Two-route operating structure for Russia and Taiwan, with improved operating efficiency

「In the ocean-going business, revenue increased substantially because the company received spot orders for cargoes bound for the Middle East in addition to its established transport of heavy construction equipment to China and Central Asia. Steel products, however, remained sluggish: cargoes bound for Taiwan were affected by deteriorating steel market conditions and other factors, while those bound for South Korea were affected by intensified price competition with overseas shipping companies.」

「外航事業における建機類において従来の中国、中央アジア向けに加えて、中東向けのスポット案件の受注により期初予想から売上が増加する見込み。」

「The revision reflects the expected contribution from sales and operating profit exceeding the initial forecasts, following the receipt of spot orders for the Middle East market in addition to the company's existing China and Central Asia markets for the handling of construction machinery in its ocean-going shipping business.」

「In the ocean-going business, shipments of construction machinery to Mongolia remained firm from the second half onward. Shipments to China, however, were sluggish amid intensifying competition, while shipments to South Korea and Taiwan also struggled. Overall revenue declined, and the positive effect of the weaker yen on ocean freight revenue was insufficient to offset the decline.」

「Shipments of mining construction machinery to Central Asia declined substantially from the previous fiscal year, resulting in a significant decrease in revenue.」

「Meanwhile, handling of construction machinery bound for Central Asia via China, including Mongolia and Kazakhstan, struggled to grow relative to the target set at the beginning of the period.」

「Handling of steel products bound for South Korea and Taiwan remained firm at roughly the previous year's level, while spot cargo, including equipment transportation projects, grew steadily.」

「In the ocean-going business, we allocated vessels as a semi-regular service for large mining construction machinery bound for Central Asia via China. We also transported cargo as appropriate on routes to South Korea, Taiwan and other nearby markets in line with demand, working to improve earnings.」

「Going forward, demand for equipment handling is expected to increase in countries rich in mineral resources, such as Central Asia and Mongolia. The company aims to provide a semi-regular shipping service by allocating vessels under charter contracts matched to cargo volumes for triangular trade cargoes routed through Chinese ports.」

「In the ocean-going business, contracts to transport construction machinery, which had been a key earnings contributor in the previous fiscal year, ended. During the current fiscal year, we worked to secure spot cross-trade orders via China to Central Asia, in addition to the established routes in East Asia, including China, South Korea and Taiwan.」

「In the ocean-going business, transportation contracts for construction machinery, which had significantly increased earnings year on year, ended. To secure new cargo, we focused on handling cross-trade shipments via China to Central Asia.」

「In the ocean-going business, contracts to transport construction machinery, which had driven the strong performance in the previous fiscal year, ended. Accordingly, during the current fiscal year we focused on securing cross-trade orders in addition to the established Asian routes to China, South Korea and Taiwan.」

「The Russia route, which had delivered a degree of success in recent years, is facing a review of its vessel allocation plan because exports of its main cargo have been suspended. The company will therefore focus on establishing a new earnings base through alternative routes. Project transport, including infrastructure development projects, has also become an earnings base, and the company will continue to focus on identifying new projects.」

「In the ocean-going business, the company focused on transporting heavy construction equipment and receiving spot orders, resulting in」

「In the ocean-going shipping business, although exports of the main cargo on the Far East Russia route were suspended, transportation of construction machinery using chartered vessels, new orders for spot cargo, and improved profitability of dollar-denominated ocean freight as the yen weakened combined to produce revenue of ¥1,677 million, up 185.1% year on year, and operating profit of ¥231 million, compared with ¥20 million in the same period of the previous year. The result was substantially above the previous year’s performance.」

「In the ocean-going shipping business, conventional vessel freight rates remained high, while the sharp depreciation of the yen increased revenue and profit margins on each voyage. As a result, revenue was ¥881 million, up 223.7% year on year, and operating profit was ¥110 million, compared with ¥9 million in the same period of the previous year.」

「The invasion of Ukraine by Russia in the middle of the fourth quarter caused geopolitical risk to emerge on the Far East Russia route, the company's main route. However, in the consolidated fiscal year, earnings increased substantially because the Far East Russia route remained strong through early March, the Taiwan route also performed steadily, and the company newly handled heavy construction equipment transport using chartered vessels and triangular trade, while also benefiting from gains on dollar-denominated ocean freight due to the weaker yen.」

「In the ocean-going business, restrictions on economic activity imposed to prevent the spread of COVID-19 were gradually eased in various countries. On the core Japan-Russia service, exports performed well, partly reflecting a rebound from the decline in the previous fiscal year. The Japan-Taiwan service also performed steadily as spot transportation opportunities increased.」

「In the ocean-going business, the core Japan-Taiwan service and Japan-Russia operations generally remained strong. However, against the backdrop of global supply chain disruptions, some transportation projects were delayed or cancelled, resulting in lower cargo volumes.」

