[300411.EN.SEA] Japan: MOL Profit Up 358pc, NYK, 'K' Line Erase 2009 Losses

JAPAN's big three container shipping companies "K" Line, MOL and NYK, posted good results at the end of their shared fiscal year of 2010, ending March 31, all declaring profits, and two erasing losses suffered in the downturn of 2009.

The biggest Japanese carrier, ranked 11th in the world, Mitsui OSK Lines (MOL) posted a year-on-year 358 per cent net profit increase to JPY5.8 billion (US$700 million), drawn on revenues of JPY1.5 trillion, an increase of 14 per cent.

Looking back, MOL said "since FY2009, we have continued effecting various measures such as cutting costs through fuel savings by slow steaming as well as reducing other cargo expenses, improving efficiency through the optimisation of our organisation both in Japan and overseas to enhance cost competitiveness.

"Regarding principal cargo trade lifted by economic recovery, it improved considerably from the previous fiscal year for the east-west trade route and south north trade routes and improved slightly from the previous fiscal years for intra-Asia which was fast to recover from the Lehman shock," said the MOL statement.

"In the Asia-North American routes in addition to extending the Asia North American west coast route to include Laem Chaband port (Thailand) we executed a super slow steam operation. In addition we opened up an Asia North American east coast route via the Suez Canal and an Asia North American north west coast route. In the Asia Europe routes, we reorganised the Japan and south China-Europe route and we became the first Japanese shipping company to add Vietnam as a direct port call on European routes" MOL said.

The No 2 Japanese carrier, ranked 12th in the world, Nippon Yusen Kabushiki (NYK) posted operating profits up 13.7 per cent to $23.78 billion that erased a 2010 operating loss of $200 million in 2009.

NYK recalled that "costs rose during the fiscal year as the price of bunker oil soared, but the segment held the increase down with cost cutting measures including streamlining services and starting the environmentally conscious operation of vessels at reduced speeds. As a result the liner trade segment's results improved dramatically, rebounding to profit following a loss in the previous year.

"In the liner trade cargo traffic is likely to be largely robust overall, but profits may be squeezed by soaring bunker oil prices and an increase in supply of shipping space coupled with a decline in transport volumes in the wake of the Great Eastern Japan Earthquake," said the NYK statement.

NYK container shipping increased 22.2 per cent and services were expanded by deploying more vessels. Cargo volume was robust in the first half of 2010 despite strong demand from emerging market economies, particularly in Asia.

The No 3 carrier, ranked 15th in the world, Kawasaki Kisen Kaisha ("K" Line) posted a full fiscal year profit of JPY30.6 billion (US$368 million) erasing FY2009 loss of JPY68.7 billion, earnings drawn on revenues of JPY985 billion, a 17.5 per cent increase year on year.

Said "K" Line: "The containership business saw a strong recovery in cargo movement, particularly on outward cargo from Asia. Although there were some adverse developments in freight rates because of seasonable factors, the increase in shipping capacity supply slowed because of eco-friendly slow steaming by various shipping companies and there was some recover in rates

"'K' Line Group continued its concerted efforts to effect a restoration of freight charges in the containership segment and to reduce costs through slow steaming and other initiatives. As a result consolidated operating revenues for the 2010 fiscal year were JPY58.6 billion, an increase of JPY147 billion over the previous year," said the "K" Line statement accompanying the results.

"Cargo movements on European service routes recovered strongly and the number of loaded containers from Asia to Northern Europe and the Mediterranean rose 13 per cent over the previous year. The number of loaded containers shipped from northern Europe and the Mediterranean to Asia was up one per cent while European service routes grew eight per cent overall," said "K" Line.

"As a result the containership business segment reported operating revenues of JPY444.9 billion and an operating income of JPY29.6 billion," said "K" Line.

Source : HKSG, 29.04.11