Joseph Bonney, Senior Editor | Oct 31, 2011 10:10AM EDT
NYK said weak rates and a strong yen contributed to a $150.3 million loss for the first six months of its April-March fiscal year, and the diversified Japanese carrier said it expects a full-year loss of $225 million.
NYK said shipping faced an “increasingly severe” environment in the last six months and expects little improvement in the rest of its fiscal year. It said a sluggish global economy will produce “tepid” container volume and overcapacity will lower rates.
The carrier said it expects the yen will strengthen further against the dollar and that bunker prices will remain high. A strong yen hurts Japanese carriers because most of their revenue is in dollars while many of their expenses are in their home currency.
NYK said recent flooding in Thailand is expected to hurt its car carrier volumes. NYK said its dry bulk division is seeing a recovery, but that its tanker division is suffering from a supply-demand imbalance as new vessels enter service.
From April through September, NYK’s consolidated revenue fell 9.8 percent to $11.35 billion while costs rose 0.4 percent. The company’s operating loss totaled $120.4 million, compared with an operating profit of $961 million in April-September last year.
NYK’s container division posted an $86 million loss, compared with a $213 million operating profit a year earlier. Liner revenue fell 12.1 percent to $1.4 billion.
NYK said container rates on North American and European routes were “significantly lower” due to rising overcapacity. It said South American routes had a favorable supply-demand balance but rates remain weak.
For the full fiscal year, NYK lowered its group-wide revenue forecast 5.5 percent to $22.7 billion, and said it expects an operating loss of $131 million and a $280 million loss on recurring operations.
-- Contact Joseph Bonney at jbonney@joc.com. Follow him on Twitter @josephbonney.