[260513.EN.SEA] 'K' Line and NYK Back In Black, But MOL Continues To Make Losses

JAPAN's NYK, the country's second biggest container shipping company posted a profit of JPY18.9 billion (US$230 million) in fiscal 2012 ending March 31 drawn on a five per cent increase revenue to JPY1.9 trillion.

Joining in the profits was the smallest member of Japan's Big 3, "K" Line, which also has reversed itself to a net profit of JPY10.7 billion (US$113 million) drawn on revenues of JPY1.13 trillion, up 17 per cent, after it sustained a net loss of JPY40.5 billion the year before.

But MOL, the biggest of the big three, posted a JPY178.8 billion loss for fiscal 2012 while revenues increased 5.2 per cent to JPY1.51 trillion. The carrier blamed losses on restructuring costs of about $1 billion, which were announced in the first quarter.

MOL's containership division improved, however, narrowing its loss to JPY11.2 billion from JPY29.9 billion the year before, saying it benefited from slow-steaming, cuts in service frequency and rate hikes as well as a better rate environment.

NYK's healthy profits were attributed to a more diversified fleet and to in bulk shipping while conceding losses in its container business. But these losses narrowed to JPY9.4 billion against JPY44.7 billion experienced the year before.

"From the third quarter, cargo volumes declined and rates fell amid the slumping market. NYK Line expanded and upgraded service network on active inter-Asia routes to meet increasing demand and raise competitiveness. On east-west routes, NYK Line continued to rationalise services and lower costs through the Grand Alliance and the G6 Alliance," the carrier added.

At "K" Line, containership revenues totalled JPY6.6 billion in fiscal 2012, up 117 per cent against an operating loss of JPY38.5 billion recorded in fiscal 2011.

The carrier says the improvement in container shipping was the result of new larger energy-efficient ships, revamping services to end loss-making loops, more slow steaming and off-season service reductions as well as general cost cutting.

"K" Line obtained 21 per cent loaded container increase in transpacific trades and three per cent rise in Asia-Europe trades. It also cut capacity in the loss-making south-north routes and inter-Asia routes that "marked a 12 per cent decrease in the number loaded".

Overall, the carrier handled three per cent more containers on a year-on-year basis.

Looking ahead, "K" Line expects the containership business to see steady growth in transpacific trade due to "mild recovery of the US economy including housing market seemingly hitting bottom".

But the Asia-Europe trade is expected to be weak owing to persistent "uncertainties over the European economy". So the carrier believes it will take "some time before there is full-fledged improvement of supply-demand balance of vessels in this sector".

Source : HKSG, 04.05.13.