IINO KAIUN KAISHA, LTD. (IINO LINES)

Transcription

1 October 30, 2015 Consolidated Financial Results For the Six Months Ended September 30, under Japanese GAAP IINO KAIUN KAISHA, LTD. (IINO LINES) Stock code: 9119 URL: Representative: Tomoyuki Sekine, President Contact: Satoshi Nakamura, General Manager of Finance & Accounting Department Telephone: (Rounded to the nearest million yen) 1. Consolidated Financial Results for the Six Months Ended September 30, 2015 (April 1, 2015 to September 30, 2015) (1) Operating Results (Six Months) (The percentage figures represent changes from the previous corresponding period) Q2 (Apr-Sep) Net sales Operating income Ordinary income Profit attributable to owners of parent million yen % million yen % million yen % million yen % FY ,328 (2.9) 3,993 (9.1) 3, ,184 (15.7) FY , , , , Note: comprehensive income Q2 / FY2015 2,048 million yen (down 55.7%) Q2 / FY2014 4,627 million yen (down 5.3%) Q2 (Apr-Sep) Net income per share yen Net income per share, fully diluted yen FY FY (2) Financial Position Total assets Net assets 1 Shareholders equity ratio million yen million yen % Q2 (Apr-Sep) / FY ,759 67, FY (Apr-Mar) / ,693 65, Note: Treasury stock: Q2 / FY2015: 67,366 million yen FY2014: 65,885 million yen 2. Dividends Dividend per share Q1 (Apr-Jun) Q2 (Jul-Sep) Q3 (Oct-Dec) Q4 (Jan-Mar) FY (Apr-Mar) yen yen yen yen yen FY FY (Forecast) Note: Revision of forecast for dividends in this quarter: None

2 3. Forecast of Consolidated Earnings for the Year Ending March 31, 2016 (April 1, 2015 to March 31, 2016) (The percentage figures represent changes from the previous corresponding period) FY2015 Net sales Operating income Ordinary income Profit attributable to owners of parent million yen % million yen % million yen % million yen % FY (Apr-Mar) 96,000 (4.2) 8, , , Net income FY2015 per share yen FY (Apr-Mar) Note: Revision of forecast in this quarter: Yes Appropriate Use of Earnings Forecasts and Other Important Information This report contains various forward-looking statements and other forecasts regarding performance and other matters. Such statements are based information available at the time of preparation as well as certain reasonable assumptions. Actual results may differ materially from those expressed or implied by forward-looking statements due to a range of factors. 2

3 Operating Results and Financial Position 1. Results for the Fiscal Second Quarter ended September 30, 2015 In the global economy in the six months ended September 30, 2015, while there were signs of economic growth in developed countries, particularly in the U.S., the slowdown in the economies of emerging countries such as China became more pronounced, which elevated the level of uncertainty regarding the future. In the U.S., despite a weakening of export competitiveness due to the appreciation of the U.S. dollar, the economy continued to expand on the back of an improved employment and personal income environments and healthy personal consumption. In Europe, the economy recovered moderately underpinned by a pickup in exports and firm personal consumption. In China, investment noticeably slowed, internal and external demand weakened, and economic slowdown became more pronounced. The Japanese economy experienced increased capital investments and solid personal consumption due to improved employment and personal income environments, and despite downward pressure on exports and production from a slowdown in China s economy, Japan s economic activity continued to have a moderate tone of recovery. In the Shipping business of the IINO Group (the Group ), although the market conditions for chemical tankers were strong and there was a boost from yen depreciation, dry bulk carrier operations continued to be affected by vessel supply pressure and as a result this market slumped. Under this business environment, the Group worked to efficiently allocate vessels and improve vessel operation profitability by such means as making efforts to renew existing contracts on favorable terms. In the Real Estate business, there were steady occupancy rates at the Iino Building and other buildings. As a result, the Group posted consolidated net sales of 49,328 million (down 2.9% year on year), consolidated operating income of 3,993 million (down 9.1% year on year), consolidated ordinary income of 3,604 million (up 2.2% year on year), and consolidated profit attributable to owners of parent of 3,184 million (down 15.7% year on year). The following is an overview of conditions by segment. 1) Oceangoing Shipping Market conditions in the Oceangoing Shipping segment for the six months ended September 30, 2015, were as follows. 3

