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Financial Results for FY13/3 1ST Quarter

and Forecast for FY13/3

July 2012

Contents
1)

Results for FY13/3 1st Quarter

p.2-4

2)

Revised Forecast for FY13/3

p.5-7

3)

Overview of Each Industrial Segment

p.8-13

4) Medium-Term Management Plan

p.14-18

Summary of FY13/3 1st Quarter Results


FY12/3
(billion yen)

Revenues

1Q

2Q

3Q

FY13/3

4Q

Fullyear

447.7 463.4 439.8 456.8 1,807.8

1Q

Yearon-year

477.5

29.8

Operating Income -10.4

0.7

-6.4

-8.0

-24.1

6.8

17.2

Recurring Profit -10.1

-4.9

-9.7

-8.3

-33.2

4.8

14.9

Net Income

-7.1

-4.9

-5.2

-55.5

-72.8

-1.3

5.8

Exchange Rate
Bunker Oil Price

82.04

78.44

76.85

78.27

78.90

80.77

-1.27

$625.20 $658.82 $680.72 $700.14 $666.22

$716.78

$91.58

- Revenues and recurring profit increased comparing to FY12/3 1Q due to container freight rates
recovery and car transport volume pickup.
- Sensitivity against recurring profit (Full-year)
Exchange rate
: 1.3 billion decrease per 1/$ appreciation
Bunker oil price : 140 million decrease per $1/MT increase

Comparison of Financial Results between


FY12/3 1Q and FY13/3 1Q by Industrial Segments
Industrial
Segm en ts
(billion yen)
L in er
T erm inal
Global
L ogis tics

Air C argo
L ogistics
T otal

B ulk
S hipping

B ulk Shipping
Cruis es

O thers

Real E state
O ther
Elim ination/
Unallocation
Consolidated

F Y13/3

F Y12/3
Full-year

1Q

Y ea r-ony ea r

1Q

2Q

3Q

4Q

108.5
-8.6
34.5
1.7
22.6
1.9
94.3
0.9
260.0
-3.9
173.1
-5.4

112.1
-8.6
36.6
2.2
20.6
0.7
91.5
3.2
260.9
-2.4
184.6
-3.3

99.4
-13.8
34.6
2.1
19.3
0.3
89.6
3.5
243.0
-7.7
181.9
-1.3

98.5
-13.6
34.2
1.6
20.0
0.2
89.6
1.4
242.5
-10.2
191.1
2.3

418.7
-44.7
140.0
7.7
82.6
3.3
365.1
9.2
1,006.6
-24.3
730.8
-7.7

115.4
-3.3
34.6
2.0
20.3
-0.7
87.8
1.2
258.3
-0.7
201.1
5.6

6.8
5.2
0.1
0.3
-2.2
-2.6
-6.4
0.2
-1.7
3.1
28.0
11.0

7.1
-2.3
2.6
1.0
45.8
0.4
-41.0
0.0
447.7
-10.1

10.1
0.2
2.6
1.0
44.3
-0.4
-39.3
0.0
463.4
-4.9

7.2
-1.6
2.6
0.9
43.8
0.0
-38.8
0.0
439.8
-9.7

7.9
-1.9
2.8
0.8
50.5
0.7
-38.2
0.0
456.8
-8.3

32.4
-5.8
10.8
3.9
184.5
0.8
-157.5
0.0
1,807.8
-33.2

8.6
-1.2
2.5
1.0
43.8
0.1
-36.8
0.0
477.5
4.8

1.5
1.1
-0.1
0.0
-2.0
-0.3
4.1
0.0
29.8
14.9

* UpperRevenues LowerRecurring Profit


* Revenues of Tanker & LNG Carriers in Bulk Shipping Segment: 34.5billion(FY12/3 1Q) and 32.5billion(FY13/3 1Q)

- Liner: Loss decreased by 5.2 billion due to freight rates recovery.


