• NYK Group
• Sitemap
• Japanese

• 2012
• 2011
• 2010
• 2009
• Before 2008

Moody's Upgraded NYK's Ratings to 'A3' from 'Baa2'

November 15, 2004

Nippon Yusen Kaisha (NYK) today announced that Moody's Investors Service has upgraded NYK's issuer rating and senior unsecured rating from 'Baa2' to 'A3'.

Moody's Investors Service pointed out the following reasons for the upgrade:

1. These rating actions recognize a significant improvement in NYK's financial position, which Moody's believes will continue over the medium term.

2. NYK has diversified its group business portfolio by growing operating logistics, terminal and harbor transport services and other businesses.

3. It has also diversified its shipping operations to include vessels such as car carriers, bulkers and energy resource carriers, thus increasing the proportion of long-term transportation contracts.

4. Diversification has contributed to a reduction in the company's reliance on the container transport business, which is considered to be the area most vulnerable to freight price volatility. (The ratio of NYK's container transport business accounts for only about 27 percent of the total revenues for the fiscal year ended March 2004, which is the smallest percentage among Japan's three major shipping companies.)

5. As a result of this business diversification and the company's continuous cost reduction efforts, cash flow generation has been stable in recent years. Stable cash flow from operations and proceeds from effective asset sales have led to the enhancement of NYK's financial structure - the company's total debt to total capitalization ratio improved to 61.7 percent at the end of March 2004 from 75.7 percent at the end of March 2000.

6. NYK's mid-term business strategy includes intensive investment in fleet expansion. Although the amount of planned capital expenditure appears large, the company intends to keep investment within the bounds of its sustainable cash flow. Moody's therefore believes that even though the pace of debt reduction may slow going forward, stable cash flow generation from the company's diversified business portfolio - as well as its long and stable relationships with major customers - will further improve its capital structure.