Completion of Structural Reforms in the Dry Bulk and Containership Businesses

「連結子会社であるGearbulk Holding AGのオープンハッチ船事業では、主要貨物であるパルプの輸送需要が底堅く推移したことに加え、配船効率の改善やプロジェクト貨物輸送の成約により、収益性が向上しました。」

「In the open-hatch carrier business of consolidated subsidiary Gearbulk Holding AG, the recovery in transport demand for pulp, its main cargo, has been slow, but profitability improved through more efficient fleet allocation, stronger sales capabilities and the capture of highly profitable project cargo. Under these business conditions, however, the dry bulk business as a whole reported lower profit year on year due to higher depreciation and amortization following the consolidation of Gearbulk Holding AG as a subsidiary and weak market conditions for wood-chip carriers.」

「The dry bulk business as a whole benefited from improved Cape-size market conditions, which remained favorable in the first half, but profit declined from the previous fiscal year due in part to the special factor of the disappearance of profit from the reversal of the allowance for doubtful accounts recognized in the previous fiscal year. As a result, equity-method affiliate Ocean Network Express Pte. Ltd. also reported a substantial increase in profit from the previous fiscal year.」

「Although market conditions remained firm, the dry bulk business as a whole reported lower profit year on year due to the special factor of the disappearance of profit from the reversal of the allowance for doubtful accounts recognized in the previous year. At equity-method affiliate OCEAN NETWORK EXPRESS PTE. LTD., the supply-demand balance for vessel capacity tightened as shipments via the Cape of Good Hope continued and cargo demand for Europe and the United States strengthened. As a result, spot freight rates rose substantially, leading to a substantial year-on-year increase in profit.」

「Although the dry bulk business as a whole benefited from the partial reversal by a consolidated subsidiary of the allowance for doubtful accounts previously recognized on loans to equity-method affiliate GEARBULK HOLDING AG, following an improvement in its financial condition, profit declined year on year as it did not match the favorable market conditions of the previous year. At equity-method affiliate OCEAN NETWORK EXPRESS PTE. LTD. (hereinafter, “ONE”), short-term freight rates remained low as consumption growth stagnated amid prolonged inflation and increased deliveries of newbuildings. As a result, ONE reported a substantial year-on-year decline in profit.」

「Although the dry bulk business as a whole benefited from the reversal by a consolidated subsidiary of the allowance for doubtful accounts previously recognized on loans to equity-method affiliate GEARBULK HOLDING AG, following an improvement in its financial condition, profit declined year on year as it did not match the strong market conditions of the previous year. At equity-method affiliate OCEAN NETWORK EXPRESS PTE. LTD. (hereinafter, “ONE”), short-term freight rates deteriorated as the vessel supply-demand balance weakened against a backdrop of increased deliveries of newbuildings. Time-charter freight rates also shifted to rates for the current fiscal year, reflecting the post-COVID-19 market, and these freight-rate effects resulted in a substantial year-on-year decline in ONE’s profit.」

「Despite the impact of weaker market conditions, profit increased year on year because a consolidated subsidiary reversed the allowance for doubtful accounts previously recognized on loans to equity-method affiliate GEARBULK HOLDING AG, following an improvement in its financial condition. At equity-method affiliate OCEAN NETWORK EXPRESS PTE. LTD., cargo demand declined as consumption in Europe and the United States stagnated under the effects of higher interest rates and inflation, causing spot and time-charter freight rates to fall, particularly on North American and European routes. Profit declined substantially year on year, reflecting the reversal from the high freight-rate levels during the COVID-19 pandemic.」

「Despite these market conditions, profit increased year on year due to the stable performance of medium- and long-term contracts and the steady capture of firm cargo movements in open-hatch and twin-deck carriers, as well as the reversal by a consolidated subsidiary of part of the allowance for doubtful accounts previously recognized on loans to equity-method affiliate GEARBULK HOLDING AG, following an improvement in its financial condition.」

「Despite these market conditions, efforts to reduce market exposure and the steady capture of firm cargo movements in wood-chip carriers, open-hatch carriers and twin-deck carriers resulted in higher profit year on year.」

「Amid these market conditions, the dry bulk business as a whole reported a substantial year-on-year improvement in profit and loss, partly due to improved profitability from more efficient fleet allocation at 商船三井ドライバルク㈱, which was launched in April 2021.」

「Amid these market conditions, efforts to improve fleet allocation efficiency and profitability at 商船三井ドライバルク㈱, which was launched in April 2021, also contributed, resulting in a substantial year-on-year improvement in profit and loss for the dry bulk segment as a whole.」

「Amid these market conditions, efforts to improve fleet allocation efficiency and profitability at 商船三井ドライバルク㈱, which was launched in April, also contributed, resulting in a substantial year-on-year improvement in profit and loss for the dry bulk segment as a whole.」

「The dry bulk segment reported higher profit year on year in the first quarter, partly because the sales and operating activities for dry bulk carriers other than those serving the steel industry and domestic power utilities were consolidated into 商船三井ドライバルク㈱, which was launched in April following the business and organizational integration with 商船三井近海㈱, improving fleet allocation efficiency and profitability.」

