Annual Report 2012


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TOACHIEVEEXPANSIONOFSTABLEEARNINGSINTHEDRYBULKBUSINESS,WEWILLMAINTAINEXISTINGMEDIUM-TERMANDLONG-TERMCONTRACTSWITHCUSTOMERSINJAPANANDABROADANDOBTAINNEWMEDIUM-TERMANDLONG-TERMCONTRACTSWITHOVERSEASCUSTOMERS,FOCUSINGONDEVELOPINGCOUNTRIES.WEWILLALSOCONTINUEEFFORTSTOACHIEVESTABLEEARNINGSINOTHERBUSINESSSECTORS,INCLUDINGENERGYTRANSPORTATION,HEAVYLIFTERANDLOGISTICSBUSINESSES.INTHECARCARRIERBUSINESS,WEWILLSERVETHEDEMANDFORCOMPLETEDBUILT-UPCARSFROMJAPANANDREORGANIZESERVICEROUTESINRESPONSETOCHANGESINTRADEPATTERNSINVOLVINGASHIFTOFPRODUCTIONSITESTOOVERSEASLOCATIONSANDHIGHERDEMANDINCHINAANDOTHERASIANCOUNTRIES.WEWILLALSOPUTINPLACEASYSTEMTHATCANflEXIBLYMEETTHEREQUIREMENTSOFAFAST-CHANGINGMARKETENVIRONMENTBYEXPANDINGTRANSPORTOFHEAVYVEHICLES—AGRICULTURALANDCONSTRUCTIONMACHINERYANDSTATICCARGOSUCHASMANUFACTURINGMACHINERY—ASANEWCOREBUSINESS.IAMCONVINCEDTHATTHROUGHSUCHINITIATIVESWEWILLSOLIDIFYTHEEARNINGSBASEANDCONSTRUCTAMORESTABLEBUSINESSBASEOVERTHEMEDIUMANDLONGTERM.WEWILLSEEKTOSTRENGTHENOURfiNANCIALSTANDINGBYCAPPINGTHE“K”LINEGROUP’SINVESTMENTCASHflOWINFISCAL2012ANDBEYONDAT¥50BILLION,LESSTHANDEPRECIATIONOFAPPROXIMATELY¥60BILLION,ANDBYIMPROVINGCASHflOWANDREDUCINGINTEREST-BEARINGDEBT.WEWILLMAKENEWINVESTMENTSINCAREFULLYSELECTEDSECTORSTHATOFFERPROSPECTSFORSTABLEPROfiTSORHIGHPROfiTS.SPECIfiCALLY,INTHECARCARRIERBUSINESS,WEINTENDTODEPLOYVESSELSSUITEDTOANTICIPATEDFUTURETRADEPATTERNS.INTHEENERGYTRANSPORTATIONBUSINESS,WEINTENDTOACTIVELYPARTICIPATEINLNGPROJECTSTHATOFFERPROSPECTSFORSTABLEREVENUESFROMLONG-TERMCONTRACTSASONEOFJAPAN’STHREEMAJORSHIPPINGCOMPANIES.WEWILLPRIORITIZEIMPROVEMENTINOURfiNANCIALSTANDINGOVERGROWTH.OURAIMISTOSTRENGTHENOURfiNANCIALSTANDINGFROMALOW-WATERMARKINfiSCAL2011ANDRETURNTHEEQUITYRATIOTO30%BYfiSCAL2014.WHATIS“K”LINE’SPOLICYONOPERATINGSAFETY?MARINEACCIDENTSCAUSEOILPOLLUTIONANDOTHERSERIOUSENVIRONMENTALPOLLUTION.LEAKAGEATSEAOFTHEHEAVYOILUSEDASSHIPFUELORTHECRUDEOILTRANSPORTEDBYTANKERSRESULTSINRUINOUSDAMAGETOTHEMARINEENVIRONMENT.TOPREVENTSERIOUSACCIDENTS,“K”LINECOMPLIESWITHTHEINTERNATIONALSTANDARDSCONCERNINGSHIPSREQUIREDUNDERCONVENTIONSESTABLISHEDBYTHEINTERNATIONALMARITIMEORGANIZATION(IMO).INADDITION,WEENSURESAFEOPERATIONANDIMPROVESHIPQUALITYOFTHEENTIREflEETBYESTABLISHINGVESSELQUALITYSTANDARDSANDOPERATIONMETHODSTHATEXCEEDLEGALREQUIREMENTSANDBYHAVINGSHORE-BASEDSHIPMANAGEMENTPERSONNELPERIODICALLYCONDUCTSHIPVISITSTOCONfiRMTHATSHIPSINOPERATIONMEETTHESESTANDARDS.ATTHESAMETIME,WEAREWORKINGTOENHANCEOURSAFETYMANAGEMENTSYSTEMSANDSTRENGTHENQUESTION5ANSWERREVIEWOFINVESTMENTCASHFLOWINFISCAL2012ANDBEYONDFY2011FY2012FY2013FY2014INVESTMENTCASHflOW83.250.050.050.0PREVIOUS(APRIL2011)95.080.065.0—DIFFERENCEFROMPREVIOUS(11.8)(30.0)(15.0)—(BILLIONSOFYEN)11ANNUALREPORT2012


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