Financial results

April 13, 2011

TSUNEISHI HOLDINGS

[Business reports]

・Shipbuilding division

Start of Vision 2020 long-term planning

At the start of 2011, our shipbuilding division, led by Tsuneishi Shipbuilding Co., Ltd., implemented a ten-year plan called Vision 2020. The goal of this plan is to lead the industry in the eyes of our customers, and to this end we seek to strengthen our business by prioritizing cost competitiveness through enhanced productivity as well as by differentiating Tsuneishi products through eco-performance and operational profitability. To do this, we have invested in the development of energy-conserving and other eco-technology and have introduced new models that comply with the latest rules, including flagship models such as the 82,000-ton Kamsarmax-class and the 58,000-ton TESS58-class bulk carriers. Moreover, we have strengthened coordination between our four shipyards in Japan and overseas to enhance quality and productivity worldwide. Our environmental initiatives include development of technology for enhanced propulsion and energy-efficiency that will help reduce CO₂ emissions from the ships we build 40% over 1990 levels by 2020.

Financial results for 2010

With the completion of expansion of our overseas shipyards and installation of new equipment for enhanced productivity at our Japanese facilities, we have had four docks and five slips operating at full capacity in four facilities worldwide since 2009. Accordingly, during 2010, we completed 61 ships, or 12 more than the 49 completed in 2009, and achieved record-high sales of 243.3 billion JPY (+18% YTY) with net profits of 32.8 billion JPY (+59% YTY). In contrast, current orders have been affected by the downturn of the global economy, and a total of just 31 ships were ordered during 2010, including changes in type of ship.

・Maritime transport division

Strengthening international multimodal transport

Our maritime transport division, led by Kambara Kisen Co., Ltd., has undertaken construction of a second warehouse at the Kambara Kisen Fukuyama Logistics Center, which when completed in December will effectively double warehouse space at that facility from 15,000 to 30,000 m². This construction was prompted by increased volumes from our current customers as well as a burgeoning need for international multimodal transport and marks a significant strengthening of our capabilities as a provider of comprehensive maritime/land transport and storage services. In December of last year, we established a tie-in with Regional Container Lines (RCL) of Thailand, thereby expanding availability of our container transport services from eight countries to 17 countries throughout Asia, Oceania, and the Middle East.
Kambara Kisen also underwent a restructuring of its organization in January of this year due to an absorption-type company split involving Tsuneishi Holdings Corporation and Tsuneishi Port Service Company, in which Kambara Logistics, Co. Ltd. became a wholly owned subsidiary in preparation for the start of full-fledged international logistics services through expansion of container transport services throughout Asia and Oceania.

Financial results for 2010

Liner services included continued operation of eight container ships on routes between Japan and China as well as expansion of service availability to 17 countries thanks to a tie-in with RCL, resulting in record-high container volumes for 2010. Tramp service during 2010 saw the addition of both an 180,000-ton and a 58,000-ton bulk carrier, bringing the fleet to a total of 24 ships by December, 2010. As a result, overall sales for maritime shipping services exhibited solid growth and totaled 56.6 billion JPY (+51% YTY) with a net profit of 6.9 billion JPY (+92% YTY).