MOL still in the red while Hanjin climbs up to black

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MOLJapanese container liner Mitsui O.S.K. Lines (MOL) said its container ship segment experienced a loss in the first six months of its current fiscal year (FY) ended September 30, 2014 as a result of adverse business conditions.

In a consolidated financial statement released today, MOL said its container ship division logged a 7 percent loss of JPY10.8 billion (US$98.7 million) in the first half of its current fiscal year compared to a loss of JPY3.7 billion from April 1 to September 30, 2013. This despite an expansion in revenue to JPY384.9 billion from JPY357.1 billion year-over-year for a 7.8 percent increase.

“Although cargo volumes from Asia to North America and to Europe were firm on the back of economic stability in Europe and the U.S., cargo volumes to China and other Asian countries showed weak growth, and as a result the Asia-bound freight market was weak,” it said.

“On the North-South routes, the freight market experienced a substantial downswing due to a slump in cargo volume, particularly in cargo bound for the South America east coast. Although Intra-Asia routes were relatively stable underpinned by strong demand, it was necessary to review operation plans due to vessel congestion at various ports in Asia.”

Under this business environment, said MOL, “although we worked to reduce operating costs by such means as implementing further slow steaming, a loss was recorded for this segment in the first six months.”

The shipping line added that consolidated revenue for the first six months was JPY890.1 billion, operating income was JPY4.2 billion, ordinary income reached JPY14.5 billion, and net income totaled JPY11.5 billion.

“This was a year-on-year worsening in our business performance, despite an increase in sales,” it stated.

Improved fortunes for Hanjin

Meanwhile, South Korea’s Hanjin fared much better, reporting a third quarter net income of KRW39.8 billion (US$37.7 million), a reversal from a loss in 15 quarters largely due to foreign exchange gains and better earnings from container traffic. In the third quarter last year, the company’s net loss reached KRW317.7 billion.

The company said revenue reached KRW2.14 trillion in Q3, down 15.1 percent from the year before, while operating profit stood at KRW60.7 billion against a loss of 69.5 billion won a year earlier.

The company’s July-September operating profit figures represent the second quarter in a row that Hanjin posted profits.

OOCL volumes expand

On the other hand, Hong Kong-based liner operator OOCL reported that for the third quarter ended September 30, 2014, total volumes were 5.3 percent up from the same period last year and total revenues increased by 5.7 percent to US$1.518 billion.

Loadable capacity increased by 1.3 percent. The overall load factor was 2.9 percent better than for the same period in 2013. Overall average revenue per TEU increased by 0.5 percent compared to the third quarter of last year.

For the first nine months of 2014 ended September 30, 2014, OOCL’s total volumes increased by 8.4 percent over the same period last year and total revenues recorded a 4.8 percent growth. Loadable capacity increased by 2.3 percent. The overall load factor was 4.3 percent higher than the same period in 2013. Overall average revenue per TEU decreased by 3.3 percent compared to the same period last year.

Photo: Alf van Beem