Interim report
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Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. Company name: Kawasaki Kisen Kaisha, Ltd. Listing: Prime Market of Tokyo Stock Exchange Securities code: 9107 URL: https://www.kline.co.jp/en/ Representative: Takenori Igarashi, Representative Executive Officer, President & CEO Inquiries: Ryo Kato, General Manager, Corporate Sustainability, Environment Management, IR and Communication Group Telephone: +81-3-6890-9620 Scheduled date to commence dividend payments: - Preparation of supplementary material on financial results: Yes Holding of financial results briefing: Yes (for Analysts) (1) Consolidated operating results (cumulative) (Percentages indicate year-on-year changes.) Operating revenues Operating income (loss) Ordinary income (loss) Profit (loss) attributable to owners of the parent Million yen % Million yen % Million yen % Million yen % Three months ended June 30, 2026 286,842 17.1 19,581 (1.3) 24,046 10.9 23,394 (21.9) Three months ended June 30, 2025 244,918 (8.5) 19,842 (35.4) 21,684 (71.0) 29,947 (58.7) Note: Comprehensive income for the three months ended June 30, 2026: ¥ 42,242million [-%] For the three months ended June 30, 2025: ¥ (6,265)million [-%] Profit (loss) per share Profit (loss) per share-fully diluted Yen Yen Three months ended June 30, 2026 37.42 - Three months ended June 30, 2025 47.40 - August 4, 2026 Financial Highlights for 1st Quarter FY2026 (Under Japanese GAAP) (Unaudited) (Amounts rounded down to the nearest million yen) 1. Consolidated financial results for the three months ended June 30, 2026 (from April 1, 2026 to June 30, 2026) - 1 -
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Total assets Net assets Shareholders’equity ratio Million yen Million yen % As of June 30, 2026 2,289,947 1,777,109 75.9 As of March 31, 2026 2,343,989 1,841,988 76.9 As of June 30, 2026: ¥ 1,737,394million As of March 31, 2026: ¥ 1,802,703million Annual dividends per share First quarter-end Second quarter-end Third quarter-end Fiscal year-end Total Yen Yen Yen Yen Yen Year ended March 31, 2026 - 60.00 - 60.00 120.00 Year ending March 31, 2027 - Year ending March 31, 2027 (Forecast) 60.00 - 60.00 120.00 (Percentages indicate year-on-year changes.) Operating revenues Operating income (loss) Ordinary income (loss) Profit (loss) attributable to owners of the parent Profit (loss) per share Million yen % Million yen % Million yen % Million yen % Yen Cumulative second quarter ending September 30, 2026 574,500 14.8 42,000 (2.2) 80,000 34.1 86,000 25.3 139.45 Year ending March 31, 2027 1,070,000 5.1 85,000 1.0 135,000 23.7 135,000 1.5 220.79 (2) Consolidated financial position Reference: Shareholders’equity 2. Dividends *Revision to the forecast of dividends most recently announced: None 3. Consolidated Financial Results Forecast for the Year Ending March 31, 2027 (April 1, 2026 to March 31, 2027) *Revision to Consolidated Financial Forecasts most recently announced: None - 2 -
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Newly included: 1 company ("K" Line Ship Management Holdings, Ltd.) Excluded: None As of June 30, 2026 639,172,067 shares As of March 31, 2026 639,172,067 shares As of June 30, 2026 33,871,539 shares As of March 31, 2026 7,077,375 shares Three months ended June 30, 2026 625,230,943 shares Three months ended June 30, 2025 631,769,213 shares 4. Notes (1) Significant changes in the scope of consolidation during the quarter period: Yes (2) Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements: None (3) Changes in accounting policies, changes in accounting estimates, and restatement (ⅰ) Changes in accounting policies due to revisions to accounting standards and other regulations: None (ⅱ) Changes in accounting policies due to other reasons: Yes (ⅲ) Changes in accounting estimates: None (ⅳ) Restatement: None (4) Number of issued shares (common shares) (ⅰ) Total number of issued shares at the end of the period (including treasury shares) (ⅱ) Number of treasury shares at the end of the period (ⅲ) Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year) *Review of the Japanese-language originals of the attached consolidated quarterly financial statements by certified public accountants or an audit firm: None *Assumption for the forecast of consolidated financial results for the year ending March 31, 2027 The forecast is based on currently available information that KLINE deems to be reasonable. Actual results may differ from the forecast as a result of various factors. Refer to “5. Qualitative Information on Quarterly Financial Results (3) Description of Information on Future Outlook, Including Forecast of Consolidated Financial Results” for assumptions related to the forecast. - 3 -
