Nippon Yusen KK
TSE:9101
US |
Johnson & Johnson
NYSE:JNJ
|
Pharmaceuticals
|
|
US |
Berkshire Hathaway Inc
NYSE:BRK.A
|
Financial Services
|
|
US |
Bank of America Corp
NYSE:BAC
|
Banking
|
|
US |
Mastercard Inc
NYSE:MA
|
Technology
|
|
US |
UnitedHealth Group Inc
NYSE:UNH
|
Health Care
|
|
US |
Exxon Mobil Corp
NYSE:XOM
|
Energy
|
|
US |
Pfizer Inc
NYSE:PFE
|
Pharmaceuticals
|
|
US |
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
|
US |
Nike Inc
NYSE:NKE
|
Textiles, Apparel & Luxury Goods
|
|
US |
Visa Inc
NYSE:V
|
Technology
|
|
CN |
Alibaba Group Holding Ltd
NYSE:BABA
|
Retail
|
|
US |
3M Co
NYSE:MMM
|
Industrial Conglomerates
|
|
US |
JPMorgan Chase & Co
NYSE:JPM
|
Banking
|
|
US |
Coca-Cola Co
NYSE:KO
|
Beverages
|
|
US |
Walmart Inc
NYSE:WMT
|
Retail
|
|
US |
Verizon Communications Inc
NYSE:VZ
|
Telecommunication
|
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
52 Week Range |
3 961
5 485
|
Price Target |
|
We'll email you a reminder when the closing price reaches JPY.
Choose the stock you wish to monitor with a price alert.
Johnson & Johnson
NYSE:JNJ
|
US | |
Berkshire Hathaway Inc
NYSE:BRK.A
|
US | |
Bank of America Corp
NYSE:BAC
|
US | |
Mastercard Inc
NYSE:MA
|
US | |
UnitedHealth Group Inc
NYSE:UNH
|
US | |
Exxon Mobil Corp
NYSE:XOM
|
US | |
Pfizer Inc
NYSE:PFE
|
US | |
Palantir Technologies Inc
NYSE:PLTR
|
US | |
Nike Inc
NYSE:NKE
|
US | |
Visa Inc
NYSE:V
|
US | |
Alibaba Group Holding Ltd
NYSE:BABA
|
CN | |
3M Co
NYSE:MMM
|
US | |
JPMorgan Chase & Co
NYSE:JPM
|
US | |
Coca-Cola Co
NYSE:KO
|
US | |
Walmart Inc
NYSE:WMT
|
US | |
Verizon Communications Inc
NYSE:VZ
|
US |
This alert will be permanently deleted.
Thank you very much for waiting. First of all, I would like to thank you for attending this session in your busy schedule. We will now start the financial results for FY 2022 and FY 2023 full year forecast briefing session for NYK. I am Okada, I am the Head of IR Group. I will be moderating today's event. First, let me introduce the presenter.
First, the Representative Director and CEO, Mr. Soga. Next, Vice President, Executive Officer, CFO, Mr. Kono. And Executive Officer and Head of Liner & Logistics segment, Mr. Banno. First, Mr. Soga, the President, will give you the overview of the full year results of FY '22. And then we will have some time for a Q&A session. I will explain how you can raise questions later. The presentation material used today are posted on our website, so please see them from the website. And also this briefing session will be streamed online on-demand basis, including the Q&A session.
Let me hand over to Mr. Soga.
I am Soga, the President of NYK, I assumed this role from April 1. Thank you very much for attending this briefing session in your busy schedule. First, I would like to go over the overview of the results for FY '22. And then I would like to cover the full year forecast for FY 2023. After the explanation, we will take some time for a Q&A session. The presentation materials will be projected on the screen. And also, if you have already downloaded the materials from our website, you can also refer to those materials. First, let me cover the overview of the full year results FY '22. Please refer to the table on Page 6. The blue highlight at the center is the actual for FY '22.
The revenue increased year-on-year by JPY 335.2 billion to JPY 2,216 billion. Recurring profit increased year-on-year by JPY 106.6 billion to JPY 1,109.7 billion. Net income increased year-on-year by JPY 3.4 billion to JPY 1.125 billion. At all levels, the results surpassed the FY '21 results, which was a historical high and renewed at the high levels. There are 3 reasons. One is that the liner trade, air cargo transportation, logistics, bulk shipping, energy, dry bulk, automotive, transportation, energy, all of them, all of these businesses achieved a very strong performance that led to the overall strong performance.
