Kuribayashi Steamship Co., Ltd.

Natural disasters such as earthquakes and typhoons may disrupt business operations including vessel operation, port cargo handling, and vehicle operation. This could result in decreased sales and other effects that impact business performance. As countermeasures, the Group is formulating business continuity plans, establishing initial response and communication systems in the event of a disaster, and developing backup sites for emergencies.

In the course of vessel operation and port cargo handling, unforeseen accidents, natural disasters, terrorism, and similar events may occur, potentially affecting business performance. While the Group complies with safety management regulations and maintains various insurance policies, risk cannot be completely eliminated. The Group strives to reduce risk through company-wide education and training via joint sea-land drills conducted once a year.

Vessel fuel oil prices have continued to rise due to global conditions, and significant price fluctuations could affect business performance. The Group requests cooperation from business partners regarding a "fuel oil price fluctuation adjustment fee," but in cases where price fluctuations cannot be fully passed on, cost increases may result. The Group continues to promote operational efficiency and gather information toward stable fuel oil procurement.

The Group primarily procures capital expenditure and working capital funds from financial institutions, and the ongoing rise in interest rates may lead to increased procurement costs that affect business performance going forward. The Group is working to improve fund efficiency within the Group through the introduction of a cash management system and to reduce external procurement. Through the use of commitment lines, review of borrowing terms, and fixing of interest rates, the Group strives to curb procurement costs and secure stable fundraising.

The business is labor-intensive, requiring the securing of highly specialized personnel such as ship crew members, drivers, and port cargo handling workers, and increased personnel costs to secure such talent may affect business performance. In addition to promoting the retention of excellent personnel through the development of favorable working environments, the Group is promoting operational efficiency through manual development and the use of digital technology. The Group is also working to ensure smooth transfer of skills between generations, advancing the accumulation and sharing of technology and know-how.

If the value of held assets such as vessels, land, buildings, and investment securities declines significantly due to changes in economic conditions or market conditions, the recognition of disposal losses or impairment losses could affect business performance and financial position. The Group continuously monitors business performance and strives to implement countermeasures against such risks.

The Group utilizes data systems across all areas of its operations, and the occurrence of a cyber incident poses the risk of economic loss and a decline in social credibility. Cyberattacks have become increasingly sophisticated and elaborate in recent years, and the Group is strengthening intrusion detection and prevention as well as incident response systems against external threats. To address risks arising from internal factors, the Group is reviewing regulations in light of the expanded use of generative AI and conducting employee education and training, thereby strengthening cyber resilience.

The medium-term management plan sets a target of reducing CO2 emissions from the domestic shipping business by 17% by fiscal year 2030 compared to fiscal year 2013, and additional capital investment and increased fuel costs may arise from the introduction of energy-efficient vessels and related technologies and the conversion to next-generation fuels. This entails the risk that responding to environmental regulations could become a financial burden on management. The Group strives to reduce this risk by advancing cost-benefit estimates.