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(Billion yen) Three months ended June 30, 2025 Three months ended June 30, 2026 Change % Change Operating revenues 244.9 286.8 41.9 17.1% Operating income (loss) 19.8 19.5 (0.2) (1.3%) Ordinary income (loss) 21.6 24.0 2.3 10.9% Profit (loss) attributable to owners of the parent 29.9 23.3 (6.5) (21.9%) Exchange Rate (¥/US$) (3-month average) 145.32 159.89 14.57 10.0% Fuel oil price (US$/MT) (3-month average) 550 787 238 43.3% (Billion yen) Three months ended June 30, 2025 Three months ended June 30, 2026 Change % Change Dry Bulk Operating revenues 70.7 90.3 19.6 27.8% Segment profit (loss) (0.3) 9.0 9.3 -% Energy Resource Transport Operating revenues 23.5 29.8 6.3 27.1% Segment profit (loss) 2.6 3.2 0.5 21.5% Product Logistics Operating revenues 150.0 166.0 15.9 10.7% Segment profit (loss) 24.3 10.8 (13.4) (55.3%) Other Operating revenues 0.6 0.5 (0.0) (10.4%) Segment profit (loss) (0.1) 0.4 0.5 -% Adjustments and eliminations Segment profit (loss) (4.8) 0.4 5.3 -% Total Operating revenues 244.9 286.8 41.9 17.1% Segment profit (loss) 21.6 24.0 2.3 10.9% 5. Qualitative Information on Quarterly Financial Results (1) Description of Operating Results The Company recorded 2.6 billion yen of equity in earnings of unconsolidated subsidiaries and affiliates for the consolidated cumulative first quarter of this fiscal year and OCEAN NETWORK EXPRESS PTE. LTD. (hereinafter referred to as “ONE”) accounted for 1.1 billion yen of this amount. Performance per segment was as follows. Following the reorganization with the aim of strengthening the Group's in-house ship management structure, ship management service, which was previously included in the “Other”, is reclassified into the Dry Bulk segment, the Energy Resource Transport segment and the Product Logistics segment and the “Other”, respectively, from the first quarter of the current fiscal year. In addition, the LNG bunkering business, which was previously included in the Energy Resource Transport segment, has been reclassified to the “Other”, in order to present the condition of each segment more appropriately. Segment information for the first quarter of both fiscal years 2026 and 2025 is presented based on the changed segment classification. - 4 -
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(i) Dry Bulk Segment Dry Bulk Business In the Cape-size sector, market rates stayed firm, thanks to the active cargo movement of iron ore, bauxite, and others. In the medium-small vessel sector, market rates were on an upward trend due to the growth in demand for coal transportation caused by the situation in the Middle East and the robust demand for grain transportation. Under these circumstances, the Group focused on managing market exposure appropriately, reducing operating costs, and improving vessel operation efficiency. The overall Dry Bulk segment recorded a year-on-year increase in revenue and returned to profitability. (ⅱ) Energy Resource Transport Segment LNG Carrier Business, Crude Oil and LPG Carrier Business, Electricity Business, CCS Business and Offshore Wind Business Concerning LNG carriers, LPG carriers, thermal coal carriers, large crude oil tankers (VLCCs), drillship, FPSO (Floating Production, Storage and Offloading system) and others, the business operated steadily under mid- and long-term charter contracts and contributed to securing stable profit. The overall Energy Resource Transport segment recorded a year-on-year increase in both revenue and profit due to the impacts of market rates, exchange rates, and other related factors. (ⅲ) Product Logistics Segment Car Carrier Business In the car carrier business, due to port congestion in some areas and the tense situation in the Middle East, the Group was affected by the longer voyage distance and the decline in the fleet capacity utilization rate resulting from transportation through alternate routes, and the increase in fuel costs and other operating costs. Logistics Business In the domestic logistics and port business, the container terminal handling volume, the work volume in the towage business, and the handling volume in the warehousing business all stayed firm. As for the international logistics sector, while cargo movement in air transportation in the forwarding business was sluggish for some shipments, such as