Driven by a very strong dry bulk market and a rebounding container shipping environment, Japan's three major shipping companies, NYK, MOL and "K" Line, all posted large net income gains for the first half of the their fiscal year 2007, which ended Sept. 30.
NYK, the largest of the three companies, reported net income for the six-month period of Yen55 billion ($479 million), up 86.1 percent from Yen29.6 billion a year ago. Operating income jumped 92.4 percent to Yen90.7 billion ($790 million) from Yen47.1 billion. NYK's revenue improved 19.3 percent to Yen1.25 trillion ($10.95 billion).
"This growth was due to an expanded fleet size, which facilitated an increase in the volume of cargo handled, the recovery of freight rates for container transport to a certain level, and unprecedented, high levels of demand in the market for dry bulk carrier transport. Increases experienced in non-shipping segments, such as the logistics, terminal and harbor transport, and cruises segments, also played a part," NYK said.
NYK's operating income from bulk shipping in the first half rose 66 percent to Yen78.2 billion ($682 million) from Yen47.1 billion. Revenue in the sector increased 31.9 percent to Yen488.8 billion ($4.26 billion), against Yen370.6 billion in the same period last year.
For liner trades, NYK posted an operating income of Yen7.6 billion ($67 million), compared to an operating loss last year of Yen4.7 billion. Revenue in the division was Yen330.9 billion ($2.88 billion), up 13.9 percent from Yen146.2 billion.
Logistics operating income improved 10.4 percent to Yen7.4 billion ($65 million) with revenue up 13.9 percent to Yen260.8 billion ($2.27 billion).
Given the strong results, NYK has raised its financial expectations for the full year to the following:
Net income: Yen111 billion (11 percent higher than the earlier year guidance).
Operating income: Yen182 billion (19 percent higher).
Consolidated revenue: Yen2.54 trillion (5.4 percent higher).
Mitsui O.S.K. Lines has also raised its full fiscal year 2007 outlook following an 81.6 percent jump in net income in the first half to Yen86.7 billion ($756 million), compared to Yen47.7 billion.
MOL's operating income climbed 86.5 percent to Yen136 billion ($1.19 billion) while its revenue increased 23.8 percent to Yen940.3 billion ($8.19 billion).
The company's bulk ships operating income rose 77.8 percent to Yen119.2 billion ($1.04 billion) with revenue up 28.9 percent to Yen484.1 billion ($4.22 billion).
Operating income from containerships was Yen4.6 billion ($41 million), which contrasts against an operating loss last year of Yen2.8 billion. Revenue from the box shipping market improved 23.2 percent to Yen343.4 billion ($2.99 billion)
"During the first half of fiscal year 2007, worldwide ocean shipping was booming, backed by high growth in developing nations including BRICs (Brazil, Russia, India and China), although signs of a U.S. economic deceleration became apparent. Performance was especially strong in the dry bulker market, which saw skyrocketing freight rates," MOL said in its financial release.
"Cargo movement on containerships was steady on all routes, but the margin of increases in freight rates varied. As a whole, revenue and profit rose at a lower rate than we had projected."
MOL's revised forecast for the fiscal year is:
Net income: Yen185 billion (up 27.6 percent on previous forecast).
Operating income: Yen270 billion (28.6 percent higher).
Consolidated revenue: Yen1.92 trillion (4.9 percent higher).
Net income at Line rose the highest of the three carriers, soaring 114.3 percent to Yen44 billion ($384 million) from Yen20.6 billion. Operating income rose even higher, up 161.9 percent to Yen61.6 billion ($537 million) against Yen23.5 billion. Operating revenue gained 24.8 percent to Yen646.6 billion ($5.63 billion) from Yen518 billion.
Operating income from "K" Line's marine transportation division, encompassing bulk carrier, car carrier and container markets, increased 221.8 percent to Yen53.9 billion ($384 million) while revenue was up 27.7 percent to Yen571.6 billion ($4.98 billion).
"In the dry bulk transport, market freight rate has remained at unprecedented high levels due to sharply increased China's imports of iron ore and tightened supply and demand relationship in shipping space resulting from prolonged demurrage in Australia," "K" Line said in a statement.
For containers, "K" Line said: "The overall operating results in operating revenues and profits both increased against the same period a year earlier, due to progress in restoring freight rates supported by strong cargo movements in the European service routes and the north/south service routes, despite negative effects from soaring fuel oil prices."
For the full fiscal year, "K" Line gave the following prospects:
Net income: Yen84 billion.
Operating income: Yen128 billion.
Consolidated revenue: Yen1.30 trillion. |
