Japanese transport conglomerate NYK Line turned in the best performance of the country’s three shipping giants in the first quarter of fiscal year (FY) 2014 ended June 30.
Its net income for the first quarter improved to JPY10.22 billion (US$99.83 million) from JPY8.56 billion year-over-year.
Consolidated revenues rose to JPY582.37 billion in the first quarter of this year from JPY528.47 billion in the same period of the previous fiscal year.
NYK Line said the positive growth in income came despite difficult global economic conditions that prevented the full recovery of the U.S., European, and China economies, and in the midst of fear of an economic slowdown of Asian markets.
Moreover, “the environment surrounding the shipping industry remained severe due to the continued slump in freight rates caused by an excess supply of vessels,” said NYK.
NYK said it surpassed these challenges and raised its earnings through a further reduction of its fleet and operational expenses “by rationalizing the fleet assignments and reducing fuel costs.”
It added: “As a result of the above, the liner trade segment increased revenues year-on-year and reduced its recurring loss.”
‘K’ Line’s box ship profit
Meanwhile, Japan’s Kawasaki Kisen Kaisha (“K” Line) reported that its net profit for the first quarter of the financial year ended June 30, 2014 went south to JPY4.28-billion (US$42.23 million) compared with a JPY6.98 billion net income year-over-year.
Operating revenue rose to JPY319.78 billion for the first quarter of FY 2014 from JPY295.72 billion for the same period in the previous FY.
“In the business environment surrounding the shipping industry, we saw some negative factors toward our operating result such as continued shrinking trend in ex-Japan cargos in car carrier business, and declined freight rates markets in the dry bulk business,” said ‘K’ Line of its profit results.
But the company said there was a “positive trend in the containership business where we saw an upward trend in freight rates for Europe-bound routes that had long been low.”
The container ship division posted increases in both its revenue and income in the first quarter of the year “with our continued efforts for cost cutting including slow steaming,” it added.
For FY 2014 ended March 31, 2015, “K” Line said it was staying with its profit forecast of JPY18 billion.
MOL’s box shipping loss
Mitsui O.S.K. Lines (MOL) reported a contraction in its profit in the first quarter ended June 30, 2014 to JPY8.51 billion (US$83.97 million) from JPY12.94 billion year-over-year.
MOL attributed the fall to a weak global economy that affected most of its business segments, including container shipping.
Revenue for the first quarter of its fiscal year was JPY443 billion, an increase over the JPY412 billion it registered in the same quarter in 2013.
For its container shipping division, MOL reported a loss of JPY7.2 billion at an ordinary level.
“In the market for containerships, the gap between supply and demand remained substantial reflecting deliveries of large containerships, and freight rate levels remained weak as a result,” the company said.
For the financial year ended March 31, 2015, it has lowered its expectations about its net profit, reducing it to JPY40 billion from the earlier forecast of JPY60 billion.
The revision came as the company also revised its half-year forecast ended September 30, 2014 to JPY12 billion from the initial JPY32 billion.
The lowered expectations for fiscal year 2014 was because MOL anticipates “significant deterioration of business performance due to factors such as continued weak supply/demand conditions in the containership business and a continuing downturn in the bulker market.”
Photo: Dick Sijtsma
