The three major Japanese shipping companies reported profitable first quarters for the period ending June 30, compared to losses in the same period last year.
All three companies have fiscal years that begin April 1.
In addition to their container liner services, they have bulk shipping and other services as well.
NYK said it had net income of 8.6 billion yen ($87 million) in the quarter ending June 30, compared to a loss of 1.3 billion yen in the same period a year earlier. Recurring profit was 11.5 billion yen in the quarter ending June 30, compared to 4.8 billion yen in the same quarter quarter last year.
Revenue was 528.5 billion yen in the quarter ending June 30 this year, compared to 477.6 billion in the same period last year.
Container shipping accounted for 148.5 billion yen in revenue, 7 percent more than the 137.8 billion yen in the same quarter a year earlier.
“In the container shipping division, cargo volumes slumped on transpacific and Asia- Europe routes and freight rates declined on all routes as supply-side pressure increased amid the continued delivery of large container vessels, which caused an increase of larger size vessels on other routes,” the carrier said.
NYK said “rationalization efforts and service network expansion progressed as the G6 Alliance was expanded to cover North American East Coast routes from the first quarter. On Asian routes, a major services reorganization was implemented to better respond to customer needs.
“Measures were taken to reduce vessel-operating costs and fuel costs through the introduction of large container vessels with high fuel efficiency and meticulous route management on a vessel-by-vessel basis. Thorough measures were also taken to precisely manage expenses on a container-by-container basis," the carrier added.
In the terminal division, NYK said “domestic and overseas container terminals' total handling volumes increased compared with the same period of the previous fiscal year. As a result, the segment's revenues increased slightly year on year, with a recurring loss relatively unchanged over the same period of the previous fiscal year.”
The logistics division made a profit of about 500 million yen in the quarter compared to 1.2 billion yen.
“Air freight handling volumes from Japan and in other markets around the world declined during the quarter," NYK said. "Although seaborne cargo volumes grew year on year, severe situation continued in terms of profitability. The logistics business suffered from a sluggish business environment, as relatively robust business in the U.S., Southern Asia and Oceania was offset by the impact of the economic slump in Europe. Meanwhile, Japanese coastal services performed well due to growth in both regional passenger transport and cargo shipments.”
MOL reported a profit of 14.5 billion yen ($147.5 million) in the quarter ending June 30, compared to a loss of 5 billion yen a year earlier.
Revenue was 412 billion yen in the quarter, up from 379 billion yen a year earlier.
In the container business, the carrier said “the perception of an oversupply of capacities was strengthened by an increase in deliveries of large containerships, and freight rate levels declined as a result."
MOL said its container segment had a loss of 1.1 billion yen in the quarter ending June 30, an improvement over the loss of 2.4 billion in the same period a year earlier. Revenue in the container segment was 175 billion yen compared to 148.8 billion yen in the same period a year earlier.
“Cargo volumes on Asia-Europe routes remained weak, while there was an increase in deliveries of large containerships, and freight rates fell as a result. Freight rate levels also weakened on other main routes reflecting a stronger perception of oversupply of capacities. Amid this environment, although a loss was recorded in this segment for the first quarter, there was a year-on-year improvement due to redoubled efforts to reduce operating costs and improve operation efficiency,” the carrier said.
MOL noted in the first quarter there was a class action lawsuit filed against it and others that operate roll-on/roll-off ships for carrying automobiles and construction equipment. The carrier also said it was subjected to inspections by authorities administering competition laws in the United States, Europe and other countries. “At this stage, it is difficult to estimate the monetary impact of these investigations as suits reasonably,” MOL said.
“K” Line said it had a profit of 6.98 billion yen in the quarter ending June 30, compared to a loss of 674 million yen in the same period a year earlier.
Revenue in the first quarter of the current fiscal year was 295.7 billion yen, compared to 273.6 billion yen in the same quarter last year.
The company said it had a small loss in the containership segment, about breaking even during the quarter, compared to a profit of around 600 million yen in the same period a year earlier. This occurred despite the fact that revenue in the container segment was up—141.9 billion yen in the first quarter of the current fiscal year, compared to 133.3 billion yen in the same 2012 period.
“The containership business suffered from freight rate deterioration, particularly in Europe service routes, affected by the sluggish European economy,” “K” Line said. “The car carrier business as a whole kept positive performance bolstered by steady cargo movements in North America-bound and Middle East-bound routes, whereas the growth in Europe-bound routes slowed.”
“K” Line said it carried 4 percent more loaded containers between Asia and North America in the quarter ending June 30 than it did in the same period a year earlier, “owing to the deployment of large-size ships." During the same period, liftings of full containers fell 10 percent from Asia to Europe and were down 30 percent in “Inter-Asia and North-South services on a Q-on-Q basis as a result of reorganization and streamlining of loss-making routes in these services," it added. - Chris Dupin