all. Last year, as in the year before that, the entire world saw major changes due to the impact of the COVID-19 pandemic. We also had a major change in the company's structure under our Business Revival Plan. I want to extend my sincere gratitude to our employees, who are working hard under these difficult conditions. My special thanks go to those who have been handling various matters in Japan and other countries.

For us, this year is the final year of the Mid-Term Business Plan 2020. It is an important year during which we will finish the Business Revival Plan. I would like to touch on three items at the beginning of the year.

Current status and challenges of our Group

Regarding the financial results for FY2020 that we announced in May last year, we posted a consolidated net profit.
On the other hand, we expect unfavorable consolidated financial results for the current fiscal year. This is because MODEC revised down its full-year forecast in November, partly reflecting a temporary loss caused by non-operation of FPSOs and repair expenses.
What we need to do now is to show the stakeholders that businesses of the Mitsui E&S Group are strong and will remain profitable, and that each business division should achieve this year's target profit. I ask individual business divisions to do their best in the remaining three months, even though the environment remains tough due in part to rising material costs and the impact of COVID-19.
In the meantime, the business revival plan has made progress, and completion of the business restructuring within the Group, etc. has come in sight. Our Group's direction and points of focus have become clear. Hereafter, we will put everything we have into growth fields and steer ourselves in the direction for the overall Group's growth.
Moreover, social engagement is more important than ever before for our survival and growth. A change like "SDGs," or United Nations Sustainable Development Goals, which results in greater importance attached to sustainability, also provides our Group with new business opportunities, such as the change to develop new products with new technologies.
As tasks to which our Group can contribute, we will first focus on the decarbonized society and shrinking population. We will focus our efforts on businesses which will contribute to society from the viewpoint of green energy and digitalization.

Our future measures and direction

2022 is the final year of the Mid-Term Business Plan 2020. It is important to advance the measures for growth set under the mid-term plan, steadily and speedily.
In the first half of FY2021, we set up the Growth Business Promoting Dept. at Mitsui E&S Holdings. Organizations in charge of new energy and the promotion of autonomous control and digitalization were also established at operating companies. With a focus on the marine business domain, where our Group has strength, we will position the following social issues as our business opportunities, aiming to achieve results in each as soon as possible. One is the conversion to clean energy, including the use of hydrogen and ammonia as marine fuel and the realization of Carbon Neutral Port. The other is the promotion of digitalization, including the realization of remote and automated ports and the application of various exploration and diagnostic technologies.
Moreover, in August last year, we announced the abolition of the pure holding company structure.
The decision reflects our determination to focus on the growth fields specified in the Mid-Term Business Plan 2020, further strengthen its strong businesses, and evolve into an organization that is moving forward powerfully towards growth. While the structure of our Group is changing, we will close the distance between the management team and business divisions and integrate them in taking actions speedily, in a more compact organization with a new structure.

Safety and health, compliance, and information security

The highest priority in all circumstances must be given to safety and health, compliance, and information security. The SDGs include "Decent Work and Economic Development." Ensuring health and safety of workers is a major theme.
On the other hand, concerns have emerged recently that the pandemic has meant that managers and supervisors have fewer opportunities than before to see the situation directly for themselves.
Each one of us needs to be careful and to ask managers and supervisors to visit business sites, see what is happening there with their own eyes, and listen to each worker to confirm the situation.
In addition, information security has grown even more important, partly due to the spread of remote work. There is also a risk that company information and work-related information will carelessly leak via photos or your activities on social media that you believe to be private.
While the company will manage the risk appropriately, it is ultimately essential that each one of you take the correct actions. I ask you to act daily with an awareness that these are your own issues.

In conclusion

Vaccinations were rolled out in Japan in the second half of last year, and resulted in a decline in new infections. Just when we thought that normal life had returned, the Omicron variant emerged. Thus, the world is expected to remain uncertain for a while. The environment surrounding companies and businesses will also remain uncertain. However, our companies and employees, who have implemented the business revival plan during the pandemic, are about to gain a lean, resilient structure.
This year is the crucial period. I believe that when you look back this year in the future, you will feel happy you did it, although it was hard. Let's try hard together.

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