Kawasaki Kisen Kaisha : Financial Highlights for 2nd Quarter FY2022

FINANCIAL HIGHLIGHTS

Brief report of the six months ended September 30, 2022

	Kawasaki Kisen Kaisha, Ltd.
[Two Year Summary]	(Million yen; rounded down to the nearest million yen)
	Six months	Six months
	ended	ended
	September 30, 2021	September 30, 2022
Consolidated
Operating revenues	357,556	482,897
Operating income (loss)	10,182	52,998
Profit (loss) attributable to owners of the parent	246,008	565,430
Profit (loss) attributable to owners of the parent per share
(Yen)
Basic	879.16	2,009.74
Diluted	-	-

• The Company split its common share on the basis of one (1) share into three (3) shares effective October 1, 2022. Accordingly, profit (loss) attributable to owners of the parent per share is calculated on the assumption that the stock split was conducted at the beginning of the previous fiscal year ended March 31, 2022.

	Year	Six months
	ended	ended
	March 31, 2022	September 30, 2022
Total assets	1,574,960	2,175,675
Total net assets	984,882	1,614,725
	Six months	Six months
	ended	ended
	September 30, 2021	September 30, 2022
Net cash provided by (used in) operating activities	3,525	145,821
Net cash provided by (used in) investing activities	6,959	(27,166)
Net cash provided by (used in) financing activities	(45,805)	(84,340)

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1. Qualitative Information and Financial Statement

(1) Qualitative Information about the Consolidated Operating Result

(Billion Yen; rounded to the nearest 100 million yen)

						Six months ended			Six months ended
												Change		% Change
						September 30, 2021			September 30, 2022
		Operating revenues				357.6				482.9			125.3	35.1%
		Operating income (loss)				10.2				53.0			42.8	420.5%
		Ordinary income (loss)				238.0				567.5			329.5	138.4%
		Profit (loss) attributable to owners of the parent				246.0				565.4			319.4	129.8%
		Exchange Rate (¥/US$)				109.90				131.56			21.67	19.7%
		(6-month average)
		Fuel oil price (US$/MT)				497				850			353	71.1%
		(6-month average)

Due to significant business performance improvement of OCEAN NETWORK EXPRESS PTE. LTD. (hereinafter referred to as "ONE"), the company recorded 499.280 billion yen of equity in earnings of unconsolidated subsidiaries and affiliates for the consolidated cumulative second quarter. Within the recorded equity in earnings of unconsolidated subsidiaries and affiliates, "ONE" accounted for 494.552 billion yen in the cumulative second quarter, and 261.651 billion yen in the second quarter alone.

Performance per segment was as follows.

(Billion Yen; rounded to the nearest 100 million yen)

								Six months ended		Six months ended
												Change		% Change
								September 30, 2021		September 30, 2022
		Dry bulk				Operating revenues		131.6		171.6			40.0	30.4%
					Segment profit (loss)		5.9		26.0			20.1	342.8%
		Energy resource				Operating revenues		42.8		50.8			7.9	18.5%
		transport
					Segment profit (loss)		0.8		9.2			8.3	986.6%
		Product logistics				Operating revenues		178.0		254.6			76.7	43.1%
					Segment profit (loss)		238.1		536.9			298.7	125.5%
		Other				Operating revenues		5.2		5.9			0.8	14.5%
					Segment profit (loss)		(0.1)		0.5			0.6	－
		Adjustments and				Segment profit (loss)		(6.7)		(5.0)			1.8	－
		eliminations
		Total				Operating revenues		357.6		482.9			125.3	35.1%
					Segment profit (loss)		238.0		567.5			329.5	138.4%

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1. Dry Bulk Segment

Dry Bulk Business

In the Cape-size sector, despite the increase in vessel supply caused by the stagnant economic activity and easing of port congestion in China, a main demand area, market rates stayed generally firm while fluctuating somewhat because of the subsequent recovery in demand for transportation and the increase of port congestion in the Far East due to heavy weather, which led to the tightening of the vessel supply-demand balance.

