■Iino Kaiun ＜919＞ Business Overview

6. Risk Factors and Profit Characteristics and Countermeasures

As a risk factor, the shipping industry is susceptible to fluctuations in market conditions, but we aim to build a solid business foundation by promoting the accumulation of stable revenue sources.

In particular, the offshore shipping industry is susceptible to shipping market conditions, fuel oil prices, exchange rates, etc., and there is a possibility that business performance will fluctuate drastically. As a countermeasure against this, the company is promoting the accumulation of stable revenue sources with large crude oil tankers and gas carriers centered on medium- to long-term regular charter agreements. Also, in chemical tankers, profits are maximized by combining multiple COAs for about 1 year with spot cargo. The composition ratio of transportation volume is about 70% for COA and about 30% for spot cargo. Note that in COA, fuel cost adjustment coefficient (BAF) associated with fuel oil price fluctuations is generally added, and there is almost no impact on profitability. We aim to improve profitability by promoting efficient ship dispatch and advantageous contract renewals in response to cost increases, including domestic and offshore shipping businesses.

Although the real estate industry is affected by real estate market conditions, vacancy rates, rents, etc. when lease agreements are renewed, all rental buildings owned by the company in Japan are located in prime locations in central Tokyo where office building rental market conditions are strong, so they are relatively less affected by market conditions. The Iino Building, which is a revenue pillar, will continue to drive the company's performance as a stable revenue source, using advantages in location and advanced environmental performance.

(Author: FISCO Visiting Analyst Masashi Mizuta Exhibition)