Kawasaki Kisen (‘K’ LINE) (9107): FY2025 Results Summary — Ordinary Income Declines Sharply on Lower Containership Profit

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

Kawasaki Kisen Kaisha, Ltd. (‘K’ Line) reported consolidated financial results for the fiscal year the company’s materials label FY2025 (fiscal year ended March 2026). Operating revenues were 1,018.3 billion yen, down from 1,047.9 billion yen in FY2024. Operating income declined to 84.1 billion yen (FY2024: 102.8 billion yen), mainly due to decreased profit in the Car Carrier Business. Ordinary income fell sharply to 109.1 billion yen (FY2024: 308.0 billion yen), due to a significant decline in profit in the Containership Business, while net income attributable to owners of parent was 132.9 billion yen (FY2024: 305.3 billion yen), reflecting factors including the sale of owned vessels and subsidiary shares, as well as a revision to the adjustment of income taxes related to deferred tax assets.

Consolidated Results (Full-Year Actual)

The full-year average exchange rate for FY2025 was ¥150.23/$ (FY2024: ¥152.73/$) and the average bunker price was $528/MT (FY2024: $610/MT). Equity capital rose to 1,802.7 billion yen (FY2024: 1,648.4 billion yen), while interest-bearing liabilities decreased to 296.0 billion yen (FY2024: 344.8 billion yen). DER improved to 16.4% (FY2024: 20.9%) and the equity ratio rose to 76.9% (FY2024: 74.6%); including off-balance-sheet charter hire (600.0 to 700.0 billion yen), the equity ratio stood at 59-61% at the end of FY2025.

Item	FY2025	FY2024	Change
Operating Revenues	1,018.3 billion yen	1,047.9 billion yen	-29.5 billion yen
Operating Income/Loss	84.1 billion yen	102.8 billion yen	-18.6 billion yen
Ordinary Income/Loss	109.1 billion yen	308.0 billion yen	-198.9 billion yen
Net Income/Loss Attributable to Owners of Parent	132.9 billion yen	305.3 billion yen	-172.3 billion yen
Exchange Rate (¥/$)	¥150.23	¥152.73	-¥2.50
Bunker Price ($/MT)	$528	$610	-$82
Equity Capital	1,802.7 billion yen	1,648.4 billion yen	154.2 billion yen
Interest-Bearing Liability	296.0 billion yen	344.8 billion yen	-48.8 billion yen
DER	16.4%	20.9%	-4.5 points
Equity Ratio	76.9%	74.6%	2.3 points

Segment Results

By segment, Dry Bulk ordinary income declined year on year as market conditions deteriorated from the end of FY2024 through the first quarter of FY2025, with disputes at loading ports in the first quarter and increased costs including dry dock costs, although conditions improved in the second half for Capesize, Panamax and smaller sizes. Energy Resource Transport secured stable profits under long-term contracts, with profit increasing due to one-time factors including the absence of impairment losses recorded in FY2024 and gains from a review of tax effects in FY2025 (both recorded at equity-method affiliates). Within Product Logistics, the Car Carrier Business saw a slight increase in units transported, supported by solid demand worldwide, but profit declined due to increased operating costs and factors such as the situation in the Middle East, despite impacts from trade policies in various countries. The Containership Business saw profit decline sharply amid the impacts of U.S. trade policies and the situation in the Middle East, due to higher ship costs resulting from deliveries of newbuild vessels and a decline in freight rates.

Segment/Business	Metric	FY2025	FY2024	Change
Dry Bulk	Operating Revenues	292.7 billion yen	322.3 billion yen	-29.5 billion yen
Dry Bulk	Ordinary Income/Loss	10.9 billion yen	13.2 billion yen	-2.3 billion yen
Energy Resource Transport	Operating Revenues	100.6 billion yen	101.9 billion yen	-1.2 billion yen
Energy Resource Transport	Ordinary Income/Loss	9.6 billion yen	4.9 billion yen	4.7 billion yen
Product Logistics	Operating Revenues	616.4 billion yen	612.8 billion yen	3.6 billion yen
Product Logistics	Ordinary Income/Loss	90.8 billion yen	293.6 billion yen	-202.7 billion yen
Product Logistics – Car Carrier	Operating Revenues	379.6 billion yen	384.0 billion yen	-4.4 billion yen
Product Logistics – Car Carrier	Ordinary Income/Loss	51.2 billion yen	76.4 billion yen	-25.2 billion yen
Product Logistics – Containership	Operating Revenues	66.8 billion yen	68.5 billion yen	-1.7 billion yen
Product Logistics – Containership	Ordinary Income/Loss	24.0 billion yen	206.0 billion yen	-181.9 billion yen
Other	Operating Revenues	8.4 billion yen	10.8 billion yen	-2.3 billion yen
Other	Ordinary Income/Loss	2.2 billion yen	0.9 billion yen	1.2 billion yen
Adjustment	Operating Revenues	–	–	–
Adjustment	Ordinary Income/Loss	-4.6 billion yen	-4.7 billion yen	0.0 billion yen
Total	Operating Revenues	1,018.3 billion yen	1,047.9 billion yen	-29.5 billion yen
Total	Ordinary Income/Loss	109.1 billion yen	308.0 billion yen	-198.9 billion yen

Note: the Car Carrier and Containership rows above are business-level components reported within the Product Logistics segment total in the source materials; the Total row is the consolidated segment total as stated in the materials, not a simple sum of every row above.

