Economic, Cargo-Handling and Business Continuity Risks from the Spread of COVID-19

「The company recognizes that infectious diseases present a risk that may materialize if an outbreak with global effects occurs over a certain period.」

「During the first three quarters, there were no newly arising business or other risks, and no material changes were made to the business or other risks described in the annual securities report for the previous fiscal year.」

「Economic and social activity gradually recovered as restrictions on movement related to COVID-19 were eased and normalization progressed, amid improving employment and income conditions.」

「Although the impact of the COVID-19 pandemic is subsiding, the company has increased its short-term borrowing facilities from financial institutions to prepare for future economic and financial uncertainty.」

「During the first three quarters, there were no newly arising business or other risks, and no material changes were made to the business or other risks described in the annual securities report for the previous fiscal year.」

「There were no newly identified business or other risks during the first quarter of the fiscal year. In addition, there were no material changes to the business and other risks described in the securities report for the previous fiscal year.」

「Although the impact of the spread of COVID-19 on the Group's performance is unavoidable, the Group continued to pursue, as initially planned, the expansion and strengthening of existing businesses through the stable operation of new warehouses in the northern Kanto region and overseas warehouses and stronger collection operations, as set out in the medium-term management plan "Vision2021: Toward New Development," for which the current consolidated fiscal year is the final year, as well as strategic investments for growth, including the construction of new warehouses and investments in the ASEAN region, despite delays in progress. In November 2021, the Group opened a new warehouse in Yokohama, Kanagawa Prefecture.」

「Meanwhile, economic and social activity remained restricted, with repeated declarations of a state of emergency and the implementation of priority preventive measures due to the spread of virus variants, and conditions remained difficult.」

「Although the impact of the COVID-19 pandemic on the performance of our group was unavoidable, we continued to pursue, as originally planned, the expansion and strengthening of existing businesses through the stable operation of new warehouses in the Northern Kanto region and overseas, stronger collection operations and other measures, as well as strategic investments for growth, including the construction of new warehouses and investments in the ASEAN region, under the medium-term management plan, Vision 2021: Aiming for New Development, whose final year is the current consolidated fiscal year, despite delays in progress.」

「Cargo volumes remained sluggish, partly due to the impact of the COVID-19 pandemic. Although signs of recovery emerged in the second half, the substantial decline in cargo volumes from the beginning of the year had a significant impact, and operating revenue fell below the year-earlier level due to declines in transport operations and other services and in port transport handling operations at Kobe Port.」

「During the cumulative third quarter under review, cargo movements remained sluggish, partly due to the spread of COVID-19. Although signs of a slight recovery emerged in the second half, the substantial decline in cargo movements since the beginning of the year had a significant impact. Transportation operations and related activities and port transportation handling operations at the Port of Kobe declined, while the sale of 1 consolidated subsidiary during the cumulative second quarter also affected results, and operating revenue consequently fell below the previous year's level.」

「The Japanese economy during the cumulative second quarter of the current consolidated fiscal year was in an extremely challenging situation, as the spread of COVID-19 severely damaged economic and social activity, causing a sharp deterioration in economic conditions.」

「During the cumulative first quarter under review, cargo movements remained sluggish, partly due to the spread of COVID-19. Although cargo storage balances remained high, outbound cargo volumes from warehouses declined sharply, resulting in weak transportation operations. Port transportation handling operations at the Port of Kobe also remained sluggish, and operating revenue consequently fell below the previous year's level.」

「The impact of the global spread of COVID-19 is currently limited because most of the imported cargo handled by the company consists of food products. However, if the situation becomes more serious or prolonged, the start-up of the new warehouse currently under construction may not progress as planned, potentially delaying its contribution to the group's operating results.」