Optimizing the business portfolio through partnerships, M&A, withdrawals and divestitures

「LNG船を中心とした長期貸船契約の積み上げ、海外化学品タンクターミナル会社やクルーズ船の取得など、当社が目指す事業ポートフォリオの実現に向けて計画よりも早いペースで投資を積み上げることができました。」

「Under the interest transfer agreement executed in March 2025, we acquired all interests in LBC Tank Terminals Group Holding Netherlands Coöperatief U.A. on 30 June 2025.」

「At a meeting of the Board of Directors held on 25 June 2024, we resolved to increase our voting interest in the business operated by our equity-method affiliate Gearbulk Holding AG and make it a consolidated subsidiary after carrying out a business reorganization, including the consolidation of the open-hatch vessel business within Gearbulk and the separation of other businesses from Gearbulk. At a meeting of the Board of Directors held on 28 February 2025, we decided to acquire a 100% interest in LBC Tank Terminals Group Holding Netherlands Coöperatief U.A., a major tank terminal operator handling mainly liquid chemicals in Europe and the United States, to strengthen the chemical logistics business, and entered into a share purchase agreement on 7 March 2025 to acquire all shares for approximately US$1,715,433 thousand.」

「From the current interim consolidated accounting period, MODEC,INC. has been included within the scope of application of the equity method because we have significant influence through additional share acquisitions and other transactions.」

「Following approval by the competition authorities in the relevant countries, we acquired all shares of FCC on 1 March 2024 and made it a consolidated subsidiary of the Group.」

「Based on this, the share transfer and other related transactions were completed on 2 November 2023.」

「Following a request from Transferee 1 to change the structure of this share transfer after analyzing and considering the optimal ownership structure, we amended the agreements relating to this share transfer as follows after discussions with ONE and Transferee 1. / Share Transfer 1: Subject of transfer, etc.: Agreement enabling the acquisition of 222 shares of ITI and a 34.5% interest in TraPac, LLC; execution date: September 2023 (scheduled) / Share Transfer 2: Subject of transfer: 778 shares of ITI; execution date: September 2023 (scheduled)」

「The share transfer has not been completed because of the schedule for the approval procedures of the competent authorities. At a meeting of the Board of Directors held on 28 April 2023, we decided to subscribe for the third-party allotment of new shares by MODEC,INC., for which we and MITSUI & CO.,LTD. would be the subscribers, and to enter into a business alliance agreement with MODEC,INC.」

「At a meeting of the Board of Directors held on 31 October 2022, we resolved to transfer the shares of our consolidated subsidiary INTERNATIONAL TRANSPORTATION INC. (hereinafter, “ITI”) to 2 transferees (hereinafter, one referred to as “Transferee 1” and the other as “Transferee 2”). We entered into share transfer agreements for this transaction with Transferee 1 on 11 November 2022 and Transferee 2 on 27 December 2022, respectively. / Date of execution of Share Transfer 2 (date of change in consolidated subsidiary): March 2023 (scheduled)」

「Since transferring our container shipping business to Ocean Network Express Pte. Ltd., an equity-method affiliate, in 2018, we have been reviewing our portfolio strategy for the container terminal business. We have now decided to transfer the shares of ITI, the holding company of TraPac, LLC.」

「At a board of directors meeting held on 30 November 2021, the company resolved to acquire all common shares of Daibiru Co., Ltd., and made the company a wholly owned subsidiary effective 28 April 2022.」

「Following a series of procedures to make the company the sole shareholder of UTOC, UTOC became a wholly owned subsidiary of the company when the acquisition of the shares took effect on 2 March 2022.」

「The purpose is to strengthen the concentration of the group’s management resources and reinforce group management by making UTOC a wholly owned subsidiary of the company. Ownership ratio of share certificates and other securities after the purchase: 95.05%. The purpose is to strengthen the concentration of the group’s management resources and reinforce group management by making Daibiru a wholly owned subsidiary of the company. Ownership ratio of share certificates and other securities after the purchase: 82.60%.」

「At the company’s equity-method affiliate ONE, cargo volumes increased year on year on all routes except North American routes, where schedule delays and blank sailings were necessitated by port congestion. Operational disruptions involving ports, inland transportation and vessel schedules had a significant impact on supply-demand conditions, resulting in a substantial year-on-year increase in spot rates. Consequently, the containership business recorded a substantial increase in profit year on year.」

「Portfolio strategy: selectively pursue new investments. Secure total free cash flow of ¥100.0 billion during fiscal 2020–2022 and decide on approximately ¥90.0 billion of new investments while promoting the monetization of assets and businesses. Having secured ¥100.0 billion of free cash flow as planned, the company is considering increasing the allocation for new-investment cash flow.」

「At the company’s equity-method affiliate OCEAN NETWORK EXPRESS PTE. LTD., cargo movements remained firm, particularly on North American routes, and spot rates remained well above the year-earlier level, partly because of container shortages in Asia. Fuel oil prices also remained low, as in the first half, resulting in a substantial profit.」

「At the company’s equity-method affiliate OCEAN NETWORK EXPRESS PTE. LTD., volumes declined year on year, but spot rates remained well above first-quarter levels as supply-demand conditions tightened with the recovery in cargo movements, particularly on North American routes. Combined with fuel oil prices remaining low, as in the first quarter, this resulted in a substantial profit.」

「At the company’s equity-method affiliate OCEAN NETWORK EXPRESS PTE. LTD. (hereinafter “ONE”), volumes deteriorated substantially year on year as demand declined due to the spread of COVID-19. Freight market conditions were weak in early April, with no sign of a bottom in cargo movements, but spot rates remained firm as signs of a recovery in exports from China emerged in the latter half of April and the decline in cargo movements was expected to remain within a certain range. Under these business conditions, additional blank sailings were implemented on both North American and European routes to minimize the decline in load factors, while cost reductions and lower fuel prices also contributed to profitability in the first quarter.」