Another factor is mostly related to container shipping after the summertime, the market softened. And also the logistics in the transport business slowdown was quite evident. In addition to container business, logistics and air cargo and due to other reasons, a dry bulk business in the second half slowed down. And in the middle of the year, the weakening of the yen became pronounced, and the overall revenue was lifted due to those factors. Due to these factors, in full year, we were able to achieve the record high results.
Regarding the comparison by segment, please refer to Page 7. Here again, the blue highlight shows the results for FY '22. In the Liner and Logistics business, which is made up of Liner Trade, Air Cargo and Logistics, for Liner Trade, the recurring profit increased year-on-year by JPY 57.1 billion to JPY 791.3 billion. Air Cargo profit declined year-on-year by JPY 1.2 trillion to JPY 61.8 trillion. Logistics profit declined year-on-year by JPY 4.4 billion to JPY 54.3 billion. In all areas, the strong first half results supported the overall results. In the Air Cargo and Logistics, the profit declined year-on-year. But still compared to usual years, the performance is very strong.
And the total Liner and Logistics segment -- the profit increased year-on-year by JPY 40.5 billion to JPY 907.5 billion. The equity need affiliate investment profit of ONE of JPY 77.3 billion has also been recorded. In the bulk shipping business, the ordinary profit increased year-on-year by JPY 73 billion to JPY 212.1 billion. In the dry bulk business, the strong market condition started from second half of FY '21, until first quarter of FY '22. However, in the second quarter, due to concern of economic slowdown, the market dropped. However, the automotive transportation business volume increased and also the tanker business market recovered rapidly, which compensated for the overall performance. And so as the segment record high recurring profit was marked.Â
Please go back to Page 3. Let me repeat. The total recurring profit increased year-on-year by JPY 106.6 billion to JPY 1,197 billion. Special P&L is added to this to reach JPY 1,125 billion net income. Based on this result, we increased the year-end dividend by JPY 10 to JPY 170 per share. The interim dividend already paid out is JPY 150 per share before the 3:1 stock split and the annual dividend before the split will be JPY 1,560 -- after the split per share annual dividend will be JPY 520 and the shareholder return ratio is 26.1%. Please refer to Page 8.
As shown on the table to the left out of the total profit increase of JPY 106.6 billion. Large portion was a depreciation contribution. As you see from the waterfall chart to the right, the bulk shipping business also made a large contribution. So far, was the overview of the results for FY '22. Next, I will explain the full year forecast for FY 2023. Please turn to Page 9. For fiscal year 2023, we are forecasting the revenue of JPY 2,300 billion, recurring profit of JPY 200 billion and net income of JPY 200 billion. Recurring profit and net income is projected to decline substantially from the previous year.
However, compared to the recurring profit of JPY 44.4 billion that we have generated in 2019 with no special factors related to COVID, it is fair to say that we have been able to grow steadily. At the same time, it is in line with the target profit that we announced in the new midterm plan. And we announced in March that is JPY 200 billion to JPY 300 billion of net income per annum for the following 4 years. Though the numbers may seem a bit conservative, we think it is an adequate level as the first year for the new midterm plan.
Based on this forecast, we are raising the payout ratio outlook to 30%. We forecast JPY 120 of dividend per share for the full year, JPY 60 for the interim term and JPY 60 for the year-end. As has been explained in our new midterm plan, we are planning to buy back JPY 200 billion worth of our own shares in fiscal year 2023 and 2024 for the 2 years. When we buy back our shares, the overall number of shares is going to decline. In that case, the ratio of 30% is as the target, this JPY 120 number may change. In terms of how much numbers of shares we can buy back the JPY 200 billion, it is dependent on the stock market. We will not -- we have not included that in this forecast. This JPY 120 dividend outlook is based on the number of shares before the share buyback.
So FY 2023 FY 2024 in these 2 years, we will buy back JPY 200 billion worth of our own shares. In the new midterm plan, we have announced that as early as possible, our commitment is to execute this. But when we announced our new midterm plan, there were questions why we're taking 2 years is going to be 1 year each I said that it is not the intention to divide this in 2 years or dividing it into box. In some cases, we will be buying back the full amount in 1 year, we will not exclude that option. That was my answer. Currently, in that sense, this JPY 200 billion, 2 years, that is what I am saying. In this fiscal year, executing the full worth of buying back of shares, that is one of our options. And currently, we are deliberating about the details. Alongside with dividend payment, we would like to return -- we are considering the details about how are we going to return to the shareholders.
