Mitsui O.S.K. Lines New Expansion Target [ MOL next ] Review on the Second Year (FY2002) Mitsui O.S.K. Lines, Ltd. May 2003

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1 Mitsui O.S.K. Lines New Expansion Target [ MOL next ] Review on the Second Year (FY2002) Mitsui O.S.K. Lines, Ltd. May 2003

2 Contents Consolidated MOL next Review 2 FY2001/2002 Results and FY2003 Forecast 3 Outline of FY2002 Results 4 Breakdown of FY2002 Results vs FY Highlights of FY2003 Forecast 6 Consolidated Cash Flows & Capital Expenditure 7 Consolidated Debt Reduction Program 8 [Supplement] Consolidated Segment Results & Forecast 10 Non-Consolidated Revenues Result & Forecast by Division 11 Non-Consolidated Cost Reduction Program 12 Liner Average Freight Rate / Lifting 13 Major Liner Trade Utilization Forecast 14 Car Carriers Loading Results 15

3 Consolidated MOL next Review Net income Ordinary income Revenues MOL next Target 1, Result 920 Result 950 Forecast (as of May 2003) 1, Revenus(billion yen) Ordinary/Net income(billion yen) (FY2000) (FY2001) (FY2002) (FY2003) 20 0 Average exchange rate /$ /$ 115/$ /$ 110/$ 115/$ 110/$ Average bunker price $159/MT $136/MT $140/MT $163/MT $120/MT $150/MT$120/MT 2

4 FY2001/2002 Results & FY2003 Forecasts (billion yen) Increase/decrease Increase/decrease Revenues Consolidated % % 960 Non-Consolidated % % 750 Operating income Consolidated % % 75 Non-Consolidated % % 57 Ordinary income Consolidated % % 68 Non-Consolidated % % 58 Net income Consolidated % % 38 Non-Consolidated % % 30 Average exchange rate /$ 2.82/$ /$ 7.29/$ /$ Average bunker price $136/MT +$27/MT $163/MT $13/MT $150/MT 3

5 Outline of FY2002 Results 1. Operating/Ordinary income Decrease Net income Record high 2. Yen appreciation and bunker price hike work negative on profit. 3. Freight rates decline resulted in Liner Division s larger deficits. 4. Shipping market recovered after hitting the bottom in the first half. 5. Interest-bearing debt decreased at a quicker pace. 4

6 Breakdown of FY2002 Results vs FY2001 Revenues Stronger yen 16.4 bil. ( 14.1) Cargo movements bil. (+12.1) Others bil. (+6.9) (Total) +6.3 bil. (+4.9) (Non-Consolidated; billion yen) Operating income (Non-Consolidated; billion yen) Stronger yen 2.3 bil. ( 2.0) (FY ; ) Higher bunker 8.1 bil. ( 5.4) (FY2002 $163; +$27/MT) Market fluctuation 9.8 bil. ( 14.9) Cost reduction bil. (+16.5) Others 10.7 bil. ( 1.7) (Balance) 14.4 bil. ( 7.5) 5

7 Highlights of FY2003 Forecast 1. The final targets of MOL next is within our reach. 2. Liner Division regains its profitability by cost reduction and rate restoration. 3. Further reduction of interest-bearing debts 4. Target dividend 8 per share. 6

8 Consolidated Cash Flow & Capital Expenditure (billion yen) After adjustment for non-cash outflows related to an employee retirement benefit trust and repurchase of the company s stock Cash flows = Net Income+Depreciation-Dividend 69 Cash Flow (billion yen) Net income Depreciation Dividend Capital Expenditure Average /$ /$ /$ 115/$ (FY2003 assumption) exchange rate (As of May 2003) 7

9 Consolidated Debt Reduction Program (As of May 2003) (billion yen) MO L next Target (assumption JPY110/$) Year-end exchange rate / / / ( /$, MOL/Overseas subsidiaries) (assumption) (assumption) 8

10 [ Supplement ]