4 Oil tanker market conditions continued to be stable owing to increased imports by China due to lower crude oil prices. However, there was a high degree of fluidity in the market such as a temporary sharp fall in the market owing to the regular maintenance periods of oil refineries overlapping with one another over the summer low-demand period, and a sharp rebound following after when shipment demand for crude oil once again strengthened in readiness for the winter high-demand period. In chemical tankers, the freight rate market was stable overall. This can be attributed to small inflow from the product tanker market, which remained firm even in the summer, and no large drop in shipment demand for petrochemical products. Market conditions for product tankers were buoyant in the summer owing to increased demand for gasoline in China and Africa but later demand declined and the market turned soft. Among large gas carriers, market conditions for LPG carriers remained at a high level on the back of firm growth in demand particularly in India and China, an increase in LPG exports from the U.S. and other factors. In LNG carriers, on the other hand, growth in new shipment demand was limited in comparison to deliveries of new vessels and spot market conditions were at a low level. In dry bulk carriers, market conditions continued to show historically low price levels due to the slowdown in the Chinese economy and the continued high supply pressure of new vessels, despite the scrapping of old vessels proceeding steadily. During the six months ended September 30, 2015, the Group s average exchange rate was /US$ ( /US$ in the same period of the previous fiscal year), while the average bunker price was US$342/MT (US$607/MT in the same period of the previous fiscal year). The activities of the Oceangoing Shipping segment amid this environment are summarized as follows. In oil tanker operations, the Group secured stable revenue by keeping its vessels deployed on medium- and long-term contracts. In chemical tanker operations, the Group steadily secured stable shipping volume through existing contracts of vessel allocation on the Middle East to Asia route, the Group's main route, and it was able to capture shipping volume on routes from Asia and Europe to India 4

5 and Pakistan in accordance with vessel allocating plans. The Group also continued carrying out vessel allocating to South America, and while substituting with vessel allocating to the Middle East, it was able to comprehensively maintain stable operations. A joint venture established by IINO KAIUN KAISHA, LTD. (the Company ) with a U.S. operator maintained a high level of operations by efficiently taking on spot cargo in addition to contracts, primarily on Intra-Atlantic routes. In product tanker operations, the Group secured stable revenues by continuing to deploy vessels on medium and long-term contracts. The Large Gas Tanker Division secured stable revenues through the steady operation of both LPG tankers and LNG tankers deployed on existing medium- to long-term contracts. In dry bulk carrier operations, the Group worked to improve profitability by keeping coal carriers and woodchip carriers deployed on medium- and long-term contracts and on contracts of affreightment. The Group also carried out measures to downsize its vessels in response to the market slowdown. As a result, the Oceangoing Shipping segment posted net sales of 38,574 million (down 4.1% year on year) and operating income of 1,870 million (down 2.8% year on year). 2) Regional Shipping Market conditions in the Regional Shipping segment for the six months ended September 30, 2015, were as follows. Looking at market conditions in domestic gas shipping operations, cargo volume remained firm on the back of stable LPG and petrochemical gases demand. In international short-haul gas shipping operations, cargo volume was in decline owing to a slowdown in China s economy, and an increase in Chinese domestic production of propylene, which is the main cargo to that country. The activities of the Regional Shipping segment amid this environment are summarized as follows. Looking at market conditions in domestic gas shipping operations, in LPG, the Group s main cargo owners had strong sales, and vessel operations proceeded steadily. The Group also secured stable revenues in transport of petrochemical gases centering on dedicated vessel contracts. 5

