Japanese carriers post mixed results, cite port delays

Japanese carriers post mixed results, cite port delays

Japan's three major diversified ocean carriers -- Mitsui O.S.K., NYK Line and “K” Line” -- posted profits for the nine months ending Dec. 31 but reported mixed results from container shipping and said U.S. West Coast port congestion is hurting their profitability.

The carriers benefited from lower bunker prices and a weaker yen during the first three quarters of their fiscal year that ends March 31, but they said delays at West Coast ports are raising costs in trans-Pacific container services.

MOL reduced its full-year forecast for ordinary income to 50 billion yen (down 53.6 percent from the previous forecast), and its net-income forecast to 40 billion yen (down 12.5 percent) despite a forecast 2.8 percent increase in revenue, to 1.86 trillion yen.

MOL said its April-December net income was 24.8 billion yen ($206.4 million), down 15.7 percent year-over-year. The company blamed overcapacity and low rates in the dry bulk and container sectors. The company’s container division posted a loss blamed on weak growth in trans-Pacific and Asia-Europe cargo volumes, and congested Asian and U.S. West Coast ports.

NYK Line’s container division posted recurring profit of 6 billion yen  for the nine months by deploying large vessels to raise shipping efficiency and retrofitting ships to improve fuel efficiency. Lower bunker prices and a weaker yen also helped results.

The carrier’s total revenue for the nine-month period was 1.782 trillion yen, up from 1.654 trillion a year earlier. Recurring profit rose to 61.5 billion yen from 50.3 billion. New income was virtually flat at 28.4 billion yen. Operating income for the nine months rose 14.4 year-over-year to 40.9 billion yen, after accounting for U.S. antitrust fines for price-fixing by the company's car-carrier unit.

NYK raised its forecasts for the full fiscal year for revenue (2.38 trillion yen, up 2.1 percent from the previous forecast), recurring profit (72 billion yen, up 9.6 percent), and net income (40 billion, up 14.3 percent). The company cited lower bunker prices and a weaker yen.

”K” Line raised its full-year profits to 135 trillion yen (up 8 percent), to 48 billion yen in ordinary income (up 41.2 percent), and to 25 billion yen in net income (p 16.3 percent). The company cited rate restoration in Japan-North America routes in an otherwise sluggish bulk market, cost-cutting in container shipping, and a weaker yen.

'K' Line’s nine-month net income surged 110 percent year-over-year to 33 billion yen. 'K' Line posted higher earnings for its container, bulk shipping and offshore energy sectors. The company attributed the higher earnings for its container business to falling bunker prices and shipping higher-value reefer cargoes.