Fiscal Highlights for the 2nd Quarter, ended September 30, 2024[PDF:232KB]

Consolidated Financial Results for Six Months Ended September 30, 2024 (Japanese GAAP) (Unaudited)

November 6, 2024

Nippon Yusen Kabushiki Kaisha (NYK Line)

Security Code:	9101
Listings:	Prime Market of Tokyo Stock Exchanges
URL:	https://www.nyk.com/english/
Head Office:	Tokyo, Japan
Representative:	Takaya Soga, President
Contact:	Yasuaki Okada, General Manager, IR Group
	Tel: [phone]

Submit scheduled date of Six Months Financial Report November 8, 2024

Start scheduled date of paying Dividends	December 2, 2024
Preparation of Supplementary Explanation Material:	Yes
Financial Results Presentation Held:	Yes (for Analysts and Institutional Investors)
	(Amounts rounded down to the nearest million yen)

1. Consolidated Financial Results for the Six Months Ended September 30, 2024 (April 1, 2024 to September 30, 2024)

(1) Consolidated Operating Results

(Percentage figures show year on year changes)

	Revenues		Operating profit	Recurring profit	Profit attributable to
		owners of parent
	million yen	%	million yen	%	million yen	%	million yen	%
Six months ended September 30, 2024	1,316,816	12.7	115,628	17.0	289,239	81.6	265,892	134.5
Six months ended September 30, 2023	1,168,335	-14.5	98,786	-39.5	159,297	-79.2	113,390	-83.9

(Note) Comprehensive income: Six Months ended September 30, 2024: ¥219,326 million (-32.9%),

Six Months ended September 30, 2023: ¥326,944 million (-65.6%)

	Profit per share	Profit per share-fully diluted
	yen	yen
Six months ended September 30, 2024	585.60	-
Six months ended September 30, 2023	224.99	-

(2) Consolidated Financial Position

	Total assets	Equity	Shareholders'
	equity ratio
	million yen	million yen	%
As of September 30, 2024	4,178,867	2,824,013	66.5
As of March 31, 2024	4,254,770	2,693,365	62.3

(Reference) Shareholders' equity: As of September 30, 2024: ¥2,780,498million, As of March 31, 2024: ¥2,650,371 million

2. Dividends

			Dividend per share
Date of record	1st Quarter End	2nd Quarter End		3rd Quarter End	Year-end	Total
	yen	yen		yen	yen	yen
Year ended March 31, 2024	-	60.00		-	80.00	140.00
Year ending March 31, 2025		130.00
Year ending March 31, 2025				-	130.00	260.00
(Forecast)

(Note) Revision of forecast for dividends in this quarter: No

3. Consolidated Financial Results Forecast for the Year Ending March 31, 2025 (April 1, 2024 to March 31, 2025) (Percentage figures show year on year changes)

				Operating		Recurring		Profit		Profit per
		Revenues				attributable to
			profit		profit		share
						owners of parent
		million yen	%	million yen	%	million yen	%	million yen	%	yen
Year ending March 31,2025	2,540,000	6.4	200,000	14.5	410,000	56.9	390,000	70.6	863.71
(Note) Revision of forecast in this quarter: Yes
4. Notes
(1) Changes of important subsidiaries in the period: None
(Changes in specified subsidiaries involving change in consolidation scope)
New: None	Exclusion: None

1. Particular accounting methods used for preparation of quarterly consolidated financial statements: None
2. Changes in accounting policy, changes in accounting estimates, and restatements
   1. Changes in accounting policy in accordance with changes in accounting standard: Yes

2.	Changes other than No.1:			None
3.	Changes in accounting estimates:		None
4.	Restatements:			None
(4) Total issued shares (Ordinary shares)
1.	Total issued shares
As of September 30, 2024	461,000,000	As of March 31, 2024	510,165,294
(including treasury stock)
2.	Number of treasury stock	As of September 30, 2024	12,393,071	As of March 31, 2024	51,027,775
3.	Average number of shares	Six months ended	454,054,518	Six months ended	503,988,216
September 30, 2024	September 30, 2023

*This financial report is not subject to the audit procedure.

