Financial Highlights: The First Quarter Ended June 30, 2022

(Unaudited translation of "Kessan Tanshin", provided for reference only)

July 29, 2022

Financial Highlights: The First Quarter Ended June 30, 2022

1. Consolidated Financial Highlights ( from April 1, 2022 to June 30, 2022 )

(All financial information has been prepared in accordance with accounting principles generally accepted in Japan)

(1) Operating Results

		(¥Million)
	Q1/FY2022	Q1/FY2021
Revenues	374,783	288,874
Operating profit	23,597	8,042
Ordinary profit	284,191	104,268
Profit attributable to owners of parent	285,779	104,147
		( ¥ )
Net income per share	791.96	290.07
Diluted net income per share	788.68	289.28

• The Company split its common share on the basis of one (1) share into three (3) shares effective April 1, 2022. Accordingly, net income per share and diluted net income 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.

(2) Financial Position

		(¥Million)
	Q1/FY2022	FY2021
Total assets	3,134,568	2,686,701
Total net assets	1,465,448	1,334,866
Shareholders' equity / Total assets	46.1%	47.4%

• Shareholders' Equity is defined as follows.
  Shareholders' Equity = Total Net Assets - ( Share option + Non-controlling interests )

2. Dividends					（¥）
		Dividend per share
	Q1	Q2	Q3	Year -end	Total
FY2021	―	300.00	―	900.00	1,200.00
FY2022	―	―	―	―	―
FY2022 (Forecast)	―	300.00	―	200.00	500.00

• The Company split its common share on the basis of one (1) share into three (3) shares effective April 1, 2022.
  Accordingly, the dividends per share for the fiscal year ended March 31, 2022 represent the actual amount of dividends before the stock split.

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(Unaudited translation of "Kessan Tanshin", provided for reference only)July 29, 2022

3. Forecast for the Fiscal Year Ending March 31, 2023

		(¥Million)
	1H/FY2022	FY2022
Revenues	770,000	1,470,000
Operating profit	47,000	70,000
Ordinary profit	500,000	710,000
Profit attributable to owners of parent	500,000	700,000
		( ¥ )
	1H/FY2022	FY2022
Net income per share	1,385.42	1,939.37

• Net income per share for the fiscal year 2022 is calculated based on the number of shares after the issuance of new shares regarding the following three cases:
• 1. Notice on issuance of new shares to directors/executive officers of subsidiaries of the company and employees of the company as fiscal

  year 2022 non-performance-linked restricted stock compensation

  The number of shares issued on the payment deadline of July 21st, 2022: 20,100 shares

  The number of shares issued on the payment deadline of August 26th, 2022: 33,000 shares

  1. Notice on issuance of new shares to non-executive directors of the company as fiscal year 2022 non-performance-linked restricted

  stock compensation

  The number of shares issued on the payment deadline of July 21st, 2022: 1,485 shares

  1. Notice on issuance of new shares to executive directors and executive officers of the company as fiscal year 2021 performance- linked stock compensation
     The number of shares issued on the payment deadline of July 21st, 2022: 70,482 shares

(The total number of new shares issued for (i)~(iii) is 125,067 shares)

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(Unaudited translation of "Kessan Tanshin", provided for reference only)July 29, 2022

4. Business Performance

(1) Analysis of Operating Results				(¥ Billion)
	Three months	Year-on-year comparison /
	From April 1, 2021 to	From April 1, 2022 to		Variance
	June 30, 2021	June 30, 2022
Revenue	288.8	374.7	85.9	/	29.7%
Operating profit	8.0	23.5	15.5	/	193.4%
Ordinary profit	104.2	284.1	179.9	/	172.6%
Profit attributable to	104.1	285.7	181.6	/	174.4%
owners of parent
Exchange rate	¥108.77/US$	¥125.29/US$			¥16.52/US$
Bunker price*	US$497/MT	US$914/MT			US$417/MT
		*Average price for all the major fuel grades

