9119.T

• Overall Interim Financial Results

  • FY2025 interim results: 61.12 billion yen in revenue, 5.77 billion yen in operating profit, 6.58 billion yen in ordinary profit, 7.48 billion yen in net profit. Net profit declined 2.15 billion yen YoY primarily due to chemical tanker market softening, even with dividend income, equity method investment gains, and a Q1 vessel sale gain recorded.
  • Overall company operating profit declined 4.1 billion yen YoY to ~5.8 billion yen, driven by the chemical tanker segment decline.

• Fleet Updates

  • Two large ethane carriers ordered for European shippers: one was completed in September 2025, the second is scheduled for completion in January 2026, with future profit contribution expected.

• Mid-Term Management Plan Progress (current plan ends FY2025)

  • Due to lower-than-planned shipping segment profits, full-year operating profit, ordinary profit, and EBITDA are expected to fall short of plan targets; management continues working toward target completion with six months remaining.
  • Investment plan progress: targeting 100.0 billion yen in total investments over the 3-year plan, progress increased from 85% in May 2025 to 90% as of October 2025.
  • Next mid-term management plan development is incorporating input from both the board of directors and junior employees, with announcement planned for May 2026.

• Shareholder Return

  • For FY2025, the final year of the current mid-term plan, the company set a 40% payout ratio target based on full-year net profit.
  • Following the upward full-year profit revision, the interim and full-year dividends are increased by 2 yen each from the July 2025 guidance, with a planned full-year dividend of 48 yen per share.

• Full-year FY2025 financial guidance: The company now forecasts 126.0 billion yen in revenue, 11.8 billion yen in operating profit, 12.5 billion yen in ordinary profit, and 12.6 billion yen in net profit. Revenue was revised downward from the July 2025 guidance, while all profit metrics were revised upward, driven by improved profit outlooks for large LPG vessels and dry bulk vessels and an upward change in the second half US dollar/yen assumption from 140 yen to 145 yen.
• A 1 yen movement in the USD/JPY exchange rate impacts half-year ordinary profit by 80 million yen: a weaker yen is profit-positive, while a stronger yen is profit-negative. For the second half, despite current spot rates around 150 yen, the company assumes appreciation to 145 yen, which will create a forecasted valuation loss on dollar-denominated balance sheet assets after a Q2 valuation gain from above-expectation dollar weakness.
• Market outlooks:
  • Chemical tankers: Second half FY2025 market is expected to stay flat at current levels, with limited inflow of new buildings and product tankers into the chemical tanker market, and continued support from extended Cape of Good Hope routing from Red Sea disruptions. US tariff impacts on chemical trade are expected to be limited, as baseline US-China chemical trade volumes are low.
  • Large LPG vessels: Second half market is expected to remain solid, with demand growth from US export terminal expansion and Middle East production increases. Newbuilding supply impacts are expected to be limited by aging vessel scrapping and 75 vessels scheduled for drydocking this year. The recent 1-year suspension of US-China reciprocal port fee measures is being monitored for future market impacts.
  • Dry bulk vessels: Second half market is expected to moderate from strong Q2 levels (driven by extended South American grain exports) but remain solid. Even with IMO GHG net-zero framework adoption delayed 1 year, the trend of tightening environmental regulation and increased scrapping of older vessels remains intact, limiting the risk of large excess supply growth.
  • Tokyo CBD office real estate: Market remains solid, with falling vacancy and rising average rents, and sustained demand for high-quality buildings. Iino Kaiun's portfolio remains nearly fully occupied, with vacancy well below market average.

FY2025 Interim (April-September 2025) Segment Operating Profit Changes (YoY):

• Chemical Tankers: 2.83 billion yen decrease in operating profit, driven by softened market conditions from lower demand
• Large Gas (LPG) Vessels: 480 million yen decrease in operating profit, due to reduced operating capacity after prior period vessel sales, even though market conditions remained solid
• Dry Bulk Vessels: 190 million yen decrease in operating profit, despite improved market performance in the second quarter from increased South American grain shipments
• Real Estate Business: 550 million yen increase in operating profit, from sustained full occupancy of domestic office buildings and the removal of initial acquisition costs for the second UK property (recorded in FY2024)
• Other: A roughly 8 yen appreciation of the yen against the US dollar created an overall headwind to profit.

FY2025 Full Year Forecast Operating Profit Changes (vs FY2024 Actual):

• Chemical Tankers: ~3.8 billion yen decrease in operating profit, due to softer market conditions reflected in renewed COA contracts and reduced operating capacity from vessel sales
• Large Gas Vessels: ~100 million yen decrease in operating profit, as prior period vessel sales remove prior profit contributions, offset partially by improved full-year market assumptions and the coming on line of 2 new large ethane carriers
• Dry Bulk Vessels: 7 million yen decrease in operating profit, despite stronger than expected second quarter market performance
• The company forecasts a 1.15 billion yen headwind to profit from an assumed ~7 yen year-on-year yen appreciation.

• Chinese economic slowdown has reduced demand for chemical products and dry bulk cargo, creating downward pressure on shipping markets for both segments.
• US trade policy and the US-China trade dispute have created uncertainty for cargo flows across shipping segments, even as trade route shifts have partially offset volume declines with longer transport distances that support ton-mile demand.
• Persistently stronger yen against the US dollar creates direct negative profit impacts for the dollar-denominated shipping business.
• Red Sea geopolitical disruptions continue to extend shipping routes, which supports ton-mile demand and tightens vessel supply, but any sudden resolution of the conflict could remove this supply tightening support.
• Environmental regulatory tightening is expected to accelerate scrapping of older vessels, but changes to regulatory timelines could alter supply-demand balances.
• The 1-year suspension of US-China reciprocal port fee measures for each other's built vessels creates uncertainty for future large gas and dry bulk shipping market conditions that requires ongoing monitoring.
• The company's current mid-term management plan (ending FY2025) is expected to miss its core financial targets due to weaker than expected shipping segment profits, amid ongoing broader market uncertainty.

No questions or answers were included in the provided earning call transcript.