*Assumptions for the forecast of consolidated financial results and other particular issues Foreign exchange rate:

(for the third quarter) ¥140.00/US$ (for fourth quarter) ¥140.00/US$ (for full year) ¥146.95/US$

Bunker oil price:

(for the third and fourth quarter) US$566.31/MT (for full year) US$599.10/MT

*Bunker oil price is on average basis for all the major fuel grades.

The above forecast is based on currently available information and assumptions that NYK Line deems to be reasonable. NYK Line offers no assurance that the forecast will be realized. Actual results may differ from the forecast as a result of various factors. Refer to pages 2-8 of the attachment for assumptions and other matters related to the forecast.

(Methods for obtaining supplementary materials and content of financial results disclosure)

NYK Line is to hold a financial result presentation meeting for analysts and institutional investors. The on-demand audio presentation and presentation material are available on the NYK website. (https://www.nyk.com/english/ir/library/result/2024/)

Index of the Attachments

1. Qualitative Information on Quarterly Results ……………………………………………………………	2
(1) Review of Operating Results ………………………………………………………………………………	2
(2) Explanation of the Financial Position ……………………………………………………………………	5
(3) Explanation of Consolidated Earnings Forecast and Future Outlook …………………………………	6
2. Consolidated Financial Statements ………………………………………………………………………	9
(1) Consolidated Balance Sheet ………………………………………………………………………………	9
(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income ……	11

1. Consolidated Statement of Cash Flows ………………………………………………………………… 13
2. Notes Regarding Consolidated Financial Statements ………………………………………………… 15 (Changes in Accounting Policies Due to Revisions of Accounting Standards) ……………………… 15 (Segment Information)……………………………………………………………………………………… 16 (Notes in the Event of Significant Changes in Shareholders' Capital) ……………………………… 17 (Notes Regarding Going Concern Assumption) ………………………………………………………… 17 (Important Subsequent Events) ..................………………………………………………………… 18

3. Other Information …………………………………………………………………………………………… 19

(1) Quarterly Operating Results ……………………………………………………………………………… 19

(2) Foreign Exchange Rate Information ……………………………………………………………………… 19

(3) Balance of Interest-Bearing Debt ………………………………………………………………………… 19

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1. Qualitative Information on Quarterly Results

(1) Review of Operating Results

				(In billion yen)
	Six months	Six months
	ended	ended	Change	Percentage
	September	September	Change
	30, 2023	30, 2024
Revenues	1,168.3	1,316.8	148.4	12.7%
Operating Profit	98.7	115.6	16.8	17.0%
Recurring Profit	159.2	289.2	129.9	81.6%
Profit attributable to owners	113.3	265.8	152.5	134.5%
of parent

In the first six months of the fiscal year ending March 31, 2025 (April 1, 2024 to September 30, 2024), consolidated revenues amounted to ¥1,316.8 billion (increased by ¥148.4 billion compared to the first six months of the previous fiscal year), operating profit amounted to ¥115.6 billion (increased by ¥16.8 billion), recurring profit amounted to ¥289.2 billion (increased by ¥129.9 billion), profit attributable to owners of parent amounted to ¥265.8 billion (increased by ¥152.5 billion).

Equity in earnings of unconsolidated subsidiaries and affiliates of ¥186.6 billion in non-operating income was recorded. Within this amount, equity in earnings of affiliates from OCEAN NETWORK EXPRESS PTE. LTD. (ONE), our equity-method affiliate, was ¥163.1 billion.

Changes in the average exchange rate between the U.S. dollar and yen as well as the average bunker oil price during the first six months of the current and previous fiscal years are shown in the following tables.

	Six months ended	Six months ended	Change
	September 30, 2023	September 30, 2024
Average exchange rates	¥139.93/US$	¥153.89/US$	Yen weakend by ¥13.96/US$
Average bunker oil prices	US$604.38/MT	US$631.85/MT	Price up by
US$27.47/MT

Note: Exchange rates and bunker oil prices are our internal figures.

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Overview by Business Segment

Business segment information for the six months ended September 30, 2024 (April 1, 2024 to September 30, 2024) is as follows.

