Hisane Masaki | Jul 29, 2011 10:12AM EDT
Japan’s Kawasaki Kisen Kaisha ("K" Line) expects to suffer a group operating loss of $64.10 million fiscal 2011, which began April 1, compared with a group operating profit of $751.4 million a year earlier.
The revision comes after "K" Line reported a group net loss $47.78 million in the first quarter of fiscal 2011, compared with a group net profit of $202.6 million a year earlier.
"K" Line, the third-largest Japanese shipping firm by group revenue, revised its group revenue and profit forecasts for the whole of fiscal 2011, which were announced April 28. The company had initially expected to post a group operating profit of 676.92 million in fiscal 2011.
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The company now predicts its group revenue to total $13.59 billion in fiscal 2011, down 2.8 percent from the initial estimate of $13.97 billion)but still up 7.6 percent from $12.63 billion in fiscal 2010.
Despite the anticipated group operating loss, “K” Line said it left unchanged its full-year group net profit forecast at $25.64 million, down 93.5 percent from $392.35 million in fiscal 2010.
"K" Line’s group revenue fell 3.8 percent in the April-June quarter from the same three-month period last year to $3.13 billion.
The company incurred a group operating loss of $126.83 million in the April-June quarter, compared with a group operating profit of $295.68 million a year earlier.
“Although there were many adverse factors in the first quarter, including the increase in the value of the yen and flagging containership rates, the car carrier business is recovering due to rapid restoration of operations by Japanese automobile manufacturers following the earthquake in March, and overall results were generally in line with expectations,” "K" Line said in an earnings release.
The company said it expects the value of the yen to remain high in the second quarter, and rates won’t recover in the ramp-up to the peak summer season.
That’s why "K" Line said it revised downward its predictions for consolidated financial results for the first half and full year. The company, however, expects in the second quarter “extraordinary profit” through exchange gains on security investments made though its consolidated subsidiaries.
Contact Hisane Masaki at yiu45535@nifty.com.
