IINO President's 126th anniversary's greetings

Yusuke Otani, President and Representative Director of IINO Kaiun Kaisha, Ltd. (IINO Lines) delivered its 126th anniversary's greetings for July 1, 2025 to all executives and employees of the IINO Group on June 30, 2025.

As we approach our 126th anniversary tomorrow, July 1, I would like to extend IINO LINE's 126th anniversary's greetings to all of our executives and employees.

The new Trump administration in the United States, which took office on January 20, 2025, has announced an "America First Trade Policy" and is currently introducing various tariff measures, bringing about major changes to the global economy and the business environment. The "reciprocal tariffs" are expected to apply to approximately 60 countries and regions, and in effect, the US plans to impose additional tariffs of at least 10% on almost all items imported into the US. There are concerns that this will not only affect exports from Japan to the US, but also lead to a global economic downturn and widespread disruption to global supply chains as other countries take retaliatory measures. Initially scheduled to take effect on April 9, 2025, the "reciprocal tariffs" have been postponed for 90 days until July 9, giving countries time to respond.

Since President Trump took office, the global economic situation has remained uncertain and unstable. Politically, the situation in the Middle East has become even more chaotic, with military conflict between Israel and Iran and the recent US attack on Iranian nuclear facilities. Although a ceasefire agreement has been reached, the situation is expected to remain unpredictable.

We are also giving priorities to the safety of our crew, vessels, and cargo when sailing in the Arabian Gulf, coordinating with relevant authorities, gathering the latest information, and strengthening the operational management system for each vessel to the maximum extent possible.

Next, I would like to discuss the progress of our mid-term management plan, "The Adventure to Our Sustainable Future."

Following the first year of the plan in fiscal year 2023, the second year of fiscal year 2024 saw significant achievements exceeding our targets, thanks to the efforts of all employees, including our group companies, overseas offices, and crew members.

Regarding the creation of economic value, which is one of our key strategies, we achieved all of our financial targets, including ordinary profit, ROE, and ROIC. While the favorable shipping market conditions that have continued since the previous fiscal year and the weakening yen exchange rate have been favorable factors for us, I believe that the results were also driven by our long-standing efforts to maintain good relationships with customers, our proactive approach to new business development without complacency, and our ability to adapt to changing market conditions.

Additionally, growth investments based on our business portfolio strategy are progressing smoothly. Specifically, in the shipping business, we have implemented investments in a methanol dual-fuel VLCC, which was pursued with patience in collaboration with shippers and shipyards. Under our business portfolio strategy, we have planned an investment of 100 billion yen over the three years of the mid-term management plan, and to date, we have completed 85% of the plan, with progress nearing the final stage toward achieving our target.

Next, I will discuss progress in creating social value.

In our efforts to reduce GHG emissions with the aim of achieving carbon neutrality by 2050, we have concluded a contract for a methanol dual-fuel VLCC, as mentioned earlier. We have also introduced internal carbon pricing (ICP) as a mechanism to promote investment in next-generation fuel ships. This mechanism provides incentives for the acquisition of assets that contribute to reducing greenhouse gas emissions through the use of next-generation fuels. We will continue to take such measures to lead to further investment in the future.

In addition, through company-wide efforts to respect human rights, we have been awarded a "Silver" rating by EcoVadis, an international sustainability assessment organization, up from "Bronze" last year, which is given to companies in the top 15% of the rankings.

As described above, the second year of the mid-term management plan progressed smoothly, continuing the momentum from the previous year.As a result, we have strengthened our financial base by continuously working to improve our earning power in each organization and achieving high levels of profit, enabling us to actively pursue new investments.However, the future is not all smooth sailing.

In fiscal year 2025, the final year of the mid-term management plan, the market conditions are beginning to show some signs of slowing down, and based on current forecasts, we are not quite meeting our initial financial targets. I would like everyone to do their utmost to increase profits and achieve our targets.