those related to automobiles, the transportation volume of semiconductors increased year-on- year. As a result, the overall business in this sector generally stayed firm. In the finished car transportation business, new car sales, a key factor influencing cargo volume at Australian ports, stayed at the same level as the previous year, and both transportation and storage volumes remained stable. Short Sea and Coastal Business In the short sea business, the overall transportation volume slightly decreased year-on-year, due to the decrease in the transportation of steel products and other cargoes canceling out the increase in the transportation of biomass fuel. In the coastal business, the volume of ferry transportation increased year-on-year for cars and passengers, resulting from the growth in travel demand. As for liner transportation, despite the decline in the number of voyages due to the docking of the vessels for the Shimizu route, the overall transportation volume increased year-on-year, thanks to the acquisition of new cargo on the Hokkaido route. The volume of tramp services remained almost unchanged from the same period of the previous fiscal year. Containership Business In the containership business, short-term freight rates increased as supply and demand tightened due to port congestion, in addition to front-loaded shipments and inventory buildup in consumer countries against the backdrop of the situations in the Middle East and rising fuel prices. On the other hand, as operating costs increased due to factors such as rising fuel prices, the performance of ONE, an equity-method affiliate of the Company, recorded a year-on-year increase in revenue but a decrease in profit. The overall Product Logistics segment recorded a year-on-year increase in revenue but a decrease in profit. - 5 -
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(ⅳ) Other The Other includes, but is not limited to, the ship management service, the travel agency business, the real estate rental and management business. The segment recorded a year-on-year decrease in revenue but returned to profitability. (2) Description of Financial Position Total assets at the end of the consolidated first quarter of this fiscal year were ¥2,289.9 billion, a decrease of ¥54.0 billion from the end of the previous fiscal year as a result of a decrease in cash and deposits and other factors. Total liabilities increased by ¥10.8 billion to ¥512.8 billion as a result of an increase in other current liabilities and other factors compared to the end of the previous fiscal year. Total net assets were ¥1,777.1 billion, a decrease of ¥64.8 billion compared to the end of the previous fiscal year as a result of an increase in treasury stock and other factors. Prior Forecast Current Forecast * Change % Change(at the time of announcement (at the time of announcement of made on May 8, 2026) the 1st quarter result) Operating revenues 1,020.0 1,070.0 50.0 4.9% Operating income (loss) 83.0 85.0 2.0 2.4% Ordinary income (loss) 100.0 135.0 35.0 35.0% Profit (loss) attributable to owners of the parent 95.0 135.0 40.0 42.1% Exchange Rate (¥/US$) 150.82 153.50 2.68 1.8% Fuel Oil Price (US$/MT) 697 718 21 3.0% (3) Description of Information on Future Outlook, Including Forecast of Consolidated Financial Results (Billion yen) * As for the Current Forecast, there is no change from the forecast that announced in the news release on July 24, 2026, titled “Notice on Revision to Consolidated Financial Forecasts for the Fiscal Year ending March 2027”. In the Dry Bulk segment, despite geopolitical risks, such as the situation in the Middle East, and uncertainty in the Chinese economy and other factors, the Group expects transportation demand to remain firm. Although the volume of new ship deliveries is limited for Cape-size vessels and slightly large for medium-small vessels, the Group expects that the overall vessel supply will be constrained, the supply-demand environment will remain favorable, and market rates will stay firm overall. The Group will work on improving vessel operation efficiency and reducing costs, and amid the growing need to deal with environmental issues, taking advantage of its high-quality transportation, the Group will strive to enhance stable sources of revenue by increasing mid- and long-term contracts, and maximize profit, while maintaining appropriate and swift risk control. In the Energy Resource Transport segment, despite uncertainties in the business environment, such as the situation in the Middle East, the Group expects steady profit growth with respect to LNG carriers, large crude oil tankers, LPG carriers, thermal coal carriers, drillship, FPSO, and others, supported by mid- and long-term contracts. The Group will continue efforts to secure stable profit. - 6 -