Next, I will explain about the full year forecast by each segment. Please turn to Page 13. On the right-hand side, this is the room on the right, the forecast number of FY 2023. For the Liner Trade segment, we are forecasting JPY 69 billion, down JPY 722.3 billion year-over-year for the recurring profit. With the continued shipping market from the second half of last year, the cargo volume declined sharply. And at the same time, the spot freight rates have gone down significantly as well.
However, in addition to the contracted fleet rate that will manage to hold in the first time of this fiscal year, we anticipate cargo volumes will start to recover in the second half as excess inventory of some consumer goods will be resolved in consumer markets. Due to these factors and from the support coming from the financial income, we forecast profit for this segment. Going to the Air Cargo Transportation segment. As announced previously, we are negotiating with ANA Holdings to transfer all of the shares of Nippon Cargo Airlines company.
The forecast of this business is based on the assumption that the transfer will be completed by the first half. This means that we are forecasting a current profit of JPY 7 billion for the first half. Compared to the first half of the previous year, profit is going to decline by JPY 37 billion. And for the full year, the decline will be JPY 54.8 billion. We are forecasting weaker cargo volume and the recovery of the international passenger market, especially impacting the Asian market. Overall, however, the yield will trend at a low level, we anticipate a soft market.Â
As for the Logistics segment, we are forecasting a recurring profit of JPY 33.5 billion, which is down JPY 20.8 billion year-over-year. We anticipate that profit levels for both air and ocean cargo will decline year-over-year, although the volume will go up and the profit will go down. On the other hand, in the Contract Logistics business, contribution is coming from price revisions and new business in North America.
We forecast that the drop of the profit level will be limited. In the Bulk Shipping segment, our forecast is JPY 102 billion of recurring profit, which is JPY 110.1 billion decline year-over-year. In automotive transportation business, although volumes are expected to remain unchanged from the previous year before just a slightly softer market as we anticipate the used cars and high-end markets -- high cars and construction equipment go back to utilizing containerships. So furthermore, in terms of the rates for the automotive transportation vessels are going at a very high level. And last year, we thought that maybe this will go down. But for the time being, we think that the freight risk will stay at a high level. But -- and basically, this will be reflected in the cost.Â
For the Dry Bulk business, the small- and medium-sized vessel segment is expected to trend below the strong levels during the last fiscal year. In the last fiscal year, specifically, the -- so in terms of what -- basically some cargo that has been coming from the container business. It came over to the drop business in last fiscal year, and that has contributed the business, but this will not appear this year, bringing to a lower outlook. In the Energy business, LNG carriers and offshore business is expected to remain steady, supported by mid- to long-term contracts. But the VLGC market is expected to fall from the high levels at last year, specifically because new ships is going to be introduced into the market, although slightly, we think the market is going to eco.
Going to Page 16. This slide is the comparison between the 2022 results and the FY '26 forecast that we announced in the midterm management plan for each of the indicators. Excuse me. Yes, this is the right slide that should be shown. So this is a comparison between 2022 and FY '26 forecast. For all of the indicators, we think we are able -- we were able to make a good start against the 2026 targets that we have announced. One thing that stands out is that the shareholders' equity and shareholders' equity ratio is higher than last year's results. But please be reminded that this does not include the share buybacks that we are trying to hammer out the details.
Lastly, please turn to Page 17. This slide shows the status of the trend in the recurring profit of the stable freight Re business, which we have highlighted in the previous midterm plan, including the forecast for FY '23. Among the box shipping business, those categorized as stable freight businesses will be on the left-hand side, the pink colored portion of the bars. In 2023, it has jumped up. But overall, the terminal business under the Liner Segment and the Logistics Business as well, all have grown steadily. This jump up in this area, it is a category of a stable praetor business. But slightly, it will be -- has been impacted by the market rate. So automobiles basically is what is contributing to this rise. With this, I would like to end my presentation about the forecast of FY 2023. On our website, following the slides that have been shown today, we have included an appendix that has referenced materials, such as assumptions for the major indicators for each segment. Please refer to this on your pleasure.
So that's all from me. Thank you very much for your attention.
Thank you very much. We would like to move on to Q&A session.
