Financial Highlights Brief Report for Fiscal Year 2024. A. Financial Highlights for Fiscal Year 2024. A.1. Financial Results for Fiscal Year 2024. For the fiscal 2024 full year results, operating revenues were JPY 1,047.9 billion, operating income was JPY 102.8 billion, and ordinary income was JPY 308 billion, while net income attributable to owners of parent was JPY 305.3 billion. Operating revenues through net income attributable to owners of parent increased year- on- year. The actual exchange rate was JPY 152.73, and the average bunker price was $610 per metric ton. From the beginning of the first quarter of fiscal 2024, we have changed the conversion rate to convert income and expenses of foreign affiliate companies from spot rate on the financial closing date to average rate during the term. The previous fiscal year's figures have been restated here using the newly changed conversion method.
Operating income increased mainly due to robust transport demand for K Line's own businesses, such as dry bulk and car carrier businesses, compared to the same period last year. In addition, due to the rise in short-term freight rates in container ship business, Ocean Network Express (ONE) performed well, which led to a significant increase in equity method earnings, an increase in ordinary income, and ultimately an increase in net income attributable to owners of parent for the fiscal year. At the end of the fiscal year, equity capital was JPY 1,648.4 billion. Interest-bearing liability was JPY 344.8 billion. Debt-equity ratio was 21%, and equity ratio was 75%. The consolidated equity ratio, taken into account off balance sheet assets and liabilities such as charter hire amounting to approximately JPY 600-700 billion, is estimated to be 57%-59%.
Lastly, with regard to shareholder returns for fiscal 2024, the year-end dividend is expected to be JPY 50 per share, in line with the forecast announced in February 2025. Combined with the interim dividend of JPY 50, the full year dividend will amount to JPY 100 per share. A.2. Financial Results for Fiscal Year 2024 by Segment. Turning to full year results by segment, in the dry bulk segment, the Cape size market progressed smoothly throughout the fiscal year, supported by steady transport demand. The market for Panamax and smaller sizes remained steady in the first half of the year. As a result, the full year results improved compared to the previous fiscal year. For the dry bulk segment as a whole, both revenue and profit increased year- on- year, partly due to the absence of temporary factors that had affected results in the previous fiscal year.
In the energy resource transport segment, LNG carrier, thermal coal carrier, VLCC, and LPG carrier businesses continue to operate smoothly under medium to long-term charter contracts, accumulating stable earnings. However, temporary factors caused a decrease in revenue and profit compared to the previous fiscal year. In the product logistics segment, overall revenue and profit increased. For car carrier business, the global automobile sales market continued to recover as the supply shortages of semiconductors and automotive parts were largely resolved. In addition, we have continued our efforts for freight rate restorations and improved vessel operation efficiency, ensuring a high level of profits. In container ship business, cargo transport demand remained strong despite an increase in the supply of new vessels. In addition, due to the situation in the Red Sea, vessels continued to avoid the Suez Canal, resulting in an approximately 10% absorption of vessel supply.
This tightened the overall supply-demand balance, supporting a firm market. Since the Lunar New Year, short-term freight rates have been trending downward due to a slowdown in cargo movements and increased vessel supply. However, for the fiscal year as a whole, market conditions improved significantly compared to the previous fiscal year. B. Forecasts and Initiatives for Fiscal Year 2025. B.1. Forecasts for Fiscal Year 2025 and Key Factors. In light of the current business environment, uncertainties such as the trade policy of the U.S. administration persist, making it difficult to predict both the extent and duration of potential impacts in fiscal 2025. Nevertheless, we would like to present our outlook based on our current assessment. First, I will explain the key points of the forecast assumptions.
For fiscal 2025, we assume that vessels in both K Line's own businesses and container ship business will continue to bypass the Suez Canal and operate via the Cape of Good Hope throughout the year. In addition, we have incorporated our assumptions regarding the impact of tariff implementation on cargo movements and market conditions, primarily in container ship and car carrier businesses. Furthermore, our forecast figures are based on these assumed impacts continuing through the end of the fiscal year. The port entry fees to be implemented by the Office of the U.S. Trade Representative, USTR, are expected to target mainly car carriers, but this impact has not been factored into our figures at this time. The dollar-JPY exchange rate for the full year is expected to be JPY 140.79 , and the bunker price is expected to be $574.
