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Contents
111. Outline of Business
Activities
1.
General Review
2. Status of Investment during the Current 1st Half Year
3. Process of Business Results & Condition
of Property
222.Overview of the Company's Affairs(as of Sept.30,1998)
1. Stock Information
2. Employees in Number
3. Ships in Operation
4. Directors and Corporate Auditors
333. Non-Consolidated Balance
Sheets (as of Sept.30,1998)
444. Non-Consolidated Statement s of
Income (from Apr.1,1998 to Sept. 30,1998)
555. Offices (as of
Sept.30,1998)
About Stock
Yen Representation
In the following tables the letter Y indicates
Japanese Yen |
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111. Outline of Business
Activities
1. General Review
The global economy during the current 1st half year had been under the expansive and
serious impact of the Asian currency crises beginning in summer, 1997.
In addition, a substantial devaluation of the Russian currency-the ruble incurred a
subsequent turmoil in the Latin American economies, resulting in prospects for the U.S.
economy also becoming opaque, despite having maintained a firm condition.
With regards to the main countries in Europe, due to a stagnation in exports, they were
obliged to sustain their economies relying on domestic demand. The economies began to show
severeness as a result.
In Asia the economies experienced a more serious depression due to the decrease in
intra-region demand and Japan's economy being in depression, and eventually fell into a
minus economic growth in most of the nations except in Taiwan, Singapore and China.
In Japan also, not only a continuing decline in personal consumption and investment in
plant/equipment but the financial turmoil was further worsening the financial condition of
businesses, particularly insolvency. Eventually, the economy still remained to be low-key.
Under the above circumstances, the Company continued to make efforts for reinforcement and
efficient operation of each class of fleet, and to endeavor continually at all levels for
reduction in costs and expenses, and furthermore the average exchange rate of the current
1st half year proceeded to be about Y138 per U.S. Dollar, Y20 cheaper as compared with the
corresponding period last year.
Eventually, the Company could post operational revenues of Y207,056M, a record high (Y187,
967M over the corresponding period of last year) and ordinary profit of Y4, 490M (Y6, 847M
last year), attaining to interim net profit of Y1, 539M (Y1, 570M last year) after adding
and subtracting special profit/loss including devaluation of marketable securities.
In terms of payment of an interim dividend, the Company would like all of its shareholders
to understand that the Company is determined to pass it, giving full consideration to the
environment which will continue to be harsh for some time to come.
The Company could accomplish payment of a dividend in the last fiscal year, thereby
meeting expectations of its shareholders to some extent. As you are aware, the new
management plan, "The New "K"LINE Spirit for Century 21(New K 21)"
started last April. Under the same plan, the management and employees of the Company and
its whole Group have been endeavoring to ensure that the Company would be able to afford
constant payment of dividends, along the basic lines of globalization of management,
importance given to consolidated management, vitalization of organization and safety in
navigation.
We believe that by the close of this fiscal year the Company will be able to attain a
level of income sufficient to permit payment of a dividend unless any further fall breaks
in circumstances surrounding the ocean-going shipping world.
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[Container Business]
In North America Service, cargo movement to the U.S.A. from Asia proceeded to be extremely
steady, and freight rates were partially restored.
In the meantime, cargo movements to Asia from the U.S.A. have dropped due to the economic
crises in Asia and freight rates also declined. The difference between cargo volumes in
the Asia-U.S.A. and U.S.A.-Asia widened, and consequently increased necessity for return
of empty containers.
In Europe Service which was in the same situation as North America Service, cargo from
Europe to Asia could not grow, whereas on the Asia to Europe route, the Company was
successful in increasing loading cargo in volume and improving freight rates.
In Inter-Asia Service, cargo movements could not recover due to the economic crises in the
Asian nations and Japan's stagnant economy. Exposed to such a tough situation, the Company
was able to minimize the minus effect taking every pre-emptive measure for rationalization
to cope with the sharp decline in cargo movement on the Japan/Bangkok route.
Under such circumstances, efforts for reduction in costs and expenses and rationalization
on each service route were carried out. The bottom line of Container Business, however,
ended with a lower level than the same period last year because of the decline in
Asia-bound cargo volume and freight rates in North America Service and Europe Service.
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[Bulk Carrier and Car Carrier Services]
According to review on general dry bulk carrier markets, despite the market for large bulk
carriers having proceeded to be comparatively firm during last fiscal year, it started to
turn around to become softer since early 1998, attributable to a fall in purchasing power
caused by devaluation of currencies in the Asian nations and a drop in production of crude
steel by Japan's stagnant economy.
