Japan’s three large container carriers, which operate with a fiscal year that runs from April 1 to March 31, on Tuesday reported their results for the 2012-2013 fiscal year ending March 31, 2013.
NYK and “K” Line reported a profit, while MOL reported a loss.
Japan’s largest shipping company had a profit of 18.9 billion yen ($230 million) in the year ending March 31, 2013, compared to a loss 72.8 billion yen the prior year. Revenue in the year ending March 31, 2013 was 1.9 trillion yen, compared to 1.8 trillion ($23 billion) the prior year.
The company had an operating loss of 10.1 billion yen in its container business in the fiscal year ending March 31, 2013, compared to an operating loss of 43 billion yen the prior year.
NYK said its liner business “actively implemented measures to cope with a slump in cargo shipping volumes, mainly to developed countries, and the increased delivery of large container vessels by rationalizing container vessel services. This effort facilitated an improvement in the supply-demand balance and the rate restorations, particularly on European and Latin American routes, over the summer.
“From the third quarter, however, cargo volumes declined and rates fell amid the slumping market. NYK Line expanded and upgraded service network on active inter-Asia routes to meet increasing demand and raise competitiveness. On East-West routes, meanwhile, NYK Line continued to rationalize services and lower costs through the Grand Alliance and the G6 Alliance,” the carrier added.
“The company also introduced on-ship broadband services to analyze weather and oceanic data on a real-time basis and select optimal routes on a ship-by-ship basis, which raised operational efficiency to cope with soaring bunker oil prices. Additionally, uneconomical vessels were redelivered or scrapped to reduce vessel operation costs and fixed costs. As a result of the above measures, revenues surged over the previous fiscal year and losses narrowed significantly.”
For the current year, NYK said it expects revenue to climb to nearly 2.1 trillion yen and for profit to reach 27 billion yen.
“The container vessel, dry bulk carrier, and VLCC (very large crude carrier) performance are all expected to be impacted by the ongoing slump in shipping market. NYK Line plans to respond with significant cost reductions, including company-wide bunker-saving campaign, reduced fixed costs through rationalization of services in the liner trade, and the expansion of optimal economical ship operations. In the car carrier division, shipments of Japanese automobiles are expected to increase. In the tanker division, the company will expand operations with the delivery of a LNG vessel. In the air cargo transportation segment, the market is expected to remain severe, while the logistics and cruises segments are expected to show improvement,” the carrier said.
MOL said it had a loss of 179 billion yen ($1.9 billion) for the fiscal year ending March 31, 2013, compared to a loss of 26 billion yen in the prior fiscal year. Revenue was 1.5 trillion yen ($16 billion) for the fiscal year ending March 31, 2013, compared to 1.4 trillion yen the prior year.
Much of the loss came in the fourth quarter ending March 31, 2013, when the company had a loss of 120 billion yen compared to a loss of 868 million yen in the same 2012 period. Revenue in the fourth quarter was 390 billion yen, compared to 362 billion in the same 2012 period.
The company’s containership business in the fiscal year ending March 31, 2013, had a loss of 11.2 billion yen on revenue of 608 billion yen, compared with a loss of 29.9 billion yen on container revenue of 544 billion yen in the prior year.
“The deterioration in the gap between vessel supply and demand took its toll on markets across the board, becoming a significant factor in market stagnation. In the dry bulker market, conditions for all vessel types stagnated because the number of new vessel deliveries was consistently high from the start of 2012, preventing further improvements in the gap between supply and demand,” MOL said.
“Although the crude oil tanker (VLCC) market temporarily showed signs of improvement in the winter demand period, overall cargo volume was sluggish and freight rate levels were low,” it said.
“As for containerships, a reduction in the frequency of services and the thorough promotion of super-slow steaming helped to constrict the supply of vessels, and along with the self-sustained restoration of freight rates this improved the market environment. From the summer, however, primarily because of slowness in the recovery of European economies and slower economic growth in China, cargo volumes to Asia-Europe routes were low and freight rate levels weakened,” MOL explained.
MOL is forecasting better times ahead—a profit of 50 billion yen in the current year, compared to last year’s 179 billion yen loss. It expects revenue will reach 1.7 trillion yen, compared to last year’s 1.5 trillion yen.
“K” Line said it had a profit of 10.7 billion yen ($113 million) in the fiscal year ending March 31, 2013, compared to a loss of 414 billion yen the prior year. Revenue in the year ending March 31, 2013, was 1.1 trillion yen compared to 972 billion yen a year earlier.
The carrier's container business had a profit of 6.6 billion yen on revenue of 553 billion in the year ending March 31, 2013, compared with a loss of 38.5 billion yen on revenue of 468 billion yen the prior year.
“K” Line said the number of loaded containers it transported on the Asia-North America route increased 21 percent and on the Asia Europe route rose 3 percent on a year-on year basis.
“Meanwhile, we continued downsizing of tonnage in loss-making South-North routes and inter-Asia routes where we marked a 12 percent decrease in the number loaded. All in all the number of container transported by the entire 'K' Line Group increased approximately 3 percent year-on-year,” the carrier said. - Chris Dupin