「Disposition of 17 vessels, mainly car carriers, carried out / Tramp shipping: launch of 商船三井ドライバルク㈱ decided / Car carriers: integration with 日産専用船㈱ to pursue greater efficiency」

「Amid these market conditions, the dry bulk carrier division's profit declined year on year. ／ At OCEAN NETWORK EXPRESS PTE. LTD., an equity-method affiliate, cargo movement remained strong, particularly on North American routes, and spot freight rates remained substantially above the same period of the preceding fiscal year, also reflecting container shortages in Asia. With fuel oil prices remaining in a low range, as in the first half, the company reported a substantial profit.」

「Amid these market conditions, the dry bulk carrier division's earnings deteriorated year on year. ／ At OCEAN NETWORK EXPRESS PTE. LTD., an equity-method affiliate, cargo volume declined year on year, but spot freight rates remained well above first-quarter levels as supply and demand tightened with the recovery in cargo movement, particularly on North American routes. Combined with fuel oil prices remaining low, as in the first quarter, this resulted in a substantial profit.」

「As measures to reduce risk exposure and minimize the impact on earnings, we will implement capacity adjustments as appropriate, including idling vessels, returning short-term chartered vessels and disposing of owned tonnage, and will take additional measures such as hedging earnings through freight futures transactions to minimize the impact on earnings.」

「Amid these market conditions, the dry bulk carrier division reported a profit despite lower profit year on year.」

「The dry bulk division worked to steadily perform and reliably extend long-term contracts for vessels carrying steelmaking raw materials, wood chips and other cargoes. Although profit declined year on year, the division reported a profit. ／ The earnings of OCEAN NETWORK EXPRESS PTE. LTD., an equity-method affiliate, improved and reached the level of profit assumed at the beginning of the fiscal year.」

「Amid these market conditions, the dry bulk carrier division worked to steadily perform and reliably extend long-term contracts for vessels carrying steelmaking raw materials, wood chips and other cargoes. Although profit declined year on year, the division reported a profit. ／ Under these business conditions, additional service reductions were implemented on both North American and European routes to minimize the decline in load factors, and the effects of optimizing the cargo portfolio and reducing costs enabled the business to return to profitability in the first quarter.」

「Although market conditions in the dry bulk carrier business as a whole have recently softened, they remained generally above the level of the preceding fiscal year, and profit increased year on year. ／ Although a loss was reported in the second half, the loss was narrower than anticipated.」

「Amid these market conditions, profit increased year on year. ／ Although we reported a loss in the third quarter, the loss was narrower than anticipated.」

「Amid these market conditions, we reported a profit that was slightly higher year on year. ／ Under these market conditions, although we continued efforts to steadily perform long-term contracts, reliably extend contracts, improve operating efficiency through pool operations and reduce costs, earnings deteriorated year on year.」

「As a result of continued cost-reduction efforts amid these market conditions, we reported a profit, although it was slightly lower year on year. In the containership business as a whole, the loss narrowed year on year, partly because restructuring-related losses associated with chartering out vessels and other matters were provided for at the end of the preceding fiscal year.」

「We secured higher profit than in the preceding fiscal year through the continuing effects of structural reforms undertaken previously and cost reductions.」

「Amid these market conditions, the dry bulk carrier division reported higher profit year on year as a result of improved market conditions and ongoing cost-reduction efforts, among other factors.」

「Amid these market conditions, the dry bulk carrier business reported higher profit year on year as a result of improved market conditions and ongoing cost-reduction efforts, among other factors.」

「Amid these market conditions, earnings improved particularly in the small- and medium-sized bulker business as a result of the structural reforms, and the dry bulk carrier division's profit increased year on year.」

「To build on the fleet's cost competitiveness achieved through the structural reforms and accumulate earnings from this fiscal year onward, we formulated "Rolling Plan 2017" as our new management plan beginning this fiscal year.」

「Amid these market conditions, the dry bulk carrier division pursued structural reforms centered on reducing spot-operated Capesize bulkers and fundamentally reviewing the business model for small- and medium-sized bulkers. As a result, the division's profit increased year on year.」

「We decided to integrate the containership business in order to operate it in a stable and sustainable manner.」

「Taking the view that no fundamental improvement in market conditions could be expected for the time being, the dry bulk carrier division pursued structural reforms centered on reducing spot-operated Capesize bulkers and fundamentally reviewing the business model for small- and medium-sized bulkers. As a result, the division's earnings improved year on year and it reported a profit in the first quarter of the current consolidated fiscal year-to-date period.」

「As part of the structural reforms, we decided to fundamentally review the business model for small- and medium-sized bulkers and reduce the fleet size of Capesize bulkers in the dry bulk carrier business, while deciding to recognize impairment losses and take other measures involving business assets in the containership business. In fiscal 2016, we will ensure the early sale of surplus tonnage and the early return of chartered vessels. At a meeting of the Board of Directors held on 31 March 2016, we finalized the implementation of individual structural-reform measures and the recognition of ¥179.2 billion in extraordinary losses associated with them.」