6 In international short-haul gas shipping operations, although the Group has the majority of its vessels continually deployed on medium- and long-term contracts, one small vessel that has become exposed to poor market conditions and it suffered lower revenues. As a result, the Regional Shipping segment posted net sales of 4,821 million (up 0.8 % year on year) and operating income of 202 million (down 44.7% year on year). 3) Real Estate Market conditions in the Real Estate segment for the six months ended September 30, 2015, were as follows. In the central Tokyo office building leasing market, while there was no noticeable new supply after large properties entered the market at the beginning of spring, there was demand for office expansion and integration driven by companies expanding their business activities and personnel. As a result, overall vacancy rates including those in existing buildings declined, and rent levels showed a modest upward trend. In the hall and conference room business, there are a large number of competing venues, and facilities continued to compete fiercely with one another, including to tie down customers. In the photo studio operations of the real estate related business, although advertising demand showed signs of firmness, magazine sales languished, driving demand for use of photo studios by publishers down to a low level, along with prices charged for usage fees. The activities of the Real Estate segment amid this environment are summarized as follows. In office leasing operations, although there were vacancies in some buildings the Group owns, its leasing operations proceeded smoothly while it worked to provide quality tenant services. The Group's hall and conference room business, IINO Hall & Conference Center, maintained its utilization level by proactively seeking to host seminars, lectures, sneak previews of movies and other events. Iino Mediapro Co., Ltd., which is engaged in studio-related business, maintained solid operations in each of its studio, photo retouching, production and location operations, mainly reflecting acquisitions of new customers. 6

7 As a result, the Real Estate segment posted net sales of 5,974 million (up 1.7% year on year) and operating income of 1,921 million (down 8.8% year on year). 2. Consolidated Financial Condition 1) Assets, Liabilities, and Net Assets Total assets at the end of the second fiscal quarter (September 30, 2015) were 225,759 million, a decline of 2,934 million from the end of the previous fiscal year (March 31, 2015). The decline was mainly attributable to a decline in cash and deposits. Total liabilities were 158,376 million at September 30, 2015, a decline of 4,410 million from March 31, This decline was mainly due to a decrease in borrowings. Net assets were 67,384 million at September 30, 2015, an increase of 1,476 million from March 31, This was mainly attributable to an increase in retained earnings. 2) Cash Flows Operating activities provided net cash of 7,432 million in the six months ended September 30, 2015 (versus 8,712 million in the six months ended September 30, 2014). This figure mainly reflects income before income taxes of 3,248 million and depreciation and amortization of 4,348 million. Investing activities used net cash of 3,277 million (versus 2,805 million in the year-earlier period), mainly because the 7,697 million spent on purchasing fixed assets, primarily capital investment in vessels, exceeded proceeds of 3,463 million from the sale of fixed assets, primarily vessels. Financing activities used net cash of 5,336 million (in the year-earlier period financing activities provided 7,216 million). This was mainly due to the fact that the 14,115 million of repayment of long-term loans exceeded the 8,335 million in proceeds from long-term loans. As a result, cash and cash equivalents at September 30, 2015, were 10,787 million, compared to 15,692 million at September 30,

