Q.1 Is it correct to think that there will be no cash outflows in the second quarter in connection with cancellation of charter contracts, a structural reform implemented in the previous fiscal year?


A.1 Cash outflows in connection with charter contracts were nearly completed in the first quarter.



Q.2 What is the background to the increase of approximately 20.0 billion yen in non-controlling interest from the end of the previous fiscal year as presented on the balance sheet?


A.2 It is related to the partial transfer of shares in a joint holding company by three domestic harbor transportation subsidiaries to Kamigumi Co., Ltd.




Q.1 What is the background to the downward revision of more than 1.0 billion yen compared with the previous forecast under “K” Line Own Containership Business on the waterfall chart on page 6 of the materials? Does this reflect a major change?


A.1 The revision reflects costs associated with container box leasing and an increase in costs in connection with cancellation of charter contracts, not a major change.



Q.2 On page 18 of the materials, the waterfall chart comparing the full-year forecast for ONE with the previous forecast shows improvement of 112 million dollars from variable cost reduction. Does this mean that this variable cost reduction was confirmed for the first time in the first quarter? Or, does it reflect the appearance of additional effects of any variable cost reduction that was previously forecasted?


A.2 Basically, cargo portfolio optimization is a major factor in variable cost reduction. For this reason, we reviewed long-term service contracts, mainly for Asia-North America Eastbound routes. The effects of the review will completely appear from May onward, from the second half of the first quarter into the second quarter. Although some of the effects appeared in the first quarter, greater effects will appear in the second quarter. Of course, there is a trade-off with cargo volume, but as far as the appearance of effects is concerned, cargo portfolio optimization has been one of our profitability improvement measures, and we replaced cargo and renewed long-term service contracts based on that objective.