- Bulk Shipping: Marked profit in 2 quarters in a row by prolonged depreciation period of VLCCs and LNG
Carriers, disposal of unprofitable vessels and volume recovery in car transport business.

Analysis of Change in Recurring Profit


between FY12/3 1Q and FY13/3 1Q
(billion yen)

Yen Appreciation

-0.4

80.77/$, Appreciated by 1.27

Higher Bunker Oil Price

-3.2

$716.78/MT, Increased by $91.58

Market Effects etc

10.4

Cost Reduction

9.1

New Consolidation

0.2

Liner 6.3

-1.2

Others
Total

14.9

Revised Forecast for FY13/3


FY12/3(Result)
1H
(billion yen)

1Q

2H
2Q

911.1
447.7 463.4
-9.6
Operating Income
-10.4
0.7
-15.1
Recurring Profit
-10.1
-4.9
-12.0
Net Income
-7.1
-4.9
Revenues

Exchange Rate
Bunker Oil Price

3Q

4Q

FY13/3(Forecast)
Fullyear

1,807.8
896.6
439.8 456.8
-14.4
-24.1
-6.4
-8.0
-18.1
-33.2
-9.7
-8.3
-60.7
-72.8
-5.2 -55.5

1H
1Q
(Result)

2Q

2H

Fullyear

980.0
980.0 1,960.0
477.5 502.4
22.0
28.0
50.0
6.8 15.1
17.0
23.0
40.0
4.8 12.1
7.5
12.5
20.0
-1.3
8.8

82.04 78.44 76.85 78.27 78.90


80.77 80.00 80.00 80.19
$625.20 $658.82 $680.72 $700.14 $666.22 $716.78 $650.00 $650.00 $666.70

Change
from
Year-onprevious
year
forecast
(Full year)

152.1
8%
74.1

-40.0
-2%
0.0

73.2

0.0

92.8

-3.0
-13%

1.29
$0.47

- Sensitivity against recurring profit (Full-year)


Exchange rate
:80.19/$
1.3 billion decrease per 1/$ appreciation
Bunker oil price :$666.70/MT
140 million decrease per $1/MT increase
- Cash dividend (Forecast): Annual dividend of 4/share (2/share each for interim and year-end)

Comparison between FY12/3 Results


and FY13/3 Revised Forecast by Industrial Segments
Industrial
Segment
(billion yen)

Liner
Terminal
Global
Logistics

Air Cargo
Logistics
Total

Bulk
Bulk Shipping
Shipping

Cruises
Others

Real Estate
Other
Elimination/
Unallocation
Consolidated

* (Upper) Revenues

FY12/3(Result)
1Q

2Q

108.5
-8.6
34.5
1.7
22.6
1.9
94.3
0.9
260.0
-3.9
173.1
-5.4
7.1
-2.3
2.6
1.0
45.8
0.4
-41.0
0.0
447.7
-10.1

112.1
-8.6
36.6
2.2
20.6
0.7
91.5
3.2
260.9
-2.4
184.6
-3.3
10.1
0.2
2.6
1.0
44.3
-0.4
-39.3
0.0
463.4
-4.9

1H
220.7
-17.3
71.1
3.9
43.2
2.7
185.9
4.2
521.0
-6.3
357.7
-8.8
17.2
-2.1
5.3
2.1
90.1
0.0
-80.4
0.0
911.1
-15.1

2H
198.0
-27.4
68.9
3.7
39.3
0.6
179.2
5.0
485.5
-18.0
373.0
1.0
15.1
-3.6
5.5
1.7
94.4
0.7
-77.1
0.0
896.6
-18.1

FY13/3( Forecast)
Fullyear
418.7
-44.7
140.0
7.7
82.6
3.3
365.1
9.2
1,006.6
-24.3
730.8
-7.7
32.4
-5.8
10.8
3.9
184.5
0.8
-157.5
0.0
1,807.8
-33.2