(in billion yen)

				Six Months Ended
			Revenues		Recurring profit
		Sep 30,	Sep 30,	Change	Percentage	Sep 30,	Sep 30,	Change
		2023	2024		Change	2023	2024
	Liner Trade	111.7	92.2	-19.5	-17.5%	46.7	176.6	129.9
Liner &
Air Cargo	77.8	92.6	14.7	19.0%	0.3	8.3	8.0
Logistics	Transportation
	Logistics	338.6	401.2	62.5	18.5%	13.7	12.4	-1.3
Automotive		243.4	271.6	28.1	11.6%	60.5	61.6	1.0
Dry Bulk		270.8	323.4	52.5	19.4%	20.5	8.5	-12.0
Energy		81.4	91.0	9.5	11.8%	22.0	21.8	-0.1
Others		108.3	103.4	-4.9	-4.5%	0.9	4.2	3.3

Following a partial review of the business management structure, we have reconsidered the reportable segments. As a result, we have divided the previous Bulk Shipping Business into the Automotive Business, Dry Bulk Business, and Energy Business. In addition, the Real Estate Business is now included in the Other Business in consideration of its relative business scale. Accordingly, the figures for the six months ended September 30, 2023 have been reclassified to conform to the new classification.

Liner Trade Business

Container Shipping Division: Despite a continued increase in shipping capacity following the completion of new vessels, market levels were significantly higher than in the same period last year due to strong cargo movements and ongoing tight supply-demand conditions caused by the situation in the Red Sea. At ONE, the profit level was significantly higher than in the same period last year due to higher freight rates compared to the same period last year.

Terminal Division: At the terminals in Japan, the handling volumes were almost flat compared to the same period last year. At overseas terminals, handling volumes declined year on year due to the sale of shares of an affiliate at a terminal on the west coast of North America at the end of September 2023.

As a result of the above, the Liner Trade Business overall decreased revenues and increased profits year on year.

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Air Cargo Transportation Business

Cargo handling volumes increased year on year, supported mainly by strong e-commerce demand from Asia to Europe and the U.S., as well as demand for semiconductor manufacturing equipment and automotive-related cargo. In addition, freight unit prices remained at a high level due to tightened supply and demand, while fuel unit prices decreased year on year.

As a result of the above, the Air Cargo Transportation Business increased both revenues and profits year on year.

Logistics Business

Air Freight Forwarding Business: Although the handling volumes increased year on year due to a recovery in cargo volumes mainly from Asia, profit levels declined due to higher purchase prices.

Ocean Freight Forwarding Business: Although handling volumes increased year on year as cargo movements centered on services within Asia remained strong, purchase prices rose caused by the change in market conditions, resulting in flat profit levels.

Contract Logistics Business: The business secured a certain level of profits despite a slowdown in cargo movements in Europe and East Asia, which was offset by a solid revenue in the other regions.

As a result of the above, the Logistics Business overall increased revenues and decreased profits year on year.

Automotive Business

In the marine transport business, though impacted by the port congestion, the conflict in the Middle East, and a rise in loading and unloading charges, we strove to maintain the number of vehicles transported by optimizing our vessel deployment plans and vessel operations.

The auto logistics business continued performing strong as it captured a robust demand primarily in the terminal business.

As a result of the above, the Automotive Business overall increased both revenues and profits year on year.

Dry Bulk Business

Capesize: Market levels in the second quarter continued to be robust, exceeding the same period last year, building on the positive trend in the first quarter supported by strong shipments of iron ore cargoes from Brazil, which was less affected by the rainy season.

Panamax size and smaller: Market levels increased year on year as the supply-and-demand conditions tightened due to the coincidence of peak soybean shipments from Brazil and the active loading of coal inventories in China and India for the summer season.

As stated above, although market levels improved year on year, the Dry Bulk Business overall saw decreased profits despite increased revenues year on year due to a decline in freight rates and total volume of multi-purpose carrier cargo, as well as the strong impact of foreign exchange fluctuations.

