Q1. You explained that the effect of injecting 14,000TEU containerships was going to be about 8.0 billion yen among the factors in increased profits of 21.0 billion yen for fiscal 2016. Please let me know that of injecting containerships in fiscal 2015.

A1. The earnings improvement effect of injecting five 14,000TEU containerships is about 10.0 billion yen a year. Since five containerships were injected in due order in the first half of the year, the effect was cut almost in half to about 5.0 billion yen on a full-year basis. As explained earlier, the effect of rationalized ship allocation for fiscal 2016 is about 8.0 billion yen, which is almost half of the 16.5 billion yen arising from cost savings in Containership Business. The effect of rationalization of ship allocation for fiscal 2016 includes this earnings improvement effect of about 5.0 billion yen.


Q2. Please tell me the situation for both annual and half-yearly contract renewals and your view on spot contract rates for this year.

A2. Negotiations for annual contracts are now progressing for both Asia-North America and Asia-Europe services. Unfortunately many contracts are renewed at freight levels lower than those in the previous year, affected by the stagnant spot market. Our policy is not to chase too far if the freight level does not allow securing a certain level of profit, and we believe the number of annual contracts for Asia-North America services will be reduced from slightly above 50% in the previous fiscal year to some 40% in the end. For the Asia-Europe services, the number of spot contracts is expected to be around 20% same as last year.


Q3. Please let me know your view about the alliance reorganization.

A3. It was announced that CMA-CGM, COSCO, EVERGREEN and OOCL are going to form a new consortium CCEO next year. Another one is 2M composed of MAERSK and MSC. As a result of forming the new consortium, it was announced that EVERGREEN and COSCO are going to leave CKYHE, the alliance we are in. From G6, OOCL and APL, which is to be purchased by CMA-CGM, are going to leave the alliance. Amid such a situation, we are currently reviewing various considerations for building a new optimum system. It may take a while before we make an announcement about a new alignment for our company, but there currently is no major matter of concern regarding our service system for the spring of 2017.


Q4. What image do you have about the scale of alliance?

A4. The scale is automatically decided according to the combination of companies in various scenarios which is currently under consideration. It’s entirely up to the end result.

Q1. In the revision of the Medium-term Management Plan, the amount of capital investment is reduced by 100.0 billion yen. Please let me know why the investment cutback in stable earnings is much greater than that in growth. In particular, it seems you plan to reduce 2 car carriers from original plan. Please let me confirm whether it is merely to put investment off or your view on the medium- to long-term prospect of the market has changed.

A1. In the original Medium-term Management Plan, it was planned to maintain or expand the scale of our middle- and small-size vessel fleet for Dry Bulk Business. On the contrary, in the revision, we decided to resolutely shrink the scale, which resulted in a substantial reduction in the amount of associated alternative investment. Additionally, sales of ships conducted as part of structural reform posed a negative impact on the investment cash flow. The amount of investment in stable earnings was greatly reduced by these two factors. For the strategic investment in growth, the amount was reduced because we decided to freeze the plan to expand our Cape-size fleet for the time being. Regarding car carriers, the number of vessels appears to be smaller by 2 due to the timing of counting them. There is no change to the investment plan.


Q2. Regarding the policy on dividends, you said you would not decide the dividend for this fiscal year at this stage and would place the highest priorities on structural reform. What would trigger you to change your policy and start paying dividends? Is it correct to think that dividends will be decided promptly if actual structural reform progresses faster than you have expected?

A2. As you pointed out, the prerequisite for dividends is progress in structural reform and major improvement in earnings.