1Q
(Result)
0 .0

115.4
-3.3
34.6
2.0
20.3
-0.7
87.8
1.2
258.3
-0.7
201.1
5.6
8.6
-1.2
2.5
1.0
43.8
0.1
-36.8
0.0
477.5
4.8

2Q
119.6
1.9
35.4
1.6
20.2
-0.6
93.1
2.3
268.3
5.2
203.9
5.9
9.2
0.0
2.6
1.0
48.2
0.0
-29.6
0.0
502.4
12.1

1H

2H

235.0
-1.5
70.0
3.7
40.5
-1.3
181.0
3.5
526.5
4.4
405.0
11.5
17.8
-1.2
5.1
2.0
92.0
0.2
-66.5
0.0
980.0
17.0

225.0
3.0
67.0
3.3
42.0
0.7
194.0
4.5
528.0
11.4
395.0
11.5
17.2
-1.6
5.2
1.8
93.0
0.0
-58.5
0.0
980.0
23.0

Fullyear
460.0
1.5
137.0
7.0
82.5
-0.7
375.0
8.0
1,054.5
15.8
800.0
23.0
35.0
-2.8
10.3
3.8
185.0
0.2
-125.0
0.0
1,960.0
40.0

Yearonyear
41.2
46.2
-3.0
-0.7
-0.1
-4.0
9.8
-1.2
47.8
40.1
69.1
30.7
2.5
3.0
-0.5
-0.1
0.4
-0.6
32.5
0.0
152.1
73.2

(Lower) Recurring Profit

* Revenues of Tanker & LNG Carriers in Bulk Shipping Segment: 131.0billion(FY12/3 Result) and 126.0billion(FY13/3 Forecast)

Comparison between FY13/3 Previous Forecast


and Revised Forecast by Industrial Segments
Industrial
Segment
(billion yen)

Liner
Terminal
Global
Logistics

Air Cargo
Logistics
Total

Bulk
Bulk Shipping
Shipping

Cruises
Others

Real Estate
Other
Elimination/
Unallocation
Consolidated

* (Upper) Revenues

Previous Forecast
1H

2H

Fullyear

230.0 230.0 460.0


-4.0
1.0
-3.0
71.0
69.0 140.0
4.0
3.0
7.0
43.5
42.5
86.0
0.4
0.6
1.0
194.0 203.0 397.0
5.4
5.6
11.0
538.5 544.5 1,083.0
5.8
10.2
16.0
395.0 405.0 800.0
8.5
11.5
20.0
20.7
19.3
40.0
0.9
-0.4
0.5
5.3
5.2
10.5
2.0
1.7
3.7
95.0
96.0 191.0
-0.2
0.0
-0.2
-59.5
-65.0 -124.5
0.0
0.0
0.0
995.0 1,005.0 2,000.0
17.0
23.0
40.0

Change

Revised Forecast

0 .0

1H

2H

Fullyear

5.0
2.5
-1.0
-0.3
-3.0
-1.7
-13.0
-1.9
-12.0
-1.4
10.0
3.0
-2.9
-2.1
-0.2
0.0
-3.0
0.4
-7.0
0.0
-15.0
0.0

-5.0
2.0
-2.0
0.3
-0.5
0.1
-9.0
-1.1
-16.5
1.2
-10.0
0.0
-2.1
-1.2
0.0
0.1
-3.0
0.0
6.5
0.0
-25.0
0.0

0.0
4.5
-3.0
0.0
-3.5
-1.7
-22.0
-3.0
-28.5
-0.2
0.0
3.0
-5.0
-3.3
-0.2
0.1
-6.0
0.4
-0.5
0.0
-40.0
0.0

Fullyear

1H

2H

235.0
-1.5
70.0
3.7
40.5
-1.3
181.0
3.5
526.5
4.4
405.0
11.5
17.8
-1.2
5.1
2.0
92.0
0.2
-66.5
0.0
980.0
17.0