「At the company’s equity-method affiliate OCEAN NETWORK EXPRESS PTE. LTD. (hereinafter “ONE”), services stabilized, volumes increased and cost reductions progressed more than expected, resulting in higher profit year on year and full-year profitability.」

「The company’s equity-method affiliate OCEAN NETWORK EXPRESS PTE. LTD. (hereinafter “ONE”) achieved profitability in the third quarter as cost reductions progressed more than expected, following profitability in the first half.」

「The earnings of the company’s equity-method affiliate OCEAN NETWORK EXPRESS PTE. LTD. (hereinafter “ONE”) improved and reached the level of profitability anticipated at the beginning of the fiscal year. Volumes also improved substantially year on year as services stabilized.」

「At the company’s equity-method affiliate OCEAN NETWORK EXPRESS PTE. LTD. (hereinafter “ONE”), volumes improved substantially year on year as services stabilized. Additional blank sailings were implemented on both North American and European routes to minimize the decline in load factors, and the effects of cargo portfolio optimization and cost reductions enabled the company to return to profitability in the first quarter.」

「At the company’s equity-method affiliate OCEAN NETWORK EXPRESS PTE. LTD. (hereinafter “ONE”), load factors, which had been weak in the first half, improved during the second half.」

「Load factors, which had been weak in the first half, improved substantially overall, although some routes, including European routes, remained below expectations. In addition, firm northbound trans-Pacific freight rates and the effects of other operating-cost reduction measures helped narrow the loss in the third quarter more than expected, despite the company recording a loss.」

「Although the synergies from the integration of the containership business integration company with Kawasaki Kisen Kaisha,Ltd. and Nippon Yusen Kabushiki Kaisha, OCEAN NETWORK EXPRESS PTE. LTD., have emerged faster than initially expected, volumes and load factors fell following service disruptions immediately after operations began in April this year and failed to fully recover through the summer peak season. As a result, earnings remained below expectations.」

「The containership business integration company with Kawasaki Kisen Kaisha,Ltd. and Nippon Yusen Kabushiki Kaisha, OCEAN NETWORK EXPRESS PTE. LTD., launched services as scheduled in April of this year. In addition to volumes falling below expectations because of service disruptions during the launch period, results were below expectations because fuel prices rose more than anticipated.」

「Regarding the integration of the scheduled containership business agreed in October 2016 with Kawasaki Kisen Kaisha,Ltd. and Nippon Yusen Kabushiki Kaisha, the company had been actively preparing for the integration, and the integrated new company, OCEAN NETWORK EXPRESS PLE. LTD., began operations on 1 April 2018.」

「(2) Operating company: corporate name: OCEAN NETWORK EXPRESS PTE. LTD.; capital: USD 600,000,000; ownership ratios: Kawasaki Kisen Kaisha,Ltd. 31%, Nippon Yusen Kabushiki Kaisha 38%, the company 31%, including indirect ownership; location: SINGAPORE; established: 7 July 2017」

「Based on the business integration agreement and shareholders’ agreement entered into with Kawasaki Kisen Kaisha,Ltd. and Nippon Yusen Kabushiki Kaisha on 31 October 2016, the company established the new company. The launch of scheduled containership services by the new company is scheduled for 1 April 2018.」

「The new companies have been established. Overview of the new companies: (1) Holding company: capital of ¥50 million; ownership ratios of 31% for Kawasaki Kisen Kaisha,Ltd., 38% for Nippon Yusen Kabushiki Kaisha and 31% for the company; established on 7 July 2017. (2) Operating company: capital of USD 200,000,000; ownership ratios of 31% for Kawasaki Kisen Kaisha,Ltd., 38% for Nippon Yusen Kabushiki Kaisha and 31% for the company, including indirect ownership; established on 7 July 2017. The launch of scheduled containership services by the new company is scheduled for 1 April 2018.」

「Regarding the integration of the scheduled containership business agreed in October 2016 with Nippon Yusen Kabushiki Kaisha and Kawasaki Kisen Kaisha,Ltd., the company is proceeding with discussions and preparations for the smooth launch of operations by the integrated new company in April 2018 and will work to realize the synergies from the integration at an early stage.」

「Based on a resolution of the board of directors meeting held on 31 October 2016, and subject to the approval and licensing of the relevant authorities, the company entered into a business integration agreement and a shareholders’ agreement with Kawasaki Kisen Kaisha,Ltd. and Nippon Yusen Kabushiki Kaisha concerning the establishment of a joint venture to integrate the scheduled containership business, including overseas terminal operations, and the integration of that business (the “Integration”).」

「Although the scheduled containership business is a growth industry, in recent years cargo demand growth has slowed while vessel supply has increased as newbuilds have been delivered, substantially worsening the supply-demand balance. In response, since last year, moves to increase operating scale and enhance competitiveness through acquisitions and mergers have become increasingly evident across the industry, and the structure of the industry itself is undergoing significant change. Against this business backdrop, the company decided to integrate its scheduled containership business in order to operate it stably and sustainably.」

「Beginning in the first quarter of the current fiscal year, the company included 3 companies, including MNN HOLDINGS INC., which became a subsidiary through additional share acquisitions based on materiality considerations, in the scope of consolidation. It also excluded 2 companies, including 関汽運輸㈱, from the scope of consolidation because all of their shares were sold during the first quarter and they ceased to be subsidiaries.」

「From the standpoint of growth potential and competitiveness, the company will reorganize each segment as necessary, including through alliances with other companies, M&A, exits and disposals, with the aim of optimizing its business portfolio.」