8 3. Outlook for the Full Year ending March 31, 2016 In the Group s actual results for the six months ended September 30, 2015, revenues and profits were lower and higher, respectively, compared with the previously announced forecasts (July 31, 2015). Looking ahead, although the Company expects to secure stable revenues in the chemical tanker operations, the Company s area of strength, and the Real Estate business, the Company has revised its consolidated earnings forecasts for the full year as follows after giving comprehensive consideration to the environment including the ongoing slump in the market for dry bulk carrier operations. Forecast of Consolidated Earnings for the Year Ending March 31, 2016 (April 1, 2015 to March 31, 2016) Previous Forecast Revised Forecast Value Change/Percent Change (Issued July 31, 2015) (Issued October30, 2015) millions of yen Net sales 102,000 96,000 (6,000)/(5.9%) Operating income 8,200 8,200 0/0% Ordinary income 8,000 8,000 0/0% Profit attributable to owners of parent 6,000 6,000 0/0% Assumptions regarding the foreign exchange rate and the Port of Singapore bunker oil price after the third quarter are shown below. Previous Forecast (as of July 31, 2015) Revised Forecast (as of October 30, 2015) Foreign exchange rate 1US$ = 120 1US$ = 120 Bunker oil price US$320 / MT US$320/ MT At the Board of Directors Meeting held on October 30, 2015, it was decided that the interim dividend payment would be 5 per share, as previously announced on July 31, This decision was based on the consolidated earnings during the six-month period ended 8

9 September 30, 2015, and the consolidated full-year earnings forecast. The Company plans to pay a year-end dividend of 5 per share, amounting to a total annual dividend of 10 per share. Both of these amounts are unchanged from the previous forecast. 9

10 Consolidated Financial Statements (1)Consolidated Balance Sheets (In million yen) As of March 31, 2015 As of September 30, 2015 Assets Current assets Cash and deposits 11,965 10,787 Notes and accounts receivable - trade 9,360 10,143 Supplies 2,064 1,796 Merchandise Real estate for sale 44 3 Deferred and prepaid expenses 2,137 2,186 Deferred tax assets Income taxes receivable Other current assets 5,457 5,839 Allowance for doubtful accounts 2 2 Total current assets 31,455 30,977 Non-current assets Property, plant and equipment Vessels, net 67,325 67,048 Buildings and structures, net 51,052 49,876 Land 40,019 39,993 Construction in progress 6,453 7,832 Other tangible fixed assets, net 9,930 9,596 Total property, plant and equipment 174, ,345 Intangible assets Telephone subscription right 9 9 Other intangible assets Total intangible assets Investments and other assets Investment securities 17,211 16,286 Long-term loans receivable Net defined benefit asset Deferred tax assets Other 4,034 3,072 Allowance for doubtful accounts 0 - Total investments and other assets 21,899 19,899 Total non-current assets 197, ,782 Total assets 228, ,759 10

11 (In million yen) As of March 31, 2015 As of September 30, 2015 Liabilities Current liabilities Accounts payable - trade 6,254 7,268 Short-term loans payable 23,590 20,582 Accrued expenses Income taxes payable Deferred tax liabilities Advances received 2,335 2,176 Provision for bonuses Other current liabilities 3,060 2,746 Total current liabilities 36,416 34,041 Non-current liabilities Long-term loans payable 102, ,720 Provision for directors' retirement Net defined benefit liability Provision for special repairs 2,078 2,355 Lease and guarantee deposits received 7,942 7,995 Lease obligations 9,415 9,002 Deferred tax liabilities 2,543 1,788 Other noncurrent liabilities Total non-current liabilities 126, ,334 Total liabilities 162, ,376 Net assets Shareholders' equity Capital stock 13,092 13,092 Capital surplus 7,613 7,613 Retained earnings 38,111 40,740 Treasury shares Total shareholders' equity 58,767 61,396 Accumulated other comprehensive income Valuation difference on available-for-sale 3,584 2,966 Deferred gains or losses on hedges 2,581 2,027 Foreign currency translation adjustment Total accumulated other comprehensive 7,118 5,971 Non-controlling interests Total net assets 65,907 67,384 Total liabilities and net assets 228, ,759 11

