IINO KAIUN KAISHA, LTD.

Business Details

Transports crude oil, petrochemical products, LPG, ethane, thermal coal, fertilizer, wood chips, and other cargo by sea across waters worldwide. Works in coordination with affiliated companies such as AZALEA TRANSPORT S.A. (ship chartering), Iino Marine Service Co., Ltd. (ship management), and Iino Enterprise Co., Ltd. (shipping brokerage) to manage voyage profitability by combining stable earnings from long-term contracts with agile responses to market fluctuations. This is the largest segment, accounting for approximately 80% of consolidated net sales.

Recent Overview

Net sales and operating income both declined significantly due to softening market conditions and the impact of the Strait of Hormuz closure

In FY2026 (ending March 2026), the Ocean-going Shipping Business recorded net sales of ¥102,464 million (down 12.8% year on year) and operating income of ¥8,786 million (down 33.4% year on year), a significant deterioration. Chemical tankers were affected by softening market conditions due to China's economic slowdown and by vessel deployment restrictions resulting from the de facto closure of the Strait of Hormuz toward fiscal year-end. On the other hand, large LPG carriers continued to see high market conditions, and the second large ethane carrier was completed in January 2026. Capital expenditure on vessels increased sharply to ¥64,005 million from ¥34,556 million in the prior period, and segment assets expanded to ¥165,558 million.

Key Products

Growth Drivers

• New earnings contribution from the establishment of a two-vessel large ethane carrier fleet (completed January 2026)
• Tightening vessel supply-demand and sustained high market conditions for large LPG carriers due to increased long-haul voyages from the U.S. to Asia
• Expansion of the earnings base through the addition of new core vessels (one Panamax-type and one Handy-type) to the dry bulk carrier fleet
• Strengthening of the stable earnings base through the accumulation of long-term and medium- to long-term contracts
• Fleet expansion through approximately ¥200 billion in growth investment over five years under the new Medium-Term Management Plan (April 2026 to March 2031)
• Asset replacement and recording of a gain on sale of fixed assets of approximately ¥7,100 million through the sale of one large crude oil tanker (Q1 FY2027, ending March 2027)

Risks

• Constraints on maritime transport with the Middle East region due to the continued de facto closure of the Strait of Hormuz (earnings forecasts assume resumption within June 2026)
• Softening chemical tanker market conditions (due to China's economic slowdown and global economic uncertainty)
• Continued turbulence in the large crude oil tanker market (difficulty in assessing actual conditions due to geopolitical risk)
• Fluctuations in fuel oil prices (compliant fuel oil VLSFO: forecast for FY2027 (ending March 2027) is US$670/MT in H1 and US$570/MT in H2, up from US$509/MT in the prior period)
• Foreign exchange rate fluctuations (impact on U.S. dollar-denominated earnings; prior-period actual rate was ¥150.23/US$)
• Risk of reduced operating days due to concentrated periodic dry-docking work
• Changes in cargo movement due to uncertainty over trade policy, including U.S.-China tariff friction
• Increased financial leverage due to a rise in long-term borrowings (¥116,204 million) associated with large-scale capital investment in vessels (¥64,005 million)