First, I have 2 questions. The President talked about the freight rate of container shipping until the first half, there was a positive impact of the high freight rates. I was wondering what that means from May, North America trade SC annual contract will be renewed. Are there customers with longer contracts? So could you explain why there is a positive impact up to first half? And my second question, JPY 200 billion of recurring profit for this period is conservative. When you break it down to the segments, which part is conservative? Do you have any comment taking share? Those are my 2 questions.
Thank you very much for your question. Regarding the freight rate for Containership Bank, Mr. Banno will add explanation later on. Regarding fine explanation. First point is, as you have said, for -- so North America trade, the renewals usually May 1, and we have been negotiating and some contracts are beyond May 1. And for Babar, the volume is not that large, but high freight rates will continue to extend. When we negotiate on sea what would be the agreed freight rate compared to our assumption, it's slightly higher. The spot rate dropped significantly, but our rate was rather higher than the spot rate. So from that perspective, the first half will not decline as much as the spot rate. That is our forecast. Banno, do you have anything to add?
What Mr. Soga said is that the renewal is on May. So April and May renewals the higher long-term contract rate will be applied. So especially in the first half of the first half, and that impact will be felt. So that is the meaning.
And the second question the recurring profit of JPY 200 billion on FY '23. The area that our assessment is conservative is the Bulk Shipping segment, especially dry market forecast. This area, we are taking a stricter view for all type of dry ships, vessels, we are setting our assumption conservatively. As I have said, for automotive transportation, there are several negative factors that cannot be avoided this fiscal year, and we factored them in. So it's not that last year's strong performance will be maintained as is.
And that is another area that we are setting conservative assumptions. Liquid, LNG and tankers, those areas, especially for LNG, this is supported by medium- to long-term contracts. So this area will be stable. There's no particular inclination of use. There is -- in terms of the tight supply-demand market continuing, we are following that assumption. For logistics business, to a certain extent, we are conservative. As I have said, the porting business for air and ocean, the cargo volume we expect to recover, especially for Ocean, the shipping companies container companies, the price gap from procurement is as suppressed in the profit level will decline year-on-year. And that view is slightly conservative. So that was my response.
Let's go to the next question.
My first question is for automated transportation business. The current demand supply situation and the following a few years demand-supply situation. What is your take on that? And based on this anticipation for the Japanese carmakers, basically, you negotiate about the price increases or price revisions every year. So what's going on there? So I would like to confirm about that is my first question. And my second question is that at this time, Kono become the CFO -- so in terms of -- I have not heard what your sense is in terms of what you think you should be? Are you focusing on balance? In terms of the balance sheet, I think there are various ways to utilize the balance sheet. So I would like to ask the CFO about his views.
Thank you for your question. So I will respond for your first question. For the automotive transportation market, but last year around this period of time, actually, that at the end of the year last year, specifically for the North American consumption demand, there was this threat that is going to diminish, and we were looking at this conservatively. But actually, what happened was that -- this -- there was no drop in consumption. Actually, the appetite for consumption has been remaining at the same level. As long as far as we know, currently, the current demand-supply balance or whether the state demand in terms of the demand for the following couple of years, I think that it will continue at this level.
But in terms of supply, in terms of the capacity for the vessels, as you know, since in the beginning -- early years of COVID, there has been super thought that the cargo volume is going to stop. So for the older vintage ships, they scrap them, and they did not build new ships. So in terms -- and demand did not go up. But in terms of supply since 6 months after COVID, well, there was a sharp recovery. So the demand tight situation of demand and supply is still continuing until now. I assume that this situation will continue from this year until the end of next year. And after that, all the new book ships for oil transportation is going to be -- come into the market. And I think the market will start to soften after the ships has been delivered.Â
In terms of this year outlook, so we have to be aware of the balance between the containerships. As I said in my presentation, so the high rates of the high unit price cargo, like construction equipment, and they used to be utilizing container ships, but there was no capacity. So they started to utilize the automobile transportation vessels. For instance, containership or bulldozers small cranes, excavators -- those tend to be high margin -- high unit price. But the containership space has aggressively become available, and they start to go back to utilizing containerships. So with the additional capacity, there are passenger cars that still has a lot of backlog -- in terms of the freight unit price, it is lower, but this will start to come back. In terms of the utilization of this space, it's not that we're going to have a lower loan ratio.