「In the ocean-going shipping business, transportation volume on the Russia route, one of the main routes, increased as tire demand recovered in Russia. However, fewer voyages on the East Asia route, which mainly transports steel products and machinery, resulted in revenue of ¥272 million, down 3.8% year on year, and operating profit of ¥9 million, compared with an operating loss of ¥1 million in the same period of the previous year.」

「To reduce costs, the company sold company-owned vessels and changed to leased-vessel operations, among other measures. It also pursued a business alliance with an overseas shipping company during the period, establishing a structure to complement each other's sales activities and vessel allocation and working to develop new markets.」

「In the ocean-going business, demand for the main export cargo to Russia carried on the company's own vessels declined locally due to the spread of COVID-19, reducing shipment lots and worsening operating efficiency. In response, the company worked to secure spot cargo transported using chartered vessels, but transportation opportunities declined.」

「Even on the core Japan-Russia service, shipment lots were reduced and return cargo declined, resulting in a significant deterioration in profitability.」

「In the ocean-going business, volumes declined on the Russia route, operated mainly with company-owned vessels, as demand for tires, its main cargo, fell owing to the impact of the COVID-19 pandemic. Voyage numbers also declined on the East Asian route, where steel products, machinery and other cargoes are transported using vessels owned by other companies,」

「However, the Philippines route faced numerous challenges, including price competition with other industry participants and securing return cargo, and did not contribute to profit.」

「As part of initiatives for future growth, we launched a Philippines service in September.」

「In the ocean-going business, the Russia service, operated mainly with the company's own vessels, remained firm. In addition, transportation of imported equipment using chartered vessels, including project orders launched in April 2019, progressed smoothly.」

「In the ocean-going shipping business, exports to Russia and Southeast Asia, the main cargoes, remained firm, while handling of imported project cargo also progressed smoothly.」

「In the ocean-going business, handling of large imported project cargoes substantially boosted performance, supported by steady exports to Russia and Southeast Asia. On the Taiwan route, difficult market conditions continued, and the company worked to secure profitability by changing its operating structure from the previous fiscal year.」

「In the ocean-going shipping business, the Russia route performed steadily and project cargo shipments also progressed smoothly. Although the company had one fewer owned vessel than in the same period of the previous year, flexible vessel allocation in response to fluctuations in orders, using vessels operated by other companies, resulted in revenue of ¥446 million, up 8.8% year on year, and operating profit of ¥34 million, up 77.5%.」

「On the Russia route, the company worked to stabilize profitability through active sales efforts. On the Taiwan route, it proceeded with the disposal of company-owned vessels and improved profitability by operating a combination of chartered vessels and other vessels.」

「In the ocean-going shipping business, revenue was ¥1,124 million, up 13.0% year on year, supported by the solid performance of the Russia route, one of the main routes, the full-scale launch of project cargo shipments, and an increase in spot shipments of exported steel products. Despite higher fuel prices, the disposal of unprofitable vessels progressed, resulting in operating profit of ¥57 million, up 147.4% year on year.」

「In the ocean-going shipping business, shipments of plant cargo between Southeast Asia and Japan, which began at the end of the previous period, moved into full operation. On the Russia route, aggressive top-level sales efforts combined with firm transportation demand, resulting in a substantial recovery in performance.」

「In the ocean-going shipping business, the Russia route performed steadily, while the full-scale launch of project cargo operations and an increase in spot shipments of exported steel products also contributed to performance. Revenue was ¥410 million, up 38.9% year on year, and operating profit was ¥19 million, compared with an operating loss of ¥11 million in the same period of the previous year.」

「The stable operating structure based on the two routes to Russia and Taiwan, together with stable fuel prices, supported performance. The company also worked to increase volumes and reduce costs by pursuing cargo-gathering activities for Russia, project orders, and changes to its chartering arrangements.」

「In the deep-sea shipping business, activity was strong on the Russia route, one of the principal routes. Revenue rose 16.5% to ¥994 million, and operating profit was ¥23 million, compared with an operating loss of ¥9 million in the previous corresponding period, helped in part by lower vessel management costs, resulting in improved earnings.」

「In the ocean-going shipping business, the Russia route, one of the main routes, remained firm and handling volume also increased. The contribution of spot cargo enabled the company to reverse the decline in handling volume caused by the disposal of unprofitable vessels in previous years and return it to growth.」

「In the international shipping business, revenue rose 8.0% year on year to ¥295 million as the Russia route performed steadily. Improved vessel allocation efficiency also improved earnings, although the business posted an operating loss of ¥11 million, narrowing from an operating loss of ¥19 million in the same quarter of the previous year.」

「Operating efficiency improved as the two-route structure covering Russia and Taiwan and its synergies gradually took shape, while the company was also able to cover gaps in the operation of company-owned vessels through contracts for chartered vessels.」