Q1: How much is the financial impact of structural reforms and provision of allowance for Containership Business (20.2 billion yen last year) that is being incorporated into the fiscal year 2018 forecast, and in which segment will it be included?
A1: It will be reflected in the Product Logistics Segment. The amount of the allowance is shown as 24.5 billion yen allowance for loss related to business restructuring as of March 31, 2018 under the current liabilities section on page 24 of the Financial Highlights. We are unable to comment on any further breakdown of this.


Q2: ONE's awareness of market conditions in Containership Business is described qualitatively as “moderately improving,” but is there any standard, such as how much this is at the spot rate, whether it has increased or decreased compared to the container freight index “K” Line used, or the month of 2017 that serves as a reference point for the SCFI and CCFI levels?
A2: This is the aggregate of the figures for the three companies, and it is very difficult to compare using the same criteria because the basic conditions are different. However, ONE has reported that it is proceeding based on market conditions of fiscal year 2017, and that the market levels have not changed significantly from the environment in fiscal year 2017.


Q3: I believe there have been discussions about whether a loss would be incurred if ships are chartered out to ONE at market rate, but how will this eventually be treated in accounting?
A3: We will appropriately handle this by concluding charter party agreements and paying charterage because the chartering of vessels is a transaction with a third party, so your understanding is correct. This has already been incorporated into the three-year plan from fiscal year 2018.


Q4: You have stated that you expect 3.5 to 4.0 billion yen per year in remaining fixed costs with the integration of business into ONE. What are the specific details?
A4: With the establishment of ONE, it is necessary to rebuild and reorganize “K” Line’s  network, and we provided 11.4 billion yen as temporary expenses related to business reorganization last fiscal year. In this process, we will use the allowance for actual expenses. Network expenses including overseas agencies have not been fully transferred to ONE yet, and operations handling BLs that we issued will remain in place for the time being. Expenses of around 3.5 to 4.0 billion yen including expenses for the collection of receivables and so on will finally remain this fiscal year compared to the ideal state after completely spinning off the business. Essentially, the overseas network of “K” Line Logistics to be built in the future and the network of “K” Line partially overlap at present. It means that we still incur around 3.5 to 4.0 billion yen in expenses compared to the eventual most efficient state. We would like to achieve this as early as possible in the next two to three years, and incorporate the effects from fiscal year 2018.



Q1: The estimate by segment has changed to the new segments, but results for the previous fiscal year are only shown by the old segments so it is not possible to compare the changes in each business from the previous fiscal year to this fiscal year. Please state the differences.
A1: We will disclose the previous fiscal year’s results based on the new segments once internal transactions and consolidated eliminations have been audited by certified public accountants.


Q2: In the Estimate for Fiscal Year 2018 versus. Financial Results for Fiscal Year 2017, “ONE as Equity Method” and “Impact by the Complex Transportation Progress Method” are the only two items in Internal Achievement, but please explain if any other items that may improve profit and loss such as reduction of costs in the Dry Bulk Segment or Automotive Logistics have been included in this estimate.
A2: Previously, we used to create an item called “Cost Reductions,” but this item has been removed because Containership Business, which had the largest impact within this item, has been spun off. However, this does not mean that there are no longer any efforts to reduce costs in other items, and these have been incorporated into the budget for this fiscal year as well. It may not have been presented in an easy-to-understand way, so we will reconsider how to more clearly disclose this next time.