Please refer to the appendix for market condition assumptions for each vessel type. Based on these assumptions, for our full year forecast for fiscal 2025, operating revenues are JPY 950 billion, operating income is JPY 80 billion, and ordinary income is JPY 105 billion, while net income attributable to owners of parent is JPY 100 billion. The imbalance between the first and second halves regarding the fiscal year's net income attributable to owners of parent is due to the timing difference in recognizing extraordinary income, including from asset sales. A one JPY change in the exchange rate has an impact of plus or minus JPY 1.6 billion, while a $10 change in the bunker price has an impact of plus or minus JPY 30 million.
The annual dividend forecast for fiscal 2025 is JPY 120 per share, consisting of a basic dividend of JPY 40 per share and an additional dividend of JPY 80. This is an increase of JPY 20 per share from the previous announcement in February. B.2. Comparison of Income and Loss of Fiscal Year 2025: Year-on-Year Comparison Impact of Tariffs. This slide provides a comparison of ordinary income between the actual results for fiscal 2024 and the forecast for fiscal 2025. The left side shows the actual results for fiscal 2024. The center shows the forecast for fiscal 2025 before considering the impacts of U.S. tariffs, and the right side shows the forecast for fiscal 2025 after considering the expected impacts of the tariffs. The change from the actual results for fiscal 2024 to the fiscal 2025 forecast before considering the impacts of U.S.
Tariffs reflects a JPY 23.2 billion decrease in ordinary income from K Line's own businesses due to an approximately JPY 12 appreciation of the JPY. However, other factors contributed to an improvement of JPY 3 billion. In container ship business, long-term freight rates are expected to increase slightly from the last fiscal year. However, we anticipate a deterioration of JPY 147 billion due to a continued increase in the delivery of new vessels and the decline in short-term freight rates. The change from the fiscal 2025 forecast before considering the impacts of U.S. tariffs to the forecast after considering the tariff impacts reflects a JPY 13.5 billion deterioration in ordinary income from K Line's own businesses, mainly in car carrier business, due to an expected decline in cargo volume and the impact on freight market conditions caused by the tariffs.
As a result, the fiscal 2025 forecast for K Line's own businesses in terms of ordinary income after considering tariff impacts is JPY 68 billion, a decrease of JPY 33.7 billion from the fiscal 2024 result of JPY 101.7 billion. In container ship business, the impacts of tariffs are expected to lead to a reduction in cargo volume and a decline in freight rates, mainly on U.S. routes, resulting in a negative impact of JPY 16.5 billion on K Line's equity in this business. Accordingly, after considering tariff impacts, our ordinary income forecast for fiscal 2025 is JPY 37 billion, a decrease of JPY 169.3 billion from the JPY 206.3 billion result for fiscal 2024. Even at this stage, it is difficult to predict what impact tariff policy will have throughout the fiscal year, including its continuity.
However, for both K Line's own businesses and container ship business, we forecast that the current potential impacts will continue throughout the year. B.3. Forecasts for Fiscal Year 2025 by Segment. Turning to the fiscal 2025 forecast by segment, we expect a JPY 4.6 billion decrease in profit for dry bulk compared to the previous fiscal year. This takes into account the risk of fluctuations in cargo markets due to the impacts of the U.S. tariff policy. Going forward, we plan to work on improving vessel operation efficiency and reducing costs in line with the situation. Regarding energy resource transport, we believe that the impacts of the U.S. tariff policy will not be significant, and LNG carrier, thermal coal carrier, VLCC, and LPG carrier businesses will keep contributing steadily to profit under medium to long-term contracts.
Profit is expected to increase, partly due to the absence of one-time temporary factors from the last fiscal year. As for the product logistics segment, excluding container ship business, we initially expected continued solid performance in car carrier business due to factors such as solid cargo movements and medium to long-term transport contracts. However, we have now made our performance forecast based on the assumption that marine transport volume to the United States will decrease by about 30% throughout the year due to the impacts of the tariff policy. As can be seen in the appendix, the forecasted number of transport units remains largely unchanged from the last fiscal year.
