To our shareholders and investors
Fiscal 2017 was a year of recovery in trade growth, supported by a firm global economy. Meanwhile, we faced increasing instability in our business environment, due to a host of factors including emerging protectionist policies and the North Korea situation. Fiscal 2017 was a year that constantly kept all of us at MOL on edge, all the more so because we are a core marine shipping business dedicated to safe operations. Looking at conditions in the marine transport market, momentum was slow overall, and a full-fledged recovery will require some more time, despite signs of an upturn in certain areas. In this challenging environment, MOL delivered ordinary profit for fiscal 2017 over and above its initial forecast, owing to steadfast measures to enhance operation efficiency and sales efforts led by the frontlines. This shows that MOL is now strong enough to steadily generate profits even when conditions are sluggish in the marine transport market. Regrettably, MOL posted a net loss due to the recording of an extraordinary loss in connection with the integration of the containership business. However, we now have a clear roadmap for turning around MOL’s business performance. With this in mind, management has decided to pay out the year-end dividend for fiscal 2017 as initially planned.
In April 2018, Ocean Network Express Pte. Ltd. (ONE), our integrated containership business venture, began providing services. ONE will serve as an unparalleled international containership operator that will take over the containership businesses of Japan’s three major shipping lines. I’m convinced that ONE will help to increase the corporate value of MOL by providing high-quality services globally and capturing integration synergies at the earliest opportunity. In fiscal 2018, the cost of withdrawing from MOL’s own containership service will remain. However, ONE will act as a major driving force behind improving MOL’s profitability over the medium term.
Additionally, we will work to reinforce and expand the strategic business segments that have become key sources of strength for MOL, like the LNG carriers/offshore businesses, chemical tankers, and ferry businesses. Guided by “Rolling Plan 2018,” a plan that progressively builds on the previous “Rolling Plan 2017,” we will continue to intensively allocate management resources to the aforementioned strategic businesses, even as we keep on honing the cost competitiveness of our fleets.
MOL has been navigating the oceans for over 130 years. During this time, MOL has grown into one of the world’s largest full-line marine transport groups by anticipating the needs of its customers and the demands of the future, while overcoming various challenges along the way. Today, the MOL Group has one of the world’s largest dry bulker, crude oil tanker, and car carrier fleets, in addition to the abovementioned LNG carriers, chemical carriers, ferries and containerships. We will make our fields of expertise in each division even stronger. By doing so, we will demonstrate the collective capabilities of a “strong and resilient” MOL Group, as laid out in our Long-Term Vision, as we make every effort to prove ourselves worthy of the trust of our stakeholders.
We look forward to your continued understanding and support as we endeavor to realize our ambitions.
April 27, 2018
Junichiro Ikeda
President, Chief Executive Officer
Mitsui O.S.K. Lines, Ltd.
