Controlling business risk by expanding the dedicated-vessel business

「The company worked to secure profitability by pursuing volume transportation contracts from its core Middle East routes to Europe and Asia, as well as actively taking on spot cargoes originating in the United States. However, it was affected by weaker market conditions and restrictions on vessel deployment to the Middle East caused by the de facto closure of the Strait of Hormuz toward the end of the fiscal year. Meanwhile, 2 newbuild vessels joined the fleet and began operations during the fiscal year.」

「At a meeting of the Board of Directors held on 6 March 2026, the Company resolved to sell one large crude oil tanker held by a consolidated subsidiary.」

「The company sold 1 LNG vessel to make effective use of management resources and improve asset efficiency.」

「The company sold 1 chemical tanker to make effective use of management resources and improve asset efficiency.」

「In the large crude oil tanker business, controlled tonnage continued to be deployed under long-term contracts, securing stable earnings. In addition, 1 large crude oil tanker was sold to make effective use of management resources and improve asset efficiency.」

「The company decided to sell 1 large crude oil tanker to make effective use of management resources and improve asset efficiency.」

「The principal equipment sold during the fiscal year was as follows.」

「Under these circumstances, the Group worked to improve operating profitability through such measures as renegotiating existing contracts on favorable terms and optimizing vessel deployment. It also disposed of vessels after assessing the vessel sale market and recorded a gain on the sale of property, plant and equipment (extraordinary income).」

「In the large gas carrier business, both LPG and LNG vessels secured stable earnings, primarily through existing medium- to long-term contracts. In addition, 1 large LPG carrier was sold to make effective use of management resources and improve asset efficiency. As the large LPG carrier sold was owned by a consolidated subsidiary whose fiscal year-end is 31 December, the gain on sale of property, plant and equipment is scheduled to be recorded in the second-quarter consolidated accounting period.」

「This was mainly because expenditures of ¥23.089 billion for the acquisition of property, plant and equipment and intangible assets, primarily capital expenditures on vessels and real estate, exceeded proceeds of ¥7.691 billion from the sale of property, plant and equipment and intangible assets, primarily older vessels.」

「At a Board of Directors meeting held on 26 December 2019, the company resolved to sell 1 chemical tanker it owned. It also resolved to sell 1 other vessel. As a result, the company expects to record approximately ¥700 million in gain on the sale of property, plant and equipment (extraordinary income) for the chemical tanker and approximately ¥300 million for the other vessel, for a total gain on the sale of property, plant and equipment (extraordinary income) of approximately ¥1 billion in the fourth-quarter consolidated accounting period.」

「In the product tanker business, we disposed of 1 operating vessel during the fiscal year to mitigate the impact of weak market conditions.」

「Our Group sought to improve vessel allocation efficiency and operating profitability, including through efforts to renew existing contracts on more favourable terms. We also assessed conditions in the vessel sale market and disposed of older vessels, recording gains on sales of fixed assets as extraordinary income.」

「In the product tanker business, in response to weak market conditions, we disposed of 1 vessel and sought to improve earnings.」

「In the large gas carrier business, both LPG carriers and LNG carriers continued to be deployed under existing medium- to long-term contracts, securing stable earnings. For LPG carriers, some contracts were transferred to newer vessels and older vessels were disposed of, strengthening resilience to market fluctuations.」

「In the coastal gas transportation business, we sought to improve profitability and fleet efficiency by returning unprofitable vessels. Against a backdrop of a substantial market recovery resulting from reduced pressure from newbuild deliveries, we achieved more favourable contract renewals than under previous contracts, improving profitability.」

「For post-Panamax vessels, we sought to secure earnings by timing vessel allocation to capture higher market rates and deploying vessels under volume transport contracts. For handy vessels, we also pursued efficient vessel allocation and operations, mainly through spot voyages during periods of rising market rates. As a result, profitability improved for both vessel types.」

「For Panamax and handy vessels, we sought to secure earnings through measures including deploying vessels following the structural reforms implemented in the previous fiscal year, timing vessel allocation to capture higher market rates, and placing vessels under volume transport contracts. Profitability improved year on year, but we were unable to avoid the impact of market conditions, which remained weak from May onward.」

「As part of structural reform, we disposed of unprofitable large vessels and transferred vessels that had not yet been completed.」

「We sought to secure earnings by deploying newly added post-Panamax vessels under volume transport contracts.」

「Coal carriers and chip carriers operated smoothly in the dry bulk carrier business, while unprofitable Panamax vessels were disposed of.」

「We will continue this as a core business of the company while controlling business risk as far as possible through measures including expanding the dedicated vessel business, which will contribute to strengthening the stable earnings base.」