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As for the Product Logistics segment, in the car carrier business, the Group expects a continued increase in finished car movement, driven by the steady growth in global car sales. However, with the forecast that the tense situation in the Middle East will continue for some time, the Group will closely monitor the latest developments concerning the future changes in transportation demand and their impact on fleet deployment and continue efforts to optimize its fleet and further improve the efficiency of vessel operation and allocation. In the logistics business, regarding the domestic logistics and port business, the container terminal handling volume, the work volume in the towage business and the handling volume in the warehousing business are expected to stay at the same level as the previous fiscal year. As for the international logistics sector, in the forwarding business, despite the continuing uncertainty in the demand for ocean and air transportation due to geopolitical risks, such as the situation in the Middle East, the handling volume is projected to stay flat year-on-year. In the finished car transportation business, both transportation and storage volumes are expected to remain stable. In the short sea business, the Group expects a year-on-year increase in the overall transportation volume, driven by the increase in the transportation volume of biomass fuel. In the coastal business, the volume of ferry transportation is expected to stay flat year-on-year for trucks, cars, and passengers. As for liner transportation, despite the continuing decline in paper-related cargo on the Hokkaido route, the transportation volume is expected to be generally on par with the previous fiscal year, thanks to the steady growth in transportation of steel frames and construction materials. The transportation volume on the Shimizu-Oita route is also expected to be on par with the previous fiscal year. The volume of tramp services is expected to remain generally in line with the previous fiscal year, except for coal carriers. In the containership business, the business environment remains uncertain due to factors such as the situation in the Middle East and U.S. trade policies. ONE will closely monitor changes in the situation, continue to provide flexible vessel allocation and efficient operations in line with demand, and strive to maintain stable business operations. Our basic policy, positioning the maximization of shareholder value as a key management priority, is to improve corporate value and shareholder interests over the medium and long term by proactively promoting shareholder returns, including share buybacks. This is achieved by taking cash flow into consideration and actively promoting investments essential for enhancing corporate value while maintaining strict investment discipline, ensuring both capital efficiency and financial stability necessary to improve our corporate value while being conscious of optimal capital structure. Based on this basic policy, regarding dividend for the fiscal year ending March 31, 2027, the Company plans for basic dividend of 40.00 yen and additional dividend of 80.00 yen per share, in total of annual dividend 120.00 yen per share (an interim dividend of 60.00 yen per share and a year-end dividend of 60.00 yen per share), as announced on Feb 3, 2026. At the financial results announcement for the fiscal year ended March 31, 2026 held on May 8, 2026, we stated that, in preparation for the next Medium-Term Management Plan commencing in the fiscal year ending March 31, 2028, we will pursue both profit growth and capital efficiency improvement as twin pillars from the fiscal year ending March 31, 2027. As part of our capital policy, we have set a policy to optimize our capital structure in the short term with a target equity ratio, including off-balance-sheet items, of around 50%. Based on these policies, the Company resolved to repurchase its stock, with an upper limit of 130 billion yen, in accordance with paragraph 1 of Article 459 of the Companies Act of Japan and Article 38 of our Articles of Incorporation at the meeting of the Board of Directors held on May 29, 2026. For the status, please refer to “Notice Regarding the Status of Own Share Repurchase” as announced on Aug 3, 2026. - 7 -