11 Consolidated Segment Results & Forecast [Revenues] Overseas shipping Ferry/Domestic shipping Shipping agent & Harbor/terminal operations Cargo forwarding & Warehousing (billion yen) Others Elimination Consolidated Increase/decrease ( 2) (+1) ( 0) (+3) (+5) ( 1) (+6) Increase/decrease (47) (+4) (+1) (+3) ( 5) (+0) (+50) Forecast [Operating income] Overseas shipping Ferry/Domestic shipping Shipping agent & Harbor/terminal operations Cargo forwarding & Warehousing (billion yen) Others Elimination Consolidated Increase/decrease ( 21) (+2) (+1) (+0) (+1) (+2) ( 14) Increase/decrease (+26) (+2) (+1) (+1) ( 1) (+0) (+30) Forecast

12 Non-Consolidated Revenues Result & Forecast by Division Shipping Increase/ decrease (billion yen) Increase/ decrease Liners 279 ( 1) 278 (+32) 310 Bulkers & Car Carriers 259 (+8) 267 (+16) 283 Tankers & LNG Carriers 145 ( 3) 142 (+3) 145 Others 8 (+1) 9 ( 0) 9 Sub Total 691 (+5) 696 (+51) 747 Other Operations 3 ( 0) 3 ( 0) 3 Total 694 (+5) 699 (+51)

13 Sales Division (Voyage expenses, Container expenses, etc.) Administration Division (Administration expenses, Interest payments, etc.) Non-Consolidated Cost Reduction Plan FY2001 FY2002 FY2003 (Result) (Result) (Plan) (5.0) 28.0 (billion yen) ( ): MOL next Plan (6.0) (1.0) (1.0) (8.0) (1.5) 7.0 (2.5) (2.0) (2.5) (7.0) Total (6.5) 35.0 Total (8.5) (3.0) (3.5) (15.0) 12

14 Liner Average Freight Rate / Lifting 2,500 1,800 1,600 2,000 1,400 $1,970 $2,009 $1,858 1,200 $1,786 $1,683 1,500 (1000TEU) 1, $1,450 $1,321 $1,307 $1,363 $1,395 $1,197 $1,088 $1,167 1,000 (US$/TEU) ,040 1,211 1,294 1,318 1,322 1,390 1,410 1,479 1,669 1,779 0 FY1991 FY1992 FY1993 FY1994 FY1995 FY1996 FY1997 FY1998 FY1999 FY2000 FY2001 FY2002 FY2003 Lifting Average freight/teu 13

15 Major Liner Trades Utilization Forecast Asia-North America Trade(TPS) (unit: 1000TEU) Outbound (E/B) Inbound (W/B) Capacity Lifiting Utilization Capacity Lifiting Utilization FY2003 2nd half % % st half % % FY2002 2nd half % % st half % % FY2001 2nd half % % st half % % Asia-Europe Trade(CEA+MED) Outbound (W/B) Inbound (E/B) Capacity Lifiting Utilization Capacity Lifiting Utilization (CEA only) (CEA only) (CEA only) (CEA only) (CEA only) (CEA only) FY2003 2nd half % % st half % % - FY2002 2nd half % % st half % 99% % 80% FY2001 2nd half % 89% % 77% st half % 90% % 75% *FY2002 2nd half: MED was terminated and integrated with CEA. TPS capacity has been adjusted by Winter Program. 14

16 Car Carriers Loading Results Far East/Southeast Asia North America Far East/Southeast Asia Europe Far East/Southeast Asia Carib/South America Cross trades/import Total ex Korea (last port sailing basis) FY2001 FY ,568 1, (1000 units) Increase/ decrease *Voyage completion basis; including voyage charter 15

Capital expenditures 50,548 49,493 Depreciation and amortization 55,334 60,710. *Estimation for FY2004: Exchange rate 1US$= 110.0,

Capital expenditures 50,548 49,493 Depreciation and amortization 55,334 60,710. *Estimation for FY2004: Exchange rate 1US$= 110.0, Mitsui O.S.K. Lines, Ltd. Financial Highlights: Fiscal Year 200 ended March 1, 2004 1. Consolidated Results for fiscal year 200 (from April 1, 200 to March 1, 2004) (All financial information has been