In the medium and small vessel sector, although the vessel supply increased due to the temporary decline in demand for transportation due to seasonal factors and the decline in demand for transportation of steel products to Europe, coupled with the easing of port congestion in China, market rates stayed generally firm, driven by the increase in demand for transportation of grains to China.

Under these circumstances, the Group strived to manage the market exposures appropriately and reduce operation costs and improve vessel operation efficiency.

As a result, the overall Dry Bulk Segment recorded a year-on-year increase both in revenue and profit.

1. Energy Resource Transport Segment

LNG Carrier, Electricity Business, Tanker Carrier and Offshore Business

Concerning LNG carriers, thermal coal carriers, large crude oil tankers (VLCCs), LPG carriers, drillship and FPSO (Floating Production, Storage and Offloading system), the business stayed firm for mid- and long-term charter contracts and contributed to secure stable profit.

As a result, the overall Energy Resource Transport Segment recorded a year-on-year increase both in revenue and profit.

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1. Product Logistics Segment

Car Carrier Business

In the global car sales market, although supply shortage of semiconductors and auto parts, lockdown in Shanghai and the situations in Russia and Ukraine affected production and shipments in some areas, the recovery from the impact of COVID-19 continued. In addition, the Group strived to achieve the recovery of freight levels and improve operational efficiency.

Logistics Business

In the domestic logistics and port business, the domestic container handling volume maintained the same level on a year-on-year basis. In the towage business, the work volume stayed firm. The warehousing business remained firm. As for the international logistics business, although demand for ocean and air cargo transportation in the forwarding business showed a declining trend, handling volume generally stayed firm. In the finished vehicles transportation business, both land transportation volume and storage volume of finished vehicles increased.

Short Sea and Coastal Business

In the short sea business, although demand for transportation of steel and timber products stayed firm, the transportation volume of coal decreased year-on-year. In the coastal business, the cargo volume stayed firm and the truck transportation volume increased year-on-year. Transportation volume for passengers and passenger cars improved year-on-year due to the removal of restrictions on movements associated with COVID-19.

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Containership Business

As for the performance of "ONE", although the recent market rates weakened with the tight supply-demand balance easing, the overall market rates increased year-on-year. As a result, the business performance of "ONE" improved year-on-year.

As a result, the overall Product Logistics Segment recorded a year-on-year increase in both revenue and profit.

1. Other

Other includes but not limited to the Group's ship management service, travel agency service, and real estate and administration service. The segment recorded a year-on-year increase in revenue and returned to profitability.

(2) Qualitative Information on the Consolidated Financial Situation

Consolidated assets at the end of the consolidated 2nd Quarter of this fiscal year were ¥2,175.675 billion, an increase of ¥600.715 billion from the end of the previous fiscal year as a result of an increase in investment securities and other factors.

Consolidated liabilities decreased by ¥29.126 billion to ¥560.950 billion as a result of a decrease in other current liabilities and other factors compared to the end of the previous fiscal year.

Consolidated net assets were ¥1,614.725 billion, an increase of ¥629.842 billion compared to the end of the previous fiscal year as a result of an increase in retained earnings and other factors.

(3) Qualitative Information on the Consolidated Prospects for FY2022

(Billion Yen; rounded to the nearest 100 million yen)

					Prior Forecast	Current Forecast
					(at the time of announcement of	(at the time of announcement of	Change	% Change
					the 1st Quarter result)	the 2nd Quarter result)
	Operating revenues	890.0	920.0	30.0	3.4%
	Operating income (loss)		57.0	80.0	23.0	40.4%
	Ordinary income (loss)		700.0	710.0	10.0	1.4%
		Profit (loss) attributable to
		owners of the parent			690.0	700.0	10.0	1.4%
	Exchange Rate (¥/US$)		129.68	132.02	2.34	1.8%
	Fuel Oil Price (US$/MT)		896	780	(116)	(13.0%)

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