We recorded revenue of ¥374.7 billion, an operating profit of ¥23.5 billion, an ordinary profit of ¥284.1 billion and profit attributable to owners of parent of ¥285.7 billion. We recorded ¥242.7 billion of equity in net earnings of affiliated companies in non-operating income, mainly due to a significant increase in earnings at OCEAN NETWORK EXPRESS PTE. LTD. (ONE), an equity method affiliate. The amount of equity in net earnings of affiliated companies we recorded which was attributable to ONE was ¥232.9 billion. In addition, the rapid depreciation of the yen during the fiscal year resulted in a significant increase in revenues in each segment, including freight rates and charter fees.

The following is a summary of business conditions including revenue and ordinary profit/loss per business segment.

Upper: Segment Revenue, Lower: Segment Ordinary Profit				(¥ Billion)
		Three months
					Year-on-year comparison /
		From April 1, 2021 to		From April 1, 2022 to
			Variance
		June 30, 2021		June 30, 2022
Dry Bulk Business	78.3		105.2	26.8	/	34.3%
6.5		18.5	12.0	/	182.9%
Energy Business	68.8		85.6	16.7	/	24.3%
4.3		9.5	5.1	/	117.6%
Product Transport Business	117.8		156.3	38.5	/	32.7%
90.1		249.8	159.6	/	177.0%
	Containerships	14.4		13.0	(1.3)	/	(9.6%)
	87.2		234.4	147.1	/	168.7%
Real Estate Business	9.6		9.8	0.1	/	1.9%
3.2		2.5	(0.7)	/	(21.5%)
Associated Businesses	10.0		13.6	3.6	/	36.3%
(0.8)		(0.0)	0.7	/	-%
Others	4.0		4.0	(0.0)	/	(1.0%)
0.8		0.4	(0.3)	/	(44.7%)

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(Unaudited translation of "Kessan Tanshin", provided for reference only)

July 29, 2022

(A) Dry Bulk Business

The Capesize bulker market and Panamax bulker market started off at a low level, reflecting the delayed recovery of Brazilian iron ore shipments due to bad weather and the lockdown in Shanghai meant to reduce the spread of COVID-19 infections. In mid-May, surging transport demand for coal to India pushed the charter rate up to around US$30,000 per day for both Capesize bulkers and Panamax bulkers. However, after the slack in coal transport demand, which eased the tight vessel supply-demand balance, the charter rate was reduced to around $20,000 per day.

In addition to generally steady market conditions for Capesize bulker and Panamax bulker, an improved market in both outbound paper pulp transport and inbound general bulker cargoes for open hatch vessels contributed to profit. As a result, the dry bulk business posted a year-on-year increase in profit in the first three months of the fiscal year.

1. Energy Business
   In the very large crude oil carrier (VLCC) market, conditions remained difficult. In line with the growth in oil demand as the global economy recovers, OPEC gradually began phasing out its coordinated output cuts and cargo movement was on a recovery path. However, the VLCC tanker remained oversupplied. Meanwhile, product tanker market remained buoyant due to an increase in ton miles driven by the procurement of alternatives to petroleum products from Russia. Under these market conditions, the tanker business as a whole posted a year-on-year rise in profit, thanks to its efforts for the stable fulfillment of long-term contracts and cost reduction.
   
   The FPSO business reported a year-on-year increase in profit by securing stable profit through existing long- term charter contracts, and also thanks to the contribution of a newly commencing project.
   
   The LNG carrier division continued to generate stable profit through existing long-term charter contracts and reported profit mostly unchanged from the same period a year earlier. The FSRU business posted a year-on- year increase in profit as a result of additional operation brought by the conclusion of a new contract for an existing vessel.
2. Product Transport Business

At ONE, the Company's equity-method affiliate, the containership business continues to be affected by the turmoil within global supply chains. Spot freight rates remained considerably higher than the year-ago level, despite the impact of the softening supply-demand balance caused mainly by the lockdown in Shanghai designed to reduce the spread of COVID-19 infections. Term contracts, reflecting the high freight rate levels so far, also pushed up profit. As a result of the above, the containerships business recorded a significant year-on- year increase in profit.

