November 12, 2019

President and CEO: Nobutoshi Torii

 Dear Shareholders,

 In line with our Long-Term Vision of becoming a “Global Top 10 Solution Partner–A Global Brand Born in Japan,” announced in May this year, the KWE Group will pursue robust business management strategies to boost corporate value in the medium-to-long term future. This is part of a larger effort to obtain air freight volumes over 1 million tons and sea freight volumes over 1 million TEUs, allowing us to record ¥1 trillion in net sales and ¥50.0 billion in operating income.

 Due to stagnating demand for cargo transport—including from the electronic components sector, which had been strong until last year, the first half-year results of the Medium-Term Management Plan shows net sales decreased 6.8% to 271,599 million yen and operating income fell 1.1% to 8,759 million yen. And because of recording share of loss of entities accounted for using equity method of 3,007 million yen during the three months ended June 30, 2019, ordinary income dropped 37.3% to 6,581 million yen, and net income attributable to owners of the parent fell 55.6% to 2,225 million yen.

 Current Medium-Term Management Plan achievements include the creation of a global-reaching Corporate Branch to strengthen Group governance; the start of operations in Sri Lanka to cultivate our retail business; and rail transportation investments in India made by APLL. We are also making substantial progress in our discussions to create a global human resources system and our next-generation IT systems.

 A trade conflict broken out between China and US, the innovation of technologies such as artificial intelligence, the Internet of Things, electric vehicles, and 5G—these are just some indications that our world is facing a major political and economic paradigm shift. In such an environment, it is paramount that the KWE Group make efforts to capture the transportation demand and flexibly respond to changes in customer supply chains.

 The KWE Group will continue to work together in order to increase our competitiveness and corporate value in the global market. We hope that we can rely on ever-greater support for these efforts from our valued shareholders and investors.

November 12, 2019
Nobutoshi Torii, President & CEO