A-１：Financial Results for 1st Quarter FY2025

Key Factors（year-on-year comparison）
‣Operating income decreased due to factors such as exchange rate impacts and the Dry Bulk market softened.
‣In Containership Business, transport volume remained at the same level as the previous fiscal year, including pre- tariff rush order demand, however freight rates decreased compared to the same period of the last year. This resulted in decrease in equity-method income derived from OCEAN NETWORK EXPRESS PTE.LTD. (ONE) and ordinary income fell significantly.
‣Extraordinary income such as gain on sale of owned vessels and gain on sale of a portion of subsidiary shares etc. was recorded.

A-２：Financial Results for 1st Quarter FY2025 by Segment

Key Factors by Segment（year-on-year comparison）

‣Dry Bulk
·Although the Capesize market temporarily improved in June due to a recovery in cargo movement, it softened as a result of factors such as accidents and disputes at loading ports.
·For Panamax and smaller sizes, market rates remained weak due to decreased cargo movement of coal and grain.
·In addition to the impact of exchange rates and market conditions, Dry Bulk segment was also affected by changes on vessel deployment due to accidents and disputes at loading ports etc., resulting in a loss.

‣Energy Resource Transport

·LNG carriers, LPG carriers, Thermal Coal Carriers, VLCCs, Drillships, and FPSOs, among others, secured stable profits backed by medium- to long-term contracts.
·While revenue decreased year-on-year due to exchange rate impacts and other factors, profit increased as a result of the absence of one-time losses, etc., recognized in the same period last year.

‣Product Logistics

·Car Carrier Business: Despite the imposition of U.S. auto tariffs, the number of vehicles transported remained generally firm, supported by solid demand in countries around the world. On the other hand, revenue and profit both decreased year-on-year due to exchange rate impacts, etc.

·Containership Business: Transport volume remained at the same level as the previous fiscal year, including pre-tariff rush order demand, however freight rates decreased compared to the same period of the last year. This resulted in decrease in equity-method income derived from ONE and revenue and profit both decreased.

B-１：Forecasts for FY2025 and Key Factors

Key Factors（year-on-year comparison）

‣FY2025 forecast is based on the assumption that the use of the Cape of Good Hope route will continue, without anticipating the resumption of transit through the Suez Canal.
‣Due to fluctuations in demand caused by the impact of U.S. tariff policies on national economies, along with the effects of foreign exchange rates and other factors, operating income is expected to decrease by 12.8 billion yen year-on-year to 90.0 billion yen, while ordinary income is expected to decrease by 188.0 billion yen year-on-year to 120.0 billion yen.
‣Compared to the May 2025 announcement) With an increase of 15.0 billion yen, ordinary income is expected to be 120.0 billion yen, and net income is expected to be 115.0 billion yen.

B-２： Comparison of Income and Loss for FY2025 （Compared to the May 2025 announcement）

‣Compared with the May 2025 announcement, the tariff impact amount is expected to be +10.0 billion yen for K Line’s own businesses and +2.0 billion yen for the Containership Business.
‣The decrease in the tariff impact amount for “K” Line’s own businesses is due to a revision of the number of units carried by car carriers.

B-3：Forecasts for FY2025 by Segment

‣Dry Bulk

· Primarily due to exchange rate impacts and vessel deployment changes caused by accidents and disputes at loading ports during the first quarter, revenue and profit are expected to decrease compared to the previous fiscal year.

‣Energy Resource Transport

· LNG carriers, LPG carriers, Thermal Coal Carriers, VLCCs, Drillships, and FPSOs, among others, are expected to secure stable profits backed by medium- to long-term contracts

‣Product Logistics

· Car Carrier Business: Although additional tariffs on U.S.-bound automobiles have been implemented, robust global demand has generally supported steady transport volumes. On the other hand, the effects of exchange rates and tariffs, etc., have resulted in decreased revenue and profit compared to the previous fiscal year.

Containership Business: Geopolitical risks such as the situation in the Red Sea, along with U.S. tariff policies and other factors, could impact national economies and shift trade patterns. The business environment is expected remain uncertain.

C-１ 【Capital Policy：Capital Policy Progress and Corporate Value Improvement

•The ordinary income target for FY2026, the final year of the current Medium-term Management Plan, is 160.0 billion yen, while the full-year ordinary income for FY2025 is 120.0 billion yen (up 15.0 billion yen from the May 2025 announcement)
•The operating CF forecast for the Medium-term Management Plan period is 1.5 trillion yen (unchanged from the May 2025 announcement)
•We will continue to make necessary investments to enhance corporate value while maintaining investment discipline. Investment cash flow during the Medium-term Management Plan period is expected to amount to total 610.0 billion yen (unchanged from the May 2025 announcement)
•We will achieve growth by enhancing businesses serving the role of driving growth, and by promoting
environmental investment taking advantage of emissions reduction and decarbonization opportunities

•Aiming for both financial soundness with an awareness of business risks, and capital efficiency
•In order to consider an optimal capital structure, we continue verifying the level of capital required for “K” Line’s own businesses and Containership Business

•Our policy is to always be aware of the optimal capital structure, ensure the investments necessary to improve corporate value, and maintain financial soundness. Moreover, regarding the portion exceeding the appropriate capital, we will actively consider shareholder returns, based on cash flow
•The total return amount during the Medium-term Management Plan period is expected to be 800.0 billion yen or more (unchanged from the May 2025 announcement)

•FY25：We plan the annual dividend to be 120 yen/share (unchanged from the May 2025 announcement)
•FY26：We plan the annual dividend to be 100 yen/share (unchanged from the May 2025 announcement)

•Taking the business environment into account and based on our shareholder return policy, we are considering additional flexible returns of 50.0 billion yen or more going forward

•We aim to sustainably achieve ROE of 10% or more by strengthening earning power and improving capital efficiency, and to return to, maintain and improve the PBR of 1.0 or more, keeping in mind reduction of capital costs and PER enhancement by cultivating further expectation for growth
•On March 28, 2025, we have transitioned to the “Company with Nominating Committee, etc.”
•Through IR activities, we will promote dialogue with stakeholders and further raise awareness of our business growth strategy among investors

C-３： Changes in the business environment

Geopolitical risks

•Economic separation due to conflict between the United States and China, Russia’s war in Ukraine, conditions in the Middle East
•Continuation of uncertain political situations in various countries

•Avoidance of the Suez Canal due to security crisis in the Red Sea and resulting shipping detours around the Cape of Good Hope
•Concern about impacts on trade
•Concern about impacts on resource supply

Global economy

•Policy changes under the new U.S. administration (such as reciprocal tariffs and countermeasures against China-related vessels by the USTR)
•Business confidence in Europe and the United States, and trend in purchasing power
•Economic slowdown in China
•Reorganization of supply chains and changes in trade patterns
•Economic impacts caused by changes in monetary policy in various countries
•Impact on the real economy due to inflation, rising labor costs and other pressures

Energy and environmental policies

•Uncertainty in national energy mix policies, including renewable energy, nuclear power, and fossil fuels
•Start of new CO2 emission regulations and response measures

•Soaring energy prices
•Future demand for transporting new fuels
•Improved service and cost
competitiveness of vessels powered by next-generation fuels due to stricter environmental regulations
•Risk of overlapping environmental
regulations resulting in double burdens

Full Report

Source: K Line