While an increase was initially expected in fiscal 2025 due to new contracts and other factors, this has been offset by a decline in the number of units transported to the U.S., resulting in a total volume similar to the last fiscal year. To offset tariff impacts, car carrier business will work to optimize fleet size and improve operation and vessel deployment efficiency as necessary. Car carrier business results will be disclosed as part of the product logistics segment, just as for container ship business, from the first quarter of this fiscal year. In addition, we assume that the impacts of tariff policies will not be significant for the time being on our logistics business and short sea and coastal business. Next, regarding container ship business in the product logistics segment, we expect ordinary income to reach JPY 37 billion in fiscal 2025.
ONE has set two scenarios for its earning guidance for fiscal 2025: a full year after-tax profit of $1.1 billion in the case of a relatively stable business environment, and a full year after-tax profit of $250 million after factoring in the potential impacts of tariffs. This includes a decrease in cargo volume on certain routes and a decline in global freight rates. The key issue is the extent to which the potential impacts of tariffs should be factored in. Taking into account the business environment from fiscal 2024 through the present, the forecast reflects the effects of reduced cargo volume and declining freight rates and projects a full year after-tax profit of just under $700 million.
ONE will continue to work on flexible vessel deployment and efficient operation according to the situation and will continue to keep a close eye on changes in the business environment. C. Status and Progress of the Medium-Term Management Plan. C.1. Key Points of the Medium-Term Management Plan. To reiterate key points of our current medium-term management plan, K Line is using emissions reduction and decarbonization as opportunities to advance investment in businesses with the role of driving growth and in environmental initiatives. To that end, we have set forth three key initiatives: capital policy, business strategy, and functional strategy. In terms of capital policy, we plan to achieve an optimal capital structure and further enhancement of business management, and then optimize cash allocation for growth investments and shareholder return.
Under our business and functional strategies, we position investments in businesses with the role of driving growth and in environmental initiatives as key pillars of our growth. At the same time, we will enhance our cross-functional strengths, namely safety ship quality management, environmental technology, and digital transformation, and work with customers and partners to realize growth in areas where these strengths can be fully leveraged. As I will explain later, we plan to hold a business briefing in the near future focusing on our business strategy. C.2. Capital Policy. Capital Policy Progress and Corporate Value Improvement. Regarding the enhancement of earning power, although the current business environment remains uncertain, we have maintained our operating cash flow target of JPY 1.5 trillion for the current medium-term management plan period through fiscal 2026. This is unchanged from the announcement in February.
As for investment plans, investment cash flow up to fiscal 2026 was expected to be JPY 740 billion when last announced in February, but is now expected to be JPY 610 billion. New investments are progressing largely as planned. However, some replacement investments have been postponed due to delays in customer plans and trends in ship prices. These delays are expected to extend beyond fiscal 2026 and into the early part of the next medium-term management plan period. In addition, there has been an increase in cash inflows from the sale of businesses and assets, and these factors have led to the revision of investment cash flow to JPY 610 billion. As explained earlier, some investment postponements will occur after the current medium-term management plan period in fiscal 2027 or later.
We will continue to investigate our optimal capital structure, aiming to achieve both financial soundness and capital efficiency with an awareness of business risks. As before, our goal in our shareholder return policy is to remain aware of our optimal capital structure, ensure the investments necessary to improve corporate value and drive growth, and maintain financial soundness. Using any capital in excess of the appropriate level, we will distribute shareholder returns in a proactive manner based on the cash flow situation. After reviewing the business environment, financial outlook, cash allocation based on operating and investment cash flow forecasts as explained thus far, we have decided to raise the total shareholder return under the medium-term management plan to JPY 800 billion or more. This includes an additional flexible return of JPY 50 billion or more on top of the previously announced target of JPY 750 billion or more.
We will provide details on how and when shareholder returns will be implemented once finalized. In addition, the dividend forecast for fiscal 2025 has been increased by JPY 20 per share to a total of JPY 120 . This comprises a basic dividend of JPY 40 and an additional dividend of JPY 80 . This increase will be carried out using surplus funds remaining after the completion of share buybacks and other returns under the previously announced total shareholder return of JPY 750 billion or more and is separate from the additional flexible return of JPY 50 billion. Lastly, with regard to corporate value improvement, we find it deeply regrettable that our current P/B ratio remains below 1.0. To improve corporate value and achieve growth, we will further strengthen our efforts by reinforcing our functional strategy that leverages our strengths while promoting collaboration with customers and partners.
