Top > Invester Relations > Management Policy > Message to Our Shareholders

Message to Our Shareholders

Dear Shareholders:

Eizo Murakami
President & CEO

Your Board of Directors always appreciates your continuing support.


We would like to herewith report our 1st Quarter Fiscal Year 2015 consolidated financial results and our estimates for full-year financial position for Fiscal 2015 that ends March 31, 2016.

Summary of Consolidated Operating Results for FY2014

Billion Yen; rounded to the nearest 100 million yen

Results for 1st Quarter
FY2015
Three months ended
June 30, 2015
Three months ended
June 30, 2014
Change
Operating revenues 335.5 319.8 ▲15.7
Operating income 11.2 9.7 ▲1.6
Ordinary income 14.6 6.5 ▲8.1
Net income attributable to
owners of parent
10.2 4.3 ▲5.9
Exchange Rate (¥/US$)
(3-month average)
120.97¥/US$ 102.40¥/US$
Fuel oil price (US$/MT)
(3-month average)
US$366/MT US$615/MT

During the first three months of the fiscal year ending March 31, 2016 (from April 1, 2015 to June 30, 2015; hereinafter “the three-month period”), the global economy continued along a gradual recovery trend overall, despite some concerns in certain areas. In the U.S., although there was a temporary slowdown due to the impacts from severely cold weather and port strikes on west coast at the beginning of the year, the economy recovered its pace to grow. On the other hand, the European economy maintained a recovery trend despite concerns over the response to the Greek debt crisis and its effects, and geopolitical risks. In emerging countries, Brazil, Indonesia and South Africa saw economic growth stagnated due to falls in resource prices, while China saw gradual slowing economic growth. The economy in India appeared to gradually turn to a recovery due to a fall in crude oil prices.

The Japanese economy showed signs of recovery in consumer spending and capital expenditure supported by continuing improvement in employment and the income environment, and the overall economic recovery trend in Japan continued.

In the business environment for the shipping industry, there were some negative factors, such as declines in market conditions in the containership business and dry bulk business. However, as a result of slow steaming and other ongoing cost-saving along with the effect of a recovery in the oil tanker market, the yen’s further depreciation, and the decline in fuel oil prices, business performance improved year on year.


As a result, operating revenues for the three-month period were ¥335.457 billion (up ¥15.670 billion year on year), operating income was ¥11.243 billion (up ¥1.558 billion), ordinary income was ¥14.587 billion (up ¥8.106 billion), and net income attributable to owners of parent was ¥10.194 billion (up ¥5.914 billion).



2) Prospects for Fiscal 2015

Billion Yen; rounded to the nearest 100 million yen

Prospects for 1st Half FY2015 Current Forecast
(at the time of
announcement of
the 1st Quarter result)
Prior Forecast
(at the time of
announcement
dated March 31, 2015)
FY2014
Operating revenues 6,800 7,350 6,598
Operating income 170 210 249
Ordinary income 200 200 259
Net income attribute to
owners of parent
145 115 212
Exchange Rate (¥/US$)
(6-month average)
120.90¥/US$ 118.00¥/US$ 102.52¥/US$
Fuel oil price (US$/MT)
(6-month average)
US$373/MT US$350/MT US$611/MT


Billion Yen; rounded to the nearest 100 million yen

Prospects for FY2015 Current Forecast
(at the time of
announcement of
the 1st Quarter result)
Prior Forecast
(at the time of
announcement
dated March 31, 2015)
FY2014
Operating revenues 1,350 1,460 13,524
Operating income 39 43 480
Ordinary income 40 40 490
Net income attribute to
owners of parent
23 23 263
Exchange Rate (¥/US$)
(12-month average)
119.45¥/US$ 118.00¥/US$ 109.19¥/US$
Fuel oil price (US$/MT)
(12-month average)
US$361/MT US$350/MT US$541/MT


In the containership business, a recovery trend in line with improvements in employment and individual consumption is expected in the U.S. economy. However, the economic trends in Europe and the slowdown in the Chinese economy have given rise to uncertainties. In addition, deliveries of newly-built and large-sized vessels are continuously expected. These still lead a projection for adverse business environment. Under such circumstances, the Group will work to improve income by maximizing the advantage of alliance, mainly on the East-West services, strengthening its competitiveness with the launch of five energy-efficient, newly-built and large-sized vessels with a loading capacity of 14,000 TEU, and adjusting service capacity in line with market demand.

In the logistics business, the Group is forecasting steady demand for international logistics out of Asia, in addition to domestic logistics in Japan and the Asian region.

In the dry bulk business, the number of vessels being laid up and scrapped in the large vessel sector increases under a prolonged slump in market conditions. However, it will still take some more time for recovery of the supply-demand balance, and in the short term, freight rates are expected to continue at low levels. In the medium and small vessel sector, recovery from bottom of freight market can be seen. However, the sense of over-supply in vessels remains as strong, and freight market is expected to continuously struggle for upward. The Group will continue to take all measures to improve income, including securing medium- and long-term contracts, efficient allocation of vessels and reduction of vessel operating costs in an effort to build an income structure that is resilient against market fluctuations.

In the car carrier business, the Group will continue to reinforce business operations to pursue cargos from South-East Asian countries and trade within the Atlantic Basin in line with the changing trade structure. At the same time, the Group will work to build a more stable and stronger business platform, including the successive launch of large-sized, new-generation vessels, featuring larger loading capacity of heavy construction machinery and rail trains and improved fuel efficiency.

In the LNG carrier business and tanker business, the Group expects stable utilization of the LNG carriers, VLCCs, and LPG carriers based on medium- and long-term charter contracts. The Group also expects improvement of the market conditions for medium-sized crude oil carriers and oil product carriers, leading improvement of income based on efficient allocation of vessels.

In the short sea business, the Group will work to improve its income through efficient allocation of vessels and by strengthening its sales activity. In the coastal business, the Group expects stable cargo movements overall for shipper-dedicated vessels and liner services. In ferry services the Group plans to increase volume of trucks, cars and passengers on services through aggressive sales activities.

In the offshore energy E&P support business, contrary to the drill ship, for which stable utilization is expected, the Group anticipates market conditions for the offshore support vessels need some more time to recover. Under such circumstances, the Group will improve income by seeking the efficient allocation of vessels and all other measures.

In the heavy lifter business, the Group expects the market of profitable contacts such as transportation of project cargos will be smaller, and overall revenues are estimated to decline year on year. However, in semi-liner services, the Group will work to increase cargo volume and efficiency of allocation of vessels.

Despite the continuous uncertain outlook for market conditions in the containership business sector and dry bulk business sector, the Group will take all measures to improve its income, including efficient allocation of vessels and cost reduction.

For the annual dividend in the fiscal year ending March 31, 2016 as announced previously, we plan to pay ¥5.0 per share (including an interim dividend of ¥2.5 per share).


We express our appreciation for your support and look forward to your continued cooperation to our “K” Line Group.

Thank you very much for your kind attention.

July 31, 2015

The content on this website is provided as a convenience for our investors for informational purpose only. This is not intended to solicit investors to buy our company's stock. This information may include forecasts, projections and strategies that are based on the assumptions. Number of risks and uncertainties may cause actual results to differ from the description in this website. The final decision and responsibility for investments rests solely with the user of this site.

pagetop