Annual Report 2012


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MARKETSTRUCTUREANDGROWTHINDEVELOPINGCOUNTRIESANDPROCEEDWITHSTRATEGICINVESTMENTSINGROWTHSECTORS.ATTHESAMETIME,WEUNDERTOOKQUALITATIVETRANSFORMATIONFROMANACROSS-THE-BOARDEXPANSIONPOLICYANDSETASOUROBJECTIVESBUILDINGASTABLEEARNINGSSTRUCTUREANDSTRENGTHENINGOURfiNANCIALSTANDING.HOWEVER,DELIVERYOFLARGENUMBERSOFNEWSHIPSINALLSECTORS,ESPECIALLYCONTAINERSHIPS,CONTINUEDINfiSCAL2011.ALTHOUGHWEHADPLANNEDFORTHEEFFECTSOFOVERSUPPLY,THESTAGNATIONINMARKETCONDITIONSEXCEEDEDOUREXPECTATIONS.INTHECARCARRIERBUSINESS,PROFITABILITYDETERIORATEDASARESULTOFSTAGNANTCARGOMOVEMENTSFOLLOWINGTHEGREATEASTJAPANEARTHQUAKECOUPLEDWITHTHEIMPACTOFTHEflOODINGINTHAILANDINOCTOBER.INANEXTREMELYADVERSEBUSINESSENVIRONMENTEXACERBATEDBYANULTRA-STRONGYENANDPERSISTENTLYHIGHFUELOILPRICES,WEWEREUNABLETOACHIEVESATISFACTORYBUSINESSPERFORMANCEANDRECORDEDASUBSTANTIALLOSS,FORWHICHIAPOLOGIZETOOURSTAKEHOLDERS.PLEASEPROVIDEANOVERVIEWOF“K”LINEVISION100:BRIDGETOTHEFUTURE,THEMEDIUM-TERMMANAGEMENTPLANANNOUNCEDINAPRIL2012COVERINGTHEPERIODFROMfiSCAL2012TO2014.LASTYEAR,ASIEXPLAINED,WEEXPERIENCEDANEXTRAORDINARILYDIFfiCULTBUSINESSENVIRONMENT,ANDALTHOUGHONLYAYEARHADPASSEDSINCELAUNCHING“K”LINEVISION100:NEWCHALLENGES,RECOGNIZINGTHATWEFACEANEXTREMELYADVERSEBUSINESSENVIRONMENT,WEESTABLISHEDANEWMEDIUM-TERMBUSINESSPLAN,“K”LINEVISION100:BRIDGETOTHEFUTURE,TOWEATHERTHISDIFfiCULTPERIODANDBUILDABRIDGETOANEWERAOFGROWTHFOR“K”LINE.THEOBJECTIVEOF“K”LINEVISION100:BRIDGETOTHEFUTUREISTODEVELOPABUSINESSSTRUCTURETHATENABLESUSTOBEPROfiTABLEONANORDINARYINCOMEBASISEVENINMARKETDOWNTURNS.INPARTICULAR,THECONTAINERSHIPBUSINESSOPERATEDATALOSSINfiSCAL2011,ANDIAMDETERMINEDTOBOOSTPROfiTABILITYANDRETURNTHEBUSINESSTOPROfiTTHROUGHCONTINUEDRESOLUTEIMPLEMENTATIONOFSTRUCTURALREFORMS,INCLUDINGSTREAMLININGOFTHEflEET.WEWILLALSOSEEKTOINCREASESTABLEEARNINGSGROUP-WIDE,FOCUSINGONTHREEKEYMISSIONS:RETURNINGTOPROfiTABILITYINfiSCAL2012;BUILDINGASTABLEEARNINGSSTRUCTURE;ANDSTRENGTHENINGOURfiNANCIALSTANDING.ATTHESAMETIME,WEWILLCONTINUETOFOCUSONTHEfiVEBASICPRIORITIESWEHAVEQUESTION2ANSWERFISCAL2011BUSINESSRESULTSRESULTORIGINALTARGETVARIANCEOPERATINGREVENUES972.31,090.0(117.7)ORDINARYINCOME(49.0)3.0(52.0)NETINCOME(41.4)2.0(43.4)DER(TIMES)2.441.830.61ROA(%)(5)0(5)EQUITYRATIO(%)2326(3)EXCHANGERATE(YEN/US$)*79.0685.0(5.94)BUNKERPRICE(US$/MT)67265022(BILLIONSOFYEN)*12MONTHAVERAGE9ANNUALREPORT2012


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