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(Million yen) As of March 31, 2026 As of June 30, 2026 ASSETS Current assets : Cash and deposits 322,548 217,810 Accounts and notes receivable - trade and contract assets 126,892 131,463 Raw materials and supplies 44,477 56,329 Deferred and prepaid expenses 24,283 23,111 Other current assets 29,230 29,389 Allowance for doubtful accounts (993) (969) Total current assets 546,439 457,134 Non-current assets : (Vessels, property and equipment) Vessels, net 375,746 372,590 Buildings and structures, net 10,479 10,356 Machinery, equipment and vehicles, net 3,075 3,149 Land 16,016 15,489 Construction in progress 82,627 99,907 Other, net 5,705 6,309 Total vessels, property and equipment 493,650 507,801 (Intangible assets) Other intangible assets 10,371 10,729 Total intangible assets 10,371 10,729 (Investments and other assets) Investment securities 1,201,899 1,219,161 Long-term loans receivable 17,341 17,709 Asset for retirement benefits 7,341 7,498 Other investments and other assets 67,924 70,903 Allowance for doubtful accounts (978) (990) Total investments and other assets 1,293,527 1,314,282 Total non-current assets 1,797,549 1,832,813 Total assets 2,343,989 2,289,947 6. Consolidated Financial Statements Consolidated Balance Sheet - 8 -
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(Million yen) As of March 31, 2026 As of June 30, 2026 LIABILITIES Current liabilities : Accounts and notes payable - trade 86,720 84,602 Short-term loans and current portion of long-term loans 57,635 61,890 Accrued income taxes 10,885 9,134 Provision for loss related to the Anti-Monopoly Act 1,638 1,664 Provision for loss on chartering contracts 2,716 2,033 Other provisions 4,832 2,562 Other current liabilities 70,726 97,153 Total current liabilities 235,156 259,041 Non-current liabilities : Bonds 21,300 21,300 Long-term loans, less current portion 157,082 147,381 Provision for directors’ and other officers’ retirement benefits 29 30 Provision for directors’ stock benefits 2,752 2,764 Provision for periodic dry docking of vessels 21,508 21,311 Liability for retirement benefits 4,465 4,497 Other non-current liabilities 59,704 56,509 Total non-current liabilities 266,844 253,795 Total liabilities 502,000 512,837 NET ASSETS Shareholders’ equity: Common stock 75,457 75,457 Capital surplus 39,055 39,077 Retained earnings 1,311,450 1,296,546 Treasury stock (7,692) (76,424) Total shareholders’ equity 1,418,271 1,334,657 Accumulated other comprehensive income : Net unrealized holding gain (loss) on investment securities 18,416 17,676 Deferred gain (loss) on hedges 5,644 4,762 Revaluation reserve for land 4,545 4,539 Foreign currency translation adjustments 352,952 372,936 Retirement benefits liability adjustments 2,872 2,822 Total accumulated other comprehensive income 384,432 402,737 Non-controlling interests 39,285 39,715 Total net assets 1,841,988 1,777,109 Total liabilities and net assets 2,343,989 2,289,947 Consolidated Balance Sheet - 9 -
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(Million yen) Three months ended June 30, 2025 Three months ended June 30, 2026 Marine transportation and other operating revenues 244,918 286,842 Marine transportation and other operating costs and expenses 204,704 245,065 Gross profit (loss) 40,213 41,777 Selling, general and administrative expenses 20,371 22,195 Operating income (loss) 19,842 19,581 Non-operating income : Interest income 1,148 1,841 Dividend income 1,104 1,815 Equity in earnings of unconsolidated subsidiaries and affiliates 7,241 2,661 Foreign exchange gains － 599 Other non-operating income 723 284 Total non-operating income 10,217 7,202 Non-operating expenses : Interest expenses 2,239 1,951 Foreign exchange losses 5,706 － Other non-operating expenses 429 786 Total non-operating expenses 8,375 2,737 Ordinary income (loss) 21,684 24,046 Extraordinary income : Gain on sales of non-current assets 6,043 3,784 Gain on sales of shares of subsidiaries and associates 2,994 － Other extraordinary income 55 70 Total extraordinary income 9,093 3,854 Extraordinary losses : Loss on sale of non-current assets － 41 Loss on retirement of non-current assets 57 22 Other extraordinary losses 6 9 Total extraordinary losses 64 73 Profit (loss) before income taxes 30,713 27,826 Income taxes : Current 3,204 5,142 Deferred (3,079) (1,206) Total income taxes 125 3,935 Profit (loss) 30,588 23,891 Profit (loss) attributable to non-controlling interests 640 497 Profit (loss) attributable to owners of the parent 29,947 23,394 Consolidated Statement of Operations - 10 -