In addition, we transition to a company with nominating committee, etc., on March 28, 2025, and will accelerate our initiatives through strengthened governance and enhanced management. C.3. Capital Policy. Cash Allocation. As for cash allocation, we plan to allocate JPY 610 billion for investment cash flow and JPY 800 billion or more for shareholder returns based on JPY 1.5 trillion in operating cash flow. The remaining portion of the cash flow will be treated as part of the management allocation. After considering future changes in the business environment, it could be directed towards M&A, postponed investments, or shareholder returns. C.4. Capital Policy. Business Investment Plan. While investment cash flow was estimated at JPY 740 billion in the previous announcement in February, our latest figure is JPY 610 billion.
In terms of investment progress, the number of LNG carriers is expected to increase from the current 46- 65 by fiscal 2026, and we are continuing to pursue further initiatives. In car carrier business, we have decided to deploy a total of 17 LNG-fueled vessels, including chartered vessels. We are also expanding our fleet of carriers for coal and iron ore, including new fuel vessels to meet customer demand. Furthermore, we are advancing investments focused on our businesses with the role of driving growth and on environmental initiatives, such as the launch of a liquefied CO2 transport business in Europe and a geological survey vessel business to support offshore wind turbines. However, investment cash flow decreased by JPY 130 billion due to delays in customer plans, the partial postponement of replacement investments stemming from trends in ship prices, and increased cash flows from the sale of businesses and assets.
By further leveraging our strengths, we will continue to work toward business growth, including collaboration with customers and partners. C.5. Capital Policy. Shareholders' Return Policy. We plan to provide total shareholder returns of JPY 800 billion or more during the medium-term management plan period, including an additional JPY 50 billion as a flexible return. The method and timing will be announced once determined. Meanwhile, for fiscal 2025, we will increase the additional dividend to JPY 80, bringing the total dividend to JPY 120 per share. This is based on the surplus of JPY 750 billion previously announced as total shareholder returns for the medium-term management plan period. C.12. Shipping Industry Environment. I would like to now discuss three important points regarding the current environment surrounding the shipping industry. The first is the U.S. tariff policy. We need to continue monitoring developments in U.S.
Tariff policy, but we believe the two major impacts will likely be a decrease in trade volume to and from the United States and the potential for changes in trade patterns, including developments in domestic production in the United States. The burden of these tariffs will likely fall on the American people, and questions remain as to whether this policy will be maintained until a full-scale economic slowdown occurs. Therefore, we believe it is important to closely monitor developments in order to anticipate the duration of its impact. Our financial forecast for fiscal 2025 has been calculated based on the assumption that the impacts we foresee at this time will extend throughout the year. The K Line businesses most likely to be affected are container ship and car carrier in the product logistics segment.
Accordingly, we are currently preparing to consider short to medium-term fleet adjustment and changes to service patterns with a focus on these two businesses. However, given the unpredictability of U.S. tariff policies and the potential impacts, we will continue to closely monitor the situation and future developments. The second is the issue of the USTR-imposed countermeasures targeting China-related vessels, which are scheduled to take effect in October this year. The key targets of this measure are mainly Chinese shipping companies, Chinese-built ships, and non-U.S.-built car carriers, while in LNG transportation, the focus is on promoting the use of American-built vessels. While K Line operates some relevant vessels, such as Chinese-built ships, we believe that the business impact on our dry bulk and energy resource transport segments will be limited in the short term.
In container ship business, we expect to be able to limit the impact by avoiding the use of targeted vessels on U.S. routes. In car carrier business, however, all services on U.S. routes are expected to be affected, which is a major concern for us. We believe that it is necessary to discuss with customers and related industries to find a solution. Please note that K Line's financial forecast for fiscal 2025 does not factor in potential impacts of the USTR measures. Thirdly, regarding the use of the Suez Canal, unfortunately, there has been no change in tension levels in the Middle East due to factors such as continued U.S. military attacks on the Houthis. While there are various reports today, our top priority is to make decisions based on the safety of our vessels, crews, and cargoes.
Although we will continue to closely monitor the situation, for our financial forecast for this fiscal year, we have assumed that there will be no transits through the Suez Canal during the year and that vessels will continue taking the Cape of Good Hope route instead.