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Energy Business

VLCC (Very Large Crude Carrier): Although market levels improved year on year, vessel utilization declined due to the increased number of vessels docked.

VLGC (Very Large Gas Carrier): Market levels significantly declined year on year due to an increase in shipping capacity resulting from the influx of new vessels and the alleviation of the impact of the drought in the Panama Canal, offsetting an increase in long-distance transport from the U.S. to the Asia. Meanwhile, charter fee income remained stable due to fixed-time charter contracts having been renewed at the level of charter fee reflecting the high market levels in the previous fiscal year.

Petrochemical tanker: Market levels exceeded the same period last year due to the tightening of the supply-and-demand conditions caused by changes in trade flows triggered by the situation in Russia and Ukraine and also by the situation in the Red Sea.

LNG carrier: The results were steady on support from the long-term contracts that generate stable earnings.

Offshore business: FPSO (Floating, Production, Storage and Offloading), drill ships and shuttle tankers operated steadily.

As a result of the above, the Energy Business overall saw an increase in revenues and a slight decrease in profits year on year.

Other Business

Vessel & Technical Service Business: Despite the bunker fuel sales business remaining weak due to decreased sales volume, the marine equipment supplies sales business remained firm.

Cruise Business: For the first time in six years, we resumed a round-the-world cruise. In addition, although some cruises were forced to change their schedules due to typhoons, the overall occupancy rate remained high, driven by summer firework and festival cruises among others.

As a result of the above, the Other Business overall saw a decrease in revenues and an increase in profits year on year.

1. Explanation of the Financial Position
   ① Status of Assets, Liabilities and Equity
   As of the end of the second quarter of the current fiscal year, total assets amounted to ¥4,178.8 billion, a decrease of ¥75.9 billion from the end of the previous fiscal year due to factors including a decrease in vessels and other items of property, plant and equipment. Total liabilities amounted to ¥1,354.8 billion, also a decrease of ¥206.5 billion from the end of the previous fiscal year due to factors including a ¥184.9 billion decrease in interest-bearing debt to ¥728.8 billion caused by a decrease in short-term loans payable. In the equity section, retained earnings increased by ¥34.4 billion and shareholders' equity, which is the aggregate of shareholders' capital and accumulated other comprehensive income, amounted to ¥2,780.4 billion. This amount combined with non-controlling interests of ¥43.5 billion brought total equity to ¥2,824.0 billion. Based on this result, the debt-to-equity ratio (D/E ratio) came to 0.26, and the equity ratio was 66.5%.

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• Cash flows

The balance of cash and cash equivalents as of the end of the second quarter of the current fiscal year was ¥137.4 billion, a decrease of ¥7.3 billion compared to the beginning of the fiscal year.

Net cash provided by operating activities was ¥230.7 billion (compared to net cash provided of ¥254.2 billion for the same period last year) as a result of profit before income taxes of ¥299.1 billion, non-cash depreciation and amortization of ¥75.5 billion, equity in earnings of unconsolidated subsidiaries and affiliates of negative ¥186.6 billion and interest and dividend income received of ¥83.3 billion. Net cash provided by investing activities was ¥30.6 billion (compared to net cash used of ¥134.5 billion for the same period last year) mainly as a result of the purchase and sale of vessels and other non-current assets. Net cash used in financing activities was ¥256.3 billion (compared to net cash used of ¥173.4 billion for the same period last year) due to the repayment of short-term loans payable, purchase of own shares, and payment of dividends.

1. Explanation of the Consolidated Earnings Forecast and Future Outlook
   ① Forecast of the Consolidated Financial Results Liner Trade Business
   Container Shipping Division: Although we expect that the tight supply-demand balance will ease after peaking out in the second quarter and short-term freight rates will decline even further than our previous forecast toward the end of the current fiscal year, the full-year profit level will be higher than our previous forecast as the second-quarter profit level has ended up being higher than our previous forecast.

Air Cargo Transportation Business

As disclosed on June 10, 2024, the share exchange between Nippon Cargo Airlines Co, Ltd. and ANA Holdings Inc. will be effective on March 31, 2025 (scheduled). Effective the same date, Nippon Cargo Airlines Co, Ltd. will no longer be one of our consolidated subsidiaries and will become a wholly owned subsidiary of ANA Holdings Inc.