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(Million yen) Three months ended June 30, 2025 Three months ended June 30, 2026 Profit (loss) 30,588 23,891 Other Comprehensive income : Net unrealized holding gain (loss) on investment securities 1,021 (744) Deferred gain (loss) on hedges 360 (546) Foreign currency translation adjustments (3,889) 3,423 Retirement benefits liability adjustments (61) (78) Share of other comprehensive income (loss) of unconsolidated subsidiaries and affiliates accounted for using equity method (34,284) 16,296 Total other comprehensive income (36,853) 18,350 Comprehensive income (6,265) 42,242 (Breakdown) Comprehensive income attributable to owners of the parent (6,835) 41,706 Comprehensive income attributable to non-controlling interests 570 535 Consolidated Statement of Comprehensive Income - 11 -
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(Million yen) Three months ended June 30, 2025 Three months ended June 30, 2026 Depreciation and Amortization 12,889 12,865 7. Explanatory Notes to Consolidated Financial Statements (Notes Regarding Going Concern Assumption) Not Applicable. (Notes on Significant Changes in Amount of Shareholders’ Equity) (Stock Repurchase) In the current cumulative first quarter, treasury stock increased by ¥68,702 million following the Company’s repurchase of 26,574,000 shares of common stock in accordance with a resolution of the Board of Directors at its meeting held on May 29, 2026. (Change in Accounting Standards) (Change in Inventory Valuation Method) The Company had adopted the moving-average method as its main valuation method for raw materials and supplies included in inventories. Effective from the fiscal year ending March 31, 2027, the Company changed to the first-in, first-out method as its main inventory valuation method. This change in the valuation method resulted from the Company's determination that, in connection with the replacement of its core business system, the first-in, first-out method would provide a more appropriate basis for inventory valuation and the determination of periodic profit or loss. The effect of this change in accounting policy was immaterial, and the change was not applied retrospectively. (Notes on the quarterly Consolidated Statement of Cash Flows) The Company does not prepare Consolidated Statement of Cash Flows for the three months ended June 30, 2026. The total amount of Depreciation and Amortization which includes Depreciation and Amortization of Intangible assets is as follows. - 12 -
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(Million yen) Dry Bulk Energy Resource Transport Product Logistics Other Total Adjustments and eliminations Consolidated Revenues Revenues from contracts with customers 69,730 22,623 149,735 630 242,720 - 242,720 Other revenues 1,000 891 274 31 2,197 - 2,197 Operating revenues from customers 70,731 23,515 150,010 661 244,918 - 244,918 Inter-group revenues and transfers 16 562 1,389 1,322 3,290 (3,290) - Total revenues 70,748 24,077 151,399 1,983 248,209 (3,290) 244,918 Segment profit (loss) (363) 2,674 24,378 (135) 26,554 (4,870) 21,684 (Million yen) Dry Bulk Energy Resource Transport Product Logistics Other Total Adjustments and eliminations Consolidated Revenues Revenues from contracts with customers 88,635 28,901 165,652 561 283,751 - 283,751 Other revenues 1,726 981 352 31 3,091 - 3,091 Operating revenues from customers 90,361 29,883 166,005 592 286,842 - 286,842 Inter-group revenues and transfers 1,346 892 1,339 51 3,629 (3,629) - Total revenues 91,707 30,775 167,344 644 290,472 (3,629) 286,842 Segment profit (loss) 9,008 3,248 10,892 452 23,602 443 24,046 Segment information Three months ended June 30, 2025 Three months ended June 30, 2026 Following the reorganization with the aim of strengthening the Group's in-house ship management structure, ship management service, which was previously included in the “Other”, is reclassified into the Dry Bulk segment, the Energy Resource Transport segment and the Product Logistics segment and the “Other”, respectively, from the first quarter of the current fiscal year. In addition, the LNG bunkering business, which was previously included in the Energy Resource Transport segment, has been reclassified to the “Other”, in order to present the condition of each segment more appropriately. Segment information for the first quarter of both fiscal years 2026 and 2025 is presented based on the changed segment classification. - 13 -