But if you look at the overall income level, because of the difference of the mix, we think that we're going to see a lower level of revenue. So this is going to happen this year and maybe continue into next year. And other points about export from China. In this past 2 to 3 years, it has doubled each year. But this year, maybe it will come to a saturation point some kind of a plateau, maybe it will be a plateau. The reason I say this is the European customers who has been purchasing. They have been looking at quality, looking at after service. I think they are trying to find out the level. And I think basically, they will analyze it this year. So export from China, it has been dramatically growing, but this growth may be more or less and become moderate this year. That is one of another assumption.Â
So in terms of the contracts with Japanese customers, in reality, the contract with the freight rate, sometimes, we renew it every year. But in some cases, we renew it when something happens. So maybe it's a kind of a semi-permanent type of contract. So there are 2 types of contracts in Japan. Currently, with the LNG energy ships, the premium, we are trying to put a premium on the freight, and we are negotiating. But based on the tightness of the demand position and increasing the rates on the continues, we're not doing that. But for the overseas customers like overseas auto OEMs -- European OEMs. -- recently depending on how the containerships are behaving, they are reaching the rates or reducing the rate dramatically. And I think this will continue to be the case this year and into next year. So I hope I have answered your question. Next, you have-- call on our CFO, will respond to your question.
Thank you very much for your question. So the CFO, I have been assigned as the CFO, and I'm trying to catch up with my role or responsibility to just to introduce myself. In 2006, I have been looking at the Energy Division. So for 17 years, I have been working in the Energy Division. Before that, in the 2000s, beginning of into 2006, I was in the Corporate Planning division. Back at that time, there has been a bulk duo in dry bulk. I think you remember that there was -- we ordered a lot of the vessels back at that time.
And it seems the investment standard as a company and the -- in terms of the -- introduce IRR, ROIC, we have been discussing about this investment criteria. And from before, in terms of investment, we have been utilizing and focusing on IRR, not only this, of course, but in terms of the criteria, we have been rising IRR. But in terms of the segment performance announces or valuation of, we have been aware of ROIC in looking at that. But in terms of the assessment, we haven't been using that. But this time around, in the new vital plan, we have referred to ROIC, ROIC and going forward in terms of the assessment of our company performance will be utilizing ROIC. So maybe for the first time in 17 years, maybe, well, there's no reason opinion, but by utilizing ROIC.
So I am not in the shipping business, but the financial situation has recovered a lot since then. And the -- based on the financial conditions that we have right now, we want -- I would like to look at ROIC and other indicators so that we will be focusing on capital efficiency, how we utilize capital and then how we return to the profit to our shareholders by striking a balance of these factors and enhance the corporate value. So this is very challenging. But great job that I have.
So another point I want to make is not only as the CFO, but as of first of April, the strategy division has been started up, and I am in charge of leading this. So decarbonization and GHG reduction is the 2 points that we are focusing on. In terms of the reduction of GHG in -- so from last year -- excuse me, for next year, Eurocom's going to be considered as cost. So the reduction measures that we are focusing on this year and to accelerate these measures. Currently, some of that will be counted as cost. But going forward, this will be our competitiveness.
In terms of the administrative accounting standards internally, I want to put in the framework. So this can be considered as a competitive is. So this is a very major task that I have. The decarbonization is from a company's accounting standard, there will be an impact, of course. So my role is to manage this side as well. So this is a big challenge for me. So this will be my aspiration, so to speak. Thank you very much for asking me for my comment.
We would like to move on to the next question.
I would like to ask one question, which is related to NCA. The first half recurring profit is factored into the plan. Let me confirm along with the sale, there is a cash income or special P&L is not factored in. Is that -- am I correct? If that is not factored in during the period, you will need to reflect that to your plan. Price is not determined yet. So it should be difficult, but will that impact the dividend plan. Will that be the magnitude. I understand this is a difficult question, but if there's anything perhaps you can share with us, please.
Thank you for your question. A topic on NCA, as you say, based on the basic agreement, we are working towards final agreement, and we are in the process of negotiation. Therefore, the price or the method of share transfer is under negotiation. So in this forecast, we could not factor in, in terms of the numbers. So this impact is excluded from this forecast.
Once we reach a final agreement and we are to execute the transaction. At that point, we will disclose -- and in case we need to make adjustment to the current plan, we will share the information with the investors. So far, we cannot say for sure, but the dividend assumption and share buyback plans we do not expect there will be a major impact on those.