Although supply chain disruptions such as global semiconductor supply shortages and automobile component supply shortages caused by the impact of lockdowns in Shanghai continued to impact the production and shipment of completed cars, transportation volume of completed cars was mostly unchanged year on year due to the effort of flexible and agile tonnage adjustments and route changes. As the supply- demand environment improved, we worked to pursue more efficient operations, resulting in a significant increasement in earnings compared with the same period of the previous fiscal year.

As there was no declaration of a state of emergency nor quasi-state of emergency, passenger numbers showed considerable improvement, reflecting success at tapping into demand during long holidays, for example. The logistics business also remained on the recovery path and the ferries and coastal RoRo ships business overall posted considerable year-on-year growth in revenue and profit.

(D) Real Estate Business

The real estate business secured stable profit, despite a year-on-year drop in profits associated with the reconstruction of some buildings held by DAIBIRU CORPORATION, the core company in the Group's real estate business.

(E) Associated Businesses

The cruise ship business achieved improved profitability year on year due to an increase in operations. The tugboat business posted a year-on-year decline in profit, largely because of the rising price of fuel, although conditions varied from company to company and from port to port.

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(Unaudited translation of "Kessan Tanshin", provided for reference only)

July 29, 2022

(F) Others

Other businesses, which are mainly cost centers, include ship operations, ship management, ship chartering and financing. Ordinary profit in this segment was almost flat year on year.

(2) Outlook for FY2022
(For consolidated cumulative second quarter of the fiscal year 2022)		(¥ Billion)
		Previous outlook	Current outlook	Year-on-year
		(As announced on	(As of announcement of
		comparison / Variance
		July 21, 2022)	Q1 financial results)
Revenue	770.0	770.0		-	/	-%
Operating profit	47.0	47.0		-	/	-%
Ordinary profit	500.0	500.0		-	/	-%
Profit attributable to owners	500.0	500.0		-	/	-%
of parent
Exchange rate		¥125.00/US$	¥125.00/US$			-
Bunker price*1	-	US$580/MT			-
Compliant fuel price*2	-	US$1,030/MT			-
			(Assumptions for the 1st half)
(For consolidated full fiscal year 2022)				(¥ Billion)
		Previous outlook	Current outlook		Year-on-year
		(As announced on	(As of announcement of
			comparison / Variance
		July 21, 2022)	Q1 financial results)
Revenue		1,470.0	1,470.0		-	/	-%
Operating profit		70.0	70.0		-	/	-%
Ordinary profit		710.0	710.0		-	/	-%
Profit attributable to owners		700.0	700.0		-	/	-%
of parent
Exchange rate		¥125.00/US$	¥125.00/US$				-
Bunker price*1		-	US$560/MT				-
Compliant fuel price*2		-	US$940/MT				-
			(Assumptions for the 2nd half)
			*1 HSFO (High Sulfur Fuel	Oil) average price
			*2 VLSFO (Very Low Sulfur Fuel Oil) average price

(A) Dry Bulk Business

Whilst the impact of global economic slowdown is a concern, the Capesize bulker market is expected to remain firm, with the usual growth in Brazilian iron ore shipments expected, in addition to solid shipments of iron ore from Australia. However, we believe that attention needs to be paid to developments in terms of the Chinese government's economic stimulus measures and port congestion due to adverse weather. The effects of the economic slowdown, especially the decline in demand for transportation to China is the concern for the Panamax bulker market but is expected to be supported to some extent by coal and grain shipments. If demand for alternative transportation to replace cargoes from Russia and Ukraine arise, this could be a positive factor to the market. However, in view of the fact that actual alternative transportation demand during the first three months under review was limited, we expect it to remain limited in the future as well.

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