The market for medium bulk ships deteriorated as shown in the fact that the grain freight
rate U.S. Gulf/ Japan, a main freight index, declined to an eleven -year record low of
US$12.00 level. Overall, the whole bulk carrier market including small bulkers proceeded
to be low-key.
Under such difficult situations, the Company made efforts to secure long- & short-term
contracts of affreightment and practiced competitively- sophisticated alignment of its
fleet and improved efficiency in ship operation.
In Car Carrier Services, exportation from Japan continued to be favorable with the support
of cheaper Japanese Yen. The Company concentrated on efficient operation of available
fleet and successfully coped with an increase in space demand through chartering timely on
a short-term basis. The Company went on to make business efforts in the fields of
cross-trade and importation into Japan. As a consequence, the Company could carry more
vehicles during the current period as compared with the corresponding previous period.
The Services, on the whole, could record a better bottom line as compared with the
corresponding period of last year attributed to the Company's business efforts to acquire
long-term contracts of affreightment and increase cargo loadings in volume under the
influence of deteriorating markets.
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[Tanker and Energy Transportation Services]
The markets for oil tankers continued to be relatively firm due to active cargo movement
supported by a decline in crude oil price. The markets for oil-product carriers were
low-key due to a stagnation in demand for product.
Under such circumstances, however, the Tanker Services accomplished a better bottom line
during the current 1st half year as the newbuildings of last year were being put into full
operation with long-term cargo guarantees.
The scale of the Company's business of transporting steaming coal for power companies
developed to a significant extent: three new ships originally designed for transportation
of steaming coal were put into operation, in addition to two dedicated carriers with
long-term cargo guarantees.
In Liquefied Natural Gas Carrier Services the bottom line was improved as compared with
last year owing to fleet alignment in progress with the backdrop of completion of No.5
carrier for Qatargas LNG Project during the current 1st half year.
(Operational Revenues Sector-wise)
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2. Status of Investment during the Current 1st Half Year
(1) Carrier Completed during the current term
(2) Carriers under Construction at the close of the current 1st half year
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3. Process of Business Results & Condition of Property
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222.Overview of the Company's Affairs(as
of Sept.30,1998)
1. Stock Information
(1) Authorized Shares of Common Stock 1,080,000,000 shares
(2) Issued Shares of Common Stock 585,501,874 shares
(3) Number of Shareholders(as of Mar. 31, 1998) 48,639 shareholders
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2. Employees in Number
|
On-Land-Duty Employees |
453 persons |
|
At-Sea-Duty Employees |
380 persons |
|
Total |
833 persons |
Attention:
1. No transferees to other companies are included in the figures thereon.
2. The On-Land-Duty Employees include fourteen At-Sea-Duty Employees.
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3. Ships in Operation
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4. Directors and Corporate Auditors
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333. Non-Consolidated Balance Sheets (as of
Sept.30,1998)
1. Accumulated depreciation of vessels, property and equipment amounted to Y103,424
million.
2. Contingent liabilities amounted to Y149,644 million.
3. Revenues from cargo freight and the related costs and expenses, except for those from
container vessels, are recorded in full at date the vessels complete their voyages. In
accordance with a change in the Company's accounting policies effective the first half of
the current year, accounts receivable from cargo freight voyages which were incomplete at
the end of the current six-month term have not been reflected in the non-consolidated
balance sheet at September 30, 1998. As a result, accounts receivable and advances
received each decreased by Y4,135 million. This change in method of accounting had no
effect on the non-consolidated statement of income for the six months ended September 30,
1998.
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444. Non-Consolidated Statement s of Income (from
Apr.1,1998 to Sept. 30,1998)
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555. Offices (as of Sept.30,1998)
Registered Head Office : 8, Kaigan-dori, Chuo-ku, Kobe 650-0024 (Shinko Bldg.)
Head Office: 2-9, Nishi-shinbashi 1-chome, Minato-ku, Tokyo 105-8421 (Hibiya Central
Bldg.)
Kobe Branch: 8, Kaigan-dori, Chuo-ku, Kobe 650-0024 (Shinko Bldg.)
Osaka Branch: 6-2, Hiranomachi 3-chome, Chuo-ku, Osaka 541-0046 (Chiyoda Seimei Bldg.)
Nagoya Branch: 13-3, Higashisakura 1-chome, Higashi-ku, Nagoya 461-0005 (NHK Nagoya Bldg.)
Other Offices : Yokohama Office, Hiroshima Representative Office
Overseas Offices: New York, other 34 places (including overseas subsidiaries)
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