225.0
460.0
3.0
1.5
67.0
137.0
3.3
7.0
42.0
82.5
0.7
-0.7
194.0
375.0
4.5
8.0
528.0 1,054.5
11.4
15.8
395.0
800.0
11.5
23.0
17.2
35.0
-1.6
-2.8
5.2
10.3
1.8
3.8
93.0
185.0
0.0
0.2
-58.5 -125.0
0.0
0.0
980.0 1,960.0
23.0
40.0

(Lower) Recurring Profit

- Liner: Revised upward due to freight rates recovery and major service restructuring.
- Cruise: Revised downward by Crystal Cruises
Cruises slower booking than initially expected.

Overview of Each Industrial Segment 1)


1. Liner Container:
Container Lifting, Slot(1,000TEU)
FY12/3(Result)
1Q
Asia
Lifting
North America Slot
Utilizaion

AsiaEurope Lifting
Slot
Utilizaion

2Q

3Q

4Q

FY13/3(Forecast)
Fullyear

152 182 161 155


650
204 217 198 184
802
75% 84% 81% 84% 81%
130 139 118 112
500
154 159 145 122
580
84% 88% 81% 92% 86%

1Q
(Result)

1Q

2Q

3Q

4Q

AsiaNorth America

103

101

97

99

100

AsiaEurope

78

74

71

66

73

2H

Fullyear

166 177 324 668


195 206 388 788
85% 86% 84% 85%
133 137 250 520
142 150 277 569
94% 91% 90% 91%

Trend of Container Freight Rate(Index, FY09/3 1Q=100)


FY12/3(Result)
Fullyear

2Q

FY13/3(Forecast)

Change
from
previous
forecast

-3
-4
0%
3
14
-2%

Previous
forecast

2Q

2H

Fullyear

104

111

110

109

115

86

89

84

86

82

1Q
(Result)

- Lifting: Expect almost the same volume as previous forecast on both Transpacific and AsiaEurope routes.
- Freight Rates: Keep effort in further recovering freight rates and maintaining the level on the
Transpacific trade.

Overview of Each Industrial Segment 2)


2. Air Cargo Transportation (NCA)
FY12/3(Result)
1H
2H
Revenues

billion
yen

Recurring
Profit
Capable
Weight
Volume

billion
yen

(RTK)

Capacity

1,000 ton
Mil.ton
kilo

(ATK)

Mil.ton
kilo

YIELD

FY08
1Q=100

MOPS

US$
per bbl

Fullyear

1Q
2Q
3Q
4Q
43.2
39.4
82.6
22.6 20.6 19.3 20.0
2.7
0.6
3.3
1.9
0.7
0.3
0.2
187
187
375
95
93
91
96
1,161
1,136
2,297
591 570 556 580
1,641
1,618
3,259
810 831 796 822
97
88
92
100
93
88
88
$128
$128
$128
$131 $126 $125 $132

FY13/3(Forecast)
1H
Full2H
1Q
2Q
year
(Result)
40.5
42.0 82.5
20.3 20.2
-1.3
0.7
-0.7
-0.7 -0.6
203
203 406
100 103
1,246
1,268 2,514
606 640
1,782
1,763 3,545
857 925
86
88
87
88
83
$119
$115 $117
$122 $115

Change
from
previous
forecast

-3.5
-1.7
34
267
204
-1
-$13

- The yield decline caused recurring loss of FY13/3 1Q despite the sales effort on increase in
handling cargo volume from/to Asia.
- Revised FY13/3 full-year forecast downward from the previous.