FY2026 Forecast

For FY2026, amid ongoing geopolitical concerns including the situation in the Middle East, ordinary income is forecast at 100.0 billion yen, down 9.1 billion yen year on year, reflecting factors such as foreign exchange valuation losses. Key assumptions include a yen-US$ exchange rate of ¥150.82/$ (average for FY2026) and a bunker price of $697/MT. Estimated sensitivities (12-month basis) are ±¥1.5 billion for each ¥1 change in the yen-US$ rate and ±¥0.07 billion for each $10/MT change in bunker price. Assumptions include the closure of the Strait of Hormuz continuing through the end of June, with passage expected to resume from July onward; Suez Canal passage is not assumed for the full year, with operations continuing via the Cape of Good Hope route; and bunker prices are expected to gradually decline from July onward, with the average price for the second half assumed at $646/MT.

Item	FY2026 Forecast	FY2025 (Actual)	Change
Operating Revenues	1,020.0 billion yen	1,018.3 billion yen	1.7 billion yen
Operating Income/Loss	83.0 billion yen	84.1 billion yen	-1.1 billion yen
Ordinary Income/Loss	100.0 billion yen	109.1 billion yen	-9.1 billion yen
Net Income/Loss Attributable to Owners of Parent	95.0 billion yen	132.9 billion yen	-37.9 billion yen
Exchange Rate (¥/$)	¥150.82	¥150.23	¥0.60
Bunker Price ($/MT)	$697	$528	$169

By segment, Dry Bulk profit is expected to increase as transportation demand remains solid and market conditions trend higher. Energy Resource Transport profit is expected to decline due to the absence of one-off gains recorded in the previous period. Within Product Logistics, Car Carrier profit is expected to decline due to the worsening situation in the Middle East, reflected in decreased cargo volumes to the region and increased operating costs such as fuel expenses, while the Containership Business is expected to be roughly in line with the previous year amid continued uncertainty from geopolitical risks including the situation in the Middle East; ONE will continue efficient operation and flexible vessel deployment in line with demand.

Segment/Business	Metric	FY2026 Forecast	FY2025 (Actual)	Change
Dry Bulk	Operating Revenues	290.0 billion yen	292.7 billion yen	-2.7 billion yen
Dry Bulk	Ordinary Income/Loss	16.5 billion yen	10.9 billion yen	5.6 billion yen
Energy Resource Transport	Operating Revenues	93.5 billion yen	100.6 billion yen	-7.1 billion yen
Energy Resource Transport	Ordinary Income/Loss	4.0 billion yen	9.6 billion yen	-5.6 billion yen
Product Logistics	Operating Revenues	628.5 billion yen	616.4 billion yen	12.1 billion yen
Product Logistics	Ordinary Income/Loss	82.5 billion yen	90.8 billion yen	-8.3 billion yen
Product Logistics – Car Carrier	Operating Revenues	392.0 billion yen	379.6 billion yen	12.4 billion yen
Product Logistics – Car Carrier	Ordinary Income/Loss	44.0 billion yen	51.2 billion yen	-7.2 billion yen
Product Logistics – Containership	Operating Revenues	69.0 billion yen	66.8 billion yen	2.2 billion yen
Product Logistics – Containership	Ordinary Income/Loss	26.0 billion yen	24.0 billion yen	2.0 billion yen
Other	Operating Revenues	8.0 billion yen	8.4 billion yen	-0.4 billion yen
Other	Ordinary Income/Loss	0.5 billion yen	2.2 billion yen	-1.7 billion yen
Adjustment	Operating Revenues	–	–	–
Adjustment	Ordinary Income/Loss	-3.5 billion yen	-4.6 billion yen	1.1 billion yen
Total	Operating Revenues	1,020.0 billion yen	1,018.3 billion yen	1.7 billion yen
Total	Ordinary Income/Loss	100.0 billion yen	109.1 billion yen	-9.1 billion yen

Shareholder Returns

The year-end dividend for FY2025 is 60 yen/share (announced in February 2026); together with the interim dividend of 60 yen/share, the total annual dividend for FY2025 is 120 yen/share. The annual forecast dividend for FY2026 is also 120 yen/share (interim and year-end dividends of 60 yen/share each), unchanged from the February 2026 announcement. The total return amount during the current Medium-term Management Plan period is expected to be 800.0 billion yen or more (unchanged from the February 2026 announcement). The timing and method(s) of flexible additional shareholder returns of 50.0 billion yen or more during the Medium-term Management Plan period, announced in May 2025, remain under continued review.

Medium-Term Plan / Capital Policy Topics

Under the current Medium-term Management Plan, operating cash flow for the plan period is expected to be 1.5 trillion yen (unchanged from the February 2026 announcement), investing cash flow is expected to be 610.0 billion yen (unchanged from the February 2026 announcement), and shareholder returns are expected to be 800.0 billion yen or more. ROIC for FY2026 is forecast at 5% (company-wide), against a Medium-term Management Plan target of 6% to 7%. The company’s PBR target is to return to, maintain and improve a PBR of 1.0 or more. The next Medium-term Management Plan is scheduled for announcement during FY2026, targeting an ROE of 15% or higher over the medium to long term by pursuing profit growth and capital efficiency improvement as two key pillars, and aiming to optimize the capital structure in the short term with a target equity ratio (including off-balance-sheet items) of around 50%.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.