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Management Message

I would like to take this opportunity to thank all NYK Line shareholders and investors for their enduring support. Yasumi Kudo, President

I would like to express my sincerest gratitude to all of the company's shareholders and investors for their understanding and support of the NYK Group's activities. I am pleased to have this opportunity to report on NYK Line's financial results for the third quarter of the year ending March 31, 2019.

First, a report was issued today regarding the company's response to the business improvement order received by Nippon Cargo Airlines Co., Ltd. (NCA). In July of last year, NCA, a wholly owned subsidiary of NYK Line, received a business improvement order from the Minister of Land, Infrastructure, Transport and Tourism for improper maintenance conducted over a period of multiple years. Following this an internal investigative committee was established at NCA, and NYK Line launched its own independent committee. Based on the details of the reports issued by these committees, the concerned executives at NYK Line will voluntarily return their salaries and the Chairman position at NCA will be made a full-time position. At the same time, definite measures will be implemented to strengthen the governance of group companies, including NCA, and we will monitor and supervise the progress of the measures to prevent recurrence that will be taken by NCA.

The consolidated results through the third quarter were: revenues of ¥1,384.6 billion, operating profit of ¥4.5 billion, recurring loss of ¥3.3 billion and loss attributable to owners of parent of ¥8.7 billion. The dry bulk division remained firm due to the gradual market recovery, and the liquid division accumulated stable profits. As a result, the performance of both divisions improved year on year. However, overall revenues fell year on year and a recurring loss and net loss were recorded due to the one-time costs recorded mainly in the first quarter for terminating the container shipping business, the increased loss at the integrated container shipping line Ocean Network Express Pte. Ltd. (ONE) and the suspension of the aircraft operations at NCA. At ONE, due to the impact of the service disruption that occurred just after the company started offering service in April of last year, the liftings and slot utilization fell. However, the disruption has already been resolved, and recently, major improvements have been seen. At NCA, all 8 of the 747-8F aircraft have returned to service as of today (January 31), and continued efforts will be made to normalize service.

The consolidated results for the full year are expected to be: revenues of ¥1,830 billion, operating profit of ¥8 billion, recurring loss of ¥5 billion and loss attributable to owners of parent of ¥1 billion. Also, there is no change to the planned issuance of a year-end dividend of ¥10 per share.

The new Medium-Term Management Plan “Staying Ahead 2022 with Digitalization and Green” was announced in March of last year, and the company will strive to increase the earnings capability and strengthen the ability to withstand the business environment by optimizing the portfolio and building up the stable freight business. Furthermore, efforts are being made to optimize the overall supply chain through the use of cutting-edge digital technology and to create new value in the environmental field. The company is also promoting new initiatives, such as the issuance of green bonds, a project directed at realizing cashless ships and creating a shared platform for the ship management business.

In addition, the liquidation of assets in accordance with the Medium-Term Management Plan and measures to further strengthen group governance will be accelerated. Furthermore, support will be given to the initiatives aimed at improving the business performance at ONE and NCA, and the group will come together and give its utmost effort to quickly recover the business results and ensure legal compliance.

I ask you for your continued understanding and support for the NYK Group in the future.

Financial Results Overview

Please see the below chart and graph for our year to date 3rd quarter results ending January 31, 2019.

(Billion yen)
FY 2017 3Q
FY 2018 3Q
Operating Income
Recurring Profit
Net Income
Average Exchange Rate
¥0.88/Yen Up
Average Bunker Oil Price
US$111.80 Up

(Note)Figures are rounded down to the nearest 100 million yen.



Recurring Profit

Recurring Profit

Earnings Forecast for the Fiscal Year 2018

In the container shipping division, there are a large number of uncertainties, including the trade friction between the US and China and the economy in Europe following the United Kingdom's withdrawal from the EU, and the external factors have conservatively been incorporated into the forecasts for both freight rates and liftings. In the Air Cargo Transportation segment, all eight of the Boeing 747-8F aircraft will reenter service during January 2019, and efforts will be made to normalize the utilization rate. In the Logistics segment, there is expected to be a limited rebound from the last-minute demand that occurred in the third quarter. In the dry bulk shipping division, in addition to the seasonal factors, due to poorer market sentiment resulting from concerns over the Chinese economy and other factors, the assumed market conditions in the fourth quarter have been revised down from the previous outlook. In the liquid transport division, the tanker market will generally remain firm, and both LNG carriers and the offshore business are expected to maintain high utilization and make stable contributions to earnings. In the automobile transport segment, shipping volumes in the fourth quarter are expected to remain on par with the previous forecast, and efforts will be made to further optimize operational efficiency and increase profitability.
Also, a certain level of extraordinary income is expected following various measures such as the liquidation of assets and the conversion of the cruise business into a joint venture.

(Billion yen)
Previous Forecast
Revised Forecast
Operating Income
Recurring Profit
Net Income attributable
to owners
of the parent company
Average Exchange Rate
Average Bunker Oil Price

(Note)Figures are rounded down to the nearest 100 million yen.

Dividends for the Fiscal Year ending March 31, 2019

NYK Line has designated the stable return of profits to shareholders as one of the most important management priorities, and the distribution of profits is decided after taking into consideration a wide range of factors, including the outlook. The company will issue a year-end dividend of ¥10 per share, and combined with the interim dividend of ¥10 per share, there is no change to the expected full-year dividend of ¥20.

January 31, 2019
Tadaaki Naito
Tadaaki Naito President