Overview of Each Industrial Segment 2)


2. Air Cargo Transportation (NCA)
Composition Ratio

Trade-wise Load Factor Trend

FY12/3

FY13/3

(Result)

(Forecast)

RTK ATK RTK ATK

FY12/3(Result)
1Q

2Q

3Q

4Q

13/3(Forecast)
Fullyear

1Q
(Result)

2Q

2H

Fullyear

North America 61% 58% 63% 58% 76% 71% 72% 74% 73% 75% 75% 78% 76%

Europe

16% 15% 17% 15% 78% 77% 78% 76% 77% 78% 82% 84% 82%

Asia

23% 27% 21% 27% 62% 59% 61% 62% 61% 59% 50% 53% 54%

All Trade

100% 100% 100% 100% 73% 69% 70% 71% 70% 71% 69% 72% 71%

10

Overview of Each Industrial Segment 3)


3. Logistics Segment
FY12/3(Result)
1H

(billion yen)
1Q

Revenues
Recurring
Profit

2H
2Q

185.9

3Q

4Q

179.2

94.3 91.5 89.6


4.2
0.9

89.6

5.0
3.2

3.5

1.4

FY13/3Forecast
Fullyear

365.1
9.2

1H
1Q

2Q

(Result)

181.0
87.8

93.1

3.5
1.2

2.3

2H

Fullyear

Change
from
previous
forecast

194.0

375.0

-22.0

4.5

8.0

-3.0

- Expand intra-region logistics and increase handling volume by targeting China, India,
Southeast Asia (Vietnam, Indonesia and Thailand) and emerging markets.
- Aim to increase profit by providing differentiated service of integrating Ocean Forwarding
business in Asia and Logistics business in Europe and the U.S.

11

Overview of Each Industrial Segment 4)


4. Bulk Shipping 1) Market trend and forecast:
FY12/3 (Result)
1Q
B DI

3Q

1,376 1,531 1,925

4Q

Fullyear

867

1,425

1Q
Result)

2Q

2H

Fullyear

1,020 1,049 1,418 1,226

Previous
forecast

1,515

8,606 17,058 28,728 6,997 15,347

5,986 8,500 16,500 11,872 17,000

12,379 10,410 12,410 7,571 10,693

8,150 8,000 9,500 8,788

10,375

Handymax (Pac) 12,730 11,285 9,397 7,672 10,271

8,415 7,000 10,000 8,854

11,000

11,148 9,512 7,709 6,055 8,606

9,016 7,500 9,000 8,629

9,000

Cape (4TC)

Dry
Bulk
Panamax (Pac)
Carrier

Handy (Pac)
Tanker

2Q

FY13/3 (Forecast

VLCC

17,160 8,151 18,087 31,420 18,705 33,665 8,000 22,500 21,666 22,500

* Market per vessel (spot charterage) 4TC = average of 4 routes, Pac = Pacific-round, Currency Unit = US$ / day

- Expect weaker Dry Bulk Carrier and Tanker market level comparing to the previous
forecast particularly Capesize bulker.

12

Overview of Each Industrial Segment 5)


4Bulk Shipping 2) Car Carrier
Car Transportation Result/Forecast(1,000Cars)

FY12/3(Result)

FY13/3(Forecast)

1Q

2Q

3Q

4Q

Fullyear

Result)

All Trade 600

770

770

790

2,920

860

2%

-5% -1%

-6%

43% 10%

Change -20%

1Q

2Q

850

2H

Fullyear

Change
from
previous
forecast

1,660 3,360
7%

15%

50
1%

- Increased in car transport volume in FY13/3 due to recovery from the Great East Japan
Earthquake and Thai floods.

13

More Than Shipping 2013


Grow with Asia, Expand across the Globe
Review and Revision
at the end of First Quarter of Fiscal Year 2012
31 July, 2012

14

14

Fleet in Operation
Review operating fleet size of vessel types exposed to market volatility
FY2011
Actual

FY2013
Estimate
(Original)

FY2013
Estimate
(Revised)

FY2016
Estimate
(Original)

FY2016
Estimate
(Revised)

Vessels in
Operation

Vessels in
Operation

Vessels in
Operation

Vessels in
Operation

Vessels in
Operation

110
(80)
120

95
(79)
120

110
(63)