12 (2)Consolidated Statements of Operations Six Months Ended September 30,2015/2014 (In million yen) Six Months Ended Six Months Ended September 30, 2014 September 30, 2015 Net sales 50,822 49,328 Cost of sales 43,253 42,010 Gross profit 7,568 7,318 Selling, general and administrative expenses 3,174 3,326 Operating income 4,395 3,993 Non-operating income Interest income Dividend income Foreign exchange gains Investment gain on equity method Other Total non-operating income Non-operating expenses Interest expenses 1,298 1,213 Other Total non-operating expenses 1,314 1,362 Ordinary income 3,527 3,604 Extraordinary income Gain on sales of non-current assets 1, Gain on sales of investment securities 20 - Gain Cancellation Of Vessel Charter Total extraordinary income 1, Extraordinary losses Impairment loss 1, Loss on valuation of investment securities 4 1 Loss on retirement of non-current assets 2 94 Loss on sales of non-current assets Total extraordinary losses 1, Income before income taxes and minority 3,968 3,248 Income taxes - current Profit 3,771 3,193 Profit (loss) attributable to non-controlling 7 9 Profit attributable to owners of parent 3,778 3,184 12

13 (3)Consolidated Statements of Comprehensive Income (loss) Six Months Ended September 30,2014/2015 (In million yen) Six Months Ended Six Months Ended September 30,2014 September 30,2015 Profit 3,771 3,193 Other comprehensive income Valuation difference on available-for-sale Deferred gains or losses on hedges Foreign currency translation adjustment Share of other comprehensive income of Total other comprehensive income 856 1,146 Comprehensive income 4,627 2,048 Comprehensive income attributable to Owners of parent 4,722 2,036 Comprehensive income attributable to

14 (4)Consolidated Statements of Cash Flows (In million yen) Six Months Ended Six Months Ended September 30,2014 September 30,2015 Cash flows from operating activities Income before income taxes and minority 3,968 3,248 Depreciation 4,263 4,348 Share of (profit) loss of entities accounted for Decrease (increase) in net defined benefit Increase (decrease) in net defined benefit Impairment loss 1, Interest and dividend income Interest expenses 1,298 1,213 Loss (gain) on sales of property, plant and 1, Decrease (increase) in notes and accounts 2, Increase (decrease) in notes and accounts Other, net Subtotal 10,120 8,600 Interest and dividend income received Interest expenses paid 1,307 1,223 Income taxes (paid) refund Net cash provided by (used in) operating 8,712 7,432 Cash flows from investing activities Purchase of property, plant and equipment 5,287 7,697 Proceeds from sales of property, plant and 2,343 3,463 Purchase of investment securities Proceeds from sales of investment securities Other, net Net cash provided by (used in) investing 2,805 3,277 Cash flows from financing activities Net increase (decrease) in short-term loans 25 1,505 Proceeds from long-term loans payable 12,655 8,335 Repayments of long-term loans payable 18,791 14,115 Redemption of bonds Purchase of treasury shares 1 0 Cash dividends paid Dividends paid to non-controlling interests Repayments of lease obligations Net cash provided by (used in) financing 7,216 5,336 Effect of exchange rate change on cash and cash 95 2 Net increase (decrease) in cash and cash 1,214 1,179 Cash and cash equivalents at beginning of 16,906 11,965 Cash and cash equivalents at end of period 15,692 10,787 14

15 (5)Business Segment Information Six Months Ended September 30, 2015 (April 1, 2015 to September 30, 2015) I. Revenues Oceangoing Shipping Regional Shipping (In million yen) Real estate Total Adjustment Consolidated (1) External sales 38,817 4,570 5,941 49,328-49,328 (2) Inter-segment sales (243) (41) - Total 38,574 4,821 5,974 49,369 (41) 49,328 Segment profit (loss) 1, ,921 3,993-3,993 Six Months Ended September 30, 2014 (April 1, 2014 to September 30, 2014) I. Revenues Oceangoing Shipping Regional Shipping (In million yen) Real estate Total Adjustment Consolidated (1) External sales 40,439 4,539 5,843 50,822-50,822 (2) Inter-segment sales (232) (42) - Total 40,207 4,781 5,875 50,863 (42) 50,822 Segment profit (loss) 1, ,106 4,395-4,395 15