JAPANESE shipping giant NYK expects to move into profitability this year despite troubles in the container business, said president Yasumi Kudo in an address on the firm's 129th birthday.
"For the current fiscal year, despite forecasts that freight rates for Europe will remain mostly flat year on year, while those for North America will worsen slightly, we are expecting to move into the black," he said.
He attributed this progress to cost savings from bunker-saving IBIS and the box use optimization EAGLE projects, to reduce wasteful activities and increase efficiency.
"Furthermore, we will be introducing eight new ultra-large, energy-conserving 14,000-TEU ships, starting with four in 2016 followed by another four in 2017.
"This is expected to result in cost reductions of over US$192.7 million per year. In the current situation, only a few containership operators are operating in the black." said Mr Kudo.
"Most accumulate losses," he said. "It is thought that any drop in freight rates will be limited in the future, and stable profits are thus within sight for our liner trade business from fiscal 2016 onwards."
Keying in on NYK corporate strategy called "More than Shipping", Mr Kudo reported on the companies investments in liquefied natural gas (LNG) and shale gas fuel.
"We are in an LNG-related upstream business through our acquisition of a partial interest in jointly owned facilities in the Australian Whetstone gas field and operation," he said.
"Operations here are due to begin at the end of 2016. We have decided to take part in the Cameron LNG Project, a mid-stream business that will construct and manage a liquefaction facility for shale gas in Louisiana in 2017.
"We expect these projects to deliver a long-term high return and to make a significant contribution to the expansion of the LNG shipping business.
Source : HKSG, 07.10.14.