Higher rates, volume spur MOL earnings

Higher rates, volume spur MOL earnings

MOL said Thursday that revenue for the quarter ending June 30 amounted to 234.5 billion yen ($2 billion). Net income was $92.4 billion.

The company said firming freight rates on key routes and increasing export cargo, mainly from China, buoyed its shipping division, which accounts for most of its business.

The fiscal year for MOL ends in March, so financial results for the company's first quarter were for April through June. Comparative year-over-year quarterly figures were not available since this is the first time publicly-traded MOL has disclosed results for the first quarter.

For its overseas shipping business, which includes liners, bulkers and tankers, revenues were $1.6 billion. Operating income was $143 million.

MOL said its earnings also benefited from improvements in Japanese corporate earnings, a gradual increase in exports and a lower-than-expected Japanese dollar.

The company said it saw steady growth in its non-liner and tanker divisions compared to 2002. With a fleet of 100 vessels, MOL is believed to be the world's largest operator of tankers and gas carriers.

In the ferry and domestic shipping unit, the company lost $1.4 million in operating income this past quarter, due to a decline in passenger traffic on the Hanshin-Kyushu route.

MOL says profitability in its shipping agent and terminal operation business was better than initial forecasts, thanks to a steady increase of container cargo in the liner division.

The company lost $319,000 in its cargo forwarding and warehousing unit, mainly because of a decline in air cargo traffic resulting from the effects of the SARS outbreak and the war in Iraq.

The SARS epidemic and war in the Middle East also had a negative impact on profitability for MOL's other businesses, especially travel agency operations.

For the next quarter ending Sept. 30, MOL is forecasting a 12 percent increase in net income from initial projections made in May.

MOL is the world's 12th largest liner company, with a container fleet totaling 156,000 TEUs. The company has an operating capacity of 2.3 million TEUs.