Business Overview 4. DX Regional Collaboration Project Signpost's DX and Regional Collaboration Project started in March 2022 with the establishment of the DX and Regional Collaboration Division. It aims to provide products and services that contribute to regional collaboration by collaborating with local financial institutions nationwide, utilizing its own DX technology and open innovation. In August 2022, it began working with Oita Made Co., Ltd., which was established with the investment of multiple companies in Oita Prefecture, including Oita Bank, to sell original products made in Oita Prefecture to both domestic and overseas markets and to match local companies and Signpost's products and services in order to promote the revitalization of Oita Prefecture's economy. In addition, in April 2024, it started offering DX support services for medium-sized and small businesses. As the first effort, it supports the creation of DX declaration by (The) Fourth Hokuriku Bank, Ltd. (Niigata City, Niigata Prefecture) to deploy DX declaration support services to the market. Furthermore, it will realize new solutions by commercializing its own technology and open innovation and promote regional collaboration through innovation.
1. Business Overview Iino Kaiun Kaisha Ltd. <9119> has both marine transportation (ocean shipping and inland/near-coastal shipping) and real estate industries as the dual revenue drivers. As of March 2024, the segment-wise composition ratio of revenue (before adjustment) was 83.3% for ocean shipping, 7.3% for inland/near-coastal shipping, and 9.4% for real estate; the composition ratio of operating profit was 79.4% for ocean shipping, 2.1% for inland/near-coastal shipping, and 18.4% for real estate; and the revenue to operating profit margin was 13.2% for ocean shipping, 4.0% for inland/near-coastal shipping, and 27.1% for real estate. The marine transportation industry, particularly ocean shipping, tends to experience significant volatility in performance due to factors such as market conditions, exchange rate trends, and dry-docking expenses. One of the characteristics of the company's marine transportation business is that it is mainly focused on medium- to long-term contracts that are less susceptible to market fluctuations, although some spot contracts are still affected by such fluctuations. The marine transportation market conditions and exchange rate trends contributed significantly to revenue growth for the March 2023 and March 2024 periods. The operating profit of the real estate business is affected by factors such as facility updates, refurbishment expenses, and electricity charges, but excluding these factors, the operating profit margin has generally remained around 30%, making it a stable high-profit source of revenue.
2. Marine Transportation Business In the marine transportation industry, ocean shipping operates large crude oil tankers that transport crude oil worldwide, chemical tankers that transport petrochemical products, large gas carriers that transport LNG (liquefied natural gas) and LPG (liquefied petroleum gas), dedicated ships that transport coal and wood chips, and small to medium-sized dry bulk carriers (bulk cargo ships) that transport coal, grains, steel, fertilizer, and other materials. Inland/near-coastal shipping operates small gas carriers that transport LNG, LPG, and petrochemical gases in domestic and near-coastal waters. As of the end of March 2024, the total number of group-operated vessels was 96 (49 company-owned vessels, 47 chartered vessels including joint ownership stakes and short-term charters). The breakdown by vessel type is as follows: four large crude oil tankers, 36 chemical tankers, nine large gas carriers (one LNG carrier, seven LPG carriers, and one ammonia carrier (small to medium-sized); note that the LNG carriers are jointly owned or chartered by investment partners in addition to the one company-owned vessel), 22 dry bulk carriers (21 dry bulk carriers and one dedicated wood chip carrier), and 25 small gas carriers (one LNG carrier, 22 LPG carriers, and one molten sulfur carrier) operated by inland/near-coastal shipping.
The major trading partners include Astomos Energy Corporation (a LPG trading company formed by the merger of the LPG divisions of Idemitsu Kosan <5019> and Mitsubishi Corporation <8058>), Idemitsu Kosan <5019>, Oji Holdings <3861>, ENEOS Corporation (a subsidiary of ENEOS Holdings <5020>), JA Zennoh (National Federation of Agricultural Cooperatives), J-POWER <9513>, Tosoh <4042>, Zeon Corporation <4205>, Hokkaido Gas <9534>, Equinor ASA, Borealis AG, and SABIC/ARAMCO TRADING FUJAIRAH FZE. In April 2022, the company won the "SABIC Suppliers Recognition Program 2022" from SABIC, a global chemical manufacturer, for its outstanding contributions and achievements.
Iino Kaiun Kaisha Ltd. specializes in resource- and energy-related transportation, providing ocean shipping services across a wide range of waterways, from deep-sea to near-coastal, using an efficient global network. The company's strengths and features include the industry's largest fleet of chemical tankers and large gas carriers that accumulate medium- to long-term contracts as a stable source of revenue. In particular, the company has a top-class share in transporting petrochemical products loaded in the Middle East. The company also has a top-class share in domestic transportation of LPG and petrochemical gases, and operates some of the few inland LNG carriers in Japan.
As of the end of March 2024, the group-operated vessels consisted of a total of 96 vessels (49 company-owned vessels, 47 chartered vessels including joint ownership stakes and short-term charters). By vessel type, there were four large crude oil tankers, 36 chemical tankers, nine large gas carriers (one LNG carrier, seven LPG carriers, and one ammonia carrier (small to medium-sized); note that the LNG carriers are jointly owned or chartered by investment partners in addition to the one company-owned vessel), 22 dry bulk carriers (21 dry bulk carriers and one dedicated wood chip carrier), and 25 small gas carriers (one LNG carrier, 22 LPG carriers, and one molten sulfur carrier) operated by inland/near-coastal shipping.
Note that the marine transportation industry, particularly ocean shipping, tends to experience significant volatility in performance due to factors such as market conditions, exchange rate trends, and dry-docking expenses. One of the characteristics of the company's marine transportation business is that it is mainly focused on medium- to long-term contracts that are less susceptible to market fluctuations, although some spot contracts are still affected by such fluctuations. The marine transportation market conditions and exchange rate trends contributed significantly to revenue growth for the March 2023 and March 2024 periods. The operating profit of the real estate business is affected by factors such as facility updates, refurbishment expenses, and electricity charges, but excluding these factors, the operating profit margin has generally remained around 30%, making it a stable high-profit source of revenue.
The company specializes in resource- and energy-related transportation, making use of its global network to provide efficient ocean shipping services across a wide range of waterways, from deep-sea to near-coastal. Its strengths and features include the industry's largest fleet of chemical tankers and large gas carriers that accumulate medium- to long-term contracts as a stable source of revenue. In particular, the company has a top-class share in transporting petrochemical products loaded in the Middle East. The company also has a top-class share in domestic transportation of LPG and petrochemical gases, and operates some of the few inland LNG carriers in Japan.
One of the characteristics of the chemical tankers operated by the company is that many of them have stainless steel tanks. Stainless steel tanks have stronger corrosion resistance than normal coating tanks, which has the advantage of being able to transport sulfuric acid and other materials, and efficient transportation is achieved not only for petrochemical products but also for transporting palm oil, etc. In addition to stainless steel tanks, the company has advanced ship management expertise required for transporting petrochemical products such as tank cleaning, as well as efficient transportation expertise, which contributes to the company's competitive advantage.
(Authored by FISCO guest analyst Masanobu Mizuta)