From the third quarter onward, we expect steady cargo demand mainly from Asia to Europe and the U.S.

Logistics Business

Air Freight Forwarding Business: Although the handling volumes are expected to be steady, the profit level is expected to be lower than our previous forecast due to a rise in purchase prices.

Ocean Freight Forwarding Business: The profit level is expected to be largely the same as our previous forecast.

Contract Logistics Business: The business is expected to secure a certain level of profits despite an expected slowdown in cargo movements in Europe and East Asia, which will, however, be backed by a solid performance of the business in North America.

Automotive Business

The profit level is expected to be lower than our previous forecast due to a slight decline in the handling volumes in terms of the number of vehicles transported, the impact of foreign exchange, and a rise in loading and unloading charges.

Dry Bulk Business

The Capesize market is expected to be in line with our previous forecast, supported by firm transport

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demand for iron ore cargoes bound for China and bauxite out of Guinea. On the other hand, the market levels for the Panamax size and smaller are expected to be lower than our previous forecast. The full- year profit level is also expected to be lower than our previous forecast due in part to the fact that the second quarter performance, strongly impacted by the foreign exchange fluctuations, ended up being significantly lower than our previous forecast.

Energy Business

VLCC: In light of the decrease in demand in China and other factors, the market levels in the second half are expected to be lower than our previous forecast.

VLGC: Although market levels are expected to be lower than our previous forecast, the earnings are expected to remain stable due to a high level of charter fee income reflecting the high market levels in the previous fiscal year.

LNG carrier: The business is expected to remain stable, backed by stable earnings from medium- to long-term contracts and new projects.

Based on the above factors, the full-year business forecast has been revised as follows.

				(in billion yen)
Consolidated forecast for the fiscal	Revenues	Operating	Recurring	Profit attributable to
year ending March 31, 2025	Profit	Profit	owners of parent
Previous Forecast (August 05, 2024)	2,570.0	215.0	410.0	390.0
Revised Forecast	2,540.0	200.0	410.0	390.0
Change	-30	-15	0	0
Percentage Change	-1.2%	-7.0%	0.0%	0.0%

Assumptions for the forecast of consolidated financial results: Foreign Exchange Rate

(for the third quarter) ¥140.00/US$ (for the fourth quarter) ¥140.00/US$ (for the full year) ¥146.95/US$ Bunker Oil Price*

(for the third and fourth quarters) US$566.31/MT (for the full year) US$599.10/MT *Bunker oil price is on average basis for all the major fuel grades.

• Dividends for the Fiscal Year ending March 31, 2025

The Company regards the stable return of profits to shareholders as one of the most important management priorities, and determines profit distribution based on a targeted consolidated dividend payout ratio of 30% with the minimum annual dividend of ¥100 per share, by comprehensively considering the outlook for business performance and other factors. In addition, the Company will make decisions on the implementation of flexible additional shareholder returns, including the acquisition of own stock, after considering investment opportunities and the business environment.

In accordance with this policy, the Company is going to pay the previously planned interim dividend for the current fiscal year of ¥130 per share. Also, the Company plans to leave the year-end dividend unchanged at ¥130 per share, as announced in the previous forecast, for a full-year dividend of ¥260 per share.

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With regard to the acquisition of own shares, the Company has decided to increase the total maximum acquisition amount in order to further enhance shareholder returns and improve capital efficiency, given the Company's performance and stock market trends. Afte the change, the total maximum acquisition amount will be increased by ¥30 billion from ¥100 billion yen resolved on May 8, 2024 to ¥130 billion. There are no changes in the total maximum number of shares to be acquired (35 million shares) and the share acquisition period (from May 9, 2024 to April 30, 2025). The Company completed the acquisition of 14,220,100 shares by the end of October 2024. Furthermore, the Company has decided to retire all the acquired shares. All the dividends for the current fiscal year are based on the number of shares excluding the number of shares of treasury stock acquired by the end of October 2024.

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