So I have a follow-up question. In the midterm plan, this JPY 270 billion, but each business, is there any businesses that is going over that or below that? And this following few years, how are you going to increase the buildup of the profit so that you can meet these targets? Can I confirm about that?
Thank you for waiting. Thank you for the follow-up question. What you have asked is that our midterm plan in the last year, like FY 2026, that's 4 years from now. At that point, the target recurring profit is JPY 270 billion. I think that was what you were referring to.
Yes, yes, that was what I was asking.
Over all to reach this target, FY '23 forecast will be JPY 200 billion. So to be able to achieve JPY 270 billion. It means that in 4 years, we'll have to accumulate JPY 70 billion of recurring profit. So that is what we are anticipating. So where is this -- what segment of business is going to contribute to this increase -- so ONE numbers seems to be quite substantial right now. But we are looking at this -- analyzing this closely and looking at other business from ONE business, like environment-related responses, investment in vessels, there's some major CapEx that we are anticipating.
So we are considering how much return that we can get from these investments. But what we can say now is that we automobile transportation vessels that we have already tapering utilizing airlines. I think basically we'll be using LNG as a fuel. So we're going to have decided we're going to construct 20 vessels until 2028. We already ordered a lot of that. So already 4 of these are operating. In 2024, '25, '26. -- gradually, these will be introduced -- start operating. And in terms of the contribution to the profit, I think these will be a great contributor. In terms of the LNG, we are doing our best to prepare these vessels. But in terms of when they start operation will be after 2026, a lot of them will be sort operation after 2026.
So in terms of the contribution coming from the LNG is more or less limited. On the other hand, -- the gas LPG VLGC is what I am talking about. For the VLGC this year, the market is going to soften. That is our outlook. But the -- I think the actual demand will grow robustly built until 2026. For besides ONE, this will be another factor that will contribute to our profit. So in terms of -- I think we have to do a close analysis of the business besides ONE. But as said, for these businesses at side of ONE will be the contributors to reach this JPY 270 billion. In terms of O&E, well, maybe this is fitting to the acquirer, but from 2024 and onwards. So there is some concerns that will be a belly capacity oversupply that will start from 2024. So in that sense, in terms of ONE, how are we going to bring this to a higher level and a more normalized level. So I think we have to take various ensures to be able to achieve that.
So another follow-up about the containerships. Currently, the demand supply situation, what's happening there in North America free trades, but the -- it will -- I think you have been able to spot rate has been increased. In terms of the demand or supply situation continues, what is your understanding about that?
Of course, I think basically some effective some are not to your outlook. But if you look at the -- in terms of the situation of volume or the construction of the ships, what's happening right now. So I would like to ask Kono to respond to this question.
Thank you. for your question. So in terms of demand supply for the vessels, they will be in the following 3 years, there will be new container ships that has been ordered or gradually be start operation, but the majority of this would be coming in for the second half of 2023 to 2024. So in that sense, the number of ships is going to increase. So in the past 3 years, the pipe capacity of the ships and all the cargo cannot be loaded. I don't think that is going to be a repetition of that situation. That means that the rate going up substantially in the following 2 years, will not -- it's not likely to happen.
And that is our take for the midterm. But for the short term on the mid-April, the trade has been raised on the spot market, but the U.S. economy has not fully recovered. And if you look at the cargo volume and in situation in the U.S. has not changed. So the cargo volume has not recovered in full. So the raise in the freight rate from April onwards, is it going to continue to rise, we are not that optimistic -- so currently, after the rate has been raised, how this is going to be -- is going to be -- is this going to hold? Or there is a possibility that the rates are going to fall in.
So that's a short-term outlook. On the other hand, the container ships of the Liner business to if we want to have a forecast with the 1 year Well, the first set of the first the rates will be relatively high. we can enjoy the contribution coming at but afterwards, beyond that is going to drop. But all of course, is now is one reason. I think the U.S. inventory will more or less start to go down and the cargo volume will start to recover. And with that, the spot rate will start to go up, if that's the case. So in some contracts, I was shorter term, not long -- so with those type of customers, there's a lot of room for us to negotiate with the mineral of the contracts. So towards the second half of this fiscal year, I think we is going to recover gradually. So that is the assumption behind our forecast.
It is a bit early. But with this, we would like to close the Q&A session. Thank you very much. With this, we would like to close the financial results presentation for FY 2022. And thank you very much for your participation.
[Statements in English on this transcript were spoken by an interpreter present on the live call.]