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March 10, 2006
Kawasaki Kisen Kaisha, Ltd.

New Management Plan "K" LINE Vision 2008+

In April 2004, Kawasaki Kisen Kaisha, Ltd. ("K" Line) started a newly developed 5-year management plan called "K" LINE Vision 2008. Since then, as we have recognized "sustainable growth and establishment of a stable profitability structure" as the most important tasks, we have been continuously expanding and upgrading our fleet of ships and services, and at the same time have endeavored to expand our businesses in new markets and significantly growing business fields. During this time, the global economy has experienced numerous structural changes, particularly in China, and due to high fuel oil price, business environment surrounding marine transportation has substantially changed from the projections we made two years ago. In addition, the major portion of our plan for upgrading our fleet has been fixed for the period up to 2008, and in consequence, our planning for new investment in vessels will aim for the mid-2010s. Under such circumstances, where there have been such substantial changes in the business environment and profit structure, it was decided that we would establish a newly-revised interim management plan to be known as "K" LINE Vision 2008+, which starts from fiscal 2006 as our navigator to meet the challenges for achieving record-high management goals. "K" LINE Vision 2008+ also includes our long-term Vision.

[Numerical Targets for FY2008]

While promoting further extension of our business activities (Vessels in operation: 500; operating revenues: ¥1,100 billion), we will make all efforts to constantly secure "A" bond rating by achieving more than ¥400 billion in shareholders' equity, and equity ratio of about 40%, ROE of about 20%, and debt to equity ratio of 90% or less, and will pursue increase of payout ratio of 20% on a consolidated basis for the present.

[Numerical Targets for FY2006-FY2008 and Mid-2010s]

(Unit: ¥Billion)

Operating revenues 970.0 1,050.0 1,100.0
Ordinary income 75.0 90.0 110.0
Net income 53.0 60.0 70.0
Payout ratio 20%, consolidated basis
ROE 19% 19% 19%
Interest-bearing debt 320.0 340.0 350.0
Shareholders' equity 293.0 342.0 400.0
Equity ratio 35% 37% 39%
Debt Equity Ratio (DER) 109% 99% 88%
Scale of Fleet     500 vessels
Total investment in vessels From FY'06 to FY'08: 125 vessels, ¥550.0 billion
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30%, consolidated basis
More than 10%
50% or more
50% or less
700 vessels

(Assumptions: Foreign exchange rate:¥110/US$, Fuel oil price: US$300/MT)

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