Profits Return for Japanese Ocean Carriers

Japanese carriers NYK, MOL and "K" Line reported profits in their April-June quarter as rising volumes and rates pushed their container operations into the black. All three lines said they are optimistic about the rest of the year.

The diversified shipping groups reported group-wide profits aided by improvement in dry bulk, tanker and car carrier markets during the quarter.

NYK reported profit from recurring liner operations of 10.3 billion yen ($116.4 million), compared with a year-earlier loss of 18.6 billion yen for that segment. The company cited “substantial” recovery in its container cargo and rates, especially on North American and European routes.

The company’s group-wide net profit totaled 22.9 billion yen ($259.8 million), compared with a loss of 18.9 billion yen a year earlier as revenue rose 33 percent to 504.7 billion yen ($5.7 billion).

MOL said its container ship revenue jumped 40.8 percent to 146.8 billion yen ($165.9 million) as higher rates and volume and savings from slow-steaming and cost-cutting offset higher fuel costs. Group-wide net profit was 20.8 billion yen ($235.3 million), compared with a loss of 13 million yen a year earlier. Revenue rose 33.5 percent to 397 billion yen (4.5 billion).

"K" Line had net profit of 15.8 billion yen ($178 million), reversing a loss of 14.9 billion yen in the corresponding period a year earlier. Operating revenue from the company’s container ship segment totaled 112.3 billion yen ($1.27 billion) and operating income was 8.9 billion yen (108.8 million).

The company said its container volume rose 6 percent year-on-year and rates rebounded as “the balance of supply and demand tightened owing to recovery in cargo movements and slow steaming, and cargo owners increasingly sought to secure space.”

“As the peak season approaches, robust cargo movements are expected to continue for some time on all routes, and especially on East-West routes,” the company said.

All three carriers reported stronger results from their bulk carriers, most of which are on long-term charters, although the bulk market has turned downward in recent weeks. MOL said it expects “a rebound in the dry bulker market supported by demand in emerging countries as well as a recovered tanker market.”