Car Carriers

100
(84)
121

130

90
(63)
130

Capesize Vessels

112

120

120

110

110

Post-Panamax/Panamax Vessels

93
149
56

100
180
60

85
150
55

110
200
60

90
150
55

Tankers

85

105

80

105

75

LNG Carriers (incl. vessels under joint ownership)

66

65

65

80

80

Others

94

95

85

100

85

876

955+

855

1,005+

865

27

30

30

Consolidated
Vessel Types Dry Bulk by Vessel Size
Containerships
# of vessels owned and in long-term charters

Handysize (incl. Boxshape) Vessels


Wood-chip Carriers

Total
Non-Consolidated

Major vessels held under equity-method affiliates

Shuttle TankersKNOT*
KNOT: Knutsen NYK Offshore Tankers

24

25

15

Investment Plan
Investment Plan (FY2011 - 2016)
(JPY, billions)

Original
Current
Investment
Plan
Shipping

Additional
Investments

Current
Investment
Plan

Total

Additional
Investments

Total

Containerships

29

29

30

30

Car Carriers

80

110

190

50

55

105

Large Bulk Carriers

320

320

330

330

Small/Medium-sized
Bulk Carriers

370

100

470

390

20

410

50

20

70

60

60

60

200

260

90

70

160

160

160

135

135

30

31

25

30

230

40

270

260

20

280

1,300

500+

1,800+

1,350

190

1,540

Dry

Liquid Tankers
LNG,
Offshore Business
Other Shipping
Non-

Logistics

Shipping

Other Non-Shipping
Investments

Total

Revised

Major scheduled investments by an equity-method affiliate not included above:


Shuttle Tanker (KNOT) investment = \50 billion

16

Financial Targets: Breakdown by Business Segment

Expand stable freight rate business


Recurring Profit (by Segment)
Revision as of 27 April, 2012

(JPY, billions)

2,000
200

Original

FY2010

FY2011

FY2012

FY2013

FY2016

FY2013

FY2016

114.1

33.2

40.0

75.0

150.0

130.0

170.0

1,500
150

40.0
30.0
30.0

1,000
100

39.6

130.0

120.0
100.0

50
500

74.5

75.0

80.0

35.0

5.0

51.2

00

84.4

50
-500

Business with stable freight rates


Other Businesses

-1,000
100

17

Financial Targets: Earnings and Financial Targets


Original
FY2011
Estimate

FY2012
Estimate

(JPY, billions)
Original
Revised

Revised
FY2013
Estimate

FY2011
Actual

FY2012
Estimate

FY2013
Estimate

FY2016
Target

FY2016
Target

2,000.0

2,100.0

2,300.0

1,807.8

1,960.0

2,130.0

2,700.0

2,620.0

Operating Income

90.0

110.0

140.0

24.1

50.0

85.0

180.0

160.0

Recurring Profit

80.0

100.0

130.0

33.2

40.0

75.0

170.0

150.0

Net Income

50.0

75.0

95.0

72.8

20.0

65.0

125.0

115.0

Depreciation and Amortization

110.0

120.0

130.0

100.8

95.0

105.0

Operating Cash Flow

130.0

180.0

200.0

29.8

100.0

140.0

200.0

230.0

200.0

139.4

200.0

190.0

Interest-bearing Debt

970.0

1,030.0

1,030.0

1,067.1

1,140.0

1,180.0

Shareholders' Equity

700.0
1.39

760.0
1.36

830.0
1.24

579.3
1.84

570.0
2.00

620.0
1.90

32%

32%

32%

27%

25%

26%

10%
12%
4%
Target: 25% consolidated payout ratio

10%

Revenues

Investing Cash Flow

D/E Ratio
Shareholders' Equity Ratio
ROE

7%

Payout Ratio
Foreign Exchange Rate (/$)
Bunker Oil Price (/MT)

\85

\85

\85

\79

\80

\80

\85

\80

$650

$650

$650

$666

$667

$730

$650

$730

18