Next, I would like to talk a little about "human capital," which is one of the key strategies of the current mid-term management plan. Recently, you may have heard people say that human capital management is important for management strategy and that improving employee engagement is essential to achieving this.

How many of you have a clear understanding of what this means? Human capital management is an approach to business operations that treats human resources--which are not reflected in financial statements--as "capital," maximizes their value, and thereby drives long-term corporate value growth.

In recent years, businesses have faced significant challenges due to economic uncertainties such as inflation, interest rates, and exchange rate fluctuations, as well as rapid changes in the business environment driven by decarbonization efforts, human rights considerations, the widespread adoption of automation technology, the acceleration of generative AI and digital transformation (DX), and the escalation of geopolitical risks. These factors have made it increasingly difficult for companies to sustain operations using traditional organizational structures.

Therefore, we have set the goal of "aiming to be an independent global company that continues to evolve with creative ideas in response to the demands of the times." as our IINO VISION for 2030. We are working to enhance corporate value by adapting to rapidly changing environments through autonomous and flexible business development both domestically and internationally. We believe that strengthening human capital is the foundation for enhancing corporate value.

The IINO Group has been focusing on creating a comfortable working environment as the foundation for strengthening human capital. We have implemented a variety of measures, including a telecommuting system, a hot desking system, flexible working hours, and the promotion of work-life balance through measures such as childcare and eldercare support, as well as the expansion of welfare benefits.

In terms of the workplace environment, we carried out a full-scale renovation of our offices in 2022, and all construction was completed in May 2025, transforming the office into a brand-new space. The office and lounge areas are designed to promote communication among employees, provide opportunities for refreshment, and host internal events, among other things, to create opportunities for communication beyond work. The evaluation of these efforts is still pending, but we hope that they will be utilized effectively to improve work efficiency. I mentioned at the beginning of the year that I would like to use the lounge area to create opportunities for communication with everyone, but this has not yet been realized. We will work to create such opportunities in the future, so please bear with us for a little longer.

These measures are primarily aimed at creating an environment that will strengthen our human capital. In order to remain " an independent global company that continues to evolve with creative ideas in response to the demands of the times." we would like to engage in deeper discussions about what kind of human resource strategy our company should pursue in the next mid-term management plan. Based on that, we would like to link the next mid-term management plan with our human resource strategy and growth strategy. To this end, we will reorganize our human resources portfolio in line with this strategy, evaluate each employee appropriately, and develop a vision of the human resources we need to remain an independent global company, including professionals who can provide safety and security in shipping and real estate, employees who can independently identify and propose solutions to issues, employees with free thinking and a spirit of challenge, employees with specialized knowledge in various fields, and employees who can see the big picture.

In addition to our current short-term overseas training programs, onboard training, and external classroom training that employees participate in voluntarily, we will evolve our existing talent development programs to include perspectives from both management and employees, thereby supporting the career plans of all employees.

The fact that our company will celebrate its 126th anniversary tomorrow, July 1, is a testament to the human capital of our employees, who have taken on advanced initiatives regardless of age, leveraging the mobility that is the culture of the IINO Group. We will continue to strengthen our human capital in order to further develop our company in the future.

This fiscal year is the final year of the current mid-term management plan and an important year for the formulation of the next mid-term management plan. Some departments have already incorporated considerations related to the next mid-term plan into their missions for this fiscal year. We believe that one of the important processes in developing the next mid-term plan is for everyone, not just the traditional management team and managers, but also those from different departments and positions, to engage in open discussions and exchange opinions. As members of the IINO Group, we would like everyone to join us in thinking about the future of our company and participating in these discussions.

In closing, I would like to express my wishes for the safe operation of all the Group's vessels, the safe and accident-free operation of the buildings we own, the further prosperity of the Group's companies, and the good health and happiness of all the Group's executives and employees and their families.
Thank you very much for your attention.

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