ENVALITH
共栄タンカー株式会社 logo

KYOEI TANKER CO.,LTD.

9130・Standard Market・Marine Transportation

Official website
共栄タンカー株式会社 logo
KYOEI TANKER CO.,LTD.9130

Business

Kyoei Tanker Co., Ltd. is an ocean-going shipping specialist founded in 1937, listed on the TSE Standard Market. The company owns and operates a fleet centered on Very Large Crude Carriers (VLCC), Very Large Gas Carriers (VLGC), small LPG carriers, and bulk carriers, with stable earnings from long-term chartering contracts forming the core of its business. Its major customers are Nippon Yusen (42.5% of revenue) and Cosmo Oil (29.7% of revenue), with the two combined accounting for 72.2% of revenue. Under a group structure consisting of the parent company and 9 overseas subsidiaries, the company conducts vessel ownership, operation, and chartering in an integrated manner. As of the end of March 2026, the company operates a fleet of 15 owned vessels with a total deadweight tonnage of 2,125,500 M/T.

Business Model

A pure chartering model in which 100% of revenue consists of charter hire. The Company and its overseas subsidiaries own vessels and charter them out under long-term contracts to major cargo owners and shipping companies such as NYK Line and Cosmo Oil, thereby securing stable cash flow. Funds for vessel construction and acquisition are procured through long-term borrowings from financial institutions, with repayment plans structured to align with the charter periods. In FY2026 (ending March 2026), shipping business revenue reached a record high of ¥15,509 million.

Company Strengths

NYK Line accounts for 42.5% of net sales and Cosmo Oil for 29.7%, with the top two customers together representing 72.2%, reflecting a highly concentrated customer structure. By operating a business centered on long-term chartering contracts, the company has built a stable earnings base that is less susceptible to fluctuations in spot market conditions. Net sales increased consistently from FY2022 (ending March 2022) through FY2026 (ending March 2026), reaching a record high of ¥15,509 million.

The company obtained ISO9001 (quality management) and ISO14001 (environmental management) certifications in 2004, and continuously engages in safe operations and marine and global environmental preservation. This ship management technology forms the foundation of trust with customers and contributes to maintaining long-term contracts with major shippers. The company also works to pass on its technical foundation through the continuous recruitment and training of crew members both in Japan and overseas.

NYK Line is a major shareholder of the company, and the two maintain an important and close business relationship, including sharing vessels among subsidiaries. This relationship has continued for over 60 years since the 1963 shipping industry consolidation, with sales to NYK Line accounting for 42.5% of net sales. This relationship also functions as a business foundation for developing new customers and strengthening the fleet.

ENVALITH's Perspective

Net income attributable to owners of the parent for FY2026 (ending March 2026) fell sharply to ¥414 million (down 91.9% year on year), but this was mainly due to the disappearance of a one-time factor: the prior period had been boosted by ¥5,800 million in gain on sale of vessels (extraordinary income). In the current period, the company recorded ¥1,961 million in income tax adjustment (gain) from the reversal of deferred tax liabilities related to retained earnings of overseas subsidiaries, while corporate, resident, and enterprise taxes surged to ¥2,083 million, distorting the effective tax rate. On an ordinary income basis, the decline was relatively modest at ¥886 million (down 13.9% year on year), suggesting that the underlying deterioration in ordinary earning power was limited.

The company's forecast for FY2027 (ending March 2027) calls for net sales of ¥14,600 million (down 5.9% year on year), operating income of ¥800 million (down 35.7%), and ordinary income of ¥300 million (down 66.2%), representing a substantial decline in earnings. Key downward pressures include the idling and increased costs from major repairs on one VLCC, decreased sales revenue from vessels sold, rising vessel operating costs amid continued inflation, and an extraordinary loss related to the denial of departure clearance for the petroleum product tanker "CHALLENGE PROCYON" from Mexico. As an external factor, escalating tensions in the Middle East and the risk of a blockade of the Strait of Hormuz are having a severe impact on the shipping market, resulting in high uncertainty regarding the earnings forecast. On the other hand, gain on sale of the bulk carrier "KT BIRDIE" (approximately ¥1.8 billion) is scheduled to be recorded in the first quarter, serving as a major support for the net income forecast of ¥1,300 million (up 213.6% year on year).

As of the end of FY2026 (ending March 2026), interest-bearing debt totaled ¥44,015 million, comprising ¥10,760 million in short-term borrowings and ¥33,255 million in long-term borrowings, accounting for 56.8% of total assets. Interest expense rose to ¥555 million (up ¥62 million year on year), an increasing trend, and further increases in financial burden are expected against the backdrop of the Bank of Japan's continued phased interest rate hikes. While the interest coverage ratio improved to 9.9 times (from 9.6 times in the prior period), the ratio of interest-bearing debt to cash flow remains high at 7.9 years. Cash flow from investing activities for FY2026 (ending March 2026) showed an outflow of ¥5,440 million (versus ¥2,137 million in the prior period), reflecting a sharp increase in payments for vessel construction, resulting in effectively negative free cash flow.

Growth Strategy

Strengthening a stable earnings foundation and improving profitability through LPG fleet expansion and fleet optimization

Two LPG carriers, "PAUL" acquired in FY2025 (ending March 2025) and "JOSEPH" acquired in FY2026 (ending March 2026), are operating smoothly. Construction in progress increased to ¥4,601 million (from ¥3,569 million in the previous period), reflecting ongoing orders for newbuildings. Full-scale earnings contribution from newbuildings is expected throughout FY2027 (ending March 2027).

The bulk carrier "KT BIRDIE" was transferred on March 3, 2026 following the termination of its charter contract. A gain on sale of vessel of approximately ¥1.8 billion is expected to be recorded in the first quarter of FY2027 (ending March 2027). The policy is to improve asset efficiency and smooth earnings through continuous fleet replacement.

The company's petroleum products carrier has continued to remain berthed after failing to receive departure clearance from Mexican authorities. An extraordinary loss of ¥349 million was recorded in FY2026 (ending March 2026), and an additional extraordinary loss is expected to be recorded in FY2027 (ending March 2027) as well. Resolution of this issue represents a significant variable for the following period's results.

The company continues to actively pursue sales activities aimed at developing a competitive fleet that contributes to environmental protection, with safe operation as the top priority, while also expanding business opportunities. In response to newbuilding prices remaining at elevated levels and operating costs staying high, the company is working to improve the operational efficiency of each vessel and reduce various expenses.

Last updated: July 19, 2026